Making Music Royalties Work For You

8 minute read 📖

Making music means different things to different people. Some create music every day that they will never share or put out because it’s just an outlet for them. These people don’t really care if they ever make a dime doing music. Others, though, think of music, not only as something they love, but as a possible career. If you are a career-minded person, then there are things a new artist must know about how money is made. Both short term, and long term.

I’m the type of person that wants to read through the rules of any new game I play because I want to play well and do my best to win. In that same fashion, when I decided I wanted to make music my career, I took it upon myself to go to the copyright office website and read the entire copyright law. I also read books and articles on the legalities of the music business and how people are compensated. Through this research, I found that almost nobody who is independent is actually doing all the right things as a label would.

The Congress shall have Power…To promote the Progress of Science
and useful Arts, by securing for limited Tımes to Authors and Inventors
the exclusive Right to their respective Writings and Discoveries.

United States Constitution, Article I, Section 8

What Is A Producer?

Legally, a Producer is anyone who contributes to the creation of a work either artistically, financially, or as an overseer. Work is the legal name used to describe a production. We might call it a record, track, song, etc. Webster’s Dictionary even describes people who oversee or supervise the production of a work as a producer. If you’ve ever heard that record labels studio sessions are closed sessions, this is why. Literally anyone in the room who voices an idea becomes a producer and is legally entitled to credits and compensation. With this in mind, your recording engineer who is there with you supervising the production, making recommendations (e.g. “Let’s try that line again/say it like this/use this chord/do this harmony”) is not your recording engineer, that is your producer. The person who made the beat is considered part of the production team but definitely is not the producer as though they are the only producer. The title of Producer is a wide title and many people can wear that title. The person who made the beat is more accurately described as a “composer” and is only one of multiple producers unless that same person also handles the recording session to manage vocal production as well as post-production (things like stuttering words, beat drops, etc.)

Work For Hire Is A Myth

As a studio worker, many people don’t realize that your recording engineer literally is one of your producers. Somewhere down the road in the past, the music production industry became flooded as software became affordable and people could start recording at home if they wanted to. This helped usher in the myth of work for hire. Because people don’t understand copyright law they fail to realize that nobody is work for hire in music unless they themselves agree to be. Involving anyone in the process of producing your song brings that person on as a producer and they will only be work for hire if they agree to. Otherwise, copyright law sees them as an equal shareholder of the copyrights to the work that they helped produce. If the person you are working with in the studio wants splits, and you elect to work with them, then they definitely deserve the splits for their contribution. Just like when you buy a beat and still have to pay the composer royalties, you have to pay the studio for the time to use the studio, but the producer also is due royalties for his contribution. The alternative is to book some studios and try to be your own engineer. Good luck with that. But if you want the person who works in the studio to work with you, then you have to understand that that person is now part of the production team.

So Who Gets What?

Royalty splits are negotiable. Most times royalty splits are based on how much a producer contributed to the work. In our case, if a client comes to us to produce a record and they already have a beat, then we may just be supervising and making recommendations and for that may take as low as 2%. If we add in other instruments like a guitar solo or add a piano part, we may take an additional few points. If we compose the instrumental completely (Pre-Production), and also record the vocalist (Vocal Production), and also handle all of the Editing, Stuttering Effects, Beat Drops, Tuning Vocals (Post Production) then we may require 50%. If we ever decided to completely produce a song from top to bottom including the word, and then chose a singer to sing it, then we may take as much as 90%. If you bring random people to the session who start chiming in with their own ideas then I would highly recommend adding them to the split sheet for .1% (one-tenth of 1%) so that if your song blows up, they can’t come back later and sue you for an equal share. If no one else was sitting in it would have only been the composer, the artist, and the studio worker. By adding an additional person that is simply there, now it would be four people instead of three and that person could be given 25% by the courts; equal share. So just use split sheets, put them on it, and move on knowing you are protected down the road.

If you bring random people to the session who start chiming in with their own ideas then I would highly recommend adding them to the split sheet for .1% (one-tenth of 1%) so that if your song blows up, they can’t come back later and sue you for an equal share.

Anthony King

The 200% Split

This is because there are creators, and labels so there are two 100% pies to be split up. Everyone on the creative side takes percentages from the songwriter side of the pie and record labels split up the second pie. If there are no labels involved, then everyone just splits up the 200% (just double each person’s agreed-upon share) If there are multiple people on the creative side, but only one person is with a label, then that label gets 100% from the publishing side as the only publisher on the project and all creators split the other 100% as normal. Keep in mind, that anyone can go to the County Clerk and register a DBA/Assumed Name for less than $30 and legally start their own “publishing company” and then “sign themself”. Then if you work on a project now you would pull from both pies. If you are the only one who has a publisher, then your publishing company takes 100% of the publishing pie as well as you, as the artist or producer, still also get your share for your contribution to the work.

