Book Table of Contents

Sources of Income
Music Licensing
Music Publishing
Television 
ASCAP/BMI/SESAC
Motion Pictures
Foreign Country Royalties
U.S. Royalties
Copyright                                
Scoring Contracts for Film, Television & Video Games
Song Contracts for Film, Television and Video Games
Good Deals and Bad Deals
Video Games
360/Indie/Major Label Record Deals
Advertising Commercials
Internet/Online/DigitalDownloads and Streams
Broadway Musical Theatre                                                                                          
Dolls, Toys & e-Cards                                                                                                                                
Lawyers, Managers and Agents/ Breaking In Advice
Buying and Selling Songs
What Your Songs are $Worth

 

Table of Contents

 

IINTRODUCTION xxxv
SOURCES OF INCOME xxxvii
1. Music, Money, Songwriting, and Music Publishing .......1
Music Publishers and What They Do.............................................2
Singles and Albums ..........................................................................................3
Demo Recordings .............................................................................................4
Proper Administration......................................................................................4
Television and Movie Music .............................................................................5
Commercials ....................................................................................................5
Video Games and Ringtones .............................................................................5
Foreign Promotion and Collection of Royalties ...................................................5
The Publisher, Writer/Performer, Record Contracts, and
Development Deals......................................................................6
Infringement Actions ........................................................................................6
Home and Personal Video.................................................................................6
The Inner Workings of a Music Publisher ......................................7
Chief Executive................................................................................................7
Creative Department........................................................................................7
Promotion Department ....................................................................................7
Business and Legal Affairs Department .............................................................7
Synchronization Licensing Department .............................................................8
Mechanical Licensing Department ...................................................................8
Finance Department ........................................................................................8
Copyright Department......................................................................................8
Foreign Department .........................................................................................9
Royalty Department .........................................................................................9
I.T./Computer Department ...............................................................................9
The Acquisition of Rights by a Publisher .......................................9
Individual Song and Exclusive Agreements ......................................................10
Administration Agreement ..............................................................................10
Foreign Subpublishing Agreement....................................................................11
The Songwriter/Music Publisher Relationship..............................11
Publishing Contracts ....................................................................11
The Individual Song Contract ........................................................................12
The Exclusive Songwriter’s Contract ................................................................13
Important Provisions of Songwriter/Publisher Contracts ..............13
Sale of the Musical Composition .....................................................................14
Return of Songs to theWriter ..........................................................................14
The Term ......................................................................................................14
Rights Granted to the Publisher ......................................................................15
Exclusivity .....................................................................................................15
Compensation ................................................................................................16
Sharing of Advances .......................................................................................16
Minimum Song Delivery Requirement ............................................................17
Advances........................................................................................................18
Mini/Max Advances.......................................................................................18
Subfloor Advances ..........................................................................................19
Pipeline Income..............................................................................................19
Timing of Advances........................................................................................20
Writing with Other Songwriters......................................................................20
Motion Picture and Television Theme Exclusions .............................................21
First-Use Mechanical Licenses .........................................................................22
Restrictions on Promotion in Certain Areas......................................................22
Altering Compositions ....................................................................................23
Ownership and Promotion of Demo Recordings ...............................................24
Foreign Subpublisher Fees...............................................................................24
Audits ...........................................................................................................25
Infringement Claims ......................................................................................26
Writer/Performer Development Deals ..............................................................27
Sources of Income for the Music Publisher and Songwriter..........31
Performance Right Payments...........................................................................31
CD and Record Sales (Mechanical Royalties) ...................................................32
Mechanical Licenses .......................................................................................32
Television Series .............................................................................................35
Motion Pictures .............................................................................................35
Home Video/Personal Video/DVDs/Downloads ................................................36
Commercials ..................................................................................................37
Broadway Musicals ........................................................................................38
Video Games..................................................................................................39i
Karaoke/Sing-Alongs ......................................................................................39
Internet Karaoke Sites.....................................................................................39
Video Jukeboxes..............................................................................................40
Lyric Reprints in Novels or Nonfiction Books ...................................................40
Lyric Reprints in Magazines ...........................................................................41
Monthly Song Lyric and Sheet Music Magazines..............................................41
Public Service Announcements ........................................................................42
Recordings of Hit Songs with Changed Lyrics...................................................42
Medleys .........................................................................................................42
Promotional Videos ........................................................................................43
Greeting Cards...............................................................................................44
Musical E-Cards/Greeting Cards.....................................................................45
Television Commercials for Motion Pictures.....................................................45
Home and Personal Video (Television Programs)..............................................45
Home and Personal Video (Recording Artists) ..................................................46
Foreign Theatrical Royalties (Motion Pictures).................................................46
Dolls and Toys ...............................................................................................47
