The Modern Guide to Music Publishing PDF

The Modern Guide to Music Publishing ider Me P r ov l s o ry C c h a n i...

The Modern Guide to Music Publishing ider Me P r ov l s o ry C c h a n i o ry r C o m p r e c o r d o - p u b l i c a l u u t i t e m as t e r ing M ec h sh in r ive at -w c t a n ic g t C o r oa a l S C et e SI c R U n PL i v y o M MU AP t -s ic E A B D E R ac songwriter r publishers Share Performance Music RO t r o M S Publishing pe RA Re AP VI Le registration rfo RA tt organization I n t e r ac t i v e MCPS ECCO sic er o i n g YO U T U B E P ISRC performing Rights AUME Ag r e IPA ASCAp Royalties m a zo n mu KODA r m a n c e Fac e ISWC IPI f D i r ec t i o n C o l l Arranger AUME AKM ACUM ement AMc SACM SDRM Misallocated SACEM SGAE SPA Derivative work ICE PRS License ZAIKS A SESAC NCB LOUDR master e r r ec o c t IMRO SIAE GEMA recording rd SUISA p e r at i o n A SABAM CMRRA Sample HFA e IMRO os TONO ec BUMA/ oir STEMRA CMRRA SUISA Musicautor SOCAN t dig bo ive z compass R s ni BMI t i ta r maoder Ma DSA ok t Administrator na l Composition e n M se g Pa e em io ic rv s e u n n ic e tC M d t D op et c o r EE yr n a re g a ze igh e di i n M D s o r T t Ro L f a - PA o u n EO S T ya lt y B oa r g A P RA t e r A rr O d Cata l o e t dc Ti tL e l o k to k S p l i t S h e e T u b ud S p o t i f y Yo u  Table Of Contents 1. Welcome to the Modern Guide to Music Publishing 2. The Two Halves of a Song a. Composition and Recording 3. Breaking Down the Composition of a Song a. What does a composition entail? b. What is a copyright & what rights do you earn? 4. Let’s Get into Music Publishing 5. The Heart of the Matter: A Deep Dive into Music Publishing Royalties a. What are the different types of royalties? b. How are songwriters paid? c. What is a license? 6. Global Music Publishing Royalty Collection: How does it Work? a. What do collection societies do? 7. Which Music Publishing Situation is Right for Me? a. How does the money your songs earn get from the collection society to the songwriters? 8. Songtrust: Access What You’re Due 9. What’s Ahead: The Future of Modern Music Publishing 10. Glossary 2 | www.songtrust.com  Welcome to the Modern Guide to Music Publishing There’s never been a more exciting time to be This guide is intended to answer a key question: a music creator. According to MIDiA Research, the What do creators need to know to be successful? number of artists releasing their music directly to the world grew by 35 percent in 2018, faster than The answer is complex, but our goal is to make it as clear, any other segment of the music business. The transparent, and understandable as we possibly can. increase in access to creative tools coupled with new and innovative distribution models has We’re addressing this topic because helping music resulted in more original songs being creators succeed is the reason we go to composed, released, and listened work every day. Songtrust is more than This guide is to around the world. With every just a rights management platform intended to answer new composition and recording, a key question: and publishing administrator: a chain of rights are created we’re a team of experts in the music and, ultimately, royalties are what do community who strive to educate, earned. Getting these royalties creators need support, and encourage creators, to those who have earned them to know to be representatives, and businesses is an elaborate system further successful? across the music industry. complicated by the global network they touch. We hope that you’ll finish this guide with a better understanding of the business behind And music publishing? Forget it. We hear from songs and that you’ll have actionable resources for songwriters, musicians, producers, labels, and even reaching your goals. We’ve included an extensive managers who say, “I just can’t wrap my head around glossary, too, to help make often-opaque terminology publishing, and I’ve pretty much given up trying.” more transparent; if you see a term highlighted in the The common refrain is that it’s really tough for music text, you’ll find it explained in the glossary at the end of creators to understand how their songs can create the book. meaningful income and fuel a viable career. And often significant portions of what music creators earn are Over the next few chapters, you’ll gain a deeper left on the table because they haven’t registered their understanding of the complexities of the general music work. We’re here to change that narrative and help royalties landscape, and music publishing specifically. you access what you’re due. This fundamental knowledge to further your career as a creator. Are you ready to get started? 3 | www.songtrust.com  The Two Halves of a Song According to urban lore (otherwise known as a quick internet search), the most recorded song in history is “Yesterday,” written by Paul McCartney of The Beatles. Paul wrote this song on his own (although it’s credited to both him and John Lennon), and The Beatles recorded the famous version you’re likely hearing in your head right now. But hundreds, possibly thousands, of other recording artists have made and released their own versions of this classic. This is a perfect example of how an original song is broken down into two parts (or halves): the composition and the master recording. original song Composition Master (Publishing) (Recording) Performance Mechanical Digital Master Royalties Royalties Performance Recording Royalties Revenues Industry Insight There are two halves to a song: the composition and the master recording. While there is always one composition, there can be several recordings for one song. 4 | www.songtrust.com  “Yesterday” (composition) by Paul McCartney Recording Recording Recording Recording #1 #3 #5 #7 Recording Recording Recording Recording #2 #4 #6 #8 The composition refers to the unique qualities that the songwriter’s title is (composer, producer, band define a song, such as its lyrics, melody, and structure. member, film/television writer, DJ, etc.). Anyone who The composition copyright (or ownership) belongs to writes or co-writes an original composition or song, the songwriter(s) and their respective publishers; they and/or any owner of an original composition or song, both collect composition royalties—performance and is due royalties when their music is used. And unless a mechanical—which we’ll get into later. songwriter signs a formal publishing deal or works with an administrator—which we’ll discuss in more depth The sound recording represents one specific recording later—they’re considered their own publisher. of a song, known as the master recording. A single composition can have many master recordings (e.g., Seems simple, right? Ultimately it is, but a lot of live versions, radio edits, or covers), and these master confusion arises when you get into the details of how recordings can be controlled by different labels or songwriting royalties are collected and paid out to artists. Master recording royalties are collected by your songwriters. As long as you understand this idea—that distributor and/or your label. your song is split into two parts and both earn money in different ways—you’re already ahead of the majority Anyone who creates original music is a songwriter, of the industry. and every songwriter can collect money—called royalties—when their music is used. It doesn’t matter Let’s dig into this a little more. what genre the music is, and it doesn’t matter what 5 | www.songtrust.com  Breaking Down the Composition of a Song Did you know John Lennon, another Beatle and one of the most important songwriters in history, wrote his first song at 18? It was called “Hello Little Girl,” and went on to become a UK top 10 hit for British Merseybeat group The Fourmost almost five years