Fri, Aug 1, 2014
How Songwriters Get Paid
HOW SONGWRITERS ARE PAID And the Federal Government’s Role

ROYALTIES:
  • Mechanical Royalty — Writers receive 9.1 cents for a song that sells on an artist’s CD. However, this is usually split with the publisher, leaving the songwriter only 4.55 cents. If the song is co-written, then they receive only 2.275 cents! So, if a writer has a song on a million-selling album, they earn around $22,750.
  • Performance Royalty — A songwriter is paid when his or her song is performed live or on radio, television, or cable. The average performance royalty is under $5,000 per year for those who are lucky enough to receive performance income.
  • Songwriter royalties are THE ONLY INCOME STREAM in America DICTATED by the Federal Government! The rate a songwriter is paid is determined by the Copyright Royalty Board. When and how songwriter royalties are distributed is governed by Congress and the Department of Justice.
  • Songwriters cannot increase their royalty income, even if the cost of doing business increases.
  • A songwriter may go years without receiving royalties. If they have a hit song, the federal government says that the songwriter must receive royalties immediately after they are collected. This means a songwriter might receive most of their income from a song in one calendar year — making that income subject to a disproportionately high income-tax levy. Other creators, such as book authors, can negotiate the terms of their payments over several years for tax purposes — but NOT songwriters! Songwriters were once allowed to average their incomes. This is no longer permitted.
  • Frivolous lawsuits can cost a songwriter their royalty income.
Protect Your Copyrights & Reduce Your Risk of Liability for Copyright Infringement
Copyright infringement is one of the most important and potentially expensive legal issues affecting songwriters.  Every songwriter needs to understand what to do, as a practical matter, to minimize the likelihood of being accused of copyright infringement and to maximize the likelihood of convincing others that the songwriter’s works are independent creations.
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