One of the most important steps to do before releasing a song is to figure out royalty splits.
It’s much more complicated than it sounds. There are all sorts of splits baked into every recording. There’s publishing (who wrote the song), which is different from “points” on the master (typically given to producers and sometimes mixers). And then of course there’s the label and distributor’s cut. There’s also the difference between royalties and ownership (BIG difference).
It’s important to understand the implications in cutting various people into splits. The last thing you want is to get offered a $100,000 sync placement only to lose it because you can’t get ahold of the drummer you cut into publishing a decade ago who you’ve since had a falling out with. This is a real life scenario.
+Get a splits template and royalty flow chart here
Just because the vibes are high now with everyone involved during the recording process, you have to emotionally detach yourself with your collaborators when figuring out splits.
+How Do Producer and Songwriter Splits Work
Remember, there are two copyrights in every recording:
- The composition/song (or “musical work” as it’s referred to in the copyright office), also referred to as “publishing.” This is the song. Who wrote it?
- The Sound Recording (or “master’). This is the actual recording. When producers or mixers get “points” it’s only from the sound recording.
Some bands split everything equally: publishing and sound recording. If you look up any Coldplay song, you’ll see that all four members are listed as songwriters – even the ones that are just Chris Martin and an acoustic guitar (which I imagine he wrote by himself). It reduces complications and maintains band harmony.
But more commonly, only those who actually had a hand in writing the song are listed as songwriters. Like what the 1975 does.
It’s typical in hip hop and pop for the producer who makes the “beat” (instrumental) to get 50% of publishing and the top liners to split the other 50%.
In Nashville, they have a saying “one word one third.”
Which translates to, essentially, if you’re in the room during the songwriting session, you get an equal cut of the song whether you contributed one word or wrote the entire chorus. It’s just easier that way and who knows what that one word may have inspired.
What you should not do is cut a session player into publishing if they didn’t have a hand in writing the song. Even if they came up with a dope riff or drum part. You can cut them into the sound recording royalties, but not the composition. Why? Well, for one, there are legal implications baked into publishing. Like sync. Every sync placement on TV, film or video game, requires the permission of every songwriter every time.
How you want to think about it is, publishing = lyrics and melody.
Even if you remove that guitar riff or drum part, the song stands on its own. Someone else could cover it without those parts and the song would still be recognizable.
When it comes to the sound recording side, there is a lot more flexibility. No laws restrict what you can do with sound recording splits. You can essentially cut in whomever you’d like. As mentioned before, it’s typical to cut in the producer. Sometimes the mixing engineer (but not super typical). And what’s becoming more common, is cutting in the session musicians.
Session musicians, by law, earn 5% of digital radio royalties (in the US) paid out by The Fund. And outside the US, neighbouring rights are paid to session musicians for radio royalties. But there’s nothing mandated for sales or streaming royalties for session musicians. So, as the Artist, you can designate a cut of your sound recording royalties for session players. I typically cut in my session musicians collectively to earn 20% (after costs are recouped). Or offering “a point” to each musician works too as a nice gesture.
It’s too common these days that Artists blow up and become millionaires, whereas their session musicians are struggling to survive.
But you want to be careful that you’re not giving too much away leaving you with nothing left.
Make sure you always have a clause in the agreement to recoup all of your costs first: all recording, marketing, manufacturing, etc costs. So if it cost you $3,000 for the recording + $5,000 for marketing + $200 for printing (1/10 of vinyl/CD pressing if there are 10 songs), make sure you make back $8,200 before paying out sound recording royalties. Publishing royalties get paid off the top by other entities and you have nothing to do with those. Publishing royalties are paid by each individual songwriters’ publishing company (and PRO / MRO).
+How To Get All Your Music Royalties
But, cutting in session musicians to royalties is very uncommon. Doesn’t happen often. Most session musicians honestly just want to earn a fair session fee “work for hire.” They don’t expect anything after the session. They’re not going to work on spec. Meaning, they most likely don’t want a lower session fee for a cut of backend royalties. That’s always a gamble.
Whereas some producers will take less up front for more on the backend if they really believe in the Artist and the recording.
And most distributors these days have the ability to pay out sound recording “master” royalties to any collaborator you designate.
If you want to know how producer and songwriter splits work, I break it down more fully (with charts!) here.
Make sure before you release the recording that all of this is worked out. It’s best to get it in writing. Email works fine. Just make sure everyone who contributed to the recording and song has a clear understanding of the arrangement so it doesn’t come to bite you in the ass when the song blows up.
