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How much should a songwriter receive for the digital distribution of a song? I know that for a cd it is 9.1 cents per cd, but have not idea about digital sales.

Tom

It's 9.1 cents per copy of the song, regardless of the format, regardless of whether it is on CD, mp3, vinyl, cassette (remember those?) or whatever may be developed in the future. Where it gets confusing is when the song is streamed rather than downloaded.

Actually, I should have said the writer gets the writer's share of the 9.1 cents. There is also the publisher's share to consider.

Kevin, actually you're getting the mechanical royalty confused with the performance royalty.

The mechanical royalty for songwriters is pretty much always 9.1 cents (that's the statutory rate for compulsory mechanical licenses.) By default, that goes to the copyright holder of the track. ASCAP and BMI are not involved. So, if you're an indie artist, it will just go to you. If you've assigned your songs to a publisher, it will go to them and trickle to you in some way. But there is not, by default, any kind of writer/publisher split.

If the cover piece is publicly performed, THAT is a public performance issue, not a mechanical one, so ASCAP/BMI step in to collect, and THERE is where you *always* have the writer and publisher side of things (even if there is only one real person involved.)

Andrew, I never mentioned the PRO's. The 9.1 cent mechanical royalty is divided between the writer and the publisher.

Tom
Are you asking about royalties or sales?

Digital streams (SALES like on Napster) of your song performed by you will pay 1000's of a penny (example $0.0009 per stream.. 1000 streams will pay $00.09).
Digital downloads will pay whatever you charge minus the host's cut. (example XYZ hosting company 50%, you 50%)

What I don't understand is why different companies pay different amounts. example I-tunes pays different than Napster. I would think it would be the same.
It even varies within one company. On spotify i see it vary from $.00781822 to $.00018711 for 1 stream.
I think it is a badly regulated model.

The royalties for spins(plays) on internet and terrestrial radio are different as explained above.
The payment to you if someone covers your song on a CD is, I believe, 9.1 cents for each CD they press.

OK, Welcome to Music Business 101, where we will discuss mechanical royalties.

Mechanical royalties are paid for each copy of the song that is sold, whether on CD, vinyl, cassette, mp3, or whatever. The statutory rate is currently 9.1 cents for songs less than 5 minutes. Mechanical royalties for streaming audio is based on 10.5% of a service's gross revenues, less royalties paid to performing rights organizations (ASCAP, BMI, SESAC), and certain other deductions.

The 9.1 cents is divided into two parts: The writer's share and the publisher's share. If the song has one writer who has not assigned the publishing to another entity, the writer is said to have 200% of the mechanicals (100% of the writer's share and 100% of the publisher's share.)

If the song has two writers, each writer owns 50% of the writer's share and 50% of the publishing. Now if Writer A assigns the publishing to Publisher C, and Writer B retains the publishing, then Writer A will receive 2.275 cents for each copy, Publisher C will receive 2.275 cents, and Writer B will receive 4.55 cents. (of course, there would likely be some administrative fees that would be deducted from those figures.)

OK. Now it's time for more class discussion.

Kevin
Isn't there a difference between Streams and spins on internet hosting vs radio?
If your song is being played on an Internet radio(One that actually pays royalties since most make to waive the royalty) you get a certain amount per spin.
If you have your song hosted through CD Baby and it is on Napster, I-Tunes, Spotify, etc. it is paid differently and they do pay, you can't waive that. Even if they are inconsistent in the amount.

And I believe mechanicals are paid on copies PRESSED not sold. Paid in advance

I may be mistaken on this, but streams and songs played on internet radio are basically the same thing and would be paid at the same rate.



Those are fees paid to the artist and are not the same as mechanical royalties which are paid to the writers and publishers.



The big labels consider the first few hundred copies to be promotional copies and typically will not pay the artists, but I do not know if that extends to the mechanical royalties or not.

I really do think you are confusing the compulsory mechanical license with public performance royalties. Can you explain to me where you're getting this information from? I have a degree in music business, I'm a full time composer/artist and I've never heard anybody talking about compulsory mechanical royalties in the context of "writer's share" "publisher's share" "200%" etc. That's how public performance royalties work, not mech. royalties...

I think we might be having confusion in terminology. and what each means.
It does seem to be very confusing. That might be intentional.

I did a quick search and came up with this: http://en.wikipedia.org/wiki/Royalties#Mechanical_royalties

"In a fair publishing agreement, every 100 units of currency that flows to the publisher gets divided as follows: 50 units go to the songwriter and 50 units to the publisher minus operating and administrative fees and applicable taxes. However, the music writer obtains a further 25 units from the publisher's share, if the music writer retains a portion of the music publishing rights (as a co-publisher). In effect, the co-publishing agreement is a 50/50 share of royalties in favor of the songwriter if administrative costs of publishing are disregarded. This is near international practice."


