Explaining the many details behind downloads and streams can be a bit complex, so we've broken down the following commonly asked questions:
You are paid when your music is digitally downloaded as either a permanent download and/or a conditional (or tethered) download. Conditional downloads will be discussed under Streams (below).
What is a permanent download?
A permanent download is the digital reproduction of a sound recording for permanent and private use. Permanent downloads are offered by online services such as iTunes, Amazon MP3. Some digital services (like iTunes) pay a fixed rate for each permanent download; others derive a pay rate based on their revenues.
How am I paid on permanent downloads?
When your songs, albums or music videos are sold as permanent downloads, you will receive the wholesale price (the money you receive from a sale) at a fixed pay rate. That wholesale price is inclusive of both master and mechanical royalties. If someone wants to own a copy of your sound recording as a permanent download, they must pay two royalties (a master and a mechanical). They must pay the master royalty to the owner of the sound recording – that is whoever owns or controls the master recording. They must pay for the mechanical royalty to the owner of the underlying composition – that is usually the songwriter or his/her publisher.
Why do permanent download rates vary?
The pay rate that you receive on each permanent download may vary with each digital store and by country. Online services reserve the right to sell music and/or music videos at any retail price they choose.
Additionally, you may notice that the payment that you receive for international sales of your music is less than what you receive on domestic sales. Payment earned on international sales is less for various reasons. First, payment on international sales is made in local currency and therefore subject to exchange rate fluctuations when converted to U.S. dollars. Second, local laws may require that before remitting the money to TuneCore, the digital services must deduct sums for applicable local taxes or other tariffs depending on the territory where you distribute your music. Third, the current wholesale price paid to you for international sales of your music may reflect a deduction for publishing royalties as some digital services (including streaming services discussed below) pay those royalties to local copyright right societies and publishers (the “Copyright Deduction”) and then the copyright societies and/or publishers pay out those royalties to the rights holders (even if you are the rights holder and/or control the underlying rights to the composition). The Copyright Deduction may vary per country depending on local laws and customs at the time of payment and are subject to change.
If you are a TuneCore Publishing client, you will receive your international mechanical royalties from international downloads per your publishing statement.
What is a music stream?
A Stream is when someone listens to your song or music video via a streaming music service application but does not own or permanently download the content.
Certain digital services allow a user to listen to music and/or music videos as part of a subscription model (such as Napster), paying a monthly subscription fee for access. Some subscription models allow customers to stream music whenever they want while they are connected to the Internet. Other services, like YouTube, do not require a user to subscribe to listen to music and/or music videos but nonetheless offer on-demand access to users. The ability to listen to any music the user wants at any time is referred to as interactive or on-demand streaming.
Some services also allow subscribers to download music files to their computer or compatible device(s) so long as their subscription is current. This type of limited downloading is typically referred to as a conditional or tethered download. In many ways, it's like your fans joined a service that lets them rent your music. As soon as they stop paying their monthly subscription fee, they will not have access to listen to your music.
Lastly, some services do not allow the user to choose what music they listen to but rather provide playlists for the end-user. These types of services are referred to as non-interactive streaming services. An example of a non-interactive streaming service is Pandora.
How am I paid for streams?
The types of royalties generated on each stream is dependent on the type of stream itself.
Interactive or On-Demand Streams: Each interactive or on-demand stream requires a master, mechanical and public performance royalty to be paid out. Please see the previous section to learn about master and mechanical royalties.
Most interactive or on-demand services pay royalties based on a percentage of their revenue (subscription, advertising or sometimes combination of both). When you are paid for interactive streaming through TuneCore distribution, you are generally only paid on the master. The streaming services pay the mechanical royalty separately, unless you are TuneCore Publishing client, in which case you will receive your mechanical royalties though TuneCore for the streaming of your music on the digital services that you select.
Non-interactive Streams: For each non-interactive streaming, the services pay out public performance royalties as well as royalties to the performance artist on the sound recording through performing rights societies and SoundExchange respectively.
GOOD TO KNOW: We've built our TuneCore Publishing Administration to get songwriters (the person or entity that controls the copyright to the lyrics and melody of the song) all their royalties from sales and use of their songs around the world. To learn more about the additional separate royalties you earn as a Songwriter, see our Publishing Administration Help section.