A recent interview with Honest Ox Publishing gave some eye-opening insight into the ways in which some musicians are losing money by not knowing what income streams they can tap into. By being the owner of a song, you earn money from its use. You are owed publishing royalties whenever your songs are sold, downloaded, streamed on sites like Spotify or Rdio, played on the radio (including satellite and internet radio like Pandora), used in TV/film/commercials/games, or performed live in a venue.

You can take care of organizing your royalties and the accounting yourself, or you can work with a music publishing company. Some songwriters sell their songs to a publisher, who then earns money for every copy of their song that is sold. According to BMI, “Publishers should help place your song with a recording artist, license third parties for the use of your song and collect/distribute money to you.” They do this by leveraging the different types of licenses and royalties available to cash in on:
 

  • Mechanical royalties: This gives a third party, like your record label, the right to reproduce an artist’s song in exchange for a royalty fee. The amount of royalties that an artist will receive is governed by the Copyright Royalty Board. The statutory rate is currently 9.1 cents per copy sold, under compulsory licenses (see below), but some third parties attempt to negotiate for lower rates directly with the owner.

  • Synchronization licenses: This is the right to “sync” music with visual images, as in with commercials, films, and video games. It is not a substitute for a mechanical license, and is often restricted on how many copies can be made.

  • Public performance royalties: These are paid when a song is sung/played. This includes your live performances of your music. Justin Hoffman of Honest Ox Music Publishing said, “In educating people on making their music make money, a lot of people don’t realize that they are owed royalties every time they play their own music at a venue. Let’s say you book a show at JJ’s Bohemia, Revelry Room, or Granfalloon and you’re playing your own songs. Those venues have paid a blanket license to all of the publishing organizations to have music played at their venue.” All you need to do is report your set list, then wait for a check.

  • Compulsory licenses: Once a song is recorded and released to the public, this license allows anyone to record and distribute the song without obtaining the copyright owner’s consent, provided that they pay a fee and meet copyright law requirements.

  • Print licenses: This gives permission to third parties to copy music in print or digital form and release it for sale.
     

Publishing companies come in many different sizes and at different levels of cost. Companies as large as BMI, ASCAP, SESAC and EMI Publishing handle registration, licensing, and royalty collection while some, like local company Honest Ox, may have a more focused approach. Some may provide all of these services on a commission basis and receive 5-25%. Some companies become owners of the copyright and collect all of the fees once artists sell their song for a flat fee. Others may come to a 50/50% co-publishing agreement. No matter what type of agreement you come to, make sure it is one that will give you the credit and money deserve for your music.