Money in Music Copyright - Part 1: Synchronization License

After reading laws on music copyright, Paul says, "Ok, now show me the money!"

Paul, our fictional music composer here, is one of a kind. "Show me the money" is a great thing to ask, but not all composers do that! I pray this blog will help music composers realize how much money they can lose when they don't ask that question.

There's another word for "money" in music copyright parlance. It's called royalties.

Because Paul has written a hit song, Paul shall see that royalties goes to his bank account in two ways: one-time and recurring.

• The one-time fee each music composer MUST know about is the synchronization fee. The amount is usually subject to negotiation between Paul or his representative (the licensor) and the user (the licensee). 

• The recurring ones that each music composer MUST know about are mechanical reproduction fee and performance rights. Mechanical reproduction is a percent of sale, now pegged at 10% of wholesale price. Performance right is a more complicated topic. More on these in the succeeding posts.

This is how synchronization fee works . . .

When Paul submits his song, Mr. A-Producer will review the song, assess the merits and profitability of it. When Mr. A-Producer finds the numbers good, he will invest on that song.

What Mr. A-Producer will then do is engage a music performer and assemble musical instruments that will accompany the performer. There is therefore Paul's musical piece (music and lyrics) that will be recorded in sync with a selected set of musical instruments.

For that, Paul is entitled to a fee that allows Mr. A-Producer to record his song with the musical instruments. That fee is called synchronization license fee. This fee is in the vicinity of P15,000 to P20,000 per song (as of 2008) for musical albums. This is a one-time fee.

Paul may decide at another time to approach another producer (granting he's allowed to do so in his contract with Mr. A-Producer). Let's say Paul approaches Mr. B-Producer to record another rendition of the song. If Mr. B-Producer likes the song, he will also pay a synchronization license fee to Paul.

Get it?

TV, Film, radio and theater producers, who want to use Paul's song in their production will likewise pay a synchronization license fee to Paul. The amount is a matter of negotiation, depending on the extent of use within the production. But this can range between P100,000 to P500,000.

If the song is really a hit song, yeah, those figures are realistic. Is that money good? or good?

Take this trivia: the song "Happy Birthday" is copyrighted. It earns somewhere around $2 million a year.

Unbelievable? Check out these articles:

Who Owns the Song Happy Birthday?

http://www.wisegeek.com/who-owns-the-song-happy-birthday.htm


Happy Birthday, We'll Sue
http://www.snopes.com/music/songs/birthday.asp

Now you know that anyone who uses that song for commercial purposes have to pay the corresponding fees to Warner-Chappell. Nobody can just record that song and not pay synchronization license.

Wouldn't you want to be the composer of a song as popular and as timeless as Happy Birthday? Check again how Jessica Hill fought for the music copyright of her sisters Mildred and Patty Hill over that song. Would you do the same for your own songs?

Next: Mechanical Reproduction License

P.S. In the years I spent with a music licensing company in the Philippines, one of my most profound realizations is that no one in the country has taken serious effort to disseminate the definitions to Filipino composers. That mainly is the reason for a lot of confusion, unrealistic expectations and, well, corruption. Sorry to say that last one.