Buggin’ Out

Oct 09 2011

It’s a perfect defining moment, encapsulating the state of music publishing in 2011:

In the middle of negotiating a multi-million dollar sale to BMG Rights (who else?), Bug Music overlooks one small thing on the to-do list and fails to pick up a contract option for superstar Bruno Mars. This petty oversight causes them to lose the services of the biggest contemporary pop star the company has ever had.  Nice one.

It would be funny if it weren’t so familiar—not in its specifics (as most companies don’t necessarily make this particular mistake) but in its substance. While the deal-makers at the top occupy themselves with acquisitions, mergers, funding schemes and due diligence (or does anyone do that anymore?), the demoralized and depleted staff, those employees who actually do the work of music publishing, are either too disinterested, distracted or disgusted to manage even the basics—registering songs, collecting money, paying the money, or yes, picking up contract options on the people who actually generate income.  From the outside, one looks on and thinks “How could this possibly happen?” Those of us on the inside wonder how it could not.

Underneath the usual legalese of the court filing, the actual issues at stake here are simple, rooted in the fundamentals of music publishing that have been discussed often in this blog. It’s a matter of minimum delivery commitments (this stipulates the number of songs that the writer must submit during the contract period), minimum release commitments (this  identifies the number of “commercially released” songs that must be part of the minimum delivery), and the contract period and subsequent options, which constitute the “term” of the deal. Judging from the filing, which you can check out below, there is not a great deal of complexity here.  But as with most matters contractual, there are a few different angles that have to be considered.

http://www.scribd.com/doc/63616763/Bruno-Mars-vs-Bug-Music-Inc

As with most writers signed to exclusive co-publishing agreements, Mars was bound for an initial contract period, and Bug had options to continue the deal for several additional periods. In each contract period, there was a specific minimum delivery commitment that set the number of songs that Mars would need to submit before Bug was required to initiate the next option (and pay the advance associated with that option).

Nothing is more important for songwriters to understand: most co-publishing contracts do not build their term around calendar years, but rather the completion of contract periods.  Conversely, most publishing administration deals are based on calendar years (usually 3-5 years, then automatically renewing until termination). It’s vital that songwriters understand what constitutes a contract period under their particular deal.  It’s good for publishing companies to have a grasp of it as well.

One of the elements that frequently adds confusion to the minimum delivery commitment is the clause that usually follows it in the contract, which is the minimum release commitment. This provision outlines the number of songs within the minimum delivery that must be “commercially released” during the contract period. For example, if Bruno Mars had a 12 song minimum commitment (the actual numbers on this have not been revealed) , the minimum release commitment  might stipulate that at least 4 of those songs had to be released for commercial sale to the public.  Together, the minimum delivery and release commitment is usually identified as the MDRC.  That’s the easy part.

In reality, the minimum release commitment inevitably raises all sorts of questions:

  • Is a song put out on the writer’s own label, or simply made available on iTunes  “a release”?
  • Should a song released only in one small territory (Canada for instance) count as a full “release”?
  • Is something commercially released when it appears in the stores or online, or when the record company completes the mechanical licensing of the song?  Split disputes between songwriters can often delay licensing for months or even years after the record is in the stores.
  • Is a song that’s licensed for synchronization (in a movie or game) “commercially released”, or does it need to generate a mechanical license?
  • Should the same song, recorded and released by two different artists, count only once toward the minimum release?

That’s all before we even start talking about song splits. The other key factor to understand about an MDRC  is that only the percentage of the song that a songwriter controls counts toward his or her commitment.  So if Bruno Mars co-writes every song, and receives 50% of the ownership on each one (in fact, he probably often received less than that), he would need to write 24 songs, and 8 of those would need to be commercially released, in order to satisfy the 12 song, 4 release MDRC. If you are part of a three-person writing team that always splits songs evenly, you would need to write 30 songs to hit a 10 song MDRC, complete your contract period and trigger your next advance.

I don’t know, but I strongly suspect that some or all of these issues will come into play in the upcoming court case between Bruno Mars and Bug. In reports I’ve seen, Bug asserts that Mars did not complete the MDRC when he claimed to, and therefore the publisher was not legally required to pick up the option at that time. On the other side, Mars alleges that Bug confirmed that the MDRC had been met, and only changed their position once he notified them that the contract was terminated.  Keep in mind that any changes in the copyright ownership on a song, even after a commercial release (because of a sample issue or a dispute between writers, for instance), could change the amount that a song would count toward the MDRC.  There are a lot of gray areas, and in this particular case, Bug is probably glad of it.

What does seem clear is that Bruno Mars notified Bug in October of 2010 that he had fulfilled his minimum release requirement; in February 2011, he notified them that he had completed the full delivery requirement.  According to the filing, Bug acknowledged at each point that the commitments had been met. Of course, this will likely be a highly contentious issue as the case moves ahead.  But after receiving notification that Mars had completed the MDRC in February, Bug had 30 days in which to exercise the next option, which simply meant sending him a letter and inevitably cutting a fairly hefty check.

When Mars did not receive any notice that Bug was exercising the option, he was required to send the company an Option Warning letter, which alerted them to the fact that the contract was on the verge of being terminated, and gave the company 10 days in which to act.  Again, this is a fairly standard “notice to cure” clause, that allows a company to cure a breach (like the failure to issue a royalty statement ) or pick up an option within a prescribed window of time.

One surprising thing here is that Bug’s window was quite small—most such clauses allow for 30 days.  The other surprise is that even with the warning, Bug failed yet again to exercise the option for their Grammy-winning, chart-topping songwriter. Companies frequently miss option periods, but most are jolted into action by the warning notice. On May 24 and again on May 31, Mars notified the company that the contract had been terminated. Only on June 6 did Bug get around to sending a letter exercising the option, paying the advance, and claiming that the MDRC had not been met in February, but rather several months later.

