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How to keep on top of royalties
Posted By : Laura Holness
|
Posted Date : May 20th, 2019
Let's face it: everyone wants to get paid. The music industry has always been a bit of tricky one to navigate when it comes to money, and when you add new technologies like streaming into the mix - it's not getting any simpler. We've worked with enough labels and artists to understand where the problems in processing royalties arise, and as you can imagine, we've got a solution to make your life easier: Royalty Worx.

The world of royalties is full of intricacies, potential pitfalls and a LOT of data; we sat down with our Senior Operations & Content Manager, Connor Devine, to better understand the difficulties that labels and artists could face in accounting royalties, and how Label Worx might be able to help:

Let's start with basics - what exactly are royalties? How can a label or artist generate them?


In the music industry, 'royalties' is the term for any money generated by the exploitation of intellectual property (i.e: your music). The number of ways by which you can generate royalties is pretty much endless - it just depends on how creative you can be with your label operations. There are however the tried and tested revenue streams such as digital downloads, streams,YouTube monetisation, neighbouring rights, sync licensing, merchandise and vinyl / CD sales - the list goes on.

With download sales falling, labels and artists need to diversify and exploit as many different revenue sources as possible to survive. As you can imagine, with royalties coming in from so many potential revenue streams, generating statements has never before been such a monumental task for labels - in fact, some labels have full departments just to handle this mammoth challenge.

Plus, with many independant artists working multiple jobs just to pay the bills, it's paramount that labels pay artists what's due and that artists are fairly compensated for their work.

Ok, so that's definitely something important that needs to be done properly. Can labels do this themselves? Is it difficult?

Labels can do this themselves, in fact many labels that move over to use the Royalty Worx system have been doing this themselves for year. However, when working from a spreadsheet with so many different revenue streams, there is so much room for error - one wrong formula can have snowball effect and end up in huge over or under-payment which can potentially bankrupt a label, or even cause legal issues with artists.

Something which many won't consider is that the label statements themselves are becoming increasingly bigger; with potentially millions of lines of streaming royalties, it is getting harder and harder to do manually, sometimes you can't even open streaming statements in Excel and you need an expert data processor just to handle the data.

And that's just the start of it, when you start to consider working out how to split release sales, currency conversions and expense deductions... Doing this manually leaves so much room for error and depending on the size of the label, would require days of checking just to have any confidence the statements are remotely correct.

Why should a label use Royalty Worx? How does it help?

There are so many reasons to use Royalty Worx in general and the main benefits for each label will depend on their specific challenges. That said, I believe there are a few key points which apply across the board:

Date consolidation - it might sound ridiculous, but some of the spreadsheets we see contain so much revenue information that they won't even open in excel; importing this data into our system and viewing the information online through our database, in one place provides a huge advantage.

We run through the Cloud - so you don't have to download any software or connect through a VPN, as long as you have an internet connection and a browser, your label's royalty operations are never far away.

Currency Conversions - your music is sold and played all over the world, definitely something which could get confusing. Royalty Worx can handle currency conversions and regardless of which currency you receive statements in, Royalty Worx has built-in functions to convert everything to your chosen local currency.

Built-in invoice - tracking and invoice submission - nobody likes this part, but Royalty Worx will keep track of what you have paid out and ensure your artists give you all the information you need to pay them correctly in a simple way.

Branded - it's the little details that matter, that's why you can customise the statements and invoice submission page with your label's brand identity, adding an extra level of professionalism.

Unlimited functionality - whether you have different territory deals, different rates for varying sales formats, different rates for release and track sales etc, the system is adaptable to handle most, if not all deals.

The full Worx - if that's not enough, you've got unlimited support from our experienced in-house team

So, if a label wants to sign up to Royalty Worx, what's the process?

Easy, if you don't already have a Label Worx account, just sign up here and we can get you started with a two-week free trial:

Check it out!



And if you already use Label Worx for another service, just click 'Royalty' in the top menu to start a two-week free trial instantly.

And Royalty Worx Accelerate - how does that service differ?

Royalty Worx Accelerate is a service where we essentially do all the boring (but essential) leg work for you. You send us the key information, such as deal / contract info, sales reports, royalty amounts that you have received etc, and our experts take care of entering this into our system and ensure the smooth delivery of your artists' statements.Having someone who uses the system day-in day-out handle this for you is definitely the most efficient way to manage royalties.

Once you're set up, we follow up with you on a monthly basis ensuring that any new contracts are created and any new sales you received have been entered - this stops labels leaving everything until the last minute and we have found this to be a huge benefit for keeping our clients organised. We then generate your statement for you according to your schedule. You, of course, still give the statements the final check - we will never send statements to your artists without your approval.

And then once they're signed up, that's it? What can they do with the time they've saved

We know that this is the last bit that many labels think about or want to deal with, so taking these time-consuming, mundane tasks off your hands enables you to do what you do best - whether that's make more music, concentrate on A&R and sign more artists, or spend more time promoting your releases. We are giving you your time back to grow your label.

Sounds like a no-brainer to me. Is there anything else we should know?

I think the main thing is that Royalty Worx pricing is scalable depending on your label size; with prices starting at just £10 per month for the software, it fits within most labels' budgets and the time that you save should far outweigh the cost. If they want to get started with RW Accelerate too, get in touch via this form and one of our team will be in touch:

Check it out!

 

Next Article : Soundcloud Operational Steps For Monetization In New Territories

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