A friend of mine wanted me to explain music publishing and he asked me to “use language a 2nd grader would understand.” I figured this could serve our blog readers who need a primer (or refresher) about music publishing. Enjoy!
Recorded music basically has two copyrights: The sound recording covers the recorded version of a release (e.g. Jimi Hendrix’s recorded version of “All Along the Watchtower”). This right is usually owned by the record label, or, if you’re an independent artist, you own it yourself.
The composition is the right to the underlying composition. Typically the songwriter(s) own this right, or their publishing firm, if they have one. In the above example, this belongs to Bob Dylan, who wrote “Watchtower” (and he owns the publishing rights, unlike many of his contemporaries).
There are a number of uses that exploit those two copyrights and different organizations license, pay, collect, and monetize them.
- When your music is played on Spotify and other streaming services, most of the streaming royalty goes to the owner of the recording. If you distribute with CD Baby, Distrokid, or Tunecore and signed up with their plain vanilla distribution service, this is the only royalty you get paid for.
- When you sign up for the “publishing admin” services from the above companies (like CD Baby’s Pro Publishing) they also collect two other royalties from the streaming services: the mechanical license royalty (for the composition) and the public performance royalty (collected by Performing Rights Organizations like ASCAP, BMI, and SESAC). These can add an additional 15-18% to your Spotify royalty payouts!
- When your music is publicly performed in bars, clubs, restaurants — when another artist performs it live, or it’s played on a jukebox or as background music, and even when you perform your own songs — those establishments pay a monthly license fee to the PROs. The PROs then distribute that license fee to their members, after taking their admin fee.
- When someone wants to record a cover version of your song, they need to pay you the mechanical license — but they can only do so if you have registered yourself as the songwriter/publisher. In these cases, whenever their cover version of your song is streamed on a service like Spotify, the sound recording royalty goes to them, and the publishing royalty comes to you.
- There are other licensing uses — sync licensing (licensing your music for TV, commercials, games, movies) is one. There are different ways these pay out, but again, there’s a component paid out for the sound recording, and one for the publishing.
- YouTube works roughly similarly to sync — there is a royalty for the sound recording and the composition. When YouTube videos earn money through advertising, the royalty paid, while tiny, is divvied up between those two.
None of the above means anything unless all these organizations know WHO owns the composition and who owns the sound recording. That’s why you need to make sure you’re registered.
For starters, you need to register with the Copyright Office of the US government to indicate that you own the composition. The old days of mailing yourself a cassette in a sealed envelope to prove copyright ownership are long gone (I mean, other than me, who even owns a cassette deck anymore?). You can register directly with the Copyright Office, or there are organizations like Cosynd that charge a modest fee and make it a much easier process.
Last October, the government passed the CASE Act, which creates a copyright small claims court making it easier for small copyrights owners to sue for infringement. However, your music needs to be officially copyrighted in order to file a lawsuit.
Registering with the US Copyright Office establishes your ownership, but that’s not enough. You then need to join a PRO and register yourself with SoundExchange. The PROs’ primary job is collecting performance royalties (for public performance of your music in bars, clubs, etc.), but they also have agreements with PROs worldwide to collect the foreign mechanical royalties (for the publishing i.e. composition) of your music played and sold abroad. ASCAP and BMI both charge a fee to join. SoundExchange collects and distributes royalties for “featured artists,” groups or individuals most prominently featured on a sound recording, track, or album. SoundExchange is free to register with.
But, just becoming an ASCAP or BMI member is not enough: you also have to register your songs with them. After all, if they don’t know which songs you own, how would they know to collect your royalties for you? And that is one of two big problems with the PROs.
Problem 1. PROs can’t identify ownership of much of the music that is publicly performed due to bad or missing metadata, so they end up with a huge “black box” slush fund of royalties they have collected but they don’t know the ownership of. How do they deal with that? Every three years or so, they just divide it up among all their songwriter members proportionately according to market share! The little guy who doesn’t register on the scale misses out on this.
Problem 2. PROs’ royalty tracking is poor even when you have properly registered your songs. Most venues don’t report playlist data or set lists to the PROs. So all these untracked royalties go (you guessed it) into the black box slush fund! Again, the little guy gets hosed.
But, there IS a way to help yourself get paid. Both ASCAP and BMI have a way you can register your live performances with them. You send your setlist and data about the venue, and eventually the PROs pay you a royalty rate depending on the size of the venue.
How much would you get paid for your publishing and public performance royalties? Depends. Usually less than your sound recording royalties from streaming and selling CDs and vinyl. But if those royalties are beefy enough that an additional 20% from publishing and public performance is meaningful, then sign up for a service that helps you collect. And you could get lucky and get a big sync placement in a commercial that could net you anywhere from $200 to $40,000… so you never know.
Tony van Veen is the CEO of DIY Media Group, the parent company of Disc Makers, Merchly, and BookBaby. As a college student, he played in indie bands, created his own LPs, cassettes, and t-shirts, and sold them at shows. Today, he collects CDs, vinyl LPs, and concert t-shirts to support the artists he loves.
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5 thoughts on “Music publishing for 2nd graders”
Hi, one thing that I keep trying to get answers for is this mysterious process of establishing a “publishing” company. Almost none of the articles I read mention this, but a lot of people insist it is still true. Like this is why you see Chappell Music listed under the songs on a Police CD, or In One Ear And Out Your Mother Music on a Soundgarden one, etc. That it’s not enough to just join BMI or ASCAP – you have to form a publishing company, or join an existing one, or you won’t get paid. This is the explanation I’ve heard countless times, and is the reason given as to why, though having dozens of songs registered for over a decade on BMI, we’ve yet to receive a cent. Even though when registering the same songs through CD Baby’s publishing service, we started instantly collecting these royalties. Can you possibly address this at some point?
Great article Tony but this leads me to a question. If I am only with the Plain Vanilla version of CD Baby which I am because I am also with ASCAP as my PRO yet my PRO does not collect BOTH of the royalties from streaming then who does? The only money I see from ASCAP is from Sync. As far as my guess is it would be Sound Exchange but I have not seen anything from them nor my PRO for streaming like Spotify and yes, I am registered with them as are my songs.
The problem with signing up with the PRO Pub deal with CD Baby is that they then act like your publisher and that is EXCLUSIVE so that negates me from signing any of my catalog to music libraries not too mention, I love CD Baby and they are great but they are not set up to collect sync royalties that I get thru placements from music libraries.
Chris, ASCAP collects public performance royalties when your music is performed at venues, plus the public performance royalty piece from streaming, plus publishing royalties from US radio airplay. A service like CD Baby Pro also collects mechanicals from streaming companies plus select other royalties, including the label part of SoundExchange for you. The fact that music libraries want part of your publishing royalties is an industry practice that I am not a fan of, and I know a number of CD Baby artists are conflicted by this – and are leaving royalties on the table by not signing up for a publishing admin service.
Horace, regarding your question…if you are with ASCAP you would also need to sign up as a Publisher in addition to just a writer so you would have 2 memberships which is what I have with them. I can’t speak for BMI but my understanding is with them, you CAN do that but it’s not necessary as if you are not also signed up as a Publisher they include that publishing money in your writer’s share. i would suggest contacting a writer rep there.
There are certain royalties for which you need to have established a publishing company in order to collect them. However, if you use CD Baby Pro, their distribution service that also includes publishing administration, you will get CD Baby to act as your publisher. They’ll collect all the royalties for you, yet you retain all your rights.