later. To better understand what happened after Lennon finished writing his song, we have to start at the beginning. What happens when you write a song? Song = Tangible Form You = own the copyright When you write a song and record it in any format, you and are the publisher automatically earn ownership of that piece of work as well as a set of rights to use that work in a variety of ways. Copyright law protects songwriters by giving them exclusive rights to grant or deny the reproduction, distribution, or performance of their work. When that work is shared and engaged with by the public, the recording of that song starts to generate royalties. As well as creating and owning the songs, you become the What rights do you get? Reproduce the work publisher of your songs. Yes, you read that right: right out Distribute copies of the work the gate, you are your own publisher. Music publishing Perform the work publicly refers to the business of making money as the copyright Make a derivative work holder of the music you write. In an ideal world, you’d Display the work publicly write an original piece of music; get a physical and/or digital copy of the song; release it to where music fans would buy, stream, or hear it on the radio; and, along with your ownership and rights, you’d start collecting money on that song. In practice, it doesn’t always work out that way. When you write an original song, have a physical or digital What royalties are generated? copy of it, and correctly register it with the appropriate Mechanical societies (and ideally start marketing your music to the Performance public), you can start earning royalties on that music, Micro-Sync both for the recording and the composition of the song. For many songwriters, publishing royalties are their most consistent and dependable source of income. 6 | www.songtrust.com  Reproduce the work What Distribute copies of the work rights Perform the work publicly do you get? Make a derivative work Display the work publicly What’s more, “being discovered”—and therefore A common misconception is that a songwriter doesn’t earning income from your music—no longer depends actually own their work until they’ve registered it upon an established music publishing company formally, for example, with the U.S. Copyright Office. pitching music to exclusive connections. Advances That’s not correct. The moment you decide that the in digital music distribution and streaming services song you’ve been creating is finished and it exists in have made it possible for independent artists to make some tangible form, such as a lead sheet or a recorded their music available to a worldwide audience with demo, it’s your intellectual property. You automatically the click of a few buttons. And it’s now possible for own the copyright for that composition. There are, a songwriter to maintain 100 percent ownership of however, circumstances in which you may want to file their work, publish their own music, and collect global a formal copyright. When in doubt, consult legal advice royalties on that music. or the copyright office. Despite that, collecting what you earn is complicated Co-Writing by the fact that every country has its own set of rules The “solo act” isn’t the typical songwriter scenario and regulations about how publishing royalties are anymore. It’s increasingly common for songwriters to calculated, and it’s nearly impossible to get a straight work on songs together, the collaborators commonly answer about how that’s done. We’ll explain it more as called co-writers. Your co-writer(s) could be a fellow we dig into the global network of collection societies in songwriter, a band member, a producer or arranger, or a few chapters. someone who works on the song in another capacity. Each songwriter owns a percentage of the song and What is a copyright, the publishing rights, and they’re entitled to publishing and how does it affect me? royalties based on that ownership. This is established Copyright refers to rights granted by law to the in the form of an agreement between the songwriters. creator of an original work. Copyright ownership is These agreements, or split sheets, of royalty terms divided, as we mentioned earlier, into two parts—the are referred to as “splits.” All writers must agree on sound recording and the underlying composition—and them. both parts collect royalties, albeit differently. 7 | www.songtrust.com Figuring out Splits also receive writing credit? While it might seem There are a lot of simple collaborative scenarios. awkward to address these topics during the creative For example, say four people in a band sit in a practice process, doing so can prevent future confusion. You’re space for ten hours a day. Every day, they work on a in the business of creativity, after all—so don’t forget song and each band member (yes, even the drummer) the business. shares in the creative work. Many bands share things equally, even the lyrics, because of the spirit and ethos As mentioned earlier, a good way to set this in stone of the group. Others have a principal songwriter who is to get it in writing in the form of a split sheet. While might cut in another member for a smaller percentage having a formal copyright registration isn’t completely for contributing a guitar riff or a unique beat. Other necessary (remember, as intellectual property, a song songs, including the infamous “Uptown Funk,” have is copyrighted as soon as it’s created), it can be helpful very complicated writer contribution breakdowns that if you’re ever involved in a lawsuit regarding the use of can take legal support to work out. your intellectual property. Which is why when you’re collaborating on songs, it’s Once a song becomes a joint work, meaning that you important to decide on the splits as you write the song and your collaborators have agreed that you’re co- or as soon as all writers agree that the song is finished. writers and therefore co-owners of the song and its The split percentages, after all, determine how much copyright, the work becomes a unitary whole. This each songwriter will be paid for their contribution. means there is no differentiation between the music and lyrics. If you’ve decided to split a song 50/50 between It’s also important that all co-writers agree on when the two writers because one produced the recording and song was actually finished. For instance, is it done when the other wrote the music, both writers now own 50 you finish writing the core composition in your rehearsal percent of the publishing. You’re going to want that space, or will the producer or session musicians who figured out before this next part, so we’ll wait while you arrange parts of the song during a recording session and your bandmates get your splits in order. 100% Solo creator: 100% Ownership 25% 25% 25% 25% Multi-writer (band) scenario: 100% Ownership 8 | www.songtrust.com  Let’s Get into Music Publishing As a songwriter, it’s good to be aware of how elements of the broader music industry affect you and your songs. It’s not as simple as finishing your song, releasing it into the universe, and voilà, royalties show up in the mail. Arguably the most important element to know about if you’d like to get paid for the use and performance of your songs—which you rightfully should!—is music publishing. Successful Song or Creator Career Organized data Brand and on your song Marketing Distribution Publishing While there exist a variety of publishing situations, which we’ll cover in more depth later, it’s important to understand the ultimate goal of music publishing. A music publisher (or publishing company) is the designated party that receives payment on behalf of songwriters when their compositions earn royalties. Traditionally, a songwriter’s relationship with a publisher would originate with an agreement that provides the songwriter payment in advance of the royalties being generated in exchange for giving the publisher partial or complete ownership of those compositions. Additionally, the publisher is responsible for maximizing the commercial potential of those compositions through licenses in films, television programs, advertisements, or other opportunities. 