Distribution of music royalties in Spain
Holding a degree in Business Administration and Programming, Pablo established Legis Music in 2016. With a focus on the royalty-free music industry, he has contributed extensively to the field, authoring over 150 articles on various aspects of music licensing. His efforts have been instrumental in developing one of the most straightforward and liberal music licensing frameworks available today.
In Spain, there has been general confusion when it comes to dealing with royalties.
- Some tended to think that labels were the ones who held the rights to the songs and artists, and therefore, the ones who should collect those royalties.
- Others thought that artists should collect their royalties directly from broadcasters, radio stations, and concert promoters.
- And it has even been thought that all the money was collected by a single entity and that this entity distributed the whole amount equally among the artists of each song.
Well, even though none of the above is true, the confusion regarding this issue is still in place.
At LegisMusic we want to help you understand how copyright is distributed in Spain.
And therefore, throughout this article, you will find out:
- The entities in charge of the management of copyrights in Spain - The competencies of each of them - All the professionals behind a musical production - What is the registration process for each of the collecting societies? - Answers to the most frequently asked questions about the distribution of music royalties in Spain.
To do so, we will begin by disproving one of the false beliefs we have just mentioned:
“No, there is no single management entity for copyright”
What are the royalty management societies in Spain?
The truth is that in Spain there are up to three performance rights organizations for music-related copyrights. These are SGAE, AGEDI, and AIE.
Sociedad General de Autores y Editores -translated as General Society of Authors and Publishers– is a private entity created to collectively defend and manage the intellectual property rights of its members, specifically authors and publishers.
Founded in 1899 as Sociedad de Autores -Society of Authors-, named in 1941 as Sociedad General de Autores de España -General Society of Authors of Spain- and renamed with its current name in 1995, this entity has as its objectives:
- Managing royalty collections. - Distribute the proceeds among authors and publishers. - To look after the interests of its members.
This entity is the most known in Spain as regards the management of musical copyrights.
However, unlike what has been thought for a long time, it is not the only one, but it is complemented by the following two.
AGEDI, whose acronym stands for ‘Asociación de Gestión de Derechos Intelectuales’ -Association for the Management of Intellectual Rights-, is a non-profit association formed in 1989 by music producers.
Its main activity is to collectively manage the intellectual property rights granted by law to phonogram producers.
For clarification, the definition of phonogram refers to the recording of sound on special supports that allow its reproduction.
In more colloquial language and about copyright, a phonogram is the same as a recording.
The rights of music producers that are managed by AGEDI are as follows:
- The public communication of their sound recordings and music videos - Their reproduction exclusively for the purpose, directly or indirectly, of their public communication - The fair compensation for private copying
In other words, each time a company uses a recording or music video to reproduce it publicly -usually on radio, television, or live concerts- it must pay a corresponding percentage to AGEDI, which will be distributed to the corresponding producer.
AIE is another collecting society in Spain, whose acronym refers to its target audience: Performing artists or executing artists.
Like the previous one, it is a non-profit collecting society that was also created in 1989. However, unlike AGEDI, whose members were music producers and publishers, AIE focuses on managing the intellectual property rights of performers over their musical works.
In other words, when a piece of music whose artists are registered with the AIE is publicly reproduced, the company or individual who reproduces it must pay a fee to this entity so that it is distributed fairly and equitably with the performers who have participated in the creation of the piece of music.
General competencies of authors’ societies
SGAE, AGEDI, and AIE are the three entities dedicated to the management and distribution of copyrights in Spain, each of which covers a different audience.
However, broadly speaking, all three cover the same competencies for their members, which are:
- Collect and distribute, fairly and equitably, the royalties of its members, through collective management.
- Oversee its compliance, implementation, and development by the laws that protect such collective management. 3. Defend and develop the rights, treaties, and laws, to carry out collective management in any territory where the rights of artists are respected, both in the analog and digital environment and in an effective, honest and transparent manner.
Parties involved in musical productions
You already know the three entities that distribute copyright in Spain, as well as their main competencies.
However, apart from these societies, there are many actors involved in each musical production.
As you may have noticed, many names can be confusing: producers, publishers, artists, performers, etc.
Below we will list each of them as well as their main competencies, something that will make it easier for us to understand the distribution of royalties.
A musical artist is any person who performs an activity related to music.
Generally, musical artists have always been musicians, however, it also includes singers, composers, lyricists, orchestra directors, and other relevant professionals in the creation of a piece of music.
In this group, we can differentiate between three types of artists: authors, interpreters, and performers.
- Author. Any natural person who creates an original musical work, regardless of the technique and/or process used for its creation. The category of performing artist includes the performer who, through his or her performance, incorporates enough elements of originality in the work he or she performs. - Performer artist. In the musical field, it is anyone who sings or performs a musical recording with a relevant status, i.e., with greater importance compared to other artists. This would include, for example, the main artists of a musical group, soloists, or the directors of an orchestra. - Executer artist. Anyone who sings or performs a musical recording along with one or more performers. The difference between the performing artist and the previous one is that they have a more secondary character than the main performer. This could include members of a musical group, an orchestra, or a choir.
