Tone

How Participation Rates & Escalations Keep Complex Deals Accurate

Kate Dessa — Fri, 11 Jul 2025 20:04:46 +0000

When it comes to music royalties payouts, most people only look at the final number on a statement. But music royalty professionals know that each payout is the result of unique deal parameters, countless data sources and collaboration splits, which create nuanced contract terms behind every statement. At Tone, we know the intricacies that go into creating even the “simplest” music deal. That’s why we built a music royalty platform that makes it easy to model these common but complicated scenarios, letting your whole team see exactly how money flows to the royalty statement. Two of the most powerful tools Tone offers for reflecting these real-world complexities are participation rates and escalations.

In this deep dive, we’ll break down:

How Participation Rates shape royalties
How Escalations handle evolving deal terms when sales benchmarks are met
How you can test every detail in Tone’s Contract Simulator before a royalty period runs

If you’re a label, publisher, or royalty expert who’s ever asked “Wait, how did we get this number?” — our music royalty platform is here to help you navigate the backend of complex music royalty deals.

Understanding Participation Rates in Tone

When you add a track to a contract in Tone, the platform assumes the contract shares 100% of the sales and costs by default. But in the real world, deals are rarely that clean.

Participation rates let you define exactly how much of a track’s or release’s sales and costs a contract shares in—before applying any royalty splits or sales rates. Think of this as a “how much of the pie do you actually get to slice?” setting.

Why Participation Rates Matter

Participation rates allow you to reflect real-world scenarios like featured artist splits, collab deals, or partial catalog ownership—without writing complex one-off rules. You can define separate rates for sales participation, cost participation, or both. If a track is part of a release, Tone automatically allocates release-level sales and costs based on each track’s participation rate.

Bonus: Tone allocates release-level income (like physical sales or album downloads) and costs based on how many tracks in that release are linked to each contract. Other platforms force you to do this manually every time a release’s track count changes or a new track is linked to the contract. In Tone, those recalculations happen automatically so you don’t forget.

Example using a Net Receipts deal:

A track on a contract has:

30% participation in sales
50% participation in costs

The contract has:

50% sales royalty rate
100% cost recoupment rate

If the track earns $1,000 and has $100 in costs:

This contract gets 30% of the $1,000 ($300), then their 50% royalty rate is applied = $150
This contract is only responsible for 50% of the $100 cost, then their 100% cost rate is applied = $50

Calculation: $150 – $50 = $100 net receipts

What Makes Participation Rates Powerful

Participation rates let you model real-world deal structures—without creating duplicate contracts, applying workarounds, and/or doing math on the side.

For example, say 100% of album costs should be recouped by your artist and their collaborators, but each track has a different producer with a different royalty rate. Rather than creating a separate artist contract with different cost recoupment rates for each track, you can adjust the artist’s cost participation on the track to account for this, directly in the Tone platform.

This means every contract actually reflects the real-world financial terms.

Participation rates are essential for common situations like:

Producers who contributed to a track or select tracks on an album
Artists with partial ownership of a catalog
Compilation albums with various contributors

So your contracts don’t just look right, they calculate right. No separate contracts, one-off spreadsheets, or side math. Just real-world accuracy built into every contract and statement.

Escalations: Smarter and Flexible Splits

At Tone we know deals aren’t static. Sometimes when an artist hits a certain revenue benchmark or unit threshold, their share of earnings shifts. This means the math of the deal can change mid-way through a royalty period.

Escalations in Tone let you model sales-based thresholds that change an artist’s share as their revenue or unit count grows—rather than having to remember to update your contracts at the right time.

This is especially useful scenarios like:

An artist whose sales rate incrementally increases by 0.5% at 100k units, 250k units, and 500k units sold
A producer whose sales rate increases from 2% to 4% once total net receipts for a track exceeds $10,000
An artist who receives a 50% sales rate during recoupment and a 25% sales rate post-recoupment

Want to explore all of these on-demand features? Our team is just a call away. Schedule a demo to see our on-demand functionality with our team.

Let's add a dollar-based escalation to our previous example:

Quick recap: A track has:

30% sales participation rate
50% cost participation rate

The contract has:

50% sales royalty rate
100% cost recoupment rate

Let’s add an escalation:

50% of the first $10,000 in total sales
60% of anything after $10,000

Now imagine there’s $11,000 in total net receipts and a $100 marketing cost. Here’s how the math works:

(First $10,000) $10,000 x 30% sales participation rate x 50% sales rate = $1,500
(Next $1,000) $1,000 x 30% sales participation rate x 60% sales rate = $180
$1,500 + $180 = $1,680 sales
$100 marketing cost × 50% cost participation rate x 100% cost recoupment rate = $50 costs
Final balance = $1,680 – $50 = $1,630

What if your escalation threshold is based on royalties earned instead of total sales? In order for this contract to accrue $10,000 in royalties, this track would need to earn $66,666.67 in total net receipts ($66,666.67 x 30% sales participation rate x 50% sales rate = $10,000), so $66,666.67 would become your escalation threshold.

What Makes Escalations Powerful

In many systems, managing these types of terms means updating contracts manually or tracking benchmarks offline. That inevitably creates miscalculations, delays and inconsistencies across accounting and legal.

Tone solves this by letting you set and automate escalations directly in your contracts. Once a threshold is met, Tone automatically applies the escalation rate—no need to monitor performance manually or adjust rates mid-period.

Since escalation rates occur after participation, sales and cost rates, and deductions are applied, every payout in Tone has a clear audit trail. Artist and label teams can understand exactly how the payout got from A to Z, while you avoid messy spreadsheets and retroactive changes.

Preview Complex Contract Logic with the Contract Simulator

Royalty math isn’t just complicated—it’s high stakes. The smallest errors in participation rates or escalation thresholds can throw off an entire royalty period, frustrate artists, and bog down payment processing.

