Musical Work Copyright and Music Publishing

In this section we look at the the concept of copyright in the UK as related to musical works, the royalty system and how it works, What a publisher does.

KNOW YOUR RIGHTS AS THE WRITER OF A MUSICAL WORK

The writer of a musical work is the creator (and the original owner) of a piece of copyright material.

It does not matter whether that musical work is a song with a lyric and melody or simply a rhythmic instrumental piece without words or tune. Provided that work is in some way a musical composition the writer of it is the owner of its copyright.

There are three basic qualifying criteria:

Originality – the work must be new and unique
Set down in a permanent form – recorded on magnetic tape, saved on a computer disc, written, drawn or painted
Skill and effort – the work should be created by the use of some skill and effort

What is copyright?

The right to copy a work and the right to prevent the unauthorized copying of a work
Copyright is a property right – it can be treated in the same way as any other type of property (bought, sold and hired)
It is an economic right – the creator and the owner have the right to earn money from its exploitation

Once a work has fulfilled these criteria it is automatically in copyright. There are certain precautions that can be taken to safeguard copyright status but there are no formal copyright registration requirements in the UK (there are in the US). To some this seems unsatisfactory, they may want a copyright registration office where they can lodge their cassette/sheet music in case their music is ever plagiarised or pirated. But international copyright conventions, to which the UK is signatory, preclude such formalities.

In the UK copyright is governed by the Copyright, Designs and Patents Act 1988.

However, there are certain precautions a writer can take:

S/he can send a copy of the tape or sheet music to him/herself by registered post and then leave the envelope unopened or s/he can lodge a copy with his or her bank manager or solicitor and take some sort of dated receipt.
S/he can register the title of the work with the copyright societies (MCPS & PRS).
S/he can make sure that any copies of the works which leave his/her possession go by a letter ( of which s/he keeps a copy)

Even though none of these precautions will do much more than establish a date, they can be useful supporting evidence in the event of a court case. In the event of legal action over a work, a court might have to establish who has prior evidence of ownership and whether (in cases of claimed plagiarism) the infringing party had access to other work.

The above precautions might help in such eventualities. It should be noted that piracy/plagiarism situations are uncommon and a sense of proportion and precaution is the most appropriate attitude when considering protecting your rights.

Many disputes over works occur in cases of multiple authorship and it is important to understand how co-writer situations work. Without agreement/understanding to the contrary an original work is initially shared: 50% lyrics writer-50% music writer and individual writers can exploit their share individually.

It is quite normal, however, for co-writers (especially in bands) to consider all song writing to be a co-operative effort and to agree to equal shares, regardless of writing situations and a simple letter to the effect that 'it is hereby agreed that the writer shares the work 'Love My Baby' ( Smith/Jones) are 66.6% Smith and 33.3% Jones, Signed ... is quite sufficient.

A person who rearranges an existing copyright work (e.g. a musical arranger or a remixer) cannot have any claim to a share of the copyright in that work. But a person who rearranges non-copyright work (e.g. an old work that has gone out of copyright or a traditional work that never was in copyright) may claim a new copyright in their arrangement.

Copyright allows the copyright owner to give permission (or to restrict permission) for commercial exploitation of the musical work, that permission will normally be granted in consideration for royalties.

KNOW YOUR ROYALTIES

The making of copies
Public performance

These are the two areas where a copyright owner can earn a living by allowing exploitation in exchange for royalties.

The making of copies

This creates sheet music royalties and mechanical royalties. Sheet music (for most types of popular music) is now just a tiny part of the music business and sheet music royalties need not concern us here.

Mechanical royalties are a different matter - these mostly arise from the following types of mechanical reproduction:

Recording musical works onto disc/tape/CD for sale as records.
Recording musical works into films or TV programmes for subsequent performance or broadcast
Recording musical works into videos for sale to the public (or transferring existing TV/film programmes onto video for sale to the public)

Any use of a musical work where a recording is made for commercial exploitation may also generate a mechanical royalty. Such as:

recording music into a video game
a storyteller cassette tape for children
recording music onto a karaoke system

Where multiple copying is involved, it is normal for royalties to be calculated as a percentage of each copy. In other cases a flat fee for specific area of use is more appropriate.

Most mechanical royalties throughout the world are collected by mechanical societies. These will either administer industry agreed rates or will help negotiate specific rates on behalf of the copyright owner. MCPS (Mechanical Copyright Protection Society Ltd.) is the UK mechanical society.

