The process of creating a song is exciting and inspiring, but songwriters sometimes overlook the legal and business implications. They may need to consider issues such as credits, royalties, and copyright registration to make sure that they reap the full rewards from their song. For example, songwriters who work together will need to decide how they will split any profits that they receive from the song. You should make sure to address this issue immediately to avoid conflicts down the road. Sometimes members of a band who did not actually write the song may want to have a share of the income from it, based on their other contributions to the band. Many bands divide shares according to the scale of each member’s contributions, but these are not always easy to quantify.
In many cases, part of the “credit” for a song belongs to a songwriter from an earlier era, whose work is adapted into a new song. If the work is in the public domain, you can feel free to borrow from it without worrying about copyright infringement. Otherwise, you may face a copyright infringement claim from the copyright owner unless you get permission to borrow from the earlier song. (Read more here about when works fall into the public domain.)
Whoever gets credit for contributing to the song’s structure, chord progression, and lyrics will receive a share of the copyright in the song. You can decide who gets songwriting credits for each song separately, or you can decide that each member of the band gets credit for every song composed by the band. After you have made this decision, you can promote the song with the names of everyone who holds a copyright in it. You can encode copyright information, including the names of the copyright holders, in the text tags that are used for music downloads.
Your song will get copyright protection automatically, as long as it has some minimal amount of creativity and is fixed in a tangible medium. Being fixed in a tangible medium means that the song has been recorded on a tape, written on sheet music, or saved in a computer file. While you do not need to formally register your copyright in the song with the U.S. Copyright Office, you may want to register it so that you can bring an infringement action later. If you register your song within three months of releasing it, you may be able to recover more damages if someone infringes on the copyright.
If your song will be played by radio stations, websites, and other entities, you should make sure to register it with BMI and ASCAP. These organizations monitor the performance rights of songwriters and collect royalties from entities that play their music. Then, they send the royalties to the songwriters directly. You should update the information attached to your registration if it changes.
Marketing and Business Concerns
Many songwriters feel reluctant to assign their copyright to a music publishing company. However, the nature of the industry often makes an assignment unavoidable. You will receive a substantial percentage (perhaps 60 or 70 percent) of the royalties received from the song during the copyright term. Some songwriters might consider starting their own music publishing company to receive all of the revenue from the song, but this is not always wise. A major company may have better connections in the industry to promote the song, so a percentage of the royalties may be a greater amount of money than the full revenue that you could secure on your own.
You should be open to exploring unconventional ways of promoting your songs. Many people listen to music on websites or in video games. Advertising agencies and movie studios sometimes discover a song online and seek a license from the copyright holder. These licenses can be more lucrative than many other sources of revenue.
If you write and record songs in your home, you may be able to get a tax deduction for your “home office” if you do not have another office space. The deduction would be proportionate to the percentage of your home that comprises the office. Tax complications can arise if you sell your home after taking the deduction. You can explore the rules regarding capital gains tax to understand their potential impact and decide whether claiming a home office tax deduction makes sense.