Publishing is an often discussed and rarely understood element of music. For those working as musicians or within the industry, understanding publishing and how it is divided is essential. However, even for those of us that have a grasp on publishing, answering the question of how publishing is or should be split is not easy.
There is no bright line rule or formula that must be followed when divvying up the publishing of a composition. In a common (and usually fair) scenario the publishing is split equally between all writers who contributed to a song. In an even clearer scenario, one writer (typically a producer for pop/dance music) comes up with a melody and a writer comes up with the lyrics. Then those two split the publishing 50% each.
As we all know, life and the music industry is just not that simple. Think about a band that has 4 members. One member writes the lyrics, one comes up with the hook, one contributes to the melody and one just plays the drums (sorry drummers). Should each band member get 25% of the publishing? Again, it depends!
If a band is truly collaborative then the drummer in the above example may have written the entire melody to another song while the lead singer fixed his hair in the mirror. Or maybe the guitarist wrote the entirety of a song while the rest of the band was at the bar. The scenarios of how a song are created are limitless. That is why we often recommend that a band enter into a band member agreement that states that all songs, regardless of who did what, are split equally. A band, like a family, is a delicate and complex thing full of personalities, egos, opinions and emotions. Setting up an equal split at the outset and putting that into writing can diffuse fights before they occur.
On the other hand, having a pre-determined and documented split could also build resentment and disdain. If your bassist never contributes to the creation of a song and the other members work tirelessly at song writing, chances are that the s$%t is going to hit the fan eventually and the agreement will be revisited to eliminate or lessen the bassist’s participation.
Bands are actually easier when it comes to splitting up publishing as compared to pop and hip hop music. It has been widely written about that many of today’s top 40 artists co-write with may top-line (lyrics) writers and producers. That’s if those pop and hip hop artists write at all.
It is not uncommon for a pop song to have 3 to 7 writers on it. Look at this year’s Grammy nominees to see just how many people it takes to create one song. A commonplace is to have a team of top liners work with one or two producers to create demo songs. Those demo songs are pitched to various artists by A&R reps from labels and publishing companies as well as managers and other industry insiders. A demo song could make the rounds looking for a home for years. Once it is finally selected by a recording artist the publishing splits are sometimes the last thing to be determined.
Playing out the above example, let’s say Kelly Clarkson selects a demo song that was written by the writing team of Julia Michaels and Justin Tranter (top liners) and produced by Mark Ronson. Kelly then puts her spin on the song and brings in her own producer, Jesse Shatkin, to tweak the production a bit. So now you are looking at 5 people that get a share of the composition. Now the question becomes, how are those 5 people splitting it up?
Again, the method is not always the same. However, the typical way a pop song’s composition is split is 50% to the producers who create the melody and music and 50% to the lyricists. In our above example, Mark and Jesse may split the 50% tagged for the producers and Julia, Justin and Kelly split up the remaining 50%. Are the splits going to be equal amongst them? We will leave that up to their respective lawyers and managers!
The bottom line when it comes to publishing splits is that it is always better to have a conversation with your co-creators sooner rather than later. The last thing anyone wants is to release a song, watch it do well and then fight over the splits. Trust us. That is no fun for anyone involved.
Maybe it is a millennial thing or maybe it is just a product of the industry but we consistently hear several things from new artists that are trying to make it to the next level:
“I need a manager”
“I need a label”
“I need a publisher”
Sometimes there is a need for one of these. Sometimes there is a need for all of them. But when does an artist really need a publisher?
We think there are only a couple of situations where a musician who writes music truly needs a publisher rather than self-publishing:
1. You are a top-line (lyrics) writer or producer that needs a publisher to set up writing/recording sessions with other similar or more established writers or producers.
2. You are in need of a substantial check as a loan/advance.
Going in reverse, the only way you are going to get to #2 is if you have a previously released catalog of music that is making substantial revenue on the publishing side of things (actual record sales, licenses, performance royalties etc.). Obviously, easier said than done.
So in our opinion #1 is probably the best and primary reason that an artist should consider or seek out a publishing situation. If you are a writer/producer that either writes for him/herself or has written for another artist and your goal is to try to continue to do so or write with writers who have credits on gold/platinum albums, a good publisher should be able to facilitate this. They should be able to pair you with established and up-and-coming artists that have budgets behind them. Getting in with those artists and getting music actually released with a budget for radio/pr etc. obviously builds your own value and the value in your publishing.
As many of you know, getting tracks to the top artists is incredibly difficult. Even if you have a direct line to the artist you still have to get through the artists, management, publisher and label to even have a shot of getting a placement on that artist’s album. Getting a writing session with the artist is even more of a challenge.
