How to Make Money as a Music Artist: A Step-By-Step Guide

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Are you a music artist, musician, or producer?

Do you want to make money doing what you love?

Hi, and welcome to my guide, “How to Make Money as a Music Artist” 

My name is Sam Mollaei, Esq. and I’m a Music Lawyer. Over the past 5 years, I have helped numerous music artists, just like you, get found and make a career doing what they love — which is making music.

Every day around the world, artists produce music but don’t earn their maximum earning potential. 

I completely understand how tough it is as an artist. I have been a producer and musician for the past 15 years and I live and breath music just as much as you. So I decided to combine my passion in music with a law degree to become a music lawyer.

As an artist, you’re owed money whenever the music is purchased, streamed, covered, played on the radio, performed in public, heard on YouTube, sampled, or used as the soundtrack to a TV show or video game.

Just imagine what you can do from making money and doing something you love at the same time!

In this comprehensive guide, you will learn how to make money doing what you love... making music.

Let's get started...

 

What is Music Copyright?

First, we need to explain what music copyright is.

Music artists own the exclusive rights to their music. This is called a copyright. Artists who make the song have the exclusive rights to: make copies of the song, make derivatives or revisions, distribute or publish the work, perform the work in public, or display the work in public.

Anyone else who wishes to use the music in these ways MUST have the permission of the author.

Under copyright law, songs are automatically considered copyrighted as long as they are original and in fixed form.

“Original” means that the song can’t be identical or substantially similar to other songs.

In “fixed form” means when the music or lyrics have been made or stored on a computer, set down on a paper, or recorded.

So if you have those 2 elements, originality and in a fixed form, then you have yourself a copyrighted song. For example, if you produce a song with a music production software such as Ableton Live or Fruity Loops, and you export it into a file, then that’s technically considered copyrighted. 

Music copyright lasts the life of the artist plus 70 years.

So in other words, let’s just say John has a copyright to a song. He will continue to own the copyright to that song 70 years after his death. Also, when the song is made by collaborating artists, the seventy years will run from death of the last living author. 

 

The Difference Between Musical Composition & Sound Recording

The most important aspect of music copyright you should know is that there are two different forms of copyright in music: the musical composition and the song recording. 

The musical composition consists of the music, the lyrics, and music arrangements of notes that define the song. The author of the musical composition is the composer and the lyricist. This right is typically assigned to a music publisher. 

On the other hand, the sound recording is the CD or MP3 audio recording of the song. The author of the sound recording is the performer who performs the song or the record producer who processes the sounds and fixes them in the final recording. This right is typically assigned to a recording company.

Although the musical composition and the sound recording are separate works, the musical composition and the sound recording can be registered together if ownership of the copyrights in both is exactly the same.

What this means is that if you create a song and also perform it, then you can be the copyright owner of both rights of your song: the rights over the musical composition as well as the rights to the sound recording.

To register a single claim in both works, you need to give information about the authors of both the musical composition and the sound recording. I will discuss more about this in depth later in the course.

Now, here’s where it gets interesting: each of those rights holders needs to be taken into account: one from the publisher (for the music and the lyrics), and one from the record company for the performance and recording. 

The copyright in the musical composition is different from the copyright in the sound recording. Generally speaking, the sound recording can be thought of as the master — or the recorded performance of the composition. 

When registering a new song, it’s important to protect the copyright in the composition separately from the copyright in the sound recording.

It’s important to know that recording artists and songwriters do not earn royalties in the same way.

Recording artists earn royalties from the sale of their recordings on CDs or digital recordings. Recording artists don't earn royalties on public performances (for example, when their music is played on the radio, on TV, or in bars and restaurants). However, we’ll talk ways in which recording artists can get paid for their public performances.

Songwriters and publishers, however, do earn royalties in these instances -- as well as a small portion of the recording sales.

The only current instance in which artists earn royalties for "public performances" is when the song is played in a digital arena (like in a Webcast or on satellite radio), is non-interactive (meaning the listener doesn't pick and choose songs to hear), and the listener is a subscriber to the service. This came about with the Digital Performance Rights in Sound Recordings Act of 1995. This act gave performers of music their first performance royalties.

We'll go into more detail about the types of licenses and royalties later in this course. But first, let's look at who owns a song.

 

Who Owns a Song?

The most important players in the music industry are:

Songwriter

The songwriter is the person who writes the lyrics and melody for songs.

Publisher

The publisher is the person who works with the songwriters to promote their songs. Publishers usually get either partial or total ownership of the song copyright, known as "assignment" or "transfer" of the copyright.

They pitch the songs to record labels, television or movie producers, or anyone else who may be interested in it. They then license the rights to use the song and charge fees. Those fees are typically split 50/50 with the songwriter.

Performing Artist

There’s also the Performer or the performing artist who is anyone who licenses the song in order to publicly perform it.

The performer doesn't have control of the song (this is controlled by the songwriter or publisher) nor does he or she have control over the recording (which is controlled by the record company.

Record Label

Recording company or record label is the company that creates, markets and distributes the recordings.

Performing Rights Organization

A performing rights organization is an association, corporation, or other entity that licenses the public performance of nondramatic musical works on behalf of the copyright owners.

The major performing rights societies are The American Society of Composers, Authors and Publishers (ASCAP), Broadcast Music, Inc. (BMI)The Society of European Stage Authors and Composers (SESAC), and SoundExchange.

 

In most situations, the author of a song will be the songwriter or team of songwriters and the lyricist. But situations can occur where the members of the band have arranged to work as employees for the band as a Corporation or limited liability company.

In this case, band members would be creating the work as a work-for-hire, and the corporation or the LLC would be the author. There are a few other situations where the composer will be asked to sign a work-for-hire agreement, but in all but rare cases, you should resist these arrangements.

As copyright owner, you have the right to reproduce the copyrighted song, to create derivatives or variations of the song, to distribute it to the public, to perform it publicly, and to display it publicly.

If you have recorded the song with yourself as the artist, then you also hold the sound recording copyright and have the right to publicly play or "perform" that recording by means of a digital audio transmission.

 

Split Sheets: What You Need Every Time You Collaborate

One of the best ways for emerging artists to gain new fans is to be exposed to another artist’s audience through the use of collaborations.

Collaboration is the process of working with other artists to create a song together.

Collaborations are an underrated way to get more exposure for your songs. Especially if you have similar target markets, fans are more likely to trust a recommendation coming from an artist they already know and like. 

As a music creator you may already have or plan to co-write with other musicians. If that’s the case, Split Sheets are very important to ensure that you and each person you are co-writing with gets paid their fair percentage of income.

A split sheet is a document that states who wrote what percentage of the song recorded by a band or artist.

A split sheet should be created for each and every song you write. Split Sheets are an important tool to track musical collaborations among songwriters, artists, musicians, publishers and any other person or company that may be directly involved.

The basic split sheet form includes the following items: song title, date the song was created, the name of the project, name of each writer, including any artists, songwriters, and producers… followed by percentage of agreed and assigned splits which includes: copyright ownership percentage, publishing percentage, songwriter percentage and other percentage share.

Make sure you include the contact information of all parties including the physical mailing address of each artist should you ever lose contact with them as well as the capacity in which the writers are working (for example, as a producer or writer). Also be sure to have everyone date and sign the form.

Once the split sheet is completed, the person who brought the writers together should print a copy and mail it to each writer’s physical address. 

For example, if you write the lyrics to a song and your buddy writes the music, then you each own 50% of the song. You don't own all of the lyrics and your buddy doesn't own all of the music -- you each own 50% of the total song, music, lyrics and all.

This means you can't give someone exclusive rights to the song on your own if you have a fight with your buddy. And, if you make any money on the song, half of that money must go to your partner.

I would highly recommend having your split sheet in writing to later avoid misunderstandings or disputes about who said what, and what part of a song you actually own when the time comes to sharing the various streams of sales and royalties and other forms of music licensing income which may result from collaborating.

I have attached a template split sheet that you can use. Feel free to use it any time and every time you do a collaboration. 

You can also use songsplits.com which is a cloud-based split sheet software. As of now, SongSplits is free to use and you can create as many split agreements as you like. I like their easy to use interface so feel free to use this website as well.

 

What Music Copyright Doesn't Cover

It’s also important to note that certain aspects of your song are not protected even if you’ve registered the copyright. These include: the names, titles, short phrases or expressions, chord progressions, or the overall idea or concept of your song. Even if a name, title, or short phrase is novel or distinctive, it cannot be protected by copyright. 

