Previously we reported on the Music Modernization Act, a bill proposed to ensure digital music services pay fair royalties to the copyright holders, and where it stands during its process to be become an enacted bill. As we are aware from the timeless SchoolHouse Rock classic “I’m Just A Bill”, in order to enact a bill it takes time and votes from different levels of Congress. The bill passed the House unanimously April 25, with a revised and amended version coming out of the Senate Judiciary Committee June 28. If the bill passes a Senate vote, it goes back to the House for a final sign off.
The bill seemed to be moving full steam ahead with no objections from any party until lobbyists discovered how much control private entities would lose to the newly formed MLC, Mechanical Licensing Collective. These offered amendments from the private sector have put the bill in danger of not passing. Technically, this copyright bill has until the end of the year to pass but legislators are targeting Oct 12 as the deadline. This date is before Congress adjourns for the midterm elections because after Congress goes on vacation, nothing new will be passed.
First the MMA received push back from The Blackstone Group, owners of SESAC and The Harry Fox Agency. They proposed an amendment that would allow the current mechanical licensing organizations to stay in control of mechanical royalties collection and administration. The Blackstone Group questioned why a government-commissioned mechanical licensing body was necessary, when these organizations already exist. After negotiations, the reps for the MMA clarified the restriction on what licenses can be administered by the MLC, which include sync, lyric and performance licenses. This allowed groups like SESAC and Harry Fox to maintain their clientele and continue business as usual, thus still allowing the MLC to collect data and administer mechanical royalties.
After putting out that fire, the MMA is now seeing restraints from another organization. SiriusXM is fighting a portion of the bill’s CLASSICS Act provision which calls for digital and satellite radio to pay royalties for playing pre-1972 master recordings, while terrestrial radio would be exempt.
The SiriusXm CEO has criticized the bill for expanding the royalty requirements for satellite radio without also expanding the requirements for terrestrial radio. Traditional radio doesn’t pay for the broadcast of any sound recordings and this bill does nothing to change that. During a period in which SiriusXM paid 2.2 billion for the use of post 1972 works, terrestrial radio paid nothing. The future of radio is digital and it would be wise for the drafters of the MMA to carve out language to fairly compensate artists in both the digital and terrestrial areas. At this point, neither side has figured out a solution and they only have a couple months left to do so.
Moving forward, the Music Modernization Act has only three paths to move through the Senate: 1. by speedy unanimous verbal consent, which would require all 100 senators to vote yes; 2. the more difficult floor process, which includes time for hearings and would require support of at least 60 Senators (46 Senators have signed on as co-sponsors); or 3. by attaching the MMA as a rider to another piece of legislation that is sure to pass.
Please continue to follow along the MMA’s progress (or lack thereof) here at L4M, @l4m, tkhlaw.com, @TrogliaKaplan or email us for more info.
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 then 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.
One of the most misunderstood areas of the music industry is publishing. Trying to explain that there are two equal halves of publishing each equating to 100% (getting you to 200%), you are bound to get some glazed over faces. We work with several publishers, administrators, writers and producers and think (brushing our shoulders off) that we have a pretty good handle of how publishing actually works. Our contributor, Lauren Schulz, does a great job of breaking it down in this straight forward article below. While this is by no means a comprehensive treatise on publishing, we hope that it can shine the light on some of they dark, mysterious and befuddling issues that is music publishing. Enjoy!
The Purpose of a Music Publisher; What Does a Publishing Contract Do For A Songwriter?
Many individuals in the music industry are aware that once a songwriter or composer starts to receive compensation for their compositions or work, they often sign with a music publisher. But what does a publisher actually do? And what are the various terms of a good publishing agreement?
In a nutshell, a writer signs with a publisher to have the publisher handle the rights to their compositions for the purpose of making the writer more money. A publisher is experienced in the business side of the music industry and often has the connections to create opportunities for the writer that they could not create on their own. Additionally, when a writer handles their own administration, accounting, and/or promotion of their work, there is often very little time to continue creating music, leaving the writer with a not so successful business plan.
To break it down, if a writer is signing a publishing contract, the writer is essentially hiring the publisher to handle copyright registration, licensing, collection of the writer’s royalties and accounting services. This is often referred to as administration. This is a huge job that often takes a considerable amount of time and knowledge of the music business. A publisher handles quote requests, license requests, monitors how a writer’s composition is used, delegates any fees or payments, prepares paperwork as well as often negotiates license terms. Additionally, publishers collect performance, mechanical and synchronization royalties on behalf of the writer. These royalties are paid in exchange for different uses and sales of the writer’s work and involve third parties such as performance rights societies or the Harry Fox Agency.
