Music Publishing & Songwriting

I was recently speaking on a panel, when one of the other panelists asked the audience, “How many of you are songwriters?” Not surprisingly, a show of hands indicated that almost everyone was a member of that not-so-exclusive club.

I followed up with another question: “How many of you are music publishers?” Now, the crowd hesitated. One… maybe two hands were raised. I couldn’t let it go at that. “How many of you need a music publisher?” Once again, unanimity prevailed. Every songwriter had decided that he or she needed a music publisher. That’s when I broke them the news:

If you’re a songwriter, you already have a music publisher. You’ve had one for quite some time. In fact, your publisher is your greatest untapped resource, ready to take your assets (that’s your songs) and put them into action (placing them somewhere where they can earn…) to yield income (which is the goal, last I checked).

Newsflash to Songwriters: Your music publisher is… you.

From the minute that you finished your first song, you became not only a songwriter, but also a music publisher. When you write a song, you control the rights to that song and are able to license those rights (which is what a publisher does), until the time when or if you decide to assign your publishing share to someone else.

Every song is divided into a writer share and a publisher share. If you, Joe Songwriter, have written the entire song on your own, then the writer share belongs entirely to you. If you have not made a publishing deal for your share of the song, then the publishing share belongs to Joe Songwriter Music, or whatever you choose to name your publishing entity. When a songwriter asks me how to find a good publisher, I usually say, “Become one.”

That of course, is a little bit trickier. That means work. It means research. Above all it means figuring out the answer to a question that perplexes even many people with years of experience in the music industry: What does a music publisher do?

Music publishers turn music into money. Did that get your attention?

It often takes songwriters by surprise when I point out that songwriting is not, in fact, a business. It’s just something that songwriters do. In the actual course of writing a song, there’s no money changing hands, nor is anything bought or sold. Hours are spent, lunch is ordered, ideas are exchanged and at the end of the day, something exists that never existed before. But it will take someone else to turn that new song into something that generates income. This is the role of the music publisher.

When I titled my book about music publishing “Making Music Make Money”, it was with this fundamental purpose in mind. The basic role of a music publisher is to find every possible opportunity to place the song somewhere it can make money, which is known as “exploitation”. Music publishers control the rights to a song, which means that anyone seeking to use that song in any way, anywhere in the world, must obtain the permission from the music publisher—that permission or “license” usually comes with a price. Publishers make their money not by creating a physical product, as record companies do. Publishers create income for themselves and the writers they represent, by granting “licenses” for the use of the song. Those “licenses” create several different kinds of income streams:

Mechanical Income: From CD sales, digital downloads and other sales from physical product.

Performance Income: Collected through ASCAP, BMI and SESAC for any public performance of the song– on the radio, television, a website or a sports arena, a hotel lobby, an elevator, or a shopping mall.

Sync Income: For any use of music “in synchronization” with a moving picture. That’s old-fashioned lawyer-speak to describe songs that are used in motion pictures, advertisements, television shows, or video games.

Other Income: This includes “reproduction” rights, which includes the right to print sheet music, or lyrics from a song—it also includes everything from uses in greeting cards to toys to karaoke machines.

Anytime you hear or see a song being used, there should be at least one, and often several licenses that have been granted, and which are now generating income for both the publisher and the songwriter.

If all that seems like a good business to you, you’re not the only one. While even major companies like BMG seem to be fleeing the record business, new publishers are sprouting like spring flowers—many of them with seed money from investment banks, hedge funds, and financial institutions. If you’re a wealthy investor, buying a publishing catalogue has become akin to acquiring an Old Master painting.

But there are plenty of opportunities in music publishing for people other than Wall Street financiers. Managers, record labels, studio owners, booking agents or other music entrepreneurs—anyone who has relationships with songwriters and the ability to recognize new talent—should be thinking about starting a publishing entity as a part of their business structure. Given the explosion in music use for ring-tones, YouTube videos, and electronic games, even in the face of falling CD sales, it doesn’t take an economist to figure out that a music publisher is a good thing to be.