Just think about how many songs have used cliche ideas like “I can’t wait to be with you,” or “What doesn’t kill you makes you stronger.”

Also, imagine how many copyright infringements there would be if the most common chord progression could be copyrighted. However, on the other hand, melodies and the actual lyrics are very much covered under copyright protection.

Copyright protection extends only to “original works of authorship.The Copyright Act clearly states that ideas and concepts cannot be protected by copyright.

To be protected by copyright, a work must contain a certain minimum amount of authorship in the form of original literary, musical, pictorial, or graphic expression. Names, titles, and other short phrases do not meet these requirements.

 

Why Should You Register Your Music?

When you write songs, the songs are automatically copyrighted as soon as they are in a fixed form. As we already discussed, in “fixed form” means that the music or lyrics have been made or stored on a computer, set down on a paper, or recorded.

When you write or record your song, technically, you’ve created it — and thus you own the copyright to it. 

However, just because the song is technically copyrighted as soon as you record it doesn’t mean you shouldn’t register your song, especially if the song is important for you. There are several special and important advantages to registering your music.

By submitting a song to the copyright office, you’re protecting your music by acknowledging the date of its creation.

First and foremost, registering your music provides notice to the world that you own the copyright. Think of it as an official way of telling everyone else that you own the song. If you created the song, this is the official way you can tell the world that the song belongs to you.

Second, before you can sue for copyright infringement, the song needs to be registered. So registration should always be done before the song is released. 

Third, timely registration may also provide a broader range of remedies in an infringement suit. Registering your music provides the right to seek attorneys' fees and statutory damages.

Statutory damages are special damages that you may be entitled to should someone steal your song. This can range from $750 dollars to $30,000 dollars regardless of actual damages you suffered from having your song stolen. Also, having your song registered entitles you to your attorney’s fees if you win your case. 

If you aren’t registered, you have to provide your actual damages in court. For example, if someone stole your song and posted it on his or her own Soundcloud account, then it would be hard to show that compensation for the damage done is any significant amount of money.

So in other words, if someone steals your song, you may be entitled to your own damages along with special set damages up to $30,000 and also get paid for the expenses of hiring an attorney.

So a simple registration can provide you an ease of mind knowing that you’re entitled to damages if there’s any copyright infringement. 

Lastly and also very important, registering your music makes it easier to transfer your copyright.

These 4 important reasons should convince you to register your songs as soon as possible.

 

Poor Man's Copyright: Does it Work?

So what is the poor man’s copyright and does it work?

You could have heard about the “poor man’s copyright” anywhere: from an online article or from a friend. The idea is that you mail whatever work you’ve created to yourself. That way, even if you don’t do anything with your work for many years, you still have a copy with an official date stamped on the package showing that that the work was on yours on that date.

It’s a nice idea but the problem with the poor man’s copyright is that it doesn’t work.

Even the federal copyright office, which is infamously really boring and plain, explains on its website that, “the practice of sending a copy of your own work to yourself is sometimes called a poor man’s copyright. There is no provision in the copyright law regarding any such type of protection and it is not a substitute for registration.”

However, since 1978, copyright law has made that it that all works are automatically copyrighted from the time they are created and “fixed” in some way.

Your song, for example, is copyrighted without having you mail it anywhere. That means that it is legally recognized as yours. But you do need to register your song so you can be eligible to take advantages of the many benefits of registering your music as we already discussed in the last lecture. 

In order to get federal copyright protection, you have to make sure to register your song with a formal notice of copyright. 

The myth of the poor man’s copyright continues to exist. There are many internet forums where commenters pass misinformation about copyright law and claim that they are protecting their creations through the poor man’s copyright. However, this does not stand in court and should not be used. 

So put away your stamps and envelopes for good. And pay attention on how you can correctly register your music. 

 

What You Need to Register Your Music?

So what do you need to register your song?

First of all, registering your music is simple and can be done online. Advantages of online filing including a lower filing fee (of $35 dollars compared to $45 dollars), faster processing time, the ability to check the status of your registration online, the ability to pay be credit card or debit card, and most importantly, the ability to upload your songs as electronic files.

The registration is used for both the musical composition as well as the sound recording. I would highly recommend filing online as this is the way I will be teaching the course. I encourage you to follow along as I register a song.

Also, you should register your song once it has been published. This typically means distributing or selling copies of the song to the public. So if you’ve posted the song on SoundCloud or YouTube, then that’s sufficient for publication. However, live performance of a song does not publish the song.

An application for copyright registration contains three essential elements: a completed application form, a non-refundable filing fee of $35.00 dollars, and a copy of the work being registered and “deposited” with the Copyright Office.

At $35 a song, this can be pricey. One way around this is to copyright an entire album. That way you still only have to pay a single fee and you only have to fill out one form.

The Electronic Copyright Office application accepts 3 types of claims: First, any single song. Second, a collection of unpublished songs by the same author and owned by the same claimant, and third, multiple unpublished songs if the elements are assembled in an orderly form.

The combined songs need to have a single title identifying the collection as a whole and the person claiming the copyright has to be the same for all of the songs.

Anyone can use Electronic Copyright Office application to register basic claims to copyright. Besides registering your sound recordings, you can file a claim for your literary works, visual arts works, performing arts works, and motion pictures.

 

Registering Your Music: Step-by-Step Guide

So let’s get started on registering a song. Feel follow to follow along as I complete an entire application from beginning to end.

To register online, you need to go to the Copyright Office website at www.copyright.gov. Bookmark this page and save it for future reference. 

Click on “Register a Copyright” > then “Log into ECo.” eCo stands for Electronic Copyright Office and is the form you will be using to register your song. This will open up a new page.

Now you will be on the Electronic Copyright Office home page. 

As we already discussed, we want to register for both the musical composition as well as the sound recording. When it comes time to copyrighting your music, first thing you need to fill out is the type of work. There’s two types that we should be familiar with: Sound Recording or Work of the Performing Arts. 

Most of the time it’s Sound Recording. Work of the Performing Arts is if you want to copyright a musical composition and those ideas. Sound Recording is when you’re copyrighting not only those ideas, but you’re also the performer of that idea.

For instance, if you have a song and you came up with the lyrics and the melody, then you would choose Sound Recording. When you select Sound Recording, it also includes Works of the Performing Arts. 9 out of 10 times, you’ll be selecting Sound Recording — you won’t go wrong with that.

Indicate the Title Type and the Title of the song being registered. 

If you don’t have a permanent title for your song yet, enter “working title” or “Untitled,” or an identifying or descriptive phrase. The phrase could identify your name, general subject matter, or the type of song. For example, you can put, “Draft of Upbeat House Song by Sam Mollaei.”

Publications

Publication, as defined by the Copyright Act, is the distribution of copies or phonorecords of a work to the public by sale or other transfer of ownership, or by rental, lease, or lending. The offering to distribute copies or phonorecords to a group of persons for purposes of further distribution, public performance, or public display, constitutes publication.

A public performance or display of a work does not of itself constitute publication. “To the public” generally means to persons under no explicit or implicit restrictions with respect to disclosure. The following acts do not constitute publication: performance of the work, preparation of copies or phonorecords, or submission of the work to the Copyright Office.

Authors

Check “made for hire” only if that contribution was either (1) prepared by an employee within the scope of his or her employment or (2) specially ordered for a certain use, with an express written agreement signed by both parties that the work would be considered a work made for hire.

Common examples of works made for hire include contributions to a collective work, parts of a motion picture or other audiovisual work, or supplementary works, such as new musical arrangements. If the contribution was made for hire, give the name of the employer, not the person who actually did the writing.

Specify what the author created as written or recorded in the copy or phonorecord that accompanies the application. Do not include elements not present in that copy or phonorecord. Do not include elements that are not protected by copyright, such as an idea, concept, name, or title.

Claimants

The name and address of the copyright claimant(s) must be given. The copyright claimant is either the author or a person or organization to whom the author has transferred all the rights in the U.S. copyright. When the claimant named is not the author, a brief transfer statement is required to show how the claimant acquired the copyright.

Limitations of Claim

Basically, you can skip this section unless if there’s something you already copyrighted. This is trying to figure out what was copyrighted before that is being copyrighted now, and vice versa. This is only if you’re trying to re-copyright something or adding something to a pre-existing copyright. So you can skip this.

