"How Royalties are Determined for New Material Written for Public Domain Compositions"

How Royalties Are Determined for New Material Written for Public Domain Music Compositions

 

(Entertainment Law & Finance, Volume 29, Number 5, August 2013)

 

By

 

Jeff Brabec

Todd Brabec

 

            A composition in the public domain is one that is unprotected by copyright, because its copyright has expired. As a brief overview of copyright duration under the United States Copyright Law (and there are more complexities depending on the composition involved so this is not dispositive in any respect other than to provide a general rule of thumb as a starting point), protection for a composition copyrighted prior to January 1, 1978 lasts for 95 years from the earlier of registration with The Copyright Office or publication.  For compositions written on or after January 1, 1978, copyright protection lasts for the life of the author (or last surviving author if a joint work) plus 70 years.  And if the composition was written as a work for hire, the copyright protection term is the earlier of 95 years from publication or 120 years from creation.

 

            Granted, not much public domain material is recorded in comparison with original material, but if such a song becomes a hit or is on a successful album, the royalties can be substantial provided the writer/arranger (who is many times the recording artist or record producer) has copyrighted his or her version and registered it with the performance right society with which the writer is affiliated..

 

              In the artist’s record contract or the producer agreement (if the writer is the producer) there is almost always a clause that deals with how mechanical royalties are paid if a public domain song is contained on the album or released as a single track.

 

            Some record companies refuse to pay any writer or publisher mechanical royalties for public domain compositions. Others pay a reduced stated penny rate.

 

            The most common approach (one accepted by most record companies), however, provides that the record company will pay the songwriter/arranger on the basis of the percentage that ASCAP, BMI, SESAC or GMR determine what they will pay the writer/arranger for performances of the copyrighted arrangement.

 

            In this regard, ASCAP will treat an arranger as a writer and pay royalties according to the amount of new material that has been added to the original public domain composition. The percentages range from a low of 2% to a high of 100%.

 

            Below is a summary of ASCAP’s guidelines in the crediting of public domain works for royalty purposes.

 

            If the arrangement is separately published or separately copyrighted, there will be a 10% royalty crediting (i.e., the royalties payable for performances will be 10% of the royalties that would be earned by an original song).  If it is included in a copyrighted collection (but does not qualify for 10%), then the royalty crediting is 2%.

 

            If the composition contains public domain lyrics and new, original music, it may receive up to 50% crediting, depending on the extent and treatment of the lyrics within the context of the entire work.

 

            If the copyrighted arrangement contains lyrics, it is deemed to be a vocal arrangement and can earn up to 100% depending on the extent to which it embodies changes in the underlying composition as follows: (a) new lyrics, up to 50%; or (b) changes in the music, up to 50% (in addition to any % received in (a) above).

 

            If the work is primarily an instrumental, it can be accorded up to 100% of the % given to an original composition as follows: (a) a transference from one medium to another, up to 35%; or (b) a development of a composition, which exhibits creative treatment and contains original musical characteristics and is identifiable as a set piece apart from the source material, up to 100%

 

            BMI, on the other hand, will pay the writer/music publisher 20% of what an original newly written song would earn. Unlike ASCAP where there is a review process if the writer requests such to increase the percentage from the initial 2% to 10% that is initially allocated, this is a flat rate determination which is applied to all copyrighted arrangements of public domain compositions across the board.

 

            SESAC treats public domain works in a manner similar to BMI, as arrangements of songs that are in the public domain are paid at 15% of the otherwise applicable income that would have been earned by an original song.

 

           GMR provides full credit for performances of copyrighted arrangements of public domain works and pays the same per minute royalties as any background music use. 

 

            To illustrate with an example as to how the procedure works in reality, let’s assume that a writer artist or writer producer is an ASCAP writer member who records a contemporary arrangement of a song that is in the public domain. In the artist’s record contract there is a provision that the artist will be paid the 9.1 cent United States statutory royalty for the sale of every composition that the artist writes and records. There is a 13x statutory cap on physical product but such does not apply due to the fact that the album does not exceed the cap (i.e., the album has only 13 songs on it).

 

             In addition, there is a provision in the controlled composition clause of the artist and/or producer agreement that states that mechanical royalties on any arrangement of a public domain work will be calculated in proportion to the percentage given the writer’s copyrighted arrangement by ASCAP, BMI, SESAC or GMR.

 

            The single is released, is successful, and sells 250,000 downloads. The album goes to #1 and sells 500,000 units in the United States.

 

            The recording artist/writer (or writer/producer if applicable) submits the recording and a copy of the new arrangement to ASCAP, where the composition is analyzed in house and a % determination made. If the writer is not happy with this decision, he or she can appeal this classification decision to the Special Classification Committee.  For the sake of this example,  ASCAP and its Special Classification Committee gives the composition a 50% royalty rating because of significant  additional new material, creativity, etc. –in effect, making the new composition worth one-half of an original newly written song.

 

            The record company is sent a copy of the ASCAP determination ( the same would occur with BMI, SESAC and GMR with their flat fee rates) which then gives the song a 50% mechanical royalty payout rate. In other words, the song will receive 50% of the “original song”9.1 cent statutory rate per composition mechanical royalty. Certain agreements have a time limit on when the determination and supporting evidence has to be received by the record company but this article is not intended to concentrate on whether such type of provision is enforceable or not. One should, however, be aware of such.

 

            The mechanical royalty calculations for sales in the United States would be:

 

                        Single                        9.1 x 50% = 4.55 x 250,000 =            $11,375

                        Album                        9.1 x 50% = 4.55 x 500,000 =            $22,750

                                                                                                            $34,125 Total

 

            Such a clause may not seem important to most recording artists and producers who write their own material, but a good recording or producer contract should anticipate and provide for all contingencies. It may not seem likely that the artist will be recording any public domain compositions. But if it happens, the artist (or writer/producer) should be guaranteed some type of fair formula for payment.

 

            It should be emphasized that songwriter and music publisher performance royalties will be based on that same percentage so if a public domain song becomes a radio or Internet hit, the % allocation received from ASCAP, BMI,  SESAC and GMR can really have an effect on the amount of money that can be earned.  For example, if a song is a major radio hit, earnings in the area of $300,000 to $700,000 in songwriter earnings are not unusual in performance royalty income for an original song during the period of chart activity.  One just has to do the math to see the monies at stake depending on the % given by the writer’s performance right organization for the public domain work arrangement. For example, an ASCAP 50% public domain crediting would generate $150,000-$350,000 in writer earnings if one were to use the above original song payments. A BMI 20 % crediting would generate total songwriter figures in the area of $60,000-$140,000 A SESAC 15% crediting would generate $45,000 to $105,000.  And a GMR writer would be credited with the full amount of royalties.

 

              And since the music publisher is paid at the same rate as the writer/arranger, this is not only a songwriter issue but a publisher issue as well.

 

            This article is not going to get into the ins and outs of the actual registration processes with ASCAP, BMI, SESAC and GMR. It should be noted that some of the forms and inquiry boxes to be checked [e.g. (a) original music, (b) public domain music, (c) pre-existing copyrighted music written by someone else, used with permission, but not in collaboration, (d) original lyrics (words), (e) public domain lyrics (words), (f) pre-existing copyrighted lyrics (words) written by someone else, used with permission but not in collaboration, (g) the work is concert music (e.g. symphonic, chamber, recital, etc. with qualifiers concerning whether the work is complete in one movement, part of a multi-movement work such as a symphony, concerto, or song cycle, or part of a larger work, etc.)] are somewhat different from the normal registration process. So knowledge of registration procedures (as mundane as this may sound) is vital to ensure rights and proper crediting, monitoring, and payment of royalties.

 

Conclusion

 

Determining whether a song is in the public domain is always the first inquiry. Once this has been established, the next inquiry is how to receive income for its use. To receive any royalties or license fees, you have to copyright your particular arrangement of the public domain work and notify your PRO. Without that step, the income flow will be 0 dollars. Once copyrighted, you will receive between 2% and 100% of the royalties that would have been generated had the song not been a public domain work. 

 

©2013, 2017 Jeff Brabec, Todd Brabec

How Royalties Are Determined for New Material Written for Public Domain Music Compositions

 

(Entertainment Law & Finance, Volume 29, Number 5, August 2013)

 

By

 

Jeff Brabec

Todd Brabec

 

            A composition in the public domain is one that is unprotected by copyright, because its copyright has expired. As a brief overview of copyright duration under the United States Copyright Law (and there are more complexities depending on the composition involved so this is not dispositive in any respect other than to provide a general rule of thumb as a starting point), protection for a composition copyrighted prior to January 1, 1978 lasts for 95 years from the earlier of registration with The Copyright Office or publication.  For compositions written on or after January 1, 1978, copyright protection lasts for the life of the author (or last surviving author if a joint work) plus 70 years.  And if the composition was written as a work for hire, the copyright protection term is the earlier of 95 years from publication or 120 years from creation.