9 | www.songtrust.com This is often referred to as a co-publishing agreement increasingly critical zone of excellence for publishing and has been the most common publishing deal companies, as complexity in how music earns royalties historically offered to songwriters. In exchange for a has increased. portion of your publishing ownership, the songwriter receives an advance on future royalties and a partner What Publishing Isn’t to maximize the commercial exploitation of the works. There are two things we want you to know up front: The writer typically retains 100 percent of the writer’s music publishing isn’t distribution, and it doesn’t refer share. During the term, which can vary, the writer might to the “publishing” of the recordings of compositions or be required to fulfill certain obligations, such as writing the royalties that those recordings earn. While in other a minimum number of songs that are commercially industries a publisher often has some relationship to satisfactory, or they might have to work within certain distribution—such as with books, magazines, and frameworks, such as that their songs must be recorded games—this doesn’t apply to the music industry. For and released by an artist on a specific type of label. this guide’s purpose, we’re exclusively referring to music publishing and all of its particular ins and outs. Because the publisher takes partial ownership, they have more of an incentive to support the compositions and generate royalties from them. They might do this in a number of ways, such as pitching them to music Industry Insight supervisors for synchronization in television, film, There are two things we want you to know and advertising, as well as to labels and artists to be up front: music publishing isn’t distribution, recorded and released by major artists. They might and it doesn’t refer to the “publishing” also set up co-writes with recording artists and other of the recordings of compositions or songwriters. the royalties that those recordings earn. Additionally, administration is typically an included service in co-publishing deals but publishing administration deals on their own have become increasingly popular over the last twenty or so years. In these arrangements the publisher handles the so- called Three Ps—the painful parts of publishing— which include song registration with collection societies and with digital service providers such as Apple Music, Spotify, Tidal, Amazon, and so on, as well as the issuance of licenses. Precision in administration is an 10 | www.songtrust.com  The Heart of the Matter: A Deep Dive into Music Publishing Royalties We mentioned royalties earlier in this guide. copyright, and they vary depending on how your song Now let’s refine their definition a bit further. A royalty will be used, among other things.) is a percentage of profit entitled to a creator or owner for the use of their intellectual property. Essentially, it’s Unfortunately, this process—issuing a license, the money your song earns when it’s used in some tracking, and paying out—takes time. It’s an enormous form. For the remainder of this guide, any time we undertaking to track and monetize the use of music refer to royalties, we’re referring to those earned and throughout the world, requiring massive datasets and collected on the composition of the song. Any many codes and unique identifiers. As a result, royalties collected for the sound recording registration with collection societies to would be collected and paid out by registration ensure that your work is tracked, and the your label or distributor. with collection subsequent monetization of your work, societies... is a vital part of music publishing. Licenses to is a vital Royalties part of How Are Any public use, reproduction, or music Songwriters Paid? sale of your music will accrue royalties. publishing. Understanding how much Collection societies issue licenses, songwriters are actually paid can be electronically track the usage of music complicated. Collection societies have very registered with them, and pay out royalties. specific, intricate formulae for their licenses and the royalties they collect. Licensing rates vary depending But what is a license, and why do you need one for on settings and circumstance: you’ll be paid at different your music to make money? Think of it like this: in order rates or earn different amounts if your music is played to drive a passenger car legally, you need a driver’s at a rugby match versus a roller rink, on a jukebox license. To drive a commercial tractor-trailer, you’ll versus in a private club, and so on. What’s more, these need a different type of license. These licenses grant royalty rates tend to be regularly renegotiated, and they you various permissions and responsibilities, allowing vary from country to country. you to operate specific sorts of vehicles in specific scenarios. Same goes for music. Music licenses are But understanding what ways songwriters are paid legal agreements that grant someone permission to use is more straightforward. Below we’ll explain the main works for certain purposes or under certain conditions. types of royalties, the methods by which they’re These licenses ensure that songwriters earn money for generated, and who normally collects and pays out the use of their song, and protect the licensee from those revenue streams in various territories. the repercussions of using the work illegally. (An aside: music licenses don’t change the ownership of the 11 | www.songtrust.com  Performance Royalties “Performance” has a broad meaning in the world of music. In this context, it means the broadcast of a song in a public place or the public performance of a song. Establishments and businesses that use music pay fees in order to use that music. This means that any time your song is played at a concert—whether by you, the songwriter, or as a cover by another person—or as a recorded version over the speaker system in a restaurant, at a sports game, or in an elevator, you’re owed performance royalties. Performance Royalties Song is publicly performed Performance royalties can be generated from: Television (This is not to be confused with the fee involved in sync—the actual placement of your songs in TV, film, or commercials) Radio Live venues Restaurants Bars Elevator music services Mechanical Supermarkets Royalties Clothing stores Song is digitally streamed Gyms/health clubs or physically reproduced Jukeboxes Internet radio/non-interactive streaming (e.g., Pandora) Online interactive streaming services (e.g., Apple Music or Spotify) Terrestrial radio (your favorite FM station) Performance royalties are collected by collection societies: performing rights organizations (PROs) in North America or collective management organizations Micro-sync (CMOs) internationally. Generally the songwriter affiliates Royalties and registers their works with the society of the territory Song is used in videos they reside in and where their songs are most likely to be performed. These collection societies (which we’ll cover in more depth in the next section) will typically collect 12 | www.songtrust.com both the writer’s share and the publisher’s share of the In the United States, Section 115 of the Copyright Act performance royalties and pay to the songwriter and provides a compulsory license to make and distribute publisher of record respectively. phonorecords, subject