Deposits

The term copyright deposit refers to the copy or copies of a work being registered and “deposited” with the Copyright Office. Depending on publication status, one or two copies of the work being registered must be submitted with a copyright application. For specific deposit requirements, see below.

As an added benefit of online registration, online filers can submit certain categories of works as electronic files, including (1) unpublished works, (2) works published only in electronic format, (3) published works for which there are special agreements requiring hard-copy deposits to be sent separately to the Library of Congress, and (4) published works for which the deposit requirement is identifying material.

See the section “Special Deposit Requirements” in Circular 1, Copyright Basics, for information on “identifying material.”

 

Performing Rights Organizations: How to Get Paid for Performance Royalty

In addition to registering your songs with the Copyright office, registering with Performing Rights Organizations can help ensure that you receive money for your work.

Performance Rights Organizations collect royalties from businesses or people who play copyrighted music in public locations and in return, pay the majority portion of that money back to music artists.

That means that PROs track down cash for you when your music is played on television, radio, online, or any other publicly broadcast music in some other fashion. These places and stations pay fees to PROs, who in turn pay their registered songwriters, most of whom are owed more money than they know.

In other words, a performing rights organization help you, the songwriter, composer or lyricist, get paid for the usage of your music by collecting performance royalties.

As a songwriter, you’re owed what is called a “performance royalty” any time your music is played users who want to play your copyrighted music.

In fact, performing rights organizations issue licenses to users of music, including, television and radio states, new media including podcasts, ringtones and ringbacks; satellite radio services such as XM and Sirius; nightclubs, hotels, bars, and restaurants; orchestra and concert bands, and even live concerts. 

Those performance royalties are paid by these radio stations, venues and TV networks to Performing Rights Organizations like Broadcast Music Inc. (or BMI), ASCAP, and SESAC who then distribute the money to their affiliated songwriters and publishers.

BMI is one of the main performing rights organizations in United States. I find BMI to be the easiest to work with so for the sake of this course, I will be working with BMI. 

In 2015, BMI collected more than $1 billion dollars in licensing fees and distributed $877 million dollars in royalties… that’s right, B for a billion. So performing rights organizations pretty much give out around 90% of the royalties they collect. And guess what — you may be entitled to a portion of that $900 million dollars.  

Currently, BMIA has more than 650,000 member. According to its website, “BMI is the bridge between songwriters and the businesses and organizations that play their music publicly. BMI serves as an advocate for the value of music, representing 8.5 million musical works created and owned by more than 650,000 songwriters, composers and music publishers.”

There’s almost a billion of dollars that are given out every year so make sure you’re getting your fair share. In the next lecture, I will walk you through how to apply for BMI so you can get paid for performance royalties.

 

BMI Live: How to Get Paid for Your Performance

When you play at gigs, such as clubs or lounges, you may also be entitled to money for your performances. That’s right -- you can even make money for your performances.

So if you have performed songs, by DJ’ing at a club or anywhere else in the last 6 months, you may be entitled to money with your name on it. 

Let me explain…

BMI Live is a new program that allows performing DJs and songwriters to input which songs they have played at performance and get paid for it. 

Both headliners and opening acts can input their song information and get paid for it. In fact, BMI Live pays its artists 4 times a year. 

However, to be eligible for royalty payments, a performance must be considered a “public performance” that is covered by existing BMI licenses. 


Note that, NON-eligible performances which will NOT be considered for royalty payment include:

  • Wedding receptions, birthday parties, anniversary parties, private house parties
  • online performances
  • Performances during religious services
  • State or County fairs performances
  • Live classical music performances.
  • and Live radio or TV performances

So if you’ve had a public performance at any other venue, such as at a club or a lounge or any other public venue, then you’re entitled for your performance.

According to BMIs Live, rates per performance each quarter are determined by “a combination of the number of performances reported during that period and the general licensing royalties collected for distribution for performances.”

Since the amount of the license fees collected by BMI changes from quarter to quarter, the royalty rate for BMI Live likewise will vary from quarter to quarter.

 

How Does BMI Live Work?

Let’s say last week you DJ’d at a club, what you need to do is to apply for BMI Live. Once you’re a member, you will be entering your performance setlist by going on BMI’s website or using the mobile app for Apple and Android phones.

It’s important to note that only the performing. When you enter the performance setlist, you have to enter the performance day and time, setlist and venue information. 

In the next lecture, I will walk you through the steps of applying for BMI Live and inserting your performance setlist so you can get paid for your performances.

 

Applying for BMI Live: Step-by-Step Instructions

First thing you should do is to join BMI Live at www.bmi.com/special/bmi_live

Performance setlists can be entered online by logging onto BMI Online Services from a desktop computer or through the BMI Mobile App for Apple and Android phones. 

All you need to do is log into your BMI account and click the BMI Live link. 

When you enter setlists for BMI Live performances, you must enter the performance day and time, setlist and venue information.

When entering a new performance, just click “Add cover song to your set list” to select a cover song from the BMI Live database of cover songs.

You can enter your performance information as often as you’d like. You will be able to enter dates for up to 2 quarters prior to the current quarter. 

What are you waiting for? Join BMI and collect on your unclaimed money that you are definitely entitled to. 

 

Music Distributors: How to Sell Your Music on iTunes, Spotify, Amazon Music, Google Play, etc.

Of course if you create a song, you want to also sell your songs online. 

However, you don’t want to go on every single music platform and upload your music and wait to get paid for you. You should definitely work with a major distributor which will help you sell your music online, including on iTunes, Spotify, Amazon Music, Google Play, and 150 other digital stores. 

In today’s world of digital distribution, you want to work with a distribution company who will take care of all of the hassle of getting your music on all of the major online music platforms while you get to keep 100% of all of your rights while at the same time earn as much percentage of the music sales as you can.

Of course, there’s the big question of which is the best music distribution company that will put your music on these platforms to make money off your music.

So there’s many online distribution companies you can sign up with, including - TuneCore, CDBaby, A.D.E.D., Ditto Music, VenzoDigital, MondoTunes, Catapult, BandCamp, RecordUnion, Beatport, and CreateSpace among many others. 

The two that are the most popular are TuneCore and CDBaby

Based on the number of members it has, TuneCore is considered to be one of the two largest music distribution companies in the world. The best parts of TuneCore is that you get to keep 100% of your music sales revenue and 100% of your rights.

You will also receive iTunes, Spotify and Amazon Mp3 trend reports which lets you see exactly how much you sold on iTunes and Amazon and even Spotify the very next day. You still don’t get paid for a couple months, but this is a great way to see how a release is doing.

Also, TuneCore has been around a long time and are proven so your releases are safe. The cons of working with TuneCore is that they have yearly fees and they have additional store costs if you want to create an online store. Currently, the costs are $30 per album for the first year. There’s also costs if you want to have extra features but overall, the prices are reasonable. Of course, the best part is that you get to keep 100% of your music sales revenue.

The second best choice is CD Baby. Although CD Baby is considered to be one of the two largest music distribution companies in the world, CD Baby is known to change prices constantly. This is annoying as well as confusing for members.

In most instances, they will also keep 15% of your royalties ON TOP of the up-front fee they expect you to pay per album, which are $50. This is referred to as “double dipping” and it is frowned upon.

As a music lawyer, I would definitely recommend TuneCore because you get to keep 100% of your sales revenue.

So if you want to distribute your music online, definitely work with a music distribution website, like TuneCore, that can help you distribute your songs on the major music platforms.

 

Direct-to-Fan Platforms: 
How to Monetize Your Relationship with Your Fans

Direct-to-Fan is a business model where you can build and leverage your fan base for your music career.

These direct-to-fan model bypass the major record label model that typically controlled radio, venue, and distribution channels, and lets you, the artist, create interest in your music directly to your fans, and market directly and develop relationships with those fans, and of course, sell directly and monetize those relationships, and even use those relationships to expand your fan base.

Direct-to-fan lets you engage directly between you and your fans, which keeps your fans engaged, knowing who you are which in return builds your brand and develops the artist-to-fan relationship over time.

Before we talk about specific direct-to-fan platforms, let’s talk about what they do.

Direct-to-fan platforms allow you to create storefronts to sell your music directly to your fans in the form of digital downloads as well as other merchandize like T-shirts, stickers, or anything else. They also offer Facebook and Twitter integration so you can promote your profile on social media. Also, they also help you build a fan email list.

