A Basic Music Publishing Glossary

It's unfortunate that many songwriters are so good at their craft yet don't understand the basics of protecting and controlling their work. Here's a quick basic glossary of frequently used publishing -related terms thanks to the Music Business Association.

Remember that each song has two rights attached to it. The first is for the composition itself (both lyrics and music) and the second is for the recording of that song by the artist.

Composition - The song written by the songwriter(s).

Copyright - The ownership or control of an intellectual property like a song.

Label - The record label, who sign the artist and usually control the copyright of the master recordings. They are responsible for licensing and distributing the recordings, then paying a percentage (a royalty) of the money earned to the artist.

Master - The produced sound recording of a song.

Mechanical License - The license to reproduce and distribute the master recordings in a physical or digital format. CDs, vinyl records and digital downloads all require this license from the publisher of the composition in exchange for a royalty for each sale.

Public Performance License - The license to transmit the compositions to the public via live concerts, radio, television and streaming.

Performance Rights Organization (PRO) - The entity that collects public performance royalties for the songwriter. This includes ASCAP, BMI and SESAC in the US.

Publisher - An entity that controls the copyright of a songwriter's compositions. The publisher is responsible for collecting the royalties on the artist's behalf.

Soundexchange - The entity that collects performance royalties for artists and labels for non-interactive streaming such as Pandora.

Sound Recording Performance License - The license issued by Soundexchange that provides the right to transmit masters via non-interactive streaming.

Synchronization (Sync) License - The license required to add music to moving images, including film, television, DVDs and video games.

Publishing is a deep subject and there are many more terms to become familiar with if you really want to get a handle on how it all works. That said, if you're unclear of the concept, these terms are an excellent place to begin.

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The "Happy Birthday" Song Could Cost Publisher Millions

If you ever went to a chain restaurant and heard the wait staff sing a lame birthday song instead of the real thing, that's because the parent company didn't want to pay the high licensing fee connected with the singing of the "Happy Birthday To You" that we all know and love.

For 120 years Warner/Chappell Publishing has been demanding payment for the use of the song "Happy Birthday," but a new documentary and lawsuit provides some strong evidence that the song has actually been in the public domain all this time. Such a ruling would mean that Warner/Chappell would be forced to not only forfeit the high licensing fees it now receives from it, but also potentially have to return hundreds of millions of dollars as well.

During the making of a documentary on the song, researchers have uncovered evidence that the song has actually been in the public domain at least since 1920, a claim that many copyright scholars have maintained for years.

"Happy Birthday To You" actually started its life as "Good Morning To All" which was published in 1883. The "happy birthday" lyrics appeared in 1901 with a note that the song was sung to the melody of "Good Morning To You" in an edition of the Inland Educator and Indiana School Journal. This was reiterated in a book in 1907, then published with notation in 1911. There were a variety of copyright claims since, but virtually all were held to be invalid or expired.

It seems that Warner/Chappell might hold a copyright on the original song (might being the operative word here), but not on "Happy Birthday To You," although the company has claimed copyright of the song even though the original copyright has long since run out. Now that a suit has been filed, it should be very interesting to see how the company responds.

While it won't shake anyone's world to have "Happy Birthday" back in the public domain, at least it will get rid of the substandard efforts to take its place in restaurants everywhere. You can read more detail, and see the complaint document here.

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Sony Threatens To Pull Out Of ASCAP And BMI

In what may be a glance at the music publishing world to come, Sony/ATV Music Publishing has threatened to end its relationship with music licensing agencies ASCAP and BMI if the changes it wants aren't implemented. And it looks like Universal Music Publishing could be lining up to do the same thing.

The issue primarily stems from the payments received from streaming royalties, which most publishers think is too little, especially when compared to downloads. Then there's the fact that the performing rights organizations (PROs) have always been nebulous how their payouts are determined. Writers and publishers alike have been frustrated for years over the disparity between royalties payments between ASCAP and BMI on the same song, where one will be higher than the other on one statement, than switch on the next.