Television Programs and Motion Pictures Based on Songs .................................47
Books Based on Motion Pictures (Lyric Reprints)..............................................48
Books about a Lyricist.....................................................................................48
Remixes .........................................................................................................49
Novelty and Theme Song Albums....................................................................49
Lyrics on Albums, Downloads, and CD Packages .............................................50
Sheet Music and Folios ...................................................................................50
Television and Motion Picture Background Scores ............................................50
Lyrics and Music on Soda Cans ......................................................................51
Lyrics On Merchandise ...................................................................................51
Lyrics on T-Shirts, Clothing, and Posters..........................................................52
Audio Recordings of Books ..............................................................................52
Special Products Albums .................................................................................52
Television Sale–Only Albums ..........................................................................53
Record Clubs..................................................................................................53
Key Outlet Marketing Albums ........................................................................53
Bonus and Hidden Tracks on an Album..........................................................53
Limited Edition Collectibles ...........................................................................54
Musical Telephones.........................................................................................55
Singing Fish...................................................................................................55
Theme Parks..................................................................................................55
Ringtones.......................................................................................................55
Compilation Albums/Mechanical Rates Based on Past Success ...........................56
Musical Door Chimes.....................................................................................56
Musical Candles.............................................................................................56
Musical Flowers .............................................................................................56i
Corporate In-House Videos .............................................................................57
Music Boxes ...................................................................................................57
Slot Machines ................................................................................................57
Instruction Videos (Internet and Discs)............................................................57
Musical Instrument Toys.................................................................................57
Downloads.....................................................................................................58
The Internet ..................................................................................................58
2. Music, Money, Co-Publishing, and Administration........59
Standard Terms of a Co-Publishing Agreement ............................61
Sharing of Income ..........................................................................................61
Compositions Covered by the Agreement ..........................................................62
Acquiring SongsWritten by OtherWriters .......................................................62
Transfer of Copyright and Other Rights ...........................................................63
Term of Agreement .........................................................................................63
Album-Based Agreements................................................................................64
Two-Album Firm Agreements .........................................................................64
Exercise of Options in Album-Based Agreements ..............................................65
Non-Exercise of an Album Option ..................................................................66
Ownership of Songs after the Contract Has Ended ...........................................67
Advances .......................................................................................................67
Release of Recordings ......................................................................................68
Advances Based on Album Content .................................................................69
Advances Based on Licensing Rates..................................................................69
Commercial Release Definition .......................................................................69
Non-Album Based Advances ...........................................................................70
Advances Based on Sales .................................................................................71
“A” Side Single Chart Activity Advances ..........................................................71
Reduced Advances if Unrecouped ...................................................................71
Unrecoupable Payments ..................................................................................72
Costs of Demonstration Recordings ..................................................................72
Additional Costs.............................................................................................73
Payment of Royalties to Songwriters.................................................................73
Sharing of Income between the Two Publishers ................................................74
Administration Charges..................................................................................74
TheWriter’s Performance Right Income...........................................................75
The Publisher’s Performance Right Income ......................................................75
Reversions and Direct Collection of Income......................................................75
Reversion .......................................................................................................76
Royalty Distributions to theWriter’s Company .................................................80
Right to Match an Offer of Sale ......................................................................80
Right of First Negotiation ..............................................................................81
Participation Agreement .................................................................................81
Signed Deal Memos........................................................................................81
Recap ............................................................................................................82
Administration Agreements ..........................................................82
Fees Charged for Administrative Services .........................................................83
Duration .......................................................................................................83
Territory ........................................................................................................83
Royalty Statements .........................................................................................84
Royalty Payment Dates ...................................................................................84
Cover Records and New Uses ..........................................................................84
Cover Records ................................................................................................85
New Uses.......................................................................................................85
Monies Earned during the Term......................................................................86
Advances .......................................................................................................87
Pros and Cons of Administration Agreements...................................................87
Choosing the Right Administrator ...................................................................88
Co-Administration and Joint Administration...................................................88
3. Music, Money, Co-Ventures, and Joint Ventures ..........91
Types of Joint Venture/Co-Venture Agreements ...........................92
Term .............................................................................................................92
Co-Publishing ................................................................................................92
Administration...............................................................................................92
Advances........................................................................................................93
Advances to the Co-Venture Partner ................................................................93
Scope of the Agreement ...................................................................................94