Of course, if you’re a songwriter, you already are a publisher. Now, the challenge is learning to be a good one. Education is part of it. Experience is a part of it as well. But the all-important first step is simply understanding and accepting your role, as the one who will create a business out of your own songs. Who needs a music publisher? You do. And now you know where to start looking.

Want to read more about becoming your own music publisher? Click the my book below to read more about it:

Mark it down in the calendar folks…. we WON this time! Like a team emerging from a five-year losing streak, publishers and songwriters are heaving a sigh of relief, jumping for joy, and for the first time in several years actually looking ahead to the future with some small glimmer of hope. Isn’t it interesting what $100 million can do?

In case you missed the big occasion, last week a federal court judge ruled that AOL, RealNetworks and Yahoo! must pay licensing fees to ASCAP for the streaming of music on their sites.

Visit this Link to the catch up on the Full Story:

I know—the idea of a company having to pay for the use of music shouldn’t really be all that surprising. But over the past several years, creators and publishers have watched whole enterprises emerge, all based on the free use of music. The cyber-gurus told us “information wants to be free”—that the whole idea of copyright is a vestige from another era no longer beneficial to our wired way of life. The theory seems to have been that while a single unlicensed use by a film company or record label would never be tolerated, violations done on a mass scale would force licensors and even the courts to rewrite the old rulebook. Turns out that it just isn’t so or at least not yet.

For now, the digital world is going to have to ante-up and pay the bill, not only for the music they’re using now, but also the music they’ve been using as far back as July 1, 2002. Web-based companies that utilize music-streaming will need to obtain a non-exclusive blanket license, in the same way that radio stations, television stations, bars, restaurants, performing halls and others have for decades, from the performing rights societies, i.e. ASCAP, BMI and SESAC. The fee for the license will be 2.5% of the service’s “music-use-adjusted revenue”. That rather clumsy terminology is short-hand for a formula that takes into account the amount of revenue generated by the business, the advertising and promotional costs for that business, the total number of hours that music is streamed, and the total hours that the web service is used. If you’re trying to do the math at home, don’t bother.

The people that have done the math say the number owed by the Big Three under this decision could be over $100 million. Of course, now that legal precedent has been set, and the courts have established that the basic performance licensing system is appropriate and applicable to these web-based services, it shouldn’t be long before BMI and SESAC step up to get their piece as well. After that, they’ll be moving on to all of the other music-streaming sites. Needless to say, there’s a lot of money in them hills.

The problem is, there may not be as much as there needs to be. Clearly, some of these services, maybe even some of the most prominent, will never be able to cope with the costly invoice now sitting on their desk. Many of them have hardly figured out how to effectively monetize their own businesses. We’ll undoubtedly hear many heart-wrenching stories of financial ruin and laments about how the licensing organizations are choking the business, standing in the way of progress, and violating the American public’s right to unlimited, unfettered, uninterrupted entertainment.

Too bad. Happily, the courts have reaffirmed once again that there really is no free lunch. This is good, since songwriters and publishers have had to pay for their lunch all this time, and will for the foreseeable future. Kudos to ASCAP for fighting the good fight. Credit goes to the court for making the right call. Here’s to a victory that’s all the sweeter for the long road it took to get there. Some things are worth waiting for.

$100 million is one of them.

Back in my songwriting days (yes, I actually used to have a job where I created something, rather than just trying to sell something), I used to work with a collaborator who referred to her songs as her “babies”. To be honest, I never felt quite that maternal about my tunes (probably a gender thing). I viewed them more as unruly teenagers—brimming with potential, but usually plagued by one or two disastrous character flaws, and prone to costing me a lot more money than they would ever bring in.

Nevertheless, those songs were mine. I wouldn’t want to think of them as orphans. Actually, I never knew songs could be orphans. But apparently, they can. Imagine them, sitting homeless and forlorn by the side of the road, waiting for someone to come by, offer a ride, and take them away…

Could happen. I saw a fascinating blog recently:

Music-Technology-Policy

which on Friday, April 25 addressed the issue of “orphan works” – a subject currently in front of the United States House and Senate. “Orphan works” are copyrights (songs, books, recordings, you name it) for which it is not possible to identify or contact an owner. What the author of Music-Technology-Policy, Chris Castle, very adroitly points out is that there are large commercial interests, Google in particular, that have a vested interest in supporting legislation to make it possible for these “orphaned” works to be used freely, without compensation or risk of penalty.

