From CD Baby:
How do you make money in music publishing? Have you ever wondered why the main songwriter in one of those megastar bands can afford to buy a mansion when the other members in the band can only afford a small house?
The answer is music publishing.
If you write or co-write a song, you are owed royalties every time that song is played in a public setting. This includes radio, TV, movies, restaurants, venues, and more. You are also owed a publishing royalty every time someone purchases your music (in any format — CD, vinyl, MP3, etc.)
Music publishing has the potential to generate big money for songwriters, composers, and lyricists. If you’ve written a song and haven’t signed away the rights to someone else, then YOU are the publisher—which means that all royalties collected for that song should be paid to you.
Here are the five most common kinds of publishing royalties you can collect:
1. Mechanical royalties —
As a songwriter / publisher, you are owed a royalty every time your composition is sold, or reproduced with the intention of being sold (on vinyl, tape, CD, MP3, etc). The mechanical royalty is generally equal to 9.1 cents per reproduced copy, regardless of whether those albums or singles are sold.
So, in other words, if someone covers one of your songs and they manufacture 1000 CDs — they owe you $91 regardless of whether those CDs ever get purchased.
You are also owed a mechanical royalty for the sales of your music on YOUR OWN albums. Though if you’re acting as your own label, you’ll basically be paying that royalty to yourself from album proceeds.
On-demand streaming services such as Spotify also pay a small mechanical royalty every time your song gets queued for streaming.
2. Performance royalties —
As a songwriter/ publisher, you are owed a royalty whenever your compositions are performed “in public.” This includes:
• plays on terrestrial and satellite radio (Sirius, KEXP, etc.)
• usage on network and cable TV
• plays on internet radio (Pandora)
Continue reading the rest of the story on CD Baby