Music Publishing Income Streams

In a year where musicians have had to face some of the most difficult times, having a good understanding of music publishing income streams is as important as ever.

Music publishing rights and activities relate to songs (both music and lyrics) and library music. Importantly, these publishing rights and activities are distinct from those relating to the sound recordings of compositions.

A great deal of income can be earned from the use of the songs, whether it’s being played on the radio or an instrumental being synched with a feature film, advert etc.

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.

This now includes public performances and broadcasts via live stream on YouTube, SoundCloud and Facebook.

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”). This is often referred to by PRS as “6/12ths” but this is, of course, just 50%!

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 actual 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 on an advert, film or TV. 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 in the composition. 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

I often get asked questions about how the rights with covers work.

Over the years there have been countless cover songs released by record companies. It is quite interesting (and, for die-hard fans of an artist, often hard breaking!) to discover that their favourite song by an artist was written and recorded by someone else first.

For example, Aretha Franklin’s “Respect” was written and first recorded by Otis Redding; UB40’s “Red Red Wine” was written by Neil Diamond; and Jimi Hendrix’s “All Along the Watch Tower” was originally written and recorded by Bob Dylan.

The original songwriters of the song will be entitled to the publishing income generated from the use of the recording released by the cover artists; whereas, the cover artist and his/her record company will receive the income from the sound recording.

I always say to clients who are singer/songwriters that they 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 therefore a nice bit of extra income too!

The same goes for writing for other artists as this will entitle you to the Performance, Mechanicals and Sync income, where applicable, as set out above.

Print/Sheet Music

Traditionally, a publisher’s main purpose was to reproduce and publish printed compositions in books and folios, much like the publishers of books by authors. 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 if a chord book is produced and sold in online and high street music shops. This tends to be for the big named artists, but we are seeing an increase in products such as printed or handwritten song lyrics or sections of a song being sold as merchandise on Patreon and Band Camp etc. This is a nice idea for fans and can provide a nice boost to income.

If you have any queries, please do get in touch with John Tunnard at T E Media Law on 0114 218 4000. In the meantime, happy music making.

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