Given the fact that we live in an age where song use tracking and royalty accounting is so much easier than in the past, it would seem that the PROs usefulness might now be diminished. Where for most of the 20th Century they were a total necessity for the publishing business, today that's becoming less true, since every play can be digitally tracked.

Sony/ATV has a catalog of over 2 million songs, including huge earners from The Beatles, Taylor Swift and Lady Gaga. Pulling out of ASCAP and BMI would be a significant blow to those organizations, and probably just the beginning of the snowball rolling downhill. It wouldn't be long before the other large music publishers followed suit.

It's probably inevitable that this will happen eventually. What's for sure is that we're about to witness both big changes in the industry and some history in the making right before our eyes.

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The 5 Kinds Of Music Publishing Payments

Too many musicians underestimate or just plain don't understand how important music publishing is. It's always been the hidden-in-plain-sight cash cow of the music business, but also has been one of the least sexy. That said, publishing is literally the gift that keeps on giving, where you can get paid (and paid well) while you sleep. It's also the one part of the business that still continues to do well even though it's taken a hit like most other areas in music.

DIY Musician posted a short article on publishing recently that I'd like to paraphrase a bit regarding the 5 kinds of payments that music publishing can provide. If you're not hip to publishing, hopefully this will wet your appetite to learn more.

1. Mechanical Royalties: Every time your song is sold either on a vinyl record, CD or MP3, the songwriter is entitled to $.091 per copy. What that means is that if there's an album with 10 of your songs on it, you'll make $.91. This is why some writers made big money in the glory days of the business when albums where king. It's also why those same writers have far less income these days where it's a singles world, and will have even less when the world changes to streaming, although you do get a mechanical from some services like Spotify, although at a far lower rate.

2. Performance Royalties: Every time your song is played in public, you're owed a royalty payment. This includes airplay on the radio (terrestrial, satellite or Internet) and television, or in restaurants, clubs or even high school plays (although that's a lot harder to collect).

3. Synchronization License Royalties: Whenever your music is played along with moving pictures like television or movies, the creator of the movie or video has to pay the songwriter a fee. If fact, if you're the artist as well and they use your recording, they have to pay a fee on that as well. This is where most of the growth in the publishing business has come from recently, thanks to the proliferation of television channels.

4. Sample License Royalties: If someone samples a piece of one of your recorded songs, they owe you a royalty. Once again, this is a relatively new revenue source that's only happened in the last 20 years. There's been some big lawsuits regarding samples that have largely gone in favor of the songwriter.

5. Sheet Music Royalties: Any time your music is reproduced in a printed form, you're owed a royalty. This includes hard or soft copy sheet music, lead sheets, and anything else that represents your music or lyrics. When the music business was young over a hundred years ago, this was the major source of revenue for the entire industry.

As you can see, publishing pays in more ways than one. Having a piece of a big hit can pay off for the rest of your life, which is why those in the know are so protective of it. I still get paid for some songs I wrote that appeared on the 80s hit television show Bay Watch (although it's not much these days), which goes to show how powerful being a songwriter can really be.

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13 Questions To Ask About Your Publishing Contract

Once upon a time, a publishing contract was a prelude to a recording contract. The advance was high enough that you could focus just on your music without any other distractions, and if a publisher was interested enough to take a chance, then a record label would be too.

Times have changed though. Advances are pretty small these days, but publishing is still one of the most lucrative parts of the music business. That's why it pays to ask a lot of questions before signing any publishing agreement that's been put in front of you.

The Liveunsigned.com blog recently posted a great article about this, and here's an excerpt oregarding the things you should be concerned with before you add your John Hancock to the agreement.

1. Is there an advance? Some publishers offer a good advance, but make sure that you are not signing with a company purely for this reason, you need to think about whether the deal is good for you in the long term. 

2. Is it an exclusive agreement? Many companies who arrange publishing deals for sync licenses are non-exclusive (for example Sentric or Music Dealers), but most conventional publishing deals are exclusive for a specific amount of time.  