That’s why we created the Contract Simulator. It’s a tool that gives you a proactive way to catch mistakes before they cost you. With the Contract Simulator, you can:

See exactly how participation rates, sales thresholds, and cost allocations flow through your deal
Confirm multi-layered splits and escalating rates apply exactly as written in your contract
Test scenarios across linked contracts, cross-collateralized deals, or compilation albums—so nothing slips through

No more hoping your statements are right. No countless re-runs and reconciling. The simulator lets you model even the most complex deal terms, so you can be confident before royalties ever run.

Interested in the Tone’s music royalty platform?

Book a demo with our team, and we’ll show you your escalations and participation rates in action—live, with your data.

The post How Participation Rates & Escalations Keep Complex Deals Accurate appeared first on Tone.

On-Demand Royalty Processing: More Control & Transparency

Kate Dessa — Thu, 15 May 2025 20:19:12 +0000

Ready to have more control over your royalty processing? At Tone, flexibility and transparency have always been at the core of how we help you manage royalties. That’s why our royalty management platform is designed to work on your schedule, not the other way around. For labels and other music companies who want more autonomy, our platform makes it easy to create and manage your royalty periods.

Whether you prefer automation or more hands-on control, our platform is here to support your royalty processing with accuracy and speed. From contract modeling to royalty tracking, Tone is built to reflect the way modern music businesses actually operate.

Draft Royalty Periods At Your Own Pace

With Tone, you can preview royalty calculations at any time by working with draft or interim royalty periods. You choose your contract group, time frame, and the specific sales and costs you want to include in your draft. With a click, see how each statement is shaping up—before anything is finalized or approved.

Draft royalty periods offer greater flexibility and visibility. They help you catch errors early and ensure your data is accurate from the start. This workflow offers proactive, informed royalty management at every stage of the process.

Here’s how to start:

Navigate to the Royalties page
Click on the + Create Draft button to begin managing a new period.
Select a Contract Group
Select the Timeframe
Click Next

Tip: Contract Groups are groups of contracts that are processed together at set time intervals. These groupings are established when creating the contracts.

Fully Customizable Sales & Costs

Use customizable filters to hone in on the set of sales files and costs you want in your royalties run. As you upload more data to Tone, those files become available for use in your royalty drafts. So you can build a period draft over time.

Start and stop at your pace. Your selections are automatically saved as a draft, giving you full flexibility to work at your own pace.

How to input sales & costs:

Select Sales
- Use the checkboxes next to each file to select individual sales files or select the checkbox in the table header to select all visible files.
- Use the search bar to quickly find specific files by name.
- Apply filters by Filename, Report Date, Source, or Status to narrow your search.
Select Costs
- Use checkboxes to select individual costs, or select the checkbox in the table header to select all visible costs.
- Search by cost name using the search bar.
- Narrow your view by applying filters for Transaction Date, Type, Mapping, or Target Period

Tip: Click Clear filters above the table’s right corner to see all costs or sales again.

Run Royalties Calculations & Go Deep on the Details

We’ve worked hard to reduce the amount of time it takes run royalty calculations. In most cases, your statements will be ready to review in the time it takes to refill your coffee.

Download reports to verify the sales lines or costs that didn’t match contracts and therefore weren’t included in the royalty period. If something needs adjustment—like unmapped sales or missing costs—you can make changes and recalculate anytime. This ensures your statements are clean, complete, and accurate before you finalize them.

How to run calculations:

When you’ve selected the applicable sales and costs for your period, click Run calculation to generate your statements. Now it’s time for review.
If you need to make any changes sales or costs selected in the period set up step, you’ll need to click the Re-run calculation button to generate updated statements and see the changes reflected.
Once you’re happy with the calculations, it’s time to share it with your team for final review. This step means you’re confident the calculations are correct and ready for one last round of approvals.

Tip: Although it’s usual to include both sales and costs, if you don’t need to include one or the other (or either) in a given period, skip this step (you can always add them later).

Tone is the royalty platform the music industry has been waiting for. Royalty processing doesn’t have to be an afterthought. With Tone you can take advantage of more flexibility, faster results, and complete control over your workflow. You’ll be able to run your royalty periods, make instant updates, and ensure everything aligns with your business needs. Plus, with Tone you get a hub for your whole team to maximize royalties data and action real-time insights.

Want to explore all of these on-demand features? Our team is just a call away. Schedule a demo to see our on-demand functionality with our team.

The post On-Demand Royalty Processing: More Control & Transparency appeared first on Tone.

How Money Flows Through The Music Industry: Royalties 101

Kate Dessa — Tue, 29 Apr 2025 21:56:04 +0000

Every time someone streams a track, performs a song, or uses a song in a TV show, money starts moving through the music industry—but not in a straight line. Royalties flow through a web of platforms, rights organizations, and contract splits, with plenty of opportunities for confusion (and missed payments) along the way.

At Tone, we believe that rightsholders deserve clarity—not chaos and confusion. So we created this guide to help independent artists, publishers, and labels understand how royalties work, where money flows, and what to watch out for when it comes to getting paid for their music.

The 3 Key Rights That Generate Music Royalties

As a rightsholder, when your song is played—whether it’s on Spotify, FM radio, or in a SoulCycle class, three major rights can be triggered:

Master rights: tied to the sound recording

Mechanical rights: tied to the reproduction of the composition

Performance rights: tied to the public use of the composition

Each of these rights has its own revenue streams, collection societies, and payout rules—and your ability to earn depends on how well you understand the differences.

As Michael Bizenov, President of Sound Royalties, puts it:

“Whether you’re a creative or on the business side, you need to understand your finances, your net income, your expenses, and your net worth. Getting that type of financial literacy is critical.”

Royalty literacy is financial literacy. And in today’s fractured revenue landscape, the creators and rightsholders who understand how money moves are the ones best positioned to sustain their careers and grow their revenue.

Master Royalties: The Money from the Recording

Master royalties are paid to whoever owns the sound recording—usually the label or the artist (if they own their masters). This is what most artists think of first when they imagine making money from music consumption.