Songwriting Services of the Co-Venturer ..........................................................94
Sharing of Income..........................................................................................94
Deals that Extend Past the Term of the Co-Venture Agreement .........................94
Guaranteed Funding ......................................................................................95
Carry Forward Advances ................................................................................96
Exercise of Options for Songwriter Agreements .................................................96
Travel and Other Expenses..............................................................................97
Puts and Calls ...............................................................................................97
Publishing Plus Ventures.................................................................................97
4. Music, Money, and Copyright......................................99
Exclusive Rights of Copyright ....................................................100
Works Made for Hire .................................................................101
Compulsory Licenses..................................................................101
The Audio Home Recording Act of 1992 ..................................102
Copyright Royalty Judges (The Copyright Royalty Board).........103
Copyright Notice .......................................................................103
Fees and Forms...........................................................................104
Duration of Copyright ...............................................................104
Rules Governing Duration of Copyright ........................................................105
Revision of Copyright Renewal Procedures ................................105
Renewal Claimants ......................................................................................107
Termination Rights ....................................................................107
Termination of the Extended Copyright Renewal Term...................................107
When the Termination Notice Must Be Sent..................................................107
Service of the Notice .....................................................................................108
Persons Entitled to Terminate the Extended Renewal Term .............................108
Termination Rights Under the 1998 Term Extension Act................................109
Termination of Agreements Made During or After 1978 ................................109
When the Termination Notice Must Be Sent ..................................................109
Sound Recordings ......................................................................109
Infringement of Copyright .........................................................110
International Copyright Protection ............................................111
Registering Your Work For Copyright ........................................111
The Digital Performance Right in Sound Recordings
Act of 1995 (DPRSRA) and the Digital Millennium
Copyright Act of 1998 (DMCA) .............................................112
Conclusion .................................................................................113
5. Music, Money, and the Recording Artist....................115
Inside the Business .....................................................................117
The Most Important Points in Every Recording Contract..........118
The Term ...................................................................................119
Artist Royalty Clauses.................................................................121
Recording Artist Royalties .............................................................................121i
Retail Price Base ..........................................................................................121
Wholesale Price Base ....................................................................................121
Changes in the Computation from the Retail Price to a Wholesale Price
or from a Wholesale Price to a Retail Price ..................................................122
Factors That Determine an Artist’s Royalty ....................................................122
Graduated-Increase Royalty Provisions...........................................................123
Sales Level Increases......................................................................................123
Contract Option Year Increases .....................................................................123
Royalties for Sales Outside the United States ..................................................124
Album Price Lines and Royalty Rates ............................................................124
Packaging Deductions...................................................................................126
Free Goods/Discounted Goods .......................................................................127
The 90% to 92.5% Sale Provision ...............................................................128
New-Technology Royalty Rate Reductions ......................................................128
Wholesale Price CalculationsWithout Deductions ..........................................129
Cut-Outs and Surplus Copies........................................................................129
Royalty Payments and Accounting Statements.................................................129
Advances ....................................................................................130
Equipment Fund Advances ........................................................133
Album Release Obligations.........................................................133
Record Company Expenses ........................................................135
Videos .........................................................................................................135
Tour Support ...............................................................................................137
Trade Name Searches for Groups...................................................................138
Promotion Expenses......................................................................................138
Recording Costs/Recording Funds...................................................................139
The Artist’s Obligations..............................................................140
The Minimum Recording Obligation ............................................................140
Satisfaction of an Artist’s Delivery Commitment ............................................141
“Greatest Hits” Albums.................................................................................142
Recording Sessions and Studios ......................................................................142
Album Artwork............................................................................................142
Warranties and Indemnities..........................................................................143
Sideman Provisions ......................................................................................145
Re-Recording Restrictions..............................................................................145
Solo Albums (For Members of a Group) ........................................................146
Provisions for New Band Members and Departing Band Members .................146
Recording and Delivery of Albums ................................................................147
Delivery of the Final Master Recording .........................................................148
Ownership of the Recordings .........................................................................149
Motion Picture, Television, Video Game and Commercial Uses, ..150
Shipping and Return Policies .....................................................151
Returned Recordings and the Artist’s Royalties ................................................152
Insurance Policies .......................................................................153
Confidentiality Clauses ..............................................................153
Artist/Production Company Agreements....................................154
Flow-Through Clauses..................................................................................154
Publicity......................................................................................................155
Responsibility for Payment of Producer Royalties ............................................155
Producer Credit ...........................................................................................155
Producer Advances .......................................................................................155
Controlled-Composition Clauses ...............................................156
Producer Royalties ........................................................................................156
Producer-Controlled Compositions ................................................................156
Mechanical Rates .........................................................................................157
Sales Plateau Increases ..................................................................................157
Increased Royalties for Later Albums .............................................................158
