Hi Musicians and Music Lovers!
I got this interesting question from a songwriter friend of mine today, and I thought I would post it and my response for you, because songwriting and the music industry are a lot more complex than most people would ever dream. It's just good to know a few songwriting and music industry basics whether you are in a band, write music, thinking of a career in or are in the music industry, or even if you just like to listen to and download music.
You are mixing up song "publishing" with licensing, distribution and other services. I suggest you do some research online about how songwriting, royalties and publishing work. They are very complex, and I certainly don't know all the ins and outs, and even if I did, I could never go into enough detail here to explain it. There's just not enough time, space, or strength in my fingers to type it all! Plus there are already some great resources online & books about how the music industry, songwriting and royalties work. Just do a search on "How the Music Industry Works" or "How songwriting royalties are paid", or similar. BTW- this is all just for songs played and written in the US, each country has it's own copyright, songwriting & royalty payment laws, so it gets really fun when you start talking about international rights & royalties for music.
In the US, when anyone writes a song, if it plays on the radio, is performed by someone else, or appears in a movie, etc., then about 9 cents in royalties are supposed to be paid to the songwriter per song every time it's played. 50% of any payments or royalties for use of that song would go to the writer (or Writer's Share as it's called, so that would be about 4.5 cents per song play), and 50% goes to the publisher (or Publisher's Share-the other 4.5 cents).
A warning about performing and recording "cover" songs: in the US, you are only paid a song royalty for any original songs that you yourself write. Additionally, if you record someone else's song (or you "cover" their song), you don't get a red-cent in royalties. However, the owner/writer of that song gets paid all song royalties for that song you recorded or performed, not you. Plus, you have to pay them a "licensing fee" to use their song. This is why in the US and generally speaking, it's a LOT more lucrative for performers to write and perform their own music.
For example, you want to sell your music online. So you choose to pay CD Baby a flat fee, plus a small percentage of each sale (usually 10-20%) for you to be able to post & sell your music on their site (like I do). CD Baby wouldn't really the "publisher", you are merely paying them for the service of helping you sell your music online, which is something different, so they are not entitled to the "publisher share" of your song royalites. If you posted your music on CD Baby, and then you also wanted to sign an additional distribution and royalty collection contract with CD Baby, then they would be the distributor of your music, not the publisher, and they would collect an additional flat fee such as $49 per song (to help you collect your royalties and get your music out there to all their online outlets like Spotify & Rhapsody in order to help you increase sales and visibility).
In addition to this flat fee per song, a distributor may also take a percentage of any song royalty payments they collect for you as well, so check the fine print. Since they are not really "publishers", they would not be getting this Publisher's Share royalty of 50%. Some distributors do charge a percentage of your writer's or publishers royalties (usually 10-20% in the US and Canada), so be careful to read the fine print and consult a lawyer when signing anything that involves giving away part or all of of your royalty payments in exchange for a service. And NEVER give away or sign away your copyrights to your music, unless you are doing so for some sort of charitable reason.
Most new artist/songwriters, and also what we call "independent artists" are their own publishers too, so that they would receive 100% of any song royalties paid for any song that they wrote. An independent artist is one who is not affiliated or "signed" with any Label or Publisher. If an artist "signs" a deal with a Record Label, in exchange for a lump sum, usually an "advance payment for future royalties", the Label usually asks you to sign away all your publishing rights. So then the Label would get all of the 50% publishing royalties for any songs you wrote that were under that contract with them.
Or, as a songwriter, you can also sign a deal directly with a music publisher. In exchange, the publisher may "publish" your song as sheet music, or place it in their "music library" where they would be able to "get your music out there" for lots of industry people to hear your songs. They could: "license", or sell, your song in order for another artist to perform it, or "license" your song for use in a movie, on TV, or in a video game, etc.. This would usually be in exchange for the 50% publishing rights. In any case, if you sign with a publisher, distributor or a Label, you would likely still retain part of or all of your writers share of 50%, but that's negotiable too.
Unfortunately, nowadays, more & more often, songwriters are being asked to give up part of their writer's share because the industry's in a financial downturn. This is due to a number of factors such as free downloading, sites like Pandora that pay hardly any royalties per song play (only 8 cents per 1000 plays, that's less than 1/1000 of what they should be paying songwriters!), and other factors that have severely cut back the revenues and royalties for artists, labels and publishers. There's also a related aspect I briefly mentioned above called Music Licensing. That's a completely different subject that I'll address another time.
I hope this helps, but all artists need to do some research on their own about how songwriting, and the music industry works. You can find out more information on songwriting royalties and other payments here: http://entertainment.howstuffworks.com/music-royalties6.htm .
It's extremely complex, and there are a lot of legal aspects and other things that you should know before you record any song for sale or commercial use, whether you own the song or it's someone else's.
Please visit my website to find out more info. about me and my music, thanks! www.DeDe-Music.com