Music publishers work with songwriters, just as a book publisher works with authors. That sounds simple enough but music publishing historically has been a “gray” area, so we will attempt to bring some clarity to the complexities of music publishing.
During the initial song registration process, the publisher usually informs ASCAP or BMI about the new song and relays all the relevant information to them. (ASCAP and BMI are performance rights organizations that pay “performance royalties” to publishers and songwriters. This occurs when your song gets played on the radio or on TV. For more, see below.)
When a songwriter is lucky enough to get a song included on an album for commercial release, they can expect “mechanical royalties”, from sales of the album. However, before mechanical royalties can be paid out to the publisher by the record label, you have to license your song to the record label. When the publisher issues a license to the record label, it allows the song to be included and sold on a particular album.
Song registration and licensing allows the publisher to collect your proper amount of royalties from all sources. In addition to performance royalties and mechanical royalties, there are “synchronization” royalties. These usually occur as a one-time, negotiated, flat fee whenever music is synchronized to a moving picture. Synch fees are paid if your song is used in a movie, TV show, commercial, video game, DVD, etc. A music publisher works diligently to collect all of these income streams from the various sources. Music publishers also must be knowledgeable about additional revenue streams, such as Ringtones, Internet streaming, DVD, and karaoke releases.
Last, there is the creative exploitation of the song, often known as “pitching.” Publishers can often spend a large part of their time attempting to “pitch” the song to advertising agencies, music supervisors who work in film and TV and videogame producers (the hot new area). The creative energies of a publisher can bring untold new opportunities to songwriters both artistically and financially.
The Fine print
What are some of the important details to understand in a publishing contract? If you are a songwriter, publishing contractual language will often look foreign to you. Don’t panic. If you get a grasp of these basic terms and you’ll be better off than most:
Advance: The potential financial arrangement within the agreement. This is where the publisher advances money to the songwriter. The songwriter should understand that at this point, they would not receive any royalties until the publisher makes back their money and turns a profit, often known as “recouping.”
Split: This is defined as the share of income that both the publisher and songwriter will be entitled to. Percentages often range from 90/10 (in favor of the songwriter) to 50/50. The latter is common when a company invests a large amount of money upfront to a songwriter as an advance against future royalties.
Term: This defines how long the agreement is actually binding. It could be anywhere from six months to forever.
Territory: Refers to the “territories” or countries where the agreement is binding. It is common to have a worldwide agreement or, sometimes, carve out particular territories or countries, like an exclusive deal solely for Japan or perhaps the United Kingdom.
Obviously, these are just a few of the many details that a songwriter has to be aware of when discussing a publishing contract. It is essential that a songwriter have a publishing contract reviewed by an attorney or an experienced industry professional. Just be careful what you sign and be creative! The right publisher can take care of the rest!
Originally posted 2009-01-17 05:21:44.