For most casual, non-industry observers, the operative acronym here will not be MDRC, but rather WTF.  Why would a company allow the relationship with their superstar songwriter and artist to deteriorate to the point of niggling over song percentages , release dates and delivery requirements? It would seem that Mars was doing a pretty good job—handing in satisfactory songs, staying reasonably active, making some hits, winning a Grammy, and doing what most publishers would like their writers to do. Wouldn’t it have made sense to pick up the option in advance, or at least when the minimum release requirement was fulfilled?  In fact, most publishers concern themselves much more with the minimum release commitment than the larger delivery requirement. And why would a company not at least respond to the option warning within the 10-day period, rather than risk losing an extremely valuable asset?  If this were a criminal trial, Bug might do better to plead insanity.

In fact, insanity is exactly what it is. Even after losing Mars and making a public show of flunking Music Pub 101, Bug was purchased by BMG Rights for more than $300 million (according to reports).  That’s a pretty high price, especially for a catalogue largely built on administration deals, most of which can be terminated on very short notice. The music publishing business has been reduced to an endless series of catalog swaps, but the people making the deals have no understanding that the assets in the company are the staff and the songwriters themselves. Sooner or later, that staff needs some leadership and vision at the top. And those songwriters require a certain level of attention and service.

This insanity is not limited to any one company.  You can find it at Warner Chappell, where months after a purchase, employees are still wondering what the go-forward plan actually is. Having lost Chairman and CEO David Renzer back in April, Universal is still waiting to find out who the new boss will be, and what that will mean for the future. For now, it runs on auto-pilot.  At EMI, the guillotine has been hanging over everyone’s head for months, which can’t help anyone focus on business. The company’s recent royalty fiasco was just one more passing scene in a long downward slide.

Is anyone running these companies? Is anyone actually taking care of the business of music publishing? The lesson here for songwriters is three-fold:

  1. Read your contract. Know how your contract period is defined, and understand your MDRC.
  2. Notify the company in writing promptly upon meeting each MDRC requirement, and get written confirmation that the commitment has been fulfilled.
  3. Keep a calendar handy. You might be the only one who has one and actually knows how to use it.

 

 

 

 

 

 

 

 

 

 

 

Happy Together

Sep 28 2011

During the travails of the past decade, when record label turned against downloader and publisher turned against record label and streaming service turned against publisher, the sage music industry commentators have been crying in the wilderness:

“Hold up guys! Remember: we’re all in this together”.

Yea. Right.

I think I might have even said it once or twice myself. But now, it turns out to be true—truer than any of us imagined at the time. As the giant merger wheel gains speed and grinds over anything and everything in its path, it seems we truly are in it together, all destined to be owned by the same uber-corporation, tools of an anonymous international venture capital fund. In a world where everyone is “strategically linked” (i.e. owned), every deal is a 360. Welcome to the new model music industry.

It’s not even the end of September, and already we’ve seen BMG Rights, the giant German elephant in the room, purchase Bug Music—rumors are that EMI will be the next to fall to Hartwig and his gang. Within days, Billboard blared the news of the recently struck “strategic alliance” (it would take a UN sub-committee to define what that actually entails) between Universal Music Group (the world’s largest record label) and Live Nation (the world’s largest concert promoter, artist management firm and ticketing company, albeit with the world’s smallest chairman). Then we also had the unveiling of the most unfortunately named venture of the year, Primary Violator, a merger of Primary Wave Music’s management company and Chris Lighty’s powerhouse Violator Management. If Violator had merged with Universal, would it be a Universal Violator?  I thought the guys at Primary Wave were supposed to be marketers. Name-check, please.

While the relative merits of each deal can and will be chewed over for weeks at Brooklyn Diner, the motivations are relatively clear. BMG is on a buying spree, and they’re doing what any savvy new player with several billion dollars to burn would do—they’re buying up classic catalog as fast as someone will sell it. Contemporary hits come and go, but when you’re investing money, there’s nothing like classic, proven songs to provide a steady cash flow and the musical depth you need for the big ticket sync placements. In that respect, Cherry Lane (Elvis, John Denver) was good, Bug (Johnny Cash, Duane Allman) is better, and EMI (Motown, “Somewhere Over the Rainbow”) is the Holy Grail. It’s a hard strategy to argue with, at least until everyone gets their accounting statements and we see if these guys had any clue whatsoever as to how they’re going to integrate all these separate companies.

The Universal-Live Nation deal was in some ways the most impressive. Lucian Grainge seems to be alone among the major label chiefs in being serious about constructing a comprehensive music company.  The Universal labels are so far out in front of their competitors in this respect that they seem almost to be engaged in a different business altogether. On the other hand, it doesn’t appear that EMI (which will be sold by the time I blog again) ,Warner (which still can’t seem to figure out who bought it and why), and Sony (overburdened with the usual 550 corporate bloodletting and X-Factor auditions) are engaged in much at all. Interestingly, the alliance with Live Nation seemed to implicitly acknowledge that the 360 model had not yet become effective for Uni, and that a fierce, fire-breathing dragon might be necessary to bring Universal’s artist management companies, Trinifold, Twenty First Artists, 5B, and Sanctuary into some kind of orderly place within the larger organization.

With Live Nation heading up the management side, Universal has the leadership it needs. At the same time, it’s an impressive land-grab for Irving, without much firm commitment from him for any real cooperation. (As is his custom). Front Line invests nothing, gets a 50% stake in UMG’s management companies, and agrees to discuss bringing the Madonna album to Universal, but only if Guy and Madonna want to.  Next time, can we please send Irving Azoff in to negotiate the federal budget with the House Republicans ?