Clarifications on the figure of musical artist
To understand what a musical artist is and to differentiate each of them correctly, it is necessary to make some notes.
The first is to differentiate between creating and performing:
- To create a musical work is to make it from scratch, both the music and the lyrics.
- To perform, on the other hand, is to play that musical work through singing and/or instruments.
On the creation side are the lyricist and the composer.
- The lyricist is the one who writes the lyrics of a song.
- The composer is the one who composes the music of a song.
In the performance and execution part, are the singer and the musicians.
- The singer is the one who performs the lyrics of the song.
- The musician is the one who performs the composer’s musical composition for his particular musical instrument.
- The authors of a song are usually the lyricist and the composer and can be the same person or different persons. - The same person could be a lyricist, composer, singer, and musician at the same time, in other words, an author and a performer. - In the case of that person performing his song with other musicians, these would be executing artists. - In addition to being a lyricist, composer, singer, and musician at the same time, the same person could also be his or her own music producer, and even a music publisher.
The competencies of the music publisher are:
- Make the author’s work known.
- Find music producers, record labels, or digital platforms interested in using the author’s work.
- Fairly and transparently share sales revenues between itself and the author, previously agreed by a private contract between them.
This figure has indeed ceased to be so relevant in the industry, mainly due to the advance in technology and social networks.
The music producer is in charge of:
- Control recording sessions.
- Guide the performers during the recording.
- Contribute ideas for the musical project.
- Supervise the final mix.
- Perform the mastering process.
Because of their competencies, it is common to confuse them with record labels.
It is the company that is in charge of discovering musical artists, hiring them, and recording their musical pieces in the studio, as well as the whole process of record distribution, marketing, and sales.
Many times, the labels themselves have their own music producers, so they are also considered producers or production companies.
Now that we know all the actors involved in a musical work, it is necessary to answer the following question:
In which management company does each part of a musical production have to be registered?
Well, to summarize:
- The authors of musical works – lyricists and composers – as well as the publishers – those in charge of promoting and selling them – must register in the SGAE. - Record labels, producers, or artists who self-produce their songs and albums must register with AGEDI. - All performers who have participated in the creation of the musical work, whether singers, musicians, or other independent professionals, must register with the AIE.
Steps to be taken before royalty distribution
- The first step is to register with the relevant copyright society, as we have just seen. 2. Subsequently, the musical works must be registered in the Intellectual Property Registry corresponding to your autonomous community. This can be done by mail, in person -at the office- or by the Internet, presenting the corresponding documentation and paying a small fee. 3. After that, the musical works must be registered with the relevant collecting societies -SGAE, AGEDI, and AIE-.
In addition to the above, if tours, concerts, or events in which a musical work is to be reproduced, as well as if the authors or other artists are to participate, the authors’ societies must also be notified.
How are royalties distributed in Spain?
Before proceeding with the distribution of royalties, it is strictly necessary to carry out the above steps.
That is, each party has:
- Registered with its corresponding author’s society.
- Registered his musical works or concerts.
- Reported its participation in such works or concerts.
Once these steps have been carried out, and after such musical works have been reproduced in any physical or digital media, income may start to be received.
The amount of such income will be variable, but it is registered in copyright law.
- The SGAE will be in charge of distributing such income to the authors of the songs, who are those who have written the lyrics – lyricists – and those who have composed the music – composers -. - On the other hand, AGEDI will be in charge of distributing the revenues to the producers or record labels, i.e., those who have the ownership or the right to exploit the musical recording, also known as the “master”. - And finally, the AIE will have the obligation to distribute the income obtained among the musicians, singers, interpreters, and performers who have collaborated in such musical recording.
For example, every time a song is played on the radio or television, royalties are generated as “Public Communication”.
These radios and televisions must pay for it to each of the aforementioned societies, and these will distribute the income to their partners periodically.
If you want a more general overview of all of the above, take a look at our beginner’s guide about the different types of music licenses – it will help you understand it better!
Contrary to what was thought for quite some time, music copyrights are not only managed by the SGAE.
This entity is only the best known of the three that deal with this task in Spain. The other two are AGEDI and AIE.
Each of them has the goals of managing the intellectual property rights of its members through collective management, as well as monitoring compliance and defending its participants against potential violations of their rights.
However, the distribution of copyrights does not fall on all of them in the same way, but each one has specialized in a type of audience:
- SGAE manages the rights of authors and publishers. - AGEDI manages the rights of producers and labels. - AIE manages the rights of performers and/or executing artists.
To obtain the benefits from the exploitation of their works, each of these participants must register with their corresponding authors’ society, register their musical works and report the reproduction of such works in the media, concerts, or tours.
The amounts to be received for the distribution of the royalties vary greatly and depend both on what has been negotiated between the parties involved and on what is set forth in the bylaws of each author’s society.
