Many developing songwriters
resent having to be a businessperson. I've heard them lament, "I've
written the songsnow let somebody else take care of the business."
But the reality is that this is the music business. The greatest song
in the world will not become a hit if it's neither demoed or brought
to the attention of music business professionals.
Although it's perfectly
acceptable to write solely for your own pleasure, if your goal is to
be successful in the music business, you have to pay as much attention
to the business as you do to the music.
For starters, it would be
helpful to understand the difference between a music publishing company
and a record label. A publishing company's primary function is to generate
income from songwriters' songs. This income typically results from getting
these songs recorded by recording artists, or included in television
shows or films. The term "publisher" is often used interchangably to
refer to an individual who's employed by a publishing company to pitch
songs, and to the company itself.
A record label is a company that's in the business of producing, distributing and seling albums. A rercord label signs recording artists. If these artists do not write their own songs, members of the label's A&R department will meet with publishers in the hopes of finding hit songs for their artists.
Songwriters' incomes come
from a variety of sources. Songwriters earn money primarily from mechanical
royalties, performance royalties, print royalties,
synchronization licenses and publisher advances. If a
songwriter is also a recording artist and/or producer, he will earn
additional royalties, but those royalties are totally separate from
monies generated by the songs themselves.
Mechanical Royalties is
the name given to revenues paid for the "mechanical reproduction" of
musical compositions on sound recordings. It refers to the royalties
paid for the sale of a physical, tangible product containing musicaudio
cassettes, CDs, record albums, and videocassettes all generate mechanical
royalties. In plain english, mechanical royalties are the monies you
are paid for the copies of your songs that are sold.
In the United States, the
mechanical royalty rate is established by Congress and is called the
"Statutory Rate." With one exception (the 3/4 rate which we'll
discuss another time), the Statutory Rate is not negotiable and applies
equally to all songwriters. Therefore, Michael Jackson, Diane Warren,
Garth Brooks and you, all receive the same mechanical royalty for each
album or single sold.
Payment is made per unit.
A "unit" refers to one recording of a song on an audiocassette, CD,
or record, whether it's an album or a single. Each song included on
an album is considered one unit. If you are lucky enough to have written
10 songs on an album, you will be paid for 10 units for each album sold.
Occasionally, more than
one version of a song may be included on an album or singlethe radio
mix, the dance mix, the urban mix, etc. In these instances, the writer
is paid for each version of the song, just as if it were a separate
For single releases, mechanical
royalties are paid equally for the "A" Side (the song that is
sent to radio stations and marked as the probable hit) and the "B"
Side (a song that the buyer is probably not familiar with). Therefore,
the writer of the hit song and the writer of the unknown song receive
the same amount of money for the sale of each single. Although this
may not seem fair, you should know that the writer of the hit will earn
the bulk of his income from performance royalties.
Next, we will take a look at exactly how much mechanical royalties actually pay, based on the Congressional chart which was negotiated through the year 2006.
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