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Composer Income Streams: Performance versus Use

September 5, 2012

There was a moment, many (many) years ago when I realized composing was what I wanted to do. Realizing I needed to make money while doing it, let alone making money by doing it didn’t enter the equation until later. Fortunately it wasn’t too late. But few colleges/universities actually teach their budding composers how to make a living as a composer, so we all wind up looking at who is successful and see folks who write film scores and video game music and think, “Sure, I can do that. I will do that.” Some of them do, bless ’em, but many more don’t. It’s not the old saw that musicians aren’t naturally business people either, it’s that we’re usually not taught how to function in the business part of the “music business.” The lucky ones learn through long and often bitter experience. Some institutions of higher learning are just recognizing the problem and rectifying it, but not enough. I try to give my own composition students mini-lessons along the way about the business end of things, based on what I know (as little or as much as that might be, it’s better than the nothing they would have otherwise). So I thought I would at least broach one aspect that confounds most of us when we’re starting out, performance income versus use income.

You might think it’s a no-brainer, but it isn’t always. And since I’m also a master of stating the obvious — you have figured that out by now, right? — I’ll take it from step one. Hang on, it gets rough at spots.

PERFORMANCE INCOME:

Performance income can take a number of forms and therefore come from a variety of sources. Here are some:

  1. Live performance. Somebody plays your music (string quartet, symphony, band work) in a concert hall, or club, or arena. Most such venues have agreements with Performing Rights Organizations (PROs) ASCAP, BMI, or SESAC, and pay those PROs fees to cover the music performed there. ASCAP calls them “blanket licenses,” but BMI and, presumably SESAC, have the same sort of thing. The monies collected are divvied up either through direct reporting of what music has been performed where or through scientifically random surveys, and then distributed to its members (you the composer). Not all venues are covered, and there are other types of venues I have not mentioned that might be.
  2. Broadcast performance. When your music is aired on television or radio (now including cable shows and digital radio formats like Sirius) the performance, live or pre-recorded, generates income. Again it would be collected by your PRO and, based on the aforementioned scientifically random surveys, distributed to the composers accordingly. (This is a general description that doesn’t begin to explain how it’s done. Check out ASCAP’s or BMI’s websites for more information.)
  3. Internet performance. PROs (which you’ve figured out usually come into play whenever performances are involved) collect monies from websites which stream music (iTunes, Pandora, etc.) and distribute those monies to the composers.
  4. The first three items cover any music except performances of musical theater, opera, and dance, which generate a different kind of performance income through what is called Grand Rights. Grand Rights are special licenses specifically for the production and performance of anything which is both musical and dramatic (musicals, opera, dance, and so on).

Some things to note:

  • If you own the copyright to your music but do not publish that work, your PRO will only give you 50% of the monies earned. If the music is published by an entity other than you, that entity will get the other 50%. If you self-publish (a “whole other issue”) you will get both halves of that income stream from your PRO (assuming your publishing concern also belongs to the same PRO).
  • Broadcasts on radio or television of music from a musical-dramatic work such as a Broadway-type musical earns regular “broadcast performance” royalties and are paid to the PRO and then on to you the composer. Ditto internet performances, etc.
  • If your musical-dramatic work is published, your publisher will negotiate Grand Rights for live production and performance. It’s one of the reasons why you split that money with them 50/50.

USE INCOME:

“Use” is, essentially, anything involving your music that is not directly a performance. Here are some examples:

  1. Mechanical licenses. These are fees paid to you the composer (and publisher, if any) for the use of your music on a recording for commercial distribution such as CDs. The term derives from the first instances of such licenses way back when music was licensed for player piano rolls! It’s important to understand that this is not the same as the performance of that music. It only becomes a performance if, for example, the CD on which the music has been recorded is played (performed) on the radio. Think of it as similar to the question that begins “if a tree falls in the forest and no one is around to hear it….”
  2. Synchronization (“synch”) licenses. This is a license to use your music in audio-visual media such as film or television. You’re being paid for them to record the music to fit that film or show. Again, it is not a performance. For television it is not a performance until it broadcast (performed) on air.
  3. Other licenses. If you can think of it, there’s a way to license your music. T-shirts, mugs, tea pots (that have, for example, a quote from “Tea for Two”), umbrellas (“It’s Raining Men” or “I’m Singing in the Rain”), tote bags…. You get the idea.

More things to note:

  • Mechanical licenses are negotiated by your publisher (if any) or you, either directly or through The Harry Fox Agency. HFA is an odd thing in the music business. Named for someone who was well-liked who had worked there a very long time (so the story goes), the agency’s sole purpose is negotiating, collecting, and distributing mechanical and other license fees. You can be a member of HFA, as can your publisher.
  • Income from synch rights is not the same as being paid to write a film or t.v. score. It’s more apt to describe when pre-existing music (like a “pop” tune) is used within the action, as when someone turns on a radio and “plays” your song. (And that’s not a performance either!)

