By Todd Brabec and Jeff Brabec This information has been provided as a service by American Society of Composers, Authors and Publishers Updated May 2008 TABLE OF CONTENTS Income Chart 2 Music and Money 3 Copyright Protection 4 Performing Right Payments 5 Download, CD and Record Sales 7 Controlled Composition Clauses 8 Television 10 Motion Pictures 11 Home Video 13 Advertising Commercials 13 Broadway Musicals 14 Internet 15 Other Income Sources 16 Recording Artist Royalties 16 Foreign Country Royalties 18 z Songwriter/Music Publisher MUSIC and MONEY Income Chart The songwriter/publisher income chart on the opposite page U.S. singles sales (100,000 copies) $ 9,100 shows some of the many ways a songwriter, recording artist or U.S. album sales (500,000 copies) 45,500 publisher can generate income. U.S. downloads (200,000) 18,200 U.S. radio and TV performances 700,000 A songwriter makes money when songs are downloaded or Foreign single/Album sales 110,000 when a CD or cassette containing one of his or her songs is sold, when the songs are played on the radio, or performed in a TV Foreign radio and TV performances 600,000 show or concert hall, or broadcast in a foreign country. Royalties Sheet music and folios 25,000 can also be generated from the sale of sheet music, a ringtone Advertising commercial 175,000 or from the use of a song in a commercial, a motion picture, Song in a television series 15,000 Broadway musical, subscription service or video game. Song in a motion picture 40,000 Foreign theatrical performances 4,000 Since each source of income has its own distinct payment Broadway show use 110,000 structure, figuring out exactly how a songwriter, artist or music publisher makes money and where that money comes Dolls and toys 20,000 from can be a major challenge. Video Games 10,000 Ringtones 65,000 But it’s not that difficult! The money that can be made is yours Miscellaneous royalties 75,000 if you know the business, have the talent, have good represen- tation, are willing to work, and have the requisite amount of luck necessary for success in any endeavor in life. z About the authors: Todd Brabec, Executive Vice President and Direc- tor of Membership for ASCAP, and Jeff Brabec, Vice President Business Affairs for the Chrysalis Music Group, are graduates of NYU School of Law, Deems Taylor Award-winning writers for excellence in music journalism, adjunct professors at the USC Thornton School of Music/ Music Industry Department and authors of the book, MUSIC, MONEY AND SUCCESS: THE INSIDER’S GUIDE TO MAKING MONEY IN THE MUSIC BUSINESS (Schirmer Trade Books/Music Sales) from which much of the information contained in this article is taken. 3 COPYRIGHT: PROTECTING YOUR SONGS As to “works made for hire” written on or after 1/1/78 (many (Life +70 or 95 Years) compositions written for film and television fall into this category), the new law’s term of copyright protection is 120 years from cre- Copyright means the protection given by the laws of the U.S., as ation or 95 years from first publication, whichever expires first. well as many other countries of the world, to the original works that a writer creates. The works can be songs, or underscore to films and Copyright Office forms and information circulars are available from: television programs, or symphonic or electronic pieces, or advertis- Fees for ing jingles or any other original creation of music, lyrics or both. Register of Copyrights Copyright The Copyright Law gives to the copyright owner (the writer, Copyright Office Registration: publisher, etc.) of a work, a number of exclusive rights which are Library of Congress Washington, D.C 20559-6000 good for a specific number of years. The law also puts certain limits Basic: $45 (202) 707-6787 on those rights. The exclusive rights include the right to produce a Online: $35 work in copies and records; the right to prepare derivative works; www.loc.gov/copyright the right to distribute copies of the work; the right to perform the work; the right to display the work; and most recently, a limited The above copyright discussion is meant to provide only an performance right in sound recordings digitally transmitted. overview of some of the basics of Copyright, as there are many In late 1998, Congress passed the Sonny Bono Copyright Term variables and considerations in any situation. The copyright laws, Extension Act which changed the 1976 Copyright Act by signifi- both in the U.S. as well as in other countries, are very complex and cantly increasing the length of time a song remains under copyright attorneys well versed in copyright should always be consulted on protection. Different rules though apply for songs written prior to individual problems or inquiries. January 1, 1978 and those written on or after