Performance royalties work in much the same way, but the original question was asking how much a songwriter should receive for the digital distribution of a song.

EDIT: My original answer was based on my own experience and education, but to find a source for you, I did the internet search.

Andrew,
If you belong to a PRO the explanation of the 200 percent is explained in the Hand Books. While a songwriter will get 50 percent of the mechanicals and the Publisher will get the other 50 percent it is described as 100 percent to the writer(s), and 100 percent to the publisher. If there is more than one writer the 50 percent that goes to the writer will be divided between the writer's as to what percentages the writer's agree to between themselves. This is assuming the Publisher gets 100 percent of the Publishing.

The Compulusory Mechanical License is obtained thru the Copyright Office in case the writer'(s) and or Publisher cannot be located and someone wants to record and release a song. This is only possible with a song that has already been recorded and released to the public. Otherwise a license would be obtained from a Publisher or his Agent, such as Harry Fox.

There is no such thing as a Compulusory PRO License.

The current mechanical statutory rate is 9.1 cents per copy of a song that is no longer than 5 minutes in length. Longer songs are adjusted to a higher rate. You can look on the copyright site and see the rates and print them out if you wish.

Ray, yes, I understand all of that - we were talking about mechanical royalties though, not public performance royalties, since the original question was what songwriters get paid for mechanical digital distribution.

My point was that there is no system, legal or otherwise, that necessitates any kind of "writer's share" or "publisher's share" when you're talking about mechanical royalties. So, it's a little confusing to say that the songwriter gets the "writer's share" of the 9.1 cents per song, when in fact there ARE no "shares" unless you've explicitly created or signed an agreement to that effect.

In Tom's case, my guess is that he's referring to a situation wherein he is the songwriter and someone else (let's say "Band X") has recorded a song he wrote, and is now selling it. If this is the case, and the band has not negotiated with Tom separately, then that band owes Tom 9.1 cents for every download of that song, or every sale of an album containing that song. Simple as that. There is no "writer's share" or "publisher's share" involved here, unless Tom specifically signed an agreement with a publisher that created such an arrangement.

Kevin, the link you posted describes a typical publishing agreement. That's all accurate. But the reason why I'm saying it's confusing to bring it up in this thread is that Tom has not said anything about having a publisher, or having any sort of pre-existing arrangement. Thus, by default, he (as a songwriter) is owed a simple 9.1 cents per sale/download. Nobody else is involved with this, and he does not need to register a publishing company or set up "shares" to be entitled to that money.

Conversely, with public performance royalties, you are actually forced to fill out both writer and publisher information with your PRO - and determine the appropriate shares - in order to even register your work at all. If you write a song and it gets used in a TV program, you actually will only receive HALF of the money if you only registered yourself as a writer - you *have* to create a publishing entity and assign it a share. Which is confusing in and of itself

To make it as simple as possible, let's assume that the songwriter had a publisher. With that being the case, the songwriter won't receive the full 9.1 cents for each download.

And to further answer the original question, a downloaded song has the same mechanical rate as physical CD.

Great discussion and great info.

Here is a situation. I co-write a song with Mr.Cowriterman. I produce the song. It is sung by Justice. The music is performed by MusicMan for a flat fee. I am the publisher. The song part of a cd on CDBaby, who also distributes it to various digital distribution services. The song is downloaded on I-tunes Japan by Miss Listen. I receive a payment from CDBaby for $.20.

How much is Mr. Cowriterman entitled to receive?
How much is MusicMan entitled to receive?

Same scenario except the song is streamed by Miss Listen on Spotify. I receive a payment of $.0002 from CDBaby.

How much is Mr. Cowriterman entitled to receive?
How much is MusicMan entitled to receive?

Tom

Is the 9.1 cent mechanical royalty applicable to cd's pressed or cd's sold?

Tom

Tom,
You will need to address each part of your question seperately.

If you co-write a song with someone else a co-writing agreement will set the percentages you each agree on. With no agreement is is 50/50.

If you paid Musicman a flat fee that should be a Work for Hire and he is not entitled to further compensation unless he is part of an agreement, (In Writing) that gives him a part of the royalities.

A license to sell digital copies will spell out what you (and) any co-writer's and Artist will receive for each sale.

I think with bigger releases a Record Label may not pay all mechanical's up front but should pay when the Physicial CD is sent to the Outlets. It may depend on what a Publisher agrees to when the song is in line for release.

Well that is all very straight forward!!