Royalties

We realize that the music industry is not an easy jungle to maneuver through. We have created individual Frequently Asked Questions for certain aspects that pertain to the music industry as well as your relationship with us. If you still have any questions, do not hesitate to contact us and we will see to it that your question is answered.

Basically, you make money when your music is bought. Through Symphonic Distribution there are various distinct options to choose from (you choose an option that you believe will work out better for you in the long run). One of our options states that you receive 90% of royalties while we retain the other 10% of royalties to cover distribution costs (bandwidth, hosting of content, etc). In other words, if your music sells on iTunes, we keep 10% of the NET sale while you keep 90% of the sale. (We also have an option that enables you to pay per release and receive 100% of royalties from all retailers (including retailers such as iTunes, eMusic, Beatport.com, and others) however, if you are a record label, this results in an up front fee followed by a per release fee.

Retailers retain approximately 40%-50% of royalties. Every retailer is different and this is based on our agreements we have with the retailer which we unfortunately cannot disclose. After this percentage we factor in the percentage you have with us for you to get your NET label share.

Our Royalty Portal allows you to download your quarterly statements, request payments, store your financial details, calculate your artist royalties, and view quarter to quarter comparisons to track the growth of your record label and its artists. In addition, weekly sales estimates are accessed via the Royalty Portal for the retailers that report them. Access to the Royalty Portal is given to a client via the “Welcome Email”.

The Royalty Portal provides sales estimates from partners that report them. The sales showed are GROSS before our fees, store fees, voided transactions, mechanical withholdings, and any additional processing fees and are only from retailer partners that report the sales. No distribution company is able to provide actual sales data for each and every partner out there on a daily or even weekly basis simply because not all partners provide the information for distribution companies to be able to pass down to you.

Symphonic Distribution uploads sales figures to our Royalty Portal for all record labels and artists 35-45 days after a Quarter ends. If your sales reach the threshold that is listed in the agreement you can request payment and you will receive emails acknowledging your request followed by prompt payment. If your label does not reach that threshold, the amount will carry over to following quarter until you reach the threshold that was agreed upon. The Royalty Portal provides spreadsheet data, weekly sales estimates, revenue summaries, and allows you to calculate artist payouts.

Estimated Royalty Posting & Payment Dates:
Q1: May 10-20 / Q2: August 10-20 / Q3: November 10-20 / Q4: February 10-20

Quarter Schedule:
Q1-Jan-Mar / Q2-Apr-Jun / Q3-Jul-Sept / Q4-Oct-Dec

The reason it takes 35-45 days to pay record labels is because many retailers deliver the royalty statements 30+ days after a quarter thus, we need time to organize the data to appropriately format it for labels to claim. In addition, many retailers do not pay us until 45-60 days after a quarter ends making the royalty payouts slightly delayed at times. Many other distributors deal with the same timeframe and some even take longer!

The Royalty Portal has a specific section dedicated to calculating artist payouts. Through this section you can merge royalties to another artist, set a percentage, and export a Excel report to deliver to artists. We can only provide the ability to help you calculate your reports but cannot pay the artists or remixers for you.

USA based record labels and artists must fill out the W9 Information section located in our distribution agreement. This W9 Information will be used to send you a 1099-MISC form at the end of a calendar year. For record labels and artists based outside of the USA, we do not send a form and these revenues must be tracked and reported by the record label or artist in their respective territory.

In order to redeem payment as an international resident we will need for you to complete a W8-BEN form. A W8-BEN form is a certificate of foreign status of beneficial owner or basically the person that will be receiving funds from the United States. The instructions and details to fill out the W8-BEN IRS form can be found here. The form is pretty straight forward, but the one item that might cause confusion will be Line 6: “US taxpayer identification number”. Many of you are not going to have a US taxpayer ID number because you don’t have a physical presence in the US, are not filing taxes, etc. This US taxpayer identification number is also called a EIN. EIN stands for Employer Identification Number and is your permanent number and can be used for most of your business needs.

If we do not have a W8-BEN on file with a EIN then that means your royalties will be paid minus 5%-30% depending on the tax treaty that the United States has with your country. Unlike other distributors though, we want to be more helpful so that NO royalty is withheld from you at all and we will help guide you through all of the steps necessary to make this as easy as possible.

Getting a EIN is easy and best of all free.

1.Call the IRS directly at 267-941-1099
2.They will ask you questions that will be similar to what this form is asking: Form SS-4
3.Answer all of the questions and when you have your EIN, note it down.

When you have your EIN, you can then fill out the W8-BEN form, sign your form, and send to us for us to note down and report to the IRS that there are no royalties subject to withholding.

There are many rumors about this being something that some stores are doing to make more money and/or the USA just taking more from overseas clients but the truth is, this is the law of the land and has been for quite some time. Any USA based business that is not requesting this from a International client is not abiding by standards and stores such as Beatport are requiring this as it is mandatory.

We can certainly help you in attaining a EIN and filling out your W8-BEN the right away. Once this step is done (typically upon sign up) it doesn’t need to be done again and you will be a compliant and active International based individual / business doing legitimate business with a USA company.