Canadian Sales ............................................................................................158
“Lock In” Rate Date .....................................................................................158
“Greatest Hits” Albums.................................................................................159
Maximum Royalty Cap ................................................................................159
Downloads, Singles, and EPs ........................................................................161
One-Use-Only Mechanical Royalties..............................................................161
Free And Discounted Units...........................................................................162
Midpriced, Budget, and Record Club Reduced Royalties .................................162
Increased Royalty Rates for Compositions That Are Published By the
Record Company........................................................................................162
Cowriter/Recording Artist Acknowledgment Forms .........................................163
Synch Rights When Cowriting with a Recording Artist or Producer.................163
Successful OutsideWriter Exception ..............................................................164
Vinyl/MP3 Redemption Programs.................................................................164
Changing Mechanical Rates..........................................................................164
Copyrighted Arrangements of Compositions in the
Public Domain.........................................................................165
New Artist/Developing Artist Pricing.........................................166
New Contract Developments .....................................................166
Net Profits Deals/Indie Labels ....................................................167
Upstreaming ................................................................................................169
“360” Deals................................................................................169
Additional Rights Secured.............................................................................170
Record Company Percentages.........................................................................171
Songwriter Performance Income....................................................................171
Internet and Other Considerations.............................................172
6. Music, Money, and Sampling.....................................173
Overview....................................................................................173
Format of the Sample Agreement ...............................................177
Copyright Registration ..................................................................................177
Administration of the New Composition........................................................177
Collection of Monies/Payment of Songwriter Royalties ....................................178
Additional Sampling ....................................................................................178
Conclusion .................................................................................179
7. Music, Money, and Television....................................181
The Television Industry..............................................................181
The Making of a Television Program.............................................................182
The Market .................................................................................................183
Types of Television Music and How Music Is Used ....................184
The Television Music Budget .....................................................185
Television Underscore.................................................................186
The Television Underscore Contract ..........................................186
Composer Services ........................................................................................187
Starting and Completion Dates.....................................................................187
Composing Fees ............................................................................................188
Theme Songs................................................................................................189
Screen Credit ...............................................................................................190
Exclusivity of Composer’s Services ..................................................................190
Ownership of the Copyright ..........................................................................191
Music Publishing .........................................................................................191
Membership in a Performing Right Society ....................................................191
Suspensions and Terminations .......................................................................193
Disposition of the Score.................................................................................193
Transportation and Expenses.........................................................................194
Share of Advance Payments...........................................................................194
Warranties and Indemnifications ..................................................................194
Assignments .................................................................................................195
Royalty Payments .........................................................................................195
Theatrical Version Release.............................................................................195
Television Series .........................................................................195
Song Demo Deals.........................................................................................195
Television Synchronization Rights (Getting Songs
into Series, Specials, and Made-for-TV Movies).......................197
The Importance of Hit Songs ........................................................................197
The Phone Call from the TV Producer ..........................................................198
Negotiating the Television License for a Song .................................................199
Actual Fees Charged for Songs Used in Television Programming......................200
Life after a Song Gets into a Television Program
(Where the Real Money Is Made) ............................................223
Option Fees .................................................................................................224
DVD, Downloads, Personal Use Video, and Discs..........................................225
Hit Singles from Television Programs.............................................................227
The Television Series Soundtrack Album........................................................228
Television Commercials Promoting the Program.............................................229
Sheet Music Folios ........................................................................................229
Royalties from Motion Picture Theaters (When a Television Program
Is Released as a Motion Picture)..................................................................229
Broadcasts of the Series, Special, Made-for-TV Movie, or Miniseries ...............230
Television Songs in Commercials ...................................................................230
Television Songs Used in Other Television Programs .......................................230
Television Songs Used in Motion Pictures ......................................................231
Production Music/Library Music...................................................................231
Sample Agreement........................................................................................231
Conclusion .................................................................................233
8. Music, Money, and Motion Pictures ..........................235
Overview....................................................................................235
The Movie Industry .....................................................................................235
The Making of a Film..................................................................................236
The Market .................................................................................................237
Types of Motion Picture Music ..................................................238
The Film Music Budget .............................................................238
Use of Pre-existing Hit Songs in Films .......................................238
The Phone Call from the Film Company.......................................................239
Determining How Much to Charge for a Song ..............................................241
Actual Fees Paid for Existing Songs ...............................................................242
Opening and Closing Credits ........................................................................242
Multiple Uses of a Song ................................................................................243
Lyric Changes ..............................................................................................243
Duration of License......................................................................................244
