Music Royalties 101: Your Music Questions Answered

Kicking off the new year, the Copyright Alliance and Music Law Pro co-hosted Music Royalties 101 to help music creators navigate the various revenue streams to ensure proper collection of royalties. Although music lawyers Jesse E. Morris, Esq. and Alexandra Mayo, Esq. did their best to answer as many questions as they could during the panel, time inevitably ran out and there were questions left unanswered. However, worry not! Jesse and Alexandra have tackled a number of unanswered questions below. The questions selected are the most relevant to all attendees, however, they understand that there may still be unanswered questions. If after watching the webinar and reading this blog, you still have questions, feel free to call or email Music Law Pro to get help understanding the ins and outs of the music industry.

DISCLAIMER: Any information contained herein is for informational purposes only and should not be taken for any individual case or situation. Please do not consider this information to be a substitute for obtaining legal advice from a qualified attorney.

Are arrangers entitled to royalties when the arrangement is recorded?

In general, it depends on whether the arranger created a derivative work or not. Oftentimes, an arrangement is just a cover version, in which case it is not a derivative work. In this case, the original writers/publishers would be entitled to royalties from exploitation of a recording that embodies their song. But if it’s derivative, the arranger may be entitled to a share of the derivative work, and then be entitled to publishing monies based on the split of that derivative song. An arranger can also be hired to create a derivative work, but that could be a buyout and they’d have no share. Also, if the arranger performed or produced on the recording, then the arranger may be entitled royalties from uses of the sound recording. 

Is it common for a writer to lose his/her writer’s share of the public performance portion of the composition if the composition is created as a work for hire? Or is that something that is always maintained by the writer?

Typically, per music industry custom, writers keep their writer’s share of public performance monies. This is generally true even when it’s a work made for hire, such as when hired to compose for a film project.

What is the difference between an arrangement that is so different it is a derivative, versus an arrangement where a mechanical license must be given?

Assuming this question touches on the issue of whether an arrangement is a cover, then a person creating the cover could obtain a compulsory mechanical license. Versus, if the arrangement is not a cover, then it’s a derivative and permission would be needed. In general, an individual is allowed to make an arrangement that is considered a cover if it doesn’t “change the basic melody or fundamental character of the work”. 17 U.S.C. §115(a)(2).

What is the difference between a lawyer filing a musician’s copyrights versus the musician filing themselves?

There are many important legal implications to consider when preparing a copyright application. Rather than trying to register alone, a knowledgeable music lawyer can guide you through the application process to ensure your music is best protected.

If you’re an ASCAP or BMI member, how do you get international royalties?

ASCAP and BMI typically have reciprocal agreements with performing rights organizations in foreign territories to collect international performance royalties on your behalf. Alternatively, your publisher may have a sub-publisher to collect directly from foreign territories.

What’s the difference between registering a work & full copyrighting?

Copyright ownership generally exists automatically once an original work is fixed in a tangible medium of expression. To enforce your rights in court against infringement in the United States, you need to register the copyright with the U.S. Copyright Office. There are numerous other benefits to registering your works with the Copyright Office as well. In addition to registration with the Copyright Office, there are various organizations to register music with to collect royalties and track uses.

If a songwriter is registered with [The] MLC and PRO[s] and SoundExchange for music that is not copyrighted, how does it affect them and their rights?

As stated above, music that is original and fixed in a tangible medium generally has copyright protection automatically. However, you can’t enforce your rights without a copyright registration. If utilizing music that’s in the public domain or not original, such music is not copyrightable. Thus, you would generally not receive royalties or remuneration.

Do you need permission to record a cover? Or is it a mandatory license? What about an arrangement?

If it is a lawful cover (i.e., it doesn’t “change the basic melody or fundamental character of the work” as mentioned above), then you can obtain a compulsory license in the US for audio distribution rights only. However, permission is needed for any visual/sync uses or any other uses. If an arrangement is a cover, then the license is compulsory. However if it crosses the line and becomes derivative, then a compulsory license is not applicable and you’d need a license.

Who assigns ISRCs, a distributor or a PRO? If five years down the line one joins a PRO, does the ISRC follow the recording?

International Standard Recording Codes (ISRCs) identify a particular recording and are generally assigned by a record label or distributor. PROs assign International Standard Musical Work Codes (ISWCs), which identify a particular musical composition. ISRCs should stay with the same unique recording for its life.

How do royalties break down for a live or recorded song performance on a TV talk show that may also be re-aired at a later date?

There’s an upfront sync fee and backend performance royalties. The upfront fee is generally paid 50% to the publisher (or whomever owns/controls the song) and 50% to the label (or whomever owns/controls the master). Backend performance royalties all go to the publisher (or song owner/admin).

What do most PROs do with royalties collected from blanket licenses collected from restaurants, shops, etc? 

They collect such royalties and pay them out.

Do you need to register with all the major publishing houses (BMI, ASCAP, etc.), or do you just select one that best suits you and publish solely through them?

As a writer, registration is only allowed with one PRO. As a publisher, publishers can join as many as needed to represent whatever PRO its writers are registered with.

Are the rates for sync quoted – the same then for master use?

Ultimately before a sync license is confirmed, everyone typically agrees on price and other basic terms. Then the upfront fee is usually split 50/50 between the publisher (or whomever owns/controls the song) and label (or whomever owns/controls the master).

How do we get a content ID account?

YouTube has certain threshold requirements for your own account. YouTube Help can provide more guidance as to YouTube’s specific requirements for Content ID, or you could work with a vendor.

On YouTube, if there’s a static album cover instead of moving images, does the revenue go to “sync”?

In general, it’s not sync because it’s audio-streaming with album artwork, but it is money coming from YouTube. Typically the revenue is considered audio-only, but depends on the contract.

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