Mandatory agreement that details the share of ownership of each writer, composer, performer, or rights holder on a composition or sound recording. This can be a stand alone document or a section of a larger agreement such as a producer agreement.

An intellectual property right that gives the owner the proper legal protection and rights of a creative work regarding distribution, licensing, or recreation of that work.

A Performance Rights Organization collects performance royalties for writers and composers. ASCAP and BMI are the primary government regulated PRO’s in the U.S. They typically collect via blanket licenses issued to radio stations, television stations, streaming platforms, and more.

A mechanical rights organization (MRO) in music is a group that collects royalties for songwriters and publishers when their songs are reproduced, such as on CDs, digital downloads, or through streaming. They issue licenses, collect royalty payments from businesses that reproduce the music, and then distribute those payments to the songwriters and publishers. The Mechanical Licensing Collective (The MLC) is a U.S. example that handles mechanical royalties for digital streaming services in the United States.

Key functions of an MRO

• Licensing

• Royalty collection

• Royalty distribution

• Data management

A distribution company will distribute your music to retailers physically and digitally. Digital distribution is the least costly and is the current norm for independent artists. Digital distribution consists of but are not limited to outlets such as Spotify, Pandora, and Apple Music. Some distributors may take upfront service fees, or a percentage of royalties collected from the distributed music.

SoundExchange collects and distributes digital performance royalties on behalf of more than 250,000 recording artists’ and rights owners’ accounts and to date has paid more than $8 billion in distributions. These royalties are mainly non interactive such as Pandora or Sirius Satellite Radio airplay. Lead performers and record labels are the primary payees. Producers, and Engineers with points on a recording can be paid via Sound Exchange after an LOD form and LOD repertoire sheet are completed and submitted by the performing artist or rights owner in Sound Exchange.

Songtrust is a global music publishing administrator used by songwriters all over the world to collect the royalties that their songs earn. They register with and collect publishing royalties from collection societies around the world.Item description

Luminate’s SoundScan is a tracking system operated by MRC Data, that tracks sales of music and music video products throughout the United States and Canada. Any music product that carries a UPC or EAN barcode and ISRC code is eligible to be tracked by SoundScan. According to their website, “Sales data from point-of-sale cash registers is collected weekly from over 14,000 retail, mass merchant and non-traditional (on-line stores, venues, etc.) outlets. Weekly data is compiled and made available every Wednesday. SoundScan is the sales source for the Billboard music charts.”

In January 2021, The MLC began administering blanket mechanical licenses to eligible streaming and download services (digital service providers or DSPs) in the United States. The MLC will then collect the royalties due under those licenses from the DSPs and pay songwriters, composers, lyricists, and music publishers.

The Harry Fox Agency (HFA) is a leading rights management organization that handles mechanical licensing and royalty collection for music publishers in the United States. It issues licenses for the reproduction of musical compositions in physical formats like CDs and digital downloads, and collects and distributes royalties to publishers for these uses. HFA also handles mechanical licensing for interactive streams, a service it has provided on a voluntary basis following the Music Modernization Act.