How the money flows: Master Royalties

The rightsholder uploads a track to a distributor (e.g. Stem, DistroKid, CD Baby)
The distributor delivers the track to digital service providers (DSPs) like Spotify or Apple Music and/or physical distributors like CD Baby or Symphonic
The track is streamed or downloaded, or CDs, LPs, etc. are purchased
The DSPs or physical retailers pay sales revenue to distributors
The distributor takes a fee (often ~10–20%)
The remaining sales revenue goes to the master rightsholder
If the master rightsholder is a record label, they would collect this income and account royalties to their artists and producers based on their contract terms.

What matters here: Master Royalties

Ownership matters: The owner of the master collects sales revenue from distributors and pays out portions of the income as royalties based on established contracts with artists and collaborators. Artists who don’t own their masters won’t collect royalties, but their share will be paid out by the owner of the master (for example, their record label).

Data accuracy is everything: Metadata errors can mean revenue goes missing or get delayed.

Each individual sound recording has an ISRC within the metadata, which stands for International Standard Recording Code. It’s a unique identifier assigned to each sound recording (not the composition, but the actual audio file).

Pro tip: Keep your ISRCs (International Standard Recording Code) clean and aligned with the right splits. DSPs can’t pay what they can’t track.

Mechanical Royalties: Getting Paid for the Reproduction of the Composition

Mechanical royalties are paid to the songwriter and publisher when the composition is reproduced—physically (like CDs or vinyl records) or digitally (through downloads or on-demand streaming).

Streaming: The MLC has a blanket mechanical agreement with DSPs to grant them a license for interactive streaming and downloads. DSP will then report usage and pay mechanicals to the MLC.

Downloads and Physical: Labels need to obtain mechanical licenses from either HFA or the publishers directly (if the publisher is not affiliated with HFA). The label will then report usage and pay mechanicals to the HFA or publisher.

Interactive Streaming vs. Non-Interactive Streaming: Why It Matters

The way a listener experiences your music affects how royalties are triggered—and who gets paid.

Interactive streaming is when a listener has control over playback this includes on-demand platforms like Spotify Premium or Apple Music, where listeners can choose specific songs, create playlists, or skip tracks. Even Spotify’s free tier—where users can shuffle or skip within limits—is still considered interactive.

Non-Interactive Streaming is more like traditional radio. The listener can not choose specific tracks or control playback order. Think SirusXM radio or Pandora’s free tier.

How Money Flows: Mechanical Royalties (in the U.S.)

1.) An artist records a track that includes a copyrighted composition

2.) A distributor sends the recording to DSPs

3.) When the track is streamed, downloaded, or manufactured physically, the underlying composition is reproduced in the process and therefore mechanical royalties becomes due. However, the flow of mechanical royalties is different for streams compared to downloads or physical formats.

4.) For streams:

a.) DSPs pay these royalties to the Mechanical Licensing Collective (MLC)

b.) The MLC does not take a fee from composers. DSPs are legally obligated to fund the MLC through their usage (thanks to the Music Modernization Act!)

c.) The MLC does not pay a fixed amount per stream, instead following a formula that calculates a percentage of the total mechanical royalty pool.

d.) The MLC pays out royalties on a monthly basis to publishers, administrators, and self-administered songwriters.

e.) The administrators or publishers would then pay out mechanicals to their songwriters.

5.) For downloads and physical formats:

a.) Mechanical royalties are generated on a per-unit basis, known as the statutory rate, or stat rate. As of January 1, 2025, the current stat rate for digital downloads and album sales is 12.7 cents per track or 2.4 cents per minute of playing time – whichever is greater. The stat rate for ringtone downloads is 24 cents.

b.) The statutory rate is then split 50/50 between the publishers and composers. For example, let’s say a track with 2 composers and 2 publishers is downloaded. At the current stat rate of 12.7 cents, 6.35 cents goes to the publisher share and 6.35 cents to the composer share – that 6.35 cents will then be split between the 2 publishers/composers.

c.) Sales revenue is typically paid to the label, who then pay the mechanical royalties to either a mechanical rights organization (MRO) like the Harry Fox Agency (HFA) or the publisher directly, depending on who their mechanical licensor is.

d.) If applicable, HFA takes an 11.5% fee before paying the publisher

e.) Publishers are then responsible for paying out the songwriter share to their writers

In the U.S., The MLC was created in 2021 under the Music Modernization Act to streamline this process. Before that, a lot of money was left on the table—millions in unmatched royalties. Today, the MLC holds over $400M in previously unmatched royalties, which songwriters can still claim by registering properly.

What Matters Here: Mechanical Royalties

You must be registered with the MLC to receive your mechanicals from U.S. streams. If your compositions are not registered, any mechanical royalties generated from U.S. streaming platforms will go unclaimed. The MLC will hold these unmatched royalties for at least three years, giving you time to register and claim them. After this period, the MLC is authorized to distribute unclaimed royalties to registered copyright owners, based on relative market share as reflected in reports of usage provided by DSPs for a given period.

Pro tip: You don’t have to have a publishing deal to collect mechanical royalties—you just have to be properly registered. You can create your own publishing entity via the MLC or a performing rights organization (PRO).

Performance Royalties: When Music Is Played in Public

Performance royalties are earned when your music is performed publicly—on radio, TV, in stores, at live events, or on streaming services. But not all performance royalties go to the same people—or through the same systems.

Songwriters, composers, and publishers are paid through PROs like ASCAP, BMI, and SESAC.

Recording artists and master rights holders (e.g., labels) are paid for non-interactive digital performances of the sound recording through SoundExchange.

