The Business of Songwriting
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EBOOK GUIDE The business of songwriting. "A wonderful, forthright guide to the ins and outs of what music publishing actually is, from a functional and realistic viewpoint, focused on what songwriters (and those musicians who don't even know they are songwriters yet) have questions about and should know." -Jeremy Peters, University of Michigan School of Music, Theatre and Dance. It is our goal at Songtrust to increase transparency and awareness about how songwriters support themselves. Songtrust provides this education along with publishing administration service for all types of music industry figures--songwriters, labels, managers, lawyers, publishers, distributors, etc. We have designed this ebook to give you an overview of the business of songwriting. Note that terms in bold are defined in the glossary. Enjoy! -keep in touch with us through social media- Table Of Contents 1. Introduction……………………………………………………….…………...4 2. Copyright & Ownership……………………………………….…………...7 Co-Writing 3. Performing Rights Organizations (PROs)……………….…….……12 Affiliating and Registering Your Songs Samples 4. Royalties and Licensing………….……………………………….…...…..16 Performance Mechanical Print Sync Fees 5. Publishing Deals…………………..…………………………….….………..23 Administration Agreement Co-Publishing Agreement Work-for-Hire Exclusive Songwriter Agreement Creating Your Own Publishing Company 6. Songtrust………………………………………………………..………….…..32 What is Songtrust? 7. Resources……………………………………………………………….….…..35 Collecting Master Royalties Distribution Synchronization Promotion Songwriting Tools Education 8. Conclusion……………………………………………………………………...41 9. Glossary……………………………………………………………………..…..44 Terms Societies & Organizations Introduction Introduction Anyone who creates original music is a songwriter and can collect songwriting royalties. Artists of every genre; composers, band members, film/television writers, DJs, and any owner of an original1 composition or song is due royalties when their music is used around the world. Unfortunately, making money from songwriting is not as straight-forward as your average nine-to-five. However, there is now ample opportunity to earn money from songwriting. With the advent of Songtrust, along with several other new music- tech startups, the modern day songwriter can take advantage of a myriad of outlets and revenue streams for their songs. It is important for songwriters to know their options in order to curate their personal and professional approach. As a songwriter, you are the publisher and owner of your songs. Music publishing refers to the business of making money as the copyright holder of the music you write2. Copyright law protects songwriters by giving them exclusive rights to grant or deny the reproduction, distribution, or performance 1 If you make it, you own it. You can also collect royalties from cover songs, arrangements, and public domain songs. Further, we will discuss what happens with Samples later in the guide. 2 quite contrary to the popular belief that music publishing is the business of publishing sheet music. of their work. When you write original music and register the copyrights correctly and comprehensively, you are able to start collecting royalties on that music, provided that others are streaming, downloading, performing, or synchronizing, that music. For many songwriters, publishing royalties can be their most consistent and dependable sources of income. Advances in digital music distribution and streaming services have made it possible for independent musicians to make their music available to a vast audience via many different payment models. “Discovery” no longer depends upon an established music publishing company pitching music to exclusive connections. It is now possible for a songwriter to maintain 100% ownership, publish their own music, and collect global royalties for that music. This guide will go into detail about the many ways you can make money as a songwriter and music publisher. We will discuss Streaming/Sales, Synchronization, Performance, and more. Enjoy. Copyright & Ownership Copyright & Ownership Copyright ownership is divided into two parts; the sound recording and the underlying composition. Both parts collect royalties. The sound recording represents the master recording of a song. Labels and Distributors collect sound recording royalties. The underlying composition, a bit less tangible, represents the structure, lyrics, melody, etc. This composition copyright belongs to the songwriter(s) of the song, and their respective publishers. Think of a composition as being embedded within recordings. Publishers and writers collect composition royalties. A common misconception is that one doesn’t own their work until they’ve filed a formal copyright. However, the moment you decide that the song you have been creating is finished and exists in some tangible form (such as a lead sheet or recorded demo), you automatically own a copyright for that composition and 100% of the publishing. It is your intellectual property. Under some circumstances, you may want to file a formal copyright to be safe. As a songwriter, you are the publisher, until you have a publisher. Your 100% ownership is divided into two pieces: the writer’s share (50%) and the publisher’s share (50%).3 If you decide to sign a publishing deal, the publisher will only take a cut of the publisher’s share and often take a percentage of ownership. If you decide to simply sign a publishing administration deal, where a company like Songtrust registers your songs and collects global royalties on your behalf, you collect all of your money minus a small commission for administrative/business expenses and time spent on your behalf. 