How to do royalties with co-writers when there is no record label?

[markblasco]

I think this should be a relatively easy question, but so far I haven't been able to find the answer I'm looking for. I cowrote a song with someone, and I'm about to release an album. They are not in the band (although they did sing on the record). I wrote all the music, and we both wrote the lyrics.

 

Is there a standard payout for royalties when doing album sales? I'm assuming that I would split all writers royalties 50/50, but how much should that be? All of the expense of recording the album came out of my pocket, the co-writer has nothing invested into the record except for a few hours of their time.

 

So, if someone has a good breakdown of how royalties of various types are paid out when selling a record, I'd love to see it.

[peanutroad]

There is a standard statutory royalty (the 'mechanical' royalty) of 9.1 cents per song for each CD sold, which you would split. However, you and your co-writer are completely free to negotiate something lower; the big record companies regularly force contracts on writers that only pay about 3/4 of that amount.

[A. Einstein]

You fill in 50/50 under composer/lyricist on the song application form.

 

When you co-wrote the lyrics, the split is rather 66⅔/33⅓, or 75/25 when you wrote half the lyrics.

 

That you payed the whole production has absolutely nothing to do with who composed the song.

 

If you talk the lyricist into signing anything to your advantage, that could be expensive for you in the future when he finds out that you cheated him into something.

[daddymack]

is this co-writer listed on the copyright filing? Have you file an SR? Do you have a publisher?

Not to burst your bubble, but how many copies do you realistically expect to sell?

[markblasco]

 

is this co-writer listed on the copyright filing? Have you file an SR? Do you have a publisher? Not to burst your bubble, but how many copies do you realistically expect to sell?

 

 

Oh, don't worry, I'm not expecting to sell many. I'd love to think I can sell 1000, but I know that that number is more likely to be in the 2-300 figure. I just want to get this all worked out officially before releasing the record, so that there is no confusion in the future. I'm not going to make the mistake of mixing business and friendship, and this draws a very clear line in the sand so there are no surprises later on.

 

I haven't copyrighted anything yet, but the album is still being recorded, and some of the songs are still being written. Before it is released I will make sure that all of the legal stuff is completed.

 

I don't have a publisher, which is why I'm trying to figure this all out. I'm doing all of it, there is no third party involvement other than the people who are performing on the record, and I'll have all of them sign release agreements.

 

The part that is throwing me is that I understand there are separate publishing and writing royalties (and if I'm wrong please correct me on this), but I don't know what amount they should be. If 9.1 cents is the standard, than we'll go with that, but is that 9.1 cents for the writers and an additional 9.1 for the publishing, or is it done a different way.

 

Should a co-writer get any of the publishing if they aren't actually part of the band (even though they will be singing part of the song on the record)? The music business books that I have are all very vague on this stuff, mainly saying that these details will be part of the record company contract. The problem is that in this case, I am the record company. I want to make sure that the people involved are paid fairly, and that everything is figured out beforehand. I don't want this to end up being one of those horror stories where everyone was nice in the beginning, and then the record sells well, and then people get mad because there was no agreement signed up front.

[A. Einstein]

You only have to fill out the song application form with ASCAP, or BMI, there fill in the lyricists and the composer and the split.

 

That's all the paper work you need - Actually you would not even have to register your song, because the minute you wrote the last note of a song, the song is protected by international law, but you register your song that you have a document which is proof of that date, and of course if you would not register, then you get no royalties from the authors societies worldwide which collect your royalties.

 

 

 

No publisher necessary. A publisher is only an advantage for you when he does something for your music, for example licencing your songs to a movie, or to a tv-spot and so on.

 

!!! Don't let yourself be talked into a publishing agreement when the publisher does not tell you exactly how he will raise your income with his work.

 

Well known composers and artists who have a large song portfolio have their music administered by a Music & Copyright company.

[peanutroad]

ASCAP and BMI have nothing to do with the mechanical royalties. They only come into play if someone else is performing your songs. It's still a good idea to register with one of them, however.

 

Be your own publisher and don't worry about splitting anything with an outsider. You don't need a publisher unless you expect to sell a lot of the songs you write to other performers. Theoretically, if you list yourself as publisher you could take an extra percentage but it's probably simpler and fairer just to split it with your co-writer(s). 50/50 is pretty much normal, regardless of how much each writer contributed -- after all, the song wouldn't exist without both of you so you're both equally responsible for it!

[A. Einstein]

Four years ago we changed to pay the mechanical royalties direct to the composer. This saves the composer about 12%, or more of his earnings.

 

The USA treats mechanical royalties in extrem contrast to the practice of all other nations. It's a wild place out there, especially in the USA.

[markblasco]

 

ASCAP and BMI have nothing to do with the mechanical royalties. They only come into play if someone else is performing your songs. It's still a good idea to register with one of them, however. Be your own publisher and don't worry about splitting anything with an outsider. You don't need a publisher unless you expect to sell a lot of the songs you write to other performers. Theoretically, if you list yourself as publisher you could take an extra percentage but it's probably simpler and fairer just to split it with your co-writer(s). 50/50 is pretty much normal, regardless of how much each writer contributed -- after all, the song wouldn't exist without both of you so you're both equally responsible for it!

 

 

I do plan to do a 50/50 split on the royalties, but I'm still not totally clear on how much that should be. Is the publishing royalty also 9.1 cents?

