TPM 67 | Music Royalties

 

Navigating music royalties can be complicated, especially when you don’t understand the legalities of copyrights. Bree Noble interviews Dave Ratner, the Lead Lawyer at Creative Law Network. Dave explains that copyright is the legal basis of creative works. As soon as you create the work, you own the rights to it. But when you record it, that’s an entirely separate copyright that involves the master. So when a song plays over the radio, it generates performance royalties for you as the artist and for the master. That’s why it’s best to create contracts and consult a lawyer. If you want to know more about handling music royalties, tune in.

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Demystifying Music Royalties With A Lawyer With Dave Ratner Of Creative Law Network

I am excited to be here with Dave Ratner from Creative Law Network. We are going to be talking about everything like copyright, royalty streams, a little bit of publishing, understanding all the different rights you have as a musician, and how to make sure that you claim all of them. Before we get into that, I would love to know a little bit about you, Dave, and how you got started in working in the area of law, specifically with musicians and entertainment.

The music works started before the law works. I am a recovering band manager. Before that, I was a tour manager, and before that, I was a roadie. When I was in my mid-twenties, I said, “I do not play music but I love music and I want to work in music.” I called up my favorite band at that time. I went out on the road with them, learned hauling gear, driving the bus, being on the road, eventually became their tour manager, became the manager, set up a management agency, and was managing bands.

What I enjoyed about it was being able to help the artists with the business side so the artists could do the art side. Artists can make music. Managers can run a business. What I realized was every time I got a contract, I needed to find a lawyer to read it. I could do a lot more or do more for my clients as an attorney.

I closed up shop and went to law school with the focus on helping artists and working in the creative industries and music industry. I started my law firm, Creative Law Network, in 2012. We work with artists and creatives on all of this legal stuff. Revenue streams are a big part of it, controlling your rights and figuring out where the revenue is coming from. We work on contracts, licensing, copyrights and trademarks, and everything a musician or someone in the music industry needs to run their business.

That is such an interesting path. Most of the time, it is like, “I went to law school and decided that I wanted to niche into this area, or I had an interest in entertainment law,” but you did the opposite. I feel a kinship working with you because you have been in the shoes of the people that you are working with. You knew like, “What do I need to learn to be up to speed to not have to be clueless about these contracts that we need to figure out whether we want to sign or not?” When you were working with bands, were you working with mostly indie bands?

Yes.

Anyone we may have heard of?

The band that I was tour managing and started managing is a band called The Motet from here in Colorado. Primarily, the bands I worked with were in the live and jam scenes and ticket sales but not a lot of album sales back in the day when we used to sell CDs and those funny things that we remember. One fascinating thing is how much the industry has changed in the time that I have made that transition. I have enjoyed being able to keep up with it because although I’m not managing anymore, I’m dealing and talking with managers and working with artists all the time. I’m familiar with those struggles. The parameters have changed but the struggles are often the same.

Do you end up working with most managers or bands that come to you that are independent and not even at the point where they have a manager yet?

I certainly work with a lot of artists who are at that early stage of not having assembled the team yet, the manager, agent, and publicist. Sometimes, the artist reaches out to me because they have been offered a management agreement and that is the first thing we need a lawyer for. They have contacted a lawyer about that and said, “Before I sign this management contract, I want someone to look at it.” It is always a good idea.

We do not want to be signing contracts, especially because contracts are written in that legalese, that the language can be hard to decipher, which is honestly one of the things you learn in law school. It is how to speak that language. Deciphering that stuff is one of the main reasons that folks will reach out to us and even work with an artist who has management. Sometimes, I deal exclusively with the manager. I’m still dealing with the artist a lot because the artist is more hands-on about that stuff.

 

TPM 67 | Music Royalties

Music Royalties: The main function for many publishing indie artists is collecting revenue.

 

Sometimes I feel like the contracts are written that way on purpose so the artists cannot understand them, then they get frustrated and sign it because they do not want to spend the money to hire a lawyer.

For what it is worth, it is not just artist contracts. All contracts are written that way. No one is singling out the artists for being persecuted by legal leads. It can be challenging. I certainly understand the inclination to say, “I do not want a deal. I’m going to sign this.” It depends on the document. If you are signing up for Distrokid or CD Baby, you are clicking to agree.