 

            Granted, not much public domain material is recorded in comparison with original material, but if such a song becomes a hit or is on a successful album, the royalties can be substantial provided the writer/arranger (who is many times the recording artist or record producer) has copyrighted his or her version and registered it with the performance right society with which the writer is affiliated..

 

              In the artist’s record contract or the producer agreement (if the writer is the producer) there is almost always a clause that deals with how mechanical royalties are paid if a public domain song is contained on the album or released as a single track.

 

            Some record companies refuse to pay any writer or publisher mechanical royalties for public domain compositions. Others pay a reduced stated penny rate.

 

            The most common approach (one accepted by most record companies), however, provides that the record company will pay the songwriter/arranger on the basis of the percentage that ASCAP, BMI, SESAC or GMR determine what they will pay the writer/arranger for performances of the copyrighted arrangement.

 

            In this regard, ASCAP will treat an arranger as a writer and pay royalties according to the amount of new material that has been added to the original public domain composition. The percentages range from a low of 2% to a high of 100%.

 

            Below is a summary of ASCAP’s guidelines in the crediting of public domain works for royalty purposes.

 

            If the arrangement is separately published or separately copyrighted, there will be a 10% royalty crediting (i.e., the royalties payable for performances will be 10% of the royalties that would be earned by an original song).  If it is included in a copyrighted collection (but does not qualify for 10%), then the royalty crediting is 2%.

 

            If the composition contains public domain lyrics and new, original music, it may receive up to 50% crediting, depending on the extent and treatment of the lyrics within the context of the entire work.

 

            If the copyrighted arrangement contains lyrics, it is deemed to be a vocal arrangement and can earn up to 100% depending on the extent to which it embodies changes in the underlying composition as follows: (a) new lyrics, up to 50%; or (b) changes in the music, up to 50% (in addition to any % received in (a) above).

 

            If the work is primarily an instrumental, it can be accorded up to 100% of the % given to an original composition as follows: (a) a transference from one medium to another, up to 35%; or (b) a development of a composition, which exhibits creative treatment and contains original musical characteristics and is identifiable as a set piece apart from the source material, up to 100%

 

            BMI, on the other hand, will pay the writer/music publisher 20% of what an original newly written song would earn. Unlike ASCAP where there is a review process if the writer requests such to increase the percentage from the initial 2% to 10% that is initially allocated, this is a flat rate determination which is applied to all copyrighted arrangements of public domain compositions across the board.

 

            SESAC treats public domain works in a manner similar to BMI, as arrangements of songs that are in the public domain are paid at 15% of the otherwise applicable income that would have been earned by an original song.

 

           GMR provides full credit for performances of copyrighted arrangements of public domain works and pays the same per minute royalties as any background music use. 

 

            To illustrate with an example as to how the procedure works in reality, let’s assume that a writer artist or writer producer is an ASCAP writer member who records a contemporary arrangement of a song that is in the public domain. In the artist’s record contract there is a provision that the artist will be paid the 9.1 cent United States statutory royalty for the sale of every composition that the artist writes and records. There is a 13x statutory cap on physical product but such does not apply due to the fact that the album does not exceed the cap (i.e., the album has only 13 songs on it).

 

             In addition, there is a provision in the controlled composition clause of the artist and/or producer agreement that states that mechanical royalties on any arrangement of a public domain work will be calculated in proportion to the percentage given the writer’s copyrighted arrangement by ASCAP, BMI, SESAC or GMR.

 

            The single is released, is successful, and sells 250,000 downloads. The album goes to #1 and sells 500,000 units in the United States.

 

            The recording artist/writer (or writer/producer if applicable) submits the recording and a copy of the new arrangement to ASCAP, where the composition is analyzed in house and a % determination made. If the writer is not happy with this decision, he or she can appeal this classification decision to the Special Classification Committee.  For the sake of this example,  ASCAP and its Special Classification Committee gives the composition a 50% royalty rating because of significant  additional new material, creativity, etc. –in effect, making the new composition worth one-half of an original newly written song.

 

            The record company is sent a copy of the ASCAP determination ( the same would occur with BMI, SESAC and GMR with their flat fee rates) which then gives the song a 50% mechanical royalty payout rate. In other words, the song will receive 50% of the “original song”9.1 cent statutory rate per composition mechanical royalty. Certain agreements have a time limit on when the determination and supporting evidence has to be received by the record company but this article is not intended to concentrate on whether such type of provision is enforceable or not. One should, however, be aware of such.

 

            The mechanical royalty calculations for sales in the United States would be:

 

                        Single                        9.1 x 50% = 4.55 x 250,000 =            $11,375

                        Album                        9.1 x 50% = 4.55 x 500,000 =            $22,750

                                                                                                            $34,125 Total

 

            Such a clause may not seem important to most recording artists and producers who write their own material, but a good recording or producer contract should anticipate and provide for all contingencies. It may not seem likely that the artist will be recording any public domain compositions. But if it happens, the artist (or writer/producer) should be guaranteed some type of fair formula for payment.

 

            It should be emphasized that songwriter and music publisher performance royalties will be based on that same percentage so if a public domain song becomes a radio or Internet hit, the % allocation received from ASCAP, BMI,  SESAC and GMR can really have an effect on the amount of money that can be earned.  For example, if a song is a major radio hit, earnings in the area of $300,000 to $700,000 in songwriter earnings are not unusual in performance royalty income for an original song during the period of chart activity.  One just has to do the math to see the monies at stake depending on the % given by the writer’s performance right organization for the public domain work arrangement. For example, an ASCAP 50% public domain crediting would generate $150,000-$350,000 in writer earnings if one were to use the above original song payments. A BMI 20 % crediting would generate total songwriter figures in the area of $60,000-$140,000 A SESAC 15% crediting would generate $45,000 to $105,000.  And a GMR writer would be credited with the full amount of royalties.

 

              And since the music publisher is paid at the same rate as the writer/arranger, this is not only a songwriter issue but a publisher issue as well.

 

            This article is not going to get into the ins and outs of the actual registration processes with ASCAP, BMI, SESAC and GMR. It should be noted that some of the forms and inquiry boxes to be checked [e.g. (a) original music, (b) public domain music, (c) pre-existing copyrighted music written by someone else, used with permission, but not in collaboration, (d) original lyrics (words), (e) public domain lyrics (words), (f) pre-existing copyrighted lyrics (words) written by someone else, used with permission but not in collaboration, (g) the work is concert music (e.g. symphonic, chamber, recital, etc. with qualifiers concerning whether the work is complete in one movement, part of a multi-movement work such as a symphony, concerto, or song cycle, or part of a larger work, etc.)] are somewhat different from the normal registration process. So knowledge of registration procedures (as mundane as this may sound) is vital to ensure rights and proper crediting, monitoring, and payment of royalties.

 

Conclusion

 

Determining whether a song is in the public domain is always the first inquiry. Once this has been established, the next inquiry is how to receive income for its use. To receive any royalties or license fees, you have to copyright your particular arrangement of the public domain work and notify your PRO. Without that step, the income flow will be 0 dollars. Once copyrighted, you will receive between 2% and 100% of the royalties that would have been generated had the song not been a public domain work. 

 

©2013, 2017 Jeff Brabec, Todd BrabecHow Royalties Are Determined for New Material Written for Public Domain Music Compositions

 

(Entertainment Law & Finance, Volume 29, Number 5, August 2013)

 

By

 

Jeff Brabec

Todd Brabec

 

            A composition in the public domain is one that is unprotected by copyright, because its copyright has expired. As a brief overview of copyright duration under the United States Copyright Law (and there are more complexities depending on the composition involved so this is not dispositive in any respect other than to provide a general rule of thumb as a starting point), protection for a composition copyrighted prior to January 1, 1978 lasts for 95 years from the earlier of registration with The Copyright Office or publication.  For compositions written on or after January 1, 1978, copyright protection lasts for the life of the author (or last surviving author if a joint work) plus 70 years.  And if the composition was written as a work for hire, the copyright protection term is the earlier of 95 years from publication or 120 years from creation.

 

            Granted, not much public domain material is recorded in comparison with original material, but if such a song becomes a hit or is on a successful album, the royalties can be substantial provided the writer/arranger (who is many times the recording artist or record producer) has copyrighted his or her version and registered it with the performance right society with which the writer is affiliated..

 

              In the artist’s record contract or the producer agreement (if the writer is the producer) there is almost always a clause that deals with how mechanical royalties are paid if a public domain song is contained on the album or released as a single track.

 

            Some record companies refuse to pay any writer or publisher mechanical royalties for public domain compositions. Others pay a reduced stated penny rate.

 

            The most common approach (one accepted by most record companies), however, provides that the record company will pay the songwriter/arranger on the basis of the percentage that ASCAP, BMI, SESAC or GMR determine what they will pay the writer/arranger for performances of the copyrighted arrangement.

 

            In this regard, ASCAP will treat an arranger as a writer and pay royalties according to the amount of new material that has been added to the original public domain composition. The percentages range from a low of 2% to a high of 100%.

 

            Below is a summary of ASCAP’s guidelines in the crediting of public domain works for royalty purposes.

