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Posts tagged “PUBLISHING

Industry Tips & Advice: Why Artists Should Own Their Own Publishing

Syd Butler, founder and President of French Kiss Records, tells aspiring artists why they should make sure to retain ownership and control of the publishing rights on the songs they write.


Industry Tips & Advice: MUSIC PUBLISHING – AN INTRODUCTION (Part 2 of 2) by Alan Korn

This article is part 2 of an overview on music publishing. In the last article I discussed what music publishers do and the types of income they collect. This column looks at typical publishing deals that are available.

SHOULD I ENTER INTO A PUBLISHING DEAL?
Actually, not every artist needs to enter a publishing deal. It may be wiser to first obtain a major record deal before finding a music publisher. Conversely, publishers may want nothing to do with an artist who doesn’t have a record deal or some other guaranteed way to generate income. In addition, some artists may prefer to hold onto their copyrights and let administration agencies collect their publishing income.

HOW IS SONGWRITING INCOME SPLIT WITH A PUBLISHER?

With the exception of print music, income from musical compositions is generally split on a 50/50 basis between the music publisher and writer. The publisher’s half of this income is called the “publisher’s share,” and the writer’s half is the “writer’s share.”

To illustrate how this works in the real world, let’s take the following example. Imagine a publisher collects slightly more than $.68 (68 cents) in mechanical royalties from the sale of one of your CDs (actually 10 songs x $.091 cents per song x 75% rate for controlled compositions = 68.25 cents. I’ll round off the extra ¼ cent for purposes of this article). Assuming there are no collection costs deducted off the top, the publisher’s share comes to approximately $.34 (34 cents) and the writer’s share also comes to approximately $.34 (34 cents).

This financial split is a basic, but important, concept. When discussing publishing income, be sure to remember this distinction between “publisher’s share” and “writer’s share.”

WHAT TYPES OF MUSIC PUBLISHING DEALS ARE AVAILABLE?
STANDARD PUBLISHING AGREEMENTS

Standard music publishing deals come in several varieties. These include song-by-song publishing deals for specific compositions, and exclusive songwriter agreements that may last for a fixed period of years (usually 1 year with options to extend the term). These publishing deals may cover all songs written by an artist, or just those songs commercially released during the term of the agreement.

Under either arrangement, the publisher becomes the copyright owner of the songs. In exchange, the Publisher may pay the artist an advance based upon the potential value of the compositions. Subsequent income generated from these songs is then split, usually on a 50/50 basis. After the publisher recovers its advance, the artist is paid the “writer’s share” of net income received, while the publisher retains its publisher’s share.

CO-PUBLISHING AGREEMENTS

Co-publishing deals are similar to the above arrangement, except the artist (or the artist’s publishing entity) co-owns a percentage of the copyright along with the publisher. It is common for both parties to each own 50% of the copyright, though percentages can vary from deal to deal.

In a CO-publishing deal, the songwriter’s publishing entity also receives a percentage of the “publisher’s share” of income. Thus, using the above hypothetical, an artist would receive the “writer’s share” of the publishing “pie” (i.e., 34 cents), while also receiving up to half the net income from the publisher’s share of the publishing “pie”(i.e., an additional 17 cents).

Although CO-publishing deals are sometimes better than standard publishing deals, not all CO-publishing deals are in the artists best interest. For instance, some independent record labels require new artists to enter into a CO-publishing deal with the label’s “publishing” entity. (Ironically, few major labels require this of their artists). Even if you are offered an additional advance for such a deal, you should resist it! Here’s why:

The record company’s goal here is to reduce the amount of money payable to you from record sales (since the record company gets to keep 50% of the “publisher’s share” of mechanical royalty income);
Independent record labels may lack the experience and resources to promote your songs like an independent publishing company;
An independent publisher has more incentive to demand and accounting and collect publishing income from your label; and
It may actually be in your interest to retain these copyrights and enter into an administration deal instead.
ADMINISTRATION AGREEMENTS

In an administration deal, the publishing administrator collects income and also helps promote the songwriter’s catalogue. An administration deal may last for a specific period of time (i.e., 3 years) or for one year with several options to renew. When the term is over, all rights revert back to the artist.

