Performance Royalties

Performance royalties make up a major chunk of a songwriter's income. This money is generated by broadcasts and public performances of your song. It doesn't matter who's singing your song, what label it's on, or if it's live or recorded — you should still get paid for it. Your publisher or record company can't take this money if you're unrecouped or make you sign it away in a standard contract (at least not anymore).

These rights are yours, period. If someone wants you to sign these rights away, say, “No” in a loud voice and run for safety. You might feel scared, but go ahead and tell everybody what happened. Trying to take a writer's performance rights is immoral and unethical, and most people won't do business with someone who engages in this practice. Even if you assign your performance monies to someone else (which is stupid), your PRO will probably refuse to pay anyone but you, unless your publisher gives you an advance specifically on performance royalties or you temporarily assign performance rights to a bank to secure a loan.

Radio Time

Songwriters receive performance royalties when their songs are played on the radio. PROs have slightly different ways of figuring out which radio stations are playing which songs. To keep collection costs down, most PROs find out what some stations are playing during a given period of time. The PRO then counts how many times the monitored stations played your song, then estimates how many total plays you probably received and pays you based on that estimate. ASCAP does this by tuning in to lots of randomly chosen radio stations for a few hours at a time. The station can be anywhere in the country and it can be any time of day. Stations are not given notice if or when they will be monitored. BMI asks each station to fill out logs for certain weeks each year stating what songs the station played during that time.

TV and Movies

TV is big bucks for songwriters these days. The nice thing about TV performance royalties is that all commercially run stations or networks have to keep logs of all music used in their programming. That means you don't get “missed” as you might on radio.

Movies, too, are simple to track. Cinematic performance royalties in the United States can be easily calculated if you multiply the number of screens showing a movie by absolutely nothing. That's right. Due to some clever legal machinations, the movie industry avoids paying performance monies to songwriters and publishers. That's why you and your publisher should punish them as much as possible when they ask for a synch license. If the movie is screened in Europe, a lovely place where songwriters make performance royalties from movies, you'll get paid based on a percentage of the box office receipts. This can mean hundreds of thousands of dollars for you and your publisher.

Watch for the phrase “work for hire” in any contract you see. It means that you give up all rights to the work and never get paid for that work again. If someone wants you to compose a song or soundtrack as a work for hire, then you need to charge a whole lot more as you'll only get paid that one time.

Printing Money

No, you don't get to print money. What you do get, hopefully, is money when people print copies of your music and/or lyrics. Your publisher collects royalties on printed versions of your song and, if you're recouped, pays you based on your contract. Publishers usually collect 20 percent of the retail list price on single-song sheet music — that's eighty cents on a four-dollar copy. For some odd reason, publishers usually pay the songwriter only five or ten cents. For marching band, choir, dance, and instrumental instruction arrangements, the royalty usually drops to 10 percent.

In songbooks with multiple songs, called “folios,” between 10 and 12.5 percent of the list price is set aside for royalties. The money is then divided by the number of songs in the book and paid out to the corresponding publishers. You should be able to get half of what the publisher takes in on multiple song folios. For the printing of your songs in books and magazines, the publisher usually collects a flat fee that may range from fifty dollars to several hundred dollars or more. How much of this you get depends on your contract. If you ever get a folio put out with your name and picture on the front, you might get as much as another 5 percent to fight over with your publisher. Since it's your face and name, you should come out okay on this one. Usually, nobody gets paid for the inclusion of lyrics in album liner notes. Hey, you're already getting a few pennies for every record — don't get greedy.

If you are ever involved in negotiating royalties for a song folio, make sure the license states that the royalties are divided by the number of songs with active copyrights. Otherwise, any public domain works in the book will eat up a share at no cost to the printer.

Subscription Services

You know you've really made it when you hear your song in an elevator. Even though you never envisioned kazoo and banjo taking turns on the vocal melody, it's just undeniably cool to hear your song this way. Subscription services provide music to businesses, like the hotel the elevator is in, for a monthly or annual fee. Recently, private use subscription services like satellite radio have begun to offer consumers access to commercial-free digital broadcasts.

A subscription service may use a version appearing on someone's album or a version, often instrumental, made for a specific purpose. If your song is licensed to a subscription service, you might hear it played in the grocery store or as hold music on the phone. Get ready for some good news. Muzak and other subscription music services are monitored by the PROs. You have another paycheck coming in addition to the licensing fee.

Jukeboxes and More

Jukebox owners have to pay a licensing fee to your publisher to use your song. PROs count jukeboxes, too. Are you starting to see how a big hit can add up? But wait, there's more! Your PRO also checks out what the live band is playing when the jukebox takes a break. This is true not only for bars, but also for performance halls, concerts, and festivals.

When they are first introduced, many public forms of entertainment go through a period during which no laws exist under which they have to pay performance royalties. Up until 1976, jukeboxes were legally considered “toys” under U.S. copyright law and were not liable for payment of performance royalties.

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