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Music lyrics are part of popular poetry that make their entrance into all areas of life and art. People consistently sing nonsense or lyrics to popular songs, and films have included this in almost every platform from musicals to more serious dramatic fare.
There are a few different ways that you can include music lyrics when you are writing the screenplay for your film.
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What you are going to want to do is to include these music lyrics into your dialogue in a way that identifies them from the rest of dialogue. The easiest way of doing this is by writing each line of the song individually like poetry stanzas.
Directly before they begin singing it would be best to identify in the characters action directions that they are beginning to sing and even the song title. This is especially easy if the character is singing by themselves such as in the shower or while doing household chores.
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If characters are singing back and forth, as in a musical or comedic moment, then use the stanza format, but have it go back and forth like regular dialogue. You will only have to indicate the song and singing action once for this type of back and forth.
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In the Scene
You are going to want to indicate whether or not the music is being played live in the scene or is intended to be played at that moment in the soundtrack. This may be something that the director would prefer to choose. Yet you can still put it in your screenplay if it is critical to the scene.
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It may be a good idea to avoid this with really popular songs as it has become a cliché. At the same time, you want to avoid putting in lyrics to songs that have expensive rights that you may not be able to get.
Public domain and original songs are always the way to go if you must include this in your screenplay. Try putting in a few alternatives in case you are unable to acquire the rights to the song you want the lyrics from.