A publishing administrator is typically paid by deducting a percentage of the income it collects on behalf of the artist. After deducting this administration fee (anywhere from 10% to 20% of the gross proceeds) the administrator distributes 100% of the remaining net income to the songwriter(s). As an incentive to promote your songs, some administrators may also charge a slightly higher collection fee for income earned from cover songs.

In some cases, a songwriter may receive as much income from a co-publisher as a publishing administrator. However, while a CO-publisher may be able to offer a generous advance, an administration deal can provide an artist with greater financial and artistic control. There are also many advantages to retaining the copyright to your songs. For example, if your first record sells only moderately but your next CD becomes commercially successful, you may gain greater leverage to negotiate a favorable publishing, CO-publishing or administration deal at a later date.

FURTHER READING:
These two columns provide just a brief overview of the music publishing industry. Because publishing money is often a major source of revenue for recording artists, it is important to know about your publishing rights. For those who want to learn more about this area, one book worth reading is “Music, Money and Success: The Insider’s Guide to the Music Industry” by Jeff Brabec and Todd Brabec. The authors have years of experience in the music business, and their book provides a detailed guide to publishing industry practices, including tips on what to look for in a publishing deal.

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

SOURCE:

http://www.alankorn.com/articles/publishing_2.html


Industry Tips & Advice: MUSIC PUBLISHING – AN OVERVIEW (Part 1 of 2) by Alan Korn

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.

SOURCE:

http://www.alankorn.com/articles/publishing_1.html


Industry Tips & Advice: Foreign Sub-Publishing Income by By Kevin Zimmerman


Whether your song is clicking in Caracas or soaring in Singapore, you’ll want to make sure someone is collecting your share for you in the international marketplace.

In addition to the secondary income streams from sales of sheet music and synchronization explained elsewhere, there are also monies to be earned internationally, should your song cross over beyond U.S. borders.

While the major multi-national publishers (EMI, Warner-Chappell, Universal, BMG, etc.) maintain offices in most of the leading territories, most independent publishers do not. As a result, these publishers sign agreements with local publishers in each territory to collect on their behalf. In these cases, the local publisher becomes known as a sub-publisher.

Regardless of what kind of publishing company is representing you, you should keep in mind that most countries have a mechanical rights collection society that licenses all musical compositions used by all record companies in that country. These mechanical societies are oftentimes government-owned and operated. Each local publisher files a claim with the mechanicals society explaining what percentage of a particular song it represents, and the collected monies are allocated accordingly.

In addition, sub-publishers collect the publisher’s share of performance monies from the country’s performing rights society, while the performing rights society pays the writer’s share to the U.S. performing rights society that you have affiliated with as a songwriter.

A sub-publisher can charge between 10% and 50% of the monies earned for its services, though typically the amount runs in the 15% to 25% range. The sub-publisher usually gets an increased percentage for covers of your song (a recording by a local artist in that territory of your song). This increased percentage usually tops out at 50 percent.

In regards to printed music, if the sub-publisher is responsible for manufacturing and selling the sheet music, it usually pays the U.S. publisher about 15% of the retail selling-price. If the sub-publisher has licensed the print music, it typically retains between 15% and 25% of the licensing income.

As is the case with your U.S. publishing agreement, an advance from the sub-publisher may be involved. For new songwriters with no proven track record, there may be no advance, with the sub-publisher content to merely collect on behalf of the U.S. publisher (this arrangement is usually referred to as a “collection deal”). In the absence of an advance, the sub-publisher will usually keep a lower percentage. Sizes of the local market and of the catalog also affect the advance amount. Advances can also be greatly affected by the currency exchange rates: if the U.S. dollar is strong, lower U.S. dollar advances are the norm.