By comparison, the Primary Violator deal is a genuine merger, or maybe even a “buy-out”, depending on who you talk with. As such, it may reflect a timely move by Chris Lighty to cash in on an aging artist roster. After all, it’s been awhile since Mariah, P Diddy, and LL Cool J were at the top of the game. It could also reflect that a management roster consisting only of Cee Lo Green and Eric Benet wasn’t exactly the A-list that Larry Mestel had in mind. But most importantly, it is a bold statement by a music publishing company of what a lot of music publishers are starting to see, especially as the real payments from streaming services like Spotify start to come in and they’re missing at least three zeroes on the checks:

Music publishing is not going to be enough anymore.

The numbers are getting smaller and smaller, and even as uses of music climb, the payments are not sufficient to cover the tidal wave of paperwork that goes into collecting and accounting for them. In some ways, it was better when people were stealing. At least we didn’t have to keep track of it. Music publishers are going to have to diversify into other areas, and kudos to Primary Wave for making a bold move in that direction.

Of course, what makes sense for Universal Music, Live Nation, BMG Rights, and the afore mentioned Primary Violator (I love writing that) does not necessarily make cents for artists and songwriters. Not much surprise there.  It’s easy to see the upside for most of the parties involved in the past week’s festivities.  But the creative community would be wise to approach their new adopted family with the wariness of an orphan. Grab the bread if you’re hungry and someone’s offering, but keep one eye on the giver, and make sure there’s an exit nearby. And don’t get attached. Most of these families won’t be together very long.

For songwriters, artists, and independent publishers trying to make sense of it all, here are four quick things to keep in mind:

Music companies are becoming entertainment companies.  This is an inevitable thing.

Lucian Grainge and Larry Mestel are right—no one thing is enough anymore. As I’ve been preaching in this space for several years: publishers, record labels, managers, and booking agents have to see themselves not as part of the music industry, but rather as part of show business.   Not only is the value of music falling, but the intertwining of music with all other entertainment forms, from theater to video games to sports to television talent shows is increasing tenfold. In this sense, music creators are going to have to take some cues from the corporate decision-makers and begin building a network that includes not simply other musicians or songwriters, but game designers, film directors, music supervisors and visual artists. Diversification is not so much a business strategy as a survival mechanism.

Not all companies from one sector of music are competent in other sectors of music. Some are not competent in any facet of the music industry. This is an inescapable thing.

Here’s where creators are going to have to turn up the noise filter to “high” in the next few years. The fact that a company is a proven, known entity in one field, like music publishing, does not mean that they have a transferable expertise in the management business. Simply controlling the best record label does not guarantee having the best management company. If it did, Universal wouldn’t have sought out Live Nation at all.  The merger of two giant messes (Warner & EMI) guarantees very little except one really big mess.

When I was at a major publisher, I heard a similar argument made to songwriters every day—extolling the virtues of a worldwide publishing behemoth with offices in every territory, a film division, a record label, and an electronics arm. It was all true. But it didn’t mention that the UK office hated the New York office, and the country division wouldn’t speak to the Christian division, and no one had any contacts with the film company, and the electronics arm (I kid you not) didn’t even know they had an associated publishing company.  Bigger just means bigger.

The interests of all parties in the music equation do not necessarily align simply because they are all part of the same corporation. This is a proven thing.

Of course, this is the inherent problem within the 360 structure.  A manager is not always an ally of the record label—sometimes he or she is the person to put the screws to the company, albeit with the best of intentions.  A record label may not wish to pay the tour support that a manager demands or that a concert promoter would like. A publisher may not wish to send their artist to their affiliated record division(ask EMI), and a label A&R person is definitely not going to cut every song the publishing division sends over (ask any songwriter).  We are not in fact one big happy family.  We’re in it together, but not in it for each other.

The only person who will take care of you is you. This is a historical fact.

In light of the above, don’t take any advice from a manager, publisher, lawyer or record exec about where to sign, or who to engage until you consider: what’s in it for them?  Are they sending you to their business partner because it’s a perfect fit for you, or for them?

This is not to say that there are not real advantages that can be realized by keeping things “in house”.  I used to work at Zomba Music and Jive Records, the music industry’s best example of that particular approach over the last two decades.  But not all of these new alliances are going to work out. You can’t afford to let your career be the experiment in which two new corporate partners learn, or don’t learn to work together. Lots of people who believe in public schools as a concept send their kids to private ones—because you only get one chance.

Be assured that in a year from now, when your trusted manager tells you that he’s leaving that joint venture that he assured you would be “an incredible opportunity for all of us”, he will regale you with tales of how his new partners “just never got it”.  He’ll be gone, but you’ll still be in that publishing deal for the next three years.

Not only are we not really family, often we’re not even friends.  Whatever anyone tells you, it’s never all for one (except when it comes to BMG’s acquisition strategy). It’s one on one, everyone for him or herself.  Choose your partners carefully, each on their own merits. Not every match is made in heaven.

 

 

 

 

 

 

 

 

 

 

 

Having vowed to keep the blog positive and focused on the new developments that could actually save the industry, I’ve decided to do what any cynical old music business weasel would do:

I’m calling on people younger and smarter than myself. (Doug Morris—wake up from your nap and take note.)

In what may be the best marriage yet of music and social networking, turntable.fm debuted this summer to rave reviews. One of those instant fans was my A&R colleague at Shapiro Bernstein, David Hoffman. Having educated our office on the endless possibilities of this new service, David recently sat down with my Berklee intern, Jorge Oliveres, to share the good news—two young guys looking at one exciting new facet in the future of music:

turntable.fm

Turtntable.fm is a virtual nightclub in which users are the DJs. The website is divided into “rooms” that play different styles of music. Users can chat with each other and bob their avatar’s head by clicking an “Awesome” button if they like the song that is being played or they can click the “Lame” button that, if pressed by enough people, skips it. DJs can choose the music they are going to play from a huge database or they can upload it themselves.

