Why Unclaimed Black Box Royalties Cost Musicians Millions

Black Box Royalties or Unclaimed Royalties are any music-generated royalties and incomes that are named towards the rights holder, but aren't given to them for one reason or another. This then causes the creator, writer, or artist to lose money and not receive the proper monetary credit that their music has generated.

In order to get royalties in the first place, an artist or musician must be registered with a collection agency, or PRO. These organizations collect money for artists and must know who the artist is and how to get ahold of them in order to allocate the funds accordingly. 

When organizations don’t have this information or either have the wrong information, this money goes into a ‘box’ where it sits there as unclaimed income, AKA black box income. To further summarize, black box income is money that’s held either by a collection agency, or more recently a streaming service, because the company doesn’t know who or where to send it to. 

Sometimes it’s the fault of the record label or publisher that the royalties can’t be matched to the artist or songwriter. In other cases, it’s because collection organizations haven’t made it particularly easy to claim the money. Either way, there is a ton of dough floating around in this ‘black box’ and some of it may have your name on it.

If you're a songwriter or publisher who hasn't received their fair share of royalties, you're referred to as a lost writer by record labels and involved parties. The moment your song hits the airway and is listened to by the public, the artist and songwriter begin to earn royalties from that usage. 

If your song(s) are either unregistered, registered with the incorrect data, have no collection society or publishing behind it — the artist/songwriter payout becomes interrupted. When the payment has no place or artist to go to, it then falls into the black box.  

The music royalties then stay in this black box for a period of 2-3 years, or until the rightful owner claims it. After the 2-3 year wait period expires and nobody has claimed the funds, the money then gets redistributed to major publishers and the industry’s top earners such as Drake or Taylor Swift. 

This is a problem because it prevents smaller artists from earning the revenue they deserve and earned. Thus, keeping them at the bottom of the totem pole and pushing the already big name, wealthy artists even further up. 

If you want to avoid this sort of nightmare in the future, there are a number of ways to do so. With the right preventative measures, you’ll be able to ensure that you are receiving every dollar of royalties you are rightfully owed. It can be easy for artists to fall into this black box due to the complex nature of song registration and publishing administration. However, if you follow these tips below, you can steer clear of losing any money moving forward. 

Music distributed on digital platforms will have an ISRC (International Sound Recording Code). Whenever you register your songs, entering this code and in complete accuracy is extremely crucial. If your song registration is incomplete or missing information, your chances of a full payout are much less likely. 

So we told you how to avoid black box royalties, but many of you may be asking, is there any way to recoup my royalties that are already in the black box? Luckily, there is. All thanks to the Music Licensing Modernization Act (MMA). 

One effect of this act is the creation of the Mechanical Licensing Collective (MLC) and the establishment of the unclaimed royalties oversight committee. This committee of American songwriters and publishers set out for a more transparent, streamlined royalty payment system. 

The MLC now works to obtain historically unmatched money by doing the research to find its owners, and giving copyright owners a transparent process to claim what is theirs. In fact, the MLC recently announced that it received $424,384,787 in unmatched royalties from digital music services to distribute back to the rightful copyright owners. 

This number proves that there is big progress being made in the future growth of streaming that will benefit not only artists, but the entire industry as a whole. If you feel that you are not receiving the proper royalty payout that you deserve, check out the Mechanical Licensing Collective and see how they can help get back what you have lost.

Unclaimed Black Box Royalties are a very real and serious problem in today’s music industry. They’ve cost millions of artists millions of dollars — dollars that could’ve been used to help boost their careers. Although the topic of royalties and the complex nature behind it isn’t the most exciting to discuss, it is an important topic to discuss and one that all artists should be knowledgeable about. 

We hope this article helped raise your awareness so that you do not fall victim to black box royalties in the future. Share this information with your fellow artist friends, so they can also be aware of how their hard-earned royalties could very easily be slipping through the cracks. Make sure you utilize this information to ensure a successful, lucrative, and thriving music career!