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Chapter SEVEN

The Money Paths: Publishing

Let’s follow the money path in publishing.

Publishing is the income a songwriter earns for writing a song, and the money path back to the songwriter is triggered in two ways: by unit sales of the song or by performances of the song.

The two main methods of calculating what is due the songwriter involve the terms “mechanicals” for sales of CDs and videos and “statutory” for sales from concert and radio airplay.

Publishing used to be part of the record companies, but laws to protect songwriters from being taken advantage of now require the separation of publishing and royalties. This separates the artist who wrote the song from the actual recording or performance of the song by an artist/band. If U2 records a BB King song on a record, U2 earns royalties from the sale of the recording and BB King earns publishing for writing the song.

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Publishing can be very profitable if the songs can be placed, recorded or used many times. Lennon and McCartney earned more publishing than most because their songs have been re-recorded by so many other artists and are used in commercials, for movie soundtracks and are frequently played on the radio.

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Traditionally, publishing revenues are split down the middle between the publishing house/publisher and the songwriter, songwriters, or company who owns the songwriters rights. It is the job of the publishing house to place the song in as many recordings as possible and to be the accountant or gatekeeper for the publishing funds.

The collection of these publishing revenues are overseen by the musician unions and associations, who watchdog this process and confirm the formulas used in “black box” splits of pooled revenue.

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Like record companies, publishing houses sometimes act like a bank or investor. They may fund song-related expenses or pay writers advances on earnings. If any monies are advanced, the publishing house always recoups its money before the writer gets paid additional publishing.

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