The problem is largely one of definitions. Certainly, anyone with experience in publishing would be willing to acknowledge that some works do fall into “orphan” status. Disputes between writers, convoluted copyright histories, failure of heirs to continue to administer copyrights, works essentially abandoned by their own authors (remember that scene in “Raising Arizona” where they leave the baby on the car)—these are all situations that can eventually make it impossible to identify the proper owner of a copyright. But companies like Google are setting the bar pretty low.

According to the blog, Google’s Lester Lessig has referred to “out of print books” as orphans. Google’s General Counsel has said publicly: “These works include those for which the author or assignee of the work – the work’s “parent”—can no longer be determined, usually because the contact Information on the copyright registration is out of date”. They also expand that definition of orphan to include “works that have been, for all intents and purposes, ‘disowned’ either because any potential monetary value of the works has expired or because their authors simply are not interested in enforcing copyrights on their works”.

Wow. Those are pretty broad definitions. To claim that just because something is “out of print” makes it an orphan would put a huge portion of American music’s master recordings into the home for wayward record albums. Only a very small portion of recorded music can ever be profitably kept “in print” at any given time. But it may still be actively used in movies, television, advertising, etc. Similarly, labeling something an orphan because of an incorrect contact on the copyright registration is like deeming anyone with an incorrect address on a driver’s license a fugitive. Copyright registrations are notoriously out of date, which is why large film studios use search services that specialize in tracking down authors and publishers.

Finally, to decide that works generating little income or for which the authors are no longer actively engaged in protecting the copyrights are “orphans” overlooks some fundamental realities of publishing. At Shapiro Bernstein, where I work, we have a song in our catalogue that for over two decades generated income in the low three figures (and that’s counting dollars and cents). But upon rediscovering it in the vaults, more than 50 years after its initial creation, the song suddenly found a new life—showing up in a Tarantino film, and then catching to become a stadium anthem, then finding its way into several national advertising campaigns. The song now generates more than enough income to keep its writers living well, and to renew their interest in their long lost “baby”. Songs come back. And when they do, the copyright owners get interested very quickly.

The point of all this is not to encourage you to write your Congressman about the “orphan works” legislation—though I wouldn’t discourage it either. The real point is to remind you once again of how important it is to maintain and update all of the information necessary for administering your copyrights.

Check your ASCAP registrations regularly. Make sure your publisher and your PRO have your correct address. Maintain accurate copyright registrations. Remain ever vigilante for unauthorized uses.

I’ve made all of these points before, both here, and in my book “Making Music Make Money”. It is a primary concern of my Berkleemusic class, Music Publishing 101. Whenever I talk about this subject, I usually emphasize that the songwriter is also a publisher of his or her own work, at least until he or she decides to assign that responsibility to someone else. As publishers, it’s our job to administer and protect the copyright.

But here’s a new way to look at it. You’re not only your song’s publisher. You’re the parent. You created it—now you have to take care of it. If you don’t, there are plenty of large “content” –hungry companies and creative “pop culture alchemists” who will be more than happy to take your song and call it their own. In this Information and Entertainment Age, nothing of value will stay an orphan for long.

I just can’t stop making you money. First, I tipped you off about Sound Exchange, and the money that is being set aside to pay performance royalties to artists whose work is used in the digital domain. Then I clued you into the importance of registering your songs at Harry Fox and MCPS/PRS in order to avoid other people collecting your lost income. Next, I told you to get in the game, and suggested that there was an important new income source in video games. And now it’s time to go to church.

Okay, I realize this isn’t for everyone. If your catalogue of songs is predominately death metal anthems or songs about getting “low”, church is probably not the place for you. Clearly, Christian music, whether it’s traditional hymns, Christian rock, CCM pop, or gospel, is not for everyone. But it’s for more people than you might think. If you’re not in the industry, it might surprise you how big these markets are. But what might really surprise you is what a big business it can be.

