Music publishers play an important role in the viability of artist’s careers. Their primary role is ensuring that songwriters and composers are compensated appropriately when their music is used commercially. Via a publishing contract, the songwriter generally assigns the rights of the composition to the publishing company. After the rights are assigned, the publishing company then licenses the work, keeps track of where the work is used and how frequently it is used. The royalties are then collected and distributed to the songwriter(s). Publishing companies can be paid up to 70% and varies for different kinds of royalties.
There are different types of royalties that publishers and songwriters are entitles to. The royalties consist of:
1. Mechanical Royalties: CD’s and Digital Downloads
2. Performance Royalties: Radio, Live Performance, Etc…
3. Synchronization Royalties: Film or Television
Mechanical Royalties relate to the money derived from CD or digital download sales. These royalties are paid to the publisher via agencies such as Harry Fox or American Mechanical Rights Agency.
Performance Royalties are collected via one of the three Performance Rights Organizations we have in America. The organizations are SESAC, BMI, and ASCAP. Radio play is considered a performance and is collected by one of these three organizations. Additionally, any venue that has artists that play cover music has to pay a fee to a Performance Rights Organization.
Synchronization Royalties, or “Synch Royalties” are required when a song is used for film or television. A deal is reached regarding how much of the song can be used and for how much money. There are other variables that sometimes play into synch licensing. The royalties generally filter back through the publisher before finally reaching the songwriter.