How does Buma/Stemra collect and pay out royalties for online music use? What can you do as an author to avoid losing out on your income?
The online music market is difficult to understand and explain. That is why we want to share our knowledge about how you can get your copyrights under control and to enable us to help each other to maximise your earnings. In this guide, we would like to share our knowledge about the processes and cash flows of online streaming music services: from play to pay.
Some of you might not be interested in reading a big introduction about copyrights whilst others might already know a lot about how our licences work. That is why this page doesn't start by going into all the basics. We take you straight to the main subject: our deals and how to get paid for online services as Spotify.
This does not mean the basics are not important. Which is why you can also refresh your knowledge about music rights and royalties later on in this guide. Plus we explain how online licenses work in the Netherlands and in other countries and how your can release your music online. Or you can just click on one of the subjects you are interested in in the table of contents.
Then you should probably start here by reading about these subjects first. Then you can always go back to the main act afterwards.
Our deals and how you get paid for online music use
This map of the world shows the areas covered by our international licences. You can see the countries where we collect royalties directly for you from the different streaming music services.
If a streaming music service isn't listed for a particular country, then our local sister society will collect the royalties for the music use and pay them to us so that we can distribute them to you.
Video on Demand deals
Buma/Stemra has various licences for the use of music in the Netherlands. You will find an overview of our bigger licences for the Netherlands here:
We are licensed with these VOD services:
We will start with the most frequently asked question: how do I get paid for Spotify use? We will take you through the whole process of Spotify. And we will give you some practical examples and tips on how to make sure you don't miss out any income.
Important: this explanation about Spotify also applies to most other international subscription based streaming music services. For example, Apple Music, Deezer, Amazon Music, Napster, Tidal and Qobuz.
Show of the big numbers
Spotify is now available in more and more countries around the world. That means your music can be streamed in all of these countries. Our goal is therefore to collect your royalties from as many countries as possible directly from Spotify, and then to distribute them to you as quickly as possible. But it's easier said than done considering the forest of IT challenges and a maze of laws and regulations.
Spotify sends us a separate report every month with all the streams in each country and for every subscription. It currently does this for 42 countries, with each country having different types of subscriptions such as Free, Premium, Duo, Family, or Student. That means we have to process around 200 reports on billions of streams every month!
We have a match!
The processing of these Spotify reports is done by computer. The system looks for matches with any songs that have been registered by you or our other members. The system also identifies the share that a particular rightsholder has in each work. That way we know exactly how much to invoice for each rightsholder.
A complicated invoice
If we can invoice for a share, then the system will claim the royalties based on the agreed rate. The agreed rate is different for each type of subscription. It is usually calculated in the following way:
The higher amount of either the Spotify use x the agreed rate, or the number of subscriptions x the minimum charge
Say the rate is 15% and the agreed minimum charge is € 1.24 per subscriber per month. For a Spotify turnover of € 90,000 and 11,000 subscribers, the calculation would be as follows: 15% of € 90,000 = € 13,500, and € 1.24 times 11,000 subscriptions = € 13,640. The royalty amount for all the music will therefore be using the minimum charging mechanism as at € 13,640, this is the greater of the two. If 50% of the music in this example is songs composed by Buma/Stemra members, then we will send Spotify an invoice for € 6,820.
After the process of matching and claiming, we send Spotify a CCID. CCID is short for Claim Information & Invoice Detail. It is basically a file with the invoice details for all the claims. A CCID has to be drawn up every month, for every country, and for every type of subscription.
We have to repeat the whole invoicing process for Spotify three times over. Namely: 2, 11, and 17 months after the month of use. Why do we have to do this? Because we want to make sure your earnings from the biggest streaming music service are paid out as quickly as possible. But we can only do that if your work has already been registered. Sometimes, you might not be able to register it within two months. That is why we have two more opportunities to submit a claim. We can make a second claim after eleven months. And finally, the last claim has to be made after seventeen months. This means we make it possible for everyone to get paid without having to wait too long.