David Hoffman, Director of Creative Services at Shapiro Bernstein & Co., Inc., began using turntable.fm since soon after it was launched and he is extremely excited about its potential. I had a chance to talk to David about all the opportunities a service like turntable presents for both music publishers and songwriters.

David Hoffman

I heard you are very interested in turntable.fm.

I’m interested, almost slightly addicted to it. Probably a month ago now, a good friend of mine who is also in the music industry and one of the most knowledgeable music people I know, emailed me about turntable.fm. He said, “You have to check it out.” He’s also a DJ and I have, from time to time, guest DJed on his show–so we know each other’s music tastes pretty well. When he told me to check out turntable, I went on it immediately and was hooked. The next day I came to the office, stood up in front of everybody and was like, “You have to check out turntable.fm!”

I follow the digital music industry and the future of the music industry through blogs and reading up on the trades, and this, turntable.fm, [represents] the potential that I see for the new cloud services that are coming up. Hopefully, it’s something that will stay around for a while. Even if it doesn’t, it will show the potential of how great music discovery can be with the right website and the right digital tools.

What do you think of the legal implications of turntable.fm? I was reading that right now they claim they are protected under the Digital Millennium Copyright Act.

Like Pandora, and a few other services, they are operating under the DMC Act of 1998 that allows Internet radio to exist as long as it operates within the confines of the law. If you spend a lot of time on turntable.fm, you’ll notice that there are some interesting little rules that they don’t tell you are rules. For instance, if you go into a room, you can’t listen to music just by yourself. As with Pandora, if you want to hear the latest Beyonce single, it’s not necessarily going to play that first; it’s going to give you other music. That basically limits the listener to what is now Spotify. [On Spotify], you call up the song and listen to it, but Spotify is a service you have to pay for. Right now you can get it for free if you have an invite, but eventually you’ll have to pay. There are other rules too: you can’t play an artist more than a certain number of times in an hour.

Last week turntable signed agreements with both ASCAP and BMI. That’s really great news because I think a lot of these services didn’t originally sign with the PROs because they figured they didn’t have to. Turntable.fm signing with them is a big step in the right direction.

I think the only problem they’ll have moving forward, and it’s a big one, is the fact that you are able to upload your own music onto turntable.fm. That’s where the waters get a little bit muddy. If I create a mashup of a song and I don’t get permission from the publishers to create that mashup, that piece of music is technically one big copyright infringement. I’m able to upload that song and play it for people, and I believe once you upload a song to turntable.fm, it stays there. And those are the most popular rooms–the ones that play these mashups and remixes.

It’s going to come to a point where they’re going to have to do some licensing like Apple has done with the cloud services and Spotify has done. I hope they can really get it together. I also hope that the music industry realizes the strength of turntable.fm. I think they do.

What do you think is its potential? How could publishers take advantage of this?

Publishers can take advantage of it in a lot of different ways. Number one: for music discovery. It used to be, back in the day, music lovers would go to record stores. You’d go to a really good one (for me it was always some of the Ma and Pa cool shops or going to the Tower Records on West 4th Street). You’d go in and just thumb through the records. If I was into jazz that day I’d go to the Miles Davis section and say “Oh, wow, this is a CD I hadn’t seen before,” an interesting import CD or something, and I’d buy it. For music discovery [today], aside from word of mouth and what you read on blogs, the organic element of actually discovering something for yourself is kind of lost.

Turntable is the perfect place [to recover this] because you’re combining word of mouth (you’re learning from someone that you’re virtually meeting or someone that you know because they’re on turntable) and you’re listening to it. You’re talking about the music, you can link from it, and that, from an A&R perspective, is the closest thing to that original sense of discovery.

As publishing companies seek out talent, they can go into the cool room on turntable.fm, figure out who the DJs are going to be, and actually listen to it, learn about it and be on stuff before anybody else. I can’t tell you how many bands I’ve heard on turntable that I’d never heard before. When you are in a great room and the DJs are really going with the vibe, there could be a song that may not be your favorite song if you just heard it out of context. But when you hear it within the context of songs that are along the same vibe, [it] makes a big difference to someone who has a good ear for music and is out there to scout talent.

Not only publishers, but also record labels, managers, publicists, booking agents; everyone [can take advantage of this] to promote music. There was a band who was inviting people to a turntable.fm room for a listening party to debut their new CD. If one of our artists or songwriters has a new album or a new song, instead of sending out random emails or taking every music supervisor out to lunch and handing them a CD, I can invite them to a turntable.fm room. I’ll know if they’re there or not, see that they’re bopping their head, thinking it’s “Awesome” or not, and I can actually talk to them about it within the chat room. You’re basically creating a virtual listening party. I think that more and more bands are going to take advantage of it, and I think publishers will as well. There’s definitely the potential to have music supervision and A&R rooms.

I was also wondering about the potential it has on the other side, for emerging artists. Do you think it’s a good platform to promote new music?

I think it’s one of the best platforms. Whenever I speak on panels, people ask, “How do I get my music into the hands of the gatekeepers?” I say, “The best way to do it is to give it to someone who knows that person.” The analogy I like to use is [this]:

I’m in my apartment in NY and I hear a random Chinese food menu come underneath my door. It’s from the local Chinese place and I’ve never heard of them before. I take it and throw it out. But if Eric [Beall], my colleague, says to me, “Hey, this great new Chinese place opened down the block from me, you should check it out, ” I’ll probably go there the next day.

