Royalties in the Music Industry

Have you ever came up with a catchy jingle or melody and thought about submitting it for use? Have you ever wondered how to become a successful songwriter? Before submitting any material, take a moment to think about some legal issues surrounding your masterpiece.

When songwriters compose material, they generally want it to be safe from replication by others. They do not want others to profit from their work. This is accomplished by obtaining a copyright. A copyright gives the author an exclusive right to publication, distribution or adaptation of a piece of work for certain time period. During this time period, no one can use the piece of work without certain permissions. Once the copyright is up, anyone can use the work because it is said to enter the “public domain.” A songwriter’s work is copyrighted as soon as it is in a tangible form such as CD or sheet music. However, most songwriters get their songs registered so as to make it easier for them to receive compensation in court if their copyright is infringed upon. To copyright a song, the songwriter needs to obtain the proper forms. For a sound recording, the songwriter should obtain Form SR and possibly form CON. You can request a copy by mail at US Copyright Office, Library of Congress, Washington D.C. 20559, by phone at (202) 707-3000, or at www.copyright.gov. The forms must be filled out and sent back to the copyright office along with $45 and a non-returnable copy of the song. If the form is filled out correctly, a certificate of registration will be sent 4-5 months later.

Once the song is copyrighted, the writer is entitled to mechanical royalties under the Copyright Act. This means that whenever the copyrighted song is further recorded, the writer is entitled to royalties. Thus, the writer is entitled to compensation for each record that the record company produces. As of 2006, the statutory mechanical rate is $.091 for songs that are five minutes or less in length, or $.0175 per minute or fraction thereof per copy for songs that are over five minutes. So as you can see, songwriters can accumulate a ton of money for songs that achieve gold or platinum status. For example, if your song sells 1,000,000 copies, as the songwriter, you would be entitled to $91,000! This is a substantial sum if you have a knack for this sort of thing.

This rate is subject to periodic change. Thus, most songwriters will negotiate with record companies to receive the rate that is in place at the time of the manufacture of the record. Otherwise, if the writer negotiates an agreement where the rate is based on the rate at the time of the song’s release, the songwriter will receive a much lower rate if the song is ever re-issued or re-released. So it is advantageous for the songwriter to negotiate for the rate in place at the time of manufacture.

Most songwriters in the U.S. employ the Harry Fox Agency to handle their mechanical royalties. They issue the licenses and collect the royalties for the songwriters in order to save the songwriters the time and aggravation of going through the mechanical license process. Many other countries have similar agencies that deal with mechanical rights such as MCPA (England), STEMRA (Netherlands), GEMA (Germany), and CMRRA (Canada).

So if you ever thought about songwriting or already have written several pieces, I encourage you to copyright the work for your protection.