3. What is the split? This is the amount that goes to you and the amount that goes to the publisher. For example this can be 50/50 or 70/30 in your favour. You should get at least 50% but ideally more.

4. Is your publisher the same company as your record company? This can be seen as a conflict of interests, giving the publisher/record label too much control. Even worse than this are the current 360 deals where bands allow record companies to control merchandise, live revenue, publishing and other revenue streams. Bands are often pressured to sign these for an advance but they can do serious damage to your career in the long term.

5. How many territories does the publishing deal cover? Is it just for your country or for the whole world?

6. Is there a minimum delivery commitment? This is the amount of songs you have to deliver during the time of the contract, usually around 10 songs a year. However if you only write 50% of a song (because you're co-writing with others), you might  have to write 20 songs to deliver the same amount of material to your publisher.

7. What is the term of the contract? The term is the length of time the contract covers, it could be months or it could be for decades.

8. Have they a proven record of getting sync deals? Ask to see what sync deals (for TV, Games, Adverts etc) that they have recently done for their clients. This is an area where there is a serious revenue and you need to see a proven record for success in this area before signing anything.

9. Are you a priority for the publisher? If the publisher has many similar writers to you is your music really going to get the push it deserves?

10. Is it a full publishing agreement? With this agreement the income is collected by the company then split between publisher and writer. The publisher owns the copyright on the song in this case.

11. Is it a co-publishing agreement? Here the writer receives their percentage as before but the writer also receives a percentage of the publisher’s share. This allows songwriters to receive an amount of the publisher’s share (as they are part publisher and writer), co-own the song and receive an overall greater percentage.

12. Is it an administration agreement? Here the writer does not give up any copyright up on the song, the publisher acts simply as an administrator collecting revenues for a percentage of the amount. These deals are less likely to be offered to artists who are unknown as there is less income for the publisher. 

13. Can you speak to some of their current clients? If possible ask to speak to some writers who are already working with the company and see what they think. Try and find out if the company pays royalties on time and how they treat their writers.

Remember to always seek legal council before you sign any agreement, but it's especially important to find someone well versed in publishing. This is a time when your personal attorney or the family real estate attorney just won't do.

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The Music Industry Is Bigger Than You Think

Whenever someone mentions the phrase "the music industry" we immediately think of record labels and music sales, be they via a digital file, CD, vinyl record, cassette or some other method where we listen to songs. The business is a lot bigger than that, especially if we look at all the different categories.

The IFPI (the world-wide music industry trade association), recently released some figures from 2010 which shows the real reach that the business has. Here are the following revenue streams of the world-wide music business, from highest to lowest:

$32.5 Billion: Radio advertising

$27.6 Billion: Recorded music retail sales

$25.0 Billion: Home Audio systems

$24.2 Billion: Portable digital players

$21.6 Billion: Live Music

$16.4 Billion: Music Instrument sales

$9.0 Billion: Music and television magazine advertising

$4.8 Billion: Publishing

$1.7 Billion: Performance rights

As you can see, it's a huge industry worth $168 billion. Sure, there are a lot of facets to it, but it just goes to show that there are also a lot of consumers out there who are still willing to part with their cash in exchange for something to listen to, play or enjoy music with. Don't believe what you read about the music business dying. The numbers don't lie.

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Songwriters May Soon Get Their Rights Back

Recently there have been articles all over the Internet and newspapers about how songwriters like Billy Joel and Bruce Springsteen will be able to get their some of their publishing rights back very soon.

The reason is that in 1978, Congress passed a new Copyright Law that stated that after 35 years, songwriters would be able to reclaim publishing rights from record labels. That date is coming on January 1, 2013, after which artists will have a five year window from the time their song was created in which they can petition to reclaim their rights. Artists still must file termination notices at least two years before the date they want to recoup their work, and if they fail to act, their right to reclaim their work lapses.

So why would a record label own their publishing in the first place? Even back before so called "360 deals," record labels knew that the real money in the music business was in publishing, so a stipulation of most recording contracts was that they would assign their publishing to the company's publishing company. For a new artist this wasn't such a bad thing, since that usually meant that they got an additional advance, and a large publishing company could place the songs in places (like movies) that a small one didn't have access to.