When you click to agree, you are signing a contract. There is no negotiating with Distrokid. You can’t say, “I would rather have this percent.” With your potential manager, your potential publisher, or label, there is that opportunity to negotiate. It is a bit of a different thing depending on the document or the contract we are looking at.

There is no negotiating with this Dristokid or CD Baby but you can choose between them. Let’s start with the DSPs. You said, “When they are clicking, they are signing a contract.” What should they be looking for in that information before they click to agree to help them make the decision of which DSP is better for them?

The main thing that I have noticed with those online distributors is the options that you can choose because you are going to sign up for one of them, and they are largely the same. To answer your question, the thing we are looking for is the rate, what and when we are going to get paid, and making sure they are going to put out all the DSPs you want it to go to. What are your options? Can you say, “I do not want it to go to YouTube but I do want it to go to Spotify?”

What I see clients run into trouble is when they add on the publishing agreement on top of it. I was speaking with a client who signed up for CD Baby Publishing when they signed up for CD Baby Distribution, without even thinking about, “I find a way my publishing rights. I have to wait a year before I can terminate.”

I have heard different stories on this and some tell me that CD Baby Publishing is non-exclusive, and other people say, “Never sign that because you will be stuck. If you get a licensing deal or something, you will have to get them to approve it because they are going to have the copyright and all that.”

That is understandably confusing. The main function for a lot of indie artists and the most important function for publishing is collecting the revenue. As individuals, there are a lot of those publishing revenue streams that we can’t collect on our own. We need a publisher or publishing administrator to collect those funds. That is one function that a CD Baby can provide, but their exclusive right to collect is not the same as the exclusive right to exploit. Exploit is the legal term we use for using the music and licensing the music.

Clarify that because to me, exploit sounds bad.

I can’t get out of it but exploit is the legal term we use. It does not have to be negative connotations in a common language. What is most important at that level where you are signing up for a CD Baby, TuneCore or Distrokid is making sure someone is collecting your publishing revenue. There are publishing administrators out there, not just the ones through those distributors. There are a lot of other ones out there that you can sign up for individually or separately from your distribution.

You do have to have someone collecting that. You can’t collect yourself.

 

Having a lawyer look at a management contract before signing it is wise. Click To Tweet

 

There are certain things you can collect. One of the most confusing things about publishing is the various revenue streams that we can be collecting. A common misconception among artists is that signing up for a PRO is all your publishing revenue. Also, SESAC, BMI, ASCAP, GMR. PRO means Performing Rights Organization.

SOCAN if you are in Canada.

In the US, we are unfortunate enough to have four of them. Most countries only have one. Your PRO collects for the public performance of your music. That is not all of your publishing. It is one of the revenue streams from publishing and one of the things that are confusing when we say Performing Rights. People often think, “Performing is I stood up on stage. I performed my music.” It is performed anywhere by any means, radio or internet.

If your music is playing well to the loudspeaker at a bar off a CD or the radio, that is a public performance. That is what the PRO is collecting for. They are not collecting for sync, mechanicals, or print. There are all these other revenue streams related to your publish that a PRO has nothing to do with it. It is important to remember that the PRO only collects the publishing revenue, not the master revenue. One of the other things people say is, “I released my album. If someone is out there, my ASCAP or PRO is collecting for all those streams.” They are collecting for the performance of those streams but only on the publishing side and the performance.

Here is another common misconception or important point to clarify. Copyright is the legal basis for all these creative works. Music, film, poetry, and visual art are all copyright protected. I often say that copyright can be confusing. Music copyright is twice as confusing because there are two copyrights in every song. There is a copyright in the composition, the words in the music. When you write a song, you create a composition. When you take that composition and record it, you create entirely separate copyright, which is the sound recording. We often call it The Master.

Each of those copyrights is a separate piece of intellectual property and generates revenue separately. You can go write a song and own that composition copyright, which we refer to as The Publishing. I can go and record that song. I own the sound recording, The Master. When my master is performed and played over the radio, it generates performance royalties for you. It also is going to generate revenue for me because it is my master and my sound recording that is being used on the other side.

There are also mechanicals. If you are going to record someone else’s song and distribute it physically or on through the DSPs, you have to pay mechanical royalties to them.