At least, that is the way it works now. As we know, the situation can change very quickly in the world today, so the quicker you register your work the better.
When processing these retrospective claims for works we need to ensure the earnings outweigh the cost of submitting claims. This is why for Spotify we currently issue three back-claims over an 17 month period, whilst for services with less royalties there may be one window to submit retrospective claims.
What is a stream on Spotify worth?
That is a question everybody wants to know the answer to. Unfortunately, there is no fixed value of a stream on Spotify or for any other streaming service.
The streaming value differs per country, per period, and per type of subscription. Our settlement statements show the average streaming values based on all the proceeds from a particular work.
This figure gives a rough indication of the value per stream over a period across all usage types and will vary each sales period, and we should all be mindful of this if using this data for further analysis.
Buma/Stemra representation of the author is the key basis on which a claim is made. When we submit a claim for a composer or songwriter, we also submit a claim for the publishers' share. In other countries, this also includes the sub-publishers' share. In that case, we will pay the royalties on to the main publisher. It can also happen the other way round.
We do not collect royalties for a publisher who is a member of Buma/Stemra if we do not represent the author as well. The collective management organisation of the author will then have to collect the publishers' share for our publisher. They will pay the money to us, and we will pay it out via the International distributions.
When does Buma/Stemra pay out distributions for Spotify?
Say a track is streamed on 1 January. Then the royalties will be paid to you 9 months later on 22 September. The diagram below shows the steps we have to go through before we can pay out the royalties to you.
Say a track is streamed on 1 January. Then the royalties will be paid to you 9 months later in September. The diagram above shows the steps we have to go through before we can pay out the royalties to you. We will now take a look at these steps in more detail.
Okay, so your track was streamed on January 1st. We would like to keep this page timeless. That is why we do not mention a year in this example.
Spotify provides usage reporting
Every month, Spotify sends us a report with all the streams for each country and each type of subscription 15 days after the end of each month.
We then wait a month before we start matching the data to give you more time to register your works so we can claim on your behalf.
The process of matching and invoicing takes around two weeks. On April 1st, our invoices will go via the digital highway to Spotify.
Our invoices have a payment period of 30 days, meaning it will take until 1 May before the royalties are paid into our bank account.
So, why does it take so long before we pay the royalties into your bank account? If you take a closer look, you will see there are only 2.5 months between the time when Spotify pays us and the time we pay you. We need this period to make sure all the works are registered properly. We always process the works with the most value first to enable us to pay out as much money as possible in one go at the earliest opportunity.
Finally, the distribution process will start on 15 July. This takes around 3 weeks. We have to check the royalty split for each work again to make sure we pay the money to the right people. This is because something might have changed between the time when we submitted the invoice and the time when we can pay out the money. For example, if the status of a work changes from conflict to resolved. We also need a couple of weeks to process the distribution files and check the amounts that are being paid out.
Payout to you
The distribution of online royalties takes place once every quarter. That means you will get the royalties for three months of usage deposited in your bank account. In this example, therefore, you not only get paid the royalties for the streaming of your track on 1 January. You will get the royalties for all the streams of your songs in the period from December to February paid out to you in September.
Is it possible for my work not to generate a match?
This is the perfect time to emphasise the importance of metadata. For all you non-techies: metadata is the descriptive data that is sent with every track. This includes data about the title, artist, composer, songwriter, and unique codes such as the ISRC (International Standard Recording Code) and the ISWC (International Standard Musical Work Code).
Sometimes a registered work does not generate a match. That is often because of bad metadata. It only takes a typing error or the addition of something like “radio edit” to cause a mismatch.
That is why it is important to make sure that every track released on Spotify is registered with us in the right way. Particular attention should be given to the title, the composer, and the performing artist. Especially the spelling and punctuation.
Publishers can also include the ISRC so it can be used for matching.