OTHER INCOME STREAMS:

So where do these next items fall — are they “performance” or “use”?

  • Commissions. That glorious moment when you’re told “please write us/me music for [our ensemble/me to play] and we/I will pay you.” Are they paying you to play the music? Believe it or not, no. That comes later, and usually through your PRO as live performance income. A commission is payment for you to create a new work — and here we’ll play with language to keep things consistent — for them to use. No, they’re not really using it in the sense that they’re putting it on a t-shirt or something, but it’s really the only way to think of it. They are paying you for your time and creativity and the end product, your music. It will only be a “performance” when they actually perform it.
  • Works for hire. This is dangerous territory for composers and arrangers. “Work for hire” tells you that what you’ve written belongs, irrevocably,to the person or entity who has hired and paid you to write it. Now this is fine when you’ve arranged, say, a pop tune for a publisher and they own the underlying rights to that music in the first place. So chances are you will earn a flat fee (or in some cases a percentage of sales with the idea that the publisher will let it go out of print once their original printed copies run out). Sometimes you might have to do a “work for hire” gig for a t.v. or radio commercial, if it’s for a big ad agency. (Note: You might still get performance royalties through your PRO if your agreement with the company hiring you allows it.) But: If you are commissioned to compose an original work for live performance and your commissioning party wants it to be a “work for hire” please be sure to have your shoes tied or buckled and run the other way as fast as you can. In those cases you should always maintain all rights to your music, including that of copyright. If your music is published, then you share that ownership or turn it over to the publisher, but otherwise it’s yours to do with as you see fit.
  • Publication. This is fodder for at least one other discussion, but suffice to say that publishing is, for our purposes, the commercial dissemination of your music for profit. This can and usually does include: Negotiating and collecting fees (either directly or through HFA) for mechanical licenses, synch rights, grand rights (for musical-dramatic works), and so on; and encouraging performances through the rental and/or sale of printed material (sheet music, etc.). Many composers self-publish these days (“All hail Finale and PDFs, and the internet!”) but there are still major and minor music publishing companies around. Selling sheet music is a difficult business to be in right now, if for no other reason than what I’d call the “download mentality”; some folks think that all music should be free and available on the internet. I disagree with that whole heartedly. (I said this is another discussion, at least.) But the attraction to publish is real and warranted. Composers want musicians to know and perform their music, and most of us would rather not have to chase the players down the metaphorical hallway to get that done. Selling your music in (physical or digital) sheet music form provides you with a (small) income stream but also can encourage more performances, and therefore more performance royalties. If the work is large your publisher (even it’s you) can rent out sets of scores and parts (use!) for a particular ensemble to perform (performance!). In other words, generating two income streams from one situation.

To summarize:

PERFORMANCE: If it’s live in a venue, or live or recorded on a broadcast medium, it’s a performance and generates performance royalties paid to you through your PRO. If it’s a musical-dramatic work, that requires the performance entity getting Grand Rights from you or your publisher, and you get performance royalties from that. If your music is heard in a film played on t.v., that’s a performance too, even if the music is from a musical-dramatic work.

USE: If it’s not a performance, it’s a use. Mechanical licenses, synch rights, licenses to put your music on objects, and more, are uses, simply because they are not performances in of themselves.

PRO: Performing Rights Organizations. They represent you in collecting and distributing monies for performances of your music. The three in the U.S. are ASCAP, BMI, and SESAC. (Other countries usually only have one each, and often are run by a country’s government itself. All of the U.S. ones are non-government businesses.)

HARRY FOX AGENCY (HFA): Negotiates, collects, and distributes monies for various non-performance licenses on behalf of members, who are usually music publishers.

GRAND RIGHTS: Special license for the performance of musical-dramatic works such as operas, musicals, and dance works. Income from the use of the musical materials (sheet music) for those productions is separate.

© 2012 Steven L. Rosenhaus

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2 Comments
  1. Byron J. Wu permalink

    Awesome stuff!
    Hi Steven, just wondering, could you give some advices on writing music for Music Library?
    I got approached by one recently…
    Thanks a lot for all of your articles! they are awesome!

  2. Dear Byron,

    Thank you! It’s gratifying to know someone is reading the blog and, more importantly, getting something out of it.

    To answer your question regarding writing for music libraries:
    * Most will want you to turn what you compose over to them as a “work for hire” — they will own the music =completely=.

    * In most cases your name will =not= be associated with the music; in other words, no credit when your music is used. Under this scenario once you are paid, that’s it; the library can make all sorts of of money licensing it (assuming it’s good and useful) and you won’t see another dime.

    * You =can= however make 50% of the performance royalties earned through broadcast, etc., when collected and distributed by your PRO (ASCAP, BMI, or SESAC in the U.S.).

    I don’t normally recommend Wikipedia, but there’s a decent article on the topic under “Production Music.” You might want to check it out.

    Steven

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