Your band’s songs can be published by an outside music publishing company or your band can be its own publisher. One reason that bands often act as their own publishers is that it gives them more freedom to divide the income from published songs.
Publishing songs is a rather complicated process because the music industry has clung to an antiquated music publishing system. If you want to publish songs, you will need to use both an external publisher and a publishing company created by your band. In a nutshell, the publishing system used by the music industry allows only music publishers to collect money for the use of copyrighted songs, and, of the money collected, a certain share goes to the songwriters and a certain share goes to the publisher. Although organization like BMI and ASCAP collect various forms of song royalties, they do so on behalf of music publishers. A music publisher is a company that owns and profits from song copyrights. A music publisher controls how a song is used and collects money from people that sell, perform, or modify the song. A songwriter either sells her songs to an established music publisher or creates her own music publishing company.
The music industry has established a system that, although illogical, has become the accepted method of collecting and dividing songwriting income. At its foundation is the basic principle that any income from songs should be divided roughly equally between the publisher and the songwriter. This half-an-half idea was born back when most recording artists were not writing their own music, but were recording tunes that were written by songwriters hired by publishers. In today’s world, bands are usually composing their own music. Unlike the old days, the creators of the music are now also the performers. It is now accepted that external music publishers no longer deserve half of the income from publishing a song. But rather than simply change the allocation of music publishing income to give the publisher less, the industry has adopted a strange system in which the publisher and songwriter each receive half of the money — but if a band who is already signed with a publisher sets up its own publishing company, then the external publishing company will split its half with the band’s publishing company.
Your band will need a music publishing company — either internal or external — only if some or all of the band members are writing original songs that you want to publish. If you want to publish songs, your main decision is whether to go it alone with your band’s own publishing company or to go to an external company. The main reason to sign with an external company is that some of them offer large cash advances and other perks for your band, such as marketing and publicity power.
After the music publisher has taken its cut, the income that goes to the songwriters must be divided up between whomever the band agrees is entitled to it. There is no standard as to how to divide up song income. At some point soon after a song is recorded, the band must decide who the songwriter or songwriters are and what their relative contributions are. Then, a band will need to decide how to divide the income from the song. Remember, non-writers can still receive song income if the band agrees on such a division.
The first step in creating a music publishing company is to affiliate with BMI or ASCAP. After you have registered as a music publisher with either organization, you need to set up a bank account so that you can deposit money and cash checks. As your own music publisher, you need to register copyrights for the songs. In addition, you should file clearance forms for any new songs that will be released.
Copyright 2012 LexisNexis, a division of Reed Elsevier Inc.