I remember the first trip I made to Nashville—I was working for a large publisher based in New York, and headed off to meet my colleagues in the Country music office (based in Nashville) and in the Christian music office (located in the center of that industry, in the suburb of Franklin). Like most offices in the country music industry, our Nashville office was located in a small family house along Music Row. It was charming and cozy, but by New Yorker skyscraper standards, not overly impressive.

With that in mind, I headed off to the Franklin office of our Christian Music division, expecting an even smaller office somewhere in a suburban office park. After all, country music is a much bigger business than the Christian business, right?

What I found was a six or seven story glass tower devoted entirely to the business of Christian music—a record label, publishing company, printing company and recording studio. “How can the CCM business be generating this kind of income?” It didn’t seem to correspond in any way to the level of CCM record sales. Turns out.. it doesn’t need to .

The Christian music industry is one segment that learned early on that there is more to making money in music than record sales. A huge portion of the income in Christian music is generated by print music, an area that has been largely ignored in the secular business. Print music is key in the CCM market because of the sale of praise and worship music, choral arrangements, youth choir arrangements and other songbooks that are marketed directly to churches and Christian bookstores. For those writers fortunate enough to write a praise and worship favorite, the money can flow in year after year—from the publishing rights, not the record royalties.

So for those of you who are actively involved in the Christian or Gospel business, it’s essential to learn how to collect the money for these worship service uses. This past week, Billboard writer Susan Butler , in her column “The Publisher’s Place”, highlighted a very important organization:

Christian Copyright Licensing International

This company, based in my hometown of Portland, Oregon, licenses and collects royalties from churches for reproductions, reprintings or other copying of songs to be used in their worship services, choir shows, etc. Churches are not required to pay performance royalties (ASCAP, BMI, or SESAC) for their services. But they are required to license, and pay for reproductions like bulletin inserts, songbooks, or visual projections of the songs. What does that really mean to publishers? About $172 million over the past 19 years!

CCLI is not only responsible for collecting the money, and distributing it to the publishers and writers, but also for helping church choir leaders, ministers and others to understand their obligations under the law, and the importance of licensing the music they use. It even has an online service called SongSelect that works with nearly 60,000 subscribers, giving them access to a library of almost 200,000 songs available for download. The organization licenses 145,000 churches, offering a “church copyright license” with scaled annual fees based on the number of church members. From those church licenses, CCLI distributed more than $15 million to publishers last year.

Please be clear. This is not a religious message. But if you’ve watched the election results on Tuesday, and seen the surprising strength of Mike Huckabee, you’ve seen that the power and size of the evangelical movement should not be underestimated. I’m not preaching to anyone here.

I’m talking business—and reminding you that if you are involved in the CCM or Gospel industry, you need to be familiar with CCLI. There is real money there—money that can help you to sustain your business, spread your message, and get your music heard. When people lift every voice and sing, someone’s getting paid. Let it be you.

We’re going to war!

No—not in Iraq, or Iran, or Pakistan or any of the other likely international hotspots. We’re going to war right here in the good ol’ USA—with songwriters and publishers right out there on the front lines.

In case you missed it, the opening shots across the bow were fired this week, when the Digital Media Association (DiMA) filed a brief in a royalty-rate setting proceeding arguing that an interactive stream should not require a license to reproduce a composition (that is, a digital phonorecord delivery, or DPD, license under Section 115 of the Copyright Act.) In layman’s terms, that means that the Digital Medial Association, the representatives for companies like MusicNet, which supplies music to Microsoft, Yahoo, MTV and many others, is trying to get out of having to pay a royalty to songwriters and publishers for reproducing their music in the digital, online sphere—something they had essentially agreed to do as far back as 2001. In short, DiMA is looking for the Federal courts to give them an escape hatch from a commitment they made to the music community more than five years ago.

Not surprisingly, music publishers, who have been kept waiting for those promised DPD royalties since 2001, returned fire immediately. David Israelite, CEO of the National Music Publishers Association, called DiMA’s move “ a slap in the face to every songwriter in America”. More significantly, Sony/ATV’s pugnacious Marty Bandier sallied with a bold offensive move—he withdrew the conditional licenses for the entire Sony/ATV catalogue. These tentative licenses had been allowing companies like MusicNet access to the catalogue, with the understanding that royalties retroactive to 2001 would be paid once the royalty rates had been set and agreed upon. Effectively, this now puts the DiMA members in the position of using music without a license (a violation of copyright law) for every song in which Sony/ATV has an interest. Given that the Sony/ATV catalogue includes everything from the Beatles to Beyonce, that presents quite a problem for DiMA. And Sony’s merely the first publisher to weigh in.