Voided transactions are songs that individuals choose to not buy, return, and/or are fraudulent transactions that were not valid to begin with. Retailers may show these on every statement and they automatically deducted from payments to record label partners and shown with a minus next to the NET to label amount.

There are several reasons for this. One is that your music may not have yet generated any sales in a given quarter and/or ever. The other reason is that we have not yet received the relevant sales report from our partners. The last and most rare reason may be that there is a bug pertaining to your account name through the Royalty Portal. Whatever reason it may be, our accounting department can assist you.

Each and every retailer reports information differently. As a company, we work hard with retailers to ensure that they report all information. Via our royalty portal, we summarize the data and reports to you to better help you and if the information remains missing it is due to the retailer not providing the information you are requesting.

Unfortunately, partners report actual sales to us 35-45 days after a quarter ends and we are only provided with sales estimates for some partners thus, you may see the sale when you receive the quarterly report. Keep in mind, if you are in the month of January and your song sold and/or was purchased by a friend in January, then you won’t see the sale until the Q1 report which is posted in May.

The term “mechanical royalties” initially referred to royalties paid whenever a song was reproduced by a mechanical device (remember that one of a copyright owner’s exclusive rights is the right to authorize the reproduction of their work). The term “mechanical royalties” was applied to the reproduction of songs in music boxes, player pianos rolls, and later, phonograph records. This term is still used, and “mechanical royalties” now refers to royalties paid for the reproduction of songs on CD, DAT, audiocassette, flexi-discs, musical greeting cards, and other devices sold on a “per unit” basis. Stores pay and take care of mechanical royalties on behalf of labels by deducting them from each sale. These deductions are not paid to you or us as a company directly but instead paid out to a Performing Rights Organization. If you are not registered with a specific PRO, money will be held by PRO until claimed by the original songwriter/artist. We also provide Publishing to artists if you wish to claim your royalties from the UK, USA, and other regions. For more information, contact us.

Most of our partners keep 40%-50% of the revenue before paying us and then depending on the country of sale, they deduct additional percentages to collection societies (some listed below). For example, if your material sells in Germany, they take 10% to pay it to the collection society there. If its in UK they take 8% of that sales. It’s different per every territory and we don’t have a breakdown as to how much is taken out because partners do not provide. In the USA they don’t take out additional percentages for mechanical transactions because here in the USA, mechanical transactions don’t work that way…

* PRS – UK/Ireland & Select European
* CELAS – Europe (EMI)
* PEDL (WCM) – Anglo-AM Content sold in Europe
* GEMA – Germany
* APRA – Australia/New Zealand
* SOCAN – Canada
* PAECOL (SONY/ATV) – Anglo-AM Content sold in Europe
* CSI – Canada

If you are an artist, you can register with one or all of the above PROs and register each and every song you have with each PRO. If you are a label, you need permission from that artist in order to register the work and collect publishing. Even then, it’s up to the PRO to recognize your song and appropriately pay it.

If we send money to you via Wire Transfer or Xoom then you will be charged a fee based on the terms of the agreement you signed. We do not charge any other fees unless you use our other services and wish to deduct from your royalties.

Each and every retailer pays out different amounts per sale. Additionally, each territory has different currencies thus, what is paid to us and then paid to you will be different per sale, retailer, and territory. No two amounts will be the same.

Via our Royalty Portal, this is where we list the previous amount(s) you earned if you had not yet made the threshold required for payment. This can include previous revenue and/or voided transactions incurred in a previous quarter from any retailer that listed them. If you did make your threshold of payment, your revenue will roll over until it does.

Unfortunately, you are charged exactly as to what we receive and are charged for by retailers. We cannot divide the fee as we are receiving the same charge thus nobody wins in regards to a transaction being voided due to fraudelent and/or charged back reasons.

Unfortunately, each retailer has their own set pricing. In the cases of Beatport, if you have a release of 10+ tracks and the album price is not $8.99 or $9.99 then we can send in a request to change the price. Ultimately, it is up to each and every retailer to select pricing that suits their retailer and fits for the consumers visiting the website. No label or distributor has control over the pricing on each and every retailer.

iTunes Match allows users to store all their digital music (including songs they’ve imported from CDs) in the cloud. This way, users can access their entire music library wherever they go; their music won’t be tethered to one device or computer.

iTunes will determine which songs in their music collection are available in the iTunes Store; those tracks will automatically be added to the iCloud for them to listen to on any device that supports iTunes.

iTunes will issue payment for every play that takes place through iTunes Match. The per-play rate varies based on subscription revenue, exchange rates, and total number of plays. Pay rates should look similar to streaming services such as Spotify.

This is a question we get quite a bit. Truly, it’s all about the music. People will buy what sounds good to them and you can do Marketing (which we suggest), however, it doesn’t mean that it will help generate sales. If you want to make more money, one thing you can do is to put out quality music, consistently. In addition, to make it in the top 10 of a retailers’ chart, you need to have some funds to invest into a producer that is well known. Doing this will cost money but may result in bigger returns.