If you are at the point where you have the chops, you have a history of writing really solid music, your previous writing is actually earning you some money and you can write for other people, you want to make sure that you are doing everything you can to maximize your value and that of your publishing. We have so many stories of writers/producers that were involved in big songs that weren’t credited the right way or were left off registrations for some reason or the other. So making sure you are handling your publishing yourself is the first step in preparing yourself to even be considered by a major publisher.
Please don’t get it twisted (as the young folks say), if you self-publish you better be able to administer your works or have a lawyer/manager who knows how. Without registering your music with the PROs or securing correct split sheets or hounding labels for statements or hitting up independent artists who have used your music, you are essentially lighting money on fire. You have to know what rights you have in and to your publishing and how to go about collecting it. Registering works is not complicated. Understanding how and when you get paid from those works is.
There are several companies popping up that are offering admin services. Some are directly tied to the big publishers but then you have companies like CD Baby and Tunecore rolled out an admin service and functions a couple of years back. Songtrust is another one that offers a ton of services including administration of publishing. We have clients that have positive things to say about each one and those that have negative things to say about each one. So we will leave it up to you to decide if one of these outlets is right for you.
Remember, if you write a song and do nothing to register it or attempt to collect on it, it’s not really “published”.
Just like everything else in music (or most industries for that matter) you have to work your way up. You won’t get a publishing deal that makes sense unless you have already proven yourself as a writer. It is tough to prove yourself as a writer without getting a break in a very competitive industry. But you won’t get a break at all if you don’t treat your writing like an actual business and get the people you need to be in your corner to help you do so.
As you know, typically we write about protecting your rights. This post is about musicians, of all types, having the right to make music in any format he or she may want.
Every decade or so a new type of music becomes popular amongst the teen to twenty-somethings. With the onset of a “new” hot genre of music an inevitable reaction is harsh criticism. The thirty-plus-somethings who still are fond of the trend that was tops when they were of a “taste-making” age cannot help themselves and shred the quality, craftsmanship or artistry of the the music trend du jour.
I guess it is a right of passage; you get to a certain age and you automatically are permitted to present your opinons on why whatever is hot right now sucks compared to what you like. In my formative years, rap took shape and took over. When I started rolling around in my Chevy Citation with a sideways tape deck and front-only speakers blasting Poor Righteous Teachers, De la Soul and NWA (when I was feeling especially hard) I definitely got some nasty looks from inhabitants of my white-bread suburb of Minneapolis. I immediately dismissed my parents and other elders who disclaimed that Rap was nothing more than unoriginal shouting and noise. They (Parents) just didn’t understand (thank you Will Smith).
Every generation has a similar story. Elvis and Chuck Berry were nothing but trouble makers with all that electronic nonsense and rotating hips. The Grateful Dead, Jefferson Airplane and the Almond Brothers were pot smoking hippies who made noise that was only audible to people on acid trips. Ramones, Sex Pistols and the Misfits were screamers who couldn’t play more than one chord on a guitar. Hair bands came about, and well…I don’t know what to say about hair bands. The point is, every generation has its own thing, its own view point on music and society. That point begets the counter point that the preceding generations typically hate the succeeding generations music and viewpoints.
Enter Electronic Dance Music. EDM has taken the world by storm. DJs who seemingly have no traditional musical ability or knowledge are selling out tours and arenas with their version of music. Is it melodic or overly complicated in production and writing? No. Will it stand the test of time? Maybe. Is it actually music at all? Who cares?
Kids love it and are paying to see it. Yet, the music industry cannot help but get in the way of itself. Complaints by critics and label execs complain that it is destroying the professional musician and his/her chance at a career. Stories of musicians making less money because of the large number of computer programmers currently “acting” as imposter musicians are all over the industry blogs and postings. Complaints of so-called talentless button pushers are rampant amongst the “purists”.
What we can’t seem to understand is why are all of these critics complaining about anyone in the music industry making money? Jealousy is the obvious answer. Laziness or stubbornness are additional answers. The point is, in an industry that has completely changed in the past 15 plus years, another change in popular genres or fan patters should not be surprising. EDM is just another example of a new generation making a choice of what it wants to party and dance to; nothing more. No one is saying you should listen to it and no one is forcing you to buy a dub-step or die t-shirt. Just don’t hate on the kids that do.
EDM has had a huge impact on recent sales from pure DJ’s like Skrillex and Bassnectar to the EDM producers like Guetta and Afrojack. The Pop world has embraced it with acts like Bieber, Usher, Britney and Madonna jumping on the bandwagon and incorporating Dubstep and EDM styles into their major label releases. New festivals and concert series are popping up all over the place and bringing in huge revenue for the promoters, vendors and, oh yeah, the musicians.
