Christmas Music: The Gift That Keeps on Giving (Royalties)

This Christmas season, cherub-cheeked crooner Michael Bublé and 3-D phenom Justin Bieber are bidding for a spot in your family's CD player, alongside stalwarts like Frank Sinatra and Nat King Cole. Many young artists have re-recorded old holiday favorites -- they're great songs, after all.

And Christmas albums can also be real cash cows, which can be milked for sales year after year. Which led us to wonder: Who's getting all that money? The recording artists? The (often deceased) songwriters? Or, as is usually the case in the music biz, someone you've never heard of who talks about things like "synergy" and "action items," and wears a really sharp suit?

Putting A Price On Cheer

Songwriting isn't a particularly lucrative profession. "Royalties are established by the Copyright [Royalty] Tribunal," explained author, educator, and music journalist Dan Kimpel, "so songwriting is one of the only industries in the U.S. with an income determined by Congress."

When it comes to CD sales, a record label has to pay the writer 9.1 cents per song, which is often split with the publisher. That means a songwriter will earn $45,500 on a million-selling CD -- half that if the song was co-written. Given that only 13 albums went platinum last year out of around 100,000 releases, that's not such a high payout for 1 in 8,000 odds.

Holiday CDs have a better shot at hitting the jackpot. According to Nielsen SoundScan, album sales during the six-week "festive season" accounted for 22 percent of all album sales in 2010, and three of last year's Christmas releases sold more than a million copies. The heirs of Irving Berlin probably have very nice houses: His song "White Christmas," performed by Bing Crosby, is the best-selling single worldwide, according to the Guinness Book of World Records.

Susan Boyle's holiday album of last year, "The Gift," went triple platinum in the U.S., garnering more than $135,000 for the composers of each song, by the 9.1-cent calculation. Fortunately for the record company, many of Boyle's selections, like "Away in a Manger" and "Auld Lang Syne," are safely within the public domain.

Boyle herself, like other artists, gets anywhere from 12 percent to 20 percent of the suggested retail price of the CD, according to The Root, with a cut of that cash going to managers, musicians, a producer, a lawyer, and to pay back any advance from the label. Even with a good deal, an artist needs to sell over 1,100 albums in a month to earn the minimum wage, according to one analysis.

The deal for writers and artists is around the same, if not worse, for digital downloads. When a song is purchased through iTunes for 99 cents, Apple gets 34 cents, the label gets 46 cents, and the songwriter and artist earn around 9 cents each.

Scoring On Screen

As always, movies are where the money is. If a song is used in a feature film, the composer receives between $15,000 and $60,000, according to Kimpel, depending on how well-known the song is and where in the movie it plays (you can make bank during the credits). It's probably no coincidence that the 2003 feel-good-athon "Love Actually" chose as its central theme a parody of the song "Love Is All Around" over a pricier seasonal staple.

Landing your song in a national commercial can help pay off the mortgage. The fees can be in the $100,000 to $300,000 range, Kimpel says, with the money split between the publisher and the writer. That's why Apple, car makers, and cell phone service providers soundtrack their ads with indie tunes, which earn their writers a more modest $20,000 to $100,000 a pop.

That may also explain why Gap often composes its own ballads for its winter wear commercials, like "Talk to the Moose," or uses "soundalikes" and remixes, so that it can avoid paying a record label.

Becoming a Christmas Classic

Performance royalties are really the gift that keeps on giving when it comes to Christmas tunes. Most pop compositions disappear once their catchy riffs start to grate, as Christmas songs do every January. But when November (or, increasingly, October) roll around again, those holiday anthems creep back onto the airwaves, and the world once again spends 8 to 12 weeks listening to music from the 1940s and 1950s.

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The top 10 songs most frequently aired on the radio from the start of October until mid-December this year were all written pre-Beatlemania, according to ASCAP, one of the three performance rights organizations in the U.S. "

Sleigh Ride" (1948) takes the crown for the second year in a row, with over 150,000 plays, followed by "Winter Wonderland" (1934), "The Christmas Song (Chestnuts Roasting on an Open Fire)" (1944), and "Let it Snow! Let it Snow! Let it Snow!" (1945). The most recently written ditty on the list: "It's the Most Wonderful Time of the Year," composed in 1963.

Bieber's "Under the Mistletoe," released on Nov. 1, has already gone platinum. Bublé's "Christmas" is inching close to double-platinum glory. But one of their tracks will have to burrow its way into the Christmas canon if the songwriter is going to get that nice little annuity under the tree each year.

José Feliciano did it in 1970 with "Feliz Navidad." Wham! did it in 1980 with "Last Christmas." Bob Geldof and Midge Ure sort of did in 1984 with "Do They Know Its Christmas At All?" -- an impressive feat for an ode to victims of African famine. And in 1994, Mariah Carey did it with a vengeance with "All I Want for Christmas Is You."

Will Bieber's teeny-bop-hip-hop version of "Drummer Boy" featuring Busta Rhymes follow suit? Only time will tell.