Two of the most popular direct-to-fan platforms are BandCamp and ReverbNation

BandCamp provides is a platform for music artist promotion that caters mainly to independent artists. You can use Bandcamp to create a customizable website where the music you create can be uploaded and share. The songs can be played for free on the websites and fans are provided with the option to purchase the album or the specific track.

Bandcamp also allows you to offer free music downloads with the option for fans to donate or to receive a free track or album by joining  your email list. Uploading music to Bandcamp is free, but the company takes a 15% cut of sales made from their website, which drops to 10% after an artist's sales surpass $5000.

Another direct-to-fan platform is ReverbNation. ReverbNation has a number of applications and services such as artist profile, email marketing, social sync where all or your profile content automatically syncs, TuneWidget which lets you embed video or audio on your website, Band Profile Facebook app, and Promote It, among many other features.

ReverbNation has also developed technology designed to help locate and evaluate band and artists, either for licensing and management opportunities or for larger events. ReverbNation currently has 3 million musicians, fans, venues, and labels all throughout the world. Basic membership of ReverbNation is currently at $10 a month for the basic plan or $20 per month for the more complete package. 

A big growing market for direct-to-fan platform means greater choice for you, the artist, and competition encourages services to improve. Both of these platforms offer marketing and retail services for you, the artist, and essentially, they are the tools to help you manage your direct-to-fan strategy.

If you’re serious about your music career, you should definitely use these direct-to-fan platforms to connect and monetize your relationship with your fans.

 

Synchronization License Royalties: How to Get Paid for Having Your Music On Movies or Shows

Synchronization license royalties are royalties generated from the “distribution” of copyrighted music. When a song is used as the soundtrack for a TV show, film, commercial, video game, presentation, or YouTube video, a fee is owed to the songwriter. 

A synchronization license, which is also called a synch license, is a one-time license that is made to you, the songwriter, to use music in the timed synchronization with visual images (for example, a song in a movie, TV show, commercial, video game, etc.).

So in other words, you, the artist, can sell the rights of your songs to a film studio, tv studio, production company, ad agency, or video game companies to be used with a pictures or video. A classic example is a song in a movie, where the song is synched with the action on the screen.

The fees for synch licenses are really all over the board, and they vary with the usage and the importance of the song. An example of the lowest end would be a 15 second background use of an unknown song in a television show. A high-end example would be an on-camera, full-length performance of a well-known popular song in a major studio’s high-budget film.

Sometimes, the money you can make off these licenses can get even higher if you’re lucky enough to get your song synched with a tv commercial. Overall, the range can be from a few hundred dollars to hundreds of thousands of dollars.

In order to give you a little bit more specific detail on how much you can earn from synch licenses, I will give you an overview of how much you can make on the following platforms:

In motion pictures, synch licenses for a major studio film can be anywhere from $15,000 to $100,000. In low-budget, independent films, the money you can make is usually much lower and can be anywhere from a couple of hundred dollars to $2,000 dollars.

From television synch licenses you can get anywhere from $10,000 to $50,000. Commercials can get you anywhere from $50,000 to $200,000. And lastly, having your song featured in a video game can typically earn you $8,000 to $10,000. 

There’s a lot of ways you can get your song featured on any of these platforms. Typically, the studios find you on their own. However, any show that uses music has a music supervisor whose role is to find and license music for the show.

This is good news for you! Because many music supervisors are eager to find and debut new songs on their shows.

The best proactive thing you can do is go on www.MusicRegistery.com and grab a copy of the Film & Television Music Guide which has a a complete guide of registered music supervisors.

 

How to Make Money Selling Merchandise

Selling merchandise at a show is probably one of the biggest sources of revenue that an artist can have. The staples of CD’s, shirts, and stickers have become even more important as income from performing has gradually dropped. 

In today’s world, there’s almost a necessity to search and reach out for other sources of income as an artist. For bigger artists, their brand seems to take over everything. They become this icon with corporate sponsorships making large portions of their income. For the rest of the world, selling merchandise can be one of the best ways to make money.

I have some suggestions on how you can increase your income by selling your merchandise at shows:

1. Be original - your merchandise is a direct representation of you as an artist.

You should be on the lookout for original and authentic ways you connect with your fans and tie that in with your merchandise. For example, if a part of the lyrics of your song is catching on between your fans, use that line in your clothing line. 

Like social media or any other hands-on interactive experience, your fans want to support you and they want to know every aspect of you as a person and an artist.

So you should be involved with the creative process of your merchandising yourself. Your merchandise should be a combination of what you represent as an artist and what your fan base tends to prefer. Since you’re an artist, be creative!

2. Talk and connect to your fans on a deeper level when you’re selling merchandise.

Fans who buy your merchandise will become more loyal fans which creates a deeper connection with your fans. The traditional types of merchandise are t-shirts, stickers, buttons, posters, hats, and hoodies.

Tying in with the last point, I would recommend being original and coming up with other products you can sell to your fans, such as bracelets, shot glasses, dog tags, etc. I’ll provide some links of some websites that can help you create original merchandise for your fans.

3. Lastly, get the best price for your merchandise.

You should always take time to compare pricing from companies when you’re shopping around for merchandise. Consider the quality, minimum amounts ordered, and additional costs that might not reflect the quote (such as screen charges, and shipping). A good online search is great for this. Also, always ask for a better price. Most companies want your business and can work with you on your budget. If you find a better price elsewhere, they’ll often meet it or throw in some incentives.

You should definitely implement selling merchandise in your income plan as an artist. CafePress.com and BigCartel.com are two great websites you can use to create merchandise for your fans. You should always make sure that your approach to merchandise is thoughtful, makes sense for your music, and makes sense for your budget.

It’s definitely worth investing into but it should be done the right way!

 

Streaming Services: Get Paid When Your Music Gets Streamed

Streaming services are currently the hot topic in the music industry. Streaming-on-demand is an interactive service meaning you can listen to an songs in the service’s database, any time you like and create playlists. However, you’re not allowed to copy; you’re only allowed to listen.

Examples of streaming services are Spotify, Apple Music, Pandora, Amazon Prime Music, and Google Play Music among many others.

The streams can be free to the consumer (which usually means there’s advertisements all over the music) or they can be subscription, meaning the user pays a typical monthly fee of $10 per month to get to listen to the music without the ads. Either way, you, as an artist, should get every time your music get streamed. 

I personally believe that streaming is a huge part of the future. If people pay for subscriptions, then the market potential is huge. 

So how do you get your music on these streaming services? The best way is to use an online music distributor we already discussed in the previous lecture like TuneCore and CDBaby which will distribute your music to all of the online streaming platforms.

 

YouTube Channel: How to Make Money with Your Music on YouTube

These days it's more important than ever to have your music available on YouTube.

First and foremost, you can use YouTube to grow your audience. To be able to make money from YouTube, you need to sign up for a YouTube channel. Then you need to apply to be a YouTube partner which will allow you to get paid for ads placed on your videos. 

Even though YouTube isn’t the best way to make money for your music, having a YouTube channel is a great way spread your music and connect personally with your fans. At the same time, if your channel grows, you have potential to make good money from the ad revenue. 

When you start your YouTube channel, make sure you have a consistent voice and branding throughout all of your videos. 

While uploading videos is great — the best way to have success with your YouTube channel is connecting with your fans and creating a loyal fan base who will be passionate to talk about you and tell their other friends about you.

You can do this by making vlogs or any other personal videos that you think your fans will enjoy. Also, encourage your fans to produce their own versions of your song to get more coverage for your songs. Always encourage covers of your song and be supportive of your fans no matter what. 

There’s 3 ways you can use YouTube’s platform to grow your audience and even make money for your music.

First, you can use YouTube’s Content ID System.

There are literally billions of videos on YouTube, with more uploaded every second. Locating your performances can be like finding a few needles in a massive digital haystack. To make the search a little easier, YouTube uses a detection system called Content ID.

Content ID makes digital fingerprints of your songs on YouTube. YouTube searches for your music in videos uploaded by you or anyone else. When a match is detected, they send notices to all of the copyright owners they know about — which are typically record labels, music publishers, or their agents.

The copyright owners then have a choice of allowing YouTube to place ads on the video in exchange for part of the ad revenue, or let YouTUbe display the video without ads, or tell YouTube to remove the video.