And then there was a conflict…
By registering your work properly with good metadata, we can usually pay out your royalties fairly quickly. Nonetheless, there are still a couple of issues that can cause problems. Such as a conflict, for example.
A conflict can arise for a number of reasons such as two or more claims for the same shares or if authors and/or publishers register different shares for the same work. As we do not know which registration is the right one, this leads to a conflict. This type of conflict can be prevented in two ways:
- 1A conflict between Buma/Stemra members
We submit an invoice on behalf of our members and Spotify pays out on the basis of our claim. The relevant amount is paid out as soon as the conflict is resolved.
- 2A conflict between a Buma/Stemra member and an external author or publisher
In that case, we will not submit a claim because we might claim too much or too little. It is therefore important for you to resolve conflicts as quickly as possible so that you can get paid. In this case, the same deadlines will apply as for the registration of your works. We will keep you informed about this via our newsletter.
Your work has a status
In MijnBumaStemra, you can see the status of every work: provisional share or definitive share. A provisional share (also known as Status 2) means the registration has not been checked yet.
We will only check the work if the use of your work has been verified and the work has value across any usage types, online and/or offline.
Once the work has been verified it will then get a definitive share status (Status 1), which means we will pay out a distribution to you.
How do we pay out distributions on works that are not claimed?
At the end of the process, there is usually some unclaimed money left over at Spotify. This can include shares of songs or whole works that have not been claimed by anybody. We call this money unclaimed or residual royalties.
Each party Spotify has a licence with will get a proportion of the unclaimed residuals based on their market share. This distribution is made per country and per type of subscription.
By paying out the unclaimed residuals, Spotify eventually pays out 100% of all the claimable royalties. We distribute these unclaimed residuals to everyone who has already received income in the relevant month pro rata their share in that settlement.
Say you have received € 500 in a particular month, and this is 0.1% of the total amount of the settlement in that month. If the total amount of unclaimed residuals in that month is € 40,000, then you will get an additional supplement of € 40 (0.1 x 40,000 = 40).
Spotify for Artists dashboard
A lot of aggregators provide insight into how often your music is streamed. Spotify also has a detailed dashboard called Spotify for Artists. This gives you all sorts of interesting data about your music. And of course you can always compare this data with the details in our settlement statements.
In fact, we encourage you to do this. However, there are four things you need to take into account so you don't end up comparing apples with pears:
- 1Spotify only reports streams in countries where our licence is active. Streams in other countries will therefore not be included in the settlement statements for Online and Online International distributions. You will still get paid for these streams via the International distributions, but we cannot show the number of streams because our sister societies generally do not send this information to us.
- 2Spotify does not report any streams during a ‘free trial’ period to us. However, these streams might also be included in the Spotify dashboard data.
- 3Make sure you select the right period using the display filter. The Spotify dashboard shows real-time data, while our statements only show details of the streams that the royalties have been paid out for. You therefore have to set the display period of the dashboard to the same period covered by our settlement statement.
Does that mean all the details should then be exactly the same? Well, yes and no. The figures will never be exactly the same because of the above factors. We therefore recommend using Spotify for Artists mainly as a tool for marketing analytics. On the other hand, Spotify’s dashboard will help you to identify if there are any major discrepancies in our settlement statements.
Say Spotify for Artists shows you had 30 million streams in a certain period in Europe, where our direct licensing agreement is operative throughout, but you only received royalties for 50,000 streams from us for that period. That means something went wrong!
You should report any major discrepancies like this to us immediately via a Service Request. We will then try to find out what went wrong and if we can still submit a claim for the rest of the streams.
From the biggest streaming music service Spotify, it is a small leap to YouTube. We get a lot of questions about YouTube because it is used so often. The way royalties are paid out is basically the same as with Spotify.
At least, it is if a record label or aggregator releases your music online. Or if it is released by somebody who is – in the words of YouTube - a “Content ID Partner”. An important requirement is that at least 90% of the video has to consist of music, and it has to be listed as a "music video". The option for advertisements to be shown also has to be selected.
