The issue of splitting royalties can bog down the creative process.
At worst, it can cause tension in relationships that previously didn’t have it.
It’s best to take care of any issues involving royalties as soon as possible.
How can you do that when you are busy taking care of other urgent matters?
If you’re in the business of making music, using DistroKid as your distributor may make the process of paying royalties significantly smoother.
Does DistroKid Split Royalties?
DistroKid will split royalties automatically if you choose to take advantage of the platform’s Splits feature.
You will decide what percentage of royalties that will be sent to each of your collaborators. Collaborators must have a DistroKid account before they can claim their royalties.
The Challenges of Royalty Splitting
As an artist, you should never neglect the collaborators who helped you create and release a song.
Your collaborators deserve to receive adequate compensation for the work they put in. Give them their royalty payments on time so they have no complaints about working with you.
Of course, making royalty payments on time is easier said than done.
For starters, you have to consider the percentage of royalties that should be sent to each of your collaborators.
The split isn’t always done evenly so you cannot just divide the total amount of royalties based on the number of people you worked with.
On top of that, royalty splits don’t always remain the same. At some point, you may have to change how the royalties are divided based on an existing agreement or an entirely new one.
After all that, you still have to consider the timing issue. Royalty payments are made regularly, but the exact structure can vary.
You may forget about making specific royalty payments simply because there were other payouts you sent just recently.
It’s easy to see how royalty splitting can turn into a chore. That said, you cannot forget about your obligations.
To make things easier, you should consider taking advantage of DistroKid’s royalty splitting feature.
How Does DistroKid Split Royalties?
An important thing to note about DistroKid’s royalty splitting feature is that the platform doesn’t actually handle the splitting itself. Instead, you are the one fully in charge of how royalties will be split among your collaborators.
Let’s go over the process of splitting and distributing royalties with the help of DistroKid below.
Choose Your Collaborators
To get started, you must first select who your collaborators are for a specific song or album. Add the accounts of your collaborators via the Splits feature.
Some of your collaborators may not have DistroKid accounts just yet. Don’t worry because you can still add their accounts later when they are properly set up.
You also have the option of removing collaborators if doing so is pertinent to your agreement.
Determine How the Royalties Will Be Split
With the collaborators selected, you can now determine how the royalties for a particular song or album will be divided. Choose the specific percentage of royalties that your collaborators will receive.
Similar to how the list of collaborators works, you can also change the royalty splitting as often as you need to. Make changes based on your agreements to ensure that all of your collaborators will be compensated fairly.
DistroKid Sends the Royalty Payments on Your Set Dates
There is no one set structure that determines when royalty payments should be made. The appropriate payment structure for your situation will depend on your royalty payment agreement.
In some cases, the royalty payment agreement may state that payments should be provided quarterly. Others may outline a monthly payment structure and some handle those payouts weekly.
No one payout schedule is better than the other, but you do have to follow the one outlined in your royalty payment agreement.
After you set the schedule for your royalty payments, DistroKid will send them out on time.
DistroKid will not delay the release of your royalty payments even if some of your collaborators don’t have accounts just yet.
If your collaborators still don’t have a DistroKid account by the time the payments are sent, the platform will hold those payouts. Your collaborators will receive them as soon as they create an account.
DistroKid Will Return Unsent Royalty Payments
At this point, you may be wondering about the royalty payments that weren’t sent to your payments.
What happens if your collaborators never create accounts? Where will the royalty payments go?
In that scenario, the royalty payments will simply be sent back to your account. With the money back in your account, you can now use it how you see fit.
If you’re planning to withdraw the money from your account so you can pay your collaborators in person, you can do that.
DistroKid Keeps Royalty Payments Private
DistroKid’s Splits feature is also useful because it keeps your royalty payments private.
You may have set up your agreements with your collaborators at different times.
Because of that, your collaborators don’t know exactly how much every one of them will get. If you would rather not disclose that information, DistroKid will help with that.
The platform will keep your royalty payments private so your collaborators will only know about how much they’re getting. You can even keep the identities of the collaborators private if that’s what you prefer.
What Other DistroKid Features Can You Use to Manage Royalties?
DistroKid’s Splits feature provides creators and their collaborators with an easy way to manage royalties. But is that all that the platform can provide in terms of royalty management features?
Notably, there are two other features that you may be able to use if you have specific plans in mind for the royalty payments. You can learn more about them via the entries below.
Recoupments
Recoupments is a handy feature that DistroKid offers so collaborators can get their money back before royalty payments are divided.
Essentially, the Recoupments feature is something you should use if you’re paying a collaborator back for a product or service.
If one of your collaborators purchased a new guitar after you requested one, you can send the payment to them via Recoupments.
Once the Recoupments are clear, DistroKid will process the royalty payments as you directed. This is another feature that should make it easy for you to pay the people who helped you create your music.
Artists for Change
DistroKid also presents you and your collaborators with an opportunity to donate to charitable organizations and causes.
By using the platform’s Artists for Change feature, you can donate a set percentage of your royalties to the organization or cause of your choosing.
The charitable contributions will be sent automatically. DistroKid will also present you with a list of charities to choose from.
