A Music Business Primer for Songwriters and Composers

As a music educator your passion for music is obvious, but what works and composers ignited a flame in you to teach and pass on to others your love of music? Was it the stirring melodies and rhythms of classical music or the infectious tunes and witty lyrics from the Great American Songbook or the catchy hooks with their vibrant messages, coming-of-age stories, and tales of rebellion of songs that germinated in the rock and roll era and spiraled on from there into all sorts of subgenres, hybrids and fusions? Whatever it was, music permeates the soul and the love of it often goes beyond the desire to teach, and to create and emulate or even transcend the works that inspired your journey early on. Many readers of this magazine aspire to write music and many of their students share that goal. This article is intended as a primer on the business and legalities of composing and songwriting.

The route to publication for composers of school band, orchestral and choral types of works may be summarized as: arrange your piece for the ensemble you are aiming for, record it as you envision it being performed, and then submit it to appropriate publishers. Such publishers may have specific times when they consider new submissions so you have to check their websites to see when that is and make sure you are ready to submit within that window. How do you find appropriate publishers for this type of music? Look at the printed scores you use and see who their publishers are as well as search the internet. If you can get a personal referral from a published composer so much the better!

If pop music is your bag, then there may be more commercial outlets to submit your music to, but the competition is more intense. Songwriters write songs with the hope their work will become popular with the public. Much satisfaction can be derived from having your three-minute little gem recognized and sung around the world, not to mention the potential revenue it can bring in. When you go to sleep at night people are streaming, buying, and broadcasting your song so your royalties can pile up long after all your work is done! 

If you don’t party with Taylor Swift or Justin Bieber, music publishers may be your best route to get your songs “out there.”  Many songwriters enter into agreements with music publishers for the services the publisher can offer them—to get their songs recorded and released by labels or used in various productions such as motion pictures, television shows, commercial advertisements, and videogames. In doing so they give up ownership of their songs to the music publisher, who provides the professional services of exploitation (getting the song recorded and used in various productions) and administration (licensing the song for all its commercial uses and collecting income generated by the song and then paying the writer his or her share of royalties the publisher collects). By entering into agreements with music publishers, songwriters hope the publishers will help their songs become hits, or at least money-makers at some level.

The songwriter-music publisher agreement has many terms that cover the transfer of the song from the writer to the music publisher, the paying of royalties to the songwriter by the music publisher, and other conditions that define the relationship between the songwriter and the music publisher.

A song is a copyrightable work. Section 102 of the U.S. copyright law lists eight categories of copyrightable works, one of which is musical compositions with or without words. This category thus includes popular songs, and they can be of any genre—rock, hip hop, Latin, country, rock and roll EDM, ska, disco, Gospel, pop, jazz, polka, rhythm and blues, psychedelic, folk, bubblegum, doo wop, metal, tango, swing, ragtime, trance, Tejano, norteno and bluegrass, among many others.

Section 102 of the U.S. copyright law also tells us copyright in a work exists when it is “fixed in any tangible medium of expression,” meaning once a work (like a song) is set down in writing or is recorded, it is immediately and automatically copyrighted. When songwriters write out the notes to their song on manuscript paper or when they record even the simplest demo of their songs, their songs are immediately copyrighted; registration of the work with the U.S. Copyright Office has benefits but is not necessary unless as a prerequisite to an infringement suit. If songwriters perform an original song they have not yet “fixed” (set down or recorded) that song is not yet copyrighted. The first copyright owner of a song is the songwriter (unless it has been specifically commissioned as a work-for-hire). But what rights does the owner of a song have?

Section 106 of the U.S. copyright law tells us the owner of a song (or other copyrightable work) has the exclusive right to reproduce, adapt, distribute, perform, and display the song. These simple words mean a lot of things in the commercial music world. They mean that without permission or a license from the owner of copyright no person, company or entity can record and release the song, broadcast it on the radio, play it in a bar, offer it to be streamed, put it in a movie or television show, use it for a television commercial or radio jingle, among many other uses. What this means in commercial practice is labels that want to release recordings of the song, radio stations who want to play a copyrighted song on the air, streaming services that want to offer a song for streaming, bars that want to play a song on their premises, movie and television production companies that want to include a song in their film or TV program, all need a license from the owner of copyright of the song. Owners of song copyrights may have agents for licensing certain kinds of rights of their songs (such as ASCAP or BMI for public performance and the Harry Fox Agency for mechanical reproduction) on their behalf; the agents deduct operating expenses (such as for a performing rights organization) or take a commission from the income they collect (such as for a mechanical rights organization), and then remit earned revenue to the copyright owner and writer.

So, to summarize:

–Songs are copyrightable works

–Songs are copyrighted once they are “fixed” in a tangible medium of expression, such as written on music manuscript paper or recorded

–The first owner of a song is the songwriter

–The owner of a song has the right to reproduce, adapt, distribute, perform and display the song

Unless the songwriter is a successful recording artist or has great connections and can get his or her work to top artists and producers, the songwriter will try to enter into an agreement with a music publisher so the publisher, with their experience and connections, can help make their song a hit.

