The owner of the song is entitled to certain exclusive rights. This means that only the copyright owner can do certain things with his song, unless people pay him to use it. When people pay the copyright owner, the owner is said to grant a license. The money from these licenses is what is called publishing. There are essentially four areas of publishing income: performance, mechanical, print and synchronization. There are a few others, but they rarely come into play.
The right to prohibit public performance of your song is the first right and area of publishing income. No one can play your song in public unless they pay you. BMI and ASCAP are responsible for collecting money for licenses from people who want to play your music. For example, every time your music is played on the radio, you are entitled to performance license money which BMI or ASCAP will collect for you. These organizations are involved in one small area of publishing (performance licenses) and are not true music publishers, but I will touch on this later.
The second right of the copyright owner is the right to reproduce the song. This is known as a mechanical right which gets its name from when they used to mechanically make records on wax tablets. This technique is gone but the name remains. A mechanical right means that each time someone makes a physical copy of the song you own the copyright for, you receive money. The current rate, as set by the United States Copyright Office, is 7.1 cents per song. Once again, there are exceptions to this, but they are too complicated to go into here. If you write 10 songs on an album at 7.1 cents per song, you will receive 71 cents for every album made. If you sell a million albums, it does not take an accountant to figure out you are looking at serious publishing money.
The third and fourth main areas for publishing money are print and synchronization licenses. These are small compared to performance and mechanical, but they are additional sources of revenue. A band receives publishing money from a print license any time the song is written down and published. For example, the piano score for "Somewhere Over the Rainbow" has probably made a lot of money from print licenses. Money from print licenses are usually a few cents per copy printed. A synchronization license, affectionately know as a "synch" license in the industry, is granted any time your song accompanies a visual image. Videos are a good example of synch licenses. In addition, commercials, movie soundtracks, and background music on TV are also examples of publishing money from synch licenses. The amount of money for a synch license varies widely. Your record company will demand a free license for a video while a feature song for a movie soundtrack from an established artist can exceed $100,000. Each license will generate a different fee.
Since figuring out how much money everyone owes you from your publishing can be difficult, many bands hire a publisher. A publisher's job is to collect all this money for you. They will also have a better idea of the going rate for the various licenses you will want to grant. For example, how much would you charge for a commercial which wanted to use your song? Publishers "administer" your copyrights which is just an industry term for collect money. Not surprisingly, publishers do not do this for free. Most publishers will collect your money and give you half while they keep the other half as a fee. There are other arrangements, but this is the standard publishing deal. It surprises many bands when they find out that they actually sign over ("assign") the copyright to the publishing company. A publishing agreement usually states that the band assigns their copyright to the publisher and in exchange, the band will receive one half of the publishing revenues generated. In this way, it really does not matter that you do not own the copyrights as long as you still receive your money. For those of you who want to know why you must assign your copyright, the answer lies in a legal technicality that states the owner of the copyright must sue to enforce a copyright. You pay the publisher to take care of enforcing your copyright for you. Ask yourself the question, would you rather be in court or on the stage?
Many record contracts force you to give your publishing to their publishing company. This should be avoided if possible; it is just another way for the record company to take more of your money. The reputation of publishers is very important. Only sign a publishing agreement with a company that knows what they are doing. A good publisher will make you money. The alternative is to administer your own publishing and set up your own publishing company for your songs.
Michael P. McCready
Attorney at Law
The Music Law Offices offer a full range of services to individuals, partnerships and corporations in the music industry. Michael P. McCready and the staff of the Music Law Offices provide the highest quality representation.
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About Michael P McCready
Michael McCready graduated from the University of Richmond in three years with a B.A. cum laude in political science and history. He attended the T.C. Williams School of Law where he was inducted into several academic and leadership societies. A member of the Law Review and Moot Court Boards, he represented the law school in several national negotiation competitions. After graduation, Mr. McCready clerked for the Hon. Richard B. Kellam, United States District Judge in Norfolk, Virginia.
He is a member of The Recording Academy, American Bar Association's Forum on Entertainment and Sports Industries, Chicago Bar Association and the Association of Trial Lawyers of America. He has been admitted to practice in many state and federal courts, including the United States Supreme Court.
Mr. McCready's experience in the entertainment field goes back to 1984. He has been a disc jockey, band manager, booking agent and concert promoter. He represents clients in all areas of the entertainment industry including, music, radio, television, stage and book publishing. His music law practice includes representing bands, record labels, production companies, recording studios, promoters, and music publishers. His work includes copyrights, analyzing and drafting contracts, trademarks, publishing and litigation.