If your video meets all these requirements, then we will get a report with the details of the recordings used and we can submit a claim for you. We will then get a share of the advertising income.
This means claims are not submitted per video, but per recording used. If a recording is used in more than one video, then all the streams will be added together and we have to submit a single claim for all the videos in which your recording was found by YouTube. YouTube searches for a recording based on references for that recording that have been uploaded by the record label, aggregator or Content ID Partner.
We can submit claims for a growing number of countries and territories. At this point in time, we can submit claims for 198 countries.
Other videos on YouTube
YouTube calls this category ‘General Entertainment’. This includes all videos that do not fit the definition of a music video as explained above. It ranges from cat videos without music, to videos with music that cannot be recognised.
We receive a lower fee for these types of videos. We cannot pay out all of these royalties to the makers of the music as we do not receive the respective data. Or if the video is of such poor quality that we are unable to make a proper match.We therefore add the royalties for General Entertainment to the report for the music we can match.
Say you have received € 500 for music videos on YouTube in a particular month, and this is 0.1% of the total amount of the settlement in that month. And in that month we received € 40,000 in royalties for General Entertainment. Then you will get an additional supplement of € 40 (0.1 x 40,000 = 40).
Finally, YouTube also has two subscription services. YouTube Music Premium is the streaming music service of YouTube, which is similar to Spotify or Apple Music. We process claims for this service in the same way as Spotify.
The other subscription service is YouTube Premium. This gives you access to the ordinary YouTube platform, but then without adverts and the ability to watch videos offline as well. This subscription also includes YouTube Music Premium. The claims for the streams of ad-free videos are processed in the same way as the streams with adverts. Only in this case, we get a percentage of the subscription income instead of a percentage of the advertising income.
Yes, you can! We have deals on using music with the largest social media platforms. We go through them one by one.
Royalty's voor Facebook en Instagram
Facebook and Instagram are owned by the same company, and we have reached a deal for both platforms covering a potential 168 countries subject to Facebook launching their music products in the territories. You can therefore expect to receive royalties if your music is played on these platforms anywhere in Europe and the many other countries outside of Europe where our agreement is operative.
The claims are calculated based on the number of views a video with your music has. This can range from wedding videos with your music in the background, to a snippet in an Instagram story.
For the use of your music that fall outside the scope of our current licence, the royalties are collected via our sister societies and paid out in our International distributions.
Important! Our licence covers the public release of music in videos. Companies that want to use music have to get additional permission first in connection with the synchronisation rights, also known as the ‘sync’. Sync permission does not have to be obtained for personal use. And the same also applies for TikTok.
Collecting royalties for TikTok
In late 2020, we signed a deal with TikTok for 187 countries around the world. We collect and pay out the royalties based on the number of creations of videos with works of Buma/Stemra members. A song that is used in 10,000 different videos is therefore likely to generate higher royalties than a song that is only used in 100 videos.
Other social platforms
We are currently negotiating with various other social platforms about music licences. We will update this page as soon as we have more news, as well as communicating any important developments via our newsletter.
Video on demand (VOD) works in a completely different way than music streaming services. With VOD, we only invoice for the streams and purchases of VOD platform users based in the Netherlands. On the other hand, we are the only party in the Netherlands that has a licence for the copyrights on music on services like Netflix.
That means we also collect the royalties for music of internationally located authors that is used by VOD platforms. We then pay the money on to the collective rights management organisation that the authors are a member of for them to distribute accordingly.It also works the other way around. If your music is used on Netflix in a foreign country, the local collective rights management organisation will collect your royalties in that country. They will pay the money to us, and we will pay it out via the International distributions.
How we invoice
We get a usage report each quarter with all the relevant applicable revenues, stream volumes and/or purchased rentals and permanent downloads from services such as Netflix, Amazon, Disney+, Videoland, iTunes and Pathé Thuis.
