MUSIC PUBLISHING - AN OVERVIEW (Part 1 of 2)
This article is designed to give an overview of music publishing. Although
the details can be less than fascinating, music publishing remains one of the
most financially lucrative areas in the music business, and one of the few areas
where artists can generate real money. As a result, it is particularly crucial
for recording artists and songwriters to protect their publishing rights. The
best way to start is to learn the basics of the music publishing business.
WHAT IS A MUSIC PUBLISHER?
Before the invention of the phonograph, songwriters earned income by relying
on music publishers to sell sheet music of their songs. Even as radio and television
replaced the piano in the parlor, music publishers continued to play an important
role as popular singers continued to rely upon established songwriters to provide
their material. However, with the advent of rock and roll (and especially the
Beatles) popular recording artists began to write more of their own songs. Since
that time, the music publishing industry has taken on a less important role.
Nevertheless, music publishers continue to perform several important functions
that you should be aware of.
WHAT DOES A MUSIC PUBLISHER DO?
Today, music publishers are concerned with administering copyrights, licensing
songs to record companies and others, and collecting royalties on behalf of
the songwriter. Some of the more important music publishing activities are listed
below:
Mechanical Royalties
The term "mechanical royalties" initially referred to royalties paid
whenever a song was reproduced by a mechanical device (remember that one of
a copyright owner's exclusive rights is the right to authorize the reproduction
of their work). The term "mechanical royalties" was applied to the
reproduction of songs in music boxes, player pianos rolls, and later, phonograph
records. This term is still used, and "mechanical royalties" now refers
to royalties paid for the reproduction of songs on CD, DAT, audiocassette, flexi-discs,
musical greeting cards, and other devices sold on a "per unit" basis.
The amount of money a record company must pay for a mechanical license is generally
set by the Copyright Royalty Tribunal. This rate is sometimes referred to as
a "statutory" rate. The current statutory rate through December 31,
2007 is nine and one-tenth cent ($.091) per song. This means that a single song
can generate up to $.91 cents for every 10 records sold. Unfortunately, it is
record industry custom to pay only 75% of the statutory rate to new or moderately
successful songwriters. This means that a typical songwriter without enormous
clout would generate a little more than 68 cents for every 10 records sold.
After the publisher collects this money from the record company and takes its
share of the income, a songwriter may receive as little as half of this amount.
Foreign Monies
Foreign countries sometimes have different laws governing the collection and
distribution of mechanical royalties. As a result, it is often necessary for
publishers to enter into agreements with a foreign publisher (or "subpublishers")
to collect a songwriter's mechanical royalties in that territory. After the
subpublisher takes a cut (anywhere from 15% to 25%) the rest of this foreign
income is divided between the publisher and the songwriter according to their
agreement.
Synchronization Licenses
Whenever a song is used with a visual image, it is necessary to obtain a
"synchronization" (or "synch") license permitting the use
of that song. Music publishers issue synch licenses to television advertisers,
motion picture companies, video manufacturers and CD-Rom companies. A portion
of this money (usually 1/2 the net proceeds) is paid to the songwriter.
Transcription Licenses
Because radio is not a visual medium, the use of a song as part of a radio commercial
requires a separate license, known as a "transcription license." Sometimes
songwriters are able to negotiate provisions in their publishing contract preventing
their songs from use in certain contexts, such as ads for alcohol, tobacco,
political campaigns or other uses the songwriter may find offensive.
Print Licenses
Although sheet music sales have diminished over the years, many songs are still
available in print form. These include books of songs by specific artists, instruction
books or compilations of hits within a given genre (i.e., "100 Country
Hits of All Time"). The music publisher issues print licenses and collects
this income from the sheet music company, while the songwriter receives a small
royalty derived from the sale of his or her song in print form.
Administration and Registration of Copyrights
Because music publishers generate money by licensing copyrighted compositions,
they must also perform various administrative tasks involving copyright transfers
and the registration of musical copyrights with the U.S. Copyright Office. Registering
your copyright with the US Copyright Office provides added protection to copyright
holders, and can permit the copyright owner to recover statutory damages of
up to $100,000 and attorneys fees if the copyright is subsequently infringed.
Public Performance Royalties
A copyright owner also has the exclusive right to authorize the "public
performance" of that work. This is why radio and television broadcasters
must enter into licenses with performance rights organizations such as BMI,
ASCAP and SESAC. These performance rights organizations collect income on behalf
of songwriters and music publishers whenever a song is publicly broadcast. A
future column of the Fine Print will discuss these performance rights organizations
in more detail.
Even though music publishers do not collect this performance rights income,
publishers remain entitled to 50% of the money received by BMI, ASCAP, SESAC
and others. Publishers also register songs with these performance rights organizations.
"Song Plugging"
This obscure term refers to music bizzers who promote the compositions of others.
This may involve convincing popular artists to cover your song, or convincing
Disney to use your latest tune in their next animated feature.
Translations
Publishers may also authorize translations in order to generate income from
cover versions of a particular song in foreign countries.
Obtaining a Record Deal
Music publishers are usually generally most in signing established songwriters
or recording artists who write their own material. However, some publishers
may be willing to sign new songwriters or bands without a record deal. If a
publisher believes an undiscovered artist will one day sell lots of hit records,
they may help the artist record demos and assist in trying to land a major record
deal. If the artist gets signed, the music publisher will hope to see a reward
for its investment in the form of mechanical royalties, public performance royalties
and other derivative income. A publisher may even be willing to contribute to
tour support or provide extra promotions money in order to generate future publishing
income from record sales and airplay.
WHY CONSIDER A PUBLISHING DEAL?
The main reason is money. Music publishers may be willing to pay a substantial
cash advance for a songwriter's past, present or future material. In exchange,
the publisher will own a percentage of that artist's musical copyrights and
keep a percentage of money these songs earn.
Of course, publishers are unlikely to pay an advance unless they believe they
can make a profit on the deal. Like everyone else in the industry, music publishers
are in the business of buying something of yours in order to sell it to others
at a profit. Unfortunately, many artists do not realize how valuable their publishing
rights are. The history of the music business is littered with sleazy promoters
who paid pennies for songs that later generated millions in income.
Not every artist needs a publishing deal, and some artists may be better off
by avoiding traditional publishing deal altogether. Many different publishing
options may be available to an artist today. Some publishers may be willing
to enter into a more limited "co-publishing" deal, and "administration"
deals may be available for independent artists who seek to retain their valuable
copyrights. The next column will look at each of these deals more closely.
Alan Korn
Law Office of Alan Korn
1840 Woolsey Street
Berkeley, CA 94703
Ph: (510) 548-7300
Fax: (510) 540-4821
aakorn@igc.org
www.alankorn.com