Note: The following column is not legal advice, and is not intended as such.
As an independent musician, your most valuable creations are not the CDs or cassettes you manufacture, but your original compositions. The songs you write can generate two sources of income well after your playing days are over. The first source is mechanical royalties, which are paid by artists (or artist's labels) when they record your original songs. The second source of income is performance royalties, earned when your songs are played on the radio, in bars and clubs, on television, even on elevators! In order to protect your interests in your original compositions, you must establish your rights to them, proving you are the songwriter and establishing the date of creation.
Copyright is established the moment your song is written on paper or recorded on tape or disk. From then on, no one has the right to copy your work and profit from it without your express permission. So why bother doing anything additional to protect your rights?
You may have heard before that an oral contract can be just as binding, legally speaking, as a written contract. Yet if the contract was for $500,000, and you stood to lose a great deal of money if the contract was not honored, would you rather have an oral agreement, or a written contract? If you can take a few extra steps to give your music maximum legal protection, then do it!
Any sheet music, CDs, cassettes, etc. you produce should have a printed or hand-written copyright notice to protect the compositions. The notice lets anyone know who comes into possession of your work, that you are the author of the music, and in what year it was created. You must include either the copyright symbol ©, or the word "Copyright" (which may be abbreviated "Copr."), the year of authorship, and your name (the composer). If your compositions are owned by a company or business (in the case of a work for hire, or if you want your copyrights owned by your record label/publishing company), the business name should be used. Your songs do not have to be registered with the U.S. Copyright office in order to carry the copyright notice.
Some examples of copyright notices:
The best way to register your original music is with the U.S. Copyright Office in Washington D.C. You can register your compositions at any time within the life of the copyright, and it's not necessary to wait until your songs appear on a record. To register your compositions, send the following three elements in the same envelope or package to:
Register of Copyrights
Library of Congress
Washington, D.C. 20559
Some attorneys recommend that you also include a lead sheet with your tape or CD. If you've got it, send it along just in case. While it's possible to save money by registering unpublished songs (on one record, for example) as a collection, under one name (ex. "The Collected Works of Daniel J. McAvinchey - 1"), it limits your ability to license individual songs to other artists and earn additional royalties. The Copyright Office will only index the copyright under the name of the collection, and not each individual song. In addition, all the songs submitted as a collection must be original and written by the same author(s). So if your collection has one cover song or a single cut written by another composer, you're out of luck.
You may have heard of a very inexpensive way to prove authorship on a particular date. Commonly called a "poor man's copyright", a "common-law copyright", or a "layman's copyright", it consists of sending a copy of the composition to yourself by registered mail and leaving the letter unopened. The postmark on the letter is supposed to prove the date the work was 'copyrighted'. I've heard people recommend doing this, followed by the statement, "But it might not hold up in court as well as a formal copyright." That's a little like buying insurance for your car or house and having absolutely no idea how much coverage you have until it burns to the ground. This method of copyright 'registration' provides you about as much legal protection as an agreement written in invisible ink. Don't be cheap or lazy when it comes to protecting your songs. Income from copyrights and publishing can continue long after your band breaks up or you are unable to play your instrument.
Collections must be unpublished works. If you act quickly, between the time you finish your master tape and the time you send it to the duplicator (the publication), you can register it as a collection (using Form PA) for $20. Submit the collection on cassette and include lead sheets if you have them. When your copyright is granted and you receive a PA number back from the Copyright Office, you can file Form CA, which stands for "Correction/Amplification". This form allows you to enter your collection name registered on Form PA, and then list all of the individual song titles contained in the collection. Form CA is then sent in along with $20. The Copyright Office will cross-reference the titles of all the songs with the collection, which accomplishes the same thing as individual registration.
Registering fifteen songs using this method will save you over $250! Here's how: registering fifteen published songs separately using Form PA will cost you $300. Registering the unpublished collection for $20 using form PA, then amplifying the registration for $20 using form CA will set you back only $40. You save $260 and each song will be individually indexed in the Copyright Office files.
Forms PA and CA can be downloaded with instructions from the U.S. Copyright Office Forms Page and printed on your inkjet or laser printer.
Your sound recordings (i.e. the CDs or cassettes you have duplicated) should also be legally protected by including the copyright notice and filing with the Copyright Office. A record company or record label is considered the 'author' of the duplicated CDs and cassettes, and authors should register with the Copyright Office to provide maximum protection against illegal duplication. If you are running your own label, then you are also the author of the sound recordings (i.e. any physical reproductions of the musical work in any format).
Any CDs or cassettes you produce should have a copyright notice on the label and on the cover (CD insert or cassette J-card). The notice lets anyone know who comes into possession of your albums, that you (the record label) are the author of the sound recording, and in what year it was created. You must include the copyright symbol (a 'P' with a circle around it; this font doesn't let me demonstrate it) and the year of publication (duplication), and the name of your record label. Your sound recordings do not have to be registered with the U.S. Copyright office in order to carry the copyright notice.
You (as a record label) should register your sound recordings with the U.S. Copyright Office in Washington D.C. To register your sound recordings send the following three elements in the same envelope or package to:
Register of Copyrights
Library of Congress
Washington, D.C. 20559
Remember, even if the album or CD your record label is releasing contains cover songs or songs by other artists, you (as a record label who owns the CDs or cassettes) should copyright the recording as a separate entity.
