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Music Business Lessons (Courtesy
Berklee Press)
The Primary Functions of a Music Publisher (Part 2)
By Eric Beall
Protection
It's a jungle out there. Once you begin to understand the value of a
copyright, which can generate income over many, many years, you begin to
understand the need to protect that valuable product. The publisher is
responsible not only for exploiting a copyright, but protecting it from
unwanted exploitation (which is usually when there is no appropriate
compensation). This means resolving issues related to reduced royalty rates,
unauthorized use of the song, unauthorized alteration of the song, and
percentage of ownership between co-writers or co-publishers.
As many writers have learned, protection is not just a matter of protecting
your song from those who might wish to infringe (read: steal) it. The
accusations can easily flow the opposite way, with other writers accusing
you of "stealing" their song. In these cases, it is a publisher's job to
protect you and your copyright--to negotiate a settlement, or, if necessary,
to defend you in court.
With the prevalence of sampling, some large publishers have now gone to the
extent of establishing a Sample Department, which includes expert listeners
responsible for uncovering unauthorized "sampling" of their copyrights.
Likewise, the creating of Web-based companies like Napster has required
publishers to carefully monitor the Internet for copyright violations. These
days, you gotta watch your back...
Acquisition
You also have to look ahead. An effective publisher is always scouting for
new copyrights and new writers, in an effort to keep up with the
ever-changing tastes of the listening public. This function requires several
skills from a publisher: the ability to accurately evaluate the skill of a
developing songwriter or the commercial potential of a particular song; the
savvy to know at what price new music can be acquired; and the
persuasiveness to convince a songwriter to turn over his beloved copyrights.
Acquisition is usually a function of the Creative Department; it's a job
that is at once the most tedious role in the publishing company, and the
most thrilling. It means listening to a ceaseless supply of demo tapes
(mostly bad), spending long evenings in dingy clubs (mostly smoky and loud),
and poring through pages of industry trade magazines (that every week tout
the Next Big Thing, which almost never is). It also means every once in a
while finding an undiscovered song or songwriter that is truly unique or
special--the rough equivalent of a very small needle in a very large
haystack. The excitement of hearing a hit before anyone else, and
having an opportunity to play a part in bringing that song into the world,
is what keeps most of us in the business of music publishing.
Exploitation, administration, collection, protection, and acquisition. If
you're a songwriter, I know what you're thinking. "What about that part that
I like best? The part where publishers pay writers money they haven't earned
yet..."
Ah, yes. The writer advance. While it is not one of the primary functions of
a music publisher, the role of Songwriters Central Savings and Loan is one
that has come to define the publishing business, particularly with respect
to the very large corporations that dominate the modern music publishing
industry. For many songwriters, the music publisher is perceived primarily
as a bank, willing to loan money in the form of "advances," which will then
be repaid to the publisher from the songwriter's future earnings. Here's how
it works:
When seeing to acquire a desirable copyright, or to sign a promising writer
to an exclusive publishing agreement (which simply means that the publisher
is acquiring rights to all of the writer's copyrights for a set period of
time), a publisher frequently finds that personal charm, vague promises of
stardom, and a couple of pricey lunches are not enough to close the deal.
In order to convince the songwriter to grant the publisher the rights to the
desired copyrights, the publisher must also fork up some cash.
As with almost everything in show business, the amount of the advance paid
to a songwriter can vary wildly, from the paltry for a young, unproven
writer, to the astronomical, for an established hit-maker or the hot new
buzz band. In addition, a publisher may also agree to pay for other items,
such as demo recording costs, travel, or equipment rentals; this will
usually be labeled an "additional advance." But whatever the amount, a
songwriter should remember that any advance is always recoupable. This means
that the writer will not be paid a percentage of the income generated by his
or her copyrights until the publisher has recovered the amount of the
advance. An advance is not a wage or a fee paid to the writer; it is an
interest-free loan against future earnings.
A publisher must remember that an advance can only be recouped from future
earnings--it will not be repaid by a writer whose songs fail to earn back
the amount of the advance. If you're going to be in the banking business,
then bankers rules apply--make your loans only to those people you are
pretty sure can pay them back. The amount of an advance should reflect his
or her songs. The advance should not be based on how badly you want to sign
the writer, or what the writer needs, or what others in the industry would
pay the writer. Because of their financial structure, large publishers can
sometimes offer an advance that far exceeds what they believe a writer can
actually earn. But if you are playing with your own money, prudence is
always the better part of valor.
While it is not an integral part of the music publishing business, the
writing of an advance check has become such an important part of the
publisher's role that we could probably add one more function to the Big
Five--let's call it capitalization. By advancing money on future
earnings, a publisher is giving the writer the money he or she needs to
survive and grown the business as they feel necessary. In this book, we will
not devote a great deal of space to this particular function, as I doubt
most readers are eager to begin handing out thousands of dollars in advances
to their songwriting cronies. Nevertheless, it is important to understand
that it is a strategy employed aggressively by all of the major publishers.
It is also important to understand how you and your fledgling publishing
business may someday be able to obtain access to that capital from a larger
company wishing to enter into a partnership with you.
Excerpt from Making Money Making Music: An Insider's Guide to Becoming Your Own Music Publisher ©2004
Berklee Press Used by Permission
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