 

            If the arrangement is separately published or separately copyrighted, there will be a 10% royalty crediting (i.e., the royalties payable for performances will be 10% of the royalties that would be earned by an original song).  If it is included in a copyrighted collection (but does not qualify for 10%), then the royalty crediting is 2%.

 

            If the composition contains public domain lyrics and new, original music, it may receive up to 50% crediting, depending on the extent and treatment of the lyrics within the context of the entire work.

 

            If the copyrighted arrangement contains lyrics, it is deemed to be a vocal arrangement and can earn up to 100% depending on the extent to which it embodies changes in the underlying composition as follows: (a) new lyrics, up to 50%; or (b) changes in the music, up to 50% (in addition to any % received in (a) above).

 

            If the work is primarily an instrumental, it can be accorded up to 100% of the % given to an original composition as follows: (a) a transference from one medium to another, up to 35%; or (b) a development of a composition, which exhibits creative treatment and contains original musical characteristics and is identifiable as a set piece apart from the source material, up to 100%

 

            BMI, on the other hand, will pay the writer/music publisher 20% of what an original newly written song would earn. Unlike ASCAP where there is a review process if the writer requests such to increase the percentage from the initial 2% to 10% that is initially allocated, this is a flat rate determination which is applied to all copyrighted arrangements of public domain compositions across the board.

 

            SESAC treats public domain works in a manner similar to BMI, as arrangements of songs that are in the public domain are paid at 15% of the otherwise applicable income that would have been earned by an original song.

 

           GMR provides full credit for performances of copyrighted arrangements of public domain works and pays the same per minute royalties as any background music use. 

 

            To illustrate with an example as to how the procedure works in reality, let’s assume that a writer artist or writer producer is an ASCAP writer member who records a contemporary arrangement of a song that is in the public domain. In the artist’s record contract there is a provision that the artist will be paid the 9.1 cent United States statutory royalty for the sale of every composition that the artist writes and records. There is a 13x statutory cap on physical product but such does not apply due to the fact that the album does not exceed the cap (i.e., the album has only 13 songs on it).

 

             In addition, there is a provision in the controlled composition clause of the artist and/or producer agreement that states that mechanical royalties on any arrangement of a public domain work will be calculated in proportion to the percentage given the writer’s copyrighted arrangement by ASCAP, BMI, SESAC or GMR.

 

            The single is released, is successful, and sells 250,000 downloads. The album goes to #1 and sells 500,000 units in the United States.

 

            The recording artist/writer (or writer/producer if applicable) submits the recording and a copy of the new arrangement to ASCAP, where the composition is analyzed in house and a % determination made. If the writer is not happy with this decision, he or she can appeal this classification decision to the Special Classification Committee.  For the sake of this example,  ASCAP and its Special Classification Committee gives the composition a 50% royalty rating because of significant  additional new material, creativity, etc. –in effect, making the new composition worth one-half of an original newly written song.

 

            The record company is sent a copy of the ASCAP determination ( the same would occur with BMI, SESAC and GMR with their flat fee rates) which then gives the song a 50% mechanical royalty payout rate. In other words, the song will receive 50% of the “original song”9.1 cent statutory rate per composition mechanical royalty. Certain agreements have a time limit on when the determination and supporting evidence has to be received by the record company but this article is not intended to concentrate on whether such type of provision is enforceable or not. One should, however, be aware of such.

 

            The mechanical royalty calculations for sales in the United States would be:

 

                        Single                        9.1 x 50% = 4.55 x 250,000 =            $11,375

                        Album                        9.1 x 50% = 4.55 x 500,000 =            $22,750

                                                                                                            $34,125 Total

 

            Such a clause may not seem important to most recording artists and producers who write their own material, but a good recording or producer contract should anticipate and provide for all contingencies. It may not seem likely that the artist will be recording any public domain compositions. But if it happens, the artist (or writer/producer) should be guaranteed some type of fair formula for payment.

 

            It should be emphasized that songwriter and music publisher performance royalties will be based on that same percentage so if a public domain song becomes a radio or Internet hit, the % allocation received from ASCAP, BMI,  SESAC and GMR can really have an effect on the amount of money that can be earned.  For example, if a song is a major radio hit, earnings in the area of $300,000 to $700,000 in songwriter earnings are not unusual in performance royalty income for an original song during the period of chart activity.  One just has to do the math to see the monies at stake depending on the % given by the writer’s performance right organization for the public domain work arrangement. For example, an ASCAP 50% public domain crediting would generate $150,000-$350,000 in writer earnings if one were to use the above original song payments. A BMI 20 % crediting would generate total songwriter figures in the area of $60,000-$140,000 A SESAC 15% crediting would generate $45,000 to $105,000.  And a GMR writer would be credited with the full amount of royalties.

 

              And since the music publisher is paid at the same rate as the writer/arranger, this is not only a songwriter issue but a publisher issue as well.

 

            This article is not going to get into the ins and outs of the actual registration processes with ASCAP, BMI, SESAC and GMR. It should be noted that some of the forms and inquiry boxes to be checked [e.g. (a) original music, (b) public domain music, (c) pre-existing copyrighted music written by someone else, used with permission, but not in collaboration, (d) original lyrics (words), (e) public domain lyrics (words), (f) pre-existing copyrighted lyrics (words) written by someone else, used with permission but not in collaboration, (g) the work is concert music (e.g. symphonic, chamber, recital, etc. with qualifiers concerning whether the work is complete in one movement, part of a multi-movement work such as a symphony, concerto, or song cycle, or part of a larger work, etc.)] are somewhat different from the normal registration process. So knowledge of registration procedures (as mundane as this may sound) is vital to ensure rights and proper crediting, monitoring, and payment of royalties.

 

Conclusion

 

Determining whether a song is in the public domain is always the first inquiry. Once this has been established, the next inquiry is how to receive income for its use. To receive any royalties or license fees, you have to copyright your particular arrangement of the public domain work and notify your PRO. Without that step, the income flow will be 0 dollars. Once copyrighted, you will receive between 2% and 100% of the royalties that would have been generated had the song not been a public domain work. 

 

©2013, 2017 Jeff Brabec, Todd BrabecHow Royalties Are Determined for New Material Written for Public Domain Music Compositions

 

(Entertainment Law & Finance, Volume 29, Number 5, August 2013)

 

By

 

Jeff Brabec

Todd Brabec

 

            A composition in the public domain is one that is unprotected by copyright, because its copyright has expired. As a brief overview of copyright duration under the United States Copyright Law (and there are more complexities depending on the composition involved so this is not dispositive in any respect other than to provide a general rule of thumb as a starting point), protection for a composition copyrighted prior to January 1, 1978 lasts for 95 years from the earlier of registration with The Copyright Office or publication.  For compositions written on or after January 1, 1978, copyright protection lasts for the life of the author (or last surviving author if a joint work) plus 70 years.  And if the composition was written as a work for hire, the copyright protection term is the earlier of 95 years from publication or 120 years from creation.

 

            Granted, not much public domain material is recorded in comparison with original material, but if such a song becomes a hit or is on a successful album, the royalties can be substantial provided the writer/arranger (who is many times the recording artist or record producer) has copyrighted his or her version and registered it with the performance right society with which the writer is affiliated..

 

              In the artist’s record contract or the producer agreement (if the writer is the producer) there is almost always a clause that deals with how mechanical royalties are paid if a public domain song is contained on the album or released as a single track.

 

            Some record companies refuse to pay any writer or publisher mechanical royalties for public domain compositions. Others pay a reduced stated penny rate.

 

            The most common approach (one accepted by most record companies), however, provides that the record company will pay the songwriter/arranger on the basis of the percentage that ASCAP, BMI, SESAC or GMR determine what they will pay the writer/arranger for performances of the copyrighted arrangement.

 

            In this regard, ASCAP will treat an arranger as a writer and pay royalties according to the amount of new material that has been added to the original public domain composition. The percentages range from a low of 2% to a high of 100%.

 

            Below is a summary of ASCAP’s guidelines in the crediting of public domain works for royalty purposes.

 

            If the arrangement is separately published or separately copyrighted, there will be a 10% royalty crediting (i.e., the royalties payable for performances will be 10% of the royalties that would be earned by an original song).  If it is included in a copyrighted collection (but does not qualify for 10%), then the royalty crediting is 2%.

 

            If the composition contains public domain lyrics and new, original music, it may receive up to 50% crediting, depending on the extent and treatment of the lyrics within the context of the entire work.

 

            If the copyrighted arrangement contains lyrics, it is deemed to be a vocal arrangement and can earn up to 100% depending on the extent to which it embodies changes in the underlying composition as follows: (a) new lyrics, up to 50%; or (b) changes in the music, up to 50% (in addition to any % received in (a) above).

 

            If the work is primarily an instrumental, it can be accorded up to 100% of the % given to an original composition as follows: (a) a transference from one medium to another, up to 35%; or (b) a development of a composition, which exhibits creative treatment and contains original musical characteristics and is identifiable as a set piece apart from the source material, up to 100%

 

            BMI, on the other hand, will pay the writer/music publisher 20% of what an original newly written song would earn. Unlike ASCAP where there is a review process if the writer requests such to increase the percentage from the initial 2% to 10% that is initially allocated, this is a flat rate determination which is applied to all copyrighted arrangements of public domain compositions across the board.