to certain terms and conditions of use. The statutory rates for mechanical licenses are Mechanical Royalties set by the Copyright Royalty Board (CRB), a panel of Mechanical royalties are generated by the three judges in DC who meet every few years to review mechanical reproduction of a song, such as on and determine the set rates. physical copies of vinyl albums or CDs, or in digital downloads like MP3s or streams. The origin of the term TLDR: the current statutory mechanical royalty “mechanical” here refers to the piano rolls created for rate for physical recordings in the US, such as LPs and player pianos and the mechanical reproduction of the CDs, and permanent digital downloads is 9.1 cents for composition for that technology. Currently, the most recordings of songs five minutes or shorter, and 1.75 significant source of mechanical royalties is generated cents per minute or fraction thereof for those over five from streaming platforms such as Apple Music and minutes. This amount is then multiplied by the number Spotify. Each type of mechanical reproduction comes of recordings—such as the number of tracks on an with its own process of collecting and payouts, as well album—you wish to make. as pay rates. Media that generate mechanical royalties include: Industry Insight Record sales (vinyl, CDs) “Yesterday” is the most covered Digital downloads pop song of all time, with over Online interactive streams (e.g., Spotify) 3,000 versions recorded, according to Ringtones The Guinness Book Of World Records. Recorded cover songs Film soundtracks physical recordings & digital downloads 5 minutes or less 9.1 cents Over 5 minutes 1.75 cents per minute 13 | www.songtrust.com For interactive streaming services, the CRB set an All-In Royalty Pool of 10.5 percent of music service revenue through 2018. Performance royalties then get deducted from the All-In Royalty Pool to come up with what’s commonly referred to as the Payable Royalty Pool. Keep in mind, too, that 10.5 percent doesn’t necessarily apply to all services—some have agreed to pay higher rates. Interactive Streaming STREAMING PLATFORM PAYOUT RATE $0.0074 per play $0.00783 per stream $0.00074 per stream $0.0038 per play $0.00134 per stream $0.01284 per stream Bromely, Jordan. “US Streaming Royalties Explained.” Manatt, August 17, 2018 It’s a complicated part of publishing that isn’t always able to be explained in an easy, executable way. What you should take away is this: as a creator, it’s very important to know that your song earns different royalty rates dependent on a number of factors. If you make sure that your songs are distributed on as many platforms as possible and you’re marketing your brand and growing your fan base, you are in a better position to be successful than if you leave this to businesses to understand. Micro-Sync and User-Generated Content Video Royalties A less frequently discussed form of royalties songs can earn is known as micro-sync royalties. These royalties refer to the revenue earned from the use of your music synchronized with a moving image in smaller or bulk uses in user-generated content (UGC), such as on platforms like YouTube, Vimeo, and TikTok. If you decide to share your music on a video platform—whether as a music video, instrumental version, lyric video, whatever you’d like—it’s important to do your research on if and how the platform pays out for the use of your music. Look into their thresholds and requirements so you are fully aware of the potential and limitations for earning revenue. 14 | www.songtrust.com On YouTube, for instance, videos are broken down into three types of assets: the visual component, the audio component, and the composition. The composition component generates both performance and mechanical royalties for songwriters and publishers. Monetization on these platforms is quite different from other digital service providers (DSPs). VIDEO Recording composition Owned by label Owned by label Owned by publisher/ or uploader or distributor third party service/ distributor Performance mechanical royalties royalties Collected by collection Collected by publishers/ societies & paid third party service/ to publishers distributor But in order to earn royalties for the use of your music in videos, the video must be monetized via paid advertisements. Platforms have different parameters, and YouTube, specifically, has thresholds that videos must meet in order to be eligible for monetization. YouTube’s thresholds for monetization include the channel having a minimum of 1,000 subscribers and a minimum of 4,000 hours of watch time within the past 12 months. Only then, unless manually reviewed by their staff, can a video be monetized and start earning royalties. Making the most of video platforms can be easy and fun. Don’t just upload your video and walk away: do anything you can to market those videos and increase your royalties. Make playlists, collaborate with other artists or songwriters with significant followings, and encourage your fans to create their own user-generated content to maximize your royalties on these services. 15 | www.songtrust.com Retroactive, Black Box, and Misallocated Some songwriters focus almost exclusively on creating music, not spending much time on the business stuff— or they don’t fully understand the importance of music publishing. (It happens to the best of us!) This can result in the several royalty scenarios potentially impacting their livelihoods. Finished song Song earns Songwriter payout Retroactive Wait period expires enters distribution royalties INTERRUPTED wait period Enters Black Box due to: 2-3 years* upon which the Unregistered songs society will release No collection society these royalties to their No publishing members based on market Incorrect data share, aka top earners One of these is retroactive royalties. When a royalties. After a certain period, these royalties are songwriter finishes a song and distributes their music to usually released by collection societies to their affiliated the world, their song starts to earn royalties. However, members, paying out based on market share. In short, if the songwriter doesn’t register their songs with their if you don’t collect these once retroactive royalties, affiliated collection society, doesn’t have publishing or they get paid out to songwriters and artists like Taylor understand publishing, or perhaps incorrectly registers Swift, Drake, and Beyoncé. Yes, you read that right: their songs, that royalty payout is interrupted. If a someone who doesn’t have anything to do with your songwriter doesn’t fix the interruption, the royalties sit song could earn revenue from it. And it’s often the around, waiting to be collected. people who make the most that stand to make even more—off your work. While it’s good news that your song is still collecting royalties whether or not you realize it, there’s a caveat: While black box royalties are impossible to retrieve once these royalties won’t wait for you forever. Depending on they enter the “black box,” if you make a focused effort the society, they’ll generally be available for two to three to affiliate with a collection society, correctly register years. Retroactive royalties earn their name because a your songs, and have a publishing administrator in songwriter or publisher can retroactively collect these place to double check all these registrations, you can (semi-)patient royalties. avoid losing out on royalties. All is not lost! But what happens if you never collect them? Eventually, There are also times when compositions are incorrectly these unmatched and unclaimed royalties become attributed to another writer or publisher and royalties black box royalties, also known as unallocated are misallocated. These can be the most painful of 16 | www.songtrust.com