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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