Theoretical Question

[jonathanm]

This shouldn't be too hard for you guys. Please tell me how the money is divided in the following scenario:Joe writes a song and doesn't publish it or sell it. Because they know Joe, a local band finds out about the song and gets permission to record it. They record it and the band owns the recording. The recording is licensed to a library in a 60/40 non-exclusive deal (40 for the library). The library gets it placed in a TV episode. The episode airs 5 times in the year.Make up your own dollar amounts, but here are my questions:What does the library get?What does the owner of the recording (the band) get?What does the songwriter (Joe) get?

[matto]

There are two parts to the compensation, license fee and performance royalties.Assuming the split is 60/40 for both, then the library would get 40% of the license fee. The remaining 60 would be split between Joe and the band, since Joe is the owner of the song, and the band is the owner of the master. So Joe gets 30% and the band 30% of the total license fee.In the US, performance royalies are only paid to the songwriters/composers, NOT to performers. In other words the payments are for the performance of SONGS, not RECORDINGS. Therefore Joe would get 60% of the performance royalties directly from his PRO, the library 40%. The band would get nothing since they don't own any part of the song (unless of course Joe has an agreement with the band in which he has agreed to share a portion of his PRO royalties with them).On the other hand when the band sells their CD's with Joe's song on them, Joe would only get the statutory mechanical rate of 9.1 cents for every CD sold, the band would get the lion's share of any profits made from the sales of CD's.matto

[jonathanm]

Excellent answer. Thanks, Matt.