Rights Granted to the Film Producer.............................................................244
Home and Personal Video ............................................................................244
Territory ......................................................................................................245
Limited Theatrical Distribution ...................................................................245
Soundtrack Album Guarantees .....................................................................245
Motion Picture Producer Cut-Ins ..................................................................246
First-Use Restrictions ....................................................................................247
Trailers and Advertisements ..........................................................................247
Indie Films/Step Deals/Deferred Payments .....................................................248
Restrictions on the Use of Songs in Other Films..............................................249
Exclusive Holds ............................................................................................249
Reduction of Fees Due to the Use of Many Hit Records...................................250
A Publisher Having More Than One Song in a Film .....................................250
Student-Produced Films/Step Deals ...............................................................251
Rescoring and Replacing Songs in a Film Prior to Release ...............................251
Promotional Television Programs...................................................................253
Nonprofit Films and Free Use of Music .........................................................253
Screen Credit ...............................................................................................253
Music Cue Sheets and Their Importance........................................................253
Getting Hit Songs into Films ........................................................................254
Websites.......................................................................................................255
Producers and the Selecting of Songs..............................................................255
Recap ..........................................................................................................256
The Song Written for a Motion Picture .....................................256
Breaking into the Business ............................................................................257
The Song for Film—From Start to Finish .....................................................257
The “SongWritten for a Film” Contract ........................................................258
TheWriter/Recording Artist Agreement for Creating and Recording
a Composition for a Movie .........................................................................262
Life after the Motion Picture Release (Where the
Real Money Is Made)...............................................................265
Motion Picture Home Video Licensing ..........................................................266
DVD and Blu-ray Only Licensing.................................................................267
Hit Singles from Motion Pictures ..................................................................267
The Motion Picture Soundtrack Album.........................................................268
Television Commercials Promoting the Film ..................................................269
Sheet Music Folios ........................................................................................269
Motion Picture Songs in Commercials ...........................................................270
Royalties from Motion Picture Theaters .........................................................270
Television Broadcasts of the Motion Picture ...................................................271
Film Songs Used in TV Programs..................................................................271
Film Songs Used in Other Motion Pictures ....................................................271
Miscellaneous Sources of Income....................................................................271
Motion Picture Underscore ........................................................272
History of the Field ......................................................................................272
The Feature Film Score Contract ..................................................................273
Composing, Arranging, and Conducting Fee..................................................284
Foreign Theatrical and Other Performance Royalties ......................................285
Sources of Income: The Underscore Composer ..........................284
U.S. Cable, Network, and Local Television Performances ...............................287
Soundtrack Albums ......................................................................................288
Conclusion .................................................................................289
9. Music, Money, and Commercials ...............................291
The Advertising Industry and How It Works .............................292
The Phone Call from the Advertising Agency .................................................292
The Advertising Agency and Its Use of Music.................................................293
The Importance of the Advertising Agency .....................................................294
The Jingle....................................................................................................294
Creation of a Jingle and the Monies that Can Be Earned ...............................295
The IndependentWriter ...............................................................................295
The Jingle Production Company ...................................................................295
TheWriter as Employee of an Advertising Agency ..........................................295
Hit Songs Used in Commercials ....................................................................296
Permission to Use a Hit Song in a Commercial..............................................296
Advantages and Disadvantages of a Hit Song Being Used in a Commercial
(From a Publisher’s andWriter’s Point of View)...........................................297
Jingles (Songs Written for Commercials) ....................................298
The JingleWriter and the Advertising Agency ................................................298
The Agency and the Production Company .....................................................299
TheWriter-Recording Artist Jingle Agreement ................................................299
Negotiating with an Advertising Agency for a Hit Song.............300
Parties to the Agreement ...............................................................................301
Copyright Ownership ...................................................................................302
Duration of License ......................................................................................302
Exclusivity Versus Nonexclusivity ...................................................................302
Number of Commercials...............................................................................303
Payment of Fees............................................................................................303
Exercise of Options .......................................................................................303
Territory ......................................................................................................303
Media .........................................................................................................304
Foreign Countries.........................................................................................305
Restrictions on Songwriter/Recording Artists...................................................305
Restrictions on First Broadcast Use by Another Product ..................................306
Lyric Changes or Instrumental Uses...............................................................306
Confidentiality Agreements ...........................................................................306
Performance Rights ......................................................................................307
Alternative Compensation Packages...............................................................307
Radio and TV Royalties for Advertising Music...........................308
Conclusion .................................................................................308
10. Music, Money, and Performances.............................309
The Performing Right ................................................................310
The Organizations and How to Join ..........................................311
ASCAP........................................................................................................311
BMI............................................................................................................312
Types of License Agreements ......................................................313
Writer and Publisher Contracts and Termination Dates .............313
Considerations in Making a Decision.........................................315
ASCAP and BMI Income and Distributions ..............................316
Components of ASCAP and BMI Income .................................317