I take pride in listening to most stuff that comes to our office. But if I’m learning of music because I’m getting a random email, I’m thinking “OK– most of the stuff that comes randomly is not very good.” But if I’m learning of the music at turntable.fm from someone I know, or even someone I might only know virtually, it’s a different situation. If they’ve played a few good songs that I liked, and they say “Check this out,” I’m going to listen with open ears.

It seems like a really cool blend between social networking and music. I’m surprised something like this didn’t come out before.

I agree with you. It’s such a simple idea. Yet the potential is massive. Think about colleges. Since it came out in the summer, it hasn’t made its impact on college yet. Once the fall semester starts, you’re not only going to be at a party and listening to awesome music— you’re going to be playing the music. You’ll bring your laptop, we’ll get up on turntable.fm and start our own room. And while we’re partying, we’re also going to be DJing. If I were in college, I’d probably do that about 14 hours a day.

Right now [turntable has] limited capacity to 200 people [per room]. I think that will eventually expand. It’s going to become more like satellite radio. It will be an Internet radio station playing in the background, somewhat like Pandora because you’re choosing your overall theme, but more like satellite radio or traditional radio with great DJs. In fact, you might personally know the DJs.

What about when turntable has an application? What about when automobiles are wired with wifi? Once it’s on your phone and you’re able to DJ on your commute to work, you’re going to say, “This is really tremendous.” There are so many ideas I’ve been reading about, like an external “Awesome/Lame” button. You can be hosting a cocktail hour and secretly, in your pocket, hitting ”Awesome”.

Also, the link with Spotify is fantastic– turntable and Spotify go together like peanut butter and jelly. You’re discovering [music] and immediately clicking the Spotify link so that you can learn more about the band later. When you’re DJing, you can call up and research songs on Spotify—it’s a better interface than turntable for that.

Turntable.fm is the first thing in a really long time that’s made me very excited about music discovery. Instead of being an old curmudgeon saying, “Back in the day it was so much better,” this is the sort of thing that [has me] thinking, “Wow, this is amazing!”

David Hoffman is the Director of Creative Services at Shapiro, Bernstein & Co., Inc., one of America’s oldest independent publishing companies. At Shapiro Bernstein he is an A&R rep, TV/Film/Advertising placement person and song plugger amongst other things. The catalog ranges from classics including “In The Mood,” “On The Sunny Side of The Street” and “Ring Of Fire” to current hits by David Guetta, and current indie-darlings Savoir Adore. David is also a music supervisor who has worked on indie films like “Still Bill” a documentary on Bill Withers, and advertisements for Apple and Puma. Prior to becoming a full time publisher, David was a professional drummer with the popular instrumental jazz/funk/jamband ulu, touring upwards of 220 nights a year. Before hitting the road, David worked at BMI and Giant Step Inc.

David has been a featured speaker/panelist for CMJ, ASCAP Expo & ASCAP Night School, AIMP and others and DJ’s regularly on EastVillageRadio.Com.

Follow me on twitter @EricBeall

Not too long ago, I had an opportunity to work on a project alongside a large, big-name consulting firm. Here was an army of highly-educated wunderkids, all who came bearing one hundred questions, but rarely even one conclusive answer. As the project grew longer and longer, and the answers increasingly elusive, I decided that these people were simply not very good consultants. After all, where were the solutions the client needed?

One day, I shared my concerns with a friend, who herself is one of those sought-after, big-name consultants. She smiled. “Ah… they sound like they’re very good at their job,” she said admiringly. “If they accomplish the objective, everyone goes home. Smart consultants never solve a problem. At least, not before they’ve uncovered a new one.”

This came to mind recently, when I saw NMPA President David Israelite’s recent comments about the need for blanket licensing, bravely made in front of the publishing masses at the NMPA annual meeting, and also reiterated in Billboard:

http://www.billboard.biz/bbbiz/industry/publishing/david-israelite-nmpa-president-s-guest-post-1005250672.story

David Israelite

On the face of it, Israelite’s primary point is unassailable. The current system of licensing, particularly in regards to mechanical and synchronization licenses, doesn’t work and must be fixed. Who could dispute it? As Israelite quite honestly points out, after all the legal sturm und drang about YouTube, if Google came to the publishing community tomorrow and completely acquiesced to all demands, offering to pay whatever it took to license the rights they needed, the publishers would be completely incapable of actually doing the licensing necessary. On a legal, practical, and PR level, that doesn’t put the publishers on particularly solid ground.

Especially when it comes to licensing synchronization uses, music publishers have always insisted that the use of a song in “synchronization” with a moving picture (like a video, film, advertisement or game) requires the licensing approval of each owner of the copyright. That’s a number that as recently as the 1980s
meant potentially three or four songwriters and their publishing representatives, but can now often mean up to ten or twelve writers, some with different publishers in each territory of the world, some of whom may control as little as 1 or 2% of the song.

Needless to say, this could require weeks of phone calls and research, and that’s just to find out who controls the necessary rights. After that, the poor music supervisor, film studio, TV producer or advertising agency still has to come up with a sync fee number and legal terms that will satisfy all parties involved—all of whom of course insist on favored nations status with each other. Now multiply all those headaches by several hundred thousand.

Why several hundred thousand? Because in the internet age, that’s the way companies are interested in licensing music. The focus now is not on one specific featured use in a movie or advertisement. It’s not even on ten songs all needing mechanical licenses to appear on an individual album. Rather, services like YouTube, iTunes, Spotify, and others need to license the whole of popular music, en masse, in order to be able to offer the variety and selection that the consumer demands. In that context, one by one is a little impractical. Like having to obtain permission to use each individual word in your novel.

Needless to say, the need for blanket licensing is pretty obvious, particularly to those who spend each day trying to work through the morass of the current system. Historically, music publishers have not stood out for their foresight and boldness. Yet even they will acknowledge that the crisis has arrived, and something has to change.