Public Performance

Public performance royalties are paid from the following types of uses:

Radio & TV use of music
The playing of music (usually off records) in clubs and discos
The playing of music (usually off films) in cinemas
The playing of music (usually off radio) in shops, pubs and restaurants
Live music performed in music venues

All performance royalties (except certain opera/ballet uses falling under a specialist 'grand rights' category) are collected, processed and paid out by Performing Rights Societies. PRS (The Performing Rights Society) is the UK performing rights society.

Performing rights societies have always handled performance moneys. In certain areas (notably in the UK, USA Canada and Australia) mechanical royalty income could be negotiated and collected by the copyright owner. Since 1989 in the UK these opportunities have diminished dramatically as the music copyright owners have chosen to pool the rights in the mechanical society in order to negotiate more strongly on an industry level.

HOW ROYALTIES ARE CALCULATED

SHEET MUSIC ROYALTIES

In the UK there are now only two or three music publishers specialising in the printing of sheet music. Typically, these will pay the music copyright owner 15% of the retail price (excluding VAT) of each printed copy of sheet music sold. In the case of albums or folios, the 15% will be split between all works in the album.

There is a 'graphic' right which is the right to print the lyric of the song in, say, a newspaper or a book or magazine. There are no typical fees and each use would be negotiated by the copyright owner. Sheet music royalties and royalties from graphic rights are not handled by any copyright society and would be negotiated/collected directly by the copyright owner.

MECHANICAL ROYALTIES

Record Royalties

The copyright tribunal in 1991 set the record royalty rate for musical works at 8.5% of the Dealer Price (excluding VAT) of every record. This can, alternatively, be expressed as 6.5% of the Retail Price (excluding VAT).

The following example calculation is based on dealer price:

The published dealer prices of a chart CD is £7.49.
8.5% of this price gives the MCPS royalty per record - £0.64p
If there are 12 tracks on the CD the song-writer will get about 5 pence (4.9p) per track
If there are 10 tracks on the cassette then the song-writer will get about 4 pence (4.2)
This is assuming that all tracks are of equal length since the royalty per track is normally divided between tracks according to their individual track timings (to the nearest second)
So, if 10,000 copies of the compilation CD and 10,000 copies of the cassette were sold and if you wrote one of the tracks you would get in the region of £490 from the CD and £420 from the cassette.

Record royalties are accounted quarterly on sales by major record companies. Smaller record companies are invoiced on pressings immediately the pressings are made. In the UK and in most territories of the world (except Canada, USA and Australia) all record royalties are handled by the local mechanical copyright society.

Video Royalties

The industry agreed rate calculates video royalties from a maximum royalty of 8.5% of dealer price (the same as the record royalty), to the total video running time. So three minutes of music in a 90 minute film is 0.28% of dealer price. There is a cap at 7% of dealer price for music videos. BPI member companies (video companies who are members of the record industry trade organisations) enjoy preferential rates of 7.5% ( with 6% cap for music videos).

Television/Film Royalties

These royalties cover the recording of music onto television film productions. The subsequent broadcast or performance generates another royalty also. Where a TV programme is made by the BBC or ITV companies, all royalties come out of an annual lump sum paid by the BBC/ITV to MCPS. 1994 allocations for recording music into TV programmes were BBC - £31.20 per minute featured (£23.40 background) and ITV - £20.16 per minute featured (£15.12 background).

Where the production is made by an independent TV production company (even if it is for eventual showing on BBC or ITV) a fee has to be negotiated. This may be in the region of £60 - £200 per 30 seconds and may be negotiated by MCPS or the copyright owner. Feature film and TV commercial uses are very lucrative and substantial moneys (e.g. £2,500 per second for a feature film or £15,000 per seconds for a TV commercial) can be generated. These can be negotiated by MCPS or the copyright owner.

PERFORMANCE ROYALTIES

These are all administered by the PRS (Performing Rights Society) in the UK from annual lump sum fees charged to broadcaster and music venues. These fees might range from £100 - £150 per year for a typical pub, to £400 for a small music club to £23 million for the BBC.

A club/disco pays £50 per 1000 people a year.

Live music events (concerts and variety shows) would be licensed by PRS on the basis of a percentage of gross box office. Music shows often pay 4% of box office.

These royalties are paid directly to the PRS on all box office takings by the promoter.

Example of PRS airplay royalties for a 3 minute song:

Radio 1,2,3,4 and 5	£39.46
Capital Radio London GLR	£ 6.05
GMR (Greater Manchester Radio)	£ 1.42
BBC TV Network	£226.71
ITV Network	£309.54

DO YOU REALLY NEED A PUBLISHER?

