By Jeff Brabec & Todd Brabec

LISTEN CLOSELY TO THE NEXT SONG YOU HEAR and you might be able to pick out a sound that’s part of neither the written music nor the performance. If you listen just right, what you’ll hear is the sweet kaching of music royalties being paid to those who bring us the melodies and lyrics. But, like a club DJ’s crossfade, music royalties are in transition, sometimes for the worse and sometimes for the better. As some distribution channels fade in importance, others increase in value and acceptance. Those changes present challenges for all stakeholders, including lawyers, advisors, producers, lenders, investors and, of course, creators and music publishers — the entities that generally administer song catalogs. Listening to and enjoying music is one thing, but getting paid for it as a songwriter, composer or lyricist is another. This article will provide a quick explanation of how writers of music and lyrics and their music publishers receive compensation from some of the primary media which generate income and how the music licensing process that generates that income works. This field comprises micro pennies in compensation for many while making millions of dollars in royalties for others. In any discussion involving a song though, it is important to understand the difference between a musical composition — the song — and the sound recording — the record. Under U.S. Copyright Law, each has its own distinct copyright, as well as rights accompanying that copyright. Also, in most cases, the owners will be different with a music publisher owning the song and a record label owning the master recording. Therefore, in most cases where a song and record are being licensed together for use in a project (e.g., a Beatles or Bruno Mars song and the original recording being used in a feature film), separate license negotiations with the song and sound recording owners must be conducted before permission can be granted.

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