Understanding Songwriter Royalties for Covered Songs
The payment structure for songwriters when their songs are covered by another artist can be quite complex, involving multiple types of royalties and various factors that influence the final earnings. This article will break down these intricacies and provide insights into how much money a songwriter can receive from a covered song.
Mechanical Royalties: The Basics
The most straightforward form of royalty for a songwriter comes from mechanical royalties. These apply when a song is reproduced as a physical object like a CD or as a digital download. According to the U.S. law, the current statutory mechanical royalty rate is set at 9.1 cents per copy for physical or digital copies. However, the rate for streaming is different, and songwriters typically receive a portion of the overall streaming revenue, which can vary.
Streaming platforms like Spotify, Apple Music, and others share a percentage of the revenue with the songwriters based on the frequency and reach of the song’s performance. This means that the actual earnings for mechanical royalties from streaming can vary and are not fixed at 9.1 cents per stream.
Performance Royalties: Public Performances
When a covered song is performed publicly, such as in a concert or radio broadcast, songwriters can earn performance royalties. These royalties are handled by Performance Rights Organizations (PROs) like ASCAP, BMI, or SESAC. These organizations collect the fees from public performances, generate reports, and distribute the money to the songwriters.
The amount a songwriter earns from performance royalties depends on the frequency and reach of the performance. The more the song is played, the more royalties the songwriter collects. PROs typically pay based on the number of plays or streams, which again means that the earnings can fluctuate significantly.
Synchronization Royalties: Music in Media
Another important source of income for songwriters is synchronization royalties. These occur when a covered song is used in film, TV shows, or commercials. Synchronization royalties are typically negotiated separately and can vary widely depending on the specific usage. For instance, a song used in a major blockbuster movie will likely generate more royalties than a commercial on a regional television channel.
These royalties are often negotiated between the publisher, the songwriter, and the entity that wants to use the song. The amount can be a lump sum payment or a percentage of the revenue generated from the song’s usage in the media. Songwriters can choose to assign these rights to a publishing company, or they can negotiate directly with users.
Negotiated Rates and Royalty Splitting
Sometimes, songwriters and publishers can negotiate different rates or terms for specific covers, which can affect the amount they earn. These negotiated rates can be more advantageous for both parties and can lead to higher earnings. Additionally, the earnings are often split between the songwriter and the publisher. Typically, 50% of the royalties go to the songwriter, and the other 50% go to the publisher.
However, this split can vary if there are multiple songwriters or publishers involved. For example, if the songwriter is the sole writer and owns their own publishing, they might receive 100% of the royalties. Conversely, if many writers and publishers are involved, the royalties will be divided among them, resulting in smaller percentages for each.
It's important to note that the songwriter's earnings also depend on whether they retained the copyright and ownership of the publishing. If they did not retain these rights, they may only receive mechanical rights as a songwriter, while the fullest benefits (including performance royalties) may go to the entity that licensed the song for use.