In addition to administration, publishers will provide writers with advances and career opportunities. An advance is similar to a loan, given to a writer so that the writer may have an upfront income for his or her work. Often once a song is released, it could take a year or more before it starts to collect any royalties, meaning the writer has to wait a long time to get paid. An advance allows a writer to have income so that he or she may continue to create music. The amount of an advance often depends on the writer’s popularity, skill and potential opportunities. The writer then recoups (or pays back the publisher) through his or her collected royalties. Publishers also create opportunities for the writer. Publishers are often the link to performing artists, record labels and producers that will help generate revenue for the writer. These opportunities help a writer to maintain a longstanding and successful career in the music industry; basically a stepping stone to help a writer reach the next level in his or her career.
The next question then becomes, if I am a writer trying to develop my talent and create a career for myself, how am I going to pay for these services that a publisher provides? A publisher is paid by owning a portion of the copyright to the writer’s compositions. This allows a publisher to receive a percentage of the writer’s royalties for the use of his or her works. The percentage of the copyright granted to the publisher varies depending on how much responsibility the publisher is given. A publisher who only conducts administration will receive a lower percentage than a publisher who provides all of the services listed above. Often when a publisher provides administration services, opportunities to develop the writer, and an advance, the writer will sign a co-publishing agreement. A co-publishing agreement grants the publisher fifty percent of the ownership to the writer’s work on the publishing side (or twenty-five percent of the ownership including the writer’s share). This explains why a publishing contract is exclusive. A writer will not want to assign any additional portions of the copyrights to their work, nor will they want more than one publisher to handle the rights to their work.
A publishing contract is limited to a term, or certain period of time. A publisher will only own a percentage of the copyright for the work the writer creates during that period of time. For example, if a publishing contract has a term of three years this means that the publisher will own a percentage of the copyright for anything the writer creates during those three years. Often writers will also give their publisher the rights to their work created prior to the publishing contract. This allows a publisher to promote a work created by a writer five years ago that was never released. In exchange, the publisher might give the writer a larger advance. It is important to understand that a publisher does not control or limit a writer’s creative process. A publisher does not control the type or style of music a writer creates nor does a publisher have the ability to force a writer to collaborate with other writers or producers. Instead the publisher will bring opportunities to the writer, and the writer and publisher often decide together whether the opportunity is a good fit for the writer.
Overall, it is best to think of a publisher as an agent for the writer. The publisher will handle the business work, promotion, administration and accounting for the writer while the writer can be left to do what the writer does best, create music.
L4M has been hard at work. Working so hard that we have neglected the site for a bit. To make up for it we have enlisted the services of our newest member, Lauren Schulz of Troglia Kaplan LLC. Lauren helps bring us back to the basics of Copyright law below. Enjoy!
Everyone from major movie producers to ad agencies to independent business owners all have the desire to incorporate music into a film, commercial, sampling or other production. Unless you have some serious skills to create your own musical composition, the majority of the time you already have that “perfect song” in mind to use in your new spot. While it may be tempting to just borrow a song from the internet or your own library, we all know (or should know) that that would be a big no-no. So how do you go about getting the permission to use that perfect song?
In music publishing world, this is called ‘clearing a song,’ which basically means that in order to use Queen’s “Bohemian Rhapsody” in your new commercial, you need to get the okay from its copyright holders. But how do you go about doing this and how do you find out who owns the rights to a particular song? The tricky part is that each song has two separate copyrights and you need to get permission from both of the right holders in order to use it.
The two copyrights are for the rights to the musical composition and the sound recording of the song. The musical composition consists of the actual written music, think notes on a bar staff. It makes sense that this is owned by the writer(s) of the composition, which is then usually assigned to a publisher. Be careful, if there is more than one writer to a song this could mean several publishers might split ownership to the copyright as well. The other copyright is for the sound recording of the song. This is the performance of the composition. This is often referred to as the master recording and the right holders are referred to as the master owner(s). Think of the master recording as a person in a studio recording a track to put on a CD. Usually the copyright to the master recording is owned by the record label, which generally finances the making of the album.