So whether you can get down to “wub wub wub” or it makes you stroke out, try to accept it as the natural evolution of music. If you make EDM music, do what you can to learn the ins and outs of the music industry. If you are good, no doubt the late to the party label folks are coming around. Know what you are getting into before you get into it. Your music, whether created on a piano or a keyboard, carries the same rights as any other music. Make sure you protect it and make sure you cash in before the next craze takes shape.
We’ve written several times about the confusion that is music publishing. It can be argued that the first publishers and labels got together and decided they were going to create a system wherein they would be the only ones who truly understood where revenue generated from the sale, performance or exploitation of music. However, with the passage of the last 150 years or so, that excuse doesn’t exactly hold a lot of weight.
The writer’s share of publishing (one half of the publishing pie) is usually controlled by the writers rather than a third party. So this little piece of the overall publishing/master owner picture can still, arguably, be controlled by you and your band. The question of how you divide it up, well that’s up to you.
When you collaborate with your own band, the most successful and conflict-avoiding method is to divide it up equally. Four members of the band, each band member gets 25% of the composition. Another method is to split the writer’s share by splitting the lyric writer and the melody writer (assuming they are different people). If one person wrote the lyrics and one person brought the melody, then each gets 50%. This is not to suggest that certain bands use a completely different method. Several famous large bands had one writer, with the other band members following the lead of that writer. Nothing has to be set in stone. One song could be written by everyone and another by only one member. It really depends on the situation. So, unless you have an agreement in place that dictates how all songs will be split, no matter what, you should approach each song with a clean slate.
A more common occurrence these days in pop and hip hop is to have producers provide the melody, professional lyric or song writers bring the lyrics and a performer add her/his own twist to create the overall composition. In those cases there is often a pre-negotiated split and advances or fees paid to the producer and writer. Certain stars can claim writer’s share even if they had little or nothing to do with the writing of a song, simply because of the clout that they bring.
The key to any split is to discuss it first and put it in some sort of writing over some garcinia cambogia extract tea. Whether you have an overall band member agreement that spells out how a song is split up or you fill out a session report indicating the roles that all musicians present during a recording session played, something needs to be in place prior to registration.
Once you have certainty on the splits and you plan to release the song or try to license it, be sure that you register it to match your split agreement with your PRO and SoundExchange. If and when the song generates performance royalties, the writers will get paid based on this registration. Without it, no payments.
Recently I was on a panel at Northwestern Law School with another lawyer, a musician (who happens to ba lawyer too) and an ASCAP representative. Our topic was the effect that cloud or subscription based music services will have on performers and songwriters. While I definitely had my own opinions on the topic, it was ear/eye opening to hear from my fellow panelists.
Most music lovers seem to have their own private way to listen and enjoy their music. While there is a lot of overlap amongst listeners (iPods, satellite radio, pandora, car radios, home stereos) everyone has their own unique method to purchase, stream, listen and (now most importantly )travel with their collection. In the past we would break out our record collection and play records in the family room. Then came the cassette and the walkman. Our record collections became somewhat mobile and we could grab our favorite tapes and walk around or drive while listening to our collection of music. Technology allowed for better sounding recordings to travel along with us with the invention of the CD. However, like one of my panel compatriots aptly pointed out, a music fan was a prisoner to his cd collection; still rather bulky and highly scratchable, you would have to lug a box/book of cds with you on each road trip and hope that they did not fall between the seats or get scratched on the dashboard.
Enter the MP3. A computer file that is quickly dowloaded and containes cd quality sound. The digital album revolutionized the way we consume music. As with most revolutions, the infrastructure that existed prior to the revolution (the big music label system) fell. Brilliant entrepreneurs and crafty opportunists from Apple to Napster entered the fray and came out making billions of dollars from the shift. For the everyday consumer of music, it became easier to listen to music wherever you wanted to do so. Your entire record collection can now fit into the palm of your hand, be programmed to your car’s stereo or be shared with people in your office with a click of a button.
Now that the digital age of music is over a decade old, there is yet another shift occurring. Technology again is making it easier for people to listen to their music collection regardless of where they are. The clouds have come rolling in.