We then send an invoice to each company for all the reported usage based on the agreed rate. Afterwards, we start processing the usage reports so we can pay out the distributions.
All musical works are listed in a cue sheet
The usage reports list the titles of the series and films where music has been used, and not the names of the songs. Separate cue sheets are drawn up for this.
A cue sheet is an international reporting format that details all the music that has been used in a film or series. These cue sheets are entered into our database so that we can match them with the quarterly usage reports of the VOD services. That way we know exactly which songs we need to collect the royalties for.
Most of the cue sheets come from CISNET, which is a portal used by collective rights management organisations for the sharing of cue sheets. The remaining cue sheets are sourced via both the producers of the films/series and the VOD services.
It’s all about the money
The amount of the royalties is calculated in the same way as for Spotify: the higher amount of either Netflix use x agreed rate, or the number of subscriptions x minimum charge. However, the agreed rate and minimum charge are lower for VOD services because the music is only used in a part of a film/series.
Just like Spotify, there is no fixed stream value for Netflix. Instead, VOD royalty distributions are calculated based on the value per second. In other words, the total royalty amount is divided by the number of seconds that the music is used on the platform. That way we can calculate the value per second of each piece of music. That figure is then multiplied by the number of seconds that your song was used and the number of times that the film or series was streamed.
That way we know exactly how much to pay out to you. This payment is calculated as follows: value per second x number seconds music use x number of views
Say we send Netflix a quarterly invoice for € 10,000. In that quarter, 50,000 hours of music was used. That is 180 million seconds. A second of music will therefore be worth around € 0.00006. If a piece of music is used for ninety seconds in a film that is viewed 40,000 times, then you will get € 200 paid out.
Please note: second values are not actually rounded up. In other words, the figure would be closer to € 0.0000555555 and not € 0,00006. But we rounded it up to make the example easier to read.
We are now collecting royalties in more and more countries around the world. Although, as we mentioned earlier, it sounds a lot easier than it is in practice. In practice, we cannot automatically offer a licence for every country and collect the royalties directly from the streaming music service.
We can collect your royalties in all the countries of Europe and are collecting royalties directly in more and more countries outside of Europe as well. For some territories, we do that via so-called licensing hubs. Licensing hubs are collective management organisations that collect royalties via a joint licence. We will do this if that is necessary under local laws or if there are significant legal challenges or risks attached to a direct licence in a particular area.
If we don't have a direct deal for a particular area, then the local sister society will collect the royalties for your music use and pay them to us so that we can distribute them to you. We mainly use licensing hubs for smaller and/or local streaming music services outside of the Netherlands, or in countries where it is against the law to conclude direct deals: the USA, Canada, South Korea, China, Australia, and Japan are the most important countries where we have to use licensing hubs.
We will now look at the two most important regions for Online: the USA and Asia.
The United States is still the biggest music market in the world. No wonder then that we get a lot of questions about how we make sure our members get what they are entitled to for the use of their music in the USA. That is why we are now going to take a closer look at exactly how licensing works in the USA. Let’s Go U-S-A!
Performance rights in America
The USA does not have a single organisation like Buma/Stemra that manages all the copyrights on music. The performance rights and mechanical rights are regulated separately. There are no less than 3 Performance Rights Organizations (PRO’s) administering only performance rights (i.e. not mechanical rights): BMI, ASCAP, and SESAC. We work together with all three organisations. More information about BMI, ASCAP en SESAC here.
If your music is used online in the USA, then BMI, ASCAP, or SESAC will collect the performance right royalties for your music where it is used and pay them to us. We will them pay them out to you via the International distributions.
Mechanical rights in the USA
As of 2021, the mechanical rights for a lot of online music use in the USA are managed by the Mechanical Licensing Collective (MLC). The MLC claims the mechanical royalties for the works that are registered in their database. That is why we are working together with the MLC to make sure as much of our repertoire as possible is registered in their database.