On the surface, the debate appears to be about the types of licenses that should be applied to a digital streaming of music. Music publishers and songwriters have long held that there are two licenses, and subsequently two royalty streams, involved in these types of uses: a DPD license, and a performance license. The perfomance license is one that everyone can seemingly agree on—a digital streaming of music is held to be similar to a radio broadcast, in the sense that it represents a public performance of a song. Therefore the music must be licensed by ASCAP, BMI and SESAC, and any use of a song in the digital realm should generate a performance royalty to the songwriters that will be collected by those performing rights organizations.

The sticking point is in the DPD license. Based on Section 115 of the Copyright Act, music publishers have maintained that the digital streaming of music also constitutes a “reproduction” of the song, in the same way that an LP or cassette tape did back in the days of physical product. That means that companies like MusicNet would also have to have a DPD license for each song, and pay what is the equivalent of a “mechanical” royalty for each song used. These royalties would be collected by Harry Fox Agency, and then distributed to the publishers and songwriters. What’s really galling to music publishers, and what was cited by Sony/ATV in their move last week, is that DiMA had acknowledged the right to the DPD license back in 2001. In fact, they obtained the conditional licensing agreements under which they’ve been operating by pledging to pay the DPD royalties retroactive to 2001. Now DiMA is claiming that digital uses are “like radio, and should require a performance license only”.

So what’s really going on? Certainly, DiMA’s members are realizing just how expensive those retroactive DPD royalties are going to be. The truth is that most digital music services are only beginning to generate significant profits. While growth in the digital market has been vast, the level of competition, as well as the ever-present disputes about rights, illegal downloading, etc. have kept a lot of players in this game on the edge of financial survival. Clearly, these guys are not looking forward to paying a very big royalty bill that’s been pending for the past seven years. At the same time, DiMA is seeing an opportunity to drive a crucial wedge among the big dogs of the music industry—they are hoping to pit the record companies against the music publishers and songwriters. With sales of physical product plummeting, the record companies’ sole hope for survival is massive growth in the digital world. The last thing they want to see is the whole operation derailed by a dispute between publishers, songwriters and companies like MusicNet. This war is likely to make things very tense in the big music business office towers, with Sony/ATV, Universal Music, and EMI Music Publishing on one side of the battle lines, and SonyBMG Records, Universal Records, and EMI Records on the other side.

But most importantly, what’s really at stake is a larger issue for the creative community. The forces at play in this dispute are the same ones fueling the current writer’s strike in Hollywood. The massive growth of the Internet and digital technology has unleashed a revolution that is only now beginning to sort itself out, and whatever copyright issues are at stake will have massive ramifications for the entire creative community over the next several decades. As large as these issues look now, they will be a lot larger ten or twenty years down the road. Mistakes or ill-considered concessions made now will lead to billions of lost income down the road. When many publishers failed to see the future potential of DVDs, and agreed to roll DVD rights into their general film/sync agreements, they made what most now acknowledge as a colossal error. The issues at stake in digital licensing make the DVD debacle look trifling.

This is only the beginning. There are going to be an almost endless succession of bloody battles over the next five years for creators in every different realm of the entertainment industry. It’s not going to be pretty. But this is one where the creative community (songwriters and artists) and those responsible for protecting them (music publishers) need to get it right. The digital medium relies on creative content. The digital providers are going to have to recognize that, and pay for the content they use. Let the bullets fly! We’ll fight them on the land and on the sea, and on the internet. DiMA: It’s time to face the music.

I’m not big on scare tactics.

But every once in a while, it’s not bad to get a sudden glimpse of the darkside– just enough to jolt you from the stupor of complacency with the sudden realization that “Hey, it’s a jungle out here!” Yup. Always was, always will be.

