Understanding the Music Industry is a series that outlines the framework of the business, explaining the roles of the industry professionals, what their jobs entail, when it’s important to involve them and deal specifics that you want to be aware of. Artist managers, booking agents, music publishers, labels, A&Rs and others – we’ll treat them all.
The first episode covers the foundations that underlie this business, and sheds light on artist managers and booking agents. Make sure you’ve read it before continuing here, so you get an idea of how the music industry works.
In this second part we’ll further explain the framework and thoroughly talk about music publishers, from both a traditional and synching perspective.
An example of the team that we have built around one of our artists.
At the essence, success of modern artists is driven by having great music, an exceptional brand and working with a team that can leverage that to the next level.
Exceptional music is the result of relentlessly honing your craft. Putting in hours upon hours of work to get closer to the point of mastery. We’ve all heard the 10.000 hours theory, which explains extraordinary feats of individuals as the result of them reaching a magical benchmark of 10.000 hours of dedicated practice, roughly the equivalent of 10 years of hard work.
Whether true or not, mastering your toolkit will allow you to better express your creativity, separating you from the masses that lack the dedication.
Once you have the product – the great music and brand – you’re not there yet. It needs to be marketed. In today’s music industry, a poor release well marketed will fare better than a great release poorly marketed.
To best leverage your product, you need to build a team of enablers around you, whom each have a specialty that contributes to your success. You build this team as you go, starting with the core as a newbie independent artists, adding more and stronger partners as you go.
At the top tiers, artists have managers, booking agents, sub agents, publishers, sub publishers, a label and multiple employees there working to push releases, and so on. That compounded force is the driver.
The job of a publisher is to represent the works of a writer.
These works are known as compositions, the written songs. Some publishers represent artists exclusively, and therefore their entire catalog, other times they represent selective works – or catalogues of record labels. What they represent is the actual composition that underlies a sound recording (read: master).
Publishers represent these works by creating as many opportunities and revenue streams with it as possible; facilitating releases on labels, getting radio play, having artists co-write on other tracks (which creates new compositions to be exploited), licensing out selections of the song to be used in other songs (sampling), synchronization to media such as advertisements, TV and film, and a variety of other methods.
Publishers are incentivized to exploit the works they represent because they receive a share of the copyright, or control over it. To quickly recap what is more thoroughly explained in my guide to music copyright, the copyright to a song, aka composition, is divided into the writer’s share and the publisher’s share.
The share attributed to the publisher varies in different domains, with the standard in the USA being 50% of the total composition and 33,33% in The Netherlands.
Income is derived from the copyright through licensing, grant of mechanical licenses (needed by labels to reproduce a song – for which a statutory rate of $0,091 per reproduction is set in the USA) and public performance – such as radio and TV play of the song – for which rightsholders are entitled to royalties which are collected by a PRO (performance rights organization) such as ASCAP.
This last feat is essential to have properly arranged if you’re looking for a career in the music industry. If you score a hit and get played on the radio worldwide, you need a publisher who will trace and collect the royalties owed to you – especially in foreign countries.
In the USA and Europe, performance rights organizations typically do a good job of administering and collecting the royalties owed by the major broadcasters (TV and radio stations).
When royalties are collected by a PRO in one country, that are owed to a songwriter that is registered with a PRO in a different country, the one society will transfer the funds to the other – in the case that they are partnered.
For example, if a song that is written by an ASCAP registered songwriter is played on Dutch national radio and royalties are collected by the Dutch PRO BUMA, the BUMA will then transfer the funds to ASCAP.
This process takes time, and you’ll find that foreign royalties take upwards of two years to be received after publication.
Sometimes, royalties get lost – especially in non-Western countries. This is why publishers employ sub-publishers, whom are tasked with the collection and administration within their specific domains, in exchange for a percentage of the publisher’s share of income (paid by the main-publisher).