 

            SESAC treats public domain works in a manner similar to BMI, as arrangements of songs that are in the public domain are paid at 15% of the otherwise applicable income that would have been earned by an original song.

 

           GMR provides full credit for performances of copyrighted arrangements of public domain works and pays the same per minute royalties as any background music use. 

 

            To illustrate with an example as to how the procedure works in reality, let’s assume that a writer artist or writer producer is an ASCAP writer member who records a contemporary arrangement of a song that is in the public domain. In the artist’s record contract there is a provision that the artist will be paid the 9.1 cent United States statutory royalty for the sale of every composition that the artist writes and records. There is a 13x statutory cap on physical product but such does not apply due to the fact that the album does not exceed the cap (i.e., the album has only 13 songs on it).

 

             In addition, there is a provision in the controlled composition clause of the artist and/or producer agreement that states that mechanical royalties on any arrangement of a public domain work will be calculated in proportion to the percentage given the writer’s copyrighted arrangement by ASCAP, BMI, SESAC or GMR.

 

            The single is released, is successful, and sells 250,000 downloads. The album goes to #1 and sells 500,000 units in the United States.

 

            The recording artist/writer (or writer/producer if applicable) submits the recording and a copy of the new arrangement to ASCAP, where the composition is analyzed in house and a % determination made. If the writer is not happy with this decision, he or she can appeal this classification decision to the Special Classification Committee.  For the sake of this example,  ASCAP and its Special Classification Committee gives the composition a 50% royalty rating because of significant  additional new material, creativity, etc. –in effect, making the new composition worth one-half of an original newly written song.

 

            The record company is sent a copy of the ASCAP determination ( the same would occur with BMI, SESAC and GMR with their flat fee rates) which then gives the song a 50% mechanical royalty payout rate. In other words, the song will receive 50% of the “original song”9.1 cent statutory rate per composition mechanical royalty. Certain agreements have a time limit on when the determination and supporting evidence has to be received by the record company but this article is not intended to concentrate on whether such type of provision is enforceable or not. One should, however, be aware of such.

 

            The mechanical royalty calculations for sales in the United States would be:

 

                        Single                        9.1 x 50% = 4.55 x 250,000 =            $11,375

                        Album                        9.1 x 50% = 4.55 x 500,000 =            $22,750

                                                                                                            $34,125 Total

 

            Such a clause may not seem important to most recording artists and producers who write their own material, but a good recording or producer contract should anticipate and provide for all contingencies. It may not seem likely that the artist will be recording any public domain compositions. But if it happens, the artist (or writer/producer) should be guaranteed some type of fair formula for payment.

 

            It should be emphasized that songwriter and music publisher performance royalties will be based on that same percentage so if a public domain song becomes a radio or Internet hit, the % allocation received from ASCAP, BMI,  SESAC and GMR can really have an effect on the amount of money that can be earned.  For example, if a song is a major radio hit, earnings in the area of $300,000 to $700,000 in songwriter earnings are not unusual in performance royalty income for an original song during the period of chart activity.  One just has to do the math to see the monies at stake depending on the % given by the writer’s performance right organization for the public domain work arrangement. For example, an ASCAP 50% public domain crediting would generate $150,000-$350,000 in writer earnings if one were to use the above original song payments. A BMI 20 % crediting would generate total songwriter figures in the area of $60,000-$140,000 A SESAC 15% crediting would generate $45,000 to $105,000.  And a GMR writer would be credited with the full amount of royalties.

 

              And since the music publisher is paid at the same rate as the writer/arranger, this is not only a songwriter issue but a publisher issue as well.

 

            This article is not going to get into the ins and outs of the actual registration processes with ASCAP, BMI, SESAC and GMR. It should be noted that some of the forms and inquiry boxes to be checked [e.g. (a) original music, (b) public domain music, (c) pre-existing copyrighted music written by someone else, used with permission, but not in collaboration, (d) original lyrics (words), (e) public domain lyrics (words), (f) pre-existing copyrighted lyrics (words) written by someone else, used with permission but not in collaboration, (g) the work is concert music (e.g. symphonic, chamber, recital, etc. with qualifiers concerning whether the work is complete in one movement, part of a multi-movement work such as a symphony, concerto, or song cycle, or part of a larger work, etc.)] are somewhat different from the normal registration process. So knowledge of registration procedures (as mundane as this may sound) is vital to ensure rights and proper crediting, monitoring, and payment of royalties.

 

Conclusion

 

Determining whether a song is in the public domain is always the first inquiry. Once this has been established, the next inquiry is how to receive income for its use. To receive any royalties or license fees, you have to copyright your particular arrangement of the public domain work and notify your PRO. Without that step, the income flow will be 0 dollars. Once copyrighted, you will receive between 2% and 100% of the royalties that would have been generated had the song not been a public domain work. 

 

©2013, 2017 Jeff Brabec, Todd Brabec

How Royalties Are Determined for New Material Written for Public Domain Music Compositions

 

(Entertainment Law & Finance, Volume 29, Number 5, August 2013)

 

By

 

Jeff Brabec

Todd Brabec

 

            A composition in the public domain is one that is unprotected by copyright, because its copyright has expired. As a brief overview of copyright duration under the United States Copyright Law (and there are more complexities depending on the composition involved so this is not dispositive in any respect other than to provide a general rule of thumb as a starting point), protection for a composition copyrighted prior to January 1, 1978 lasts for 95 years from the earlier of registration with The Copyright Office or publication.  For compositions written on or after January 1, 1978, copyright protection lasts for the life of the author (or last surviving author if a joint work) plus 70 years.  And if the composition was written as a work for hire, the copyright protection term is the earlier of 95 years from publication or 120 years from creation.

 

            Granted, not much public domain material is recorded in comparison with original material, but if such a song becomes a hit or is on a successful album, the royalties can be substantial provided the writer/arranger (who is many times the recording artist or record producer) has copyrighted his or her version and registered it with the performance right society with which the writer is affiliated..

 

              In the artist’s record contract or the producer agreement (if the writer is the producer) there is almost always a clause that deals with how mechanical royalties are paid if a public domain song is contained on the album or released as a single track.

 

            Some record companies refuse to pay any writer or publisher mechanical royalties for public domain compositions. Others pay a reduced stated penny rate.

 

            The most common approach (one accepted by most record companies), however, provides that the record company will pay the songwriter/arranger on the basis of the percentage that ASCAP, BMI, SESAC or GMR determine what they will pay the writer/arranger for performances of the copyrighted arrangement.

 

            In this regard, ASCAP will treat an arranger as a writer and pay royalties according to the amount of new material that has been added to the original public domain composition. The percentages range from a low of 2% to a high of 100%.

 

            Below is a summary of ASCAP’s guidelines in the crediting of public domain works for royalty purposes.

 

            If the arrangement is separately published or separately copyrighted, there will be a 10% royalty crediting (i.e., the royalties payable for performances will be 10% of the royalties that would be earned by an original song).  If it is included in a copyrighted collection (but does not qualify for 10%), then the royalty crediting is 2%.

 

            If the composition contains public domain lyrics and new, original music, it may receive up to 50% crediting, depending on the extent and treatment of the lyrics within the context of the entire work.

 

            If the copyrighted arrangement contains lyrics, it is deemed to be a vocal arrangement and can earn up to 100% depending on the extent to which it embodies changes in the underlying composition as follows: (a) new lyrics, up to 50%; or (b) changes in the music, up to 50% (in addition to any % received in (a) above).

 

            If the work is primarily an instrumental, it can be accorded up to 100% of the % given to an original composition as follows: (a) a transference from one medium to another, up to 35%; or (b) a development of a composition, which exhibits creative treatment and contains original musical characteristics and is identifiable as a set piece apart from the source material, up to 100%

 

            BMI, on the other hand, will pay the writer/music publisher 20% of what an original newly written song would earn. Unlike ASCAP where there is a review process if the writer requests such to increase the percentage from the initial 2% to 10% that is initially allocated, this is a flat rate determination which is applied to all copyrighted arrangements of public domain compositions across the board.

 

            SESAC treats public domain works in a manner similar to BMI, as arrangements of songs that are in the public domain are paid at 15% of the otherwise applicable income that would have been earned by an original song.

 

           GMR provides full credit for performances of copyrighted arrangements of public domain works and pays the same per minute royalties as any background music use. 

 

            To illustrate with an example as to how the procedure works in reality, let’s assume that a writer artist or writer producer is an ASCAP writer member who records a contemporary arrangement of a song that is in the public domain. In the artist’s record contract there is a provision that the artist will be paid the 9.1 cent United States statutory royalty for the sale of every composition that the artist writes and records. There is a 13x statutory cap on physical product but such does not apply due to the fact that the album does not exceed the cap (i.e., the album has only 13 songs on it).