In the middle of the flurry of holiday merry-making that constitutes the last month of work (?) in the music industry calendar year, I received one of those jolts of reality– from a songwriter friend of mine just recently returned from a sudden plunge into the abyss. As we caught up on the year’s activities at the BMI Holiday party, he recounted to me a horror tale that served to remind me that some of those music business weasels surrounding us that evening, as charming and harmless as they might appear (which was not all that charming or harmless really), were still predatory and dangerous beasts.

Two years ago, my friend had a song on an album that became a sizeable UK hit– needless to say, it promised a significant windfall for a songwriter who had achieved some success, but never quite had the good fortune to score a major US single. (Obviously, the names here have been omitted, to protect the innocent, and the not-so innocent). As he was signed to a US publishing company, my friend assumed that his publisher, obviously aware of the success of the album, would take the necessary steps to collect the money earned by the song. So he waited. And waited.

As a year went by and earnings failed to materialize, he became concerned (that’s an understatement). Finally, he began to do his own research as to what had happened to the pot of gold that was supposed to be at the end of his rainbow. It had vanished into thin air.

Well, not exactly. It had vanished into someone else’s pocket. It seems that my friend’s publisher, mired in paperwork as most publishers are, had failed to properly register the song with MCPS-PRS in the UK (their version of Harry Fox). Consequently, the money that had been earned by the writer fell into the vast pit of unclaimed earnings. That’s a big, ugly cauldron where confusion reigns supreme, and nothing and no one is safe.

How big is it? You can’t imagine. As a member of MCPS-PRS, our publishing company receives a document semi-annually that lists the unclaimed monies, with song titles and often with the names of the writers. The document is well over fifty pages long. Some titles are well-known hits, by superstar artists. The fact that a writer’s money falls into the unclaimed file doesn’t mean that the writer or the artist is obscure or unknown. It merely means that the song has not been properly registered, and therefore, the society has no place to send the money. It’s a very educational list.

Therein lies the problem. For an unscrupulous publisher, such a list is an invitation to treachery. After all, here is a list of titles, many of them recognizable from successful albums, representing money that the true writers and publishers don’t even know exists. What’s to stop another publisher from forging a contract, and claiming that money on behalf of the writer? Not much it seems. This is what seems to have happened to my friend.

But that’s stealing, right? Uh, yes. Surely one can take legal action to reclaim the money that was taken illegally. Well, sort of. My friend could have hired a lawyer in the UK (not all that easy, and definitely not cheap) to sue the other publishing company. It’s a pretty good strategy, if there’s over several hundred thousand dollars at stake. But when one calculates the costs of a two-year legal wrangle in a foreign country, it’s not a a very practical undertaking for any amount under $200,000. Keep in mind that there is no way to know exactly how much may have been stolen, until you launch an investigation, an audit, etc. More importantly, remember that most of the money on the Unclaimed Income list is money that the writer and publishers don’t even know is out there. Nine times out of ten, no one will ever find out that it’s gone.

So what’s the moral of this sordid little tale? What can a writer do to protect him or herself in the Darwinian world of the music biz? Start by obeying the first law of the jungle: Don’t leave money lying around.

1. Check your registrations. Then check them again. BMI, ASCAP, and Harry Fox all have systems that allow you to check that your song is registered correctly. Even if you’re signed to a publishing company, you still need to check and re-check those registrations. A publisher has a responsibility, but in many cases not a legal requirement to register your songs. This is not an area for blind faith. Trust, but verify.

2. Make some friends. Get to know your ASCAP, BMI, or SESAC representatives. If you do a lot of business in the UK, then make some contacts at MCPS/PRS. You need to know people, and just as importantly they need to know you. Low profile is no profile.

3. Act fast. I’m amazed at how many writers have a hit, then spend a year or two trying to decide if they want a publishing deal, who they should sign to, what society they want to affiliate with, etc. All the while, the money being earned by the song is languishing in “copyright control” or “unclaimed earnings”. If you put a $1000 on the sidewalk, would you expect it to be there a year later? Time is of the essence.