Second, the most effective way for you to take advantage of Content ID and collect ad revenue is to work with a YouTube Partner service such as AdRev, Exploration, ONErpm or Songtrust.

A YouTube Partner service takes the sound recordings that you give them and submits them to YouTube for Content ID. They will then place claims on videos that use your music, and send you usage statistics as well as your share of the ad revenue.

Your partner service can also identify covers of your music, even when the video doesn't include a fingerprinted sound recording. They'll do keyword searches to find new versions of your music, and report them to YouTube on your behalf.

Most YouTube Partner services offer free registration. In exchange for their services, most take a portion of the ad revenue, typically between 15% and 30%. There are no requirements other than that you own the rights to the music and have a clean history with YouTube.

Third, you can get paid performance royalties for having your music on YouTube.

For example, the Performing Rights Organization, ASCAP, pays their members their respective performance royalties. As we already discussed, ASCAP is one of the main Performing Rights Organization you can sign up with. Visit www.ascap.com to join their service.

Once you’ve joined ASCAP and joined a YouTube Partner service, you're in a good position to earn ad revenue from YouTube video plays. You've also taken an essential step toward earning performance royalties.

Here's how it works: once YouTube has received claims on videos that use ASCAP music, they send ASCAP quarterly performance data about those videos. ASCAP then automatically processes this data with their matching system, and then they pay you royalties.

For music that doesn't match automatically, ASCAP manually matches and pays royalties for those songs.

Two important things to keep in mind with these performance royalties: YouTube only includes views from the United States. So that means that the number of views on your play counter may be higher than the data that ASCAP pays over since the counter can include views from around the world. Also, YouTube’s CONTENT ID system doesn’t detect any music that is shorter than 30 seconds. However, your YouTube Partner service can still find these short songs and submit claims manually.

So if you’re looking to make money from YouTube, make sure you follow through with all of the uses of YouTube I pointed out in this lecture to help you grow your fan base and make money from your music.

 

Sampling: How to Get Paid When Another Artist Samples Your Song

If someone wants to use a drumbeat, sound bite, or any other portion of a song you have written and recorded, they must first get your permission and then also pay you royalties for its use. This is known as getting a license for sampling. 

Both copyright holders, the owner of the master recording and the songwriter, are owed money when another artist uses a sample from a one of your songs.

If you use samples in your commercially released music, you should get legal permission. The process of getting permission from the owners of the sampled music is known as "sample clearance." If you do not get proper permission from the person who owns the song, this could lead to lawsuits or not being able to distribute your music to the public.

In general, sample clearance is required only if you plan to make copies of your music and distribute the copies to the public.

Sample clearance is generally not required if you are just using the sampled music at home or if you are using the sample in live shows. This is because, usually, you are not making copies and the owner of the venue pays the blanket license fees to performing rights organizations such as BMI.

Even if you plan to distribute copies of your sampled music, sample clearance may not be required if you meet one of the following: One, an average listener would not notice the similarities between your end product and the sample, or two, your use of the sample falls under the "fair use" doctrine. We won’t go into depth about the fair use doctrine since it’s a very complicated legal issue.

If you have any serious questions about this, please post it on the discussion board and we can further discuss the issue. 

So if you find another artist sampling your song, and if their music has been commercially released and they’re making a profit from the release, then you’re entitled to money from that artist for sampling your music. Just make sure aware of this just in case you find yourself in this situation.

We’ll talk further in depth about sample clearances later in this course.

 

Crowd Funding: How to Raise Money from Your Fans

Crowdfunding can be a great way to generate income for your music career. A well-executed crowdfunding campaign can help you raise enough money to pay for the cost of producing and marketing your album. 

Kickstarter is currently the leader in crowdfunding for music artists with nearly $120 million going to successful music projects. IndieGoGo is a close second and, unlike Kickstarter, allows creators to keep the money even if a project is unsuccessful. 

The most successful music crowdfunding project was Amanda Palmer’s project which raised $1.2 million for her album. But there have been over 18,000 successful Kickstarter music projects (most of which funded albums) ranging from $1,000 to $1.2 million.

Crowdfunding has been a great way for independent artists to bankroll their albums and tours without a label or investor.

The newest of the crowdfunding bunch is Patreon. Patreon launched in 2013 and is now paying out over $1 million dollars per month to creators. 

Music artists on Patreon ask their fans for continued financial support. Most patrons pledge $1 to $5 dollars per piece of content released. This content can be in the form of a song, music video, blog post, podcast, or whatever you’d like.

Some artists have got pledges of upwards of $1,000 per piece of content because some fans can afford it and want to support the artist. The Patreon model embraces the new philosophy of asking your fans for support, not forcing them to buy. 

Because album sales have been rather week in the last decade, this is the frontier for independent music artists to be successful with raising money for their music projects — especially if you have a highly engaged fanbase.

 

Online Concerts: How to Host & Perform to Your Fans Online

Online concerts are a great opportunity for musicians to perform for all of their fans at once, connect in a unique and creative way with fans, and open up performances to ticket purchasers everywhere who otherwise may not be able to attend a concert.

Whether in combination with an event you’re already performing at a local venue, or as a special online-only concert, using this exciting new medium can be a great way to expand your audience and earn more as a musician.

A music artist can only be so many places at once. Touring can be extremely expensive.  And with conventional performance you can only reach so many fans at once. 

Given the physical constraints and high overhead of traditional touring, it can be hard on an artist to maintain consistent touring and regularly perform for all of their fans around the world. And given the unlimited access that being online provides, it’s only natural that virtual concerts would begin to become more of a reality.

Think about it. Where are your fans? Really, where are your fans, friends, and family for that matter? Everywhere! This is why we connect through Facebook, Twitter, Youtube, and email. 

Of course, like all aspects of being creative, creating an online concert is your chance to express yourself, connect, and share your creativity with the people that appreciate you and your music the most.

I would recommend getting creative, getting personal, and expanding your potential by trying out a live performance to your online fans. Look at this as an opportunity to bring all of your fans who appreciate your music to one place, all at the same time, all under the same virtual roof, and all sharing the same experience.

Three of the most important online concert platforms you can use are ConcertWindow.com, StageIt.com, and Gigee.com.

You’re an artist. Be creative and connect to your fans in more ways that one.

 

Sponsorships: How to Get Endorsed or Sponsored by Brands

Sponsorship spending on music tours, venues and festivals is expected to total $1.4 billion in 2015, up 4.8 percent from 2014.

Spending on sponsorships is largely driven by two factors: continued interest in national music festivals and a growing appetite for regional music festivals, some of which have secured significant deals with national brands.

As a music lawyer, I frequently get asked from music artists, “How do I get sponsorship?” or “How do I get an endorsement?”

The best to try to succeed with sponsorships is to change our mindset with sponsorships.

Sponsors don’t really care about what they can do for you. In reality, they care about what you can do for them – or rather, what you can do together. 

So from the beginning, you have to switch the mentality from “What can I gain from this?” to “What can we gain from this relationship?”

Here’s a couple of suggestions:

1. Ask, straight up. 

The saying is, “the answer is always no until you ask. In the music industry, there are 3 kinds of people: those who make things happen, those who wait for things to happen, and those who wonder “what the hell just happened?” Don’t just wait for an opportunity. Create it by initiating contact, networking, or asking the right questions that will get you a lead or information on how to get a sponsor. Don’t be afraid in emailing, calling, or scheduling an appointment to do an in-person presentation on why they should sponsor you. 

2. Don’t ask for too much, too soon.

When you first write to someone, you’ll find that it’s easier to get 15 minutes of their time rather than getting $15,000. Begin by asking for small things where you can also provide them with some kind of value first.

In other words, give them a specific, compelling reason to return your call that can build the relationship so eventually you can both feel comfortable discussing larger proposals.

3. Don’t talk too much about yourself.

90% of your communication with your sponsors should be about their company, brand, or organization, and what you can bring to the partnership. Before you begin pitching ideas to the sponsors, get them to talk about their goals, their audience, and what they want to accomplish.

If your ideas are based on their goals, you’ll be much more effective than if you just sent a generic proposal asking for money in exchange for logo placement.

4. And lastly, try untapped industries.

Getting sponsors leads you to find other sponsors. Typically, if the sponsor you’re working with is happy, they’ll refer you to other companies to you. To get your start, try companies with less competition.

For example, try local businesses that you already frequent and see if they’d be willing to do some cross-promotional marketing. Also, smaller music instrument companies are often less competetive compared to the big brands you see at Guitar Center. 

