If you are an aspiring songwriter, the promise of earning a steady stream of music royalties from the use of your songs is just that – a promise. Assuming that you’ve written songs that have the potential to attract an audience, and likewise a potential user of your songs (a licensee), understanding the numerous avenues available to license your original song is the next step on the road to earning money from your compositions.
Once you have an understanding of your music licensing options, increasing awareness and visibility for you and your material becomes an ongoing effort as you need to make connections throughout the music business. In this article, we’ll look at the range of music royalty opportunities and get some advice from a music publishing and licensing professional on how to expand your industry connections and increase the exposure for you and your catalog of songs.
Part I: Who licenses songs?
The short answer to this question is, anyone who wishes to earn money, enhance their product, attract an audience, or create an image or impression. Songs can become powerful pieces of a brand or artist identity. Cadillac used Led Zeppelin’s iconic guitar riff from “Rock ‘n’ Roll” to bring energy to its staid brand, while James Taylor continues to perform Carole King’s “You’ve Got a Friend” as one of his career-defining songs after more than forty years.
Before you license your song, you’ll need to secure a copyright to fully protect your rights to the song by registering it with the Library of Congress and by registering your work with a performance rights organization (BMI, ASCAP, SESAC). With your song registered, you’re now ready to explore the various licensing options to earn money from your song, often referred to as exploiting your copyright.
Getting a successful artist interested in recording his or her own version of your song is a great way to earn royalties. Copyright law requires anyone recording a version of your original song to pay you mechanical royalties on each record manufactured and distributed, as well as for downloads. Note that, as copyright owner, you also have the right to determine who will make the first recording to be publicly distributed of your new song. Some writers hold on to their best material hoping to land their own record deal, but many savvy writers are offering their strongest material to up-and-coming artists with career momentum. Doing so can help the writer gain a larger audience and industry profile. Ultimately, this decision is up to you.
Mechanical royalty rates are negotiated between the licensor (that’s you, if you control your own songs) and the licensee. Generally, in the case of mechanicals, the licensee will be the artist’s record label. The basis for negotiated mechanical license rates is the then current statutory license rate, set by the Copyright Royalty Board, and currently standing at 9.1¢ for each recording of your song up to five minutes in length. If the recording runs longer than five minutes, a formula is used to calculate a progressively higher mechanical rate as the song length is extended.
One point to note about mechanicals is that record labels will often require songwriters to accept a reduced rate if a song is to be included on an album. However, digital downloads of your song sold through iTunes, Amazon, etc., result in earning the full statutory rate due to a 1995 revision to Copyright law. The bottom line is that mechanical license revenues can form a significant part of a songwriter’s income stream if his or her song is recorded on an album that becomes a solid seller.
Public Performance Royalties
The next major source of potential licensing income for a songwriter is to secure frequent public performances of your songs. What is a public performance? When your song is performed live at a venue before an audience – via a live band, acoustic act, juke box, etc. – that is one type of public performance. However, the greatest opportunities to earn income in the U.S. via public performance come from use of your song on radio and television.
Public performance royalties in the U.S. via broadcast outlets generate hundreds of millions of dollars in revenue for songwriters and publishers each year. As just one example, think back to the ubiquitous theme song from the hit TV series Friends (the Rembrandts’ “I’ll Be There For You”) and how many times that song was performed publicly during Friends’ ten-year run in prime time, as well as the thousands of continuing syndicated broadcasts all around the world. Likewise, when a song becomes a major radio hit such as Katy Perry’s “California Gurls,” its nearly non-stop public performance racks up substantial earnings for the song’s writers and its publisher.
By joining one of the performing rights organizations (PROs for short), you can tap into the revenue potential offered by public performance. The PROs have the necessary systems and infrastructure to keep tabs on the various public performance outlets for your song and work closely with broadcasters, venues, and other licensees to collect royalties and pay writers and publishers. There are ample details on each firm’s website to fill you in on how each monitors, collects, and pays its respective members royalties.