Pandora has already helped put the cloud on the map with approximately 80 million users (1 new user every second per the www.digitalmusicnews.com). But services such as Spotify, Sony’s Qriocity and Google’s delayed cloud service will take it one step further. While Pandora allows you to listen to music based on bands or songs you tell it you like, the cloud subscription services allow you to pick all of your music. Essentially, you will no longer have to actually purchase a song, let alone an album. Rather, you will pay a monthly fee that will allow you to pick your favorite songs, categorize them, rank them, etc. and, most importantly, take them with you. Whether you are listening on your hand-held device (smart phone or iPod type device), on your computer, in your car or listening to your home stereo system, your music will be there waiting for you. As long as you keep paying the monthly fee, that music will be with you.
As a consumer, I think cloud based systems are the bees knees. Technology should make things easier and better. Allowing me to go from my office to my car without missing a beat of the song I was just listening to (I’m very fast) and without plugging anything in, is amazing. As a lawyer who represents musicians and songwriters, I’m worried. For interactive internet based music providers (where the user gets to select the songs he/she wants to listen to) the royalty rates are negotiated between the labels/publishers and the cloud provider. This means that the labels and big publishers negotiate pre-determined revenue shares for each stream of a song; typically a teeny tiny fraction of a dollar (in England the rate is thought to be around 0.00085 pound). A famous example of how potentially horrible these rates can be is the report that Lady Gaga who had over one million streams of Poker Face on Spotify in the UK earned $167.00 (click here for more on that).
The labels and publishers in the US are fighting for more per stream. But don’t go rooting for them quite yet. They are negotiating deals so that they actually get an equity or ownership stake in the cloud based service. So while it appears as though they are fighting for the artists (which some of them might actually be doing), they are also positioning themselves to make as much money as they can in the process. If the clouds make it unnecessary to ever download and actually own a song, how are the songwriters and artists going to recapture that lost income? As of now, the songwriter lobbyists are doing a good job of asking that question and fighting to establish fair payments for musicians.
The laws in place that cover interactive internet radio and subscription services did not imagine the day when streaming would eclipse downloads. That day has clearly arrived: “Streams of music are eclipsing everything,” Universal Music Group UK chief David Joseph recently told the Guardian. “It’s a different digital currency to downloading. You’re dealing with 175 million single tracks bought a year compared to 7 billion streams of music.” (from The Digital Music News). Just as technology has adjusted, the laws dealing with fair payments to the providers of content need to be modified.
The bottom line is that just as the cassette replaced the record, the cd replaced the tape and the mp3 replaced the cd, the cloud is going to replace the downloaded mp3. The clouds are rolling in and the artists may be left in the impending dark.
Music is everywhere. You turn on your tv, see a youtube video or turn on the radio and hear a famous artist performing a song. But who makes money when the public hears or sees a performance?
It is a common misperception to think that the artist you see or hear is making all of the money from that song. In the pop world, especially, this is not true. Don’t get me wrong, the famous artist probably has more money than you or I could ever dream of. However, the main revenue streams come from songwriting. Oftentimes, pop stars do not write their own songs. Songwriting for bands or artists can bring in huge amounts of money. The main areas of revenue from songwriting come from mechanical royalties, performance royalties and synchronization licenses.
Suppose you write a song and a major artist (for this post let’s use Justin Timberlake) decides he wants to record your song and put in on his next album. If your song has never been released to the public his label will have to pay you a First Use Mechanical License. This gives Mr. Timberlake the right to be the first person to reproduce and distribute your song. The rate for a First Use is negotiable and varies widely. You have to weigh the exposure of being on Justin Timberlake’s next album vs. your leverage in getting paid. But, keep in mind; this will not be your only source of revenue. Let’s say you and Timberlake’s label settle on $15,000 for the First Use right (this could be and probably is higher or lower).
So, you now have $15,000 in your pocket but cannot be the first one to record and release your own song. That tradeoff is up to you. Let’s assume you think it is worth it. What other sources of revenue streams can you now expect from this song?
First off, for every copy of the song reproduced you should receive 9.1 cents. Usually, this is only paid on each copy sold (digital or physical). So, for every album sold you should received 9.1 cents. If your song happens to be the single or a hit, chances are your song will sell digitally as a single more than the entire album. So, for every 99 cent download you should receive 9.1 cents. If the single or single and album combined sell 1,000,000 you should receive $91,000. Not bad. Not bad at all. Keep in mind that label contracts and tricky accounting can lower these numbers. However, the 9.1 cent rate is set by the government.
Another lucrative source of revenue is from synchronization licenses. Every time a song is placed with a visual (think on a tv show, in a video game or in a movie) the writer and publisher must grant a synchronization license. This is a negotiated rate. A hit movie can pay in the hundreds of thousands of dollars for a theme song or a song that plays in the climax of a movie. A television show will pay less but this difference can be made up in performance royalties.