How money flows: Performance Royalties (PROs)

A license is obtained from PROs to grant public performances of their members’ repertoire in a commercial setting (e.g. radio, DSP, venue, retail store etc)
When the composition is played live, streamed, or broadcast, this is considered a ‘public performance
Usage data is collected by the PRO or reported by the licensee depending on the licensing agreement and source type
Revenue is collected by PRO, either in advance or in arrears, in line with licensing agreement and usage reporting
PRO collects international income from affiliate societies, via reciprocal agreements, for their members’ usages outside the US
The PRO deducts an admin fee depending on source and license type (usually 10–15%
The PRO distributes royalties separately via a songwriter and publisher share

How money flows: Performance Royalties (SoundExchange)

A non-interactive digital service (e.g., Pandora’s free tier, SiriusXM, internet radio) plays a sound recording
The service pays a statutory license fee to SoundExchange
SoundExchange collects usage data and deducts a small admin fee (typically 4–6%)
Royalties are distributed to recording artist and master rights holders

What matters here:

Recording artists do not receive performance royalties from PROs unless they are also credited as a songwriter—but they do receive digital performance royalties through SoundExchange.
Performance royalties for international usage flow through reciprocal agreements between affiliate PROs.
Venues often underreport setlists—make sure yours are submitted, whether you are touring or not.
Compositions in the public domain are do not need to be licensed

Pro tip: Register with a PRO and submit your live performance setlists. This can be an overlooked income stream for working artists.

How These Rights Work Together

In reality, every on-demand stream activates all three rights. That means your revenue is divided between different entities, and errors anywhere in the chain—metadata, contract terms, incomplete registrations—can break the flow.

And with increasingly complex deal structures (think: featured artists, producers, sample clearances, multiple publishers, etc.), one misconfigured contract can have ripple effects across every right.

That’s why understanding not just what royalties are owed—but how they flow—is so important for today’s independent rightsholders.

A Smart Music Royalties Strategy Starts with Clarity

Most successful indie artists and labels have on thing in common: they treat their music like a business. That means:

Knowing what rights you control
Understanding how those rights generate income
Tracking where that money is going
Identifying gaps before they become lost revenue

At Tone, we’re building tools to help artists, labels, and publishers take control of their royalty pipelines to create streamlined strategies to scale their business and get paid.

Our platform helps you:

Connect contracts across collaborators (artists, producers, publishers)
Simulate different deal structures before signing
Track and account for royalty income across master, mechanical, and performance rights
Catch missing metadata, broken splits, and bad assumptions—before they cost you

Our latest feature, the Contract Simulator, lets you preview what royalties will look like across linked deals (producer points, escalations, recoupments) before you distribute. It’s built to prevent headaches and preserve trust for you and your team.

In today’s music economy, creative control is only half the battle—financial control is just as essential. Whether you’re a self-managed artist, a boutique label, or a new publisher, the more you understand how money flows, the more empowered you are to build something sustainable.

At Tone, we’re here to help you turn knowledge into strategy—and complexity into clarity.

Want to start seeing your royalties more clearly? Book a demo or explore the platform to get started.

The post How Money Flows Through The Music Industry: Royalties 101 appeared first on Tone.

Optimize Your Business with Music Revenue Tracking

Kate Dessa — Wed, 02 Apr 2025 19:30:57 +0000

Tracking music revenue is notoriously complex for labels, publishers, business managers and their artists. Information often lives in silos across distributors, platforms, and collection societies. With multiple revenue sources generating streams and sales data, managing this information efficiently can seem impossible.

Or as Annabella Coldrick, CEO of Music Managers Forum (MMF) put it,

“[I]f the global music publishing business were a house, its plumbing would be the leakiest, most bizarre, inefficient and complicated imaginable. The research indicates that it’s here, within the structures of the industry, that a huge proportion of value is leaking away.”

Poor music revenue tracking has real consequences. Artists and labels can miss out on income they’ve rightfully earned due to delayed reports or missing data. One analysis of the industry estimated that more than 20% of song streaming royalties globally may go missing or unpaid because of these complex systems and data mismatches.

At Tone, we understand this all too well, which is why we continue to develop tools that improve music revenue tracking and sales processing. Our royalties management platform helps labels process, manage, distribute, and pay out music royalties income. We know messy data leads to inaccurate royalty calculations–and successfully managing royalties starts with understanding and standardizing all sales inputs. Even if you aren’t processing royalties, accurately tracking and visualizing your artists’ revenue is invaluable.

That’s why we are excited about Revenue Tracking – our standalone suite of tools that will help you manage your income sources, track your revenue and analyze sales insights.

Ready for a tool to help you track and visualize your sales over time? We got you.

Revenue Tracking in Tone

Our Revenue Tracking offers a focused solution for detailed sales analysis without the commitment to a full royalties system. This suite of tools encompasses key features from our royalties management platform–catered directly to your specific needs.

Key Features of Revenue Tracking

Automated Data Aggregation:

Revenue Tracking pulls in revenue data from multiple sources into one unified dashboard. Just upload your files and Tone merges and normalizes your data so that all your sales figures appear in a single view. This saves countless hours and ensures that no revenue source is overlooked – streaming, downloads, sync fees, performance royalties and more can all be tracked in one place. Tone will even convert all sales data to your home currency.

Timely Sales Insights:

With Tone, your team gets fast processing times and up-to-date analytics on earnings for each artist, track, platform and territory. Want to keep a view of your sales data all year round, instead of just during royalties season? Once you upload, Tone can process them immediately. Meaning you can see analytics, visualize sales data and start making more informed decisions immediately.

Error Identification & Reconciliation:

This tool intelligently flags discrepancies and missing entries, helping catch revenue that might otherwise slip through. By spotlighting anomalies, Tone enables your label to investigate and resolve issues before they become lost revenue. It essentially acts as a safety net, automatically checking that all reported data is accurate and complete.

Customizable Visual Data Tools:

Beyond raw numbers, we provide visualizations and reporting tools that make it easier to understand and present the data. If you are a business manager, say goodbye to excel and pivot tables, and start generating custom reports or dashboards for your next revenue review meeting. Our interactive charts and graphs help translate the sea of numbers into clear trends and actionable insights. This empowers you and your team to forecast future earnings, set realistic goals, and communicate financial trends to artists and stakeholders in a digestible way.

