Indie Music Copyrighting.
What do you do when you don’t have a label endorsing your music and you need to pick between paying your own bills and paying a studio, publisher or marketing expert? It is becoming increasingly important for indie artists to look at alternative means to generate revenue streams. I have written about this in detail in my blog Raising money for Your Indie Music. While understanding music copyright and publishing is quite difficult and totally out of league from what an artist has entered the industry for, it is important to understand in order to establish alternative means to generate revenue. Because of the constant changes in the non-universal laws and treaties as well as music regulations, copyright becomes an incredibly dense subject. Like this was not enough, every country does it differently from another, adding to the difficulty of understanding the subject.
Even if it is only to know how to delegate copyrighting your music to someone else, grasp the basics of these principles. A musician’s most important asset is copyright. It can help you get exposure, turn around your career and make you money, if you understand its concept.
Originally, I had set out to write about all possible income streams that indie musicians and artists could look at as alternative means to generate revenue, but this subject turned out to be vast, so I decided to write a few posts only on copyrighting music. Here, I am going to lay out the essential concepts of publishing and music copyright.
When you record a song or write lyrics, your work automatically becomes copyrighted. Copyright is a form of intellectual property. The one who creates, becomes the copyright owner. This right is automatically split equally if there are multiple creators; though owners are free to deviate from this equal share through mutual agreement. Copyright ownership rights are meant to give control over who can perform publicly, reproduce, create derivatives of and distribute work. Ownership rights can be fully transferred and assigned to others. Licenses of your music can also be granted to others. This is done typically in exchange for payments commonly referred to as royalties.
You issue the permission to reproduce or distribute your song through a mechanical license, and receive mechanical royalties in exchange. Record labels and performing artists request these licenses from the copyright holders to use their songs for actual recordings. Mechanical licenses can be issued directly by you or you publishers to the requesting party. There are also mechanical rights societies like the Harry Fox Agency in the USA that issue mechanical licenses.
As soon as a song has been recorded and released to the public, songwriters are forced to give out mechanical licenses for it, in the USA and many other countries. As I have written in my blog Publishing Income for Indie Artists, there are regulations of fixed royalty rates for certain licenses that have to be explicitly given or those that are compulsory to be granted, as determined by law. These type of licenses are called compulsory mechanical licenses and the royalty which has to be paid for them is called the statutory rate. For every copy of a song shorter than five minutes, the current statutory rate is $0.091. Because issuing monthly accounting statements of compulsory licenses is too much work, in practice, labels rarely acquire a compulsory license because it obligates them to issue statements.
A sign up with mechanical rights societies is required for writers and publishers in order for the societies to issue mechanical licenses on their behalf and administrate, collect the owed funds and account back to the right holders. The mechanical societies take a percentage of gross revenues in exchange of this. This is usually 7%. Most publishers have an existing deal with an MRS, so you get an MRS representing your repertoire from the moment you sign a publisher and he registers it with them.
If your music gets many sales, downloads and streams, your mechanical royalties are high and this maximizes your income if the deal is tightly represented. Registration, followed by diligent accounting and administration is key here. As mentioned before, this is best done by an engaged publisher that works closely with a MRS. It is important to note that MRS’ usually pay out at the close of each calendar quarter.
I am going to write more about this subject soon. Please share your experiences in the comments section and I will add them in my future blogs.
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