Still, after you've had some success and you see at least a quarter (maybe even half) of your songwriting income going to the label's publisher, it does give one pause. Today there are so many less expensive alternatives to a major publisher that it would seem that the only songwriters who pass up this opportunity will be those with real estate attorneys acting as entertainment attorneys. Bob Dylan, Tom Waits and Loretta Lynn have all filed petitions already; they'll get the snowball rolling down the hill. Are you or someone you know eligible?

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Warner's Earnings An Industry Warning?

Warner Music Group's quarterly SEC filing today is symptomatic of a number of trends in the music business, and not surprisingly, most of them aren't good. Here are a few lowlights.

• Revenues declined 13 percent from the previous quarter and 7 percent for the year. While you can blame this on many things, I believe it's an indictment of the quality of music. Lots of good music = lots of sales = lots of revenue. If you give us music that goes in one ear and out the other, it will never have any catalog value, which directly translates into long term revenue.

• Digital revenue grew 7 percent for the quarter and is now 30.9 percent of WMG's total revenue. Great, but that's not enough to offset the decrease in CD sales. Generally speaking, digital revenue industry-wide is flat to slightly declining, yet I see no company adjusting for a world with less revenue unless it's by the weight of a balance sheet.

• CD sales have been hurt by a drop in retail floor space. You can't buy a CD even if you want to these days. Try to find a music retailer in a mall; it's hard. There are some large cities that don't even have a single record store, and the ones that are left have such a limited selection that it's only a matter of time until they die as well.

• CEO Edgar Bronfman Jr. stated on a conference call with analysts that music in the cloud presents a "significant opportunity" to increase sales next year. This was a pep talk for the financial analysts. The fact of the matter is that no one knows how music in the cloud will be accepted. In my view, it's going to be a tough sell unless the industry finds a way to easily convince the public that it's a lot more convenient than storing music on your hard drive as you do now. No one except the music industry is waiting for this to happen, and they only want it because it will move everyone into a subscription model, which is the "Holy Grail" business model that the major labels crave. Make no mistake, music in the cloud is in our future, but it will take someone like Apple to lead the way, not a record label like WMG.

• Music publishing revenue fell 12.9 percent, mostly due to the drop in mechanical royalties. This one is bad. Music publishing has always been the steady, if under the radar, performer in the business. Until recently, that is. There are a lot of industry execs quivering in the their Gucci's over the fact that publishing revenue is declining too.

• The company has $430 million of cash on hand. This is code for, "We collect cash so we can make a run at buying EMI." WMG has kicked EMI's tires before. Now it gets serious.

Can't wait for the next quarter. Some big things are going to happen in the business, if this earnings report is any indication.

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The Music Copyright Enforcers

Here's an excellent article from the New York Times about copyright enforcement. It's long but filled with interesting information on how the publishing rights organizations (BMI in this case) collects the money that it doles out to songwriters and publishers.

To summarize, the way a publishing rights organization (PRO) collects money is by making licensing deals with the various broadcast entities like television networks and radio, but also with any business that plays music. If you own a restaurant, gym, or just a retail store playing background music, you need a license and must pay accordingly. Even clubs where live music is played must have a license. As you might expect, collecting from a small mom & pop store, bar or club that doesn't have a lot to begin with isn't that easy.

I've been on both sides of this equation. As a songwriter, I loved the fact that someone was actually out there scouring the country to collect money for me (although I'd only see a very very very small piece of it). As a former restaurant owner, I hated the fact that we had to pay what we thought was an excessively high fee for the privilege of playing background music in our establishment, although we did pay it.

The article also has some great info on how the PRO's started, and some of the their high-teck tracking technology.

It's a great article and worth a read - The Music-Copyright Enforcers.

