The million dollar reason why songwriting is where the money is: Lessons from Whitney & Dolly

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If you know anything about how music generates income you know music publishing is where the money is. Some of the most financially successful folks in the music industry are some of the most little known.

They are the composers of the songs all of those famous performers sing. Case in point. Most of Whitney Houston’s greatest hits are written by other people. True, some are not only notable but noteworthy. For example, Dolly Parton wrote I Will Always Love You, Robert “R” Kelly wrote I Believe I Can Fly and Diane Warren wrote I Didn’t Know My Own Strength, for example.

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Music Copyright 101

Music and Copyright

In previous posts, I have focused mostly on literary creations in the publishing industry (books, articles, magazines, and so forth). But copyright in a song (whether lyrics, music, or both) is created in the same way as in any other literary or artistic work. And music copyright is made up of the same bundle of rights, which includes the right to publish.

What Music Publishing Is All About

Although the Internet has in some cases removed the “middleman” from the music publishing equation in some sense (and of course there’s Platinum Hit), traditionally only those who were well-known songwriters could go it alone without the assistance of a music publisher. The reason is because it is a challenge for an emerging or undiscovered songwriters to commercially exploit her music on a significant scale without the help of a music publisher, one who licenses your songs to others for flat fees or royalties so that your songs get recorded or played or synchronized in TV and film and so forth. Performance royalties are all right, but music publishing, if properly managed, is really where the money is in the music industry.

Music publishing can be big business. It is also confusing to many songwriters who tend to focus on the creative aspects of writing rather than the business and legal sides. Essentially, there are two potential income streams involved in songwriting: first is the songwriter’s share as the creator and copyright owner, and second is the publisher’s share for the person or company that actually enables the song to be released to the public (i.e., to be published). This has been explained in the past as the two “pies,” where the total percentage of income is 200 percent (each of the pies equaling 100 percent).

This explanation is somewhat outdated and only adds to confusion. Others explain the writer’s share as 50 percent of the revenues and the publisher’s share as the other 50 percent.

Regardless of how you slice it (pun intended), in general, songwriters transfer some percentage (or all) of the copyright to the publisher, and keep the entire songwriter’s share of income and none (or very little) of the publisher’s share. The percentage of copyright transfers affects the way money is split between you and the publisher. [sample publishing agreement]

If you do a co-publishing deal in which you (or the publishing company that you form) team up with an established publisher, then you will most likely transfer 50 percent of the copyright to the publisher, keep the entire writer’s share of revenues, and split the publisher’s share of revenues fifty-fifty. [sample co-pub agreement]

Or you may be in a strong negotiating position and opt for an administration deal, in which case you will control copyright and keep all of the songwriter’s share, all (or most) of the publisher’s share, and simply pay to the company an administrative fee for handling the business of exploiting and managing your copyrights.

Click here for more information about copyright

Click here for music publishing sample forms

[Excerpt from Chapter 13 of Copyright Companion for Writers © 2007 Tonya M. Evans. This excerpt may be “shared socially” and republished provided this post is copied in its entirety and copyright information is included for attribution]