Domestic .....................................................................................................317
Foreign ........................................................................................................317
Special Distributions ....................................................................................318
Interim Fees .................................................................................................319
Future License Fees/Considerations ................................................................319
Advances/Guarantees/Loans/On Account Payments/Other Financial
Transactions ...............................................................................................319
Payment Dates and Methods of Payment...................................320
ASCAP........................................................................................................320
BMI............................................................................................................322
ASCAP and BMI Payment Philosophy and Rules ......................323
ASCAP........................................................................................................323
BMI............................................................................................................324
Payment Changes.......................................................................325
Cowritten Compositions ............................................................326
Removal of Works ......................................................................326
Services Provided........................................................................327
ASCAP Payments and Payment Rules ........................................327
Types of Performances and Their Values.........................................................328
Weights........................................................................................................329
Payment Formulas/Weights into Dollars ........................................................331
Radio ..........................................................................................................332
Network Payment Formulas .......................................................335
Local Television............................................................................................335
Highly Rated Shows Premium Payments........................................................336
Cable ..........................................................................................................337
Music and Lyrics in Commercials .................................................................337
Payments .....................................................................................................338
Live Performances ........................................................................................339
Per Program Distributions ............................................................................339
The Internet ................................................................................................340
The BMI Payment Schedule ......................................................340
Voluntary Quarterly Payments ......................................................................341
Radio ..........................................................................................................342
The 1977 Song Bonus..................................................................................342
The 1987 and 1998 Payment Schedules .......................................................343
Special CreditWorks ....................................................................................344
The 2004 Radio Payment Schedule ..............................................................345
Additional Criteria For Payment ..................................................................345
Survey of Performances .................................................................................346
Radio Payment Examples..............................................................................346
Television ....................................................................................................347
Types of Performance ....................................................................................347
Network Television Payments Prior to 2008 ..................................................347
Payment Schedule Rates................................................................................348
June 2008 Television Payments .....................................................................349
Local Television ............................................................................................350
Cable ..........................................................................................................351
Music and Lyrics in Commercials..................................................................351
Live Performance Payments...........................................................................352
Internet .......................................................................................................353
SESAC .......................................................................................353
Past Payments ..............................................................................................353
Current Payments.........................................................................................353
Contracts .....................................................................................................354
Competitive Payments ..................................................................................355
Chart Songs—What They Earn .................................................355
Future Changes ..........................................................................357
11. Music, Money, and Broadway ..................................359
An Overview of the Broadway Musical ......................................359
Broadway and Road Performances ................................................................360
Broadway Musicals.......................................................................................360
The Broadway Composer and Lyricist ...........................................................361
Sources of Income for the Broadway Composer and Lyricist.............................361
Rights and Royalties of the Broadway Show Writer: The
Dramatists Guild Contract.......................................................362
Monies Paid to the Composer and Lyricist Prior to the Actual
Production of the Broadway Musical (Option Payments)..............................362
Advance Payments........................................................................................363
Pre-Broadway Performances..........................................................................363
The Broadway Opening ...............................................................................364
BroadwayWriter Royalties............................................................................364
Royalty Pools and Operating Profits...............................................................365
The Motion Picture as a Broadway Musical ..................................................366
The Television Series as a Broadway Musical .................................................366
Weekly Costs of a Broadway Musical .........................................367
TheWeekly Break-Even Point .......................................................................367
Road Performances during or after the Broadway Run ...................................367
Weekly Costs of a Show on the Road..............................................................368
Adjustments in a Writer’s Royalties (Dramatists
Guild Contracts) ......................................................................370
The New York Run (MinimumWeekly Guarantee)........................................370
Touring Shows (MinimumWeekly Guarantee)...............................................370
Broadway Shows Produced under Non-Dramatists Guild
Contracts .................................................................................371
Fixed-Dollar Royalty Shows ..........................................................................371
Percentage-of-Receipts Royalty .......................................................................372
Touring Shows with Guarantees....................................................................372
Touring Shows vs. the Broadway Production..................................................373
Off-Broadway to Broadway to Off-Broadway ................................................373
Secondary Performances................................................................................373
What the Producer Must Do to Ensure Rights to
a Share of Subsidiary Income from the Broadway Show
(Dramatists Guild Contracts)...................................................374
Producer’s Share of Subsidiary Rights ............................................................375
Producer’s Right to Subsidiary Income under non-Dramatists
Guild Contracts .........................................................................................375
Life after Broadway (Where the Money Is Made).......................377
