Music Publishing Income Streams

By Pete Bott, Music specialist solicitor at Sound Advice, London

Posted

Music publishing concerns the rights and activities relating to musical compositions such as songs (including lyrics) and library music. Importantly, these publishing rights and activities are distinct from those relating to the sound recordings of compositions.

Introduction

A great deal of income can be earned from the use of compositions, whether that’s a song being played on the radio or an instrumental being synched with a feature film. The wide variety of uses can be broken down into the following main sources of income.


Performance Income

If you are a member of PRS or affiliated collecting society and your compositions are registered correctly, there will be a fee payable every time that composition is performed live, played in public or broadcast over TV, radio or the internet. These fees are paid by the persons responsible for playing or broadcasting the song (e.g. night clubs; festivals; TV channels; and websites) and come in the form of either one-off usage licences or annual blanket licences. PRS uses its database to identify the rights holders of the publishing copyright and distributes their share of the revenue to them accordingly (after deducting the PRS commission).

When entering a publishing deal it is worth noting that  the composer will always receive 50% of these net fees direct from PRS (the “writer’s share”) and it is usual for the publisher to be entitled to collect the other 50% (the “publisher’s share”). The composer will then often also receive some of the publisher’s share from the publisher after collection, but this is subject to the terms agreed in the publishing contract.

Performance income can be a highly lucrative income stream for composers. It is also especially useful in assisting with cash flow for those composers who are unrecouped under their publishing contracts, as they will continue to receive their writer’s share from PRS directly. The PRS website has plenty of useful guides for maximising performance income including how to register live gig performances.


Mechanical Income

Mechanical royalties are paid by the entities (usually record companies) using compositions in the form of records. These royalties derive from the grant of a “mechanical licence” from the owner of the publishing copyright to the record company reproducing the compositions in the form of records. For  every sale, there is a statutory rate  (in the UK) payable by the record company to the owner of the publishing copyright. This is regulated by MCPS, a branch of PRS. MCPS collects the royalties and pays them to the publishers. The statutory rate is obligatory and is     a fixed rate of 8.5% of the dealer price. It is therefore a guaranteed stream of income for a composer (particularly a singer/songwriter) if their compositions are recorded, manufactured and sold by a record company.


Synchronisation Income

It is commonplace to hear a composition in the background of a broadcasted audio-visual advert, film or TV show. When this occurs, there is a fee payable by the user of the music to both the owner of the sound recording and the owner of the publishing copyrights. The amount of these fees is subject to negotiation between the rights holders and the entities wishing to make use of the rights; however, they can be substantial and significant for any composer, particularly if the composer is the owner of both the sound recording and the publishing copyrights. If you do not have a publisher and you are approached for the synchronisation of your composition, then you should be careful to clarify how the composition is to be used (e.g. the length of the clip; the media (TV, film and/or internet); and the context of use). This will help you negotiate an appropriate fee and establish that any additional uses will be subject to a further fee.


Covers

Over the years there have been countless cover songs released by record companies. A great example of this would be the classic song “All Along The Watchtower”. While most people will associate this song with Jimi Hendrix, it was originally written and recorded by Bob Dylan. As the original songwriter of the song, Bob Dylan will be entitled to the publishing income generated from the use of Jimi Hendrix’s released recording; whereas, Jimi Hendrix and his record company will receive the income from the sound recording. All singer/songwriters should be open-minded when considering granting permission to another artist to record a composition – you could end up with a hit on your hands and some extra income too!


Print

Traditionally, a publisher’s main purpose was to reproduce and publish printed compositions in books and folios, which is where the name “publisher” comes from. They would sell the reproduced sheet music to generate income. Nowadays, this practice is less  common  and not a prominent source of income for most composers; however, it can still be profitable for some composers (just think of all those Ed Sheeran or Adele chord books sold). In addition, if a substantial section from a composition is printed on merchandise (e.g. to be sold in tandem with live performances or on online stores), there will be extra income payable to the composer. As a result, while printed sheet music is no longer considered a composer’s main source of income, it can provide a nice boost.


Pete Bott

Senior Associate, Sound Advice

By Pete Bott, Music specialist solicitor at Sound Advice, London

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