It is the notion of a cover. We will use this example. You wrote a song and I go recorded it. I owe you a mechanical royalty. That comes from, “I’m mechanically reproducing your song, whether that is on a physical media like a CD, vinyl, or digital.” It still is generating mechanical royalties, which are also different because mechanicals, at least in the US, is statutory. They are set by statute by the copyright royalty board. It is a set amount and there is no negotiation. It’s just that I owe you a set amount for every CD I print or every time my recording is streamed because you own the composition that I recorded.

That is why people need to buy some license they can use, Easy Song, Harry Fox, or one of those to get that mechanicals taken care of before they put it even digitally distributed.

The statute the law provides for how regularly we have to report or pay and how much we have to pay. The other thing that is important for musicians is to realize that you want to make sure you are collecting your mechanicals because this sounds silly, but if you write a song and you record it, you have mechanically reproduced it, then you upload it to the DSPs. Every time they stream it, they are generating mechanical royalties for you. There is a relatively new thing in the US.

The MLC, The Mechanical Licensing Collective, was created by law a few years ago. What was happening was you write a song and record it. It is played online and wear your mechanicals. How are we getting the mechanical money that we used to get by printing CDs that were very measurable? The Mechanical Licensing Collective collects mechanicals from the DSPs and pays them to the songwriters and owners of the publishing rights.

 

TPM 67 | Music Royalties

Music Royalties: Any songwriter putting their music out in the world can register with the Mechanical Licensing Collective.

 

Any songwriter or anyone who is putting their music out in the world can register with The MLC and when your music is played on Spotify, Pandora, Tidal, and Amazon Music, those are the DSPs that are going to pay mechanicals to be MLC. The MLC will pay their mechanicals to you. If free of you write a song, you put on Harry Fox. I want to record it and I go get mechanical from Harry Fox. That is a common way to do it but me getting a mechanical to record your song is different than the DSPs paying mechanicals for the performance of your song over the years.

I did not even think about the mechanical of me recording my song.

When we sign a record deal, this happens. If you write a song and I’m a record label, you recorded it but you are giving me those sound recordings or masters and I’m going to go distribute your record. Every time I print a CD and stream your music as your record label, I owe you a mechanical royalty. If you are looking at a record deal, you will see how much the label has to pay you? Is it a full mechanical royalty? Is it 75% of the mechanical royalty? Are you giving your label a free mechanical license?

Even though this is mandated by law, can they get out of it by putting it into the contract?

We can contract around laws all time. You do not have to. This is a negotiating point. These contracts can be negotiated. This is the confusing stuff. If you are an artist without a Law degree, when you are reading a record deal, you are like, “What is this about mechanicals?” It will say, “Gratis mechanical license.” That means free. Be aware of that because your label is given a free mechanical license.

That could be in exchange for them doing the production of the thing.

It is all things that they could be doing that may hope they are giving you in advance. They are spending lots of money on marketing, promotions, and labels, which they do for us. Mechanical royalties are one of the things they can contract out of.

This would be good to look at, especially for indie labels because a lot of times, they do not give you nearly as much as far as in advance. If they are also not paying you the mechanical, you have to make sure that you are getting something in return for that.

There are a lot of those deal points to look at, the percentage of your royalty and what the recruitment structure is. There are many different ways we structure label deals. It is funny because I would say, “In the old days,” which is not that long ago, there was the traditional label structure that did not vary much. There were a few majors and that was the way we did things. Now, anybody can start a label. There are millions of labels out there and I see all different types of deals. I help write those deals for people. There are a lot of more artist-friendly deals and some that are not so much.

Let me ask you this about labels because I get this question all the time. Artists think that they should start their label because that is somehow going to make them more legit. I tell them, “There is no reason to start your label unless you are going to be bringing other people under you.” Am I correct in that or do you have any reason that they should start their label?

It depends on what we mean by starting a label. If you write, record your music, and sign up on to TuneCore, Distrokids, and CD Baby, and you get your music up on the DSPs, you have a label and you publish your music. You can say, “I got Sunny Day Records.” However, if we go start a company like an LLC or a corporation like Sunny Day Records, get a bank account and register then we have a label. You said, “We are signing other people to our label and distributing other people’s music so we need contracts for that.” It depends on what we mean by starting a label. The answer to the question is, what do you mean by that? We can tell you whether it is worthwhile.