Hit Singles from Broadway Shows.................................................................377
Broadway Show Music in Commercials .........................................................378
Television and Internet Commercials Promoting a Broadway Musical .............379
Television Performances of Songs in the Play ..................................................379
Television Performances of the Play................................................................379
The Broadway Show Cast Album..................................................................379
Motion Picture Soundtrack Albums...............................................................381
Successful Cover Records ...............................................................................381
Cover Singles ...............................................................................................381
Sheet Music Folios ........................................................................................381
Royalties from Motion Picture Theaters .........................................................382
Broadway Songs Used in Television Programs.................................................382
Broadway Songs Used in Motion Pictures ......................................................382
The Broadway Musical as a Motion Picture ..................................................382
Home Video/DVD/Downloads/Video on Demand..........................................383
Non-cast Albums of the Broadway Musical....................................................384
Catalogue Musicals ......................................................................................384
Conclusion .................................................................................385
12. Music, Money, and Video Games.............................387
Video Games..............................................................................387
Types of Video Game Music ..........................................................................388
Songs in Video Games ..................................................................................388
Sales Plateau Bonuses/Per Unit Royalties .......................................................389
Downloadable Content (DLC) Royalties........................................................390
“Bundled” Content.......................................................................................390
Video Games Based on Television Series .........................................................392
Video Games Based on Movies ......................................................................392
Video Game Underscore Contracts ................................................................393
Fees .............................................................................................................394
13. Music, Money, Internet, Mobile Phones, Apps,
and New Media .....................................................397
Rights.........................................................................................397
The Laws....................................................................................398
ASCAP, BMI, and SESAC Internet Licenses ..............................401
Downloads and Online Subscription Services ............................402
On-Demand Streaming and Limited Downloads .......................403
Streaming (Noninteractive) ........................................................405
Licensed Rights ............................................................................................405
License Fees And Services ..............................................................................406
Performance Rights.......................................................................................406
Unilicense...................................................................................407
Podcasting ..................................................................................407
Ringtones/Mastertones/Mobile Phones ......................................408
Ringbacks/Other Uses/Mobile Phones .......................................408
Term ...........................................................................................................408
Territory ......................................................................................................408
Royalties ......................................................................................................409
Cowritten Compositions ...............................................................................409
Most Favored Nations Clauses.......................................................................409
Compositions Controlled...............................................................................410
Rights Granted by the Music Publisher ..........................................................410
Performance Rights.......................................................................................411
Timing........................................................................................................411
Royalty Accountings......................................................................................411
Other Provisions...........................................................................................411
Master Ringtones/Master Ringbacks ..........................................412
Ringtones With Video................................................................412
Ringtones/Foreign Countries......................................................412
Applications (Apps) ....................................................................413
Digital Jukeboxes........................................................................415
Grant of Rights ............................................................................................415
Royalties ......................................................................................................415
Record Company Contracts .......................................................416
Royalty Calculations .....................................................................................416
Recording Artist Royalties for Downloading Master Recordings ......................417
Licensed Masters/Download Royalty Calculations...........................................418
Escalating Royalty Clauses ............................................................................418
Term/Release Obligations/Advances ...............................................................419
New Pricing Approaches for Physical Product ...............................................420
Deductions ..................................................................................................421
Website Ownership and Control ................................................421
Website Merchandise Sales ............................................................................423
Combination Audio and Audiovisual Recordings.......................423
Record Company/Traditional Versus Internet.............................425
Commercial Release/Internet .........................................................................426
Sound Recordings and Terrestrial/Broadcast Radio .........................................426
Music Publishing Contracts........................................................425
Conclusion .................................................................................427
14. Music, Money, and Foreign Countries .....................429
Overview....................................................................................429
The Role of the Subpublisher.....................................................430
Administration versus Promotion ..................................................................431
Worldwide Representation vs. Territory-by-Territory Agreements......................431
The Subpublishing Agreement ...................................................432
Term ...........................................................................................................432
Royalty Percentages .......................................................................................432
Local Cover Recordings.................................................................................433
Increased Fees for Cover Records (Mechanical versus Performance Income).......433
Print ...........................................................................................................434
Compositions Controlled by the Agreement ....................................................434
Advances .....................................................................................................435
How Advances Are Paid ...............................................................................436
Information That Must Be Supplied to the Foreign Representative ..................437
At-Source Royalty Payments ..........................................................................438
Rights Granted to the Foreign Representative .................................................438
Rights Reserved by the U.S. Publisher............................................................440
Royalty Payment Dates and Audit Rights.......................................................441
Retention Rights...........................................................................................441
Foreign Performing Right Societies ............................................443
