Royalty splits with collaborators: how to share the income

A royalty split is the agreed division of a track's income between the people who worked on it. If you make a song with a producer, a featured artist or a co-writer, you record who gets which share. There are two separate pots: the master, meaning the recording itself, and the composition, meaning the song as music and lyrics. Each pot gets its own split, and the two don't have to match.

Agree both splits in writing before the release, in a split sheet that everyone signs. You then set up the master split with your distributor. At Crystal Distribution you record per track who gets which share; collaborators accept their share and can then see their own streams, share and payouts. The songwriting split goes to your collecting society when you register the work. This guide explains how the pieces fit together and how to avoid falling out.

What is a royalty split?

A split states who gets which share of which income. Everyone's shares together make up exactly the whole, no more and no less. You make a split per track, not per release: on an EP, each track can have different collaborators.

A split is not the same as a credit. A credit says who did what, for example that someone mixed the track. A split says who shares in the money. Someone can have a credit without a share, like a mix engineer who was paid a fee. And someone can have a share without a visible credit, like a person who invested in the recording. How to fill in credits correctly is covered in the release metadata checklist.

Two pots: the master and the composition

Most misunderstandings about splits come from mixing up the two pots. Here is the difference at a glance:

There is a third stream as well: neighbouring rights, paid to performers and the owner of the recording when music is played on the radio, on TV or in public places. Organisations such as Sena in the Netherlands and PPL in the UK collect these, and session musicians can share in them as performers. Streaming works differently. In the Netherlands, for instance, Sena's FAQ (in Dutch) states that Sena has no legal mandate to collect for on-demand music: that right belongs exclusively to the producer, meaning the record company. The money streaming services pay for your recording goes to whoever controls the master, which for an independent release means through your distributor. That is exactly the pot a master split divides.

Watch the word "producer". In Sena's definition, the producer is the company that is financially responsible for the recording and owns the master, not necessarily the music producer who made the beat. They can be the same person, but they don't have to be. An overview of every type of royalty is in music royalties explained.

Who gets what? Roles and shares

There is no fixed formula. What is fair depends on who contributed what and who paid for what. It helps to go through both pots for each role:

Two roles deserve extra attention. A producer who made the beat has usually contributed to the composition as well. So agree not only a master share but also a songwriting share, or put in writing that they knowingly give it up. And with a sample, the rights holder sets the terms: sometimes they ask for a share of the master, the composition or both. How clearance works is explained in releasing covers, samples and remixes.

Put it in writing before the release: the split sheet

Agreements made in the studio feel clear until a track takes off. Then it turns out everyone remembers something different. A split sheet prevents that: a short document per track that everyone signs before the track comes out. Ideally, fill it in at the end of the session, while everyone still remembers who did what.

What goes in it:

• The track: title, any working title, and the version, for example the original or a remix.
• Date and place of the session or sessions.
• Everyone involved: legal name, artist name and contact details.
• Roles: who composed, who wrote the lyrics, who produced, who played or sang.
• The songwriting split: each writer's share of the composition, with their collecting society, IPI number and any publisher.
• The master split: each person's share of the recording income, and who owns the master.
• Samples: which samples are used and whether they have been cleared.
• Recoupment: which costs are recouped first, and from whose share.
• Future decisions: who decides on remixes, Content ID and requests to use the track in a film or an advert.
• Signatures from everyone, with the date.

This is what a completed split sheet can look like:

Add up both columns: half plus half is the whole, and so is half plus a third plus a sixth. If a column doesn't add up, the split is wrong.

How splits work at Crystal

At Crystal Distribution you keep ownership of your master and give Crystal a licence to distribute your music. The income that comes in through Crystal is shared out with splits:

1. You set the split per track. You state who gets which share, for example you, your producer and your featured artist.
2. Your collaborators accept their share. Only then do they get their own access.
3. Collaborators see only what is theirs. They see the streams of the tracks they are involved in, their own share and their own payouts. More on roles and access in team and collaborators.
4. Recoupment can be agreed. If you have advanced costs, you can agree with a collaborator that those are recouped first.

That way you and your collaborators look at the same stream figures. Royalty statements are issued per period, per track and per store, and you can export them as CSV. A published statement does not change afterwards; a correction appears as a new statement. Payouts go to a verified bank account, after two-factor authentication and approval by two people at Crystal. How that works is explained in payouts and bank details.

The advantage over paying collaborators yourself: you don't have to calculate and transfer amounts every period, and nobody has to take your word for it. Splits at Crystal cover distribution income, so the master. Songwriting royalties come through registering your works, which is where a publisher can help. What a publisher does is explained in what does a music publisher do?.

Recoupment: costs first

Recoupment means that costs someone has advanced are earned back from the income first, before someone else's share is paid out. Think of studio time, mixing and mastering, a music video, promotion or an advance.

Example with invented names: Label L pays for the studio and the video for a track by Artist A featuring Featured artist C. L and C agree that C's share first recoups part of those costs. Once that part has been recouped, C's share is paid out as normal.

Recoupment is fair when it is clear from the start. So put in writing:

• which costs count, with an itemised list;
• the total amount to be recouped;
• which tracks or releases it is recouped from;
• how much of someone's share goes towards it, all of it or only part;
• what happens if the costs are not recouped: does the balance lapse, or does it carry over to a later release?

A recoupment that is mentioned only after the fact comes as a nasty surprise to a collaborator. So put it in the split sheet and discuss it before you set up the split.

Registering songwriting splits with your collecting society

You don't earn from the composition through your distributor, but through a collecting society and, if you have one, your publisher. Writers join a collecting society, often the one in their own country: BumaStemra in the Netherlands, PRS for Music in the UK, or ASCAP or BMI in the US, for example.

The details differ per society, but BumaStemra shows the principle well. According to its FAQ for music creators, you register each work with the title and the rights holders, with the correct percentage share for each. Members named in the split receive a notification asking them to approve or amend their share. If a publisher is involved, the publisher registers the work itself.

What if you register different splits? Then the work is in conflict: BumaStemra describes a conflict as an author or publisher registering the same work with different shares, and it cannot tell which registration is correct. The rights holders have to agree on one split and pass it on. With a signed split sheet, that is quickly settled. Without one, the discussion only starts once there is money at stake.

Working with writers who belong to a society in another country? Make sure everyone registers the same split everywhere, so that no conflict arises anywhere.

Common disputes and how to prevent them

Disputes over splits usually follow the same pattern: something was not agreed, or not agreed clearly. These are typical situations, with the fix:

• "We'll sort it out later." Later is when the money comes in. Sign the split sheet before the release.
• The producer sees themselves as a co-writer; the artist sees them as hired help. Discuss both pots separately and write down what you agree for each.
• Credits and shares get confused. A credit is not a promise of money. State in the split sheet who gets a credit and who gets a share.
• A featured artist expected a share and got a fee, or the other way round. Agree in advance which one it is.
• A sample changes the split. Clear samples before you set the split, because the rights holder's terms can change the proportions.
• Someone registers a different split with their collecting society. Send everyone the signed split sheet before you register the work.
• A collaborator doesn't accept their share. Invite collaborators well ahead of the release and check beforehand that everyone has accepted.
• A band member leaves. Agree what happens to their shares in existing tracks, and put it in writing.
• Someone later wants Content ID or a remix. Agree who decides. For Content ID and the TikTok and Instagram music libraries, the rights also have to be exclusive; see YouTube Content ID, TikTok and Instagram explained.

On tax and invoicing: whether you need to deal with VAT or income tax on your share depends on your own situation and country. Check with your tax authority or an adviser.

Ready to release with splits set up properly? See how distribution at Crystal works.