In addition, sometimes when an American song becomes an international hit, various territories will seek the release of a version with lyrics in the language of their country. The local lyricist (or translator) will then receive a share of the royalties on that version, paid by the local societies. Sometimes the American songwriter and publisher are responsible for this percentage, while other times the sub-publisher pays for it.

At any rate, the translated version should be registered separately with the society, which usually ensures that the translator does not get paid on the English language version.

Be sure to receive a copy of the new lyrics translated into English by a reliable third-party source for your approval. This will prevent a new version of your song going out with lyrics that you – or someone else – may otherwise find confusing or even offensive.

Sub-publishing deals are established to run for a specific duration (usually at least three years).

SOURCE:

http://www.songwriter101.com/articles/entry/Foreign_Sub-Publishing_Income


Industry Tips & Advice: Barry Menes On How Do Publishing Deals Work?

Entertainment lawyer Barry Menes talks about various publishing deals and how money is made distributed from such arrangements. He also discusses how publishers use their catalogs to generate revenue, and what a good publisher ought to be doing to generate money for their client off their catalog.


Article: On Life Support: A Look at the Big Four Record Labels by Michael Melchor

Hi there and welcome back after a longer break than I intended to take. I didn’t intend to take one at all, actually, but … well, this isn’t the place to discuss it. Not that I even care to. Just know it was pretty serious to take me away from here for two weeks and to interrupt a two-parter. Feel free to familiarize yourself with part one on my look at the state of the few remaining major record labels left before I move on below.

All caught up? Good. Now that you are, I have to admit I screwed up. To his credit, a reader named Da Maya called me on it in the comments section:

“Contrary to your blog [post], Warner Bros. does not own Warner Music Group. Neither does Time-Warner. Warner Music Group has been an independent company since around 2005.

Warner Music has been signing more and more artists to “360 deals” where they take a percentage of the artists’ touring, merchandising, endorsement and other revenue. This is probably why so many people are interested in bidding for WMG. So basically I disagree with you because the business model has changed on the recording side, and that is far from a ‘nail in the coffin’.

WMG’s other business – publishing, is a money printing machine, by the way.”

He’s right, you know. I’m not about to make any excuses for it either. I made an assumption, didn’t check my facts, and was rightly called on it. For that, I apologize and also promise that it’s not a mistake that will happen again.


To wit: Warner Music Group has already been sold by Time-Warner (as of seven years ago). Edgar Bronfman Jr. led a group of investors in picking up the label in 2004, and it has been under his watch ever since. We see now where that “leadership” has led and how much it has cost them (which, again, was discussed in part one). We could certainly debate how much money they’re losing and the publishing business (which WMG has insisted be bought with the rest of the label, but that’s for another time).

And now, it’s a moot point. Just as I have this ready to go to press, word broke that Warner Music Group has a new owner. Access Industries’ billionaire owner Len Blavatnik is now the proud owner of the label courtesy of a $3.3 billion winning bid. Fascinating what changes in so little time. He might look at cutting it down to the “big three,” but we’ll touch on that in a minute.

With all of that now done, let’s continue our look at the state of the music industry as it pertains to the major labels in existence. In the interest of disclosure, I’m not doing just a review of numbers. They’ll be there when pertinent, but otherwise this will read like a quarterly financial report, and we all know how boring those are. We’ll stick with facts, and start with a label aside from WMG that has already changed hands.


EMI Music was picked up by Terra Firma Capital Partners in 2007 for £4.2 billion after EMI had lost financial ground to the tune of £260 million between 2006 and 2007. Upon the takeover, many artists, including Radiohead and Paul McCartney, left the label. Pink Floyd sued it over royalties. Not a good time to be EMI, but Terra Firma wasn’t doing itself any favors.

Immediately, it laid off 1,500-2,000 employees to try and cut costs, but more artists were still unhappy with it. Then, many more artists were affected when EMI pulled out of the Southeast Asia market altogether. Its plan to recoup losses (other than layoffs)? Completely withhold selling CDs to independent album retailers, among other brilliant moves.