Seamless Team Collaboration:

Our cloud-based system allows different team members – your label owners, accountants, managers, and artists themselves – to access the information they need with appropriate permissions. Instead of requesting a spreadsheet from the label or waiting on an emailed report, everyone can log into the platform and see real-time updates. This transparency ensures that all stakeholders are on the same page.

By addressing data fragmentation, delays, errors, and accessibility, our Revenue Tracking suite of tools will transform your workflow. It turns what was once a tedious, error-prone process into a streamlined, collaborative, and insightful experience.

In an industry where margins can be thin and every source of income counts, having a reliable system for tracking music revenue is crucial. If you’re ready to take our Revenue Tracking Tool for a spin – send our Sales Team a note or book a demo here.

The post Optimize Your Business with Music Revenue Tracking appeared first on Tone.

Streamline Royalties Management With Our Costs Tool

Kate Dessa — Fri, 07 Mar 2025 20:00:00 +0000

Royalties management is complex, meaning streamlined tools for the process is essential for your label and your artists. That’s why at Tone, we’re always improving our platform to meet your evolving needs. Our latest update? New features in our Costs tool that will speed up your workflows and enhance transparency.

Enhanced Cost Management

Reporting Period Column: Keep track of costs by royalty period more efficiently. Each entry now shows the specific period in which a cost was reported or is slated for reporting. If a cost has already been reported, you’ll find a clickable link that takes you directly to that period for detailed viewing.

Status Column: Instantly see the current status of your costs—whether they’ve been submitted, reported, or are partially reported in a royalty period.

Additional Flexibility: In this view, you also have the ability to customize the transaction date format to your preference. Plus, our robust filtering options allow you to streamline your view, focusing on costs by description, amount, type, mapping, or status.

Smart Cost Mapping

To further simplify your workflow, the Costs tool update gives you smarter cost mapping. Now Tone will automatically assign new costs to the relevant reporting period based on the mapped contract group’s cadence and transaction date. This means no more manual tracking of allocations—Tone does it for you, ensuring accurate and timely expense reporting.

Expanded Costs Details Panel

Attach Documentation: Easily attach receipts, invoices, or other pertinent documentation directly to cost entries. This information is for your reference only, and is not shared with artists.

Remapping Costs: Adjust mappings effortlessly by removing the current mapping with a simple click and selecting a new contract, track, or release.

Override Royalty Periods: Our system now allows you to manually select from upcoming available periods or opt to “Do not report” if you prefer to exclude a cost from all reporting periods temporarily.

New to the platform? Here’s a quick guide to get you started with the Costs tool.

This tool is designed to help you enter and manage all recoupable expenses associated with your contracts. When you log into Tone, navigate to the Costs page under the Royalties Hub. Here, you can add new costs by going to the last row in the list and entering the necessary details such as description, transaction date, amount, and cost type.

Each of these fields plays a crucial role in how costs are managed and reported:

Description: Enter a clear and specific description for each cost, as this appears on artist statements and should be easily understandable.

Transaction Date: This is crucial for determining the reporting period for the cost. Tone uses the ISO date format (YYYY-MM-DD), but you can adjust the date format settings if you’re importing data from systems using different formats.

Amount and Cost Type: These details help categorize the expense correctly under your contract terms, affecting how costs are recouped during payout calculations.

Cost Mapping: Assign each cost to the relevant contract, track, or release to ensure that expenses are recouped correctly according to contractual agreements.

Tips for Effective Cost Management

Customize Views: Use filters to manage which costs are displayed. For example, focusing on unreported or pending expenses for spot-checking ahead of your next period.

Documentation: Make Tone your team’s financial hub and keep your records organized by attaching all related receipts and invoices to their respective cost entries. This ensures all documentation is readily available for audits or reviews.

Stay Informed: Regularly check the status of costs to manage them proactively and ensure they’re included in the reporting period you want to apply them to.

Our platform is designed to reduce the complexity of financial management, allowing you to focus more on strategic decisions and less on administrative tasks. Embrace these new features to enhance your label’s efficiency and maintain a clear overview of your financials.

Ready to streamline your royalties management process? Explore these new features by logging into your Tone account or booking a demo with us today. Let Tone transform your financial management strategy and help you focus on what really matters—your music.

The post Streamline Royalties Management With Our Costs Tool appeared first on Tone.

The Right Royalty Management Platform: Why Tone Stands Out

Kate Dessa — Thu, 27 Feb 2025 17:30:00 +0000

For many labels, managing royalties becomes a cumbersome process, especially when they rely on outdated systems like Excel and disjointed third-party payment apps. That means for artists, the process is frustrating, opaque and unpredictable, which leads to lots of questions for your label to field. Making the switch to an integrated platform like Tone can transform these challenges into streamlined operations that empower artists and strengthen their trust in your label.

Why Artists Love Labels Who Choose Tone Over Other Platforms

Seamless royalty payments

At Tone, we’ve streamlined the royalty payment process by integrating it directly within our royalties management platform. This approach not only simplifies your workflows but also facilitates timely and accurate payments directly to your artists’ bank accounts. Our platform relieves your team of the burden of juggling multiple systems, while also giving you peace of mind that your artists are getting paid properly. No more wondering how, when, and where payments are made.

Enhanced Onboarding and Transparency

We have refined the onboarding process to ensure a smooth transition for your artists. From the moment they login, our royalties platform takes them through the steps to set up their account for payments, including bank and tax information. This not only fosters transparency, but also allows you, as a label, to monitor which artists are payment-ready.

How Bank and Tax Status Monitoring Works

You can quickly view whether artists have been invited to join Tone, have activated their accounts, or need to update their bank and tax information. This feature keeps all financial data up-to-date, which is crucial for smooth payment processes.

