Composition Vs Sound Recording Royalties
When you create a new, original song, there are two different copyrights associated with it: one for the composition and one for the sound recording . Each copyright generates different revenue streams and each can have different owners.
If youre an independent artist, you likely own both the composition and sound recording copyright, which means you may receive royalties or license fees when either the composition or the sound recording is sold, performed, licensed, or used in any way by others. Check out our two-part series of blog posts if youre curious about all the rights and royalties you own and can earn as a songwriter, artist, publisher, label, and producer. Of course, those posts are missing one new revenue stream because it didnt exist at the time
What Is A License For
If any individual, group or company wanted to use your music for any reason, whether its the master recording for a video or the composition for a cover, they will need a license so that you, as the copyright owner, can get money from it in the form of a royalty. There are fair use laws, but I wont go into that.
The licensing money you get when someone uses your music composition is set by the government at a flat rate . Your permission is actually not required to obtain a license to use your music composition.
However, if someone using your composition wanted to tweak or change it a bit, like in a song cover, they would need your permission first. This includes changes like lyrics, melody and structure, but the tempo and key dont need your approval.
On the other hand, if you have full rights to the master recording, you can charge someone as much as you want for a license to use your recording. Permission is required and you have the right to refuse requests.
Definition Of Licenses In Effect
Generally, if BMI has a final license agreement with a music user and the license has not yet expired at the time your works are otherwise removed from BMIs repertoire, BMI retains the right to license your works to that music user for the duration of their license agreement. Once the license agreement ends, the license is no longer in effect, and BMI will no longer license or distribute royalties to you for performances that occur under a subsequent license. For a complete definition of licenses in effect, please review your BMI Affiliation agreement.
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Licensing And Copyrights For Beats
When I buy a beat from a producer who gives me the exclusive rights, I have received different contracts. Some are very precise, some arent, and it seems that the music production is 100 percent mine. Are there worldwide laws that always apply, even if the contract is very short?Generally for these situations, contract law will apply. Be careful and clear with what the letter of the contract is that you agree to.
What should always be contained in such a contract?Disclaimer: I am not an expert in contract law, nor in licensing beats. That said, Ive seen enough general contracts to be dangerous, so you should make sure that the following are clear:
- Who is the buyer?
- Who is the seller?
- What is bought?
- What are the terms of the sale, what does the buyer end up owning, and what are they allowed to do with it?
- Assurance that the seller owns 100 percent of the rights to the beat that is being sold .
- What are the buyers rights and obligations post sale?
- What are the sellers rights and obligations post sale?
It is good practice for both parties to have a lawyer look at any agreement. If youre buying a beat for cheap and dont want to spend the money on a lawyer, it can come back and bite you in the butt if your track blows up.
Streaming Revenue From Your Sound Recordings
What are streaming royalties?
This is money youre owed whenever your recordings whether youre the label, the artist, or both are streamed on platforms like Spotify, Apple Music, or Deezer. This royalty is sometimes called the streaming license fee.
How to collect streaming revenue?
With CD Baby as your distributor, well deliver your music to all the important digital platforms, collect the money youre owed, and add it to your account with detailed reports on your streaming activity across all platforms.
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Option To Have Songtrust Register You For A Pro
Todd: There was another tip I might want to put out there.
If you havent done any of this yet. If you havent registered with a PRO, and you havent registered with a publishing administrator, I think there is a time-save. SongTrust offers a service where theyll actually help you .” rel=”nofollow”> for a fee), theyll help get you set up with a PRO. And thats helpful because, you know, part of this discussion was about trying to save some energy and have one solution for all.
And thats another thing to consider. If SongTrust can do both registrations for you and get you signed up for a PRO at the same time and save some energy that might be worth it. Right?
Paul: Yeah, agreed. I think youre right.
Todd: Because then you need to know how to sign up for a PRO, whereas SongTrust already knows how. They can teach you , as their customer.
Paul: Right. Thats it. Yeah, I agree.
Follow Up Notes: SongTrust charge $100 upfront to cover setup and administrative costs. They also take a 15% commission on any royalties that we collect on your behalf. They ONLY collect your publishers share. You would receive your writers share directly from your Performing Rights Organization . And they wont be taking a charge on your writers share. I think thats very fair for the amount of upfront and ongoing work this involves.