Big publishers pride themselves on having subsidiaries as it enables them to collect a lot of monies that would otherwise be left unaccounted for.
It’s common to see publishing deals that revolve solely around the administration of rights. And successful artists can justify giving up a share on their rights in exchange for the revenues earned.
Publishing agents typically work for agencies instead of by themselves. Most agencies are divisions of labels, with the powerhouses being divisions of major labels such as Universal, Sony and Warner.
To get a sense of their significance, note that 72% of the top 100 songs on USA radio in 2014 are represented by only four publishers.
Then realize that they likely control over 33,33% of copyright on all the works they represent. These four agencies are the true behemoths: Sony/ATV, Kobalt, Universal Music Publishing Group and Warner/Chappell.
Traditional publishers boast huge rosters that sometimes reach into the thousands of writers, besides the huge catalogues of work they represent. Individual agents here represent many more talents than you would see a manager or booking agent do, partly because their job is more administrative and less creative and personal, but also because publishers actively hoard talents to sign – before they blow up.
Now, it’s imperative for all music industry professionals to scout talent in the early stages of their career, when they can still negotiate better deals (for themselves) and beat the competition to the signing. Yet for publishers, this can go to extremes.
Finding publishing agencies with offices where four full-time employees represent upwards of 200 artists is not uncommon. Only their most successful artists get full attention, whereas the rest is neglected.
This is the result of publishers wanting to improve their chances of striking gold and hedging their bets: the success of a few writers pay for the investments in all the others, an the more promising writers are signed, the bigger the odds of one blowing up.
This has it’s obvious downsides for artists and it’s a common phenomenon to see artists sign with publishers, take an advance, to later find themselves tied down with a publisher that isn’t actively working for them.
I therefore urge you to be reluctant with these deals in the early stages of your career, as you won’t fully appreciate the value of your publishing share yet. Only once you develop momentum will you have the clout to negotiate a good deal, guaranteeing that your publisher will work for you – and leave you off the ‘hedged bets’ shelf.
Nevertheless, a pro-active publisher can greatly contribute to your career. They can pair you up with other writers, deliver top-lines (lead melodies and vocals), finance studio recordings or other endeavors and negotiate and check legal contracts for you.
It’s also interesting to note that many labels have ‘publishing pools’ together with publishing agencies, which puts labels in a position to sign the publishing rights on the records they put out (instead of solely the master rights). These rights are placed in the publishing pool, where the publisher actually does the publishing – with revenues split 50/50 between the label and publisher.
Traditional publishers sign artists exclusively, representing all their works. The standard duration is an initial three years, followed by yearly extensions.
Make sure that you sign over control over your works, not ownership, and never go beyond your country’s standard of publishing share: 50% in the USA, 33,33% in The Netherlands.
Many deals will request that the publisher stays entitled to administer works that were created during the term, for an everlasting period. This is done as they can argue they’ve contributed to it’s creation, possibly by arranging top-lines or co-writers. You want to push this down to 10 years maximum.
An advance on royalties will be offered with a new deal, which is an up-front payment on royalties that you have yet to earn. As attractive as this may sound, be very wary with this, as publishers use it as a way to lock down talent.
Normal advances are recoupable, meaning that the publisher will withhold all the income due from your writer’s share, until the advance is paid back. In the case the advance is not recouped within the initial term of the agreement (say an initial three years), the contract is automatically renewed for another period. Always ask for a non-recoupable advance, do not sign the deal otherwise.
Scoring syncs means to pair up songs in media such as advertisements, film and TV. These opportunities are also pursued by traditional publishers, however there’s a special branch of agencies that focus solely on this activity – the sync publisher.
Because of this focus, sync publishers tend to sign works on a per title basis, instead of signing artists exclusively (and therefore their total catalog). They cherry-pick tunes that are most likely to get synched.
To synchronize a song, two licenses need to be secured: a composition sync license and a master sync license.