 

As soon as you create the work, you own the copyright before you, whether or not you register it. Click To Tweet

 

Artists tend to, especially ones that are beginning, think that having a “label” is going to make them more legit. I thought of this. This was way back in the early 2000s when labels were more legit than they are now. They are like, “I need to create this whole LLC and all that stuff.” There are a lot of expenses around it. What is that for? You could create a company around your music without having a “label.” I could be music incorporated, have an LLC, and all of that, and not have a label but still be legit and taking advantage of all those tax opportunities.

The thing is, you could have Bree Noble Music as your company and your company could function as your label, your performing company for doing gigs, publishing comp, and merch company. As artists grow, we separate the merch company, the touring company, and the label. We start to do that but to start, a lot of times, we will put it all under one roof in the initial stages until we grow to a point where we want to break it out into separate companies.

Let’s go back to the CD Baby Pro example because this is something I get a lot of questions about. If they are to check that box and say, “I want to be part of CD Baby Publishing,” what does that mean for them?

I have not looked at that agreement in a while so I do not remember it off the top of my head. What I do know is that you are granting CD Baby the right to collect your publishing revenue. That means that, for example, when you sign up with your PRO, we split our rights into the writer’s share and the publisher’s share in half. The publisher share was going to start going to CD Baby because they are acting as your publisher. I do not want to say anything that I’m not certain of. I’m happy to review their CD Baby Pro agreement, come back, and chat with you again, but I do not remember all the details.

The whole point of it is they are supposed to be operating as your publisher, go out and get you opportunities.

That is the difference. I’m happy you raised that. When I’m teaching about publishing rights, we will say, “What is a publisher’s job?” A publisher’s job is to go and find opportunities to use the music. I won’t say that we are going to find opportunities to make money off the music. That could be sync opportunities or rerecord opportunities like covers. That will generate more revenue for them. They take a cut and pay you your cut.

The difference with something like a CD Baby Pro is, in my experience, I could be wrong, they are collecting the money that is being made from your music. There could be programs I have not been involved in but they are not aggressively shopping your music or trying to make money off your music. This is the difference between a publishing administrator and a publishing company or a publisher.

A publishing administrator administers the rights, which means they collect the money, take a cut, and pay you the rest. A publishing company should be doing that work to help you make money off music to help find opportunities for the music to shop your music. They take a higher percentage for that. They will take more money because they are doing more than just administering the rights.

I would have to go look at it again but I do believe they have both of those options. I believe you can have them be your administrator. They might even work through Songtrust. You can also take the extra layer of, “I want them to be my publisher and they are going to look for opportunities for me.” I have heard them talk on their podcast that they do look for opportunities for the people that sign up for that.

The question is, if you have been doing that for a year and you have seen nothing from it, you probably do not want to keep doing that. You are signing off the whole catalog that you have with them so you are giving them money from the things that you have gone out there and gotten done with your stuff.

They are getting paid for the work that you did.

 

TPM 67 | Music Royalties

Music Royalties: As artists grow, we separate the merged company, touring company, and label.

 

You read the agreement for sure but I wanted to bring up all those things to keep in your mind when you are deciding whether you are going to sign for something like that because it takes you by surprise when you are putting your music in there, releasing a new album and all of a sudden, you have got all these options that are coming up in front of you. You need to make decisions on quickly. You are like, “I do not know what this means.”

That is a tough situation. Honestly, that is where we are always encouraging folks to not sign things that we do not understand. That is the bare bones of it. Our job as attorneys is to help make sense of those things and advise on what it means and whether it is a good fit.

Let’s talk about copyright because here is another thing that I get a ton of questions about. When is it important to copyright your music? I hear everything from the second you write the song immediately copyright it because someone might steal it to plenty of people that are out there licensing their music and do not ever copyright or do not copyright it until it has been signed by someone, by a publisher or for a sync deal. What is your feeling about this?

One thing to clarify is that copyright exists as soon as we create the work or as soon as we lift our pen from the paper. You own the copyright whether or not you register it. We do have a registration system in the US through the US Copyright Office where you can go register those copyrights that you created that you already own. We have a registration system because registration is the legal proof of your copyright ownership.

Where that comes in, at least from a lawyer’s perspective, is if you ever needed to file a lawsuit for infringement of your copyright. If somebody steals your work, you need to have a registration to file that lawsuit. To answer the question of my general feeling on it, it is when you will release the music. It is not likely someone is going to steal your music if no one has ever heard it.

