by Sheryl Nance-Nash
So you think you can write a song? Maybe you stand out among the competition, but if you want to make a living this way you’ll need more than the right melody, lyrics and rhythm to keep you afloat. Your business savvy better equal your talent. But before you start working the system you must understand a few things about how the system works.
How do royalties work?
Royalties are classed according to the media by which a piece of music is experienced. Mechanical royalties are paid for physical sales, i.e., CDs, digital downloads, vinyl records and tapes. Performance royalties accrue as a song is played via the radio, piped in music service or live performance at a music venue. Synchronization royalties or “sync fees” are earned when a piece of music is “synchronized” with a piece of film as in motion pictures, television programs and advertisements. There are now also streaming royalties for a number of internet and digital uses, such as when companies make songs available on their website and telephone service providers sell ringtones.
Radio airplay usually pays the most. When you have a hit song it’s heard repeatedly all over the country and sometimes the world, making it possible to quickly garner substantial royalties. Physical sales are way down from where they used to be as many people skip buying albums to purchase singles. Illegal downloads also hurt profits in this camp. These days, a performing songwriter may make most of his or her money doing live performances of their songs.
Radio airplay is collected by BMI (Broadcast Music Inc), ASCAP (American Society of Composers Authors and Publishers) and SESAC (originally stood for Society of European Stage Authors & Composers). Their methods for collecting royalties and paying their songwriters vary, but generally they collect money each quarter, take out operating expenses and distribute the remainder to songwriters based on the amount of airplay they received during the quarter.
Mechanical royalties, funds collected on the sale of a physical product, is set by copyright law at 9.1 cents per song. According to Bruce Burch, director of the University of Georgia’s Music Business Program and former creative director for EMI Music Publishing, the world’s largest music publisher, synchronization fees are negotiated according to several criteria. Contracts take into consideration such factors as how much of a song is used by the licensee, how popular the song is (hits and classics generally receive higher payments) and the popularity of the songwriter or artist. Sync fees can be set as low as zero, such as when a new artist offers their song to a television show that cannot pay but allows exposure to a new audience. At the other end of the spectrum they can bring in hundreds of thousands of dollars, even millions, for top film composers like John Williams, who has been nominated for 45 Academy Awards, winning five.
What about ownership rights?
It’s all about the deal. There are two ownership shares of a song: the writer’s share and that of the publisher. A writer owns both rights until he assigns the publishing rights, usually for a monetary advance against the song’s future earnings. Starting out novice songwriters must typically sign deals in which they have to give up all publishing rights. A more established songwriter, who perhaps enters a publishing deal with a song already recorded, will usually be able to negotiate an agreement in which he or she retains 50 percent of the publishing rights. Sometimes a songwriter can negotiate reversion rights, an arrangement whereby publishing rights revert back to the songwriter after a certain period of time.
What are you waiting for? (OR How do you get started?)
Now that you know the basic economics of songwriting, here’s some advice from folks at the top of their game.
Study up. Do your research. “This game will eat you up and spit you out. You’re sitting in a lion’s den,” said Sean Garrett, who earned his nickname, “The Pen”, from Jay-Z. He’s written and produced over 17 number one hits for the likes of Usher, Beyonce and Mary J. Blige, in part because he took the time to learn the business. There’s a ton of resources from websites, blogs and seminars, to books like Everything You Need to Know About the Music Business by Donald Passman and Music, Money and Success by Todd and Jeff Brabec.