Todd: Well, do you want to leave it at that for today, Paul, and we come back to some of these later?
What Are Music Royalties And How Do Royalties Work
Music royalties are payments that go to artists and songwriters for the use of their intellectual property. The types of music royalties include mechanical, public performance, synchronisation, and print music royalties. The music industry relies on these royalties as the main income for musicians.
There are two sides of music copyrights, master rights and publishing rights. Master rights belong to the owner of the original sound recording. The owner could be the artist, record label or recording studio, it all depends on who funded the recording.
Publishing rights belong to the owner of the actual musical composition. This refers to the notes, melodies, lyrics and anything else that goes into the song. The publishing rights will belong to you, the songwriter, unless you have signed your rights to a publisher.
A lot of artists write their own songs and will earn royalties for both the composing and performing side. This is the best situation because you could earn twice as many royalties when your recordings are played or broadcast.
Publishers and record labels can own and manage royalties. They receive royalties before the artist or songwriter. The songwriter or artists share of royalties is then allocated, which varies depending on the deal thats been signed.
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Word To The Wise: Never Pay A Licensing Company Money Up Front To Go Pitch You
If they believe in your music, they will pitch you and work solely on commission.
Some of the biggest and best independent licensing companies out there include:
- Secret Road
- Words and Music
- Catch The Moon Music
However, there are literally hundreds more. You can purchase a music licensing directory containing most licensing companies, publishing companies, music libraries and music supervisors from The Music Registry here for $100. The above licensing companies mostly wont take submissions directly from artists . Its best to get someone they trust to refer you .
Mechanical Royalties From Music Compositions
The Mechanical Licensing Collective launched in January of 2021 to help track, collect and pay mechanical royalties to songwriters and music publishers. They specially focus on music streamed and downloaded in the United States on Digital Service Providers . To get this royalty as a self-administered songwriter, you will need to become a member of the MLC.
To cover a wider range of mechanical royalties , you would need a publishing administrator.
Publishing admin services, like SongTrust, help to collect royalties generated from your music compositions all around the world. This includes mechanical royalties from someone streaming, downloading or using your song in a cover. Some services will charge a yearly fee to collect but some just take a percentage.
Here are some options, but do the research to see whats in your best interest:
When using a music distribution company, or music aggregator , you will often have a chance to sign up for their publishing admin services. I believe CDBaby and TuneCore offer it within their system, but DistroKid does not yet. This is a way to have a good majority of royalties collected and distributed to you in one company.
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Fees For Session Production Arranging Or Remixing Work
What are session fees?
As a musician, you probably do OTHER work outside of your own music-making. You play on a friends record. You help arrange or produce a track for someone in your scene. You remix a song by an artist halfway around the world. Sometimes youll work for free or as a favor for a friend, and sometimes most times you should get paid for these efforts.
How to collect music session fees?
This area is a little more nebulous, as terms are usually negotiable. For instance, should a producer get songwriting credit or just get points?
One thing is certain: Get your agreement in writing before you collaborate. Determine if this is a work-for-hire situation where youre contributing your talents for an upfront fee ONLY, or if you deserve some ownership stake or ongoing royalty split.
Performance Rights Organizations In Your Country Pick One And Sign Up
**Its important to note that if you go for an ASCAP membership as a songwriter, you also need to register a vanity publishing company. That means, just make up a name and register your publishing company with ASCAP. You must do this to get paid all of your music royalties. If you dont have your vanity publishing company registered as a corporation , or have a bank account under its name, make sure to tell ASCAP you are doing business as the vanity publishing company so they can write the checks appropriately. You can also sign up for direct deposit which expedites this entire process. ASCAP pays out 50% of the total money to the songwriter and 50% to the publisher. If you dont register a publishing company, you will only get half of your money.
If you are an unaffiliated songwriter with BMI, you dont need to register a vanity publishing company. BMI will pay you 100% of the money.
HOWEVER, if you sign up for an admin publishing company , they will collect your publishing money from your PRO, take their commission , and pay you out the rest. So, you dont need to register a vanity publishing company or register it as an LLC or open a bank account. This is a far easier option.