When you write a song and it sits in the drawer or sits on your phone and never goes anywhere, pretty unlikely that somebody can infringe it because no one has ever heard it but once you are releasing the music, that opens the door to possible infringement. That is a good time to put in a registration application.

The other thing to keep in mind, however, is that the corporate registration process takes a long time, and that time, unfortunately, has been lengthened due to the pandemic while pre-pandemic, we were getting registrations in 4 to 6 months. Now, I do not know what the corporate office is publicizing as their timeline. I see 12 or 18 months, so it is good to think ahead about these things.

When you submit a registration application, the registration you get will be effective as of the date you submitted it. If I submit it now and I do not get it until next year, my registration is still effective as of now. When am I going to need that registration? It might be sooner. There is the option of paying for what they call expedited service at the copyright office. You can get it turned around in about a week but that expedited service is an extra $800. Add that to your recording budget.

I do think it is worthwhile to register all the music we are going to release. There are some tricky steps to the registration process. Some clients will say to me, “I’m going to go register all the music I have done in the past several years.” You can’t do that under one application. Each application has to be for a PCA unit, something that was sold, offered, or published as a unit. An album or one song can be under one registration but a bunch of music that you have written over the past years is not the units that were not sold or published together. It cannot all be on one registration.

I wonder if they are going to change this that most people are releasing singles because it gets to be expensive. You can take all the singles you release and put them into an album at the end but you are putting them out there one by one before you have copywritten them if you are waiting.

You can register before you release. You register it as what is called an unpublished work. You could register the whole album and release them one at a time but your register is unpublished, which is an easier process. When you do register, you have to give the corporate office a copy of what you are registering. We call the Deposit Copy.

 

When we create any copyrighted work, whoever has contributed to its creation is a co-owner. Click To Tweet

 

The deposit copy has to be what they consider the best addition to your work like if you physically print any CDs, vinyl, or anything like that. You send them two copies of the vinyl but if you register as unpublished before you have printed any vinyl, you can upload your files and not have to send them anything. This is what we do every day.

It is not something I would expect people to know. There is so much information out on the internet but it is not all in one place. It is also not all correct. The internet is a beautiful, wonderful, horrible thing that has lots of good and some bad information. It is hard to find it all in one place. These are the tricks of the trade we learn by doing it every day.

If you register and it is unpublished, do you have to register again like as published?

You do not. You can but if you have not changed the music that you registered, which is unpublished, it is already protected after you published it.

I’m glad you said that because that is exactly what I tell my students to do in my Rock Your Next Release Course. I say, “As soon as you get your masters and before you start releasing your first single, it is time to send all of it in.” If they are doing an EP or a full album, “Send all of it in for copyright so you can feel fine about releasing your singles up to your full album release because you have got it all registered.” There are two kinds of copyright. There is the R and the W, the Written and the Recording.

The SR is the Sound Recording. The PA is the Performing Arts. I’m not saying it makes sense but this is what it is. We have those two copyrights in the composition and the sound recording. You can register them separately. In the example, if you write the song, your own composition, then you go register it. If I make the sound recording, I own the sound recording so I go register it.

However, you have to solely own both of them. Let’s say you have an EP. If you solely own all the compositions and all of the sound recordings, you can register both copyrights on one SR application. If you co-wrote some or you have got some other people or a producer who has got some ownership in your sound recording, they would not let you group things if the ownership is not the same in all the things that you group together.

The other thing I will mention to complicate it further is there is a thing they added called the GRAM. It is the Group Registration for Works on an Album of Music. It is for registering an album. You can use the GRAM application. There are tricks to that, too, and certain things you are allowed to do and not allowed to do but that is a new thing they added reasonably.

It is more often writers. We have different collaborators on each song, and you use the GRAM.

GRAM allows for that and just a PA will not allow for that. You are right. Commonly, we have co-writing going on. One thing people fail to think about sometimes is that when we create a sound recording, we will not create any copyrighted work. Whoever has contributed to the creation of the copyrighted work is a co-owner of that work. That sounds pretty intuitive. If you and I write a song together, you and I co-own the copyright of that composition.

