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Creative Commons 401(K) 2012

Rights, royalties, revenues & remuneration – How do we make money in this business?

By:Kendon Polak | Published:10/2/2014

Royalties are your songwriting revenues. They are the standard method of moneymaking in the music industry for songwriters.

As a songwriter, a creator of original material, you are the first rights holder. This is automatically granted to you under copyright law, thanks to the Canadian Copyright Act. Your diligence as a rights holder is key.
It is your responsibility as the original copyright holder to keep track of your rights and royalties – unless, of course you choose to sell your rights to a new owner or transfer your rights to a label or publisher.

A royalty is paid to the author (and/or owner if the songwriter has sold a share to a publisher, for example) of a song when another party us- es it, plays it, reproduces it, broadcasts it or sells it. An agreement grants the other party a licence to use the song for one of the specific purposes listed above, and the royalty that eventually flows to the songwriter (and/ or owner) is generally proportional to the revenue that the other party collects as a result of using the author/owner’s work.

Thankfully, there are several rights organizations, also known as copyright collective societies, that can help you (and/or your publisher) track your rights as a songwriter. A rights organization will work on your behalf to grant permissions, determine the conditions of usage, collect licence fees, tariffs and levies, and also distribute royalties to you and the other the rights holders (cowriters, publishers). You can maintain mem- berships with several rights organizations which collect different types of royalties for different uses of songs (listed in the chart below).

When your material is used abroad, or when a foreign songwriter’s work is used in Canada, rights organizations in other countries will work alongside Canadian rights organizations to pass royalties back and forth across national borders.

Rights and royalties are divided into several categories:

Reproduction: Mechanical

This refers to the mechanical reproduction of your song, whereby physi- cal copies of your song (on CD, for example, or digital download) are sent into the marketplace and sold. A mechanical licence is granted by the publisher or rights holder (you), giving permission for your song to be reproduced and distributed publicly. A mechanical royalty is paid to the publisher/author based on the number of recordings sold. (Unless you self-publish, you will traditionally share 50% with the publisher.) In Canada, these rights and royalties are tracked by CMRRA (Canadian Musical Reproduction Rights Agency; cmrra.ca), which represents over 6,000 North American publishers who own and administer roughly 75% of the music recorded and performed in Canada.

Reproduction: Synchronization

When one of your songs is licensed to be used in a film, TV show or commercial, you will receive a synchronization royalty, which is usually negotiated between the publisher and the producer of the film, TV show

or commercial. If your song is broadcast on a TV show it will also earn a performance royalty (see below). When a specific recording of your song is used, the user must also seek permission from the label or re- cording artist and pay them in the form of a Master Use Licence.

Performance

Whenyoursongisplayedontheradio,ajukebox,onTV,atahealth club, on an airline, in a restaurant, on a piped/streamed music service over the internet or live on stage, a performance royalty is payable. Such licences are often granted to radio and TV stations via annual licence fees that represent a percentage of the station’s advertising revenue. In Canada, these rights and royalties are tracked and paid to songwriters and music publishers by SOCAN (see page 23).

Print

This royalty is based on sales of printed sheet music.

Neighbouring

Every recording of a song has a copyright, and every performance with- in that one recording has a quasi-copyright. Canadian law recognizes that everyone (including all musicians and producers) who contributes to a recording has an economic interest in the recording. In Canada, neighbouring rights royalties are administered by Re:Sound (resound. ca).

Rights organizations in Canada:

• ACTRA Performers’ Rights Society. actra.ca/racs
• ArtistI. uniondesartistes.com
• AVLA. Audio-Video Licensing Agency. avla.ca
• CMRRA. Canadian Musical Reproduction Rights Agency. cmrra.ca • CSI. CMRRA SODRAC Inc. Joint venture between CMRRA and SO- DRAC to handle online music. cmrra.ca / sodrac.ca

• MROC. Musicians’ Rights Organization Canada. musiciansrights.ca
• Re:Sound. Formerly known as the Neighbouring Rights Collective of Canada. resound.ca
• SOCAN. Society of Composers, Authors and Music Publishers of Canada. socan.ca
• SODRAC. Society for Reproduction Rights of Authors, Composers and Publishers in Canada. sodrac.ca
• SOGEDAM. Société de gestion des droits des artistes-musiciens.
• SOPROQ. Société de gestion collective des droits des producteurs de phonogrammes et vidéogrammes du Québec. soproq.org
• UDA. Union des artistes. French-language equivalent of ACTRA. uda.ca

Online Rights
If a songwriter/artist is putting their own music online, what kind of rights do they need to know about? There are three main rights you need to be aware of: rights in the master sound recording, rights in the musi- cal composition embodied in the master and rights in the performer’s performance in the master. There are also rights relating to artwork, logos, photographs and name and likeness uses. – Paul Sanderson, Sanderson Entertainment Law, Toronto.

(This article is from Songwriters Magazine 2011/12)