About Music Publishing

It's all too easy to get the wrong impression when entering into a publishing deal. If you can afford to, you should always get a music industry lawyer to look over an agreement for you before you sign it. It need not cost a fortune, and it may prevent you from losing a great deal of money in the future.

If you really can't afford legal advice then at least consider the points made here to stop you agreeing to the worst of the scenarios in which your royalty income could be reduced. Some of the examples given here are extreme cases but they are designed to illustrate the pitfalls that can lure the innocent songwriter or publisher.

CONTROLLED COMPOSITIONS

The Controlled Composition Clause is normally applied to record royalties that are earned in the U.S.A. and can have an absolutely amazing effect on the amount of income you may receive when these clauses are applied to you.

There are several types of clauses and any of them, but often all of them, can be applied to your income.

Remember that in the U.S.A. there is a cent rate (currently 8 cents and referred to as the Statutory Rate) that is paid for each song on a recording. However, that is not normally what happens.

The first element of the Controlled Composition Clause attempts to limit payments to "75% of statutory rate".

This is even nastier than you think as it not only reduces that 8.00 cents to 6.00 cents, it is also designed to stop you benefiting from the increased rate that is available when works are longer than a certain duration.

Next, there is the clause that says that only one recording of any composition will attract a royalty. So, all those dance records with more than one mix of a track will really lose out! They have probably already lost out because they did not get the bonus amount because the track was of a longer duration.

As if all this was not enough, there is a final kick in the shape of a "cap". This would typically say that the total royalty that would be paid on an album would be the amount payable (including all of the limitations already discussed)

as if there were only 10 tracks on the album irrespective of how many tracks there actually were. So an 11 track album would only be paid as if there were 10 tracks etc. This type of restriction can also be applied to singles. Let's now see an example.

We will assume that all tracks are of normal length, it would be much worse if they were not! Also remember that a co-writer may have insisted on "full rate" (i.e. no reduction) which could also affect an artist/writer's royalty. Let us assume that you are a 50% co-writer of a song on an album with 12 tracks and that your co-writer is able to demand a full rate and you are not. Let us also assume that two other (100%) writers on the album have also insisted on full rate.

So, the total royalty on the album is 10 (maximum number of tracks paid on) multiplied by 8.00 cents multiplied by 75% equals 60.00 cents. There are 2.5 songs at full rate which equals 8.00 cents multiplied by 2.5 equalling 20.00 cents. This leaves 9.5 songs. They will all have to share 60.00 cents less 20.00 cents which equals 40.00 cents. Each song will therefore get 40.00 cents divided by 9.5 which equals 4.21 cents, just over half the full rate. You can see how much worse this could be if there were longer songs, more songs or more full rate writers on the CD.

AT SOURCE" vs. "RECEIPTS" - WHERE DOES THE MONEY GO?!

Here, we compare what happens to your royalties when you enter into either a "Receipts" deal or an "At Source" deal.

Let us assume that a song has earned £100 in Germany (the "Source" of the payment). If you have signed a receipts deal with a U.K. publisher then they will pay you whatever royalty rate has been agreed as a percentage of the amount they receive from their German sub-publisher (their "Receipt"). So, if you have signed a 75/25 deal and your U.K. publisher has agreed a 75/25 sub-publishing deal with a German sub-publisher you will get 75% of 75% of the original £100. In other words, £56.25. That 75/25 deal you signed is actually only 75/25 in the United Kingdom. Everywhere else it is 56.25/43.75. It could be worse.

If the sub-publishing rate is 50/50 then you would only get £37.50 from the original £100. With an "At Source" deal you will get the same contract percentage wherever in the world it has been earned. If you have a 75/25 deal, you will receive £75 for every £100 you earn "At (the) Source" wherever it is earned.

 


Homepage | Music Publishing | Contact | Help