INCOME FROM A SONG TRACING THE MONEY FLOW FourFront Media & Music Christopher Knab Copyright 2000 All Rights Reserved

Who are the partners in the business of a song?

Songwriters: ®One or more people who contributed to the writing of a song’s lyrics and melody ®They should decide how any income from the songs should be divided between the existing number of songwriters

Music Publishers Are responsible for the “Business of songs”

What does a Music Publisher Do? ®Find ‘USES’ for a song: ®For singers who don’t write their own songs ®For Films, TV shows, Documentaries ®For Ads, Jingles ®Online – Internet ®Any other uses

How do songs generate income for songwriters and music publishers? Let’s take a look at a hypothetical situation…

For starters, any income from a song is usually divided: ®50/50 between the: ®Songwriter and ®The Music Publisher

Sources of income from songs ®#1. Performance Rights: Uses of a song through: ®Radio ®TV ®Background Music (Muzak, DMX, etc.) ®Restaurants/Bars (size restrictions) ®Users of music must pay a licensing fee to the P.R.O.’s * ®ASCAP ®BMI ®SESAC *Performance Rights Organizations. (P.R.O’s pay publishers and songwriters for the USES of songs)

Sources of income from songs ®#2. Mechanical Rights: ®Record labels record ‘versions’ of songs and sell them to the public. ®They must pay the songwriter and music publisher a fee for each unit sold! ®The Harry Fox Agency handles most Mechanical Royalty issues, but not all. ®They deduct a fee for their services. ®Labels send H.F. (et al) a check either monthly or quarterly based on Mechanical Royalty rate (currently 9.0 cents per song, per unit sold.)

Controlled Composition Clause Most labels will not pay the full mechanical royalty rate, but only 75% of the current rate!

Sources of income from songs ®#3. Synchronization (Synch) rights ®Fees paid to S.W/M.P for uses of songs ®In movies ®TV shows ®Documentary films, etc.

Sources of income from songs ®#4. Fees negotiated through licensing deals for the the use of music in advertisements on: ®Radio ®TV ®Internet

Sources of income for songs ®#5. Sheet Music fees ®Any hit songs that are printed in sheet music portfolios or song collections