In the area of mechanical royalties, Israelite suggests an approach that grew out of an attempt to reform the compulsory license section of the US Copyright Act (Section 115). This would provide for a series of mechanical licensing agents (similar to the PRO’s like ASCAP and BMI). Publishers would have the right to choose among the agents, or change agents, but these designated agents would represent the one-stop, or maybe three or four-stops for anyone seeking a mechanical license. Further, these same agents could also license synchronization rights, on a pre-set, “blanket” rate basis. The blanket licenses would cover everyone and everything, eliminate the back and forth negotiation over each individual permission, and hopefully bestow that warm and fuzzy feeling for which blankets are known.

It sounds more efficient for the publishers as well as for the people seeking to license music or to build services around music. And while it certainly takes away some of the possibility of demanding a king’s ransom for that 7.5% share of the classic copyright that you own, the increase in the number of small wins, on a global basis, will probably more than make up for the loss of the occasional jackpot. Not to mention, it might keep folks like YouTube from just tossing in the towel and taking the music without any licensing at all.

So why hasn’t it happened?

As I said up at the top—not everyone loves a problem-solver. If the consultants fix what’s broken, everyone goes home. Likewise, music publishers don’t necessarily want to remove the logjams in the licensing system. Those logjams are largely the reasons publishers exist in the first place. Simplifying a system is rarely good news for the middle-man. And publishers are the ultimate middle-men between songwriters and the people who actually use the music the songwriters create.

If one agent is responsible for issuing all of the mechanical and sync licenses according to a pre-set fee structure for a particular composer’s catalog, why would that composer need a publisher? After all, the agency is presumably already taking some sort of fee for its role in the process. Why would a songwriter also give a publisher a 25% share of the income for the next 15 or 30 years? To do what? In a more precise example—if the whole music licensing world worked in roughly the same way as ASCAP and BMI do with performing rights, would future songwriters have any real need for a publisher?

Skeptical music weasel that I am, I don’t anticipate that the NMPA membership will be rushing out immediately to champion the cause for blanket licensing. Still, realist that I am—it’s probably worthwhile for those in the publishing game to take a glance at the inevitable and ask, in our customarily self-interested way:

What does this mean to us?

Three quick things to ponder, as our livelihood passes before our eyes:

1. Age before beauty.
The older publishing catalogs, particularly those built in the Fifties, Sixties and even Seventies, when you could still manage to obtain a full-publishing share for life of copyright , are looking even better. They won’t be doing deals like that no more.

2. Quantity over quality.
It’s hard to see how a blanket licensing system will not in some way reduce the viability of building a successful business around a few isolated “big copyrights”. While the sync fees may come down for any one individual copyright, the theory is that the money will be made up in volume. It may well be true, but it’s a system that favors the major publishers, who own thousands of licensable songs, rather than a small independent with one classic in the catalog.

3. The end of the paper tiger.
If licensing problems disappear, administration is no longer a service for which songwriters will pay. That means it’s all about advances (as if it weren’t already) and creative services. Songwriters may still need a bank, at least to keep them alive in the early stages of their career. They may also still need someone to help them jump-start their career and keep it moving—pitching songs, setting up collaborations, and finding opportunities for their music. At least, I hope they will.

Otherwise I’m going back to my consulting business.

Follow me on Twitter @EricBeall

Tomorrow's Forecast

Jun 22 2011

Today was a strange day in NYC —not quite sunny, but not giving in to rain either. The skies were in constant motion, drifting from lightly overcast to grey and ominous to hazy and hopeful in a constant cycle that never seemed to reach a culmination.

It’s not unlike the music business these days. No doubt there are some dark and weighty issues hanging over us, including the massive restructuring (or lack thereof) of the major music corporations, the budding crisis at the PROs and HFA, and our continuing inability to sell music, except when we essentially give it away at 80% off. Still, the mood among the weasels is noticeably brighter these days, and it’s not only due to the promise of a summer weekend with Lyor in the Hamptons. It’s as if those dark grey clouds have lifted a bit, and have been replaced by clouds of the whiter, puffier sort. Clouds that look a lot like an iCloud.

Negotiating season is over, and for once a new music technology is being brought to consumers with the blessing of the music industry—we’ve not been blindsided, ignored, or misled. Or at least we don’t know it yet. In fact, for the first time in decades, the music industry and the publishing business in particular acquitted themselves quite nicely at the bargaining table, not sticking in the fork to gouge a promising innovation but not settling for table scraps either. Maybe ten years of trouble has taught us something. No one wants to mess up what might be the last great hope for the music business.

Of course, at the moment, it is indeed a matter of hope. On the positive side, a partner like Apple certainly instills some confidence. Since the inception of iTunes, they’ve managed to consistently comprehend the way the modern consumer wants to listen to music, and to provide the best, most stylish, and most iconic technology to meet that need, in a way that music companies, including technology giants like Sony, have not.

At the same time, it remains to be seen how much of that genius stemmed directly from Steve Jobs, and how much will endure now that he is no longer an active presence in the company. I’m sure I’m not the only one to at least ponder why someone who refuses to pay even 99 cents for a legal download will pay $25 a year for a music locker, in which to store the contraband. But like the rest of the publishers, labels, artists and songwriters that have suffered through a decade of downloading and file-sharing, I sure hope they do.

In fact, one of the best aspects of the new licensing agreements between labels, publishers, and Apple is the chance to actually monetize, in retrospect, much of the music that has been pilfered in the past. With iCloud, Apple is charging $25 a year to scan and match a user’s existing music collection for songs not purchased from iTunes against the iTunes library—users will then be able to redownload up to 25,000 tracks to those same devices. With labels and pubs actually getting significant share of that $25 fee, this is a chance to recover at least part of what we missed the first time around. Life does not offer many such second chances.