 

             In addition, there is a provision in the controlled composition clause of the artist and/or producer agreement that states that mechanical royalties on any arrangement of a public domain work will be calculated in proportion to the percentage given the writer’s copyrighted arrangement by ASCAP, BMI, SESAC or GMR.

 

            The single is released, is successful, and sells 250,000 downloads. The album goes to #1 and sells 500,000 units in the United States.

 

            The recording artist/writer (or writer/producer if applicable) submits the recording and a copy of the new arrangement to ASCAP, where the composition is analyzed in house and a % determination made. If the writer is not happy with this decision, he or she can appeal this classification decision to the Special Classification Committee.  For the sake of this example,  ASCAP and its Special Classification Committee gives the composition a 50% royalty rating because of significant  additional new material, creativity, etc. –in effect, making the new composition worth one-half of an original newly written song.

 

            The record company is sent a copy of the ASCAP determination ( the same would occur with BMI, SESAC and GMR with their flat fee rates) which then gives the song a 50% mechanical royalty payout rate. In other words, the song will receive 50% of the “original song”9.1 cent statutory rate per composition mechanical royalty. Certain agreements have a time limit on when the determination and supporting evidence has to be received by the record company but this article is not intended to concentrate on whether such type of provision is enforceable or not. One should, however, be aware of such.

 

            The mechanical royalty calculations for sales in the United States would be:

 

                        Single                        9.1 x 50% = 4.55 x 250,000 =            $11,375

                        Album                        9.1 x 50% = 4.55 x 500,000 =            $22,750

                                                                                                            $34,125 Total

 

            Such a clause may not seem important to most recording artists and producers who write their own material, but a good recording or producer contract should anticipate and provide for all contingencies. It may not seem likely that the artist will be recording any public domain compositions. But if it happens, the artist (or writer/producer) should be guaranteed some type of fair formula for payment.

 

            It should be emphasized that songwriter and music publisher performance royalties will be based on that same percentage so if a public domain song becomes a radio or Internet hit, the % allocation received from ASCAP, BMI,  SESAC and GMR can really have an effect on the amount of money that can be earned.  For example, if a song is a major radio hit, earnings in the area of $300,000 to $700,000 in songwriter earnings are not unusual in performance royalty income for an original song during the period of chart activity.  One just has to do the math to see the monies at stake depending on the % given by the writer’s performance right organization for the public domain work arrangement. For example, an ASCAP 50% public domain crediting would generate $150,000-$350,000 in writer earnings if one were to use the above original song payments. A BMI 20 % crediting would generate total songwriter figures in the area of $60,000-$140,000 A SESAC 15% crediting would generate $45,000 to $105,000.  And a GMR writer would be credited with the full amount of royalties.

 

              And since the music publisher is paid at the same rate as the writer/arranger, this is not only a songwriter issue but a publisher issue as well.

 

            This article is not going to get into the ins and outs of the actual registration processes with ASCAP, BMI, SESAC and GMR. It should be noted that some of the forms and inquiry boxes to be checked [e.g. (a) original music, (b) public domain music, (c) pre-existing copyrighted music written by someone else, used with permission, but not in collaboration, (d) original lyrics (words), (e) public domain lyrics (words), (f) pre-existing copyrighted lyrics (words) written by someone else, used with permission but not in collaboration, (g) the work is concert music (e.g. symphonic, chamber, recital, etc. with qualifiers concerning whether the work is complete in one movement, part of a multi-movement work such as a symphony, concerto, or song cycle, or part of a larger work, etc.)] are somewhat different from the normal registration process. So knowledge of registration procedures (as mundane as this may sound) is vital to ensure rights and proper crediting, monitoring, and payment of royalties.

 

Conclusion

 

Determining whether a song is in the public domain is always the first inquiry. Once this has been established, the next inquiry is how to receive income for its use. To receive any royalties or license fees, you have to copyright your particular arrangement of the public domain work and notify your PRO. Without that step, the income flow will be 0 dollars. Once copyrighted, you will receive between 2% and 100% of the royalties that would have been generated had the song not been a public domain work. 

 

©2013, 2017 Jeff Brabec, Todd BrabecHow Royalties Are Determined for New Material Written for Public Domain Music Compositions

 

(Entertainment Law & Finance, Volume 29, Number 5, August 2013)

 

By

 

Jeff Brabec

Todd Brabec

 

            A composition in the public domain is one that is unprotected by copyright, because its copyright has expired. As a brief overview of copyright duration under the United States Copyright Law (and there are more complexities depending on the composition involved so this is not dispositive in any respect other than to provide a general rule of thumb as a starting point), protection for a composition copyrighted prior to January 1, 1978 lasts for 95 years from the earlier of registration with The Copyright Office or publication.  For compositions written on or after January 1, 1978, copyright protection lasts for the life of the author (or last surviving author if a joint work) plus 70 years.  And if the composition was written as a work for hire, the copyright protection term is the earlier of 95 years from publication or 120 years from creation.

 

            Granted, not much public domain material is recorded in comparison with original material, but if such a song becomes a hit or is on a successful album, the royalties can be substantial provided the writer/arranger (who is many times the recording artist or record producer) has copyrighted his or her version and registered it with the performance right society with which the writer is affiliated..

 

              In the artist’s record contract or the producer agreement (if the writer is the producer) there is almost always a clause that deals with how mechanical royalties are paid if a public domain song is contained on the album or released as a single track.

 

            Some record companies refuse to pay any writer or publisher mechanical royalties for public domain compositions. Others pay a reduced stated penny rate.

 

            The most common approach (one accepted by most record companies), however, provides that the record company will pay the songwriter/arranger on the basis of the percentage that ASCAP, BMI, SESAC or GMR determine what they will pay the writer/arranger for performances of the copyrighted arrangement.

 

            In this regard, ASCAP will treat an arranger as a writer and pay royalties according to the amount of new material that has been added to the original public domain composition. The percentages range from a low of 2% to a high of 100%.

 

            Below is a summary of ASCAP’s guidelines in the crediting of public domain works for royalty purposes.

 

            If the arrangement is separately published or separately copyrighted, there will be a 10% royalty crediting (i.e., the royalties payable for performances will be 10% of the royalties that would be earned by an original song).  If it is included in a copyrighted collection (but does not qualify for 10%), then the royalty crediting is 2%.

 

            If the composition contains public domain lyrics and new, original music, it may receive up to 50% crediting, depending on the extent and treatment of the lyrics within the context of the entire work.

 

            If the copyrighted arrangement contains lyrics, it is deemed to be a vocal arrangement and can earn up to 100% depending on the extent to which it embodies changes in the underlying composition as follows: (a) new lyrics, up to 50%; or (b) changes in the music, up to 50% (in addition to any % received in (a) above).

 

            If the work is primarily an instrumental, it can be accorded up to 100% of the % given to an original composition as follows: (a) a transference from one medium to another, up to 35%; or (b) a development of a composition, which exhibits creative treatment and contains original musical characteristics and is identifiable as a set piece apart from the source material, up to 100%

 

            BMI, on the other hand, will pay the writer/music publisher 20% of what an original newly written song would earn. Unlike ASCAP where there is a review process if the writer requests such to increase the percentage from the initial 2% to 10% that is initially allocated, this is a flat rate determination which is applied to all copyrighted arrangements of public domain compositions across the board.

 

            SESAC treats public domain works in a manner similar to BMI, as arrangements of songs that are in the public domain are paid at 15% of the otherwise applicable income that would have been earned by an original song.

 

           GMR provides full credit for performances of copyrighted arrangements of public domain works and pays the same per minute royalties as any background music use. 

 

            To illustrate with an example as to how the procedure works in reality, let’s assume that a writer artist or writer producer is an ASCAP writer member who records a contemporary arrangement of a song that is in the public domain. In the artist’s record contract there is a provision that the artist will be paid the 9.1 cent United States statutory royalty for the sale of every composition that the artist writes and records. There is a 13x statutory cap on physical product but such does not apply due to the fact that the album does not exceed the cap (i.e., the album has only 13 songs on it).

 

             In addition, there is a provision in the controlled composition clause of the artist and/or producer agreement that states that mechanical royalties on any arrangement of a public domain work will be calculated in proportion to the percentage given the writer’s copyrighted arrangement by ASCAP, BMI, SESAC or GMR.

 

            The single is released, is successful, and sells 250,000 downloads. The album goes to #1 and sells 500,000 units in the United States.

 

            The recording artist/writer (or writer/producer if applicable) submits the recording and a copy of the new arrangement to ASCAP, where the composition is analyzed in house and a % determination made. If the writer is not happy with this decision, he or she can appeal this classification decision to the Special Classification Committee.  For the sake of this example,  ASCAP and its Special Classification Committee gives the composition a 50% royalty rating because of significant  additional new material, creativity, etc. –in effect, making the new composition worth one-half of an original newly written song.