Many of musicians don't realize that in order for a song to be considered published, it only needs to be available for public sale. They may believe it's necessary to start a publishing company or have their music published by a large, established publishing company. The truth is, once your records are available for purchase, your original compositions are considered published, and anyone wishing to re-record and release your songs must give you proper notice -- and pay you too! Think of publishing as an additional method for you as an independent artist to earn and collect royalties whenever your songs are played on the radio, or covered by other artists. In order to maximize your potential income from publishing, I'm recommending you take a few easy steps that will ensure you get paid any royalties due, and permit other artists to find you and get permission to record your songs.
As an independent artist, it's a good idea to form your own publishing company. Your publishing company doesn't have to be a separate business entity from your record company, if you also own your own record label. For example, Shrapnel Records, run by Mike Varney, publishes all of the songs on records it releases by such artists as Greg Howe, Tony MacAlpine, Michael Lee Firkins, etc. So the recordings are released by Shrapnel Records, Inc. and they are published by Varney Metal Music. You will file your copyrights under the name of your publishing company, and any performance royalties due will be paid to the publishing company.
You should also join one of the performance rights organizations, ASCAP, BMI, or SESAC, as a publisher. They will tell you if the name you have chosen for your publishing company is unique; if it isn't, and you've used the same name as your record label, you may have to form a separate business entity for publishing, with a new name. The performing rights organization collects money on behalf of its member songwriters and publishers from radio stations, clubs, restaurants and television stations. This money is allocated and distributed to the members of the organization based upon how frequently their compositions were performed over the course of a year.
Don't use cost as an excuse to delay joining a performance rights organization; it's really very inexpensive. Songwriters can join BMI or SEASAC for free, and publishing companies can join SESAC for free, or pay a one-time fee of $50 to join BMI. With ASCAP, there are yearly dues of $10 for songwriters and $50 for publishers. If you really can't decide between the different organizations, and which one to pick, I'll decide for you - BMI. Remember, if you fail to join one of the performance rights organizations, you will effectively forfeit any royalties due you, since there is no other effective method to enforce your copyrights.
Once your copyrights have been filed and you've joined a performing rights organization both as a songwriter and as a publisher, you will earn the maximum performance royalties possible when you get radio airplay, club play, etc. Usually, half of the performance royalties are paid to the songwriter and half are paid to the publisher. Since you are both, you will earn all the money!
Once your CDs or cassettes are available to be purchased, any other musician or band can record your songs as long as their record company files a mandatory mechanical license (compulsory license) with the publisher (hopefully, that's you). The mandatory mechanical license requires that the record company pay the publisher mechanical royalties (6.95 cents per song or 1.3 cents per minute, whichever is more, for every record sold) and report on a regular basis how many records were sold, returned, etc.
Of course anyone looking to get permission to record your original compositions needs to be able to contact you or your record label/publishing company. Make sure the perfomance rights organization you join always has your current address. You should also print the address of your record label on your manufactured CDs and cassettes.
Frequently, record companies and publishers negotiate a reduction in the mechanical royalty rate to be paid by the record company for the use of the songs. There is no law against negotiating for reduced rates; the statutory rate is effectively the maximum that will be paid as a royalty. The commonly referred to "3/4 rate" is often paid by labels on "controlled compositions". Controlled compositions are generally owned, in part or in whole, by the label's recording artist who is also the composer. As a publishing company, you would only accept the 3/4 rate when you want to encourage covers of your songs by established or up-and-coming artists signed to a major label.
If you are lucky enough to have a number of your songs recorded by many artists (what a nice problem to have!), the best way to keep track of all the mechanical royalties due your publishing company is to turn the job over to someone else. Many publishers sign up with the Harry Fox Agency (a wholly-owned licensing subsidiary of the National Music Publishers Association - NMPA) in New York City. The agency issues licenses for use in films, commercials, television programs, etc. and collects the mechanical royalties. The agency takes a 4.5% commission from mechanical royalties collected and remits the remainder to the publisher.
Another important service the Harry Fox Agency provides is the auditing of the books and records of record companies who are issued mechanical licenses, to insure the royalties are being paid properly. This would be extremely difficult and expensive to do on your own (assuming more than a few licensees), and in my opinion, is well worth the commission assessed against royalties collected. It's very easy to join and doesn't cost anything. More information about joining the Harry Fox Agency can be found on their web site.
As a general rule of thumb, if you have released your record independently and own the record label/publishing company, you should never sell 100% of the publishing in any of your compositions. Established songwriters like Paul McCartney and John Lennon were duped into signing away the publishing on the majority of their Beatles compositions; McCartney, to this day, with all his financial resources, can't buy back the ownership of songs like "Yesterday" and "Nowhere Man".
At some point, you may consider making a deal with a large publishing company where you would sell 25% or 50% of the publishing of a song or several songs. A large publisher may be able (through their contacts and network) to get your songs recorded by one or more established artists, meaning additional mechanical royalties and performance royalties, especially if it becomes a hit. An established publishing firm may be able to exploit your songs in Europe or Asia, again, bringing in additional revenue for you and the large publishing company to split. In short, they can make more money for you and make money for themselves at the same time. However, make sure you have a good entertainment lawyer review any contract you are considering signing, especially one pertaining to publishing, or the selling of your publishing rights.
I hope I've given you a good introduction to the world of copyrights and publishing. If you want to learn more, there are some excellent books available.