Music Publishing 101: An Overview
Understand the fundamentals of music publishing.
In 2023, music publishing generated $6.21 billion in revenue in the United States, a 10.74% increase compared to the previous year. Although music compositions are generating more money than ever, most people in the industry do not understand how music publishing works. This results in loss of money, time, and energy. Understanding the basics of music publishing is vital to songwriter and publishers alike.
US music publishing revenues by year, and year-on-year percentage change. Source: NMPA.
What is a music composition?
A musical composition, or song, is a specific combination of melody, harmony, rhythms, and lyrics. In copyright law, musical compositions are also known as work of the performing arts or PA.
What happens when a song is created?
Once a song is completed, it is automatically protected by copyright law. That means the copyright owner has the exclusive right to copy, modify, sell, perform, or display the song. These rights are crucial because they can be sold or licensed to others for money, called royalty.
What is music publishing?
Music publishing is the power to control the five exclusive rights of a musical composition under copyright law.
Who owns the copyright of a musical composition?
As a general rule, the owner of the PA copyright is the person who created the song.
When a song is created by two or more people, it is known as a joint work, and the copyright is divided equally among them.
The exception is if there is a written contract stating otherwise. In that case, we need to see if the contract complies with the law, mainly if it is in writing.
A common example of a simple contract used by songwriters to establish the percentage division of a song is a split sheet.
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What are publishing royalties?
Publishing royalties are the money made from using songs. There are three main types of publishing royalties:
Performance Royalties: When a song plays on the radio or a streaming platform.
Mechanical Royalties: Each time someone streams a song or buys music (digital or physical).
Synchronization Royalties: When a song is used in a movie, video game, TV show, or commercial.
According to the National Music Publishers' Association, here's the average share between the three:
Performance: 50%
Mechanical: 20%
Sync: 25%
Other: 5%
What other royalties does a song generate?
Other royalties depend on the type of agreement or license with the person or company using the song. Examples include:
Micro-Synchronization: Used on YouTube, TikTok, Instagram, Facebook, Snapchat, etc.
Translation: If someone wants to translate a song into another language.
Interpolation, Replay, and Sampling: When part of a song is used in another song.
Display: When the lyrics of a composition are shown in karaoke or Spotify.
Print: When sheet music and arrangements are printed and distributed in music books.
Theater Musicals
Ringtones
Elevator Music
Other Uses: When a song is used on gift cards, toys, dolls, or merchandise.
In each of these scenarios, the payment and type of agreement or license vary.
Who is entitled to publishing royalties?
Usually, the copyright owner of the song is entitled to publishing royalties. Because songwriters are generally the copyright owners of their songs, they are entitled to publishing royalties. The exception would be when songwriters sign away their copyrights through a written agreement.
How are songs payments divided?
Like a coin, each composition has two sides: the writer’s share and the publisher's side. Every time a composition generates royalties, the payment is divided into two parts: one for the writer’s share and the other for the publisher’s share. In the music industry, these two halves are referred to as the 100/100 or 50/50 split.
As a general rule, the songwriter owns the whole coin and has full rights to both the writer's share and the publisher's share. Each type of royalty is collected by a different organization.
Who collects performance royalties?
The organizations that collect royalties generated by compositions vary by country and depend on the type of royalty.
In the United States, the entities responsible for tracking, collecting, and distributing performance royalties are performance rights organizations (PROs). The main PROs in the U.S. open to the public are ASCAP and BMI.
PROs directly distribute the first part of performance royalties to songwriters and the second part to publishers. If you are not signed with a publisher, you have the right to claim 100% of those royalties through your PRO.
Who collects mechanical royalties?
There are two types of mechanical royalties.
First are traditional mechanical royalties that record labels or master owners pay to music publishers for music sold in physical or digital format. In the United States, the intermediary responsible for collecting and distributing these mechanical royalties is the Harry Fox Agency (HFA).
Second are mechanical royalties that streaming platforms pay to publishers for streaming music. In the United States, the Mechanical Licensing Collective (MLC) is responsible for collecting and distributing these mechanical royalties.
What are collective management organizations?
In the United States, PROs collect performance royalties, while HFA and MLC collect mechanical royalties. However, in many Latin American countries, both roles are handled by a single entity known as a collective management organization (CMO).
Examples of CMOs include:
SACM: Sociedad de Autores y Compositores de México
SAYCO: Sociedad de Autores y Compositores de Colombia
SADAIC: Sociedad Argentina de Autores y Compositores de Música
SGAE: Sociedad General de Autores y Editores de España
SGACEDOM: Sociedad General de Autores, Compositores y Editores Dominicanos de Música
SCD: Sociedad Chilena del Derecho de Autor
ABRAMUS: Brazil
Who collects synchronization royalties?
Unlike other royalties, no specific organization collects synchronization royalties. This means if someone wants to sync a song with a visual for an audiovisual project, they must contact the songwriter or their publisher directly and request permission.
In exchange for this permission, called a synchronization license, the user must pay a fee. Typically, the payment for the license is a one-time fee rather than a percentage.
Conclusion
Music publishing is the power to control the rights of a song. The songwriters are their own publishers, unless they sign away their copyright through a written agreement. When someone uses a song, it generates publishing royalties. The type of royalty one generates depends on the type of usage of the song. Each type of royalty is collected by a different organization.
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