 

            The record company is sent a copy of the ASCAP determination ( the same would occur with BMI, SESAC and GMR with their flat fee rates) which then gives the song a 50% mechanical royalty payout rate. In other words, the song will receive 50% of the “original song”9.1 cent statutory rate per composition mechanical royalty. Certain agreements have a time limit on when the determination and supporting evidence has to be received by the record company but this article is not intended to concentrate on whether such type of provision is enforceable or not. One should, however, be aware of such.

 

            The mechanical royalty calculations for sales in the United States would be:

 

                        Single                        9.1 x 50% = 4.55 x 250,000 =            $11,375

                        Album                        9.1 x 50% = 4.55 x 500,000 =            $22,750

                                                                                                            $34,125 Total

 

            Such a clause may not seem important to most recording artists and producers who write their own material, but a good recording or producer contract should anticipate and provide for all contingencies. It may not seem likely that the artist will be recording any public domain compositions. But if it happens, the artist (or writer/producer) should be guaranteed some type of fair formula for payment.

 

            It should be emphasized that songwriter and music publisher performance royalties will be based on that same percentage so if a public domain song becomes a radio or Internet hit, the % allocation received from ASCAP, BMI,  SESAC and GMR can really have an effect on the amount of money that can be earned.  For example, if a song is a major radio hit, earnings in the area of $300,000 to $700,000 in songwriter earnings are not unusual in performance royalty income for an original song during the period of chart activity.  One just has to do the math to see the monies at stake depending on the % given by the writer’s performance right organization for the public domain work arrangement. For example, an ASCAP 50% public domain crediting would generate $150,000-$350,000 in writer earnings if one were to use the above original song payments. A BMI 20 % crediting would generate total songwriter figures in the area of $60,000-$140,000 A SESAC 15% crediting would generate $45,000 to $105,000.  And a GMR writer would be credited with the full amount of royalties.

 

              And since the music publisher is paid at the same rate as the writer/arranger, this is not only a songwriter issue but a publisher issue as well.

 

            This article is not going to get into the ins and outs of the actual registration processes with ASCAP, BMI, SESAC and GMR. It should be noted that some of the forms and inquiry boxes to be checked [e.g. (a) original music, (b) public domain music, (c) pre-existing copyrighted music written by someone else, used with permission, but not in collaboration, (d) original lyrics (words), (e) public domain lyrics (words), (f) pre-existing copyrighted lyrics (words) written by someone else, used with permission but not in collaboration, (g) the work is concert music (e.g. symphonic, chamber, recital, etc. with qualifiers concerning whether the work is complete in one movement, part of a multi-movement work such as a symphony, concerto, or song cycle, or part of a larger work, etc.)] are somewhat different from the normal registration process. So knowledge of registration procedures (as mundane as this may sound) is vital to ensure rights and proper crediting, monitoring, and payment of royalties.

 

Conclusion

 

Determining whether a song is in the public domain is always the first inquiry. Once this has been established, the next inquiry is how to receive income for its use. To receive any royalties or license fees, you have to copyright your particular arrangement of the public domain work and notify your PRO. Without that step, the income flow will be 0 dollars. Once copyrighted, you will receive between 2% and 100% of the royalties that would have been generated had the song not been a public domain work. 

 

©2013, 2017 Jeff Brabec, Todd BrabecHow Royalties Are Determined for New Material Written for Public Domain Music Compositions

 

(Entertainment Law & Finance, Volume 29, Number 5, August 2013)

 

By

 

Jeff Brabec

Todd Brabec

 

            A composition in the public domain is one that is unprotected by copyright, because its copyright has expired. As a brief overview of copyright duration under the United States Copyright Law (and there are more complexities depending on the composition involved so this is not dispositive in any respect other than to provide a general rule of thumb as a starting point), protection for a composition copyrighted prior to January 1, 1978 lasts for 95 years from the earlier of registration with The Copyright Office or publication.  For compositions written on or after January 1, 1978, copyright protection lasts for the life of the author (or last surviving author if a joint work) plus 70 years.  And if the composition was written as a work for hire, the copyright protection term is the earlier of 95 years from publication or 120 years from creation.

 

            Granted, not much public domain material is recorded in comparison with original material, but if such a song becomes a hit or is on a successful album, the royalties can be substantial provided the writer/arranger (who is many times the recording artist or record producer) has copyrighted his or her version and registered it with the performance right society with which the writer is affiliated..

 

              In the artist’s record contract or the producer agreement (if the writer is the producer) there is almost always a clause that deals with how mechanical royalties are paid if a public domain song is contained on the album or released as a single track.

 

            Some record companies refuse to pay any writer or publisher mechanical royalties for public domain compositions. Others pay a reduced stated penny rate.

 

            The most common approach (one accepted by most record companies), however, provides that the record company will pay the songwriter/arranger on the basis of the percentage that ASCAP, BMI, SESAC or GMR determine what they will pay the writer/arranger for performances of the copyrighted arrangement.

 

            In this regard, ASCAP will treat an arranger as a writer and pay royalties according to the amount of new material that has been added to the original public domain composition. The percentages range from a low of 2% to a high of 100%.

 

            Below is a summary of ASCAP’s guidelines in the crediting of public domain works for royalty purposes.

 

            If the arrangement is separately published or separately copyrighted, there will be a 10% royalty crediting (i.e., the royalties payable for performances will be 10% of the royalties that would be earned by an original song).  If it is included in a copyrighted collection (but does not qualify for 10%), then the royalty crediting is 2%.

 

            If the composition contains public domain lyrics and new, original music, it may receive up to 50% crediting, depending on the extent and treatment of the lyrics within the context of the entire work.

 

            If the copyrighted arrangement contains lyrics, it is deemed to be a vocal arrangement and can earn up to 100% depending on the extent to which it embodies changes in the underlying composition as follows: (a) new lyrics, up to 50%; or (b) changes in the music, up to 50% (in addition to any % received in (a) above).

 

            If the work is primarily an instrumental, it can be accorded up to 100% of the % given to an original composition as follows: (a) a transference from one medium to another, up to 35%; or (b) a development of a composition, which exhibits creative treatment and contains original musical characteristics and is identifiable as a set piece apart from the source material, up to 100%

 

            BMI, on the other hand, will pay the writer/music publisher 20% of what an original newly written song would earn. Unlike ASCAP where there is a review process if the writer requests such to increase the percentage from the initial 2% to 10% that is initially allocated, this is a flat rate determination which is applied to all copyrighted arrangements of public domain compositions across the board.

 

            SESAC treats public domain works in a manner similar to BMI, as arrangements of songs that are in the public domain are paid at 15% of the otherwise applicable income that would have been earned by an original song.

 

           GMR provides full credit for performances of copyrighted arrangements of public domain works and pays the same per minute royalties as any background music use. 

 

            To illustrate with an example as to how the procedure works in reality, let’s assume that a writer artist or writer producer is an ASCAP writer member who records a contemporary arrangement of a song that is in the public domain. In the artist’s record contract there is a provision that the artist will be paid the 9.1 cent United States statutory royalty for the sale of every composition that the artist writes and records. There is a 13x statutory cap on physical product but such does not apply due to the fact that the album does not exceed the cap (i.e., the album has only 13 songs on it).

 

             In addition, there is a provision in the controlled composition clause of the artist and/or producer agreement that states that mechanical royalties on any arrangement of a public domain work will be calculated in proportion to the percentage given the writer’s copyrighted arrangement by ASCAP, BMI, SESAC or GMR.

 

            The single is released, is successful, and sells 250,000 downloads. The album goes to #1 and sells 500,000 units in the United States.

 

            The recording artist/writer (or writer/producer if applicable) submits the recording and a copy of the new arrangement to ASCAP, where the composition is analyzed in house and a % determination made. If the writer is not happy with this decision, he or she can appeal this classification decision to the Special Classification Committee.  For the sake of this example,  ASCAP and its Special Classification Committee gives the composition a 50% royalty rating because of significant  additional new material, creativity, etc. –in effect, making the new composition worth one-half of an original newly written song.

 

            The record company is sent a copy of the ASCAP determination ( the same would occur with BMI, SESAC and GMR with their flat fee rates) which then gives the song a 50% mechanical royalty payout rate. In other words, the song will receive 50% of the “original song”9.1 cent statutory rate per composition mechanical royalty. Certain agreements have a time limit on when the determination and supporting evidence has to be received by the record company but this article is not intended to concentrate on whether such type of provision is enforceable or not. One should, however, be aware of such.

 

            The mechanical royalty calculations for sales in the United States would be:

 

                        Single                        9.1 x 50% = 4.55 x 250,000 =            $11,375

                        Album                        9.1 x 50% = 4.55 x 500,000 =            $22,750

                                                                                                            $34,125 Total

 

            Such a clause may not seem important to most recording artists and producers who write their own material, but a good recording or producer contract should anticipate and provide for all contingencies. It may not seem likely that the artist will be recording any public domain compositions. But if it happens, the artist (or writer/producer) should be guaranteed some type of fair formula for payment.