that date. For compositions written on or after January 1, 1978, the basic term of protection is the life of the writer plus 70 years. For example, PERFORMING RIGHT PAYMENTS if two 20 year old writers wrote a song in 2005, and one lives to be 50 and the other lives to be 100, the copyright protection for that One of the greatest sources of long- and short-term income song would last for 150 years from its creation. In this case, the pro- for songwriters and publishers is the royalty money received from tection would last from the time the song was written through the performing rights societies around the world. Of the $5-billion gen- life of the last living writer (i.e. 100 years minus 20 = 80 years) plus erated worldwide each year, the three U.S. organizations account an additional 70 years. for close to $2 billion in collections. The two largest U.S. performing For compositions written prior to January 1, 1978, and which right organizations are the writer- and publisher-owned American were still under copyright protection as of the time the Term Exten- Society of Composers, Authors and Publishers (ASCAP) and the sion Act was passed, an additional 20 years of protection was added broadcaster-owned Broadcast Music Inc. (BMI). to the old law’s terms. As the total number of years of protection for These organizations negotiate license-fee agreements with the most pre-1978 songs under the 1976 law was 75 years (28 origi- users of music (radio and TV stations, cable stations, concert halls, nal years + 28 renewal years and a 19 year extension), the term of wired music services, airlines, websites, etc.), which give the user the protection for these works has been extended to a total of 95 years right to perform the music and lyrics of any member of these orga- from the original date of copyright. nizations. The fees then collected are distributed to the writers and music publishers whose works are performed in the licensed areas. 4 5 This performing right is one of the most important rights a publisher does not have a foreign sub-publisher collecting their granted by a country’s copyright laws. It is based on the concept share in each country, foreign PROs will forward the royalties to the that a writer’s creation is a property right and that a license must publisher’s U.S. performing right organization. be acquired by any user of music in order for that user to perform a The U.S. PROs similarly collect performance monies for for- copyrighted musical work. eign society writers and publishers whose works are performed in In the U.S., the primary types of the U.S. The monies collected are sent to the foreign society (PRO) This performing music use which generate performance that the writer or publisher is a member of. For example, if a United right is one of the royalties are feature performances (a vi- Kingdom writer who is a member of PRS has performances of his or most important sual vocal or visual instrumental on TV, a her songs on U.S. radio or television, the royalties will be collected rights granted radio performance of a song, etc.), under- by the U.S. PRO (e.g., ASCAP) and sent to PRS in England which will by a country’s score on television series, specials, mov- then pay the writer. copyright laws. ies of the week and feature films, theme The financial importance of the performing rights area can- songs to TV series, TV logos and promos, not be overemphasized – the fact is, a fortune can be made from advertising jingles, live concerts and copyrighted arrangements of a single composition. For example, in just a few years, the #1 song public-domain compositions, among others. of the year can generate a $2 million writer and publisher payout; a The value of each type of music use varies depending on which successful TV-series theme song can generate numbers in excess of performing-right organization the writer and publisher belong to $1.5 million over a 10-year period; and the score of a top box-office as all three organizations have different payment rules, contracts film can generate well over $2 million in performance income dur- and philosophies. ing its copyright life. Although most writers never achieve this level Complicating matters further is the fact that two of the three of success, it’s helpful to know what’s possible at the top end. organizations (ASCAP being the exception) change their payment rules without notice to their writers and publishers. Also, two of the three U.S. organizations (ASCAP again being the exception), do not DOWNLOAD, CD AND RECORD SALES give writers and publishers a voice in their organization, nor do they allow writers and publishers to be on their Board of Directors or vote Among the major sources of income for the songwriter and for their Board of Directors.