The prior can be granted by the party in control of the composition (typically the publisher of an artist), the latter can only be granted by the owner of the master (typically the record label – or the artist, in the case of a self-release).
The licensees in these scenarios are typically movie studios, broadcasting networks or advertising agencies (whom are hired by corporations to create marketing campaigns).
There’s a lot to be gained from scoring a sync, both financially and in terms of exposure. Just imagine what a Campbell soup advertisement, broadcasted on TV, would do for you if your track were put underneath it.
It’s an interesting field to investigate – and if you’re signed with a traditional publisher, you definitely want to urge them to pursue sync opportunities – both by themselves and by working together with synch agencies (whom can be incentivized to participate, if you can convince your traditional publisher to give up half of their publisher’s share in the case the synch partner lands a placement).
The sync working process is driven by the demand of the clients (ad agencies, broadcast networks, etc) more than by the supplied music. When a publisher receives a brief for an advertisement for which they’re looking for music, they will look for a fitting track – instead of looking for the right advertisement for the music.
Sync publishers sign works on a per title basis or represent catalogues of partners such as labels. Most of these works are represented non-exclusively, as demand is driven by the clients, resulting in many works remaining untouched for longer periods.
The typical duration for a non-exclusive deal is an initial two years, followed by consecutive one-year renewals.
In the case a sync is scored, the publisher will want to register the work with a PRO. You need to make sure that they re-title the work, so that they only collect income derived from the actual placement. They will want to have this registration for 5-10 years, and sometimes need exclusive rights to grant sync licenses, should a client demand this.
For example: say you have a hit record that is self-published and released via Universal. The release is doing well and is racking up public performance royalties because of radio plays worldwide. You team up with a synch publisher, with whom you have a non-exclusive deal, and they score a sync – then you want to make sure they only collect monies on the actual placement, through retitling.
A retitled registration with a PRO would look something like this: “Artistname – Songtitle – PUBLISHINGAGENCY”, which would co-exist with a traditional registration of “Artistname – Songtitle”. In the actual placement, the publisher then has to take care to inform the client to administer the used work using the re-titled title, should public performance royalties be part of the deal.
The publishing share demanded by synch publishers is the same as for traditional publishers.
Sync deals are often paid for in flat fees, which is up-front cash paid in exchange for the sync license and a sometimes as a waiver of public performance rights. As licenses need to be obtained from both the owner of the composition and the master, this means two fees need to be paid.
Flat fees are common, however you always want to make sure that the fee reflects the amount of money you would have earned from a work’s use. A sync to an ad that is to be displayed on Fox five times a week, for five minutes, would bring in more royalties than a minor ad on a minor channel – thus the flat fee for the prior should be higher.
A strategy that we have found to work well, is to retain publishing rights on the majority of music we put out with our label, whilst licensing it out non-exclusively to a team of sync publishers. They bring in a variety of opportunities, to which we can respond with high accuracy and speed, as we’re very familiar with our catalog.
As for exclusive deals, some of our artists signed with publishing agencies early in their careers. At the time, those decisions made sense, winning them expert insight and advances. However now, the control and copyright give-away are in no way justified by what they get back. I have yet to see a publisher that really worked hard for an artist, instead of just on the occasions when there’s money to be made.
I recommend refraining from signing with a publisher exclusively until you’re in a position to really make them work for you. Meanwhile, do whatever you can to score syncs and leverage those publishing rights.
That concludes this part of the Understanding the Music Industry series.
Here’s a full overview of the series on how the music industry works:
1. Understanding the Music Industry: Artist Managers and Booking Agents
2. Understanding the Music Industry: Music Publishers, Syncs and Licensing
3. Understanding the Music Industry: Record Labels, A&Rs, Distribution, Pluggers and PR
Before we finish, I want to ask you a question that you can answer in the comments below;
“What is your experience working with publishers? Do you think artists should do it themselves, or that there is added value in finding a good partner?”