 

            It should be emphasized that songwriter and music publisher performance royalties will be based on that same percentage so if a public domain song becomes a radio or Internet hit, the % allocation received from ASCAP, BMI,  SESAC and GMR can really have an effect on the amount of money that can be earned.  For example, if a song is a major radio hit, earnings in the area of $300,000 to $700,000 in songwriter earnings are not unusual in performance royalty income for an original song during the period of chart activity.  One just has to do the math to see the monies at stake depending on the % given by the writer’s performance right organization for the public domain work arrangement. For example, an ASCAP 50% public domain crediting would generate $150,000-$350,000 in writer earnings if one were to use the above original song payments. A BMI 20 % crediting would generate total songwriter figures in the area of $60,000-$140,000 A SESAC 15% crediting would generate $45,000 to $105,000.  And a GMR writer would be credited with the full amount of royalties.

 

              And since the music publisher is paid at the same rate as the writer/arranger, this is not only a songwriter issue but a publisher issue as well.

 

            This article is not going to get into the ins and outs of the actual registration processes with ASCAP, BMI, SESAC and GMR. It should be noted that some of the forms and inquiry boxes to be checked [e.g. (a) original music, (b) public domain music, (c) pre-existing copyrighted music written by someone else, used with permission, but not in collaboration, (d) original lyrics (words), (e) public domain lyrics (words), (f) pre-existing copyrighted lyrics (words) written by someone else, used with permission but not in collaboration, (g) the work is concert music (e.g. symphonic, chamber, recital, etc. with qualifiers concerning whether the work is complete in one movement, part of a multi-movement work such as a symphony, concerto, or song cycle, or part of a larger work, etc.)] are somewhat different from the normal registration process. So knowledge of registration procedures (as mundane as this may sound) is vital to ensure rights and proper crediting, monitoring, and payment of royalties.

 

Conclusion

 

Determining whether a song is in the public domain is always the first inquiry. Once this has been established, the next inquiry is how to receive income for its use. To receive any royalties or license fees, you have to copyright your particular arrangement of the public domain work and notify your PRO. Without that step, the income flow will be 0 dollars. Once copyrighted, you will receive between 2% and 100% of the royalties that would have been generated had the song not been a public domain work. 

 

©2013, 2017 Jeff Brabec, Todd Brabec

How Royalties Are Determined for New Material Written for Public Domain Music Compositions

 

(Entertainment Law & Finance, Volume 29, Number 5, August 2013)

 

By

 

Jeff Brabec

Todd Brabec

 

            A composition in the public domain is one that is unprotected by copyright, because its copyright has expired. As a brief overview of copyright duration under the United States Copyright Law (and there are more complexities depending on the composition involved so this is not dispositive in any respect other than to provide a general rule of thumb as a starting point), protection for a composition copyrighted prior to January 1, 1978 lasts for 95 years from the earlier of registration with The Copyright Office or publication.  For compositions written on or after January 1, 1978, copyright protection lasts for the life of the author (or last surviving author if a joint work) plus 70 years.  And if the composition was written as a work for hire, the copyright protection term is the earlier of 95 years from publication or 120 years from creation.

 

            Granted, not much public domain material is recorded in comparison with original material, but if such a song becomes a hit or is on a successful album, the royalties can be substantial provided the writer/arranger (who is many times the recording artist or record producer) has copyrighted his or her version and registered it with the performance right society with which the writer is affiliated..

 

              In the artist’s record contract or the producer agreement (if the writer is the producer) there is almost always a clause that deals with how mechanical royalties are paid if a public domain song is contained on the album or released as a single track.

 

            Some record companies refuse to pay any writer or publisher mechanical royalties for public domain compositions. Others pay a reduced stated penny rate.

 

            The most common approach (one accepted by most record companies), however, provides that the record company will pay the songwriter/arranger on the basis of the percentage that ASCAP, BMI, SESAC or GMR determine what they will pay the writer/arranger for performances of the copyrighted arrangement.

 

            In this regard, ASCAP will treat an arranger as a writer and pay royalties according to the amount of new material that has been added to the original public domain composition. The percentages range from a low of 2% to a high of 100%.

 

            Below is a summary of ASCAP’s guidelines in the crediting of public domain works for royalty purposes.

 

            If the arrangement is separately published or separately copyrighted, there will be a 10% royalty crediting (i.e., the royalties payable for performances will be 10% of the royalties that would be earned by an original song).  If it is included in a copyrighted collection (but does not qualify for 10%), then the royalty crediting is 2%.

 

            If the composition contains public domain lyrics and new, original music, it may receive up to 50% crediting, depending on the extent and treatment of the lyrics within the context of the entire work.

 

            If the copyrighted arrangement contains lyrics, it is deemed to be a vocal arrangement and can earn up to 100% depending on the extent to which it embodies changes in the underlying composition as follows: (a) new lyrics, up to 50%; or (b) changes in the music, up to 50% (in addition to any % received in (a) above).

 

            If the work is primarily an instrumental, it can be accorded up to 100% of the % given to an original composition as follows: (a) a transference from one medium to another, up to 35%; or (b) a development of a composition, which exhibits creative treatment and contains original musical characteristics and is identifiable as a set piece apart from the source material, up to 100%

 

            BMI, on the other hand, will pay the writer/music publisher 20% of what an original newly written song would earn. Unlike ASCAP where there is a review process if the writer requests such to increase the percentage from the initial 2% to 10% that is initially allocated, this is a flat rate determination which is applied to all copyrighted arrangements of public domain compositions across the board.

 

            SESAC treats public domain works in a manner similar to BMI, as arrangements of songs that are in the public domain are paid at 15% of the otherwise applicable income that would have been earned by an original song.

 

           GMR provides full credit for performances of copyrighted arrangements of public domain works and pays the same per minute royalties as any background music use. 

 

            To illustrate with an example as to how the procedure works in reality, let’s assume that a writer artist or writer producer is an ASCAP writer member who records a contemporary arrangement of a song that is in the public domain. In the artist’s record contract there is a provision that the artist will be paid the 9.1 cent United States statutory royalty for the sale of every composition that the artist writes and records. There is a 13x statutory cap on physical product but such does not apply due to the fact that the album does not exceed the cap (i.e., the album has only 13 songs on it).

 

             In addition, there is a provision in the controlled composition clause of the artist and/or producer agreement that states that mechanical royalties on any arrangement of a public domain work will be calculated in proportion to the percentage given the writer’s copyrighted arrangement by ASCAP, BMI, SESAC or GMR.

 

            The single is released, is successful, and sells 250,000 downloads. The album goes to #1 and sells 500,000 units in the United States.

 

            The recording artist/writer (or writer/producer if applicable) submits the recording and a copy of the new arrangement to ASCAP, where the composition is analyzed in house and a % determination made. If the writer is not happy with this decision, he or she can appeal this classification decision to the Special Classification Committee.  For the sake of this example,  ASCAP and its Special Classification Committee gives the composition a 50% royalty rating because of significant  additional new material, creativity, etc. –in effect, making the new composition worth one-half of an original newly written song.

 

            The record company is sent a copy of the ASCAP determination ( the same would occur with BMI, SESAC and GMR with their flat fee rates) which then gives the song a 50% mechanical royalty payout rate. In other words, the song will receive 50% of the “original song”9.1 cent statutory rate per composition mechanical royalty. Certain agreements have a time limit on when the determination and supporting evidence has to be received by the record company but this article is not intended to concentrate on whether such type of provision is enforceable or not. One should, however, be aware of such.

 

            The mechanical royalty calculations for sales in the United States would be:

 

                        Single                        9.1 x 50% = 4.55 x 250,000 =            $11,375

                        Album                        9.1 x 50% = 4.55 x 500,000 =            $22,750

                                                                                                            $34,125 Total

 

            Such a clause may not seem important to most recording artists and producers who write their own material, but a good recording or producer contract should anticipate and provide for all contingencies. It may not seem likely that the artist will be recording any public domain compositions. But if it happens, the artist (or writer/producer) should be guaranteed some type of fair formula for payment.

 

            It should be emphasized that songwriter and music publisher performance royalties will be based on that same percentage so if a public domain song becomes a radio or Internet hit, the % allocation received from ASCAP, BMI,  SESAC and GMR can really have an effect on the amount of money that can be earned.  For example, if a song is a major radio hit, earnings in the area of $300,000 to $700,000 in songwriter earnings are not unusual in performance royalty income for an original song during the period of chart activity.  One just has to do the math to see the monies at stake depending on the % given by the writer’s performance right organization for the public domain work arrangement. For example, an ASCAP 50% public domain crediting would generate $150,000-$350,000 in writer earnings if one were to use the above original song payments. A BMI 20 % crediting would generate total songwriter figures in the area of $60,000-$140,000 A SESAC 15% crediting would generate $45,000 to $105,000.  And a GMR writer would be credited with the full amount of royalties.

 

              And since the music publisher is paid at the same rate as the writer/arranger, this is not only a songwriter issue but a publisher issue as well.