User-friendly Dashboard

Understanding and managing royalties shouldn’t require advanced technical skills. Tone’s dashboards are designed for clarity and ease of use, empowering your label and your artists with tools to understand and explore their earnings. This transparency allows you and your artists to manage finances with confidence, ensuring both can focus more on music and less on math.

Advanced Analytics

As soon as you release statements to your artists, detailed analytics on earnings and streaming data are ready at their fingertips. This type of access to visualized analytics is vital in the constantly-changing music market, enabling swift decisions that propel you and your artists ahead.

Here's how artists can see their analytics

Artists can delve into their financial progress, viewing detailed breakdowns by track, platform, or territory. This visibility into sales and streaming patterns is crucial for understanding market trends and optimizing strategies.

When your artists are on Tone they can monitor their progress against recoupable costs, view detailed sales from previous periods, and analyze performance across various dimensions. This granular insight into their financial landscape is not just empowering—it’s essential for making informed decisions that align with their artistic and business goals.

Dedicated Artist Support

At Tone, we pride ourselves on delivering dedicated, comprehensive support. We know that smooth operations are essential for building trust and maintaining continuity. Our support team works directly with artists on everything from dashboard navigation to royalty statement interpretation. This proactive approach takes the burden off your label by handling inquiries that would otherwise consume your team’s time and resources. By shifting these day-to-day support responsibilities away from your label, you’re free to focus on strategic initiatives that drive growth.

Embracing the Evolution of Music Royalties Management

As the music industry continues to evolve, Tone remains at the forefront, distinguished not only by our robust features but also by our commitment to innovation and user-centric design. We’ve developed our royalties platform with direct input from industry professionals, record labels and publishers, to ensure we meet the real-world needs of you and your artists.

In an era dominated by data-driven decisions, Tone stands out as a royalties processing and management partner by prioritizing functionality, security and support. Our royalties platform is designed to enhance your operational efficiency and financial transparency, enabling you to build stronger relationships with your artists and optimize every revenue opportunity.

Ready to Transform Your Label’s Royalty Management?

If you’re looking to revolutionize how you manage royalties and strengthen your relationships with artists, share this article with your team and book a demo with us today. Discover how Tone can make every release and stream count towards the success of both your label and your artists.

Together, let’s harness the full potential of your music revenue.

The post The Right Royalty Management Platform: Why Tone Stands Out appeared first on Tone.

15 reasons to choose Tone over other royalty platforms

Naomi Con — Tue, 27 Aug 2024 20:24:40 +0000

Here at Tone, we have a team of royalties professionals with 30+ years of combined experience. Our team knows how to process royalty periods accurately, expertly avoiding the pitfalls in other royalty processing platforms.

But we’re guessing you didn’t get into the music industry because you’re passionate about the math on artists’ statements, like our team is. You want to pay your artists fairly, accurately, and on time, but the prospect of learning how to do it yourself or hiring a team is overwhelming. We saw this as an opportunity to meet you where you are and build a more intuitive and comprehensive platform with validations built in to protect you from tripping yourself up.

To be fair, comparing other royalty platforms and Tone isn’t a 1:1 comparison. Other royalty platforms are royalty accounting softwares that have established themselves as reliable tools for royalties experts to complete the accounting task. On the other hand, Tone is an integrated platform for royalty accounting, data analytics, and payments. Tone is designed to be user-friendly and transparent for everyone, providing additional features and empowering your whole team to maximize the royalties workflow.

Here are 15 reasons modern music companies should choose Tone over other royalty platforms:

1. Tone includes integrated payments. Once you’ve processed your royalties and generated statements, the next step is getting money into the hands of your payees. Easier said than done. With other royalty platforms, your team has to manage a separate payments tool, which introduces additional steps and opportunities for mistakes. With Tone, payments are fully integrated into your workflow and processed through the Tone app. We also provide fund tracking, and our support team manages any returned payments, freeing up even more time for your team. Most importantly, your team is in control of which statements get paid out, whether that’s all of them or just a subset, and when.

*Disclaimer: The data shown here is for demonstration purposes only.

2. Tone gathers your payee bank account and tax information. We knew that integrated payments would be a valuable function for a royalties platform, but we didn’t stop there. Tone only pays payee accounts that have verifiable tax info on file, and we collect that info from your payees as part of our payee onboarding process. So, say goodbye to chasing down tax info come tax time! Our team also collects your payees’ bank account information, so that it’s easy to make payments when you’re ready. This is just another way our software-and-services offering helps your team focus on more high-value activities than confirming routing numbers.

3. Tone handles your payee support. When you and your payees begin using Tone, our support team makes themselves available to answer any questions your payees have related to royalties, payments, and using Tone. That can be dozens of emails landing in our inbox instead of yours, and our friendly support team provides quick responses, making your payee experience even better. With this service, the conversations you have with your payees can be focused on the music you’re making together, rather than what each line of their royalty statement means or when to expect their next payment.

4. Tone offers your payees a uniquely valuable experience. With Tone, you can offer current and future artists easy-to-read statements, expert support from the Tone team, a personalized dashboard, predictable royalty accounting, and analytics tools that help them understand their income better. With other royalty platforms, you’ll get your artist statements and … that’s about it. Your payees are the heart of your business and giving them tools that help them succeed will be a competitive advantage when you’re looking to sign your new favorite artist.

*Disclaimer: The data shown here is for demonstration purposes only.

5. Tone is for your whole team: leaders, A&R, accountants, marketers, and everyone else. Companies that use other royalty platforms probably aren’t sharing it with their label managers or marketing teams. On other royalty platforms, there’s not much designed for those groups, and it’s not easy enough to access what is there. The opposite is true of Tone. We’ve specifically designed features that your execs and A&R team members will be eager to access, like our insights dashboards. Plus, we’ve made it super easy to add team members and set their permissions, so your whole team can have access to only the tools and information they’ll find valuable. Maybe your marketing team wants to add marketing costs and view insights on per-project spend in the insights tab. Maybe your accountants want to fund royalty periods and view past payments. You can even add your outside legal counsel to add in contract information and details as they’re negotiated. No matter what your team looks like, all access is controlled by you, but we recommend you don’t hog Tone!