Remember, one of the top reasons why your request for sponsorship can get rejected is because the sponsors don’t know who you are. So, take the time to develop those relationships.

You wouldn’t propose to someone before at least asking for a first date, just as you usually wouldn’t ask someone to risk investing time and money into your career without talking to them first. 

Learn how to pitch your band to entice them. Give them a reason to want more, to hear your story. After that, you can begin talking about a sponsorship.

Be memorable, stand out from the crowd. Know your fans, and don’t be afraid to ask.

 

Print Royalties: How to Get Paid for Your Sheet Music

As the songwriter, you are paid whenever your music is duplicated in print form, including sheet music, lead sheets, fake books, and other ways.

The majority of printed music revenues comes from sheet music. Sheet music is printed music of a single song — the kind you stuff inside your piano bench and folios which are collections of songs, such as the “Greatest Hits of the 90’s” or “The Complete Britney Spears Collection.”

Print royalties are earned when a composition is transcribed onto sheet paper, printed in songbooks, and published for the general population to purchase and play your music at home on their personal instruments for fun.

Print royalties are really only applicable to you if you have a Top 40 radio hit – think pre-teens taking piano lessons and buying Taylor Swift sheet music online, or purchasing a Guns N’ Roses hit on sheet music to sight-read on your guitar.

As the name suggests, this royalty, generated from the Public Display copyright, has to do with printed materials—lyrics, sheet music, tablature, etc.  

When music publishers create sheet music, or a company prints t-shirts with lyrics on them, they are required to pay a print royalty. This is done as a one-to-one negotiation meaning that every print royalty is negotiated separately. If we’re talking sheet music, the royalty is usually 15% of retail price.

Print royalties are paid by printers to the song owner that granted the print music license (which are usually the music publisher). The print licenses are usually non-exclusive and limited to three to five years in duration. 

While print royalties are not as common as some other ways you can make money from music, you should still familiarize yourself with the potential that print royalties offer.

 

“Follow to Download” Tactic: Exchange of Song Downloads for Email Addresses

You’re an artist and you want to let people download your music. But you also need followers on Soundcloud, Twitter, YouTube, and Instagram. Getting people to follow you on these social media websites is important.

You may have already been confronted with these “Follow to Download” platforms like Hypeddit.com, or ToneDen or Tunebula. With these platforms, if a fan wants to download your song, they have to first follow you on your desired social media accounts before they can download the song from you.

This has been rampantly used by many music artists in the past couple of years. Even some of the biggest EDM names are using these platforms for their free downloads. 

Building a following on social networks has never been this easy. It’s even good practice to give out some free songs in exchange for downloads.

This is a good strategy that I’ve noticed has worked for many artists. If you’re not utilizing this strategy as part of your social media campaign, you should definitely begin.

Feel free to visit Hypeddit.com, click.dj, ToneDen.io, or Tunebula.com along with many other platforms that offer the follow to download service to grow your social media accounts and increase you fanbase at the same time.

 

How to Use Social Media to Get Fans & Grow as a Music Artist

Using social media as a music artist can be one of the most effective ways to get new fans and grow as a music artist.

Here's how for each social media...

 

Facebook

Share announcement, photos, and videos. Videos have the most leverage right now.

The trick isn’t to get as many people as possible to like your Facebook page; Engagement is key so your fans may be compelled to share and recommend to their friends, potentially turning their friends into your fans as well.

Twitter

Announcements of new releases, gigs, etc. 

Use of hashtags - Don’t overdo it; don’t be annoying.

Instagram

Huge impact on mobile influence. Don’t forget to utilize videos on Instagram.

 

How a Music Lawyer Can Help Boost Your Music Career

Musicians and artists may want to consider using private legal services.  In addition to the general information about hiring a lawyer provided on our website, Volunteer Lawyers for the Arts (National Directory) (link is external)  provides a list of volunteer lawyers programs throughout the country.  

This is provided for informational purposes only, and reference to any specific organizations, attorneys, law firms, corporations, or websites does not constitute the USPTO's endorsement or recommendation.

Lawyers in the music business do much more than just look over contracts and advise artists about the law. 

Some important items to check before a contract is signed include:

  • The contract accurately reflects your understandings of the terms of the contract,
  • The benefits and risks of entering the contract; an analysis of whether the benefits of entering the contract is worth the risks associated with the contract,
  • You are made aware of your responsibilities under the contract and your obligations are adequately explained

An artist is meant to work on his craft while a lawyer makes sure the terms of the contract meet the artist's expectations.

A music lawyer can provide services drafting, reviewing, negotiating, and providing guidance on the following contracts and agreements: 

  • Split Sheets
  • Records & Publishing Contracts
  • Live Performance Agreements
  • Sponsorship & Merchandising Agreements
  • Distribution Contracts
  • Marketing Contracts

Most importantly, a music lawyer helps artists achieve their full potential while minimizing legal distractions.

Lawyers in the music business do much more than just look over contracts and advise artists about the law. They are very involved in organizing deals and shaping artists' business lives.

Music lawyers have evolved into one of the most powerful influencers in the music industry. Music lawyers are involved in all areas of an artists' career.

A music lawyer can come up with a clever concept or business strategy to further an artist's career. Further, a music lawyer helps make the introduction to other powerful influencers in the music industry including agents, business managers, record labels, other DJ's, personal managers, and promoters.

These connections create long-lasting relationships which may ultimately garner you music deals to further your music career. 

Moreover, a music lawyer can provide services reviewing and providing guidance on the following contracts and agreements: 

  • Records & Publishing Contracts
  • Live Performance Agreements
  • Sponsorship & Merchandising Agreements
  • Distribution Contracts
  • Marketing Contracts

As an artist, you need to make sure you are being fairly treated while maximizing your creative potential. It is important that the terms of contracts are fairly negotiated, properly drafted, and reviewed to ensure the contract meets your interests. At Mollaei Law, we provide the necessary legal advice and service to be able to succeed in your creative field without any legal worries. 


What are some questions to ask your potential music lawyer?

If you are considering hiring a music lawyer, you should ask these questions before you retain a lawyer:

  • Do you have expertise in the music business? 
  • What do you charge?
  • Do you have a written fee agreement? Have the music lawyer provide you a copy so you can review it.
  • You should ask the music lawyer explain to you in detail the fee agreement so that you are able to understand it.
  • Ask for references of artists at your level and check them out and learn from them. 

 

Does Your Cover Song Violate Copyright Law?

The problem with covering songs on Youtube is that you may be covering copyrighted music to make your cover song.

However, like most things in life, executives and big corporations start paying attention to copyright infringement when large sums of money are being made. That means that if your cover songs ever goes viral on YouTube, then record companies may file infringement suits against you.

Of course, you have to do everything to avoid a lawsuit. 

With millions of content being uploaded to YouTube every day, YouTube doesn’t necessarily have the time to sort through each of the videos and every take-down notice. 

In YouTube’s FAQ section, it says, “Recording a cover version of your favorite song does not necessarily give you the rights to upload that recording to YouTube. You may need permission from the owner of the underlying music in order to upload the recording legally.”

In 2012, YouTube made deals with various music publishers that allowed creators to keep their covers while publishers took upwards of 50 percent of the revenue generated from them.

Unfortunately, we’re still not sure which publishers officially signed on. This means that even though YouTube has made it legal to upload a great deal of cover songs, we have no clue what those cover songs actually are.

So are you likely to get used to having your cover song on YouTube? Most likely not. As an individual artist, the worst case scenario is having your video pulled down by YouTube, who is acting in response to a copyright notice they may have received. 

Of course, you should keep YouTube’s three strike policy in mind. According to YouTube, if you receive three strikes, then you YouTube account can be terminated. Even worse, at the time of termination, all of your other videos will be removed and you will be permanently blocked from creating new accounts or accessing YouTube’s community features in the future. 

So three strikes is a pretty serious issue. If you want to avoid getting permanently banned from YouTube, you can look into what songs are covered in YouTube 2012 agreement with music rights representatives, the National Music Publishers Association and the Harry Fox Agency. 

Also, if you’re part of a YouTube multi-channel network, ask their legal team to provide you with information about any licensing deals they may have made with publishers.

Of course, the best option is to contact whoever owns the rights to a song you want to cover and simply ask them for permission to cover their song.

 

What are the Common Music Licenses?