Even better, the technology of the cloud allows true, verifiable accountings of what is being purchased, using iTunes Match to monitor what each individual consumer is putting into their locker. Unlike radio monitoring at the PROs, which is an error-ridden exercise inevitably weighted toward the mainstream pop playlists and the major publishers who represent the bulk of those writers, or the questionable system of divvying up the pots of gold netted in settlements with YouTube, Napster and the like, the accounting practices of iCloud should allow for a reasonably transparent system. While Apple has yet to lock in deals with the indie record companies and independent publishers, they have said that they will offer independent publishers the same percentage as is received by the major publishers who have signed on. Happily, the deal structure that’s in place would seem to be capable of getting everyone a piece of the pie.

Most importantly, unlike previous deals with companies like YouTube, we might be getting a share of a pie that’s actually large enough to mean something. Under the current agreement, the revenue from iCloud will be split with 30% going to Apple, 58% to record companies, and 12% to the publishers (and songwriters). For publishers and songwriters, that’s a big raise from the .091 cent per unit statutory mechanical rate—and most of us haven’t been seeing full stat rate on a consistent basis for a long, long time.

David Israelite

On the songwriter and publishing side, much of the credit for wrangling a more equitable split of the money goes to David Israelite, the president and CEO of the National Music Publishers Association. Easily the savviest of those trade group lobbyist/media spokesperson/diplomat/enforcers who’ve become the real champions of the music industry while the label presidents and publishing chiefs have been busy moving offices, schmoozing with hedge fund managers, and judging TV talent shows, Israelite was not directly a part of the iCloud negotiations. But according to Greg Sandoval’s insightful article in CNET News, Israelite was key in encouraging the publishing community to put some steel in their all too flexible spines. It’s a little like telling Charlie Brown, the perpetual loser, to man up and kick the ball. But lo and behold, it seems to have worked.

http://news.cnet.com/8301-31001_3-20071823-261/apple-google-music-clouds-can’t-snub-publishers/

Now, we can only hope that the publishing powers that be will also listen to Israelite’s advice about the essential need to streamline the process of licensing. Tech services have been demanding this for years, and every person that labors in the publishing community on a daily basis knows that the system as it currently exists is entirely dysfunctional. It doesn’t work for the new technology services, it doesn’t work for the old ones, it doesn’t work for the publishers themselves, and it certainly doesn’t work for the songwriters. If you want a peek at how bad it is, check out my blog “Life In The Slow Lane”:

http://ericbeall.berkleemusicblogs.com/2010/08/12/life-in-the-slow-lane/

But with the prospect of clouds on the horizon, publishers are going to have to sacrifice a certain level of independence in order to make sure that this new technology can be successful. The ability to access all music all the time without restrictions is a key factor in winning over the public to a format that could be the miracle cure for our business. We simply can’t afford to cling to our old system of clearing songs writer by co-writer, publisher by co-publisher, territory by territory around the world. No one has been a more outspoken advocate for the rights of publishers and writers than Israelite. But even he realizes that now is the moment to seize the initiative.

For the first time in a very long while, music publishers are in the drivers seat, but we have to keep the motor running. As we’ve already seen with YouTube, technology will move ahead with or without us. If people can’t get what they want legally, they will simply find another way. It’s up to us to create a centralized, global, uniform licensing system. If we can provide that, we are in a position to leave behind a mechanical royalty rate that even at its best was wildly weighted in favor of the record labels.

The current deal with Apple is a good one, and any competing service is going to have to match or better it in order to get in the game. Moreover, no one can win this game unless they have access to all our songs—old, new, hits, misses, and obscure album cuts.

All we have to do is go back to making music that matters to an audience, and figure out a quick way to make it available to them. The opportunity is there. As any kid who’s ever stared into the sky could tell us, clouds are what you make of them. If we make the necessary changes in the licensing process, they could bring an end to the longest drought of our lives. But there has to be something to put inside them. The cloud without our music is just that – an empty, substance-less piece of dead air. It’s up to us to make it rain.

Follow me on Twitter @EricBeall

Looking Out For #1

May 08 2011

It’s remarkable how quick that warm and fuzzy feeling fades. Just last week the music weasels were gathered together at the ASCAP Awards, toasting EMI’s continued reign as Publisher of the Year. Well, okay… actually everyone was grumbling and sniping behind their back, and of course, chortling over their imminent sale. It’s a music awards dinner after all. You can only expect so much goodwill.

EMI Wins ASCAP's Publisher of the Year

Still, not too many foresaw that Publisher #1 would turn around a week later and publicly give the finger to ASCAP, and the songwriter and publisher community they represent. I suspect Marty Bandier at Sony ATV might get the front and center table next year, rather than Roger Faxon. Not that much of EMI will necessarily be around to see it.

Earlier this week, EMI Music Publishing made news by announcing that EMI would be taking back from ASCAP the responsibility for licensing digital rights in North America– EMI will now be able to “bundle” their rights together (mechanical, performance, and synchronization) and license them all directly, negotiating their own rates and terms, to digital services, rather than allowing ASCAP to negotiate and licensing the performing rights. In one sense, it’s a step closer to the “one-stop” licensing long-sought by digital services and many in the music community.

Roger Faxon

“The digital world demands a new way of licensing rights in musical compositions”, said EMI Music Publishing Chairman & CEO Roger Faxon. “We are reunifying the rights in many of the songs that we represent. By bringing these rights back together our aim is to reduce the burden of licensing, to create greater efficiency and importantly to reduce the barriers to the development of innovative new services.” Oh. And I thought it was just one more attempt to undercut the competition and cut out the middleman.

