This page is intended to be a basic American music business resource for independent artists new to the business. This is not meant to be a definitive guide on everything there is to know about the music business. That topic is way out of scope for this page.
Once you are a member of Music Promotion Online, you have this and hundreds of other resources available to you all compiled in one location. Everything from the legal end of things to the creative side such as finding nearby mastering engineers.
Here are some of the things you may need to know: Performing Rights Organizations, Publishing Companies, The Harry Fox Agency, Master Rights, Web Royalties, Copyrighting, Trademarking, Entertainment Lawyers
Performance Rights Organizations (ASCAP, BMI, SESAC)
The role of PROs is to collect and pay the royalty payments for non-dramatic performances of intellectual property such as music. These societies collect from radio stations, TV stations, Internet companies, bars where cover bands play and anywhere and everywhere else intellectual property is being used. This is in turned paid to the publishers and authors of the performance or recording.
Every time a recording or performance is played on the radio, TV, etc., a small royalty is owed to the publisher and songwriter. If it’s your song, the only way to be paid to align with a PRO. Radio stations don’t pay the songwriters directly. They pay the PROs which pay the songwriters and publishers. Often times they pay a lump payment (depending on listenership size)for rights to play all of a PROs associated songs. The station then submits playlists of every song aired to the PRO which then distribute the royalties. PROs often have major listen campaigns going on in large cities, monitoring each song played. Anywhere there is a public performance of the song the writer and publisher should be compensated. There are a few exceptions such as, bridge, cue, or background music on radio, partial performances of pop songs on radio, station IDs or public service announcements, and promotional announcements on radio or local television.
There are three PROs in the United States. ASCAP, BMI, and SESAC. Other countries have their own. SESAC has a comparatively much smaller membership base. ASCAP and BMI are the most often used by indie artists. Both have unique playlist capture methods and costs associated. They typically pay out quarterly. You can only be a member of one at a time. ASCAP and BMI are “not-for-profit” organizations yet have high paid CEOs. SESAC is for profit.
www.ascap.com
www.bmi.com
www.sesac.com
Publishing Companies
They collect the money owed to songwriters they represent. Any time a song is used on a record distributed in the US, the writer is owed a compulsory mechanical license at the current statutory rate. The current statutory mechanical rate is 9.1 cents for up to 5 minutes. This is paid to the writer of the song only. It’s common to pay 25% to 50% of your publishing royalties to a publisher. For this, they shop and push your music to other companies for use in movies, television shows, advertising campaigns, etc. Publishers also collect the funds from use of the songs by radio stations, movie companies, movie soundtracks, artists who do covers of it, and artists who sample it. They also collect and distribute synchronization rights for use of your song in combination with visual images.
The Harry Fox Agency
They issue licenses to labels that wish to put a cover song on their album and assure that the original writer is paid the current mechanical license rate for each record sold. The HFA also periodically checks record companies to make sure they are paying the compulsory mechanical license to the publishers and writers. The HFA charges publishers and writers affiliated a commission of 4.5%.
Master Rights
Are for total use of the master recording and are typically owned by the record company.
Web Royalties (PRO for sound recordings)
Only songwriters are paid when a song is played on the radio. The artist, session guitarist, and drummer are not. This led to an amendment of the US Copyright Act in the 90s. The new law establishes a statutory license for sound recordings that are digitally transmitted. The current webcasting rate is very low, less than $.0008 per performace. This includes satellite radio and web radio. It works similarly to the common PROs however, this royalty is paid to 4 groups. Copyright owners (50%), featured artists (45%), and non-featured musicians and artists. (2.5% each). The non-profit organization handling this huge undertaking is SoundExchange. You can register with them at www.soundexchange.com. You can register and view the current rates there. Most royalty payouts are for far less than the traditional performance payouts but this may change as SoundExchange expands.
Copyrighting
The purpose of registering your copyright with the US government is to protect you if a situation arises where someone infringes on your copyright. Your work is under copyright protection automatically when a song is captured in a tangible form. The registration gives you a public record of your copyright and a certificate of registration. You may copyright published or unpublished works. Keep in mind this does not guarantee your work from infringement. No one listens to the recordings sent in unless they are pulled and used in a case. They are simply “on file”. You can still lose a copyright case even if you have your material registered. Even if your material was registered first, someone else could have had the idea and neglected to register timely. If they can still prove their original conception date, they can win. However, having a copyright on file provides a date which proves that the work was conceived at least by that date by the applied party. It’s a timestamp from the government. But keep in mind that the courts have ruled the two people can both come up with the exact same work at different times, in different locations, and without knowledge of one another. So in reality, the best copyright protection is getting your song to the top with your name on it before anyone else can claim they wrote it.
To register you will need a recording of your song, $45 (currently) and the proper application. You will need form SR to copyright the recording and the underlying music as well. There is a checkbox to state you are copyrighting both. Alternatively you can copyright just the underlying song is it’s not the master recording. Use form PA for this. If it’s not your song, you must use the SR form but do not check the box that covers the underlying music. This is still all handled through physical mail, so you’ll need to ship the package out. You may receive a confirmation receipt, but it will take six months or more to receive the certificate.
It’s important to note that you cannot copyright your material by mailing it to yourself and not opening it. This is not true!
Forms and info:
www.copyright.gov
Trademarking your band name
This is a tricky subject that everyone must deal with. First you must find out if anyone has your band name. It’s best to hire a search team of attorneys to find this out, but you can do some digging on your own Try http://www.uspto.gov/ Search for anything close to your name. If anyone is using it or anything similar, you might want to change or consult your lawyer.
Also check if the domain name or .com is taken as well. This may affect your decision.
You’ll be using a Service Mark or SM as a musical artist. This is if you are primarily a live artist. If you only sell CDs and merch, you’d want a TM. Each will run you $245.
Entertainment Lawyers
You’ll need an entertainment lawyer for anything you have to sign. An entertainment lawyer specializes in intellectual property law, contracts, and licensing. These deals and be very complicated and is best left up to the law professionals. They can help structure deals with that give you maximum benefit. Expect to pay over $200/hr or around $1500 to review and negotiate a contract. It isn’t cheap, but protecting you from a financially doomed musical career is worth it. We’ve all heard the horror stories of artists making hasty and shady deals that sign away their future rights and finances. Protect yourself!
