| Music Publishing: How Your Songwriting Generates Income by Joy R. Butler, Esq. This article on music publishing and songwriting income is a modified excerpt from the audiobook, The Musician's Guide Through the Legal Jungle: Answers to Frequently Asked Questions About Music Law View a detailed outline or listen to excerpts of the audiobook. As a songwriter, you earn money by licensing your songs for various uses, and collecting the corresponding license income. This process of generating income from your songwriting is music publishing. To understand music publishing, you should understand the distinction between a song and a sound recording. You should also understand the exclusive rights a copyright owner holds in his songs and sound recordings. If you're a bit foggy on these issues, you might want to review the article, What Exactly is A Music Copyright?. While some songwriters choose to handle their own music publishing, many songwriters work with a music publishing company. Music publishing companies are important in at least three areas. Naturally, their most important function is marketing and promoting your songs. Second, the music publishing company handles all the administrative paperwork involved with copyrighting, licensing and collecting royalties for your songs. Finally, a music publishing company may help you develop as a songwriter by finding other songwriters and lyricists with whom you can collaborate. In return for its services, the music publishing company generally receives 50% of all songwriting revenue. The most significant revenue for the typical songwriter comes from issuing the following licenses: Mechanical Licenses Performing Rights Licenses Synchronization Licenses Print Licenses Foreign Licenses Let's briefly go through each one. Mechancial Licenses A mechanical license gives a record company or other party the right to reproduce your song onto a record. You might negotiate this license directly with the person who wants to record your song. Alternatively, the person who wants to record your song may obtain a compulsory mechanical license. The compulsory mechanical license is a creation of the United States Copyright Act. Here's how it works. Once a song has been commercially released, anyone may make another recording of that song and sell copies of his recorded version as long as he pays the song's copyright owner the license fees set by copyright law. In order for a compulsory mechanical license to be valid, the copyright owner must have authorized the commercial release of the song, and the song must be non-dramatic. While the Copyright Act doesn't provide a specific definition for the term "non-dramatic song", most people think of it as a song that's not from a musical or an opera. The Copyright Office periodically modifies the compulsory mechanical license rate. As of January 1, 2000, the compulsory mechanical license rate, also called the statutory rate, is 7.55¢ per song per record for recordings of up to five minutes. If the recording is more than five minutes, the rate is 1.45¢ per minute per record. The next change is scheduled to become effective on January 1, 2002. As of that date, the statutory rate will increase to 8¢ for recordings up to five minutes, and 1.55¢ per minute for recordings over five minutes. Despite the existence of the compulsory mechanical license, most mechanical licenses are in fact negotiated. That's because the notice and accounting requirements of the compulsory mechanical license are quite cumbersome. Also, many artists record songs that have not been previously commercially released and, as a result, are not available for compulsory licensing. Nevertheless, the statutory compulsory mechanical license rate still has substantial importance because it provides a guideline for setting the negotiated license fee. Many songwriters or their music publishers use the Harry Fox Agency to negotiate and issue their mechanical licenses, and to collect the corresponding license fees. The Harry Fox Agency charges a fee equal to four and a half percent of the mechanical license fees they collect. Performing Rights Licenses Each time your song is performed in public, you are entitled to receive royalty income for that public performance. It doesn't matter whether your song is performed by a live band, or if a recorded version of your song is played. Both can qualify as a public performance. That means your song is performed publicly when a recording of it is broadcast on a radio station, when it is played as part of a television program or when it is played in a nightclub. To comply with copyright law, the radio station, television network, or club must have a performing rights license authorizing the public performance. With some limited exceptions, performing rights apply only to the song and not to the sound recording. Each time a song is performed publicly, the songwriter - but not the recording artist singing the song or the record company that released the record - is entitled to receive compensation. To eliminate the need to negotiate a separate license with each radio station, night club, and restaurant that wants to perform their song, songwriters or their music publishers affiliate with performing rights societies. ASCAP, BMI and SESAC are the performing rights societies in the United States. These associations specialize in negotiating performing rights licenses and collecting performing rights revenues. The societies often negotiate blanket licenses with radio stations, television networks, and restaurants that allow those organizations to perform any song in the catalog of the performing rights society issuing the blanket license. Synchronization Licenses Through a synchronization license, you authorize someone to use your song with visual images. The visual images might be from a commercial, film, video, television show or other audiovisual production. Synchronization fees are subject to negotiation and vary according to the popularity of the song and the importance of the song in the visual piece. For example, the synchronization fee to use an entire song in a major motion picture might be in the $50,000 to $75,000 range while the synchronization fee for use of a song as background music in a television show might range from $1,000 to $2,000. Print Licenses A print license authorizes the sale of your song in printed form. Printed music is sold as single song sheet music or as part of a folio, which is a book containing a collection of songs by one or more songwriters. Print licenses are generally issued to a company that manufactures and distributes printed music. The manufacturer then pays a royalty to the songwriter or his music publisher for each unit of sheet music and each folio that is sold. Foreign Licenses The same licenses that we just discussed - mechanical, performance, synchronization and print - are also issued in foreign countries. Songwriters or their music publisher typically retain an agent located in each of the foreign countries where the song is exploited. These sub-publishers - as they are frequently called -collect royalties generated in their country, retain about 15-25% as their fee, and pass the remainder along to the songwriter or U.S. music publisher. by Joy R. Butler, Esq. |