If you have come this far, we hope that you have a better understanding of how the distribution of royalties works in Spain.
However, if you still have unanswered questions, we recommend you take a look at the following FAQ section.
FAQ. Frequently asked questions on the distribution of royalties in Spain
- If I am both lyricist and composer of my own song, do I get 100% of the revenues collected by SGAE?
No, you will not receive 100% of the income. As you know, a part of them will be kept by the SGAE as a management fee for the collection.
Of the rest of the income you will receive the totality, but only regarding your role as author of the song.
If you have worked with a publisher, a producer, and/or a record label, they will also receive their proportional part of the royalties, as well as the proportional part of what you, as the author, have negotiated with them.
- I am an author, I produce and record my own songs, and I don’t work with record labels. Do I get all the royalties?
In this case, subtracting the percentage that corresponds to SGAE, AGEDI and AIE as management fees, you would be entitled to the totality of the remaining royalties.
- Collecting societies charge abusive amounts for royalties. Do I have any alternative?
Yes, you can not register your work in these societies, but this will bring a series of problems.
The first is that your songs will be susceptible to commercial use without permission.
In that case, you will have to pursue on your own those who use your songs without your permission, sue them, and go through the whole legal process.
The problem here is that it will be difficult for you to prove that you are the author of that musical work because it is not registered with the copyright societies.
On the other hand, you will need to do the management and collection process on your own.
Something that will probably take a lot of time that you can dedicate to create your songs.
In conclusion, you can do without collecting societies and save their fees, but this usually brings more disadvantages than advantages.
- How does the SGAE work?
Each time one of the works registered by its members is used commercially, the authors and publishers of the work receive remuneration.
This is done through non-exclusive licenses issued to audiovisual companies, music companies, or businesses that want to commercially exploit the songs.
In return, SGAE receives the remuneration set out in the commercial exploitation license.
Subsequently, these remunerations are distributed among the authors and publishers, deducting the society’s management fees.
- SGAE’s members are authors and publishers, but who are its customers?
SGAE’s clients are mainly the following:
Leading technology companies.
Restaurants and cafeterias.
Commercial establishments and stores.
How much do SAGE members receive?
It is difficult to determine them since it depends on the type of license issued to audiovisual, music, or business companies.
As indicated on their own website:
“To determine the amount that corresponds to each member, it is necessary to resort to complex information systems such as computer tools that access the programs made by users and that reflect the works used (television, cinema, shows, concerts, music sales) or polls (in hundreds of radio stations, discotheques, and similar establishments).”
In short, estimates are made of how many times the songs have been played and in what situations they have been played to determine the remuneration to be received by authors and publishers.
- What other goals and objectives does AGEDI have beyond the collective management of copyrights?
In addition to collective management, AGEDI has other goals. Some of them are:
Professional representation of its members.
Defense of their rights.
Promotion of their works.
Collaboration with organizations in activities related to intellectual property rights.
Management of representation contracts.
Carrying out promotional activities for its members.
Legal actions and compensation claims in favor of its members.
What is the geographical scope of AGEDI’s management, is it international or does it only operate in Spain?
AGEDI is a Spanish non-profit corporation, and therefore, the scope of its management is limited to Spain.
- What is the IRSC code and what does it have to do with AGEDI?
The ISRC (International Standard Recording Code) is an international code created by the recording industry that has been standardized to identify sound recordings and music videos.
This code has 12 characters, which means the following:
- Country Code (2 characters)
- Registrar Entity Code (3 characters)
- Reference Year (2 digits)
- Designation Code (5 digits)
An example of an IRSC is this one: ISRC ES-000-07-00001 The international agency in charge of coordinating this system is the International Federation of the Phonographic Industry (IFPI).
This agency is also in charge of designating the agencies in each country that will be dedicated to this task at the national level.
And in the specific case of Spain, this is AGEDI.
- Does AGEDI have anything to do with the music sales charts?
Yes, AGEDI prepares lists of albums, songs, vinyl, and radio.
This is done jointly with the Spanish Music Producers Association -PROMUSICAE-, and in collaboration with independent companies, such as Gfk and BMAT.
- What other activities does the IEA carry out?
Apart from collective management and distribution of proceeds, AIE also carries out other activities for its members:
Assistance activities such as insurance or financial support.
Training activities such as lessons, courses, workshops, and seminars.
Promotional activities, such as support for concerts, festivals, travel, or conferences.
How many members does AIE have?
The number of members is data that advances as time goes by.
However, as of today, the AIE has more than 29,000 members in Spain and represents, together with other collecting societies, more than 800,000 artists, performers, and executants.
More unresolved questions?
- What are the royalty management societies in Spain?
- General competencies of authors’ societies
- Parties involved in musical productions
- In which management company does each part of a musical production have to be registered?
- Steps to be taken before royalty distribution
- How are royalties distributed in Spain?
- FAQ. Frequently asked questions on the distribution of royalties in Spain
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