Music Publishing: Learning To Deal

While making music is one of the greatest joys in life, making a living off of your music can be
one of the biggest pains—but it doesn’t have to be.

When everything comes together on a song, it’s magic. However, to reap the benefits of that
magic, you may need a publishing deal. Now, don’t go signing just any ol’ dotted line. Read on
to find out what’s the best deal for your professional needs.

 

Musicians may be some of the most creative minds, but we aren’t always the most businesssavvy. So, in order to make money from your music, it’s important to understand that music is considered and valued as an asset, and that there’s no one-size-fits-all solution in the publishing
world.

 

Ownership v. Administration

A musician’s income can come from many places and publishing one’s assets is the act of commercially exploiting & administering the music copyright(s). This can be done by the owner (artist/songwriter) or by a hired publisher/administrator.

As the musician, once your song is documented through writing or recording, you are the owner
of its copyright. Ownership provides artists with control over who can reproduce, distribute, perform publicly, sync and license, display, or sample your master recording.

Deals are determined based on various factors like the ownership and administration of a song, the period of time outlined, geographic location, financial considerations, etc. Here’s a great article to learn the lingo & brush up on the basics.

Before getting into what to expect in a publishing deal, let’s first break down…

 

What’s In A Song?

 

Music Publishing 101 | Stem Blog

To start earning money on your music, the administrator of your copyright grants licenses & receives royalties. A solid publisher will pitch your songs for placement in film and TV, and should set you up with other artists or writers to collaborate with. Plus, they will provide administrative support, which means helping you collect royalties for your music whether it’s in far-flung countries or in the U.S. This can play out if your music is sold in digital or physical format (mechanical royalty) or collected by a Performance Rights Organization (PRO) issuing a performance license when played out on the radio, television, etc.

 

More on this can of worms later, but here’s helpful links on calculating royalties by the three major PROs: ASCAP, BMI, and SESAC.

 

 

What’s Your Deal?

With all these variables in mind, publishing deals are structured and administered according to their unique terms. In music publishing, there are two equal shares of the total publishing pie: the publisher’s share and the writer’s share. And there are two main types of deals: administrative deals and co-publishing deals.

Admin Deal

This type of deal traditionally allows a songwriter/creator to retain full ownership of his or her composition and costs an administration fee paid to the publisher/publishing company (~10-15%) to manage the day-to-day operations of collecting all the revenue earned from the recording.

An administrative deal, or “admin” deal, usually provides more flexibility for both the writer and the publisher. For example, there are specific restrictions as well as allowances that an administrator can perform without explicit approval from the writer. Another advantage is that the period of time is short and variable (2–3 years) compared to that of life-of-copyright deals like ghost-writing deals or work-for-hire agreements.

 

 

Licensing Deal

Another form of an admin deal is in a licensing deal structure for recording artists, where the creator owns the master, but licenses them to a label. The label is then responsible to market and distribute the masters in exchange for sales (%). Depending on the status and estimated sales potential, the label may offer an upfront advance or customary upfront earnings and on a shorter term limit based on the cycle of a particular EP/LP release. In this case, the label works for the artist.

 

An extreme case of an admin deal is the 360 deal. The 360 deal allows a label to collect revenue from all sources of an artist’s income—sales, touring, publishing, endorsements, etc. But in this case, the label owns the master recordings in perpetuity, and artists are essentially working for the label and have to meet certain contractual obligations.

 

Co-publishing Deal

A co-publishing deal is the most common deal for songwriters, where the creator splits ownership with a publishing company. This type of deal costs an artist part of their rights and control over their compositions, but the tradeoff may be worth it at the end of the day.

A simple way to think about a co-publishing deal is that with every dollar your song earns, 75 cents will come back to you. That may sound like a sky-high loan with 25 percent of your hard-earned money going to your publisher, but unlike a loan from a bank, a loan from a good publisher — in the form of an advance — comes with all kinds of perks such as sponsorships or incentives.

For instance, the publisher and songwriter typically co-own the publisher’s share of publishing equally (i.e. 50/50). This really means that the publisher owns and retains half of half of the total revenue from your songs created or assigned during the term of your agreement (i.e. 25% of the total revenue). For example, if your songs earn $500,000 of revenue $125,000 will go to the publisher and $375,000 will go to you (which is initially used to pay off your advance from the publisher and give your manager a cut of the pie).

In this arrangement, the co-publisher has control over the quality of your administration and this should be heavily considered before getting swayed by the bird-in-hand money you get offered. Another way to look at this sort of deal is like betting against yourself with a professional bettor, especially in the case of multinational, too-big-to-quit publishing houses. The balancing act here is that publishers only offer what they predict they can make back and spread the risk around, so as the creator, you need to consider what chips you want to put on the table.

“Full” Publishing Deal

The least common publishing deal is a “full” pub deal – that works just like the co-publishing deal, except the publisher owns and retains 100% of the publisher’s share of publishing on all songs created or assigned during the negotiated term (i.e. 50% of the total revenue). This means that the publisher basically owns all of your songs. 
Advances may be much larger in this type of deal, but your recoupment rate and ongoing royalty is effectively only 50% of total revenue on these songs (whereas on a co-publish deal you get 75% of the pie). Before you sign a full pub deal weigh your options carefully.

Simply put, the quality of the administration can tip the scales for an artist greatly – which is the very reason why certain artists “sell out” by going with a major label or why Prince boycotted music streaming platforms.

It all boils down to the details and the balance between the ownership and administration of the recording. This infographic by The Current makes this all a bit more digest-able and easier on the eyes…

How Performers & Songwriters Get Paid | The Current

 

Advice On How To Deal

 

Know your history:

Times are changing rapidly and the demands on artists to keep up with the times (without burning out) are greater than ever. Until last year, music was valued based on an act that is more than 109 year old when music was made on tape loops and not taking digital music production into consideration. So, it’s essential to advocate your value as a musician and support the Music Modernization Act. If you need to catch up on the news, listen to this awesome podcast with the President of the National Music Publishers Association, David Israelite.

 

Don’t rely on others:

A publishing deal can truly change the game, but you need to take care of your own. If you get too comfortable with the newfound support and misplace your deal memo or final copies of your contract, that is deep water you don’t want to find yourself in.

 

Do your homework:

Reflect on what you really want & what you need. By understanding where you are, you can make the right moves. Whether that’s self-publishing or finding the right publisher to take your career to the next level.

 

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