*Disclaimer: The data shown here is for demonstration purposes only.

6. Tone provides a guided onboarding experience. Changing software tools can be daunting. In the royalties world, it’s often an incredibly painful process that involves numerous templates your team has to fill out in detail before uploading the templates to your new system and reconciling any errors that appear. At Tone, we appreciate the challenge that changing platforms presents and the trust you put in us as you make the move. For that reason, we’ve developed a process that guides you through onboarding, with dedicated working sessions and expert consultation from our support and royalty services teams. Plus, all of your onboarding data is entered in our app (no excel templates here!) and validated as you go.

*Disclaimer: The data shown here is for demonstration purposes only.

7. Tone lets you visualize the relationships between your royalty data. You know there are contracts, payees, catalog, territories, and rate models affecting your royalty calculations. But where do you go to see which artist contract is linked to which tracks on which releases? And is it set up right? At Tone, we’ve answered these questions with convenient, integrated ways to see all those interconnections, including crossed contracts, and verify they’re set up accurately. For example, in Tone you can quickly jump between a contract and its payee, because the contract view has a link to the payee, and the payee view has a link to the contract. In the interfaces of other royalty platforms, each payee is listed in the contract view, but it’s not a link, so you have to search that payee name separately on the payee page, which makes moving between items time consuming.

*Disclaimer: The data shown here is for demonstration purposes only.

8. Tone can collect sales statements on your behalf. If you want to save extra time, Tone provides the option for you to skip a couple of steps by giving us access to your sales sources. To take advantage, just share the login credentials for your sales portals, and we will sync over new statements when they become available. Once the sales statements are processed, your team will receive a notification to complete the sales reconciliation workflow before we include the statement in a royalty period.

9. Tone gives you an opportunity to verify that you received the funds indicated in your sales statements. Have you ever wondered whether the totals on your sales statements match the funds deposited in your bank account? Tone has. That’s why we built our sales reconciliation workflow, which encourages you to verify the income you received before we include your statement in a royalty run. Other royalty platforms lack this verification step, which means it’s on you to verify that information outside of your royalties workflow.

*Disclaimer: The data shown here is for demonstration purposes only.

10. Tone provides near real-time insights into your income data. Once upon a time, the music industry waited six months to see the contents of their sales statements in a digestible way. At Tone, we know that data is too valuable to wait until your next semi-annual royalty period. Now, when you upload a sales statement in Tone, we start processing the statement immediately, then give you access to a page of insights that show which artists, tracks, and territories drove that income.

*Disclaimer: The data shown here is for demonstration purposes only.

11. Tone streamlines managing costs & expenses in-app. The money you spend on behalf of your payees is a key piece of royalties data, and Tone saves you time (and headaches) with our in-app Costs tool. In Tone, you can quickly copy & paste thousands of costs directly into the app, immediately validate each line, and easily connect your costs to a track, release, or contract, using Tone’s intuitive mapping functionality. Any costs you mark “Ready” are automatically included in the next applicable royalty period, based on your mapping. Compare that to the processes of other royalty platforms, where you have to download a spreadsheet, enter your costs, upload the completed spreadsheet, and wait to see if the other royalty platforms report any errors when parsing the file. Then, if you have multiple upcoming periods, you’ll need to remember to manually select the correct upcoming period for each cost based on the contract mapped to that cost. Time is money, and you’re losing it doing costs the way other royalty platforms do.

*Disclaimer: The data shown here is for demonstration purposes only.

12. Tone prevents errors with in-app validations. We know how much data goes into processing royalties and the level of attention to detail that’s required to do it correctly. That’s why we’ve built guardrails into our platform, to help you identify the tiny mistakes that can have an outsized impact on your calculations. For example, Tone flags potential duplicate catalog, sales, or costs as you go and warns you when you’ve entered a cost, advance, or opening balance with an unusual sign (negative vs positive number), allowing you to resolve those issues quickly. Tone also checks that all transactions within a statement sum to equal the closing balance and that closing balances match the opening balances of subsequent periods. It’s much harder to catch these types of mistakes on other royalty platforms, since the platform is built for experts who know to look for those specific errors and lacks the built-in checks and validations that we believe are essential.

13. Tone gives a clear view of how much payees have recouped in an easy-to-read visualization. Understanding your payees’ advances and how much they’ve recouped is a critical piece of information for your team. With that in mind, we asked ourselves what the easiest way to see that information would be and developed a dashboard that shows each of your payees and the percentage of their advance that’s been recouped. On other royalty platforms, you can get your payees’ negative balances easily, but the rest of that math is on you.

*Disclaimer: The data shown here is for demonstration purposes only.

14. Tone provides data analytics and an insights dashboard. Your royalties data are a gold mine of business insights, and making sure your whole team has easy access to that gold mine is one of our favorite things. Tone’s user-friendly insights dashboards quickly perform aggregations across millions of sales that exceed the Excel row limit (~1 million rows). Our unparalleled analytics tooling also gives you a variety of filters that allow you to dig into the integrated view of your sales data once it’s been processed in a royalty period. Plus, you’re able to save key views of the data for frequent reporting, and they update automatically when new data arrives!

*Disclaimer: The data shown here is for demonstration purposes only.

15. Tone is a pleasure to use. Although some other royalty platforms were certainly an upgrade from older systems, Tone is truly a platform for the future of the music industry. Tone is designed to be user-friendly and easy to navigate with really fast load times, so you’re never stuck wondering. While other royalty platforms and other royalty accounting platforms are made up of pages of uniform form fields and lists, Tone’s accessible interface integrates data visualization and tool-tips, highlights important tasks, and communicates what to expect next. Each aspect of our app is thoughtfully developed with your team in mind, so that processing royalties can be something you want to do.

The post 15 reasons to choose Tone over other royalty platforms appeared first on Tone.

