Join Richard Stim for an in-depth discussion in this video Affiliating with collection organizations, part of Music Law: Managing a Band's Business.
- The two music copyrights, song copyrights and recording copyrights earn money in different ways. In the US, only songwriters, or song owners, not sound recording owners, earn income from over-the-air radio play when the recording is played by an AM or FM station or from concerts and related plays. However, both songwriters and sound recording owners are entitled to payments from play via digital transmission such as Pandora, Spotify, Live365 and Sirius XM radio.
SoundExchange is the company designated to collect these payments and to pay the sound recordng copyright owner, usually your band or record company. Before you band fills out the online SoundExchange paperwork you may want to find out whether SoundExchange has logged any action for your band's recordings by checking their list of unregistered artists. If your band does not appear, there's no immediate rush to register as no money is currently waiting for you.
If your band's name appears or if you just want to sign up complete the online application. You would sign up as a group and register as both a performer and copyright owner, assuming the band owns the copyright. You can sign up using the online application or by filling out a pdf. Either way, the registration is not automatic. It takes a few weeks to confirm acceptance in the SoundExchange program. Affiliating with a performing rights society. Performing rights societies, also known as a PRO or PRS, collect royalties from radio and television stations, nightclubs, websites, and other entities that play songs.
Then, they pay this money to songwriters and music publishers. That is, this money is paid to those who have written or owned songs. As I mentioned in the video about song ownership, your band needs to determine who wrote the songs and who will share in the income from the song copyright. Some bands form music publishing companies for the purpose of distributing the income. If a songwriter doesn't for a music publisher, the songwriter will receive a full share of the performing right society income.
If the songwriter creates a music publisher, the publisher and songwriter divide the PRS income. Your band's initial decision is whether you need a publisher. If not, the writers can simply register as songwriters at a PRS. There are 3 performance rights organizations, BMI, ASCAP, and SESAC, although most bands affiliate with either BMI or ASCAP. A songwriter can affiliate with only one performing rights organization.
It would be helpful if the songwriters in your band all affiliate with the same performing rights organization. Otherwise, it gets confusing if you later form a music publishing company. The registrations can be done online and the fees vary. You can join BMI as a songwriter for free. If your band joins BMI as a publisher, there is a one-time fee of $250. There is a one-time $50 fee to join ASCAP as either a songwriter or music publisher.
As you will see, forming a music publisher is fairly simple. It begins with a PRS affiliation. Start by furnishing the PRS with a name for your music publishing company. Since many names are already in use, you should search the BMI and ASCAP websites to find out if a name is already being used. If possible, try to use your band name or band partnership name as it may make it easier for you to cash checks. After you've registered with BMI and ASCAP, you must submit clearance forms.
This can be done online. If you don't submit a clearance form for each song that is being released, you will not get paid. In addition to publisher's clearance forms, songwriters complete separate writer's clearance forms. The publisher's clearance form asks for each writer's share. That is something the songwriters in your band need to decide. The clearance form also asks for the names of all publishers and their shares. If your music publishing company is the only publisher of the song, indicate 100% for the publisher's share.
Six to eight weeks after submitting a clearance form, you should also review the BMI or ASCAP website to make sure that the song has been registered properly. If there is an error, contact the indexing department for that performing rights organization. If you were able to use your band partnership name for your music publisher, then you've completed the process and you've created a music publisher. If you had to use a different name, you may need to acquire a fictitious business name or federal employer identification number in order to cash checks.
It starts with what it means to be the manager of a band, and what types of business structures are available for bands. Once you've decided on a business structure, you can create a band partnership agreement that covers voting rights, postbreakup scenarios, new members, and terms for resolving disputes. Richard also exposes potential sources of disputes, like ownership of the band name, songs, equipment, and recordings. He includes advice on negotiating solid band contracts and managing financial basics: taxes, income, cash flow, and bookkeeping. Finally, he'll address how to protect your work, including your copyrights, band name, and songs, and explains how to find a lawyer—and save money on attorney fees.
DISCLAIMER: This course is taught by an attorney (or other instructor) and addresses US law concepts that may not apply in all countries. Neither LinkedIn (including Lynda.com) nor the instructor represents you and they are not giving legal advice. The information conveyed through this course is akin to a college or law school course; it is not intended to give legal advice, but instead to communicate information to help viewers understand the basics of the topic presented. The views (and legal interpretations) presented in this course do not necessarily represent the views of LinkedIn or Lynda.com.
- Putting together a band partnership agreement
- Working out ownership disputes
- Limiting band liability
- Protecting your copyrights and band name
- Hiring a lawyer