A third form of income is from the use of your song as part of a larger video or film work. These are known as synchronization or synch licenses for short. Synch license fees vary widely from a “gratis” – or free – license to use your song as part of an audio/visual work, to up to six figure sums for a major motion picture or national advertising campaign. I spoke to a colleague who licenses songs for advertisements, and she mentioned that a recent national advertising campaign paid the publisher $400,000 for the use of a hit song under their advertisement. Like just about everything in the music business, synch fees are negotiated based on the perceived value of the usage to both the licensor and the licensee, and the $400K fee is not something an unknown indie artist could realistically hope to earn. The point is, there is money to be made in synch licensing. But even for gratis synchs, the exposure gained may be worth whatever deal you can arrive at.
For example, if you are a relatively unknown band and have the opportunity to license one of your songs for little to no money for use in a new installment of a popular video game series in exchange for a credit while the song is heard during game play, that may be a worthwhile opportunity. At the other end of the spectrum, if a movie director wants to use an iconic R&B song in a key scene of a romantic comedy, the song’s publisher is likely to negotiate a substantial royalty payment for use of the song in the movie, and its pre-release promotional efforts. Then, there may be additional royalties if the movie makes it to DVD or foreign markets.
Today, the overseas market for American music is equal to, or for some genres, greater than the size of the U.S. market. As a songwriter, however, it’s impractical to enter into the foreign licensing game without the proper connections to profit. For this reason, signing with a music publisher that has a proven track record with foreign licensing is usually the best way to develop song licensing income from overseas. All of the previously mentioned licensing opportunities (mechanical, public performance, synchs) exist in the major foreign territories and for a song that gains a global listening audience, the revenue potential is significant.
Part II: How to Increase Awareness and Visibility for Your Songs
No matter how good your song is, if no one in the industry who can either license it or help you secure licenses knows about it, your revenue potential will be very low. That’s why many songwriters decide to sign with a music publisher that has strong ties to licensors who typically use songs similar to those being created by the writer. It’s a trade off that requires the writer to usually share all licensing income on a 50-50 basis with the publisher. However, for that equal share in the royalties, the publisher accepts the responsibility to build awareness and visibility for the writer’s material and to secure appropriate licenses to help earn money from the song’s use.
To get some tips from a music licensing insider, I spoke with Michael Lorda, Concord Music Group’s Director of Publishing, who handles dozens of licensing deals weekly for the more than 17,000 song catalog he helps administer. Michael offered some practical advice for up-and-coming songwriters.
“There are several ways for songwriters to get their music to publishers,” says Lorda. “ASCAP and BMI have regular events, workshops and conferences for songwriters. Participating in those and networking at them can be very helpful. Participating in songwriting competitions is a great way to expose your material to publishers, too. There are several songwriter groups on LinkedIn, as well as other publishing and music industry groups on that site. I have noticed some publishing companies announcing that they are accepting demos. Certainly social networking is important.
“Another thing to do is to research music business attorneys. A good attorney will have contacts within the industry and may be able to help you find the right publisher for your songs. Billboard and Music Connection produce directories that list music publishers along with their contact information, and tell you which ones accept demos. Another avenue is for songwriters to try using some of the services that shop your songs to the industry, such as TAXI and Music Opps. I would suggest you speak with another songwriter that has used a service like this first before working with them to get an idea of what to expect.”
Landing a publishing deal requires excellent material, patience, and perseverance by the songwriter. The upside is you have a team of professionals representing your compositions and you can focus on creating more hit songs. Even if you sign with a publisher, it’s vital to educate yourself about the music publishing business by reading up on the subject, and then starting to meet and get to know people that work in all segments of the music publishing and licensing business. All three PROs offer their members outstanding workshops and seminars to help writers connect with publishers. You can look on each of their websites to learn about the various types of member workshops and when they are offered.
In the meantime, it’s not uncommon for an aspiring writer to be self-published until such time as there is interest from an established publisher. As a self-published songwriter, you can enter into any of the licenses mentioned earlier if there is a licensor interested in using your song. It makes sense to consult with a music attorney or other experienced music licensing professional if you have questions before entering into any license agreements.
If you’re looking to learn more, you can start by checking out the books mentioned below and consider joining a regional songwriting organization where you can become part of a community of writers. Doing so will help you navigate this sometimes complex side of the music business and grow your successful songwriting future.