Now that you know about both copyrights, how do you find out who owns the rights to those copyrights, and then ask them for permission to use the song? First, start with the copyright for the composition to find out who the publisher(s) and writer(s) are for the song. The best place to look is the performance rights organization’s (“PRO’s”) websites. The most popular PROs in are ASCAP (American Society of Composers, Authors and Publishers), BMI (Broadcast Music Inc.) and SESAC (Society of European Stage Authors and Composers). The majority of artists register with a PRO in order to receive performance royalties. (see the post below for more discussion on PRO’s). So all you have to do is search for the song or artist on one or more of these websites and it should tell you who the publisher(s) are. If the song does not appear, look for songs on the same album. Although the publisher might be different for the song you are looking for, generally that publisher will know who owns the rights and who you should contact.
The more complicated task is finding out who the master owner is. This becomes difficult because there is no database or website that lists the master owner(s) for each song, so it might involve some trial and error. Remember, the majority of the time the master copyright belongs to the record label, so your first step should be finding out which label produced the album that the song you’re look for is on. A few places to start your search are the U.S. Copyright Office website, Spotify, iTunes, Wikipedia, or any site that includes a biography of the performer. Often the biographies will include which label the performer was signed to at that particular time the song was recorded.
The next step is to contact these publishers and master owners and send a request to license the use of the song. Make sure to tell them the purpose of the use, how much of the song you want to use, the type of media you are incorporating the song with, the length of time your production will be available for public view, and an estimated quote. The quote usually depends on the popularity of the song, the term, and the type of media you are using. For example, an unknown jazz instrumental used for the background of a TV commercial set to air for one year, will be considerably less than Queen’s “Bohemian Rhapsody” used in a commercial distributed on the internet forever. Therefore, pick your battles when you have a strict budget.
Although this process can get discouraging, it is something that everyone who uses music has to do. Once you start getting the hang of it, it becomes easier. Know that the process could take from one week to several months, so plan accordingly. Thus, be patient and in the meantime let us know if there are questions we can answer to help you along the way!
Check out this article by our friend, Chris Rucks for the biggest mistakes people make in music clearance.
We are constantly writing about the pitfalls of the music industry, the changes in the music scene today and the problem with the overal label system. Let’s focus on some of the positives of today’s music industry (there are more than you may expect, especially if you read our content regularly).
It has never been easier to get music recorded, produced and distributed to the masses. With today’s software, the home studio has become a reality for a ton of musicians. That means that the prohibitive costs of a studio, a producer and studio musicians can be avoided. While sound quality may not be as amazing as it would be if you spent the money to record at Abbey Road or Paisley Park, decent recordings can be done with equipment you can pick up at Best Buy.
Once the recordings are complete, the plethora of web sites and web based software that offers digital distribution is pretty amazing. Whether it is through www.tunecore.com, www.cdbaby.com or one of the hundreds of other sites out there, your music can be on the world wide web in a matter of minutes for little to no cost. The question then is: NOW WHAT??????
Getting noticed in today’s music industry has become the biggest obstacle for bands. The quality of music that is out there hasn’t necessarily dropped, there is just so much music on the web that trying to find something worth while is near impossible. In speaking to some industry experts, including major music supervisors and licensing agents, trying to get noticed by posting your music on myspace, facebook, bandcamp,etc. or by submitting unsolicited discs to supervisors and labels is pretty much a waste of time. The ease of production and manufacturing has left everyone in the music industry drowning in its own cash crop: music.
In the past, spending money on a radio campaign could help break a band. However, terrestrial radio has lost millions of listeners to the internet and satellite radio, so paying to get your music on the radio doesn’t even work anymore. If you can’t get noticed by creating a wicked cool website, submitting your music to supervisors/labels or paying to get your music on the radio, what is a band to do?
Fear not our loyal minions, we think we have some viable options. We’ll explore one at a time over the span of several posts. Here’s the first way:
1. The missing link in today’s independent music scene is competent, affordable and effective PR. As discussed above, a band can produce its own music, package that music in a brilliant way, promote the music to its own fans in its own region and send the music out to anyone it sees fit. However, without the right contacts and knowing where to send the music or the link or the super sweet low budget video that your cousin shot last night, your project, just like so many before you, will fall into a black hole.
In the old days labels had scores of PR/Marketing employees who got paid to promote their clients to radio stations, concert promoters, magazines, television stations etc. Now, those employees are looking for jobs and the labels have either cut way back on in house PR or outsource PR just like independent bands need to do.
