Understanding Royalties and Rights for Songwriters

Songwriting is often perceived as a straightforward process, with songwriter ownership as the norm. However, the reality can be more complex, especially when an artist decides to sell their work to another label or publisher. This article explores what happens to a songwriter's royalties and rights when they do not own their songs, and highlights the intricacies of the music industry.

Ownership and Royalties

Various factors can impact the royalties a songwriter receives. Generally, a songwriter would own the rights to their songs, which allows for a fair distribution of royalties. However, there are instances where artists, especially those in their latter years, sell their catalog to another label or publisher. In these cases, the new owner retains the royalties rather than the songwriter. This can have a significant impact, especially if the work becomes valuable over time, such as with the iconic songs of The Beatles, The Rolling Stones, and David Bowie.

Role of Publishers and Publishers' Contracts

The role of a publisher in the songwriting and music publishing industry is crucial. Publishers are responsible for 'plugging' a songwriter's work with different labels and specific singers, connecting the music with potential audiences. The distribution of royalties between the publisher and the songwriter can vary; it is now a common practice for publishers and songwriters to split royalties equally, with the publisher receiving 50% and the songwriter 50%. However, the publisher often manages performance rights, while the songwriter retains the right to control other rights, such as merchandising and licensing.

Unscrupulous Practices and Fair Contracts

Unfortunately, there are instances where unscrupulous publishers will enter into unfair contracts with performers or songwriters, where they retain all the royalties or require upfront payments for songs or signing recording contracts instead of sharing any royalties. It is crucial for songwriters to be aware of such practices and to avoid signing any agreements that do not align with fair compensation and equitable sharing of royalties. As an example, a songwriter should never sign a contract that requires them to pay up front for their songs or entangles them in a recording contract without a share of future royalties.

Types of Rights in the Music Industry

The music industry involves several types of rights that can impact songwriters and their royalties. These include:

Master Rights: This includes the copyright for the sound recordings. Typically, the label owns these rights. Name and Likeness Rights: These are often lost through contracts, as seen with Creedence Clearwater Revival who lost their band name to their record label. Mercandising Rights: The Beatles, for example, received a poor deal in this area due to the actions of their manager. Licensing Rights: Labels and artists split these based on contracts. Download, Streaming, and CD Pressing Rights: Split between the label and the artist according to contracts. Publishing Rights: The publishing company acquires these rights from the songwriter either in full or in part for an upfront payment. Public Performance Rights: Administered by organizations like ASCAP and BMI, with a 50/50 split between the publisher and the songwriter. Grand Rights: Administered by the publisher or Harry Fox agency, also split equally between the publisher and the songwriter.

The Re-Sale of Rights

When a song or a set of songs becomes valuable, such as with the Beatles' catalog, the sale of the catalog can generate significant revenues for the new owner. In the case of The Beatles, 150 odd Lennon McCartney songs, sold for mere dollars in the 1960s, would have been worth much more had the artists retained their shares. Instead, Dick James, who owned a significant portion of the rights, earned 50 million from selling those rights. Had the Beatles retained their rights, they could have potentially earned millions more.

Exceptions and Case Studies

There are certain exceptions to the general rule regarding royalties and rights. For instance, Taylor Swift's agreement with an artist for a painted portrait allows her to sell the original work but requires her to pay a small royalty to the artist on the increased value of the painting if she sells it for a higher price. This nuanced aspect of American Copyright Law highlights the complexities and the importance of clear and fair contractual agreements for songwriters and artists.

In conclusion, understanding the intricacies of royalties and rights in the music industry is essential for songwriters and artists. The legal framework and industry practices can significantly impact their financial benefits and creative control. It is important for songwriters to be aware of their rights and to enter into fair contracts to ensure they receive a fair share of the revenues generated from their work.