Organization and Distribution Rules ............................................................443
Mechanical Royalties....................................................................................444
Ringtones.....................................................................................................446
Downloads/Streams/Subscription Services.......................................................446
Conclusion .................................................................................447
15. Putting It All Together.............................................449
Mechanical Royalties (Digital and Physical) ...............................450
Recording Artist Royalties ..........................................................451
U.S. Performance Royalties ........................................................451
Commercial Use.........................................................................452
Motion Picture Use ....................................................................453
Television Series Use...................................................................454
Foreign Mechanicals and Performances ......................................454
The Broadway Musical ...............................................................455
The Motion Picture Underscore.................................................455
Additional Income-Producing Areas ...........................................455
Conclusion .................................................................................457
16. Music, Money, and the Buying and
Selling of Songs ......................................................459
Overview....................................................................................460
Purchase of Assets .........................................................................................460
The Purchase Price.......................................................................................461
Calculation of Net Income (Cash vs. Accrual Basis) .......................................461
Salaries and Other Costs of Doing Business....................................................462
Purchase Price Multiples...............................................................................463
The Prospectus: Its Form and Content.......................................463
Business Summary........................................................................................463
Financial Information..................................................................................464
Listing of Top-Earning Compositions.............................................................464
Net Income and Earnings History Charts ......................................................464
Current Contracts ........................................................................................466
Foreign Subpublishing Agreements ................................................................467
Future Commitments ...................................................................................467
The Letter of Intent/Short-Form Commitment-to-Sell
Agreement................................................................................468
Description of Assets Being Sold ....................................................................469
Earnings History ..........................................................................................469
Purchase Price..............................................................................................469
Warranties ...................................................................................................470
Subpublishing Agreements.............................................................................470
Income Cutoff Date......................................................................................470
Definitive Closing Date................................................................................471
Investigating the Assets Being Acquired......................................471
Financial Due Diligence ..............................................................................471
Legal Due Diligence.....................................................................................474
The Formal Purchase Agreement................................................478
The Aftermath of the Acquisition Agreement.............................479
Buy-Back Provisions .....................................................................................480
Income Participation ....................................................................................481
Bonus Provisions ..........................................................................................481
Compositions Acquired In The Future ...........................................................481
Mergers .......................................................................................................481
Securitization..............................................................................482i
Assignments Of Writer Royalties ................................................482
Conclusion .................................................................................483
17. Music, Money, Lawyers, Managers, and Agents .......485
Lawyers and Their Role..............................................................485
Lawyers’ Fees ................................................................................................486
Costs and Disbursements .............................................................................488
Managers and Their Role ...........................................................489
Manager’s Contracts .....................................................................................489
Manager’s Fees .............................................................................................491
Agents ........................................................................................491
Conclusion .................................................................................492
18. Breaking into the Business .......................................493
Music Websites/Internet .............................................................493
Cowriting Songs with Writers with Publishing Deals .................494
Being in a Performing Group .....................................................495
Submitting Songs to Music Publishers........................................495
Demo Recordings.......................................................................496
Songwriter Conferences..............................................................496
Showcases...................................................................................497
Attorneys....................................................................................497
Record Producers .......................................................................498
Managers....................................................................................498
Agents ........................................................................................499
Music Videos..............................................................................499
Cable Television .........................................................................500
ASCAP, BMI, and SESAC..........................................................500
PBS/NPR Radio Stations ...........................................................500
Internet Radio............................................................................500
Paying to Get Your Songs Published...........................................501
Finding the Right Publisher .......................................................501
Different Types of Publishers......................................................502
Film and Television ....................................................................503
Music Supervisors.......................................................................504
Video Games..............................................................................505
Demo Reviews in Print and Online Magazines ..........................505
Conclusion .................................................................................505
19. Guide to Music Industry Organizations ...................507
Academy of Country Music (ACM)...........................................507
American Federation of Musicians (AFM)..................................508
American Federation of Television and Radio Artists (AFTRA)..508
Country Music Association (CMA)............................................509
Dramatists Guild, Inc.................................................................509
Gospel Music Association (GMA)..............................................510
Harry Fox Agency ......................................................................510
Nashville Songwriters Association International (NSAI).............511
National Academy of Recording Arts & Sciences (NARAS).......511
National Music Publishers Association (NMPA) ........................512
Performing Right Organizations.................................................512
Recording Industry Association of America (RIAA) ...................513
Society of Composers & Lyricists (SCL) ....................................514
Songwriters Guild of America (SGA) .........................................514