The Spreadsheet Nobody Built: Why Independent Artists Lose Money on Royalties They've Earned

Music royalties flow from multiple sources, each with its own collection mechanism, reporting timeline, and registration requirement. An independent artist with releases on streaming platforms, who performs live, who has placed songs in film or television, and who has registered with a performing rights organization, has royalties potentially sitting in multiple pools simultaneously.

Most of that money will be collected only if the artist has taken specific affirmative steps to register with the appropriate organizations and to claim it. Money that is not claimed is either redistributed to other rights holders (in the case of black box royalties at the Mechanical Licensing Collective) or simply held indefinitely.

The Royalty Sources an Independent Artist Needs to Track

The primary royalty sources for a typical independent country, Americana, or gospel artist include: mechanical royalties (paid when recordings are streamed or downloaded, collected by the Mechanical Licensing Collective for U.S. digital streaming), performance royalties (paid when music is performed publicly or broadcast, collected by ASCAP, BMI, or SESAC), digital performance royalties (paid when sound recordings are performed on internet radio and satellite radio, collected by SoundExchange), and synchronization licensing fees (paid when music is placed in film, television, or advertising).

Each source requires separate registration, separate identification of the specific recordings and compositions involved, and separate monitoring to ensure that payments match the reported activity.

The MLC and Mechanical Royalties

The Mechanical Licensing Collective, established under the Music Modernization Act, began distributing mechanical royalties for U.S. digital streaming in 2021. By 2022, it had distributed more than $500 million in royalties to registered rights holders.

The critical detail is that registration with the MLC is not automatic: songwriters and publishers must register their songs and their ownership of those songs with the MLC to receive royalties. Songs that are not registered are held in the MLC's pool until claimed or until the redistribution period is triggered. After that period, unclaimed royalties are redistributed to registered rights holders on a market-share basis, effectively transferring the income to whoever is registered even if they did not earn it.

According to MLC documentation on royalty distribution, any songwriter or publisher who had released music before the MLC's January 2021 launch and had not registered should have done so immediately and should verify their registration is complete.

Building the Tracking System

The practical solution for independent artists is a simple spreadsheet that lists all registered works, the organization where each is registered, the most recent royalty statement for each source, and the dates of the next expected statements. This is not sophisticated accounting. It is organized record-keeping that most independent artists never do because nobody has told them they need to.

For artists working with development operations like Mollohan Production Inc., business infrastructure that includes royalty tracking as a basic operational requirement is part of what a serious artist development relationship provides.

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Building the Business Infrastructure Before You Need It

The most common error independent artists make in the business side of their careers is waiting until they have a commercial success before building the infrastructure to support one. The registration with PROs, the publishing administration, the accounting systems, the legal entity for the label, the distribution agreements, the touring documentation: all of these should be in place before the record that requires them arrives.

That preparation is not bureaucratic overhead. It is the condition that allows commercial success to translate into commercial benefit. An artist whose song breaks through without having registered their publishing rights is losing money in real time. An artist whose live performance revenues are not being tracked and documented is building a career without the financial documentation that future business relationships will require.

Operations like Mollohan Production Inc. work with artists on exactly this preparation, not because the business side is more important than the creative side, but because the creative work is wasted if the business infrastructure is not ready to capture its value.

FAQ

What is the Mechanical Licensing Collective? The Mechanical Licensing Collective (MLC) is a non-profit organization that collects and distributes mechanical royalties for U.S. digital streaming of music. It was established under the Music Modernization Act and began operations in January 2021.

How does an independent artist register with ASCAP or BMI? Songwriters can join ASCAP or BMI (but not both) as writer members. Registration as a writer is free for BMI and has a one-time fee for ASCAP. Songs are registered through the organization's online portal with title, writer, and publisher information.

What is SoundExchange? SoundExchange is a non-profit performance rights organization that collects and distributes digital performance royalties for sound recordings played on internet radio, satellite radio (SiriusXM), and streaming non-interactive services. Both the recording artist and the sound recording owner (label) must register separately to receive their respective shares.

What happens to unclaimed royalties at the MLC? Unclaimed royalties at the MLC are held for a period specified in the MLC's governing documents. After that period, unclaimed royalties are redistributed to registered rights holders on a market-share basis, effectively transferring income from unregistered to registered songwriters regardless of who actually earned it.

How should independent artists track their royalties? A basic tracking spreadsheet listing all registered works, the organization where each is registered, and the most recent statement from each source is sufficient for most independent artists. The key discipline is registering all releases with all relevant organizations immediately rather than treating it as an optional step.