This is not a happy story. It’s unfortunate that the industry has people who will rip-off songwriters and others in the creative community. These “take the money and run” types are not the majority, but they’re not rare birds either. The reality is that they prey on the ignorance or inattention or complacency of legitimate writers and publishers. That’s the value of the wake-up call. Lost money will not find its own way home. Nor will it remain lost forever. If it’s yours, you have to go out and get it.

Here’s a recipe for dissension within a band:

Four guys in a group– but only one writes the songs. Happily, one of those songs becomes a huge hit, playing daily on the radio and bringing stardom to all. But look out Johnny, there’s trouble in paradise. When the royalty accounting arrives from the record company, the band is shocked to find that they’ve earned… $0. No payments are due, as the income from record sales, while significant, are not yet enough to pay off the expenses incurred in making the record and promoting it.

Meanwhile, back at the ranch, the one guy in the group who wrote the songs is walking out to his mailbox, where he finds a very large surprise: an envelope from BMI or ASCAP or SESAC. “Oh yeah. I remember those guys”, he thinks to himself, vaguely recalling that he signed a contract with them, but never really understood what they were supposed to do. It now appears that what they have done is to keep track of every time his band’s song was played on the radio and television. In the envelope, there is a very long statement showing the various uses. There is also a very large check, made out to him alone. Indeed, it’s so large that this lucky band member is now buying a new, much improved ranch.

Things are getting very tense on the tour bus right about now…

Here’s a similar scenario for strife within an industry:

Record company pays A&R people to find the band. Pays to make the record. Pays to promote the record. Pays ridiculous amounts of money to get the record on the radio. Then when the label finally bribes so many stations that the record is playing all around the country, the label earns… nothing. Sure it sells a few records (these days, very few). But as far as earning money off the radio play? Nada.

Meanwhile, the music publisher, having heard the finished record a few weeks before release, signs a deal with the primary songwriter in the group. The publisher pays nothing to make the record, and does nothing to promote it. The publisher does however register the song with ASCAP, BMI or SESAC, which means that once that song is playing all over the country, the publisher, like the songwriter, is earning a big, pleasantly plump check.

All of which brings us to: The Public Performance Right for Sound Recordings.

At present, labels and artists have joined forces to demand that they too receive performance royalties each time one of their songs is used on the radio or on television.They are trying to convince Congress to change the rules that require broadcasters (radio stations, television stations, etc.) to pay performance royalties to songwriters and music publishers, but exempt them from paying those same performance monies to record labels and artists.

Granted, the present set-up is a little strange. It’s odd to think that if Rihanna’s “Umbrella” is played 1 million times on pop radio stations around the US, the writers of that song will get paid for each play, but Rihanna, as the artist, will earn nothing. However, the argument has always been that Rihanna benefits from the radio play because of the exposure it offers her– it fuels record sales, concert tours, and her general, all-purpose fame. Likewise, the label benefits from the radio play to help sell albums– that’s why labels spend so much money to get things on the playlist. It’s a quandary for the music industry, for the broadcasters (who would prefer to keep more money, and forgo paying the artists), and for the lawmakers (who have a lot more ties to broadcasters than they do with rockstars or label presidents).

The interesting thing is: the performance right for artists and labels already does exist… in the digital realm. In fact, it was the 1995 Digital Performance in Sound Recording Act, that ultimately led to the current call for performance money from radio and television. In the digital world of webcasters, satellite radio, cable subscriber channels, etc., the user of music must not only pay ASCAP, BMI, and SESAC, but also SoundExchange, which is the performance rights organization for artists and the sound recording owner (i.e. the label).

The fact is, SoundExchange is a pretty cool thing… if only people knew about it. Unfortunately, many labels and performers have no idea that they are earning a royalty each time their song is on satellite radio or a webcast. Consequently, much of the money is unclaimed. SoundExchange can’t find you– you have to go to it and tell them where to send your money.

Am I saying that you should be for or against the performance right for artists? I’m saying, don’t worry about it. Let the big boys fight that one out. I’m saying: GO GET THE MONEY YOU’VE ALREADY EARNED. If you are a label, an artist, a band, or a featured musician on a sound recording that has been used on satellite radio, webcasts, cable tv, or anywhere else in the digital world, go visit the website of SoundExchange today. I just hate the idea of unclaimed money. Go for yours at:

www.soundexchange.com