An interesting article about Music Publishing for mere mortals!

Collecting your publishing and performance royalties can be very daunting when you don't know the basics. As a publishing administrator its is surprising and sometimes a little worrying to discover how many songwriters are kept misinformed. There are plenty of stories (and even as many examples) of songwriters signing agreements without knowing exactly what they are stepping into. In many cases the songwriter or even their manager will discover that they have lost out on thousands of dollars many years after the fact. For this reason alone there is no excuse for songwriters not to know about music publishing. Viewing publishing as your long term investment is perhaps the best way to begin thinking!

So what do I need to know?
The basics are quite easy to follow and is simply all about knowing the bigger picture. Lets start with a songwriter who manages to get their song on an album. The real issue turns on publishing. But what exactly is publishing and royalties? What are 'income sources'? Basically, what am I entitled to?

If your song is released on a CD, Cassette or Record.
This is what publishers and record companies call 'Mechanicals' (Your music in a tangible [physical] format). When a record company releases an album or CD, the law requires that they must pay the owners of the copyright in the music for the use of the composition. "Mechanical" Royalties are based on several factors (the amount of the song you own, the royalty rate that prevails for that year and the number of records sold are just a few!). As you are the owner of the song you are the "Licensor". The record company uses your song by way of a "Mechanical License" (Allowing someone to use something that your own, according to certain terms that you set out). Record companies will rarely issue royalties before a mechanical license is signed by both you and their copyright or legal department. The bottom line is that the record company does not want to be liable for copyright infringement. It follows that once this step is completed the royalties can be paid out.

If your song is being played on the radio, satellite TV, cable or commercial or a live performance.
Payment for this type of use is often called a performance right. The rights that you own entitle you to performance royalties. Unlike mechanical rights, performance rights are anything that is played or performed (this includes radio play, on-line digital streaming and live performances). These royalties are entirely different from mechanicals and are separated into two types (Writer and Publisher royalties). As a songwriter you are entitled to both types unless you agree to sell or assign (transfer ownership) of your publishing.

Think of your writer share as 50% and the publisher portion as the other 50% of all of your performance royalties. Often songwriters make the mistake of only joining a performance society as a writer and not as a publisher. This means that they miss out on the other 50% of their entitlement. To make sure that you get 100% of your performance royalties you must join a performance society as a writer and a publisher. Once you have joined as a writer and publisher it is up to you to register your songs in order for the society to collect royalties on them. Just because a co-writer registers your name on a song with a society, does not mean that you will receive royalties for that work. Once you have registered your songs under your writer and publisher accounts, the societies can collect your performance royalties. Be warned! If you do not register your songs within 18 months of performance, the society can liquidate the money that they collected (leaving you with nothing!). That is why registering your songs quickly is very important.

If your song is featured in a motion picture, video, DVD or anything that 'synchronizes' audio with visual.
These royalties are often called 'synchronization' or 'synch' rights. They are usually open to negotiation on how much you as a songwriter is entitled to from the use of the song. In almost all cases, an attorney should be used to negotiate such a deal. The amount that you are entitled to will often depend on how the production company use the song. For example if they use 5 seconds in a movie trailer that features your song in the foreground (prominently), expect to get more than if they used 1 second in the background of the movie. Your attorney should be able to tell you what the difference is between these uses and how much you should be asking for.

If your song is featured on an Internet pay-site as a permanent download.
These royalties differ from 'digital streaming' because once downloaded they are permanently owned by the user. The permanence of the download puts them in the category of mechanical royalties (however as they are a very new phenomena they are treated a little differently for now). Digital permanent download (DPD) licenses are issued in the same manner that you would for a mechanical. The main difference is that a DPD is licensed and paid on the basis of that individual song (independent of the album that it may feature on).The difference is that with albums, you are paid even if the customer only wants to hear somebody else's song and not yours.

If your song is released or performed abroad.
Foreign royalties exist when your music is distributed by record companies or media companies outside the US. The difference is how you collect from them. Usually the large publishers right down to smaller operations use sub-publishers (publishers that collect for them in different countries). Sub-publishing can be confusing if you are unfamiliar with this industry. However there are many societies that will work with songwriters to collect their publishing (including MCPS and CMRRA). These societies although foreign have systems where they can collect your international royalties from other foreign societies that you many not be able to join as a single songwriter. The most noteworthy point to make when it comes to foreign royalties is that it is not impossible to do it yourself. Most membership requirements are not more diffcult than setting up a bank account or publishing name with ASCAP or BMI.

Record Clubs.
Royalties are also payable on discounted CD sold by record clubs. These work in a very similar way to mechanical royalties but pay less because the CD's are sold at a lower price than a normal retailer.It follows that the royalty rate is far lower.

Learning about your music publishing rights
In conclusion to this brief exploration of publishing income sources, you should bear in mind that although it may not be so glamorous, it could help you make tens of thousands of lost dollars rather than losing them.

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