Keith Hatschek is a regular contributor to the Disc Makers Blog and directs the Music Management Program at University of the Pacific. He has also written two music industry books, How to Get a Job in the Music Industry, which just came out in its third edition, and The Golden Moment: Recording Secrets from the Pros.
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All You Need to Know About the Music Business (By Don Passman)
The first and still the most complete guide to the music industry, written in terms that any musician can understand.
Music, Money and Success (By Todd and Jeff Brabec)
This book focuses on the myriad opportunities for writers and publishers to maximize earnings from their songs. Highly recommended.
Hey, That’s My Music (By Brooke Wentz)
This book looks specifically at how to license your music for film and TV, one of the most lucrative areas of licensing. Veteran music supervisor and licensing guru Brooke Wentz includes interviews and sample licensing forms in this excellent volume.
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12 thoughts on “Music licensing and leveraging your songs”
Hey there, glad to see the dialog following up on this point that the article touches on briefly. Just to clarify, I actually stated that the majority of all public performance revenues come from radio and TV performances of songs that are registered with ASCAP, BMI or SESAC. Every spin results in some level of songwriter and publisher income since copyright law requires broadcasters to pay for such music use.
RE: songs that are performed live in front of an audience, Humtune is basically correct in stating that a performance of “Lyin’ Eyes” written by The Eagles on a Friday night at the local steak and ale house does not generate a trackable royalty for the writers. That restaurant’s blanket license payment goes into the kitty at the PROs and gets divvied up by a formula specific to each PRO.
However, for the Top 300 grossing tours, set lists do get recorded according to my colleague, Sean O’Malley, Senior Director, Strategic Services at ASCAP “based upon Pollstar data and set lists provided by respective headlining and support artists. In addition, we conduct a census survey of the top 12 venues in the US.” So if you get a slot opening for Rascal Flatts, your set list will be sent in and royalties will be forthcoming for your songs performed each night.
What about the band playing original tunes gigging at a local club? So long as the club is a signatory to PRO, “BMI Live” and the just about to be launched ASCAP “On Stage” will allow members to report all performances of their registered songs and receive compensation. Thanks, Pamela and Paul for pointing this out.
Simply put, “the times they are a changin'” for small venue public performances of your songs and that will be a change for the better, IMHO. But you have to be affiliated with one of the PROs to particpate in this new opportunity to earn royalties from your song’s public performances.
Thanks, everyone, for the spirited dialog.
There is one erroneous section of the article. The PRO’s do NOT pay royalties for live performances of your song in clubs and restaurants. They all collect their fees up front from club owners. But, they have NO way of tracking what songs are played live as no records are kept anywhere (go ahead and ask them), and do NOT pay royalties on specific songs played live. Check your resources please!
@f56e55b049781af8bb676fe9e48cd971:disqus , actually they do pay! And there is a way to track songs that are played, I belong to BMI and they have a program called BMI Live, in which songwriters or performers can report their setlist by selecting songs from the BMI catalog, thus allowing those writers & publishers to get paid, even if you performed your own song that you wrote and it’s registered, you get paid. Gotta stay current Humtune.
the pro’s are collecting money for any music played live in bars and restaurants. I’ve been playing in bars for years and I GUARANTEE you I’m the only one who knows exactly what I played. Money was collected from the owners of the restaurant. I think it goes into a “Black Box”. I’d love to think that all that money went to some of the obscure artists who’s music I love and perform. But, sadly, it doesn’t. Don’t delude yourself. This is a major issue as to why several restaurants I play in stopped having music. Guess what that means? More TV’s less live music.
How do they know when someone else has played your song? They don’t. I played live last week. Can you tell me where that list is kept and how they plan to distribute the money they’ve already collected on (supposedly) your behalf? They don’t. Sorry!
I have been playing music in all kinds of venues for the past 40 years…Until recently, I never got royalties for live performances…Since they have changed the rules…I receive royalties on my songs that I perform,I am a happy camper now…Altho,I do not play resturaunts or clubs,It was about time…I belong to BMI and have for the past thirty years…
BMI does! They have a new program, BMI Live, which allows an artist to collect royalties for her/his OWN LIVE PERFORMANCES on a quarterly basis. It rocks.
they do not keep track of when your song is played by others….sorry. Seek the truth for your self.