To start off with, we have focused on the works that have not been sub-published in the USA. The practice is, namely, that the sub-publishers collect all the mechanical rights in the USA. We have discussed the situation with our Council of Members, but for the time being we will follow the existing practice. If your works have been sub-published in the USA, then we recommend that you get in touch with your publisher.
We will continue to do our best to make sure as much repertoire as possible is registered with the MLC. Unfortunately, we cannot guarantee that all the works we represent will actually be registered in the database of the MLC. A lot of manual checks need to be carried out on both our side and by the MLC. Sometimes a choice has to be made about which works are going to be checked. Naturally we will do our utmost to make sure as much repertoire as possible is registered with the MLC.If your songs are not registered in the MLC database yet, that does not automatically mean you will lose out on your royalties; the MLC pays out monthly royalty settlements to Stemra, also for usage in earlier periods. They will do this for usages up to 3 years in the past. Would you like to find out if your works are registered with the MLC? You can search their database, which is accessible to everyone.
YouTube and Facebook are exceptions
One exception to this rule is YouTube. We work together with the company Muserk, which claims the YouTube mechanical rights in the USA on our behalf. You might therefore see the name Muserk listed as one of the claiming parties under your video.
We collect the mechanical rights for usages on Facebook in the USA via Harry Fox Agency (HFA).
The online market in Asia is growing fast, but it has always been a very difficult market to licence. At the end of 2020, we were therefore pleased to announce our partnership with APRA AMCOS, the Australian copyrights management organisation.
This partnership will now enable us to collect your royalties for online use across a large part of Asia, including India. We will be doing this together with the 12 members of the so-called ‘Pan Asian Multi-Territory Licensing (PAL) hub’. This will enable us to collect your royalties from popular online streaming music services much faster in this region.
However, this method of direct collection is not yet allowed in South Korea and China. In these countries, the collection of royalties will still have to go via our sister societies.
The PAL deal applies for the following countries*:
* For a number of these countries, we do have a direct license with YouTube, Facebook and Tiktok. The compensation for these countries will then not be through the PAL deal.
This is what we like to do the most, but we realise that not everyone wants to be a copyright specialist and work for Buma/Stemra. If you are already up to date with the basics of rights and licences, you can skip this part if you want to and go straight to our practical tips. You can always come back and read this part later on. Or you can send it to your manager.
Let us take you through the basics. An online streaming music service involves two types of rights under Dutch law:
- copyrights within the lyrics and composition, and
- neighbouring rights on the recording (sometimes referred to as Master rights).
Copyrights are the rights held by the composer and the songwriter. They are often represented by a publisher. Neighbouring rights are the rights held by the performing artists and the recording label.
Anyone who wants to use a musical recording has to get permission for both types of rights.
Our favourite example
A lot of music released by Marco Borsato is written by John Ewbank. This means he has the copyrights on the songs. Because Marco Borsato is the performing artist, he has the neighbouring rights on the songs.
John Ewbank is a member of Buma/Stemra and gets his online royalties paid to him via Buma/Stemra. Marco Borsato is a member of Sena and gets his royalties via Sena or via his record label.
Online streaming music services get permission for the use of music through licences. If the streaming music service is only active in the Netherlands, then this process is fairly straightforward.
Buma/Stemra will offer them a licence for virtually all copyrights within the musical work. The licences cover the songs of all our own authors and publishers, and those of all our partner copyright management organisations (sometimes referred to as ‘Sister Societies’) around the world.
As a member of Buma/Stemra, all your songs will be covered by these licences. This means we give the music users permission to use your music on your behalf, and of course we collect the royalties for that use afterwards.
Are you not a member of Buma/Stemra yet?
Online licence on behalf of Buma and Stemra
Do you know what the difference is between Buma and Stemra? Buma collects royalties for the public performance of music, also known as the performance rights. Stemra collects royalties for the reproduction rights, in other words the making copies, also known as the mechanical rights.