3 Sometimes these shares will be considered to be 100% each, adding up to a total 200% for the ownership of the composition, but for the purposes of this guide, we’ll stick to 50% per share, equaling 100% for the song as a whole It is very important to use a publishing administrator like Songtrust because independent songwriters are unable to collect mechanical royalties without a publishing entity. Songtrust acts as that publishing entity and collects your mechanical royalties. Without Songtrust acting as a publisher on your behalf, you miss out on 85% of the royalties you should get from streaming. Co-Writing It is common for songwriters to work on songs together. Your co- writer(s) could be a fellow songwriter, your band members, a producer or arranger who works on the song, or even a friend who gives you a great title idea. Each songwriter owns their own percentage of the song and the publishing rights. He or she is entitled to publishing royalties based on that ownership. These percentages, known as splits, must be negotiated by the songwriters. Examples of Splits It is very important in a co-writing situation to decide on the splits as soon as all writers agree that the song is finished. Otherwise, you may find yourself in somewhat of a “he said she said” situation, and negotiations will get messy. It’s also important that all co-writers are in agreement about when the song was actually finished. When you bring the song to a recording session, will the producer or session musicians who arrange parts for the song receive writing credit? You may or may not want that, but you’ll want it to be clear before the session, either way. A good way to set this in stone is to get it in writing, perhaps in the form of a split sheet, and even to register the song with the US Copyright Office. While having a physical copyright isn’t completely necessary (as intellectual property is copyrighted as soon as it is created), it can be helpful if you are ever involved in a lawsuit regarding the use of your intellectual property. Another way to lock down your splits is to register the song with a Performing Rights Organization or a PRO, which we’ll discuss in the next section. Once a song becomes a joint work, meaning you’ve agreed that you are all co-writers and therefore co-owners of the song and copyright, the work becomes a unitary whole. This means there is no “separate but equal” concept involving the differentiation between the music and lyrics. If you’ve decided to split a song 50/50 between two writers because one wrote the lyrics and the other wrote the music, both writers now own 50% of both the music and the lyrics. For example, if the song gets a sync (we’ll discuss this concept more later) in a film but only the instrumental version is used, both writers will still receive 50% of the royalties and sync fees. @songtrust Performing Rights Organizations (PROs) Performing Rights Organizations (PROs) A Performing Rights Organization or PRO is a society responsible for collecting income on behalf of songwriters and music publishers when a song is publically performed. Restaurants, bars, clubs, radio stations, television networks, concert venues, streaming services, and any other entity that uses music in a public manner is required to pay licenses in order to play that music. They pay these license fees to the PROs, who in turn, pay out to the songwriters and publishers in the form of performance royalties. In the United States, songwriters can affiliate and register their songs with one of three PROs: ASCAP, BMI, or SESAC. The differences between the three are subtle, and are outlined in the Glossary under Societies and Organizations. Territories around the world each have their own Performing Rights Organization that collects performance royalties for writers in that territory (we’ve listed these organizations in the glossary section). PROs in the US collect performances royalties from public performances of your song within the US. If your music is being used outside of the US, you are owed royalties from those countries’ PROs. The best way to register your songs with foreign societies is through Songtrust. Songtrust has direct deals (read: no extra fees) that cover 120+ territories. This is the most expansive (and least expensive) publishing administration deal that currently exists. Affiliating and Registering Your Songs When you affiliate with a PRO, you will receive an IPI number.