the Three Ps—it can practically take forensic science calculated by measuring how the song is used in the to identify the errors and get the royalties where they production, for how long, the time of day or night the belong. But it can be done, and any publisher worth production airs, and on what network, for example. their weight should be prepared to do it. Theatrical Royalties Traditional Sync In the United States, performance royalties are Licensing Fees not paid when a film is shown at a movie theater. When you license your song to be synchronized Outside of the US however, in many territories, movie with visual media—such as in a TV show, movie, or theaters are required to obtain licenses to perform the advertisement—you’re entitled to a sync licensing music contained within the film, in the theater. For a fee. (However, songwriters/copyright owners can and worldwide hit film the potential for royalties generated sometimes do choose to license their music for free for this single income stream could be in the hundreds in exchange for the exposure a project can offer.) The of thousands of dollars. sync licensing fee is negotiated between the copyright owner(s) of both the composition and sound recording Print Royalties and the entity using the music. As a copyright owner you also have the exclusive right to authorize others to display copyrighted sheet Visual media with which music music or lyric reprints of your work. Theatrical, choral, can be synchronized: and orchestral productions rely heavily on sheet music TV shows such as: Advertisements (web and TV) Lyric reprints Films and trailers Guitar tabs Video games Films and trailers Smartphone apps Sheet music DVDs and Blu-Rays Songbooks YouTube videos While royalties from printed reproductions and sheet Note: While Songtrust doesn’t pitch songs or provide music are not a large revenue stream for many modern creative services for our clients’ songs, we’re happy songwriters, they should not be overlooked. to help with or negotiate any sync licenses that you receive, for a fee. Using Other Songwriters’ Works Sync Performance Royalties There are several ways songwriters can use pre- In addition to a sync fee, every time the production existing, copyrighted work as a starting point, whether is broadcast there are performance royalties payable to through a new arrangement of an existing song, songwriters and publishers via their collection society. covering a song more or less as written, or sampling The royalties generated for audiovisual performances part of an existing recording. Let’s take a quick look at originate from the license fees paid to your collection all three. society from the broadcaster or music user, and are 17 | www.songtrust.com Derivative Works A derivative work is a new work that includes aspects of a preexisting copyrighted work. For example, a big- band jazz arrangement of the song “Jingle Bells” would count as a derivative work. The original copyright owner of “Jingle Bells” would earn money through licensing fees. Cover Versions A cover is exactly what you think it is: a different rendition or version of an original song. If you want to record and release a cover song, you’ll first need to obtain a compulsory mechanical license. (Those different types of licenses for different uses we mentioned earlier are coming into play here!) You’ll most likely do this either through the music publisher (i.e., the owner of the composition) or a third party such as the Harry Fox Agency or Easy Song Licensing. You can also search for the publisher in the databases of collection societies. If you perform someone else’s song in public, the original songwriter is owed performance royalties. These will be paid by their collection society, not by you. Sampling A sample is a piece of a recording from a song that you don’t own but that you’re using in your own song. Conceptually speaking, covering and sampling could be treated as two sides of the same coin: they both describe the use of pre-existing material, but while covers involve the use of a new version, sampling involves the literal use. You should do this legally, with permission from both the sound recording owner and the publisher (or, often, publishers) of the composition. Depending on what you negotiate, you may pay a licensing fee to both sides. Some artists you sample also stipulate that you give them a writing credit on your song. There are many services and resources for creators, such as TrackLib, to utilize if you choose to use samples in your songs. Make sure to do your research and get proper permission—you don’t want to wind up in a legal battle later. Industry Insight Covers and samples are similar but different. They both describe the use of pre-existing material, but while covers involve the use of a new version, sampling involves the literal use. 18 | www.songtrust.com  Global Publishing Royalty Collection: How Does it Work? We’ve mentioned collection societies numerous times—and you’re probably wondering what, exactly, they are, and what they do. Collection societies play a huge role in music publishing and are vital to the tracking and registration of your songs that enable you to collect royalties. We use “collection society” as a general term for all these organizations, but they’re also referred to more specifically as PROs in the United States, and CMOs internationally. and many more... Direct Society Affiliations ABRAMUS - Brazil CAPASSO - South Africa MCPS - United Kingdom SESAC - USA ACUM - Israel CMRRA - Canada MEDIANET - USA SGAE - Spain AKM - Austria COMPASS - Singapore MUSICAUTOR - Bulgaria SIAE - Italy AMCOS - Australia ECCO - St. Lucia MUSIC REPORTS - USA SOCAN - Canada APRA - Australia GEMA - Germany NCB - Denmark SPA - Portugal APRA-PAL - Australia HFA - USA OSA - Czech Republic STEMRA - Netherlands ARTISJUS - Hungary ICE - Europe PRS - United Kingdom STIM - Sweden ASCAP - USA IMRO - Ireland SABAM - Belgium SUISA - Switzerland AUME - Austria KODA - Denmark SACEM - France TEOSTO - Finland AUTODIA - Greece LATINAUTOR - Latin America SACM - Mexico TONO - Norway BMI - USA LOUDR - USA SAMRO - South Africa WAMI - Indonesia BUMA - Netherlands LYRICFIND - USA SDRM - France ZAIKS - Poland and many more to come... 19 | www.songtrust.com Performing Rights If you’re a songwriter living in the United States but Organizations (PROs) have a big international following, your PRO will collect A performing rights organization, or PRO, is your international performance income via reciprocal a professional association responsible for collecting agreements with CMOs, but mechanical royalty revenue on behalf of songwriters and music publishers collection differs by society and territory. It’s important when a song is publicly performed. Note that the term to understand the subtle differences between collection PRO is generally associated with collection societies societies and to be aware of which societies are available in North America, and less so with collection societies to you in your specific territory. ex-US. Restaurants, bars, concert venues, streaming services, and any other entity that uses music in public Rights Management Agency is required to pay a PRO a license in order to play So who collects your mechanical royalties if your that music. The PROs, in turn, pay songwriters and collection society doesn’t? That would be a rights publishers in the form of performance royalties. management agency. These agencies collect and distribute mechanical royalties and are responsible The PROs in the United States—ASCAP, BMI, SESAC, for the tracking and collection when your song is and GMR—all have different rules and registration terms reproduced. and fees. Each has slight variations in how they pay out their royalties as well. They always pay out the writer’s