United States copyright laws provide all songwriters with exclusive rights to their work. Music royalties are a percentage of the gross or net profits or a fixed amount per sale or use to which the creator of the work is entitled.
Music royalty amounts are determined by a contract between the creator and distributor. Copyright laws and music royalties law provide that copyright works cannot be used without obtaining a license from the copyright owner, which involves the payment of royalties.
If an individual is a songwriter, it is important to consult with a royalty lawyer to ensure that their rights are protected.
What Are the Different Types of Music Royalties?
There are 4 different types of music royalties that are paid to songwriters, including:
- Mechanical royalties: These royalties are paid from a record company for records sold based on exclusive rights to reproduce and distribute copyrighted works;
- Public performance royalties: Public performance royalties are royalties paid by music users for songs in operation of their businesses and broadcasts based on exclusive rights to perform publicly copyrighted works;
- Synchronization fees: These fees are royalties that are paid by users who synchronize music with their visual images based on exclusive rights to reproduce and distribute copyrighted works as well as to prepare derivative works of copyrighted materials; and
- Print music income: Print music income is royalties paid by music printers for sheet music based on the exclusive right to reproduce and distribute copyrighted works.
Who Gets Royalties from Songs?
Typically, songwriters and publishers get the bulk of royalties from songs. For example, every time a song plays on the radio, the songwriter and the publisher will receive a fixed amount for its use from the record company.
Musical performers typically get royalties from the sale of their recordings on tapes and CDs. This practice is based in copyright laws as well as the fact that radio play generates more sales for the music performer.
How Long Do Music Royalties Last?
The duration of ownership for a copyrighted song will depend on whether the song was copyrighted prior to or after the year 1978. If a song was copyrighted prior to 1978, it is protected for 95 years from the date the copyright was secured.
If the song was copyrighted during or after 1978, that copyright is valid for the life of the author plus 70 years. The payment of royalties on these works will also last for the duration of their copyright protection.
How Much Royalties Do You Get for a Song?
In general, a record label may keep a cut of anywhere from 50% to 90% of an individual’s earnings. It is normal in the music industry for a new artist to receive only 10-16% of their sales.
This is because there are multiple parties that may be involved in creating, publishing, and selling the song, such as music publishers. The music publisher will get a percentage of the royalty income that is generated from the sale of songs.
If an individual is a songwriter with a publishing deal, the music publishing company manages their songs and ensures that all of the royalties to which the songwriter is entitled are collected. Entities that broadcast the songs are required to pay royalties to the music publisher, which may include playing the song:
- On television;
- On the radio;
- Over the internet; and
- In retail outlets.
Typically, a music publisher gets a 50% stake in a song. This means that the songwriter or composer, or the original copyright owner, assigns a portion of the copyright for a song to the publisher.
When the copyright is obtained, the author of the musical work gets an exclusive right to:
- Reproduce and distribute the musical work;
- Perform or display the musical work publicly; and
- Create a new derivative work based on the musical work.
In addition, the owner of the copyright can authorize or prevent other individuals from using their composition in any of the above listed ways. Therefore, if another individual wants to exercise one of those rights, they are required to obtain a license from the copyright owner as well as compensate them for the license.
This compensation for the license is referred to as a royalty. It is important to note that the copyright owners may be required to take legal action in order to enforce their exclusive copyright ownership by filing a lawsuit for copyright infringement.
If a songwriter enters into the right deal with a good music publishing company, their earning potential can greatly increase. The wrong deal, however, may leave them cheated for years to come.
Because of this, songwriters should always consult with an attorney before entering into a publishing deal. A music publisher typically also needs legal advice on a number of topics in order to succeed in their business.
What Can You Do if You are in Negotiations for Music Royalties or Have a Dispute about Music Royalties?
The most important thing an individual can do if they are in negotiations for music royalties or have a dispute involving music royalties is to consult with an attorney to protect their livelihood. Negotiation is an important element to achieve the best terms an individual can in a music recording contract.
There are several elements during negotiations that an individual should ensure are included in their contract, including:
- Agreeing on their obligations, especially what the record company promises to do or provide;
- The duration of the contract;
- Typically, record contracts last between 1 and 5 years;
- During the contract period, artists typically have a minimum requirement for tracks and albums for release;
- The amount of royalties to be paid and whether they will be paid in proportion to the number of sales or in a lump sum;
- A license deal is the best option because it gives the musician limited-time, exclusive control over the master recording;
- A clause regarding termination of the contract;
- This may include notice requirements as well as fees and penalties for an early termination; and
- Any limitations placed on the artist;
- This may include limitations on appearing in other artists’ recordings; and
- 360 deals, which give the recording label rights to extra income streams, which may include:
- touring;
- merchandise sales; and
- endorsements.
There are many different intellectual property issues that may arise related to music copyrights, including:
- Record contracts: Some record contracts involve the protection of copyrighted songs, and their use or sale exclusively with a single record company;
- Royalty payments: Record companies and record stations must pay small fees to the owner of a song each time it is played, called royalties. A song must be copyrighted before royalties can be collected;
- Infringement: The unauthorized use of a copyrighted song is called infringement;
- Infringement may result in a lawsuit and, in some cases, criminal consequences; and
- Public performances: Copyrights also dictate who and who can’t perform the song in public for profit.
Conflicts involving copyrights may be complex. For example, a dispute may arise regarding which individual first wrote the song and whether or not one of the artists copied the other.
In these types of cases, expert testimony may be necessary. In addition, a copyright database search may be required to resolve the dispute.
Other consequences for violating these laws may include:
- Fines;
- Jail time; or
- Other consequences.
A copyright violation is considered to be among the most serious intellectual property crimes and will be penalized accordingly.
What Do Royalty Lawyers Do?
Royalty lawyers protect the property rights of their clients. They may assist their clients in many ways, including:
- Advising clients regarding pending contracts;
- Draft contracts for property owners;
- Advise the individual what to do if their property rights are infringed upon or their royalty contract is breached.
Do I Need a Lawyer?
Music royalty issues may be complex and overwhelming. If you have any issues, questions, or concerns related to music royalties or other intellectual property issues in the music business, it is important to consult with an entertainment lawyer.
