Introduction to the Business of Songwriting

JamPlay, LLC
Published on 06-21-2016
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You've built up your guitar playing chops, you've written a number of songs, performed them for a few crowds, and even made some decent recordings. You've posted videos of yourself playing your songs on YouTube and your Facebook, Band Camp, and Reverb Nation accounts all offer your music for people to hear, download and enjoy. You might even be selling your music on iTunes through a service like TuneCore. And in our world of digital media, you could have gone this far without knowing the first thing about copyrights and song licensing.

It's been said that writing the song is the easy part. Once you have a song that you think could go somewhere, before you really do anything with it, you need to make sure you understand the process of protecting your work. In the event that someone wants to use your song(s) to perform, for a movie, a broadcast or even distribute your recordings, you need to know how things work... and you might be able to make some money too!

If you start to look in to music licensing or copyrighting with a few Google searches, you are hit with a bunch of acronyms and links that pretty much leave your head spinning. ASCAP, BMI, SESAC, CCLI, HFA... what do all these mean? Once you know a few details, and are given a few starting points, the whole process isn't near as daunting as you might think..

Getting Your Songs Copyrighted

Technically, (and supported but not enforced by law) your songs are 'copyrighted' from the moment they are fixed in a permanent medium. This means that if you make even a poor quality, basic recording, or create a lead sheet and chord chart that contains the lyrics and melody, your song is copyrighted. Just because your song is copyrighted does not be mean you have the necessary protection in place should someone decide to infringe on your copyright. If you wrote a song, and someone stole it and made a bunch of money off of it, simply showing a judge your copy of the recording and lead sheet isn't enough to set things right. Many songwriters have sought out to protect their work by simply postmarking a lead sheet or CD and sending the materials to themselves by mail. This seems like it would provide more protection because the federal mail system has stamped a date on the envelope containing your work, but it will still not hold up in a court of law if you are seeking monetary damages for stolen or misused work.

The only way to ensure that your songs are legally copyrighted is to register them with the Copyright Office at the U.S. Library of Congress (www.copyright.gov). Once you access the website, you will want to start by locating and filling out the "Form PA". "PA" stands for "Performing Arts." This form is really quite well done and straightforward. They've done a good job not making it feel like your doing your taxes. If your work has been published (publishing is not the same as copyrighting. We'll get in to publishing in a little bit), you'll need to send two copies of the song in fixed form and a non-refundable check for $45 (at the time this article was written, check the website for current fees). If your song is unpublished, you only need to send your best copy of the song in a fixed medium (CD, tape, MP3 data). If you are the sole writer and have multiple unpublished songs to submit for protection, you can send in as many songs as you want at a time and only pay the $45 fee once. This is a good way to save some $$$ but you have to make sure that no other writing credits are due.

Now, here's an area where some people get stuck: There is a difference between filing for copyright protection for a creative work such as a song or lyrics and filing for copyright protection for a sound recording. In order to protect a certain recording, version or arrangement you've made of your original song, you need to fill out "Form SR." You can also use the Form SR if you are creating your own version/arrangement of someone else's song (as long as you have permission). With Form SR, you need to fill out one form for each sound recording you are registering. You can register multiple works at the same with Form PA. This creates a little bit of confusion as well. You might be thinking: "Well, if I want to save money and register all of these songs at once, but I still have to fill out a bunch of forms for each sound recording... what?? huh??" Well, if you are serious about songwriting and want to eliminate some confusion, read on.

Publishing

If you regularly write songs and are interested not only protecting your work but also seeing it used and enjoyed while possibly making a profit, I recommend you start your own publishing company and then seek out promoters/marketing separately. What exactly is publishing, you ask? Think of it as a gateway for people to lawfully find and use your material. Publishing can also act as a form of promotion. You could try and get your music picked up by some 'big and successful' publishing company in hopes of striking gold with some huge exposure, but keep in mind that you'll be sharing whatever success you and your songs enjoy with your publisher. Depending on the arrangement with the publisher, this can be quite costly! You can have your own publishing company and still get 'signed' if that's a goal. If you look in the liner notes of almost any 'big' act these days, you'll notice that many of their songs are self-published. You can tell this because much of the time, the publishing company is a goofy variation of the band name, album name, or band member name.