EMI kept sinking under Terra Firma, reporting a pre-tax loss of £1.75 billion for the year 2009. With 2010 not faring any better, EMI was not bought out, it was reposessed. Citigroup, who EMI had a huge debt toward, stepped and agreed to cut down the debt by 65% (£2.2 billion) upon the condition that it simply take control of the label. And that’s exactly what happened three months ago. Now that Access Industries and Len Blavatnik have bought WMG, talk around the water cooler is that Blavatnik may be eyeing EMI as his next acquisition. Couldn’t think of a better time to do it, really.

The real irony here? Five years ago, EMI attempted to buy Warner Music Group. WMG responded with a counter offer to buy EMI instead, and the whole thing was dropped. Imagine how much worse off WMG would be right now had it accepted a buyout then.


Sony Music hasn’t seen days nearly as bad as EMI. However, it is not faring quite that well, either. In terms of numbers, Sony Music, which is owned by Sony Corporation of America-a natural assumption that, alas, couldn’t be made about Warner Music-reportedly had a loss of 11% ($1.33 billion) in 2009. Not much was found after that time, but it would be easy to believe that, while consumer behavior changes and Internet availability (whether legal or not) has affected it as much as the others, Sony also has an ace in its sleeve: the Michael Jackson catalog.

Sony’s woes could both also come from the acquisitions and personnel changes. Keeping track of all of these has been dizzying, but I’ll try to simplify them as best I can. Since 1987, Sony has acquired or merged with BMG Records (bringing the “big five” down to the “big four” labels), CBS, Arista, and Columbia Records. In addition, the company is installing a new CEO as Doug Morris-former head of Warner Music Group and Universal Music Group, ironically enough-is set to take over operations of Sony Music effective July 1, 2011. In return, Barry Weiss left his position as RCA/Jive Records CEO to lead Island Def Jam & Universal Motown Republic, both of which are part of Universal Music Group.


UMG (owned by French media monster Vivendi) is the biggest of the big. Maybe because of sheer size and amount of holdings, UMG was the only label I came across that showed any signs of a recent profit. Of course, that was back in 2007 when it posted gains of $6.1 billion. That was after the famous payola scandal in 2006 and since that time, Universal Music Group has been one of the only companies to really embrace online content delivery. Sure, there was Imeem-and we know how well that eventually played out. However, it also developed Vevo, enemy of many a YouTube user everywhere but still a great asset for UMG.

That, of course, came after it was accused of abusing the Digital Millennium Copyright Act not once, but twice in the same year it turned the above reported profit. Once, it was reportedly to scare away some poor girl criticizing Akon online-and, really, who can find fault in criticism like that?-and another involved yaking a 30-second video of kids dancing to Prince.

On the other side of that coin, UMG was the first label to reach one billion YouTube views and the fourth channel to nab one million subscribers. So, all in all, UMG can be a little overbearing, just like any other label freaking out over the prospect of the people having control of what they get and how. But it has turned itself around to embrace change better than the other three have.

All in all, the “big four” labels have seen better days by a damn sight. One was reposessed, one is about to be sold off, one can’t find its way past inner turmoil, and the last one is doing okay for itself but has shown signs of paranoia. Strange times for some of the biggest companies in the world, indeed.

The speculation will continue as to whether or not any of them will survive in the long haul. Most are wont to say “no,” including, apparently, those running the label system itself. It’s good to have hard facts in a debate like this instead of speculation, however. Now, we have some of that when it comes time to argue the inevitable-yeah, I said it-demise of the industry standard of the major label system, giving way to something else.

Thanks for checking back, and I will see you again next week.

SOURCE:

http://www.seattlepi.com/default/article/On-Life-Support-A-Look-at-the-Big-Four-Record-1370813.php#ixzz1MEeNG4sH


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