 

            This article is not going to get into the ins and outs of the actual registration processes with ASCAP, BMI, SESAC and GMR. It should be noted that some of the forms and inquiry boxes to be checked [e.g. (a) original music, (b) public domain music, (c) pre-existing copyrighted music written by someone else, used with permission, but not in collaboration, (d) original lyrics (words), (e) public domain lyrics (words), (f) pre-existing copyrighted lyrics (words) written by someone else, used with permission but not in collaboration, (g) the work is concert music (e.g. symphonic, chamber, recital, etc. with qualifiers concerning whether the work is complete in one movement, part of a multi-movement work such as a symphony, concerto, or song cycle, or part of a larger work, etc.)] are somewhat different from the normal registration process. So knowledge of registration procedures (as mundane as this may sound) is vital to ensure rights and proper crediting, monitoring, and payment of royalties.

 

Conclusion

 

Determining whether a song is in the public domain is always the first inquiry. Once this has been established, the next inquiry is how to receive income for its use. To receive any royalties or license fees, you have to copyright your particular arrangement of the public domain work and notify your PRO. Without that step, the income flow will be 0 dollars. Once copyrighted, you will receive between 2% and 100% of the royalties that would have been generated had the song not been a public domain work. 

 

©2013, 2017 Jeff Brabec, Todd BrabecHow Royalties Are Determined for New Material Written for Public Domain Music Compositions

 

(Entertainment Law & Finance, Volume 29, Number 5, August 2013)

 

By

 

Jeff Brabec

Todd Brabec

 

            A composition in the public domain is one that is unprotected by copyright, because its copyright has expired. As a brief overview of copyright duration under the United States Copyright Law (and there are more complexities depending on the composition involved so this is not dispositive in any respect other than to provide a general rule of thumb as a starting point), protection for a composition copyrighted prior to January 1, 1978 lasts for 95 years from the earlier of registration with The Copyright Office or publication.  For compositions written on or after January 1, 1978, copyright protection lasts for the life of the author (or last surviving author if a joint work) plus 70 years.  And if the composition was written as a work for hire, the copyright protection term is the earlier of 95 years from publication or 120 years from creation.

 

            Granted, not much public domain material is recorded in comparison with original material, but if such a song becomes a hit or is on a successful album, the royalties can be substantial provided the writer/arranger (who is many times the recording artist or record producer) has copyrighted his or her version and registered it with the performance right society with which the writer is affiliated..

 

              In the artist’s record contract or the producer agreement (if the writer is the producer) there is almost always a clause that deals with how mechanical royalties are paid if a public domain song is contained on the album or released as a single track.

 

            Some record companies refuse to pay any writer or publisher mechanical royalties for public domain compositions. Others pay a reduced stated penny rate.

 

            The most common approach (one accepted by most record companies), however, provides that the record company will pay the songwriter/arranger on the basis of the percentage that ASCAP, BMI, SESAC or GMR determine what they will pay the writer/arranger for performances of the copyrighted arrangement.

 

            In this regard, ASCAP will treat an arranger as a writer and pay royalties according to the amount of new material that has been added to the original public domain composition. The percentages range from a low of 2% to a high of 100%.

 

            Below is a summary of ASCAP’s guidelines in the crediting of public domain works for royalty purposes.

 

            If the arrangement is separately published or separately copyrighted, there will be a 10% royalty crediting (i.e., the royalties payable for performances will be 10% of the royalties that would be earned by an original song).  If it is included in a copyrighted collection (but does not qualify for 10%), then the royalty crediting is 2%.

 

            If the composition contains public domain lyrics and new, original music, it may receive up to 50% crediting, depending on the extent and treatment of the lyrics within the context of the entire work.

 

            If the copyrighted arrangement contains lyrics, it is deemed to be a vocal arrangement and can earn up to 100% depending on the extent to which it embodies changes in the underlying composition as follows: (a) new lyrics, up to 50%; or (b) changes in the music, up to 50% (in addition to any % received in (a) above).

 

            If the work is primarily an instrumental, it can be accorded up to 100% of the % given to an original composition as follows: (a) a transference from one medium to another, up to 35%; or (b) a development of a composition, which exhibits creative treatment and contains original musical characteristics and is identifiable as a set piece apart from the source material, up to 100%

 

            BMI, on the other hand, will pay the writer/music publisher 20% of what an original newly written song would earn. Unlike ASCAP where there is a review process if the writer requests such to increase the percentage from the initial 2% to 10% that is initially allocated, this is a flat rate determination which is applied to all copyrighted arrangements of public domain compositions across the board.

 

            SESAC treats public domain works in a manner similar to BMI, as arrangements of songs that are in the public domain are paid at 15% of the otherwise applicable income that would have been earned by an original song.

 

           GMR provides full credit for performances of copyrighted arrangements of public domain works and pays the same per minute royalties as any background music use. 

 

            To illustrate with an example as to how the procedure works in reality, let’s assume that a writer artist or writer producer is an ASCAP writer member who records a contemporary arrangement of a song that is in the public domain. In the artist’s record contract there is a provision that the artist will be paid the 9.1 cent United States statutory royalty for the sale of every composition that the artist writes and records. There is a 13x statutory cap on physical product but such does not apply due to the fact that the album does not exceed the cap (i.e., the album has only 13 songs on it).

 

             In addition, there is a provision in the controlled composition clause of the artist and/or producer agreement that states that mechanical royalties on any arrangement of a public domain work will be calculated in proportion to the percentage given the writer’s copyrighted arrangement by ASCAP, BMI, SESAC or GMR.

 

            The single is released, is successful, and sells 250,000 downloads. The album goes to #1 and sells 500,000 units in the United States.

 

            The recording artist/writer (or writer/producer if applicable) submits the recording and a copy of the new arrangement to ASCAP, where the composition is analyzed in house and a % determination made. If the writer is not happy with this decision, he or she can appeal this classification decision to the Special Classification Committee.  For the sake of this example,  ASCAP and its Special Classification Committee gives the composition a 50% royalty rating because of significant  additional new material, creativity, etc. –in effect, making the new composition worth one-half of an original newly written song.

 

            The record company is sent a copy of the ASCAP determination ( the same would occur with BMI, SESAC and GMR with their flat fee rates) which then gives the song a 50% mechanical royalty payout rate. In other words, the song will receive 50% of the “original song”9.1 cent statutory rate per composition mechanical royalty. Certain agreements have a time limit on when the determination and supporting evidence has to be received by the record company but this article is not intended to concentrate on whether such type of provision is enforceable or not. One should, however, be aware of such.

 

            The mechanical royalty calculations for sales in the United States would be:

 

                        Single                        9.1 x 50% = 4.55 x 250,000 =            $11,375

                        Album                        9.1 x 50% = 4.55 x 500,000 =            $22,750

                                                                                                            $34,125 Total

 

            Such a clause may not seem important to most recording artists and producers who write their own material, but a good recording or producer contract should anticipate and provide for all contingencies. It may not seem likely that the artist will be recording any public domain compositions. But if it happens, the artist (or writer/producer) should be guaranteed some type of fair formula for payment.

 

            It should be emphasized that songwriter and music publisher performance royalties will be based on that same percentage so if a public domain song becomes a radio or Internet hit, the % allocation received from ASCAP, BMI,  SESAC and GMR can really have an effect on the amount of money that can be earned.  For example, if a song is a major radio hit, earnings in the area of $300,000 to $700,000 in songwriter earnings are not unusual in performance royalty income for an original song during the period of chart activity.  One just has to do the math to see the monies at stake depending on the % given by the writer’s performance right organization for the public domain work arrangement. For example, an ASCAP 50% public domain crediting would generate $150,000-$350,000 in writer earnings if one were to use the above original song payments. A BMI 20 % crediting would generate total songwriter figures in the area of $60,000-$140,000 A SESAC 15% crediting would generate $45,000 to $105,000.  And a GMR writer would be credited with the full amount of royalties.

 

              And since the music publisher is paid at the same rate as the writer/arranger, this is not only a songwriter issue but a publisher issue as well.

 

            This article is not going to get into the ins and outs of the actual registration processes with ASCAP, BMI, SESAC and GMR. It should be noted that some of the forms and inquiry boxes to be checked [e.g. (a) original music, (b) public domain music, (c) pre-existing copyrighted music written by someone else, used with permission, but not in collaboration, (d) original lyrics (words), (e) public domain lyrics (words), (f) pre-existing copyrighted lyrics (words) written by someone else, used with permission but not in collaboration, (g) the work is concert music (e.g. symphonic, chamber, recital, etc. with qualifiers concerning whether the work is complete in one movement, part of a multi-movement work such as a symphony, concerto, or song cycle, or part of a larger work, etc.)] are somewhat different from the normal registration process. So knowledge of registration procedures (as mundane as this may sound) is vital to ensure rights and proper crediting, monitoring, and payment of royalties.

 

Conclusion

 

Determining whether a song is in the public domain is always the first inquiry. Once this has been established, the next inquiry is how to receive income for its use. To receive any royalties or license fees, you have to copyright your particular arrangement of the public domain work and notify your PRO. Without that step, the income flow will be 0 dollars. Once copyrighted, you will receive between 2% and 100% of the royalties that would have been generated had the song not been a public domain work. 

 

©2013, 2017 Jeff Brabec, Todd Brabec