Setting up your own publishing company is relatively easy and in addition to keeping all of your money, you'll have the added benefits of never getting rejected by the publisher (since it is you) and you'll be able to publish and showcase other artists' work. Pretty soon, you could have your own catalog of original songs from a variety of different writers. Here's how you set up your own publishing company:

1. Think of a very unique name. There are a lot of publishers out there, so be creative, make up words, combine words, spell things backwards... whatever it takes to make sure your publisher name is not like any other. Believe it or not, it will make you easier to find if your name stands alone.

2. Go to a local bank, and set up with the city and state government to do business as Music Publisher. You'll also need to open a business account and get a Tax ID # for the business. I recommend starting with a Sole Proprietor type business because it is easy from a tax standpoint and you can always move to more beefy forms of liability protection as your business grows. Both setting up your accounts and obtaining what is necessary to 'do business' should be able to be done through most local banks.

3. Join a Performance Rights Organization (PRO) such as ASCAP, BMI or SESAC. You'll also want to join the HFA. These are some of those cryptic acronyms again... I will unpack and demystify these, I promse!

Performance Rights Organizations

The primary function of these entities is to collect performance rights royalties on behalf of their members. The PROs then pay you, the publisher or the composer/songwriter. When you see the term "performance rights", it is generally referring to use a performed song or sound recording in broadcast settings as well as other live performances. Examples include network and cable TV, radio, music being played over the speakers at nightclubs, malls or restaurants or live performances of songs in these places. As you might expect, this stuff is extremely difficult to track, and there is no way a music publisher or composer can go around making sure every business is paying them for using their work. So, the PROs do it for you.

Recently, I was involved with an organization that purchased an old nightclub facility and turned it in to a coffee shop and live performance venue. The owners wanted to have music playing over their house speaker system throughout the day and wanted to have live music on the weekends. They were visited by an ASCAP representative who had them pay for a yearly $4000 blanket license to cover the artists they represent based on the maximum occupancy of the facility. The music is then tracked and reported through the broadcasters that are sharing the musical performances and royalties are distributed out of that blanket license.

This is just one example, and each business that wants to have music as part of their atmosphere or plan MUST square up with the PROs unless they want to deal directly with the publisher of each song they wish to broadcast in their facility. This would be a very time consuming and tedious process. There is large value in performing rights organizations for artists, publishers, and the broadcast world!

There are a great number of PROs throughout the world and doing a quick Internet search for ones in your country will lead you to the right places. The three big ones in the United States are ASCAP, BMI and SESAC. They pretty much all do the same thing, and as a publisher or composer, you only need to affiliate yourself with ONE organization. There are a few differences in their sizes and they way they are run and managed, so knowing a little about their differences may cause you to lean towards a specific PRO based on your values as an artist or publisher.

ASCAP or the American Society of Composers, Authors and Publishers was founded by and is run by its members. It was the first PRO in the USA and is, by far, still the largest. Many people gravitate to ASCAP because there is a sense of "we're all in this together" among its members. People also feel that there is strength in numbers.

BMI or Broadcast Music Inc, was formed as a non-profit by radio executives back in the 1930s to provide some competition in the area of PROs. It seems kind of ironic that the 'broadcasters,' or the ones paying for the use of music would form such an organization, but it seems to have worked out. Artists and publishers may gravitate to BMI because they like the idea of a dedicated staff looking out for their interests as opposed to other artists who also have their own work to look out for. The best thing to do is to check each organization out for yourself via their websites and see which one seems to fit your personality best.

SESAC is the third major player in the United States. Its name used to be associated with an acronym but they are now only known by the name SESAC. This organization is much smaller than the other two mentioned here but is structured and run most like BMI. Founded originally to help European music collect American royalties, it is now exclusively focused on American Performance Rights. Artists may join SESAC over another PRO because it is smaller and they may feel more personally valued and better represented. SESAC prides themselves on their customer service.