Historically, a music publisher was the person who published (i.e. made available to the public) copies of a songwriter's works. Now this role has been largely taken over by record companies. Even after the sheet music industry was superseded by the record industry as the maker of multiple copies of music, the publisher still played a major part in the music industry which recognised two separate talents: that of the artist and that of the songwriter.

Up to the 1960s it was unusual for an artist to be a songwriter or a songwriter to be an artist. Since the 1960s it has become more and more the normal for an artist or band to be a combined performing/song writing creative entity, so the continuing song writing/music publishing side to the music business is now largely based on historical practice.

Music publishers, nowadays, fulfil three basic roles:

AGENT/PROMOTER/FIXER
ADMINISTRATOR
BANKER

The first role is the most questionable, though music publishers will stoutly defend their creativity in getting covers for songs, in getting TV commercial uses.

Administration plays a major part, as their corporate effort is geared towards copyright documentation, royalty collection and royalty distribution.

Bankers, they certainly are since most major publishing deals will be on the basis of a royalty advance paid by the publisher to the copyright owner in exchange for the right to administer/control the copyright owner's work for a period of time and for a certain percentage.

To a great extent it is the willingness of the music industry to pay advances that has guaranteed their continued existence.

Nowadays, the main bulk of royalties is administered by the copyright societies (MCPS & PRS) in this country and by their affiliates abroad) according to music industry-agreed rates and conditions. The front-line administrators, are the societies.

Music publishers are members of these societies and receive their royalties from them. But songwriters can/should become members and there is nothing to stop a songwriter dealing directly with societies and not having a music publisher. This is becoming more common.

Established songwriters will tend to create their own music publishing catalogue identity and work through that. If they have the necessary administrative expertise (or can call on a consultancy expertise) and if they do not need advances (which are recoupable in any case) they can hold all their rights and receive their royalties without having to pay a middle-man a percentage.

What is a publishing deal?

A publishing deal is made between a copyright owner (usually a songwriter) and a music publisher. The publisher will be entitled to receive royalties on these works and will not deduct a percentage before passing over the balance to the copyright owner.

In exchange, the copyright owner will benefit from an advance payment (possibly), the promotional power (possibly) of the publisher and the administrative expertise of the publishers.

Types of publishing deals

The administration deal
The sub publishing deal
The single song assignment
The exclusive publishing agreement

An ADMINISTRATION deal

Popular for songwriters who have a small but potentially lucrative catalogue, or for established composers or songwriters, or for small labels. It is a deal where one party manages the day-to-day running of another party's publishing catalogues. It is usually exclusive (and thus, precludes appointment of other publishers for the term of agreement).

Typical deal 10-15% to the publisher with no advance for administering the songs and grants no rights of ownership.

The sub publishing deal

This is a mixture of administration deal and an exclusive publishing agreement. The owner of the copyrights sub licences some or all of these rights to a publisher. The original owner keeps copyright so it’s a licence not an assignment of rights. It appeals to songwriters who want to keep control of the copyright or smaller publishers who don’t have an established system overseas.

Typical deal 15-20% to the publisher of gross income with an advance

The single song assignment

The rights of a song go to the publisher. This could be for the life of copyright or it could be for a shorter RToghts or Retention period. Typical deal 20-25% of the gross income to the publisher and a small advance.

Exclusive Publishing agreement

This is considered to be the holy grail for most pop songwriters. Subject to the same restraints for trading as any exclusive agreements. The length of the term is limited and the publisher has to do something with the work or it reverts to the original copyright owner. Typical deal 20-30% to the publisher with an advance.

Terms of contract

Normally shorter than a record contract. Maybe an initial period of one year and then options in the music publishers’ favour for a further two or three option period. Or it may be a rolling term – this is fixing the period up front rather than options ie 3-5 years. The fixed period can be extended until you’ve fulfilled the minimum commitment as agreed.

The single song ASSIGNMENT is a transfer of ownership.

It is usually between a composer and a publisher and transfers ownership of the copyright to the publisher. It is usually on a specific song-by song basis. An assignment will often be the consequence of an Exclusive Songwriter Agreement (ESA) where the composer gives ownership of all written work during a specific period of contract (plus, usually all works written up to the date the contract started). An ESA is a composer/publisher arrangement.

An assignment must be signed by the composer and contain an element of valuable consideration on exchange for the assignment.

A LICENSE (or sub-publishing) agreement

It is usually a publisher/publisher deal. It grants ownership to rights but limited by time (e.g. three years) and by territory (e.g Europe) and sometimes by type (e.g. not including video or broadcast rights).