It isn’t easy for new or unestablished songwriters to get contracts with music publishers and the songwriters usually need good-quality recordings to show the potential of their songs. But industrious and ambitious songwriters will work hard to craft a good song (listening to current hits is a good way to know what’s commercial), make the best demo they can, and then look for a publisher for their work; perseverance and diligent research into finding companies most suitable for your work can pay off with hard work. Once the songwriter finds a publisher who is interested in his or her work, the two parties will enter into an agreement for the songwriter to transfer ownership of his or her song, and for other conditions of the transfer to be spelled out.

Among the potential sources of income for a song are what’s referred to as performance royalties, mechanical royalties, and synchronization. Generally speaking, these are the most lucrative sources of income for a song.

Performance royalties is money paid for public performances of a song. That means the songwriter earns income, or performance royalties, when his or her work is played on the radio, streamed, played in concert halls, clubs, bars, stores, and other venues. This happens because the venue cannot legally play copyrighted music without the permission of the copyright owner (permission is given in the form of a license, which is accompanied by a payment). Because there are millions of copyrighted songs and tens of thousands of broadcasters, streaming services, bars, stores and other public venues, there are agents who license the performance right of songs on behalf of music publishers and songwriters. These agents are called performing rights organizations (PROs), and in the U.S. there are four main PROs: ASCAP, BMI, SESAC, and Global Music Rights. Virtually all music publishers and songwriters join or affiliate with a PRO so their songs can be licensed for public performance and so they can be paid for public performances (radio airplay, streams, etc.) of their songs.  

To join, a writer or publisher has to fill out forms. Once a song is likely to be released, usually as a recording, the owner of the song (most likely a music publisher) will have to fill out a form related to the song, in which the song title, writer, publisher, artist and label are listed. It is easy to understand why the PROs need this information: they need to be able to identify the writer and publisher of a song when it has been publicly performed. Both songwriters and music publishers join or affiliate with the PROs and it is the practice of the PROs to pay writers and music publishers performance royalties separately and directly when they find their songs have been publicly performed.

Music users such as radio stations, streaming services, concert venues and bars pay performance fees to the PROs, which the PROs (after deducting their operating expenses) in turn remit to the writers and publishers of publicly-performed songs in a manner that represents the quality (such as radio play versus television play or play on a 50,000-watt radio station versus play on a 1,000-watt radio station) and the quantity of public performances. The distribution of the money songwriters and music publishers from the PROs (via the music license fees they collected from music users) is called performance royalties.

Another type of royalty is the mechanical royalty. This is a royalty paid for sales of physical or digital recordings containing a song. Performance royalties are paid for plays of a song, mechanical royalties are paid for objects (like CDs, vinyl albums or cassette tapes, as well as digital recordings) embodying or containing a song that are sold. Digital mechanical royalties are also paid for songs streamed on interactive or on-demand streaming services (as opposed to non-interactive streaming services). 

Many music publishers retain a mechanical rights organization to represent their songs for mechanical licensing to labels. A mechanical license gives a label the right to record and publicly distribute recordings of a song. The mechanical license contains many provisions, including the royalty the label pays for each recording of the song that is sold. A publisher, or if it has an MRO, will negotiate the mechanical royalty rate with the label. Labels commonly pay mechanical royalties twice a year. If the publisher has an MRO, the label pays the MRO the mechanical royalty after deducting its commission. The publisher then splits the mechanical royalty with the writer in accordance with the terms of their agreement.

When a song is used in conjunction with a motion picture or television program or televised commercial a license is required. The producer will negotiate a synchronization license for the song to be used in its film. Factors such as the prominence of the song in the production, whether it is used in the opening or closing credits, how often it is used, and how long it is played will be considered in the fee that is negotiated.

Songwriter-music publisher agreements will provide how the music publisher and songwriter split the revenues generated by the song. There are other sources of income for a song, but performance, mechanical and synchronization revenue are historically among the most important. There are many other terms of the songwriter-music publisher agreement, but royalty splits are of prime concern and to fully understand this agreement one needs to know the basic concepts of performance, mechanical and synchronization licenses.

It is the publisher’s job to create as many different revenue streams for a song as it can, and to maximize the revenue in each stream. When done effectively, the music publisher can help the songwriter realize his or her dream of having a hit. In the best-case scenario, the song will become a standard, where new artists will cover the song long after its initial release, or it will be used in movies, TV programs, TV commercials, or videogames long after its initial release, so the song will earn royalties many years down the line.

For school band, orchestra, and choral composers, imagine how gratifying it would be for you to have a piece you wrote publicly performed, and the same for a student. Then of course there is the opportunity if your composition is published to copies of your work publicly distributed and to have it performed around the world.

What is great about popular songs, is they can earn income on a 24/7 basis and that one three-minute ditty can be a perennial money-maker. A catalog of songs by a single writer can even be worth millions of dollars if those songs are successful. 

Whether you or your students write music, it’s nice to know the joy that comes from writing music, not to mention the potential income that may be derived from it, can add a new dimension to teaching or performing.

HarveyRachlin.com