In the United States, the Harry Fox Agency (HFA) and share of your royalties directly to the songwriter, but they Music Reports take on this responsibility. In Europe, differ on how they pay out the publisher’s share. Some an example is ICE Services. The differences between require an actual publishing company to be registered in these collection organizations can be subtle, and they order to collect your publisher’s share, while others will vary from country to country. pay this out even without a publishing entity. Affiliating and Collective Management Registering Your Songs Organizations (CMOs) A major part of the music publishing process Outside of North America, collection societies is affiliating yourself with a collection society and are generally referred to as collective management registering your songs so they can be tracked and organizations, or CMOs. These organizations operate earn royalties. Without this step, you can forget about similarly to their North American counterparts (PROs) in earning any substantial income. that they register, track, and collect royalties earned, and they pay them out to the respective songwriters. Their When you affiliate yourself as a songwriter with a differences lie in each territory’s terms and restrictions. collection society, you’ll receive an IPI number, that is, an Interested Parties Information number. This As with PROs, CMOs collect and pay out the writer’s number identifies you as a songwriter and connects share of performance royalties to their songwriters. you with your songs to ensure that you receive all However, some CMOs, such as GEMA in Germany, also royalties owed to you. You can also affiliate yourself as collect the mechanical royalties that, in the U.S., would a publisher with your collection society—we’ll cover be paid out by an entirely separate entity. Societies this process and its benefits in the next section. also vary on whether they pay out the publisher’s share directly to the songwriter or to the publisher. 20 | www.songtrust.com After you’re affiliated with a collection society, the next step is to register your songs. You’ll tell the collection society the name of each song, who wrote it, and who has administrative control of the publishing. Below is a list of important information you’ll want to have on hand so that you register your songs properly: 1 List any and all performers of the song List any and all writers and/or publishers 2 with their correct shares 3 List any alternate titles (i.e. a song called “2 Good 4 U” you’d list “Too Good for You” as an alternate title) 4 Updated writer/publisher contact information 5 Report any live performances with your collection society Songtrust also allows you to register live performances with international collection societies through our platform Once you’ve successfully registered your song, you’ll steps over and over would heap quite a bit on your receive an International Standard Work Code, plate—and that’s before you factor that some societies or ISWC. An ISWC is a song’s identifier, unique to have strict restrictions on how you can affiliate which the composition, which allows it to be tracked and can add additional layers and complexity. for royalties to be mapped to it. It’s issued by your collection society. Once you distribute your music, It sounds like a lot, but it doesn’t have to be. We’ve you’ll also be assigned an International Standard come up with an easier way: Songtrust has direct deals Recording Code, or ISRC. An ISRC is a recording’s (read: no extra fees) with over 45 societies that cover unique identifier, and allows your publisher to track and 120+ territories, and we have experts who can help you collect royalties. It’s issued by your distributor. navigate international publishing as your career expands across the globe. Want to know more? Read on. An important note, before we jump into publishing deals: if your music is being used outside of your territory, you’re owed royalties from those other Industry Insight territory’s societies. As an individual songwriter without With over 150 collection societies worldwide, publishing, you could feasibly register your songs with registering your songs over and over would multiple societies around the world, though the process heap quite a bit on your plate—and that’s would be long and tedious, and you might wind up before you factor that some societies have collecting only part of your royalties. With over 150 strict restrictions on how you can affiliate. collection societies worldwide, completing the above 21 | www.songtrust.com  Which Music Publishing Situation Is Right for Me? As we’ve talked about, there are a variety of publishing situations you can find yourself in. Choosing the best fit for you and your career is based on how much work you’ve put into the business side of being a creator and what you’re ready for. In this section we’ll go through common publishing deals and their details—but the real preparatory work lies in doing your due diligence before you sign any deals. Determining Songwriter Ownership When a song is complete and ready to be shared with the world, the songwriter claims ownership of the song’s rights, split between the master recording and the composition. While recording rights are often negotiated and determined based on the situation (e.g., terms laid out by a distributor or a label relationship), the composition ownership is a bit more finite. Writer’s Publisher’s share share 50% 50% The percentage of The percentage of ownership of a work owned ownership of a work owned by the creator, typically paid by the creator until you enter a by the collection society deal with a publishing situation Composition ownership is divided into two pieces: the But why would you partner with a publisher if it means writer’s share (50 percent) and the publisher’s share (50 giving away a portion of your publisher’s share of percent). The writer’s share refers to the percentage revenue that would otherwise be yours? Traditional of ownership in a work attributable to the author and/or publishers can find outlets for your music that you may composer. The publisher’s share refers to the share be unaware of and help you find synchronization deals of revenue that may be granted to a music publisher via that might otherwise be difficult to attain. Moreover, a publishing contract, or, if you do not have a publisher, having a publisher often means that independent belongs to the songwriter unless and until you decide songwriters get paid in a more complete, timely manner. to enter into a partnership with another publisher. These days, however, there are more options than just 22 | www.songtrust.com traditional publishing deals, and songwriters have more + PROS – CONS stock to negotiate and leverage for their careers. Keep 100% ownership No creative services If you want to make a go of it as an independent Advances not Flexible Terms always available songwriter, you may want to seek out representation in the form of a publishing deal. A publishing deal Choose which songs to register or agreement is essentially an agreement with a publishing company to provide administrative, and sometimes creative, support for your catalog so that Whether you’re a fresh DIY artist looking for publishing you get to focus on what you do best: songwriting. or an industry veteran just discovering its complexities, Each publishing situation differs, but we’ll outline a publishing administration deal is ideal for any creator four of the most common below. at almost any stage. You’ll learn more about Songtrust’s unique offering in the next section. Administration Agreements In an administration agreement, or admin Co-Publishing Agreement deal, the songwriter keeps 100 percent ownership of In a co-publishing agreement, also