Crash Course on Music Publishing – Part 3

Carlos Alvarez's picture

Before I continue, I wanted to mention briefly that I was just recently asked by a reader of this article of when should a writer expect to be paid his/her royalties.  The music publishing industry works on a quarterly basis when it comes to getting paid.  So for all royalties generated by the use of the song, the music publishers will receive royalty payments every quarter. They will then make their account and pay the respective writer(s) their appropriate share. The exception to the rule are the PRO’s.  They pay their affiliated writers / publishers directly (yet still quarterly).

Sources of Income (continued)

I’ve talked about three sources of income so far. They are the most common but not the only ones. . .  Here are some other sources.

DPD (Digital Phonorecord Download)

The best example of this would be a purchase of a title on an online music store such as: iTunes

How does the music publisher/writer receive their royalty: this source is treated like mechanicals and adhere to the statutory mechanical royalty rate that I discussed in part I of this article. The record label usually pays this royalty to the music publisher.

Ringtones / Ringbacks - the most popular use of this source is the sale of the 30-second clip of the actual master recording of the song (interpreted by the artist).

  • Copyright Law has issued the rate to be .29 cents per ringtone
  • who pays??...most likely the record company, but the license request can also come from the service provider directly.

Print Income

This is the printed version of our titles.  Best examples: sheet music & lyric reprints.  Sheet Music usually is handled with a “print” publisher who deals primarily in this type of business (ex: Hal Leonard).

How do we get paid?  Sometimes a small advance is given for the print rights, followed then by a percentage (12-20%) of the retail price of each print sale.

Sampling

Depending on the portion of what is sampled. . .  if the original song is very noticeable in the new adaptation.  We must license the new user creating the new adaptation for this type of use.

The producers and artists that focus on this type of record production do not like to hear that their new “creation” based from a preexisting song does not constitute a new copyright!

payment: There’s a FEE for the initial sample . . .  its negotiated and then there’s the other considerations . . .  mechanicals, performance, etc. . .

YES, more than likely the original copyright owner will make the claim that new adaptation is still their copyright. Many times, the situation will end that way with copyright ownership of the new adaptation staying with the original copyright owner.

Sorry to my friends/colleagues who sample!!

Digital Streaming

A very new source. streaming of our songs thru outlets such as Pandora, AOL Radio, online radio, etc. . .  does generate royalties for writers & publisher.   However, the pay scale is almost equivalent to one 100th of a penny per spin (I may be exaggerating a bit).  Hopefully this will change in the coming near future.

Factors to consider when dealing with sources of income:

No matter what the income source, always remember that there needs to be a license for the particular use (even if the use is promotional / free).  Many times, the user may request a rate reduction. . . basically wanting to pay less than what is norm.  Approach this carefully and at the end of the day. . .  politically.

Why politically?  Well, we do want to the song used!  It could potentially generate royalties.