You may have written an outstanding song with a fabulous melody, great lyrics, and memorable hooks. Yet your work doesn't stop there. Songwriting raises many legal issues such as: who gets the credit for a song, how are royalties split, can you claim tax deductions for home studios, and should you register a copyright. Here are ten tips to help manage the legal and business side of your songwriting.
1. Figure Out Songwriting Credits, Now!
If you're writing songs with others, as soon as you finish the song, agree with your collaborators as to how to split potential revenues. If you wait until after you have a deal or record the song, you could end up sorting out credits and payments with band members who have long since left the group. Many bands also include non-writing members in the income. You don't need a formal contract on who gets the credits; an informal written agreement will suffice.
2. How to Decide Who Gets Songwriting Credits
A songwriting copyright is awarded to those who jointly contributed to the song's structure, chord progressions, and lyrics. This can be anyone, even the members of the rhythm section (in many songs -- especially in rock, pop, and dance music -- a bass or drum part is so integral to the song that it becomes as important as the melody). The best way to decide:
- the members of the band determine who wrote the songs, or
- throw out traditional rules and share equally (or by some other formula) in all band-written tunes.
3. Publicize Songwriters' Names
Once you've established who wrote a song, publicize the names and how to contact you or your music publisher. When preparing music for downloads -- for example MP3s, AACs, or WMAs -- make use of the text tags that allow you to encode the names of the songwriters and any related copyright information.
4. Consider Cowriting With a Dead Songwriter
Having trouble writing a catchy tune? You might consider trying the approach of Vera Matson, who took a civil war song, "Aura Lee," and added her own lyrics. The result was "Love Me tender," a monster hit for Elvis Presley and many other artists. Older music (published before 1923) like "Aura Lee" isn't protected by copyright, and therefore is said to be in the "public domain." It's free for anyone to copy.
Others may use these tunes as well but cannot copy the unique elements that you add. For more information about locating tunes in the public domain, consult Steve Fishman's book The Public Domain: How to Find Copyright-Free Writings, Music, Art & More (Nolo).
5. Register With BMI and ASCAP
BMI (Broadcast Music, Inc.) and ASCAP (American Society of Composers, Authors, and Publishers) -- known as performance rights organizations -- monitor radio and television stations, nightclubs, websites, and other entities that play music. They collect royalties from these places and pay the royalties directly to the music publishers and songwriters (so you get payments from them, not your publisher or manager).
6. Don't Be Afraid to Give Up the Copyright for a Deal
"Don't give up your copyright," is the cry often heard from musicians and songwriters. Yes, it's true that the music business is rife with tales of woe about songwriters like Richard Berry, who gave up his copyright for "Louie, Louie" for $750. (Berry eventually won a $2 million court judgment over the song.)
The reality is that just about every songwriter who signs with a major music publisher gives up the copyright to the song. In return, the publisher pays the songwriter a hefty portion of the royalties over the life of the copyright. Often, the songwriter, not the music publisher, earns the bigger share of the songwriting royalties and benefits from the music publisher's hustle.
The bottom line: If you're dealing with a reputable music publisher, don't be afraid to sign off on copyright -- especially if an attorney examines the deal for you.
7. Market Your Songs to Nontraditional Media
Changes in technology have altered the ways in which songs earn money. The source for most music listening hours is neither CDs nor radio but video games.
In addition, advertising agencies, motion picture and TV companies, and Internet websites have all opened up new licensing opportunities. For example, MTV discovered one songwriter at MP3.com and licensed his music for background in its Real World television series, resulting in payments from MTV and later from BMI.
8. Consider Taking a Lower Percentage of Revenue for an Established Publisher
If you create your own music publishing company you'll get 100% of the songwriting revenue. If you sell your song to an existing music publisher you'll probably earn 60-75% of the song revenue. But don't assume that getting a larger percentage of the revenue is always better. An established publisher may be better equipped to get you deals, especially lucrative ones like putting your songs in a movie or an advertisement.
9. Copyright is Automatic
You do not have to register your music with the U.S. Copyright Office in order to get copyright protection. In most countries, including the U.S. and Canada, all that is required for a song to be copyrighted is that it be "original" and "fixed." "Original" means that the song is original to the writer and that it was not copied from another source. A work is "fixed" when it exists in some tangible manner such as sheet music, a tape recording, or saved onto a computer disk.
Even though copyright registration is not necessary to protect your song, it can help protect it from infringement, especially if your song is registered prior to an infringement or within three months of its release (you may be able to recover more money from an infringer in that case). For more information on copyright registration, see Music Law: How to Run Your Band's Business , by Rich Stim (Nolo), or check out the U.S. Copyright Office website at www.copyright.gov.
10. Tax Breaks for Home Office Use
If you regularly use part of your home exclusively to compose and record your songs, and you have no other fixed location where you do such things, you can claim a home office tax deduction. How much you can claim toward your home office deduction depends on how much (what percentage) of your home you use as a home office or studio.
For example, if you use 20% of your home, you can allot 20% of your home office expenses (such as rent, depreciation, mortgage interest, property taxes, electricity, gas, insurance) to the home office deduction.
You may lose the capital gains tax exemption. If you do take the home office deduction and then sell your home, you could lose the capital gains tax exemption on the home office portion of your home. However, this won't happen if you live in the home two out of the five years before you sell it.