License means to give permission. A licensor grants a licensee the permission to use a song.

By giving someone a license, you are giving him permission to use your song. Once the song has been recorded and publicly distributed, however, compulsory licensing kicks in and everyone who wants to cover (record) the song can do so without your specific permission.

They are required by law to pay you a statutory royalty rate, however, as well as notify you that they're going to release it, and send you monthly royalty statements. They are NOT allowed to make any changes to the words or melody or change the "fundamental character of the song" without the copyright owner's approval. If the song is changed, it is considered a "derivative work."

Record companies rarely use compulsory licensing because they don't want to have to provide monthly royalty statements. Instead, they go to the copyright owner and get a direct license so they can negotiate the terms more freely.

 

Types of Rights and Royalties

Licenses and their corresponding royalties fall into four general categories:

1. Mechanical Licenses and Royalties

A mechanical license refers to permissions granted to mechanically reproduce music onto some type of media (e.g., cassette tape, CD, etc.) for public distribution.

The music publisher grants permission for the musical composition to be reproduced. The mechanical royalty is paid to the recording artist, songwriter, and publisher based on the number of recordings sold.

2. Performance Rights and Royalties  

A performance-rights license allows music to be performed live or broadcast. These licenses typically come in the form of a "blanket license," which gives the licensee the right to play a particular PRO's entire collection in exchange for a set fee. Licenses for use of individual recordings are also available.

All-talk radio stations, for example, wouldn't have the need for a blanket license to play the PRO's entire collection. The performance royalty is paid to the songwriter and publisher when a song is performed live or on the radio.

3. Synchronization Rights and Royalties

A synchronization license is needed for a song to be reproduced onto a television program, film, video, commercial, radio, or even an 800 number phone message. It is called this because you are "synchronizing" the composition, as it is performed on the audio recording, to a film, TV commercial, or spoken voice-over.

If a specific recorded version of a composition is used, you must also get permission from the record company in the form of a "master use" license. The synchronization royalty is paid to songwriters and publishers for use of a song used as background music for a movie, TV show, or commercial.

4. Print Rights and Royalties

 This is a royalty paid to songwriters and publishers based on sales of printed sheet music.

 

To make things a bit more complicated, there are different kinds of licenses for different uses.

The largest categories are performance/communication/publication (live public performance of the music or publicly playing the recording, broadcasting, narrowcasting, streaming, etc.); reproduction (making copies for public distribution of the music – sheet or electronic, or of the music and recording – vinyl, CD, digital files for download); and synchronization (a special type of reproduction that matches the recorded music to video).

There are variations depending on the medium (analog, digital, online).

There are obscure terms (mechanical rights, master rights, and neighbouring rights, for example), a multitude of collectives for administering various combinations of rights, uses and distribution media, and tariffs for some of those combinations that are set by the Copyright Board, while other combinations have to be directly negotiated with the copyright owners.

Copyright Licenses

By giving someone a license, you are giving him permission to use your song. Once the song has been recorded and publicly distributed, however, compulsory licensing kicks in and everyone who wants to cover (record) the song can do so without your specific permission.

They are required by law to pay you a statutory royalty rate, however, as well as notify you that they're going to release it, and send you monthly royalty statements. They are NOT allowed to make any changes to the words or melody or change the "fundamental character of the song" without the copyright owner's approval.

If the song is changed, it is considered a "derivative work." Record companies rarely use compulsory licensing because they don't want to have to provide monthly royalty statements. Instead, they go to the copyright owner and get a direct license so they can negotiate the terms more freely.

Transfer of Copyrights

In most music publishing agreements, there is a requirement that the songwriter assign the copyright of the written song to the publisher. This is known as a "transfer of copyright," or simply "assignment."

This, in effect, transfers ownership of the song to the publisher in exchange for the payment to the songwriter of royalties in amounts and time intervals agreed upon in the publishing contract. Typically, song copyrights are held by the music publishers, while sound recordings are controlled by the record companies.

 

What are the Different Types of Copyright?

Public Performing Right

The exclusive right of the copyright owner, granted by the U.S. Copyright Law, to authorize the performance or transmission of the work in public.

Public Performance License

BMI issues licenses on behalf of the copyright owner or his agent granting the right to perform the work in, or transmit the work to, the public.

Reproduction Right

The exclusive right of the copyright owner, granted by the Copyright Act, to authorize the reproduction of a musical work as in a record, cassette or CD.

Mechanical License

Harry Fox Agency, Inc. issues licenses on behalf of the copyright owner or his agent, usually to a record company, granting the record company the right to reproduce and distribute a specific composition at an agreed upon fee per unit manufactured and sold.

Synchronization License

Music Publishers issue licenses as copyright owner or his agent, usually to a producer, granting the right to synchronize the musical composition in timed relation with audio-visual images on film or videotape.

Publisher information is available from our online repertoire search. If you need further assistance in locating complete publisher information, please contact our Research Department.

You can also call the BMI repertoire information hotline at 1-800-800-9313 where you can request information on 3 song titles per call.

 

Works Made for Hire

If someone hires me to write a song for them, who owns the copyright and how long does it run?"

For such “works made for hire,” as they are called, the employer is considered the author, and the copyright, which the employer owns, runs for either 95 years from the time the work was first published or 120 years from the time you created it, whichever is shorter. (That is the same copyright term for an anonymous or pseudonymous work.)

In order for the work to be considered “made for hire,” it must be prepared by an employee in the scope of his employment under a traditional employee-employer relationship, or else it must be commissioned as one of several special categories of works (such as part of a motion picture or other audio/visual work) with there being a written agreement between the parties that it is to be for hire.

 

Creative Commons: An Alternative Way to Copyright

Creative Commons is an alternative way you can copyright your work which grants copyright protection for some rights instead of all rights being reserved. This allows other artists to use your work for certain purposes without getting your permission from you first.

Creative Commons allows people to use your music without dealing with legal repercussions. A Creative Commons license gives the public permission to share and use your creative work on conditions of your choice.

CC licenses let you change your copyright terms from the default "all rights reserved" protection to "some rights reserved" which as supports creativity, sharing, and innovation. Further, all Creative Commons licenses require at least attribution to the copyright owner. 

 

There are 6 types of Creative Commons licenses:

1. CC Attribution - Allows for all copying, modification, and redistribution, provided that the original author is attributed.

2. CC Attribution ShareAlike - The same conditions as CC Attribution above apply, except that all derivative work must be licensed the same way. This ensures that all resulting work remains free.

3. CC Attribution NoDerivs - Redistribution is allowed, under the condition that attribution is given and no modifications are made.

4. CC Attribution NonCommercial - Everything is allowed with attribution, provided that it is not done commercially.

5. CC Attribution NonCommercial ShareAlike - The same as above, but derivative work must be under the same license.

6. CC Attribution NonCommercial NoDerivs - Redistribution is allowed for noncommercial use and without any modification.

For example, you might allow your song to be used in a non-commercial product where is no financial profit without forcing the licensee to get permission from you, but still reserve the right to collect a royalty if the product is a money-maker.

For more information regarding Creative Commons, please visit http://creativecommons.org/about

 

Assignment: Transfer of Copyright

I wanted to quickly touch upon on assignments. An assignment is when you transfer a copyright.

How is the copyright assigned?

By written instrument to the party to whom you are making the assignment. You cannot validly make an oral assignment of copyright.

In most music publishing agreements, there is a requirement that the songwriter assign the copyright of the written song to the publisher. This is known as a "transfer of copyright," or simply "assignment".

This, in effect, transfers ownership of the song to the publisher in exchange for the payment to the songwriter of royalties in amounts and time intervals agreed upon in the publishing contract.

Typically, song copyrights are held by the music publishers, while sound recordings are controlled by the record companies.

 

What is the Difference Between a Performing Right and a Mechanical Right?

Both the performing right and the mechanical right are granted to a copyright owner by law as two of the distinct parts of a copyright.

The public performing right entitles the copyright owner to receive royalties when his song is sung or played, recorded or live, on radio and television, as well as through other surveyed media such as the Internet, live concerts and programmed music services.

Such royalties go to both the composer and publisher through their performing rights organization, which grants licenses to perform the music in their respective repertoires to thousands of users of music in public places, such as broadcasting stations, hotels, clubs, colleges, restaurants, stores, etc. More details about the responsibilities of music users can be found in BMI’s brochure, “The Legal Aspects of Performing Copyrighted Music.”

