DEALING FAIRLY WITH MEMBERS WHO DON’T WRITE SONGS
In many bands there is either a single songwriter or a songwriting “team.” This archetype was established early — Jagger/Richards, Lennon/McCartney, et al. — and persists to this day. Whether it’s a single songwriter or songwriting team who come up with the necessary elements to create a copyright in a song, there are often others in the band (drummer, bass player, etc.) who have no claim over this copyright.
ONLY SONGWRITERS ARE AUTOMATICALLY GRANTED RIGHTS ASSOCIATED WITH COPYRIGHT
The owner(s) of the copyright are immediately — upon creation of an original melody and lyric that is “fixed” in a tangible form (i.e., written down or recorded) — granted a bundle of exclusive rights.
From these rights comes the ability to make money in the music business.
Whether the song is downloaded, streamed, used in a movie, or exploited in numerous other ways, it is often the songwriter, and the songwriter only, who is compensated for the use of the exclusive copyright.
So, if the guitar player and the singer write a song, and that song gets used in a TV show, it will be the guitar player and the singer who receive the income from the synchronization fee (and its associated royalties; e.g. public performance royalties if the show is broadcast, etc). The drummer, bass player and any other member of the band will see none of this money. Zip.
Band members may not understand the rights around either creation of the copyright of the income generated from the various means of exploitation; too often, they believe that all income the band earns will be divided up.
While they may be correct with respect to money earned from gigs, and potentially money earned from the so-called artist royalty if they are signed to a recording agreement with a label, they are gravely mistaken when it comes to money derived from the exploitation of copyrights of songs they did not write.
To be 100% clear, only the writers (© holders) of the song receive royalties from the exploitation of the songs related to mechanical royalties (from both streaming and physical/downloads), synchronization up-front fees, and public performance income; non-writers do not.
WHY BANDS WITH SOME MEMBERS WHO WRITE SONGS AND OTHERS WHO DON’T HAVE PROBLEMS
What often happens is that a band is formed with a single songwriter, and, in the early parts of the band’s career — when the only money anyone is making is coming from live shows — everyone shares in the income equally. Then, much to everyone’s initial delight, the band gets some momentum, and a label releases a record, a TV show uses a song, the radio starts playing a single, Spotify streams go up, etc., and all of a sudden the songwriter starts getting paid, while the other band members do not.
For instance, when a song is released on a record/download or stream, the writer and only the writer receives a “mechanical royalty”; when a song is used in a TV show/movie, the writer and only the writer receives a “synch fee/royalty”; when a song is played on terrestrial radio (i.e. not Satellite or Internet), the writer and only the writer receives a “performance royalty.”
Pretty soon, the writer has a house and a car, while the other band members are still taking the bus and living at home.
This creates obvious tension in the band, and too often one of two negative things occur: 1. The band breaks up; 2. The writer allocates a percentage of his copyright to the other members of the band.
AVOIDING PROBLEMS VIA AN INTRA-BAND AGREEMENT
There are, however, ways to avoid either of these two negatives: an intra-band agreement.
Put simply, this type of agreement — among other things, such as delineating decision making processes, determining who owns the name of the band, etc. — stipulates the division of all money, including money from the exploitation of a songwriter’s copyright.
This can be done any manner of ways, however, the way that seems to work best is to create an agreement that allows all members of the band to share in the income from all sources so long as the non-writing band members are in the band. If any of the non-writing band members leave the band, they forego any future income — including income derived from the songwriter’s copyrights.
In this manner, two beneficial outcomes occur: 1. Bands stay together longer because there is a more equitable distribution of income. 2. The songwriter does not have to divide her copyright; all she is doing is dividing the income from the exploitation of the copyright, and not the copyright itself.
WHY YOU SHOULD NOT DIVIDE YOUR COPYRIGHTS — I.E. AVOID CO-WRITES WHENEVER POSSIBLE
Too often, people do divide the copyright by giving non-writers a piece of the songwriting credit, and thus a perpetual claim to income derived from the exploitation of the copyright.
In this scenario, even after a non-writing band member leaves the band, he will still receive income from the exploitation of the copyright…forever!
Not only is this non-value adding in terms of keeping the band together, it also makes it that much harder to divide the copyright in the future (you now have less of it to divide).
CONCLUSION
While intra-band agreements should address a number of other things (and you must consult an attorney to draft these for you), a strategy for dividing all revenue amongst members — irrespective of if they are writers or not — must be a central point of any deal between band members. Doing so creates an incentive for bands to stay together, while not creating perpetual divisions of copyrights that result in past members of a band being paid even while they no longer add any value to the band.
George Howard is the former president of Rykodisc, the world’s largest independent record label, and cofounder of TuneCore, the world’s largest independent digital music distributor. He is also the cofounder of Music Audience Exchange, which comprises a team of digital marketers, engineers, and music lovers, using technology to redefine the fundamental structure of brand-artist relationships.
Mr. Howard is a professor of music business/management at Berklee College of Music, and the founder of GHS, a strategic consulting firm that advises a wide range of clients on how to integrate technology with strategy in order to increase brand awareness and revenue through innovation, social media, digital platforms, and strategic partnerships. A partial list of clients includes: Intel, National Public Radio, CVS Pharmacy, Alticor/Amway, Brown University, Paste Magazine, SpokenLayer, SingFit, The Landmark School, BigchainDB, Wolfgang’s Vault, and the Townsend Group. Howard is a sought-after expert witness who has drafted reports for and testified in many high-profile cases. He also is a columnist for Forbes, and a frequent contributor to the New York Times and many other publications.