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Music Publishers And The 360 Deal

As everyone connected to the music business knows these days, record labels are demanding 360 deals with all of their new signings. Just in case you're not sure, a 360 deal is one where the record label owns a piece of all your income streams, including revenue from touring and merchandise.

Now you might think, "Why should I give them part of anything other than the part that they're supposedly good at - selling recorded music?", and you'd be right. It's pretty outrageous to pay anyone who can't make a real contribution to the success of a revenue stream. A 360 deal in essence gives a label the same control as a manager has, or at least the same fees, but since they're not even that good at their core business of selling music anymore, why should you give them part of something that have no experience in?

But now it turns out that major publishers want to get in on the act too, and are demanding their own 360 deals.

At one of the recent monthly Association of Independent Music Publishers (AIMP) luncheon at LA's House Of Blues, a panel of publishing business affairs execs told the audience that music publishers are now demanding additional rights that amount to major label 360 deals when signing new artists.


The reason why the major labels want (even need) 360 deals is because CD sales are in the toilet, and downloads don't make enough (and even those sales are flat) to compensate. They have to make up for the loss of income somehow, and taking additional rights from the artist is the only way (so they seem to think).

So it is with publishing. Until recently publishing escaped much of the turmoil of the music industry. Mechanical royalties (the royalty when a CD or download is purchased) have dropped, but performance royalties (when a song is played on the radio, television or in a film) have gone up as more and more television channels came on line. But now that income has dropped as well as just about every broadcast entity is paying less for music, so publishers are also trying to make up the lost income.

What's an artist to do? If the label, the publisher, the manager, and maybe an attorney have a piece of all of your income streams, there's not much left.

All the more reason for the DIY approach that's now possible in Music 3.0. That's the only way that you can put yourself in a position not to have to take a 360 deal of any kind. Any kind of success that you generate increases your bargaining power. It's no longer just another way to do it, it's now a necessity.

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Follow me on Twitter for daily news and updates on production and the music business.

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The New Music Publishing Reality In Music 3.0

Music publishing has always been the quiet, but steady money maker of the music business. Even though it's perhaps the least glamorous of just about any part of the entertainment industry, it made its participants vast fortunes. The real money makers of hit records were always the songwriters and publishers and not the artists, a fact that few are aware of unless you're actually in the business of songwriting. That's what makes the new publishing reality in Music 3.0 so important.

Before Music 3.0 (the era of paid digital music), it was pretty easy for a songwriter and publisher to make money if the records or CDs were selling. Each song on an album brought in 9.5 cents, which the songwriter and publisher would split (called a mechanical royalty). That means if a writer had 10 song on an album, he would generate $.95. Multiply that by a few million and you have some real money. Plus the song would generate additional revenue when played on the radio (called a performance royalty), as determined by a rather obtuse allocation of a larger pie paid to either ASCAP or BMI.

In Music 3.0 (M30 for short), that's all changed as the post regarding Lady GaGa and her earnings of $169 from Spotify for one million plays indicated. While a paid download from a digital distributor like iTunes still pays the same 9.5 cent mechanical royalty, a stream pays only $.0018 in 2009 with an increase to $.0019 in 2010! That's less than a fifth of a penny per stream!!

Now by my calculations, that should still end up being $1800 that Lady G should have generated so the 169 bucks seems way off, but it does illustrate an important point about publishing in M30. Many publishers are terrified that a subscription model of digital music (where you pay $10 a month or so for as much music as you can stream) will be adopted. The reason? Greatly diminished mechanical royalties, and less that a fifth of a penny generated for every stream played.

Indeed, publishers are finding that their administration costs in accounting for streams are far greater than the income generated, and that's the heart of the matter. In streaming, the creative part of the business (artist, songwriter, and by proxy, publisher) look to be making a whole lot less income than in a download world. Plus, most artist's record label contracts don't adequately cover how much of what the label takes in from streaming will actually be paid out to the artist, so you can bet that it'll be the very least amount possible, or even less. All this adds up to a new music publishing reality in M30.

But it's not all bad. Publishing does have its bright spots and we'll cover the ways the a writer can make money in M30 in the next post.