There are fees associated with being a member of a PRO, but realizing that these organizations are put in place to act on your behalf as an artist makes these fees well worth their small price in the grand scheme of things.

The Harry Fox Agency (HFA)

In addition to making sure your hard work is covered in terms of performance rights, you need to make sure that you get paid when other artists use your songs on a fixed medium such as cds, tapes, vinyl or mp3 distribution. Let's say you wrote this awesome song, performed it for an Internet radio show and someone heard it and wanted to do a cover version for their own CD. If you and your work is affiliated with the Harry Fox Agency, this person would be able to track the song down, request permission, pay the licensing fees and ensure that you get compensated for someone else using your song on their CD.

Such a license issued through the HFA is called a Mechanical License. Since PROs do not issue these licenses, you have to be affiliated with one PRO and the HFA. When you join the HFA, you'll register each of your songs using their own database called SongFile. This cool tool allows people to search through all the songs by artist, publisher, song title etc... This lets them find exactly what they want, quickly, and then you get paid!! The HFA does not issue blanket licenses to users of copyrighted material like the PROs do, so their job is a little easier and able to be more precise in terms of collecting and distributing royalties. If your song gets hit up, you get paid. The going rate for someone to use your songs 9.1 cents per track per copy. (At the time this article was written. Check with the HFA for current rates.) That can add up pretty quick if someone makes 2500 copies of a CD with two of your songs on each CD!

Mechanical licensing provides the right for someone to copy and distribute their sound recording/arrangement of YOUR song. It does not cover using your finished, or "master recording" on their CD.

Other Types of Licensing

If your master recording is used on the radio, Internet radio, TV, cable etc... It would fall under the performance rights discussed earlier, but if your master recording is being distributed on a fixed medium such as a compilation CD, tape, vinyl, MP3 download etc... The party wishing to do so would need to obtain Master Use Rights. Since these rights are not tracked or distributed through PROs or the HFA, master use rights are granted directly by the publisher or artist.

So far, none of the licensing discussed has addressed the use of your song with picture such as a movie, TV ad, or other audio/visual presentation. PROs cover use on TV, cable or other 'visual' media, but only for performance based situations. In other words, PROs cover the broadcast of a performance of your song like you playing on the on a late night talk show or a half-time football game or streaming on the radio. They do not cover licensing for your sound recording to be used and distributed in a manner in which it is synchronized with moving picture. A film director or producer wishing to use your tune on her movie would need to contact you or your publisher directly to obtain a Synchronization License, or more commonly referred to as a "Sync License." Harry Fox used to track and distribute royalties for Sync purposes but has completely disconnected from it now.

A third license that is not moderated by any of the organizations discussed above is called Grand Rights. These rights are granted for the live performance of your work (not the sound recording) during a musical, play, opera, stand-up comedy or similar. These licensing agreements are also made between the party wishing to use the music and the publisher.

Once your basis are covered with a PRO and HFA, people seeking to use your songs will have an easier time tracking you down for some of these other types of licensing. So, if someone wants to use your song in a movie and needs a sync license, he may browse HFA's songfile to track you down and make an 'outside agreement' with you even though Harry Fox does not deal with sync licensing. In these cases, if you are your own publisher, people looking for one of your songs will easily be exposed to many more of your songs while searching for the one they want and this is always a good thing!

Since the late '80s, the legal use of live music performances, distribution of materials for rehearsals, and lyric 'reprints' or projected lyrics in churches has been tracked and maintained by Christian Copyright Licensing Inc, or CCLI. Each year, churches are required by law to report every individual use of each song performed in a service. This is called "CCLI reporting." CCLI takes the data from each church and pays performance royalties out to each publisher and/or artist based on the number of times the song was used that year and the sizes of churches using them.

You might be wondering: "Doesn't this sort of use fall under live performance and therefore should be the jurisdiction of a PRO?" That is a good question! Since churches are non-profit organizations, use music in a unique way and have an entire sube genre devoted to them (Christian Music), CCLI takes care of this corner of the industry.