Both rights fall under the scope of copyright law and both rights play a role in the online use of music: the performance and the copying of music.
We therefore offer a combined licence on behalf of both Buma and Stemra. The income is then paid out to the members of Buma and Stemra on the basis of a fixed distribution key or royalty split.
Split between performance rights and mechanical rights
In the case of streaming, the emphasis is on the performance: making it possible for people to listen to music. That is why we allocate 75% of the income to the performance rights and 25% to the mechanical rights.
In the case of downloading, the main emphasis is on the saving of copies. In that case, the royalty split will be the exact opposite: 25% performance rights and 75% mechanical rights.This royalty split can vary per type of use and per country. You can find more details on the website of CISAC:
Neighbouring rights via Sena or NVPI
To get a licence for the neighbouring rights, you need to go to the collective neighbouring rights management organisation Sena. Sena collects the royalties for the non-interactive (or linear) online use of music. For example, through an online radio station.
On-demand streaming music services and other forms of interactive music users can get more information on the necessary licences for the neighbouring rights from the NVPI, the industry association of recording labels.
Unfortunately, there is not a single international licence for international music services that covers all the copyrights on music in all the different countries. Services like Spotify therefore have to get licences from lots of different organisations, including Buma/Stemra. We invoice these services for the worldwide use of the tracks of our members whenever we can. This means you will get your royalties paid out quicker, in a more transparent way, and with lower administrative charges. We do this for all the major international streaming music services. But only if the earnings outweigh the cost of submitting claims, because it is a fairly complicated process.
Overview: how we collect and pay out your royalties
Are you still reading? Then here is a summary of the basic rules:
In the Netherlands
We invoice all the major streaming music services, but also the smaller online radio stations, for the use of your music and every other type of service in between. We pay out your royalties via the Online settlement.
We collect your royalties directly from all the international streaming music services. We pay these royalties out to you via the Online International distributions.
We are increasingly able to claim your royalties directly from the biggest streaming music services that are also active in the Netherlands. For some countries, we (partly) have to do that via a licensing hub or partner organisation. These royalties are also paid out via the Online International distributions.
Okay, so now you understand how copyrights work and how our licences work. However, we also get a lot of questions about other ways of earning money with your music online.
We don't pretend to be the specialists in this area, but we can tell you what we do know. Let's start at the beginning.
It might not be the biggest, but – even if we say so ourselves (…) - it is still the most important revenue stream: the money you get from copyright royalties via Buma/Stemra.
Of course, you have to be a member first and you have to register all your musical works with us as well. What happens if you don't? Then you will lose out on around 13-15% of your potential earnings.
Instead, the streaming music service will keep this money and then divide it up proportionately amongst all the licensors after around 18 months. That means Buma/Stemra will eventually get some of this money.
This unclaimed money will then be paid out to our members as a supplement on top of the Online distributions.
Every month, we get multiple data files from streaming music services with the details of all the millions of tracks that have been streamed in each country.
That means we get hundreds of files with billions of streams. Each file then has to be matched against our database of registered songs. We will therefore automatically know if we represent a composer or publisher of a song and what their share in the work is. We then submit a claim for this share based on the agreed rate.Finally, we send an invoice for our claims to the streaming music service.
That sounds pretty tough and it is. Furthermore, we can only claim your royalties if you register your work on time. If we don't have your song in our database, then we can't submit a claim for it.
Your royalties will then stay with the streaming music service because the work has not been claimed. It is possible for us to submit a so-called ‘back claim’ if you register your work later on. But you will often have to wait 2 years before it gets processed.
If you don't register your work on time to make a back claim, then you really will lose out. And you won't get any royalties at all.
You have recorded your track and are ready to release it. Naturally you want to make it available on all the major music platforms, including Spotify. You can do this in two ways:
- Your recording label arranges the online release for you
- Or you can use an online music distributor – a so-called ‘aggregator ‘ – to arrange the distribution on Spotify
For reasons of quality, you cannot upload your own music directly to Spotify in the same way as you can with YouTube and SoundCloud. That is why Spotify works with aggregators who can offer your music in the right way to the selected music platforms.