However, if you and I go into the studio, we hire a horn section or backup singers. They are contributing to the creation of that sound recording copyright. They are going to be co-owners of the copyright and that sound recording unless they sign something saying they are giving up their rights. No one likes to walk into the studio with a piece of paper saying, “It is great to see you. Sign this.”

 

TPM 67 | Music Royalties

Music Royalties: Registering before releasing an unpublished work is easier.

 

Honestly, we have to because the only way copyright can be transferred is in writing. There are no handshake deals for changing ownership of copyright. Whatever it is, if someone is contributing to the creation of your copyright, you want to make sure you are thinking about who owns what. “If I want to own everything, everybody has to sign their rights over to me.”

That is another thing that I go over in my course and give them links to some contracts they can use because when you are new, I certainly did not know that. Luckily, my producer said, “If we are going to have this soloist play on this saxophone player, you need to have them sign this agreement.” I was like, “Thank goodness he told me that.”

Honestly, I probably did not have everybody sign it because I had my band at that time. It was still my music and stuff. I’m not sure I had them all sign a contract. There are so many things to think about when you are going to the studio. You also have to have your producer sign it and your engineer because then they could claim part of the sound recording.

It is most important for the producer because a producer is much more likely to contribute meaningfully right to the creation. I’m nothing against engineers but their contribution is not necessarily as material. Producer agreements are important. Not only for the rights ownership but also for what is the financial arrangement. They are getting a flat fee and any points. We can put a re-recording restriction. There are a lot of things that can go into a producer agreement as well to help protect your investment in those recordings.

Is there anything that you think legally that these indie musicians that are reading need to know though we have not covered? There are probably a lot.

I teach Entertainment Law at the law school. We can talk about this all day all semester. What we have not talked about that is important to this conversation is some people ask you, “When do I do a copyright registration?” People ask me, “When do I hire a lawyer?” It is challenging because it can be expensive and prohibitive.

I will encourage folks to talk to an attorney if you think they might need that help. We will always do a free consultation for anybody. We do not expect anyone to pay us until they decide to hire us. Having the opportunity to go over these things like when you are offered a contract, you do feel like the band is gelled and we need a band agreement, or you do have questions about how to do a copyright registration.

It is very important to work with an attorney at that point. Contracts do not have to be confusing. I’m always going to encourage anyone to have a contract with the folks they are working with. When you are bringing people into the studio, have something in writing. It does not have to be long or full of legalese. It has to be clear, explicit, and unambiguous. You have to know what we agree to.

Honestly, in law school and your contrast course, you would learn that there was a case hundreds of years ago where people wrote out a contract on a bar napkin and that contract was enforceable. I’m not encouraging anyone to write contracts on bar napkins but you can do deal points like, “This is what we agreed to.” Have a split sheet when you are co-writing with people. Say the name of the song or the name of each co-writer, what are our percentages, and everybody signs.

Put things in writing because our memories fade or change. Oral agreements do not always go well. Do not be afraid of the legal stuff. Reach out to an attorney or write a simple contract and see what you can find online. Be careful what you find online but do not ignore this stuff. Do not try and sweep it under the rug. It is worth it to pay attention to it. It pays you back in the long run.

One big thing is not to feel like asking people for contracts is annoying. It feels comfortable that you are a professional wanting to protect everyone’s rights.

 

Put things in writing because our memories fade or change, and oral agreements don't always go well. Click To Tweet

 

We say, “How good fences make good neighbors?” Good contracts are made for good deals, good partnerships, and good working relationships because it is all there. We do not have to worry about it.

There is never any ambiguity or wondering if maybe they interpreted something differently than you did. No, it is all in writing. This is how it is. I have a few more questions that came to mind. One big thing that people ask me about is whether they should start a publishing company. I always explain to them, “As a writer, you own your publishing unless you give it away to someone else,” but they are always wanting to start their publishing company and register as a publishing company with the PRO because they think somehow that that is better for them. I would love to hear your opinion on that.

One of the things that motivate that is it may have been a long time ago. Remember, when you sign up for your PRO, if you are self-published and you do not have a publishing company, you still need a writer’s account and a publisher’s account. The PRO split it in half into the writer’s share and the publisher’s share. You do not have to form a legal entity like a corporation to do that publishing account and sign a publisher’s account.