As a songwriter and/or publisher, you can be affiliated with a PRO and with CCLI and it's a really good idea to do so if you feel like your song(s) have the potential to be used regularly in a church setting. Interestingly enough, because of the nature of churches, (once a few big, "cool" churches start doing something, they all start doing it), if your song catches fire on the church worship music circuit, you can sit back in a nice, expensive, comfortable chair and enjoy opening piles of envelopes containing royalty checks! *dramatization*

You can't just register any song with CCLI and hope that it goes somewhere though. Songs in the CCLI catalog must be deemed appropriate for use in a worship service. Your song about buying a new car or breaking up with your girlfriend will not fly.

Work For Hire

If you write something specifically for a company you may be writing as a "work for hire." This means that you are paid for your writing but do not own the copyrights yourself. The company you wrote for owns them. An example of this would be writing jingles or music beds and selling them to a music house or publishing company. It might also include writing a song specifically for a stage play or drama.

You would write the song, be paid a one time fee, and the production company putting on the play would purchase the copyrights as part of the fee paid to you. Some publishing companies also deal with songs on a work for hire basis. Watch out! Make sure you know what you are getting in to before you are paid any money for your work! Work for hire situations can be a great, steady form on income. I did it for years as a staff writer for a recording studio, but I was paid once for each piece of music I wrote and the company I worked for continues to make money off of my work. The trade-off was: I got to have and keep my job.

More De-mystifying

The organizations and entities discussed in this article have a ton of excellent and detailed information on their respective websites. The purpose of this article was not to re-post what is already available as resources on their websites, but rather to present a comprehensive look at how to go in the right directions with your songwriting from a 'business' standpoint. If you're serious about songwriting, you need to be serious about business because being a successful songwriter is like owning your own business. Ideally, you are producing a product that people want and are willing to pay for and then you make money doing what you love. It's tough to blend pure creativity and a practical business sense, but they guys who's music is out there in front of the masses either are savvy and creative or are creative and know savvy people.

Once you go down the road of registering with the Copyright Office, and affiliating with a PRO and the HFA, there are details you will encounter, paperwork you won't fully understand, and you'll still have some questions. Now that you know the right places to look and start from, get on the phone, start sending emails to some of these organizations, find your fit, and get the ball rolling. Once you've gone through the process a few times, it's becomes just part of what you do as a songwriter.

It is important to understand that copyrighting your music and affiliating with the appropriate organizations is NOT promoting your music. This stuff is set in place to make sure that, when people hear your music and want to use it for something, they can do so legally and you get compensated. People rarely browse HFA's SongFile looking for songs to use on their CD. Instead, they hear your music somewhere and decide it would be a good fit for their purposes.

In order for people to like your music, want to use it, and make the effort to track you down using all of the entities discussed in this article, they need to be exposed to your music. So once your music is copyrighted correctly, affiliated appropriately, and recorded and arranged as good as it can be, you need to take the next step and work to promote your music. Publishers do help promote your stuff, but there are many other artist representation companies that promote your art while still letting you keep all of your royalties. This is why I recommend being your own publisher. In the end, you keep more money.

In this day and age, there are more ways than ever to get your stuff out there. Some of them were mentioned at the beginning of this article. You also have to remember that because there are more ways than ever, and because it is easy to do so, everyone with a half decent recording setup, a YouTube account and a FaceBook page will be putting their stuff out there for people to hear. You have to figure out a way to get out from under the pile of the millions. Be creative and devoted! People have been discovered on the Internet, or playing at a club, and they go on to have great, fulfilling and creative lives but it is because they did something that caught someones ears or eyes, and that someone had money, and that someone thought they could make more money off of their art.

There is no real way to know how to "make it" as a songwriter, but if you take the steps to make sure your work is the best it can be, protected, and available, you've set yourself up for success. Keep playing, and keep writing. Do it because you love it and enjoy the journey of showing off and showcasing your work! You just might end up somewhere you always dreamed you would be!

For further information on the organizations discussed in this article, browse the following websites:

www.copyright.gov
www.ascap.com
www.bmi.com
www.sesac.com
www.harryfox.com
www.ccli.com
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