known as their copyright and pays somewhere between 10–25 a traditional publishing deal, you typically assign 50 percent of royalties, depending on the terms, in the percent ownership of your publisher’s share to your form of an administrative fee, typically for a term of one co-publisher. This leaves you with 100 percent of your to three years. writer’s share and 50 percent of your publisher’s share. The term of these agreements is negotiated, though Publishing administrators, like Songtrust, have the publishing company can exercise options to extend relationships with performance and mechanical the deal if certain stipulations of the contract are met. collection societies around the world that make royalty collection much simpler than it would be for a Co-publishing agreements are much more rigorous songwriter to manage on their own. Many—though not than straight admin arrangements. The songwriter has all—artists prefer to hand off the administrative duties certain obligations—things like submitting a minimum so as to focus on their creative development. number of commercially satisfactory songs. If you have co-written any of those songs, only the percentage that Publishing administrators don’t own any percentage of you’ve written will count towards satisfying the terms of or take creative control of your copyright at any point the contract (for example, if you write 50 percent of two during or after the term of the agreement. Administration songs, it will count as one full song). Some agreements agreements ordinarily don’t include creative services; also require that a number of your songs be recorded they’re centered around administrative duties such as and released by an artist on a particular label. properly registering your songs with collection societies and collecting royalties on your behalf. Admin deals What to Know About can occasionally include an advance, which must Traditional Publishing Deals be recouped in the same way as in a co-publishing Because the publisher generally takes partial agreement. ownership over the works, they have much more of 23 | www.songtrust.com an incentive to exploit your compositions and generate + PROS – CONS royalties from them. They may do this in a number of Offer creative and Give 25%-50% of your ways, including: sync opportunities copyright for life Locked into a fixed Advances available term, usually 3+ years 1. Pitching your songs to music supervisors for synchronization in television, film, Generally required to and advertising register all your songs 2. Submitting demos to labels to be recorded and released by major artists Show Me the Advance 3. Setting you up on co-writes with artists One of the most enticing aspects of co-publishing and other songwriters deals is the advance, a prepayment of your royalties before they are earned. Advances can be alluring, In addition to this creative work, your publisher will but it’s extremely important to remember that they’re also handle necessary administrative duties, such as not free money or extra money. Advances must be registering your songs with collection societies and recouped in full by your publisher before you’re paid collecting royalties on your behalf. out any royalties from your compositions. Though you retain ownership of 50 percent of the Work-for-Hire publisher’s share in this deal, you often give away In this increasingly common arrangement, a work- creative control. You will likely have little say in how a for-hire means that a songwriter is paid a flat fee and song is used, aside from what’s agreed upon in the forfeits all ownership and administration rights for the initial contract, i.e., not allowing your compositions life of their copyright. This means that you’re not entitled to be used for political campaigns or in objectionable to any publishing royalties earned by the composition content. in the future, nor does it guarantee you’ll be credited as the composer. This control is often granted to the publisher for the life of the copyright, which means the publishing company Think of a Work-for-Hire agreement like this—you’re will retain the rights to your compositions written under approached by an influencer in the hip-hop community the deal with them even after the deal has ended. known for creating songs with a lot of commercial value There are certain laws that allow the rights to revert and clout on Instagram. They want you to help them back to you after a specified period of time, but they’re with a new project by going out and capturing ambient generally long—think 35 to 40 years. While traditional street noise that they can underlay in the background. publishing deals have plenty of merits, they aren’t for With their busy schedule and focus on the core of the every creator: some aren’t ready to enter into a deal or song, they don’t have time to do this, so instead they want to keep more creative control, which is completely want to hire you to provide them with these assets, okay. Always look over all the terms for any publishing and more specifically as a work-for-hire. They would deal, ideally with a lawyer, and make sure it’s right for pay you a flat fee of, for example, $500, for twelve you and your career before you sign any rights away. hours of your time and at least five separate tracks that they can choose and use in the new song. As soon as you sign that agreement, you’re officially forfeiting 24 | www.songtrust.com any right to future royalties on that song and any other Creating Your Own song that creator might decide to use one or more of Publishing Company those assets you provided. They essentially own the Another option for songwriters when they’re work you did and can use however they see fit without considering signing with an established publisher is having to give you a portion of ownership. forming their own publishing company. After all, as an independent songwriter, you’re already your own It sounds, outrightly, like a negative thing. However, publisher, and there are major benefits to exploiting the plus is that, depending on the agreement originally that opportunity. To do this on your own is quite a task, set, you could receive at least your writer’s share of the as we’ll detail below, but working with a company royalties. You’re also often able to meet and network like Songtrust makes it easy to have the benefits of with more established creators and earn immediate owning your own publishing company while avoiding money until your career is solid enough to work on the dreaded Three Ps. collaborations with these creators. + PROS – CONS + PROS – CONS Forfeit all your You keep all your Get paid immediately Can be very costly rights to you work publishing royalties Meet/work with Not entitled to any Not prohibiting from signing Requires hands-on work established creators publishing royalties future publishing deals to administer all works Your work can be used Protect your The workload can keep however they’d like personal assets you from creating everyday without your consent Exclusive Songwriter The Benefits Agreements Perhaps the biggest advantage is that you’re not Under an exclusive songwriter agreement, or sharing your royalties with anyone else (except, of “staff writer” contract, a songwriter generally assigns course, for any credited co-writers). You can register a the entire publisher’s share of any songs written publishing company with a collection society in much during the agreement to a publishing company. In the same way you did as a writer, depending on that exchange, the publisher provides the songwriter with society’s terms. The publishing company will serve as an advance paid out on a weekly, monthly, or quarterly a separate business entity, and your publisher’s share basis. That regular advance must still be recouped in will be distributed to that entity. Both checks will come the same way as an advance in a co-publishing or to you, just as they would if you were solely registered administration deal. as a songwriter, but the publisher’s share will be made out to your publishing entity. The salary-like advance payments are the main attraction for this type of deal. In addition, the publisher In addition, creating your own publishing entity doesn’t will usually perform administrative and creative duties prohibit you from signing a co-publishing or admin deal for the writer’s catalog, depending upon the agreement. in the future. If you do so, your publisher would send a This type of deal is often offered to writers who have letter of direction to your collection society to notify a demonstrated track record so that the publisher is them that they’ll be taking administrative control of your confident they’ll receive a return on their investment. catalog on your behalf. 