Indie Music Publishing and Royalty.
Whenever your song is copied or reproduced for sale, streamed or downloaded online, a mechanical royalty must be given to you; even if the CDs of reproduced music do not sell.
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 administer, 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.
Modern music producers are often both the composer and performing artist of a record. The ‘producer royalty’ mentioned above refers to a record producer in the old sense, when a producer used to record a band where the band members were performing artists.
It is highly recommended that you find a publishing agent to help you with ways to use musical works and generate revenue from them. Publishers not only register your works with the right associations, they also create commercial opportunities and administrate your royalty income. Getting a good publisher is beneficial for both writers and performing artists. Of course you don’t have to get a publisher and can manage your repertoire independently. However, the publishing landscape is intricate and highly technical. The amount of diligence required for publishing, makes it a time consuming task.
Labels need to have control or ownership of the ‘master recording’ of a finished record, in order to release it. When recording hasn’t been assigned to a label, the master rights are in the hands of the performing artist and the record producer. In exchange for royalties paid directly to the performing artist and producer, the label gets ‘sound recording copyright’. The producer royalty is sometimes paid out of performer’s royalty, because this ideally is part of the ‘recording costs’ and should therefore be covered by the artist and not the label.
A label is obligated to issue royalty statements or income reports at least twice a year or every six months. Payments are made only upon receipt of a valid invoice. If the label has not provided the income reports, be proactive in requesting statements and invoice, as labels will not pursue you to let you know they still owe you money. It is the responsibility of a publisher or manager, if you have one, however, they need to be well-informed of all your deals and accounting cycles in order to do their job. An occasional nudge may often be required. Anyone who wants to reproduce or distribute your song, will need to get permission from you, the musical copyright owner. I have written about this in detail in my post Alternative Income for Indie Artists.
A musical composition is a piece of music, in part or in whole. The authors of music are typically the music composer and the lyricist. These authors are the owners of the musical composition copyright. Both the composer and lyricist of a track get assigned 50% of the composition’s copyright in a typical composition copyright case, unless they agree on a different split. The reason for a different percentage is mostly one party contributing more than the other.
Copyright owners have the exclusive right to determine who can produce copies of their song, for example to create records. A mechanical license can be given out to grant this right to others. This is done in exchange for a monetary payment which is called ‘mechanical royalty’. Whenever a performing artist or a record label wants to record a song that they do not own, the law requires them to get a mechanical license from the copyright owners.
Please share your experiences in the comments section and I will add them to my future posts.
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