This is handy for DIY artists (self-administered artists) who want to release their music but who haven't got a record label. It is also a good idea to use aggregators for the release of music on YouTube and SoundCloud as well, because you usually don't get any royalties if you upload the tracks yourself.
Below is a list of aggregators we know. Because we often see them in our work. Or because we've heard good stories from our members about it.
These are the aggregators we know:
Disclaimer: We do not work with aggregators ourselves, but our members occasionally tell us about new services. Our legal advisers have told us we have to say that no rights can be derived from this overview. So now you know.
And if you have had good experiences with an aggregator, then let us know. Send us the details, so we can update our list. Thanks!
An aggregator is not only useful if you want to release your music on Spotify and similar services. It will also generate an important revenue stream: the royalties for the recording rights, also referred to as the master rights.
The aggregator will collect the royalties for these rights and tell you when and where your music has been streamed. These royalties will be saved until the distribution threshold has been reached. Sometimes you can have them paid out whenever you want.
Some aggregators will keep a percentage of the royalties that they have collected as a commission. Other aggregators will ask for a fixed amount per year.
Please note: do you have a share of the master rights on the recording of a track? Then you will have to share the royalties with all the other rightsholders.
What happens if you have signed a deal with a record label? Whether or not you get royalties, and if so, how much, for neighbouring rights from interactive streaming will depend on the deal.
These types of royalties are often set-off against any money the record label has invested in you. Or against any advance that it has paid to you. You will find the exact arrangements in your recording contract.
We have provided this information about collecting royalties for recording rights via aggregators and record labels in order to give you a more complete picture. And so you know what the differences are between royalties from recording rights and royalties from copyrights.
But, as we pointed out earlier, this is not really our area of expertise. You should therefore get in touch with an expert for more information or advice.
To wrap-up this section, we will briefly summarise what the different revenue flows are, and how big they are. This information is based our own experience. And what we know from international sources, such as the Digital Dollar: Song Royalties Guide.
A Premium subscription costs €9.99 per month. After deduction of 21% VAT in the Netherlands, that leaves €8.26. This amount will be divided as follows:
- € 2.48 to € 2.89 for the streaming music service (30-35%)
- €4.13 to €4.54 for record labels (50-55%)
- € 1.07 to € 1.24 for copyrights (13-15%)
Look ahead to the future
We have almost come to the end of this page. We would like to finish by taking a look ahead to the future. Because there are a number of important developments that will have an impact on the world of music copyrights. And thus on your income.
In this last section, we will discuss the so-called value ‘gap’ and the new laws that are supposed to get rid of it.
A lot of music on major international platforms is used in content that has been made by the users. In other words, user-generated content. Until recently, these platforms did not have to pay for the use of user-generated content.Sometimes they paid a small amount of royalties, but not enough compared to the value of the content. They were able to do this because it was not clear if the platforms were responsible for this content. This led to the creation of the value 'gap’: the gap between the actual value of the content and the amount that is paid for it.
As of 7 June 2021, the situation has changed. This is because a new European Directive on copyright and related rights in the digital single market has been introduced that is supposed to get rid of value gap. The Directive clearly states that the makers have a right to receive “appropriate and proportionate remuneration” for the use of their works.
The exact details can be found in Article 18 of the Directive. It is therefore a right that is protected under the law. And we want to make sure that happens in practice.A lot of attention in the media was focused on Article 17, which makes it possible for this type of content to be blocked. To be honest, we were quite surprised by the concerns about this. We have never blocked any content in the past. On the other hand, however, platforms have occasionally blocked access to music, if they were unable to reach a deal with the makers.
The new Directive only supports us in what we were already doing. We will therefore continue to work for better royalties and conditions for composers, lyricists, and publishers.
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