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The average person is aware
that songwriters receive money for their work once
it becomes part of a CD and sells, but most people do not
realize that these sales comprise only a fraction of the money a
songwriter receives.
Songwriters receive, as just mentioned, income in the form of
“royalties” when their song is sold as part of an artist’s CD. These
royalties are sometimes referred to as “mechanical royalties”, which
derives its name from the mechanical license agreement which is
required under current copyright law to allow a writer’s creation to
appear on someone else’s record. Current law dictates that 8.75 cents
be paid to the copyright holder for every copy of the creator’s song
contained on the CD. Most people are aware of this particular
payment because of all the media attention given to “gold” and
“platinum”records which sell millions of copies and make stars of the
artists performing them.
Songwriters also receive
money from the airing and broadcast of their
material through radio stations around the globe. These payments are
called “performance royalties” and are paid to writers for each and
every time their song is broadcast. Performing rights organizations
like ASCAP (www.ascap.com), BMI (
www.bmi.com) and SESAC
(
www.sesac.com) were established to help members accurately
monitor the usage of their material. These companies charge radio
broadcasters a yearly fee in the form of a “license” which allows
these stations to broadcast the material.
Furthermore, ASCAP, BMI, and SESAC monitor how
accurately these stations use their member’s
material through data provided by the stations including log sheets and
program listings. To further ensure the accuracy of such data, the
performing rights organizations conduct random samplings of the
stations and cross- check data with other organizations who track
broadcasters for various reasons, such as Nielsen and Arbitron which
gather information that indicates how many people are listening to a
particular station.
Concert arenas, nightclubs,
shopping malls, and skating rinks are among the
many other places that contribute to a songwriter’s bank
account due to their having to obtain a license from ASCAP, BMI, and
SESAC to play music publicly. These venues are charged a fee based
on many factors, including how often live or pre-recorded music is
performed, and the seating capacity of the facility (e.g nightclub,
concert hall, stadium, etc.).
Another source of income comes from songwriters licensing their
music for use in movies, CD-ROMS, TV shows, video games, and web
sites. This music is used by producers and developers of these media
through what is called a “synchronization “ license. This license,
unlike the compulsory mechanical license, is one whose price is open
for negotiation, meaning the songwriter--usually through his or her
publishing company--charges whatever price they can get. Songwriters
have found a gold rush of sorts in recent days thanks to commercial
advertisers using their compositions in regional and national ads.
Movie soundtracks which contain nostalgia-laden tunes run a close
second in terms of money-making abilities under synchronization
rights.
Thanks to the recent fad of karaoke bars, songwriters have found
another income bearing medium. Karaoke bars allow the average
person to sing along with hits recorded by their favorite stars. The
CDs these songs are contained on as well as the clubs that they are
played through all must be legally sanctioned by the respective
owners of the material before they can use the
material--a process that involves a licensing fee.
Print music sales comprise still another avenue for songwriters to earn
money. Print music is usually done by way of a publishing house
sub-contracting with a sheet music publisher (Hal Leonard Publishing
is one of the largest in the US) to produce printed versions of their
songs. These printed versions find their way into the homes of
consumers who want to practice material of their favorite artists, or
with schools, colleges, and universities who buy the notated
arrangements for instructional purposes of their marching and jazz
bands; choral groups; and stage plays. Sheet music of current hit
songs is also included in the packet of material
amateur musicians receive when they purchase their
first instrument, thereby creating even more money
for the songwriter.
Composers of music also have to thank the ever-present cell-phone as
contributing to their healthy bottom line. Consumers purchase ring
tones--small snippets of a pre-recorded songs, usually by a hit
artist like Beyonce or Jay-Z--so that when their
phone rings, it will play that snippet instead of
the customary ring. This practice has become so
popular--and so profitable--that BILLBOARD magazine announced
that they will soon begin listing a chart of the top-selling
ringtones.
Finally, another source of revenue for songwriters includes foreign
sales of their songs and sheet music. Whenever a song becomes
a hit in the US, it is a good bet that it
can or will become a hit in some other market such
as in the Caribbean, Africa, or Europe. The many nations
that comprise these regions account for a huge piece of the
songwriting revenue stream since every way that the song was utilized
or exploited domestically can now be replicated there: print sales;
synchronization rights; public performance rights; and mechanical
licenses. Due to all these money-producing
opportunities, songwriting has been
called--and rightfully so--the most profitable end of the
entertainment industry. Now go out and get your
profits.
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