25 | www.songtrust.com Finally, forming a publishing company affords you certain legal protections, similar to creating an LLC or incorporating a personal business. This arrangement allows you to earn income, pay taxes, and do business in general as an entity rather than an individual, thus protecting yourself and your personal assets from personal liability for business debts. The Downsides Although there are many positives to establishing your own publishing entity, it’s worth noting that the costs often outweigh the benefits. Managing your own publishing company is no simple task and requires serious prep and administrative work to do well. The Process If you’re considering forming your own publishing company, it’s helpful to follow a checklist. Some key steps to keep in mind are: You’ll need a unique business name so that royalty payments don’t 1 get improperly assigned. When you go through your collection Decide on a name society affiliation process (see step 2), you’ll be required to submit a few potential names in case some are already taken. DBA stands for “doing business as.” It’s also known as a trade name, Register your publishing fictitious name, or assumed name. All this really means is that your new 2 company as a “DBA” publishing company is registered for tax purposes. The required forms name in your state can be found at the Secretary of State’s office website for your current state of residence. Fees for obtaining a DBA tend to be under $100. If you’re publishing your own music, you first need to affiliate with a collection society as a songwriter. Affiliate as a publisher with the same society. If you’ll be publishing music from other writers, you should affiliate Affiliate & register your songs 3 with a collection society with all of the organizations with which your writers are affiliated. Approval to become a writer or publisher affiliate typically takes several weeks, and there’s usually a fee to apply. Remember, you’ll now have two accounts at your collection society: one as a songwriter and one as a publisher. Get a publishing To collect royalties globally—that is, outside the U.S. or administrator to handle local wherever your local CMO is located—you’ll need to affiliate 4 and international registration and register your songs with the appropriate CMOs. This and royalty collection will require a laundry list of paperwork and legal filings. It’s a formidable challenge, and some songwriters will determinedly take it on (kudos!). There are, however, options for minimizing that administrative workload: You can join a publishing administration service, such as Songtrust, to handle all the administrative work for you, and get you properly registered and earning royalties worldwide. Speaking of which, now’s a perfect time to tell you a little more about what Songtrust is, what we do, and how we help make the process of actually earning money as a creator a lot simpler and easier. 26 | www.songtrust.com  Songtrust: Access What You’re Due Songtrust is the world’s largest global royalty lawyers, distributors, and more simplify music rights collection service and publishing administrator, enabling management. This includes the administration of over 206,000 songwriters and over 25,000 publishers music publishing assets, performing rights, and digital to collect their publishing royalties worldwide for more licensing. than 2,000,000 copyrights. In our global work with songwriters and creators, Songtrust is working not We maintain direct relationships with more than 45+ only to change the way music publishing is viewed and performance, mechanical, and digital societies globally understood, but the way the music publishing industry covering over 120+ territories: the most extensive, views royalty collection itself. accessible publishing network in the industry. Our industry-leading online solutions help songwriters, Songtrust’s online dashboard allows clients to avoid artists, producers, managers, publishers, labels, sub-publishing fees and to maximize their revenues. Songtrust Terms Traditional Publishing Deal Locked into a longer term, Deal Length Cancel at any time after one year usually three or more years Accounting Pays four times per year Pays only two times per year Generally required to register all Register only the songs you want Catalogue your songs written prior to or Songtrust to represent during the term Give publisher 25-50% of Copyright Keep 100% of the copyright your copyright for life Give up sync rights for Sync Rights Control your sync rights publisher to exclusively license 15% fee on publishing royalties administered. Varying percentage of all royalty Fees Client receives 85% streams including upwards of 50% Tech Technology focused and client centered Offline, manual process 27 | www.songtrust.com As a technology-first platform, our elegant and easy-to-use experience removes complexity from the publishing landscape and offers detailed access to data otherwise not directly available to creators. Songtrust was co-founded in 2011 by the CEO of Downtown Music Publishing, Justin Kalifowitz, and Joe Conyers III, now Songtrust’s Chief Strategy Officer. The vision was and is to assist every songwriter in accessing the publishing royalties they are due. Songtrust is now seventy employees strong, with offices in nine cities across the globe— including our New York City HQ, plus Atlanta, Nashville, Los Angeles, London, Paris, Amsterdam, Tokyo, Sydney, and more to come. We have teams dedicated to copyright administration and rights management, society relations, royalties, income tracking, engineering, product development, business development, marketing, and more. We can handle catalogs of any size, from one song to all of a publisher or distributor’s offerings. Our tech-forward, progressive team is focused on resolving the inefficiencies within music publishing and creating fair solutions that enable independent songwriters like you to support themselves. what songtrust offers Registration with a collection society, Claiming and monetization tools if you’re not already affiliated for songs that stream on YouTube (we cover your application fee) One-stop global song registration with Responsive and sophisticated performance and mechanical collection client services societies worldwide, verified by ISRC data Global royalty collection Authoritative, up-to-the-minute educational resources about songwriting and music publishing Live international setlist submission so you Detailed royalty reports and seamless can collect your live performance royalties payment by direct deposit Industry Insight Songtrust has offices in nine cities across the globe—including our New York City HQ, plus Atlanta, Nashville, Los Angeles, London, Paris, Amsterdam, Tokyo, Sydney, with more to come. 28 | www.songtrust.com  What’s Ahead: The Future