Songwriting royalties are the mother’s milk of mailbox money. Mailbox money is loot that shows up in the mailbox: the royalties for your songs which are out there working for you while you sit on the couch and eat potato chips. There’s nothing like a big, fat ASCAP or BMI check nestled in amongst the bills and junk mail. You can imagine what Bob Dylan’s mailbox money looks like! It’s the business of songwriting, baby! So spit out your gum and listen up! This is the part you don’t want to screw up.

For every dollar a song generates through airplay, half goes to the publisher and half goes to the writer. The two major songwriter’s organizations are ASCAP (The American Society of Composers, Authors and Publishers) and BMI (Broadcast Music, Inc.) Every time your composition is played for profit somewhere in the world (Radio, TV, Movies, Discos, Sheet Music, etc.) you get a songwriter’s royalty known as a mechanical royalty. These organizations keep track of all that airplay and pay you directly. The checks come quarterly. It’s a sweet deal, but you have to join either ASCAP or BMI to get on the gravy train.

The other half of the equation is the publisher. All songs need to be published. Publishing companies vary greatly throughout the slagheap of the music biz. The big ones have many songwriters on contract and make their own deals. Many artists (like me) have their own publishing companies, that way they don’t have to split the money with anybody. It’s a two-way street, though. A big publisher can go out and “work” your songs. They would supposedly have connections to get your songs placed with hit artists or in movies or on TV. They don’t do this because they love you. They’ll make money on it, of course. Whether or not they actually do what they say is always a factor. Like I said, it varies. There are some sleazy publishers out there, so look out. Starting your own publishing company is easy, just whip out your checkbook and call your friendly neighborhood entertainment lawyer.

The task of administrating the publishing is usually done by the publisher. Administrating is simply collecting and paying out the money. This is where a bit of skullduggery can sneak in, but you can keep general tabs on how much the publisher makes by what your ASCAP or BMI statement says. Remember, it’s a 50-50 split. So, let’s say you wrote a hit song for Joe Blow and Blowettes. You wrote the lyrics and Joe Blow set them to music. You’ve already decided on a two-way split for the songwriting royalties. Joe says he won’t record it unless he can publish it on Joe Blow Music. This happens all the time. You have no other fires burning so you roll the dice and let Joe be the publisher. So now, for every dollar that comes in, Joe gets fifty cents for being the publisher, and he also gets twenty-five cents for being the co-author. You wind up with a quarter to his seventy-five cents.

You figure that sucks, so you cajole Joe to copublish the song. You’ve got your own publishing company called Knee Cap Music. The song credit now reads Joe Blow next to your name, published by Knee Cap/Joe Blow Music. Now you’re back to fifty cents per dollar. Some songs can have multiple publishers and authors. It can get confusing. Always pay attention and keep a fresh stick of gum handy.

I’ve managed to hold on to my publishing over the years and it’s doubled the amount of money I’ve made as a songwriter. Later, if you fall on hard times you can always sell your publishing company. The price usually comes out to one year’s royalties times ten. If you make an average of $10,000 per year from song royalties, then your publishing company could conceivably be worth $100,000. That is, if you can find a buyer. I know quite a few old rockers who have sold their publishing over the years to raise money. If at all possible, hang on to your publishing. That way, when your career becomes a mountain of burning tires, at least you’ll still have your publishing.

Originally posted 2009-07-21 01:44:28.