When a songwriter transfers a song copyright to a music publisher, the agreement will list out the various licensing and income rights associated with that copyright. It is necessary for the publisher to have these rights so they can legally represent the songs in the marketplace. Most agreements will state this as the “Sale of Compositions” which includes:
Ownership of the songs
Reproduction and distribution rights:
$$$: Physical and streaming mechanical income
- $$$: TV/Film/Ad/Video Game income
- $$$: Public performance income from ASCAP, BMI, SESAC, etc.
- $$$: Sheet music, lyric re-print income
Grand / Dramatization rights
- $$$: Income from creating Broadway shows, stage plays and film scripts based on the songs.
Administration and collection rights
- $$$: So publisher can license and collect all rights above.
New media licensing rights
- $$$: So publisher can license for current and future tech advancements.
Rights to make new musical arrangements
- $$$: So publisher can create new licensed uses.
Rights to make lyric translations
- $$$: So publisher can license non-English speaking artist cover recordings.
Notice: Some publishing agreements may include assigning the copyright to the sound recordings an artist owns. This agreement must state a purchase price for the recordings and/or sign a separate agreement called a “Master Purchase Agreement.” Otherwise, the publisher can obtain the rights to pitch, license and collect for the recordings – but not actually own the recording copyright.
The advance a publisher gives to a songwriter is against future royalties earned on the “writer share” of income. This means if the publisher gives a $15,000 advance, the songs must earn $30,000 for the writer to re-coup that $15,000. All publishing income is split 50/50 between writers and publishers and the writer advance is always recouped from the “writer share.”
The range of publishing advances is varied. For example, some “baby writers” in Nashville get signed to a $15,000 full-service deal – while some get an “advance” of $1.00. I’ve also worked with clients where “baby artists” were offered $30,000 to $150,000.
One time, a friend of mine was in a band that had a No. 1 radio hit, and the song created a bidding war between major publishers and major record labels. The band finally signed with a publisher for a $500,000 advance – and they recouped that in a short period of time. So the advance is pretty much tied to the emotion and confidence the publisher is feeling at the time.
The timing of these payments is usually split into monthly installments, sometimes referred to as the writer “draw.” So if you’re the “baby writer” with a $15,000 advance, your monthly songwriter “salary” is $1,250 a month before taxes. Of course, this isn’t really a salary, because the writer is an independent contractor and the publisher will issue a Form 1099 Misc each tax year. Important to note: the songwriter is not an employee of the publisher.
The payments of these advances are often based on the writer successfully writing and delivering songs to the publisher. This is typically tied to a provision in the deal called the “Minimum Delivery Commitment” or sometimes, the “Minimum Commitment” or even worse, the “Minimum Delivery Release Commitment.” This “Minimum Commitment” provision is essentially a quota on the songwriter. We’ll discuss this prickly topic in Part III.
Notice: Advances should always be “recoupable” and “non-returnable.” That means if the writer was unable to recoup their advance, they don’t have to pay it back to the publisher “out-of-pocket.” The advance isn’t like a loan. If the writer doesn't recoup, the publisher eats the loss. In my opinion, only a malicious agreement would require the writer to pay back the un-recouped balance. It’s the risk of doing business in the music industry. Many a music company has burned through loads of cash because they handed out advances like candy, but were unable to recoup. If a publisher gives an advance, they understand the risk they may not get their money back.
Read the rest of the series here:
- Part I: Full-Service Publishing Agreements
- Part III: “Minimum Commitment” & “Minimum Delivery Release Commitment”
- Part IV: Royalty Splits, Accounting, and Rights Reversal
Benom Plumb is an Assistant Professor of Music Industry Studies at the University of Colorado Denver. He is a veteran music industry professional with over 12 years of experience in music licensing and publishing, including VP of Licensing at Nashville publisher Bluewater Music. He is not an attorney. For more info about Benom, visit his website at www.professorplumbmusic.com.