As a songwriter, the music industry can be difficult to navigate when trying to balance being creative with managing the business aspects of the industry. In this blog, we will discuss what music publishing is, different revenue avenues for songwriters, how publishers collect royalties and the difference between publishing and distribution royalties.
What is Music Publishing?
When a song is produced, there are 2 rights created: the Sound Recording (Master Rights) and the Composition (Publishing Rights). A music publisher looks after the rights in the Composition and will collect the performance and mechanical royalties generated by its usage. This revenue is then divided between the publisher and songwriter based upon the split agreement in place.
The composition refers to the elements within the music which can be the melody, lyrics, the structure, or process of creating or writing even a small piece of the music. The sound recording is the actual recording of the music, which in general is owned by the maker of the recording. This is usually the person who funded the project, such as a production company, record label, studio, or artist.
It’s important to note that within music publishing, all parties who contribute to a song may own rights to a percentage of the composition. Even if you have paid a producer upfront, it does not mean they do not own any of the copyright. This is why it’s exceptionally important to agree splits and ownership in advance and ensure mutual agreement between all parties involved. Splits should always be written in a legal document, so it is clear from the get-go and to avoid any legal problems in the future.
What are music publishing royalties?
Music publishers work on behalf of the composition rights owners to collect 3 types of royalties:
- Performance royalties
Performance royalties are generated from performances of a song, including concerts, radio play, tv broadcasts, festivals, and public venues.
Artists are still owed these royalties even if you perform outside of your home country. Collection societies have agreements with PROs across the globe which enables them to transfer royalties to the writer. However, for this to work, it is essential for artists to be registered with their local performing rights organisation (PRO) so that they can receive royalties from the foreign collection society.
- Mechanical royalties
Mechanical royalties are paid to the writer when their composition is reproduced onto a physical product such as a Vinyl or CD. This is also applicable for digital royalties, which are due when a sound recording contains your composition and is downloaded or streamed on digital platforms such as Spotify.
- Sync licensing
How are publishing royalties collected?
The music publishing industry is huge, making it hard for independent artists with smaller catalogues to claim potential publishing revenue.
Music publishers have direct relationships with PROs (Performing Rights Organisations) and other collection societies around the globe to ensure payments are made. PROs collect public performance royalties on behalf of songwriters and publishers.
For a song to be played on radio, TV shows and commercials, broadcasters will typically have an annual licence deal in place with the PRO operating in their country.
For public performances in places like shops, gyms and restaurants, the premises must also have a licence. In the UK, The Music License collect fees from British businesses and organisations on behalf of their parent companies PPL and PRS for Music. PPL will then collect and distribute the license fee to the performers and record companies for the use of the recorded music. PRS for Music will collect and distribute the license fee on behalf of songwriters and publishers for the musical composition. Publishers will then take their share of the royalties based on the splits which are agreed upon in advance.
How are publishing royalties different from distribution royalties?
Music distributors are responsible for collecting the sound recording royalties. They collect and pay the master recording royalties generated from downloads and streams from digital platforms and subscription services like Spotify and Amazon Music.
Music publishers will collect royalties from the composition rights. These are earned every time the composition is sold, streamed, or played globally and you don’t have to be the master rightsholder to receive these royalties.
As a songwriter and recording artist, you earn money from both master recordings and the composition. This means you are also the automatic owner of your composition copyright which makes you a publisher by default. However not all PROs will recognise individual songwriters as a publisher without a publishing entity, therefore having a music publisher can help ensure all revenue is collected and distributed.
Why is music publishing important and what are the benefits?
Music publishers are responsible for songwriters and composers receiving their royalties for the use of their composition in sync, live performances, streams, or downloads. By having a publisher, this ensures you receive royalties from all revenue streams.
Music publishers can also provide you with opportunities to secure sync deals, allowing you more time to be creative and make music whilst they take care of the admin.
By signing up with a music publisher, you can benefit from:
- Getting your music heard by a wider audience.
- Increased revenue streams.
- Possible sync opportunities.
- More time to be creative and focus on making music.
- Protection as a songwriter and composer.
- Less Admin.
If you’re interested in working with a music publisher or would like to find out more about how publishing works, keep your eyes peeled for some exciting news coming from Horus HQ soon!