The “mechanical” right is really the right to reproduce a piece of music onto records or tapes and certain digital media. (Non-mechanical reproduction includes such things as making sheet music or printing songbooks, for which royalties are paid by the publisher to the composer.)

When reproduction of music is made onto a soundtrack of a film or TV show, the reproduction is called “synchronization,” and the license that the TV or film producer needs to obtain is called a synchronization or “synch” license.

Mechanical royalties and synchronization fees are paid by record companies, digital media providers and film and TV producers directly to the copyright owner, usually the publisher. The Harry Fox Agency (601 West 26th Street, Suite 500, New York, New York 10001, (212) 834 0100, harryfox.com) represents over 30,000 U.S. publishers in granting mechanical licenses and collecting fees for them from the record companies and digital media providers who need them.

 

When Do You Need Permission to Sample Another Artist’s Music?

It seems most music these days, especially house music, is sampled from other songs.

Is Sampling Illegal?

Yes, contrary to popular belief and practice, sampling of an original copyrighted song without permission of the copyright’s owner is illegal copyright infringement.

Unauthorized sampling actually violates two potential legal rights.

First, the instant you sample a portion of someone’s song (no matter how small), it constitutes a violation of the copyright in song itself - the © symbol - which is owned by the song writer or the music publisher.

Second, sampling violates the sound recording copyright - the symbol - which is usually owned by the record company or recording artist. Thus, sampling without prior permission subjects the illegal copier to a copyright infringement in federal court by the original author (or publisher) and by the record company. 

If you use samples in your commercially released music, you should get legal permission. 

In general, sample clearance is required only if you plan to make copies of your music and distribute the copies to the public.

 

Sample Clearance is Generally NOT Required If...

  • You are just using the sampled music at home.
  • You are using the sample in live shows. 
  • You plan to distribute copies to the public but meet one of the following criteria: 
    • 1. An average listener would not notice the similarities between your end product and the sample, or
    • 2. Your use of the sample falls under the ”Fair Use” doctrine. 

Fair use - your use is for a limited purpose, such as for educational use in a classroom or to comment upon, criticize, or parody the work being sampled.

 

Fair Use: Defense to Copyright Infringement

Factors in determining Fair Use. Generally, when reviewing Fair Use, courts look for 3 things:

  • You did not take a substantial amount of the original work.
  • You transformed the material in some way.
  • You did not cause significant financial harm to the copyright owner.

There is no bright line. You can use the above arguments in order to defend yourself against a lawsuit for sampling without permission.

The problem: You won't know for sure which way the judge will rule. And, most likely you'll have to hire an attorney to represent you in court.

 

If You Use an Uncleared Sample, You Can Lower Your Risk Be...

  • • making it unrecognizable
  • • not using the sample as the groove or hook
  • • burying it in the mix, and
  • • not using the title of the source music in the title of your song.

Don't believe the widespread myth that "less than two seconds is fair use." It's not true.

 

Fair Use: The 4 Factors the Judge Looks For

  • What is the purpose or context of this work? Educational, profit vs. nonprofit? criticism?
  • What is the nature of this work? Published or non-published? Fiction vs. nonfiction?
  • How much was taken? A little bit or whole lot? What are you copying?
  • What is the effect on the value of the original work? Are you just a substitute for the original or not affecting the original?

Sample Clearance is Generally Not Required If...

You are using the sample in live shows. This is because, you are not making copies and the owner of the venue pays the blank license fees to Performing Rights Organizations.

 

How to Get Sample Clearance?

Simply call the performance rights organizations such as ASCAP, BMI, and SESAC to determine the owner(s) of any song(s) you want to sample. 

Once you get the address of the copyright owner(s), write or fax over your proposal to the owners or their licensing agent. If this does not work, try contacting Warner Bros. Publications or Hal Leonard, Inc. They are owners or agents of many copyrights of different publishing companies and are good at responding to inquires. 

When negotiating a "sampling license," remember you must secure two licenses: (1) a mechanical license from the record company (which owns the sound recording); and (2) a licence from the writer/publisher (which owns the underlying song).

The best way to locate a Music Publisher is through Performing Rights Organizations by visiting their websites. Look for the "song indexing" section.

Finding the Record Company that currently releases the music can be tricky. Best advise is to use a Clearance Expert who will guide you through the clearance process. 

What to do if you can’t get Sample Clearances:

  • Recreate the sample by re-recording the sampled section. Instead of sampling the original recording, you play the parts yourself and re-record the music to sound exactly like the original. 
  • Find Sample-friendly Copyright Owners. Some bands seek to promote their music for sampling. 
  • Contact the Artist or Songwriter Directly

While there are no standard fees to get sample clearances, the Music Publisher usually wants:

  • An up-front "advance" payment (which could be anywhere between $250 and $5,000), and
  • A percentage of the song income (usually between 15% and 50%).


The owner of the Master Recording will want:

  • An up-front payment (usually at least $1,000), and
  • A "rollover." A rollover is a payment that's made when a certain number of copies have been sold.


Source: http://www.nolo.com/legal-encyclopedia/how-obtain-sample-clearance-29725.html

 

If I Only Use 3 Notes, is that Copyright Infringement?

There are rumors that sampling only four notes is not copyright infringement because it is protected as "fair use". This notion of reducing copyright infringement down to the number of notes uses, however, is simply wrong.

If you sample a single note, beat, or line from a sound recording without permission, that constitutes copyright infringement. Under current US copyright law, unauthorized "sampling" - no matter how minimal or seemingly innocuous- is usually not considered "fair use". 

Under US Copyright law, the true test for copyright infringement is not the number of notes sampled, but whether the sample is "substantially similar" to the original work. The other main questions is whether it should qualify as "fair use".

In short, if you engage in unauthorized sampling and get sued by the owners, don’t expect to prevail in court on a "fair use" defense if you use the songs commercially for your own private benefit. 

 

What are the Penalties for Copyright Infringement?

For each work that the defendant is found to have infringed, the plaintiff copyright owner is entitled to receive its choice of:

a) the actual damages suffered plus the infringer’s profits that were attributable to the infringement

b) “statutory damages” in an amount between $750 and $30,000 (or up to $150,000 if willful infringement is found), as the court considers just. The U.S. Supreme Court has ruled that the amount of statutory damages is to be decided by a jury.

 

If you sample without permission, not only are you violating US Copyright laws, you may also be in violation of your own recording contract.

If you are signed to a major label, most recording contracts contain several provisions called "Warranties," "Representations" and "Indemnification," in which you promise all the material on your album is original and agreeing that if your label are sued for copyright infringement, you agree to reimburse them for all their court costs, legal expenses and attorneys fees. 

Similar "warranties" and "indemnification" clauses exist in the distribution agreements between your record company and the retail stores. Thus, when you violate a copyright by sampling it without consent, all the warranties point back to you as the artist.

Therefore, if you sample illegally, be prepared to possibly shell out substantial sums of monies to not only the copyright owners, but also possibly to your label and their distributors and retail outlets.

In addition to these costly legal problems, the penalties for copyright infringement is harsh. If you sample somebody’s song without obtain proper clearances, you may be liable to the author for "statutory damages," which generally range from $500 to $20,000 for a single act of copyright infringement.

If the copyright owner proves you willfully infringed their music, you can be liable for damages up to $100,000. The copyright owner also has the right to obtain an injunction against any further infringements, forcing you to cease your further violation of the copyright owner’s rights.

There is also a destruction procedure, which forces the infringer to recall all the illegal copies of the song in the albums and destroy them.

Finally, you may even face criminal charges from the U.S. Attorney’s Office if you engage in intentional copyright infringement. Therefore, before any artist tries to sample somebody’s copyrighted material to create a new song, no matter how small a portion of the song is used, they should secure the right to do so from the owners of the pre-existing copyrighted owners - the writers, publishers and/or the record companies. 

 

Digital Distribution Costs

Digital Distribution Percentages Based on $.99

Using iTunes, you’ll receive $.69 since iTunes takes 30% per download.
Using TuneCore, you’ll receive $.69 since you keep 100% of distribution sales revenue. 
Using CD Baby, you’ll receive $.63 since they take a 9% cut from every digital sale.

 

Wrap-up

Mollaei Law is a law firm specializing in music law serving music artists. 

Sam Mollaei, Esq., music lawyer, can be reached by email sam@mollaeilaw.com