Contract Tool Glossary

Khal — Tue, 21 May 2024 21:20:04 +0000

Not sure what to enter in each column in the Contract Tool? Here are explanations of what you need for each one.

TRACKS

Track Title – The title of the track (song).

ISRC – The International Standard Recording Code is a unique 12-character identifier used to distinguish an individual sound recording.

Version – The version of the song that is being listed here. For example, if it is the original version, you can leave this field blank. If it is a secondary version you can enter that here, e.g. explicit, radio edit.

Track Artist – The lead artist associated with this track.

Label – The label responsible for the release of this track.

P Line – The “P line” stands for “performing rights,” and it refers to the copyright information for the composition of the song. This includes the songwriters, the music publisher, and any other parties who hold rights to the composition of the song.

Duration – The length of the track in seconds.

Notes – Please enter any important information about this track that has not been entered in the previous columns.

Linked Contracts – This column is automatically filled with the # of contracts that are currently linked to the track. Sales generated by the track will abide by the rates and terms in these contracts.

RELEASES

Catalog Number – The primary identifying number associated with this release. In most cases this will be the UPC (Universal Product Code).

UPC – The Universal Product Code associated with this release. This is often provided by the distributor.

Release Date – The original release date of this release. This should be entered in the following format: yyyy/mm/dd

Distribution Channel – How this track is distributed, e.g. digital, physical, licensing. Create a different line for each channel of distribution.

Linked Tracks: This column is automatically filled with the # of tracks that are currently linked to the release. Sales generated by the release will be pro-rated across the linked tracks.

Linked Contracts: This column is automatically filled with the # of contracts that are currently linked to that track. Sales generated by this track will abide by the rates and terms in these contracts.

CONNECT TRACKS TO RELEASES

Catalog Number – Use the dropdown menu to select a Catalog No. associated with the release you have in mind.

Distribution Channel – Use the dropdown menu to select the distribution channel associated with the Catalog No. you chose.

Release Title – This field will automatically display the title of the release that matches the catalog number and distribution channel. A Release is an EP or Album.

ISRC – Use the dropdown menu to select the ISRC of the track you want to connect to the release you previously chose.

Track Title – This field will automatically display the title of the track that matches the ISRC number.

Payee Name – The name of the person or entity receiving the royalty payment.

Professionally Known As – The professional name of the artist.

Contact Email – the email address of the primary contact for this payee account.

Users (advanced field) – Tone users with access to this payee profile. Users without a checkmark need to activate their Tone account.

Bank status (advanced field) – Verified payees profiles have bank account information. If the payee profile is missing bank account information, Tone cannot pay out any outstanding royalties due.

Tax status (advanced field) – “Verified” payee profiles have uploaded their W9 tax info and passed the IRS validation process. Payees who provide their W8/W8BENE show up as “Accepted”. If the payee’s tax status is “missing”, they still need to provide their W9 or W8-BEN(E) forms before they can be paid any outstanding royalties due.

Contract Name – The title of the agreement between the label and the artist or producer.

Role – The role of who the contract relates to (e.g. the label, artist, producer).

Opening Balance – This should equal the closing balance from the previous royalty period. If there is no previous period, it will likely be 0.

Sequence – This is the accounting period group in which the contract will be processed.

Advance – The amount of the advance, if any, issued to the payee for this contract.

Contract Type – This will be either Net Receipts (calculated based on the sales terms of the contract) or Profit Share.

Profit Share % – If the contract is a profit share, enter the percentage of the profit that is owed to the payee of this contract.

Territory – The country in which the music will be distributed. Select Worldwide if there is no specific country.

The post Contract Tool Glossary appeared first on Tone.

Wondering how to read your royalty statement?

Khal — Mon, 13 May 2024 16:52:56 +0000

What exactly does “Opening Balance” mean?

This is your closing balance from the previous statement. If this is an inception to date royalty period (meaning your first statement with your label), that is why the balance is $0.

What are Transfers?

The collaborator’s share of the royalty income. For example, if another contract’s income or costs are crossed with this one, like another featured artist, those transactions are summarized here. Details of the transfers are displayed further down in the statement.

What is “Your share of Net Profit Deal”?

If your contract includes a Net Profit share, this will be your income with the royalty rate percentage of your net profit share deal applied

A summary of the Net Profit deal will also be displayed further down the statement, as pictured:

What is my Digital Income?

This is the contract’s share of the digital income earned this period.

How much will I actually receive?

The New Balance is the amount that you will actually receive from this statement. If the balance is negative, the contract has not yet recouped and therefore no payment will be due.

What time period is this for?

The time period will be listed at the top of the statement. For example, H1 2023 stands for the first half of 2023 (January to June) and H2 2203 stands for the 2nd half of 2023 (July to December). Q1 stands for the first quarter of the calendar year (Jan to March), etc.

What does “Unrecouped” mean?

This means that the contract has not yet recouped the advanced costs. The percentage you see is what has been recouped so far. When it reaches 100%, the contract is fully recouped.

What are the Costs?

These are the recoupable expenses associated with the contract during this royalty period, (e.g. artwork, recording costs, travel, marketing, etc), as well as the date of the transaction.

In the Sales Highlights section, what are the amounts shown to the right?

These are the sales that each release has generated on each platform (e.g. Spotify), each configuration of the platform (the type and level of streaming service, e.g Spotify Premium) and in each country.

What does my Sales Breakdown tell me?

Your sales breakdown will tell you exactly how much you have earned from each platform, the time period during which it was earned and the particular tier on the platform through which the sale came.

Questions? Please contact your label or reach out to us at support@tone.run

The post Wondering how to read your royalty statement? appeared first on Tone.

Can I choose how I get paid?

Khal — Tue, 20 Feb 2024 23:27:17 +0000

Payments are typically deposited into bank accounts, but in the event that we are not able to support your bank account or you would prefer another method, please contact support@tone.run to discuss other options.

The post Can I choose how I get paid? appeared first on Tone.