I am based in Singapore so this article is geared towards the Singaporean musician and the article has been started in Sep 2015. However it is applicable for any DIY musician anywhere in the world. There is a lot of information about this topic online and after reading loads on google, asking questions to Compass, CD Baby, Tunecore and Believe Digital I think I have found a strategy for my new album.
The first thing you need to understand is what is a performance royalty and who can help you collect it. To put it in simple terms, anytime you perform your song at a venue, a royalty is owed to you. Similarly if you play a cover song, a royalty is owed to the owner of the cover song. Venues are supposed to pay an annual royalty fee to a Performing Rights Organization (P.R.O) to help the respective songwriters collect their royalties. Although please take note not every venue, event or festival pays these fees. So be careful not to upset the people who have hired you to do a show. I suggest you ask the venue if they are paying royalty licenses to the local PRO. If they are, then you can go to the PRO and claim to them you have performed at the venue. If they aren't, they most probably don't want to and i wouldn't advise stepping on anybody's toes to get a few bucks.
Your local P.R.O can help you to collect these royalties. The local one in Singapore is Compass and it's free to sign up your songs with them.
To find out who is the local performing rights organization in your country check out this article HERE
Mechanical Royalties (aka Publishing and Reproduction Royalties)
Next you need to understand what is a mechanical royalty and who can help you collect it. My understanding is every time your song is streamed, played on radio or downloaded, you can earn a mechanical royalty. Also if your music is released on a compilation, you can receive a royalty for that. A publishing administrator can help you to collect these royalties. Compass expects exclusivity when it comes to publisher rights. Meaning if you assign your reproduction rights to them, you can't sign up with anyone else for your publishing rights.
However before you sign up with a publishing administrator make sure you know what rights you are assigning over to your publishing administrator. HERE is a really good article on what factors to take into consideration when choosing a publisher:
HERE is a great article about ISRC codes and why you need it
Youtube royalties can be collected in 2 ways, by yourself or by a third party digital distributor like CD baby or Tunecore (both companies take cuts but i believe tunecore takes a lesser cut). To setup a way collecting your youtube royalties by yourself you need to connect your youtube account with an adsense account. You have to setup an adsense acocunt if you don't have one already.
To setup your own youtube adsense account visit this link HERE and do take note it takes a few days to set up the account
If you have multiple youtube channels, you can connect all of them to one Adsense account. HERE is a video explaining how to do it.
I've been reading youtube royalties are pretty bad. For 1 million hits songwriters claim they only get USD $40. I've heard a friend from japan who has a million hits is getting USD $200 / mth. I also read that some companies that stream 1 million hits can get 1000 pounds. The information is all very inconsistent. If i make a million hit video i'll let you know what the real numbers are!
There is also a thing with youtube where you can register your songs with them through youtube's Content ID program. I tried to register with them last year but when i tried recently, i just got a message saying my registration was still pending approval. I feel Content ID doesn't work well in Singapore at the time of writing this article.
Other Digital Royalties
Lastly there are digital royalties from non interactive webcasters (service that doesn't let you pick and choose what you want to listen to like pandora), digital and cable tv, and satellite radio services (SiriusXM) which SoundExchange can help you collect royalties for. Check out how SoundExchange works HERE.
Finally how do you digest and process all this data. Thankfully there is a fantastic article that explains all of the above and has been inspirational for me making the decisions i'm about to make to release Mantravine's new album Anicca. Checkout Ari's post on music publishing HERE.
Chosen Strategy for Mantravine's album Anicca
1. Sign up for distribution with CD Baby (69 USD for distribution + UPC album code)
2. Sign up for publishing and sync licensing with Tunecore (75 USD for administering international publishing rights)
3. Register my music with Compass (Free)
4. Register my music with SoundExchange
5. Connect all my youtube accounts to my existing adsense account (free)
This strategy is not necessarily going to work for you. I suggest you should do your own research and figure out what's best for your needs.
If you are curious to checkout the new mantravine chillout album it will be available in October on all major digital platforms like iTunes, Deezer etc and at http://www.mantravine.com. World Chillout Music made with love from the Heartbeat of the Universe. This album features 7 musicians from Asia, Africa, Europe & Latin America playing instruments like Trombone, Guitar, Flute, Lithophone, EWI 5000, Vocals, Trumpet in multiple genres
Update 15 November 2016
1. Singing up with CD Baby has been fairly satisfying. I've only made $4 since i put it online but there are a number of transactions occurring with my music around the world. Below is a screenshot of my sales progress
2. Signing up for publishing with Tunecore has been unsatisfying. They aren't tracking my publishing royalties as well as i think that they should be capable of doing. In fact they only seem to be tracking one song and definitely don't think it's in it's entirety. After sending quite a few emails and getting so many rubbish replies I finally called them last night and concluded there seems to be a lack of interest in doing the work to sync distribution and publishing royalty. There may also be some technical complications that i'm not aware of but it was never explained to me.
a) can my publisher (tunecore) track the relevant publishing royalty attributed to the sales of my distributor (cdbaby)
Answer : No
b) can i submit sales information from my distributor to sync the relevant publishing royalties with my publisher so as to track this income
Answer : No
c) new question that i asked on the phone. there is a company called symphonicdistribution that does distribution and i believe is using tunecore for publishing services. i asked if distributing with them allowed for proper tracking of relevant publishing royalty since they are using tunecore services.
Answer : No. Tunecore cannot sync any publishing royalty with any other distribution company.
I've put another of my mantravine album's for publishing and distribution with tunecore just to see how it does. keep you posted on the progress of this.
3. Registering with compass has been interesting. My first check turned out to be SGD $545 which involves a process of submitting paperwork of shows played at different venues. I've learned that there is a careful balancing act that needs to be made between venues and yourself as artist. Basically venues are supposed to pay compass an annual music licensing fee and part of that fee is supposed to go to artists. However some venues don't like paying this fee to Compass so if you make a claim and Compass asks the venue for money, the venue theoretically could find out you asked for compass royalties so be careful not to step on the wrong toes of venues who support you. Honest open discussions with venues is a good step forward.
4. i don't think i completed this yet.
5. youtube's payment system is rubbish due to the revenue split. i've not seen a dime.
6. there is a new player on the market that does distribution and publishing. Symphonic distribution. They seem to be the best player in the market for my personal needs. Great distribution, excellent price and apparently their publishing is built off of tunecore but don't separate distributor and publisher if you can do both under the same roof. Turns out that's a failed strategy.
Update April 2020
I believe i've been with tunecore for 5 years now and I made $1.98 in publishing off my first 2 Mantravine albums Dream of Dragons & Anicca. At this rate my 75 USD investment will get paid back in ($75 / $2) * 5 yrs = 187.5 years. I'm not trying to imply that Tunecore hasn't done a good job because to be honest maybe my album wasn't good enough at generating revenue.
I've terminated my agreement with Tunecore and I will be trying Songtrust as my new publisher. After some research they seem to be the very well established for publishing in terms of their network.
Sign up fee is USD $100. I have a referral code so you can sign up for $10 less and i will get a $10 credit. Everyone wins. Sign up using this REFERRAL CODE HERE