Canadian Musician - March/April 2021 | Page 47

HOT TIP : If you ’ re a session musician or a backup vocalist , Sound- Exchange pays your royalties to the American Federation of Musicians Intellectual Property Rights Distribution Fund and SAG-AFTRA . You can search this fund for unclaimed royalties via their website . No union membership is required to collect your royalties !
terrestrial radio . If you ’ re registered with a PRO , that ’ s great and I ’ m glad you ’ re collecting your public performance royalties , but it won ’ t help you collect digital performance royalties , which is what I ’ m talking about here .
Who collects digital performance royalties ? If you ’ re Canadian , you have two major players to consider . Re : Sound , which is Canada-based , and SoundExchange , its U . S . equivalent . How did these players get to advocate for and collect digital performance royalties ?
The Library of Congress designated SoundExchange to administer a licence that allows digital radio services to stream commercially-available sound recordings . Digital radio services pay a fixed rate per play . Similarly , The Copyright Act of Canada grants Re : Sound authority to continue to collect digital performance royalties under certified tariffs .
When internet radio , satellite radio services , and digital television radio services use a song on their platform , they send a playlist of songs they ’ ve played and a fee to SoundExchange or Re : Sound . SoundExchange and Re : Sound then comb through data and distribute the payments .
Who does Re : Sound and SoundExchange deliver the payments to ? Both services distribute a percentage of the royalties to the rights holders , which is often a label ( unless the artist is independent , in which case the royalties are delivered to the artists ). They pay featured artists on a recording , and a certain percentage is also paid to a fund for non-featured artists . Non-featured artists include backup vocalists and session musicians .
How do you get your money ? SoundExchange and Re : Sound have reciprocal collection agreements with each other . That means you have options as to how to collect digital performance royalties .
First , you can easily find out if Sound- Exchange or Re : Sound have money for you by visiting their websites and searching their online databases . Most people don ’ t know about this ! You do not have to be registered with either organization to conduct a search of unclaimed royalties . If you find your artist or band name listed , you can choose how you would like to register .
Here are a few options to register as a Canadian or U . S . citizen or a resident of either country :
The first option is you could register for SoundExchange even if you ’ re not a U . S . citizen or resident and you could have SoundExchange collect all international royalties for you .
You can also choose instead to register in Canada and have Canadian organizations collect all royalties generated worldwide via Re : Sound or one of Re : Sound ’ s member organizations ( ACTRA RACS , Artisti , or MROC ).
Another option is you can use Re : Sound or Canadian organizations to collect royalties internationally except for the U . S ., and use Sound Exchange for U . S . royalty collection only . Similarly , SoundExchange also has the option to exclude certain countries from royalty collection .
Re : Sound also collects funds for non-featured artists , such as session musicians and background vocalists . To collect these funds , you can sign up with Re : Sound or one of its member organizations . Some member organizations have different perks than Re : Sound , such as equipment insurance , so check that out before making a decision .
So which option is the best for you ? Don ’ t flip a coin , don ’ t call your mom , don ’ t ask your bandmates , don ’ t call your manager , don ’ t call your lawyer . Contrary to our own belief , us lawyers don ’ t know everything ! Consider taxation . Everyone ’ s favourite word ! Talk to your business manager or , if you don ’ t have one , talk to your tax person . If you don ’ t have a tax person you love , get one ! A good tax person will get rid of those frown lines on your face quicker than Botox . Or at least help you write off the Botox ! If you ’ re doing cross-border business , such as with the U . S ., make sure your tax person or the tax company you use works with or has someone on staff that understands and is familiar with cross-border taxation .
Some considerations to ask your business manager or tax person about :
•° For non-U . S . members of SoundExchange there is a 30 % withholding tax applied to royalties .
•° If you ’ re from Canada , Re : Sound can collect these royalties without the deduction of the 30 % withholding tax .
•° Alternatively , you could sign up with SoundExchange for your U . S . royalties and submit a W-8BEN-E tax form ( entities ) or a W-8-BEN tax form ( individuals ) to SoundExchange to avoid the tax withholding .
Cool Fact : There is something called ‘ private copying royalties ,’ which are royalties paid when someone burns a CD-R with copies of your music . These royalties are paid by the manufacturers of the CD-Rs and other blank media . Well no longer as relevant , it ’ s still cool . Re : Sound pays this royalty , SoundExchange does not . In other countries , these royalties are paid when a listener copies music from their computer to their phone or tablet as well , and there is a push within Canada ’ s music industry to make that the case here .
Distro deals & collecting royalties If you are an independent artist or a band and you ’ re entering into a distribution deal , you can exclude digital performance royalties from your distribution deal . Oftentimes , you just have to ask your distributor . Ideally , before you sign your distro deal ! If you ’ re making a significant sum , or anticipate that you will make money via digital performance royalties , exclude digital
performance royalties from your distro deal and collect the royalties yourself .
If you ’ re in a band , royalties collected by SoundExchange and Re : Sound are split equally or as designated . That means you can alter how these organizations split or designate royalties .
Producers , listen up ! Artists can also – via something called a Letter of Direction often attached to a Producer Agreement – designate a percentage of royalties due to certain creative personnel ( such as producers !) accredited or recognized for the sound recording on which the artist performs . Ask your lawyer about this . For example , if you ’ re submitting a Letter of Direction to SoundExchange and you ’ re a producer that gets a certain number of points on an artist ’ s release , a lawyer can help you figure out the percent calculation of what you would be due directly from SoundExchange .

HOT TIP : If you ’ re a session musician or a backup vocalist , Sound- Exchange pays your royalties to the American Federation of Musicians Intellectual Property Rights Distribution Fund and SAG-AFTRA . You can search this fund for unclaimed royalties via their website . No union membership is required to collect your royalties !

If you haven ’ t already explored digital performance royalties as a revenue source and you don ’ t have someone pitching for you , you can do it yourself . In fact , I absolutely encourage that you do ! You can check out the different SiriusXM channels available , see where your music might fit , and submit yourself . There is a music submission form directly on the SiriusXM Canada website . For the U . S ., it ’ s a bit tougher , but you can find a PDF of the channels online and try to find direct contact information for each channel you ’ re interested in . You can also submit yourself for platforms like Pandora . It takes a bit of online research , but you can do it .
Best of luck and see you in that Rolls soon !
Dani Oliva is an artist advocate , speaker , and music attorney focused on helping talented creators thrive in the music business . Follow him on Instagram @ olivaesq or visit www . olivaesq . com .
° CANADIAN MUSICIAN 47