Especially for an indie musician, a publisher’s most important job is to collect those revenues streams. If you are forming a company, it does not allow you to suddenly go sign up with YouTube to collect publishing revenue. That is where the administrators are much more efficient and effective because they have those relationships and revenue collection functions already set up.

You do not need to form a publishing company to have a publisher’s account with your PRO. You can use a name but you can have one company that functions as your music company for your music that can collect your publishing revenue, also from Distrokid, TuneCore, or when you play gigs. That could all be under one roof to start. Starting a publishing company is a much bigger endeavor than signing up for a publisher’s account with a PRO.

It is pretty much unnecessary like the label thing unless you are going to be a publisher for other people, but you are going to have to figure out how to collect and do a whole bunch of footwork to try to get their music in sync or whatever like you are doing at yours. If you are going to do that, form a publishing company.

As far as your checklist of things to do, there are a lot of things to do before we get to the foreign public. We have not even talked about the SoundExchange.

We need to talk about that. There are so many.

In the same way that the PROs are collecting for the public performance of your compositions or publishing rights, SoundExchange in the US collects for the public performance of your sound recordings or your master. Every time you release a master, you want to register it with SoundExchange because they are going to collect the performance royalty for when your master or sound recording is played on any of the DSPs or anywhere on the internet.

If someone is listening to my song on Spotify with 20,000 streams, if I do not register with SoundExchange, am I not getting paid for that sound recording used?

Spotify will pay you the pennies that they do but SoundExchange is a different revenue stream. Splitting these things up as we do, you are leaving money on the table. It may not be a ton of money until your 20,000 streams become 20 million streams but it is still money and another revenue stream that is worth registering and collecting.

 

TPM 67 | Music Royalties

Music Royalties: If you don’t have a publishing company, you still need writers’ and publishers’ accounts.

 

Can you sign up for SoundExchange and collect anything from the past? I know you can with the MLC.

SoundExchange does the same thing. It is never too late to register with the PRO, MLC, or SoundExchange. It sounds like a lot but once it is done, they should be sending you checks or wiring you money.

The last thing I wanted to cover was the foreign neighboring-rights like foreign income, especially if we are on DSPs that are popular in other countries. It is being played in other places. How do we collect that money?

Your US PRO has relationships with foreign PROs. Your US PRO should be collecting your worldwide royalties for all the performances in all the countries that they represent or have relationships with. That goes both ways. If you are outside the US, your PRO and home country should have relationships with the US PROs so that the US performance money is going to you international.

What about the money through SoundExchange? Do they do outside or just US money?

It should be the same.

We do not have to register with anything else if we have got those three big three.

Your PRO, the MLC, and SoundExchange are good ones that we can rattle off very easily.

You want to have a publishing administrator like a Songtrust or something like that.

I feel like we gave everybody a list of things to do. They did not read to be told what to do.

When they read this show, they know I’m going to give them action steps. I gave you your action steps for the day.

 

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I’m happy to help.

You are boiling it down to something that I can understand. You are not making us feel like idiots for not getting it because it is a lot.

I have been doing this for a very long time. I did not wake up knowing this stuff. I learned it because I did not know it when I was on the music side before I went to the law side. It is confusing. Part of when things I do as an attorney is I’m helping with contracts and copyright registration but I am also helping people navigate the music industry. Answering those questions is part of my job.

You are based in Colorado. Do you work with clients all over the US?

All over the place, yes.

How can our people get in touch with you if they like your everyman brand of entertainment law?

Our firm is Creative Law Network. It is CreativeLawNetwork.com. We are on all the socials but you can just reach out. What we do is help artists with the legal so they can focus on the art. Send me an email, give us a phone call, and send us a note on the website and through the socials. We will find a time to connect and answer any questions you have but Creative Law Network is the way to find me. I would love to hear from folks who have read this.

Thank you so much. I appreciate talking through all this complicated stuff and boiling it down to something that people can go out and take action on.

Thank you for having me. It is great chatting with you.

 

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About Dave Ratner

TPM 67 | Music Royalties

Dave Ratner is a former manager and tour manager who is now the lead lawyer at Creative Law Network, a boutique entertainment law firm in Denver. Dave counsels clients throughout the music industry on everything from contracts and licensing, to intellectual property registration and protection, to dispute resolution.

He is a graduate of Cornell University and an adjunct professor of entertainment law and copyright law at the University of Denver College of Law.