Copyright My Song

Under Copyright Law, copyrights are in place the second something is created. If you are a writer who writes books, then the moment your pen touches paper or you type a word on a word document, you legally own rights to that “work”. In the same fashion, copyrights are instant with music creation also. The moment that random girl, the one that your client brought to the session to show off, says “Say Da Club instead of The Club” and you accept that advice, she becomes a copyright owner at that very moment. Now as far as how you prove your rights, that can be done in various ways. The courts will honor a lot of things to show when ownership of rights started. For the composer, they have the original files for the beat and each file in the computer has metadata that a person can not edit. These are things like file creation date and file edit date. You can’t change the creation date on a digital file. Similarly, when you go to the studio to do your vocal production, the studio also then has digital files that all have metadata. Further, when the session is done, many studios will convert the completed track to an MP3 and will Email it to you. The email also has a timestamp of the date of creation and can be used as proof in legal proceedings. If you want to copyright written words, you can go to a Notary to stamp your paper to show the date. Or you can even take a photo of your papers with your phone and save the photo somewhere, like a cloud-backup service, so you won’t lose it. It will have a timestamp. Lastly, when your album is complete, you can go to the copyright office website and upload your work there. They charge for this, but they physically will add the album to the copyright library. Labels still do this, but with us being in the digital age this isn’t so important if you have all of your digital files to prove dates. I would still recommend doing this though if you think there is any chance at all that you might lose all of the digital files.

Solidify The Splits

Credit: Anthony King Recordings

There are multiple things you want to do to make sure the splits are properly logged and that everyone gets their royalties if the song hits. The first thing is to fill out a Split Sheet. A Split Sheet is simply a form that has fields for each person to fill out to formalize the agreement of royalties splits. It has a place for each person’s personal info to identify who they are and to put what percentage they are agreeing to, and a place to sign and date. A Split Sheet also has fields to denote who the publisher is for each person as well as what splits the publishing companies want. You will need each person’s Writer Numbers (the number assigned to them with their Performing Rights Organization) and you put it all on the sheet, and then someone would then take all that info and Register the Work with their Performing Rights Organization (or PRO). After the information is processed, then the PRO will issue an Identifier Number that is linked to the song. At that point, you would then get your song Digitally Scanned via Nielson. Nielsen is the company that tracks spins and sales. They produce a quarterly report that shows what stations played what songs and how many times in that quarter. Your PRO pulls these reports every quarter and looks up each song identifier that they manage and will then bill each station, restaurant, jukebox, TV show, or anywhere that your song was spun for the royalties that they owe for each song that they played during that quarter. They then disperse those royalties out to each person according to the splits that were entered in by you. They pay each person directly, so you will never have to worry about splitting stuff up yourself.

Types of Royalties

There are different kinds of royalties: Mechanical, Performance, and Sales Royalties. This article is more about Performance Royalties, or the royalties generated from Performances of your song. Performance means that the song was played or performed. So if K104 spins your song they owe you a Performance royalty. Sales and Mechanical Royalties generally refer to Physical or Digital Sales. Generally, you would split these all the same way if you are independent, but if you are with a label, they will negotiate Sales type royalties. This is because they generally cover all of the up-front costs associated with actually printing physical copies, so they have the power to demand a higher percentage since they financed the duplications.

When working with major labels, they make the rules. They determine splits. And if you don’t like it, they will find someone else who does.

Anthony King

Disclaimer

Laws change and copyright law is no exception. Though Copyright Law doesn’t change too often, it is still evolving along as things change in our world. Therefore, I recommend that you take the time to read the current copyright laws on the official government website for the latest information. You can also download the full article from the US Constitution here.

Final Advice For Producers & Studio Workers

As the old saying goes, “He who has gold is King”. When working with major labels, they make the rules. They determine splits. And if you don’t like it, they will find someone else who does. If you have the chance to work on a major project that you will earn credits but 0% royalties, take the job. Even though you may not get royalties here and are agreeing to work for hire what you are getting out of it is credits to show a major song that you worked on. Then continue doing splits as normal with everyone else, except now you have major accolades that might help you either charge a higher hourly rate and even make people more liable to give you even higher splits than before. Use these as opportunities.

More…

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Anthony King

I'm a music producer in Dallas, TX who produces under the name Anthony King Recordings. I pride myself in composing music that I love as well as helping other artists to produce their records when they have a song ready to record.

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