Today, there are some really solid PR/Marketing companies out there servicing both major and independent labels. While a healthy budget is still required, we have worked with some PR companies by getting creative with budgets. Check out Riot Act, Flower, and Big Hassle to get some ideas. If you can scrounge together enough money to pay one of these companies to help you get your music in the right places, it will be one of the smartest investments your band can make.
What if you have a budget of $500 or less? Time to hire interns! Get your friends, class mates or family members together. Figure out which one understands your music and where you want your music heard. Make sure they have a computer and access to the internet and then…start posting! Smart teens and 20 somethings know where they go for new music (usually free). Figure out submission policies and be relentless. Finding the right blogs (the “tastemaker sites”) and getting your band’s music, or better yet your band itself featured on such a site can be a huge boost. If your music finds its way onto HypeMachine or Allhiphop or even Pitchfork, more doors will open. We’ve seen bands featured on these sites end up with sponsors or even tours. After that, if capitalized correctly, the added exposure can actually lead to money, which in turn, may lead to the ability to hire a PR company to expand the reach.
Obviously everything that a band does is predicated on actually having a playlist of high quality music. If your music is bad, eventually, the public will reject it (regardless of your budget). Speaking of good music, here’s our SHAMELESS PROMOTION OF THE MONTH: CHECK OUT ELEPHANT STONE. Our Canadian friends are on tour and will be hitting up CMJ. Find out more about them here: ELEPHANT STONE
Due diligence is a phrase that is thrown around the legal world on a daily basis. “Is that borrower credit worthy? We’ll have to do our due diligence.” “Do we want to purchase that gas station? We will only know after we complete our due diligence.” Does the concept of completing due diligence in the music world ever come into play?
The answer is that it should. Just like a business looking to buy out its competitor or a bank trying to figure out if it should issue a credit line to a borrower, a musician should always complete due diligence before making any decision related to his career.
In my quest to get musicians treat their music like a business, I have often compared a music career to any other type of business. However, even though being a musician is similar to being a manufacturer of tires or a having a shoe store, there are different rules and procedures in the music industry. These different rules and standards are due partially because of the slick talkers and stereotypical music industry professionals but mostly from a successful system that has been in place for decades. If it ain’t broke, don’t fix it has been the mantra of the major label music industry for years. In this system, the typical scenario played out as follows: a musician breaks onto the scene or discovered by an A&R rep, the musician blindly signs a multi-album record deal, a manager is provided by the label and the label would control the musicians career for the length of the contract and beyond. As we all know, this system is no longer the norm. Due to the failures of the record industry over the last several years, the system has changed and the process for building a career as a musician has changed along with it.
While a musician was happy to sign the first contract that came from a “reputable” label in the past, that musician now has the ability to conduct her own due diligence. For a musician his or her music is her work product. Today, when that work product gets to a level where it is ready to share with the public and the public wants to hear it, several doors may open for the musician. Behind every door, however, is another business who wants to make money off of the musician’s work product. A manager, business manager, lawyer, label, publicist, publishing company, etc. etc. are all examples of businesses who make money off of your work product. But just like a business owner who is looking to hire a new CEO, a musician must conduct diligence before making a long term committment which may direct the musicians career and check book for the next several years.
So what should you look for as a musician who is looking to sign with a third party (a label, producer, manager, etc.)? How does a musician conduct his own due diligence? First, conduct your own research: google the hell out of the company or individual that is looking to work with you; talk to people in the industry to see what their experience has been with that company or individual; and spend a lot of time talking and observing what that individual or company is really like to work with. A label might have a good reputation, but that reputation could have been built on a success 10 years ago; what have they done lately? Ask for a specific plan for you and your band. How will the label help you get tours? How will the manager deal with finances? How will the lawyer bill you? We know that Sub-Pop has been successful with many of thier artists, but how do their contracts work? Will they enter into a license deal or maybe they are only a 360 deal label? Just because a label or management company has a good name doesn’t mean that they are a good fit for you.
It is always exciting to have someone interested in working with you and in some cases offer you money to work for them. But in today’s music world, you have to ask: is it worth it? Maybe you can do it on your own. Maybe you make your own start and then go with a label. Maybe your best friend is ok to work as your manager for a regional tour. All of these things must be thought about before signing on the dotted line. In the business world if one business is looking at buying out another business, the due diligence period may take months (years even). Lawyer pour over the existing contracts, the amount of money coming in and out of the company, the people working at the company, the systems in place that are working or need to be fixed. Why should your music career be any different?
