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SOUND BANK

June 1, 2005
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As vice president and co-founder of Reach Global Inc., an independent music-publishing company, I get asked a lot of questions by curious songwriters. Most often, people ask, “What exactly does a music publisher do?” The most basic answer is, I work with songwriters who compose music and lyrics just as a book publisher works with an author. Songwriters can use this column as a guide to the basics of music publishing; here are some of the more common questions that songwriters often ask.

What does a music publisher do? What kind of royalties do songwriters earn?

A music publisher is responsible for song registration, licensing, royalty collection and creative matters. It all begins with paperwork: During the initial song-registration process, the publisher usually informs a performance-rights society — such as ASCAP, BMI or SESAC — of all the relevant information to it. This sets up the publisher and songwriter to earn performance royalties, or royalties that are paid to songwriters and publishers whenever the song is played on radio or TV, for example. Once the song is registered, the performance-rights society will collect and pay out performance royalties directly to the publisher and songwriter. Say a piece of original music for CSI plays in the show or continues to air on reruns; the publisher (then the writers) receive performance money from ASCAP or BMI if the composition is registered. (This is as long as the piece of new music created isn't deemed a work for hire, which is like a buy-out.)

Other types of royalties that a songwriter can earn are those that get paid when a song is included on a commercially released album; these are called mechanical royalties. But before mechanical royalties can be paid out to the publisher by the record label, you first have to license your song to the record label. By granting the license to the record company, it can then pay mechanical royalties per each album sold. Your rights and payment rates are included in this license, so I don't recommend signing a mechanical license that is directly sent to a songwriter from a record label without the review of a publisher or attorney.

This brings you to royalty collection. Song registration and licensing allow the publisher to collect your proper amount of royalties from all sources. In addition, a third royalty type, called synchronization royalties, usually occurs as a one-time negotiated flat fee whenever music is “synchronized” to a moving picture. Sync fees are paid if your song is used in a movie, TV show, commercial, video game, DVD and so forth. (Publishers often spend a large part of their time pitching songs to advertising agencies, video-game producers and music supervisors who work in film and TV.)

What role do ASCAP, BMI, SESAC and the Harry Fox Agency play?

ASCAP, BMI and SESAC are performance-rights societies, not publishers. They monitor, collect and pay out performance royalties to publishers and songwriters. Songwriters must choose to affiliate and register their work with only one society. The Harry Fox Agency (or HFA) only deals with licensing and collecting mechanical royalties. For a commission, it can collect the royalties via record sales.

How does a publisher protect its songwriters?

The most common way for a publisher to protect songwriters is by formally registering their songs for copyright protection at the U.S. Copyright Office. But one of the larger protection issues comes into play when a publisher attempts to license a song with the record label. According to copyright law, the royalty rate you are entitled to receive — the statutory mechanical rate — is currently 8.5 cents if you wrote 100 percent of the song. Record labels frequently request a reduced rate to save money. They accomplish this not by breaking the law, but by having you sign documentation that allows them to pay you a lower royalty rate or pay royalties on fewer albums. If you work with a publisher, it can stop record companies from issuing royalties at a reduced rate, unless the label is entitled to do so according to a prior written agreement (known as a controlled-composition clause).

What are some important details to understand in a publishing contract?

Copyrights are assets, just like a house or a land investment. If you can imagine how complex a mortgage contract is for a home, a publishing agreement can often be just as daunting. But don't panic — there are a few basics of publishing contracts that songwriters should have a grasp of. First, there is the potential financial arrangement within the agreement, in which the publisher advances money to the songwriter. The songwriter will not receive royalties until the publisher recoups its money and turns a profit. You should also be aware of a phrase called the term; this defines how long the agreement is binding. It could be anywhere from six months to forever. Another phrase commonly referred to in an agreement is the split. This is defined as the share of income that both the publisher and songwriter will be entitled to. Percentages range from 90/10 in favor of the songwriter to 50/50, common when a company invests a large amount of money up front in a songwriter as an advance against future royalties. The definition of territory (or countries included) in the deal is also an important aspect of the contract.

These are just a few of the details of 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 with making music! The right publisher can take care of the rest.

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