Copyrights, Royalties and Licensing
by Al Delaney

Introduction

You’re a musician. You write and perform your own music. You want to “do” the music and not get bogged down in a bunch of business stuff. I understand that but if you’re good at what you do you might make some money beyond the occasional gig but only if you learn and apply some of that business stuff. Here we’re going to talk about the basics; what your rights are (as pertaining to your original music), how to protect those rights and how those rights can earn you money. In a following article we’ll go a little deeper and talk about how you can set up a business around your music.

Copyrights

Copyright law specifies who owns a song and what rights they have (it covers other types of material but we’ll just deal with songs here). The law is very simple and straightforward. Once you put an original song on paper or record it or reproduce it in any way you own the copyrights to that song. It could be just lyrics, just a melody or both but once it’s someplace other than just in your head, you own it. What does it mean to “own” it? It means there are certain things you can do with that song that no one else can. Here they are:

  1. You can reproduce copies of the song in written or recorded form.
  2. You can sell copies of your song.
  3. You can perform your song.
  4. You can create adaptations based upon your song.
  5. Only you can license others to use your song in any of the above ways.

That’s a pretty short list but it’s powerful. The first four items specify how a song can make money and the last item identifies who controls the money making process.

Legally your music is copyrighted as soon as you put it to paper but how can you really prove authorship? The best way is to register your song with the government’s Copyright Office. There are other ways, like mailing a copy of the song to yourself and then not opening the letter except in court if your ownership is challenged, but this is fraught with problems.

Registering a copyright only takes a few steps and it’s relatively inexpensive. You can download all the forms and instructions you need from the Copyright Offices’ website, www.loc.gov/copyright.

  1. Complete Forum PA (Performing Arts)—in most cases the Short Form PA will do.
  2. Make out a $30.00 check to the “Register of Copyrights”.
  3. Prepare a non-returnable copy of your song and/or melody.
  4. Package the above in one envelope and mail it to:

Library of Congress
Copyright Office
101 Independence Avenue, S.E.
Washington, D.C. 20559-6000

Here’s a money saving tip. You can copyright more than one song on the same forum for the same $30.00 fee. Just register them as a “Volume” of work—be sure to include copies of each of the songs in the “Volume”.

There is one other copyright registration you might consider. Forum SR (Sound Recording) is used to register the copyright of a particular version of a song. As an example, if you recorded a live performance of your song you might want to protect that recording.

Royalties

There are four recognized possible revenue streams (royalties) from an original song. These income sources cover the “rights” that a copyright holder controls and they include:

  • Performance Income: This is the income due whenever your song is publicly performed. “Publicly Performed” pretty much means anywhere; a club, radio station, background music in a department store, on the Internet, in an elevator or even when used as the ringer for a cell phone.
  • Mechanical Royalties: If you allow someone else to perform your song on their CD you’re due a royalty for each CD sold.
  • Synchronization Income: These are the royalties due if you allow your song to be performed in a movie or on a TV show.
  • Print Income: You’re also due a royalty if you allow your song to be reproduced in a songbook or on sheet music.
Managing Royalties

It’s the job of one or more music publishers to manage a songwriter’s royalties. The publishers’ split is 50% of the royalties. The traditional arrangement was that a songwriter would hire one publisher who would pitch his/her songs and handle all the licensing. Now it’s more typical, and I recommend this approach, that a songwriter self-publish—that is form his/her own publishing company. It is simple to do, does not cost a lot and affords you more control. Being self published you control the publisher’s 50% royalty split and can offer smaller percentages to others only for those jobs you don’t wish to handle. That said, the next two steps you should take in managing your royalties is to join a performance rights organization as a songwriter and then as a music publisher.

The performance rights organizations; ASCAP, BMI or SESAC, have set and efficient ways of assuring their members are properly compensated when their music is publicly performed. They collect licensing fees from music venues, Internet sites, and radio stations wanting to play their member’s music. Those fees are based upon the amount of music used and the amount of third party revenue it helps generate. After subtracting a small administrative fee, usually around 4%, the organization distributes the remainder among its members. The amounts paid are based upon how often a song is used. It should be noted that the performance rights organizations don’t send checks to their songwriter members; they send the checks to the songwriters’ publishers.

ASCAP, BMI and SESAC all have similar songwriter joining requirements that are fairly easy to meet. Also, within the last couple of years they’ve all dropped their signup fees—so it’s free. ASCAP’s requirements are that you have at least one original song that has been:

  • Commercially recorded
  • Or has been performed publicly in an ASCAP licensed venue
  • Or has been performed on radio, television or on the Internet
  • Or has been published and is available for sale.

Once you’re an affiliated songwriter and “music publishing capable” you’re ready to take advantage of the remaining possible revenue streams.

Congress has dictated standard fees for the recording and selling of copyrighted songs—mechanical royalties. If someone records one of your songs on their CD project the royalty due are $0.085 for every CD sold (if the song is longer than five minutes the amount jumps to $0.0165 per minute). But, it would be very difficult to track all the CD sales for any one project. Some might be sold in stores, some over the Internet and some at shows. So, instead of taking on this burden it’s best to employ an agency already set up to do this, at least in a round-about-way. The Harry Fox Agency performs this function. They don’t actually track sales directly. Instead they sell manufacturing licenses. When the recording artist has the projects’ CDs pressed he pays the agency a fee based upon the number of units manufactured. Then, like the performance organizations, The Harry Fox Agency subtracts a 4% administrative fee and cuts a check for the remainder to the songwriter’s publisher.

The Harry Fox Agency can also be retained to track and collect fees for synchronization income. Their fee is 5% for television and 10% for motion picture licensing. In this case your publisher negotiates the details of the license with the television or motion picture company and notifies The Harry Fox Agency. These negotiations can be for either a flat fee or a percent of earned revenue. The percent of earned revenue is harder to get and track but can be more lucrative.

It’s the publisher’s job to handle all aspects of licensing and tracking for print income.

OK, that’s the short course on Copyrights and Royalties. The main points are that it’s easy and inexpensive to register your copyrights. It’s easy and free to join a performance rights organization. It’s easy and inexpensive to form your own music publishing company (and affiliate it with a performance rights organization). And once you’ve done all that easy and inexpensive stuff you can get other people to track your music and send you checks. Not bad.

Here are some important related links

www.loc.gov/copyright
www.ascap.com
www.bmi.com
www.sesac.com
www.harryfox.com
www.governor.state.tx.us/music