Did someone say performance royalties? Yes. In addition to getting paid to have your song in a movie or television show you will also receive money each time the tv show airs, the movie is shown outside the U.S. or shown on tv. Lastly, if your song is a single and receives radio airplay or is played on the internet you will receive performance royalties. All of these performance royalties are collected and distributed by performance rights organizations. In the U.S. we have three; ASCAP, BMI and SESAC.
As you can see being a songwriter can be a very lucrative business. You will have access to multiple revenue streams. Think of the writers of the song “Toxic” by Britney Spears. She did not write that song. However, every time it aired on MTV or radio the writers received performance royalties; every time her album sold or someone bought “Toxic” the writers received a mechanical royalty. If anyone wanted to use the song in a video game, movie or tv show , the writers would get paid multiple times. Also, if any cover versions are done the writers would receive mechanical royalties. I really wish I wrote that song.
Protecting yourself as a songwriter is not an easy proposition. Seek counsel if anyone wants to buy your song or if you are going start publishing your own material.
SHAMELESS SELF PROMOTION OF THE WEEK:
Come check out L4M and a ton of other experts on music and advertising at the Billboard Music and Advertising Fall seminar on September 15-16, 2010 at the Westin on Michigan Avenue right here in Chicago. We are on a panel and will be floating around all weekend. Follow up the seminar on the 16th with a L4M sponsored show at Bottom Lounge featuring Blah Blah Blah. More info coming soon.
Did you know that the U.S. is grouped with China and Ghana as one of the only countries that does not pay royalties to the performers of a song that is aired publicly (Radio/TV)? Weird, right? Well this odd and troubling (for some) fact may be changing soon. Here is my fellow L4M’er, Eric Malnar with his take on the Performance Rights Act and what changes may be on the horizon:
The Performance Rights Act (the “PRA”) was introduced in the U.S. Senate (S.379) and the House of Representatives (H.R. 848) in February of last year. So why are we talking about this now? Well, as most of you should now, L4M was recently in Austin, Texas for the 2010 SXSW festival and the PRA was the topic of an interesting and heated panel. Interestingly, all sides of the issue were represented, except of course the radio stations (these are the guys who are supposedly adversely affected by the bill). Perhaps invitations were sent but nobody from the radio world wanted to appear on the panel…who knows. It is a shame because it would have been nice to hear their perspective especially since it appears as though the Obama administration is supporting the PRA and it might actually become law.
As a musician or someone who makes money through music, should you care about the Performance Rights Act? Well, it depends on what you do. As many of you know, every time a song is played on terrestrial radio a royalty is supposed to be paid to the songwriter. However, there is no payday for the artist who appeared on the song (singer, guitar player, chime and etc). For example, if I wrote a song for a famous pop singer I would receive the royalty not the singer. This is currently the system for terrestrial radio. Think of Aretha Franklin singing RESPECT. Everyone in the world has probably heard that song, but every time it is played the royalties for public performance go to the writer (specifically his estate) Otis Redding.
Digital sources of music are governed under a different law. Under the Digital Performance Right in Sound Recordings Act of 1995 (“DPRSRA”) digital music providers are required to pay performance royalties for performance of the sound recordings. Many feel that the difference in the way royalties are paid for terrestrial radio versus digital providers is unfair. The PRA would remedy this scenario by requiring a royalty for the singer as well as the background musicians. So as you can imagine, the digital folks, like Pandora and LALA are excited about the passage of the PRA because they feel it will provide a level playing field.
Another often heard argument in favor of the PRA is the fact that other countries do not have the same terrestrial radio exception that we have here in the States. In other words, money is being collected overseas for American artists but it is not being paid because the U.S. does not have a reciprocal system.
Wow, so this all sounds too good to be true, what is the catch you ask? Well terrestrial radio stations are not happy about the PRA. They argue that this will drive up costs and either put them out of business or force them to change their format to talk radio. Thus the dilemma, is it worth receiving new rights under the PRA to the potential detriment of your opportunity (as an artist) to have your music played on terrestrial radio? Back in the day when my band was struggling to get exposure we would have done almost anything to get played on big radio. If the radio industry, which claims to be struggling, pulls music from most of its stations, another avenue for musicians to get exposed is closed.
Regardless of what happens it is important for every artist to understand his or her rights as a songwriter, performer or both. As recording contracts morph into more intricate deals (e.g. 360 Contracts) artists need to be versed on all avenues of revenue. It is no fun talking about music and money in the same sentence but at the end of the day, you need to pay the bills so you can live to play another day.
Stay tuned for updates on the PRA and more insight into some of the hot topic areas of music in film.