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All You Need To Know About Music Royalties
Having original songs is a key factor to creating your own voice and style as an artist. Therefore, there are multiple artists who write original music for themselves or for other people. Regardless of whether you are a singer-songwriter selling songs to other artists or performing your own original music, knowing what money is being made by this music is essential. These payments are referred to as royalties therefore, Groover wants to help out and guide you through the breakdown of a song and its royalties.
Songwriter Vs Recording Artist
A songwriter creates a musical composition, which is essentially the blueprint of a song. The authors of a composition are typically the lyricists and the composer .
A recording artist is someone who performs the music composition that a songwriter creates. Generally speaking, the authors of a sound recording are the recording artist and the producer .
These are important distinctions as the royalties involved are different for what role each person plays in the creation of a song. In some cases, the songwriter and recording artist are the same person or group in which they get more of copyright ownership and a larger share of royalties.
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Who Distributes Music Royalties
If you want to collect royalties then you need to sign up with a collection society. For songwriters, this will be PRS for Music. This is a UK organisation that collects revenue that you are owed for uses of your songs and is the best way to collect your royalties. PRS for Music collects and distributes royalties on behalf of the songwriter/composer. This is perfect if you write your own music!
PRS for Music includes two separate collecting societies, PRS and MCPS that operate together. Musical works that are performed or play get their royalties collected and distributed by PRS. MCPS collects and distributes royalties for musical works that have been reproduced or copied.
The Phonographic Performance Ltd society is another way in which you can collect royalties. This company collects royalties on behalf of performers and record labels.
PPL does a very similar job as the PRS. However, they specifically license the use of recorded music to be played in public, radio, TV or the internet. You will have to register each of your tracks on the website for free in order to collect royalties.
Music Publisher Vs Record Label
The musical composition of a song includes things like the structure, lyrics, melody and chord progression. In this case, a music publisher handles this aspect of music, whether its to help with the writing of the music to be performed or find opportunities for collecting royalties. Publishers represent songwriters and the compositions they create.
The master recording is the final product that you would typically consume or listen to when it comes to music. In the music industry, a record label is usually the one who will help you create the master recording so it can be sold and consumed to the public, whether its a physical copy or made available to download. Therefore, a label represents recording artists and the sound recording.
I like to think of the composition as a blueprint of the song where other artists can recreate or record their own master recording of it. This is essentially what we know as creating a cover of a song.
Its important to understand these concepts first as it starts to get confusing later when it comes to discussing licensing and royalties.
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Performance Royalties Generated By Master Recordings
If you are a recording artist or producer who owns the rights to your masters, then you would need SoundExchange to collect digital performance royalties generated by master recordings . This is specifically for non-interactive streams on streaming services , satellite radio services and non-interactive webcasts.
However, you are still owed public performance royalties from masters in other countries , which SoundExchange can help you to get.
If youre strictly a songwriter who does not perform the songs and have no ownership in the actual sound recording, then you technically dont need to sign up for SoundExchange. You would get performance royalties for your compositions from the Performance Rights Organization that you signed up for.
Recording artists and producers who have ownership of your sound recordings, register here:
Sync Licensing Company / Agent
Sync licensing companies, sometimes referred to as sync agents, work to get your music placed in TV shows, movies, trailers, commercials and video games.
Sync licensing companies, oftentimes referred to as sync agents, typically only represent artists who are also the sole songwriters. Sync agents are one-stop shops for music supervisors. They want to make it as easy as possible for the ad agency or TV show to use the song. Licensing companies can clear the songs immediately for the music supervisors. So if you cowrite with anyone, first make sure they are not signed to a publishing company . And make sure you get in writing , that you have full rights to the song to license without getting permission from your cowriters.
WORD TO THE WISE: Never pay a sync agent money up front to go pitch you. If they believe in your music, they will pitch you and work solely on commission. Commissions are typically between 25% and 50% of the up-front fee. Some will take a commission of your backend PRO royalties and some will not.
If you want to learn how to get your music synced and get a full list of reputable sync agencies, join Aris Take Academys course: Advanced Sync Strategies for Film, TV Shows and Video Games
Again, DO NOT pay anything up front. If any company charges you up front for these services its a scam. Run away !
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