Musicians should focus on music. That is what they are inherently good at and why they have the exciting prospect of people paying them for what they create. However, saying that “I only want to make music” and ingorning the decisions that effect your career as a musician can have devastating results. Do your due diligence before you make decisions that will effect your ability to continue to make music for a living. Once you have made smart decisions on who makes up your professional team, you can go back to what you are truly meant to be doing: making music.
I had a lengthy internal debate over whether to join the endless number of blogs, articles, tributes and montages in honor of Michael Jackson. Even though I was big fan of MJ and I did rock the moon-walk on numerous occassions during bar and bat mitzvahs and family weddings during the 80’s, I decided that for purposes of my posts, we should learn from Michael rather than add to the endless fluff pieces circulating our globe at the moment.
So, what can we in the independent music industry learn from the King of Pop? One glove is better than two, Emmanuel Lewis (aka Webster) is cool, living on a ranch with children, monkeys, and an amusement park will definitely get you noticed. All joking aside, Michael Jackson was one of the biggest grossing artists of all time. He single-handedly changed the way music was marketed to the masses. He was one of the first truly international (Asia to Africa to Australia) superstars. Along the way, he purchased the Beatles catalog.
That purchase, along with some of his other buisness decisions is what I can’t help but focus on when thinking about MJ’s legacy. Michael and/or his management team had the foresight to purchase a large chunk of the greatest rock and roll band’s publishing catalog of all time. In 1985 he puchased ATV Music Publishing for $47.5 Million. ATV controlled around 200 Beatles songs. This investment, at a time where the value of music publishing was still unknown, was one of the best investments anyone could make.
Every time one of the Beatles’ songs was played on the radio, which is virtually every minute of every day, Michael was earning money as the publisher. For every song that was licensed in advertisements, tv shows, movies, greeting cards, etc. Michael got a check. At the time of his death, the Beatles catalog would have been one of his most valuable assets. Think about that; Michael Jackson albums sold in the 100’s of millions but he had more earning potential from another artist’s songs.
Obviously when we discuss the Beatles and Michael Jackson we are looking at musicians who are in a different stratosphere when compared to most indie musicians or even most major label acts. However, the lesson that any musician can learn from both the Beatles and MJ is that control of publishing, control over who owns your music and how it is maintained, can be the life-blood for your retirement, and even for future generations.
When you sign to a label you need to think about what you are signing away. If you choose not to sign with a label but pursue a publishing deal, the same rule applies. Most major label deals will come with a publishing deal wherein the label or a division of the label will get the right to publish your music. While this is not always a bad thing, just remember what you are giving up and what the financial repercussions may be. A good warning flag that indicates that a musician may be giving away her music forever is an offer of an advance. Typically, publishing deals, like label deals, come with an advance. BE WEARY OF ADVANCES. If you are getting money up front, it usually means that you are leaving something behind. The length of publishing deals can be for the life of the copyright (95+ years in some cases) or can even be perpetual (never ending). Is a $50,000 advance worth the value that publisher is going to bring to your music for the next 100 years? Maybe…
Publishers are ideally supposed to act as your world-wide agent. They are supposed to help advertise your music to the world and seek money making opportunities for that music. Also, publishers are there to collect the money that is earned for music which is actually “published”. The typical split with most publishers is 50/50. The even split looks better than it is (of course). Many artists need sub-publishers to reach different markets around the world. A sub-publisher will take its percentage which in turn reduces your percentage.
The easy argument to make in favor of publishers is that without them: are you going to get your music out to the public en masse and more importantly are you going to collect once that music has been published? While the new music industry has seemingly endless opportunities to get your music out to the public, the publisher still plays an important role. Several new bands and even labels have either formed their own publishing company or partnered with a publisher. The partnership or the self-publisher model will reduce the endless percentages that go out to people and companies who are not in the band. But, just like everything else in the D-I-Y music model, it takes a lot of work and a strong team to accomplish what established publishers can already provide.
God willing your catalog of music will be worth as much as Michael’s or the Beatles. Realistically, you might not get to that level. That does not mean that you should not think about the value of your music before you hastily sign it over to a publisher. A quick advance from a publishing company may look great now, but as I have ranted on several occassions, advances are simply loans which must be paid back. Look at all your options first and go with the one that is best for you and your band. Think before you ink.
SHAMELESS SELF PROMOTION OF THE WEEK: NALEDGE’S (AKA MR. BRAIN) CHICAGO PICASSO