[markblasco]

 

You only have to fill out the song application form with ASCAP, or BMI, there fill in the lyricists and the composer and the split. That's all the paper work you need - Actually you would not even have to register your song, because the minute you wrote the last note of a song, the song is protected by international law, but you register your song that you have a document which is proof of that date, and of course if you would not register, then you get no royalties from the authors societies worldwide which collect your royalties. No publisher necessary. A publisher is only an advantage for you when he does something for your music, for example licencing your songs to a movie, or to a tv-spot and so on. !!! Don't let yourself be talked into a publishing agreement when the publisher does not tell you exactly how he will raise your income with his work. Well known composers and artists who have a large song portfolio have their music administered by a Music & Copyright company.

 

 

I don't plan on signing anything with anyone without a music lawyer looking everything over, but I know that realistically it will probably never come to that. I just want to make sure everything is on the up and up so there's no chance for any confusion or bad feelings later on.

[A. Einstein]

Today it is way simpler. it works like that:

 

 

1) You are the owner of the master recordings of all songs.

 

2) Your song with the co-author sells 100 mp3 via iTunes.

 

3) iTunes tranfers $60 to you for the sale of 100 songs.

 

4) You pay your co-author $30 for his 50% ownership.

 

5) In the US mechanical royalties for digital sales will be sent via the aggregator to the label for payment to the songwriter. The mechanical royalties for digital sales in all other countries will be paid in that country to the relevant mechanical society. In your case, when you are not with a label or record company, the mechanicals are payed to you directly, when there is a paragraph in the digital sales shop's agreement that they pay mechanicals.

 

 

That's about all, and forget all the publishing stuff in your present situation.

[daddymack]

okay, hold on...first the 9.1 cents is for licensing the use of a song. Forget that part.

You have a writing partner who co-wrote one song on the CD...so far?

What you need to determine, when you are all done recording and filing copyrights (both PA and SR), is who contributed what percentage to the total recorded work.

If you are selling downloads of individual songs, that is one thing, if you are selling the CD only, that is a different issue.

Honestly, for the possible outcome of selling 300 CDs...I have already spent more time typing this at my going rate than you will earn as the songwriter

[peanutroad]

 

okay, hold on...first the 9.1 cents is for licensing the use of a song. Forget that part.

 

 

That's exactly what he's asking about. He and his co-writer are licensing their song to the band. In this case, he is also the band but that does not matter. If they put the song on a CD (I know nothing about download royalties so I won't say anything about that), the co-writer is entitled to his 50 percent of that 9.1 cents for each CD sold. If they co-write two songs and put them on an album, then twice that amount and so on. That's why it's a good idea to have original material on your albums -- those royalties can really add up!

 

That's also why many songwriters in bands will often give their bandmates a percentage of the songwriting. Otherwise, they might not make much off the sales.

[A. Einstein]

For no entity it is mandatory to pay mechanicals.

 

And in this case it is a dummy number, because he, or his band would pay his own mechanical royalties to himself, or themself.

[A. Einstein]

This is a typical calculation of a CD single on the base of € 10 for an even number. Percentage stay the same for any price in the shop. Longplay are slightly different.

 

 

 

€ 10.00 - Sales price of one CD single in the shop.

 

€ 7.66 - PPD retail price, 100%

€ 3.66 - Distributor, 47.7806 %

€ 4.00 - Record Company, 52.2119 %

 

€ 4.00 - Label/Record Company, 52.2119 %

€ 1.90 - Pressing and inlay, 24.8004 %

€ 1.30 - Net earnings (60/40), 16.9712 %

 

€ 0.78 - to Production Company, (60), 10.1827 %

€ 0.52 - to Record Company, (40), 6.7885%

€ 0.80 - to ASCAP, (10.4438 %)

 

€ 0.80 - ASCAP 10.4438 %

€ 0.12 - ASCAP administrationn, 1.5665 %

€ 0.34 - to authors: 4.4386 %

€ 0.34 - to publisher, 4.4386 %

[markblasco]

OK, so here is where I'm confused. Let's say that we split 50/50 to make things simple. If I sell the single for a dollar, or the album for 10 dollars (with ten songs on it, so still 1 dollar for the song), what portion should the co/writer get? It doesn't make sense to me that they get 50 cents, because they didn't pay for any of the recording or distribution costs, and they only sang half of the song, whereas I played all of the instruments and did all of the recording/mixing/etc. So, how much should I pay my cowriter?

 

As I understand it, record companies don't pay the band anything until the album expenses are paid off, but they still get writing royalties (is this correct)?

 

So, let's assume for the moment that we're going to sell a million copies of the album. How much should the cowriter get paid (either in percentage or in cents) for each sale until the album is paid off? How much should they get paid afterwards?

[A. Einstein]

The entity which pays the production fee is seperate from the author ownership.

 

A record company can not deduct any of your author royalties from the pre-financed production fee. Not saying that maybe some artist signed themself into a nonsense lioke that.

 

When you sold 1 million albums, your co-writer gets about $175'000 USD for that one song he co-wrote. he gets that money from ASCAP.

 

However when you as well your co-writer signed a publishing agreement, then this amout is divided by 2, is around $80'000 USD. The other about half of the royalties go to your punisher.... eeeeh publisher.

[A. Einstein]

One song on an album which sold 10 million CDs, is worth about £2.500.000 GBP in royalties for the songwriter.

[A. Einstein]

I must add ----> this is only the case when you don't put your signature on a piece of paper with which you are singing yourself out of optimal earnings, happens every day, and artist managers and their associated publisher are worldchampions in signing songwriter out of their optimal royalty earning.

 

 

 

When you sold 1 million albums, your co-writer gets about $175'000 USD for that one song he co-wrote. he gets that money from ASCAP. However when you as well your co-writer signed a publishing agreement, then this amout is divided by 2, is around $80'000 USD. The other about half of the royalties go to your punisher.... eeeeh publisher.