Of course, it might be some of that as well. While the ASCAP contract with publishers generally grants the PRO an exclusive right to represent the performance rights of the member’s catalog, even ASCAP CEO John LoFrumento acknowledges that “our members have always had the right under our Consent Decree to license their works directly”. Historically, most publishers have not chosen to do so– believing that the collective power of ASCAP (and BMI) allows them to negotiate more favorable licensing terms with radio, television, nightclubs and the rest of the music users than any one publisher could achieve on their own. Apparently, that’s no longer the case.

You heard it here first– this topic was brought up several months ago in this blog-space, in “With Friends Like These”. That missive explored the policy of DMX, the custom music service, which encourages music owners to license to them directly, rather than through the PROs. Of course, the money at stake from Muzak-type uses with companies like DMX is dwarfed by the monetary potential of digital rights. A publisher licensing DMX directly is someone breaking off a piece of crust from the pie that is PRO performance income. Taking away digital rights is like someone sticking their grubby hand in and walking off with a fistful of PRO pie.

http://www.ericbeall.com/with-friends-like-these/

ASCAP quickly sought to put a good face on the whole matter, even sending out a letter to members several days after the announcement– most likely to quell a quiet panic spreading among other publishers. Emphasizing that EMI continued to use ASCAP to license and collect on uses at traditional media, like radio and television, LoFrumento explained:

“A changing licensing environment has led certain members to experiment with licensing defined categories of music directly. This only involves the performing rights for those online music users who are not currently licensed or do not have licenses in effect with ASCAP. The online dollars represented by this licensing alternative could amount to less than 1% of ASCAP’s total current revenue.”

John LoFrumento

A generous statement from the little guy who just got sand kicked in his face by the big bully. But it purposely evades the point. As the undeniable industry leader in the publishing world, EMI’s decision to go it alone has an impact much beyond the actual dollar value of what it will be taking out of ASCAP coffers. Most importantly, it undermines the entire “strength in numbers” principle that justifies the existence of the PROs. If ASCAP can no longer speak for EMI, which has a larger share of the most popular songs than any other publisher (hence their status as Publisher of the Year), how effective can the PRO be at negotiating licensing terms with the digital community.

It also potentially weakens ASCAP in relation to BMI– strangely, no announcement was made as to whether or not EMI would also be taking digital rights away from BMI. It would seem very odd if EMI did not take the same action at BMI and SESAC. If the goal is to bundle rights, then certainly you want to bundle all of the catalog, not just a portion. I suspect that if BMI manages to hold on to what ASCAP has lost, it will have been by making a massive, unmentioned cash advance to bolster EMI’s shaky financial picture. This highlights the other big problem of the moment at ASCAP, which is BMI’s willingness to dole out mega- advances to major writers and publishers– a game in which ASCAP is hard-pressed to compete.

Needless to say, it all comes down to money. Despite Faxon’s media-ready press statement, this action has very little to do with easing the licensing process or encouraging new services. In fact, the licensing process would seem to have just gotten a whole lot more confusing, given that almost no current contemporary hits are entirely controlled by EMI April Music. Instead, most could easily have seven or eight different writers and publishers, all represented by some combination of ASCAP, BMI or SESAC– except for EMI April Music, which will be off on its own. That should be very simple. This EMI move is really about:

1. Eliminating the middle man.
On the most straightforward level, this move is not much different from the whole DMX idea– one less organization taking a cut of the money. While ASCAP’s fees are relatively low, they add up, especially when your company is bankrupt and up for sale. While ASCAP and most of its supporters would not paint the organization as a “middleman”, but rather an advocate and a representative in the collective bargaining process, the portrait of the unnecessary, fee-grabbing, intermediary is one that the technology community has been painting for the PROs over the past ten years. According to many in the digital community, there would be more uses of music, they could pay higher rates, and we’d all be making more money without these outdated organizations. Hmm. And the auto workers would do better without the UAW. We’ll see soon enough, I expect.

2. Screwing your buddy.
Unity in the face of opposition has never been standard operating procedure in the music biz. From the vantage point of the giant companies that dominate the landscape of music publishing, the downside of the PROs is that they even the playing field. Small publishers benefit from the clout of huge catalogs like EMI, while those same huge catalogs pay most of the cost of maintaining the organization. Being free of ASCAP allows EMI to negotiate rates on its own. In fact, it may have been the dismal state of the current negotiations at the CRB (Copyright Royalty Board) that prompted this move by Faxon. EMI could feel it can negotiate more effectively alone. At the very least, it can use the new independence to undercut the competition when it’s advantageous to do so, and to over-charge where it sees an opportunity. And what about the small independent companies? Well, they can always sell their companies to EMI.

3. Being the first rat off the sinking ship.
The real reason that the EMI move has resonated so heavily in the pub world is that it’s the first undeniable evidence of the elephant who has been lurking in the room for several years. Virtually all of the licensing and collection organizations around the world are houses of cards that will have to withstand some very big approaching storms. Dwindling mechanical royalties and exploding paperwork demands have left HFA in a very precarious position. Performance income has remained stronger, but now that looks poised to take a significant dip as well. Couple that with the pressure to make imprudently aggressive advances to top new writers and you’ve got the recipe for disaster at the PROs. All it will take is for one or two more major companies to follow EMI’s lead before that sinking feeling begins. The big guys will swim for shore and the little companies will be left behind with less influence, lower income and rapidly escalating fees.

According to ASCAP, this step by EMI is no big deal. And indeed, it may not last very long, given that the management team of EMI can measure their future with a stopwatch. It’s perfectly likely that ASCAP will be holding its awards show next year without Roger Faxon, who may be floating around outside the Renaissance from a golden parachute. But the first shot of the battle has been fired, everyone’s seen it, and everyone will react to it. There’s no taking it back.

Despite all the accolades and warm words at last week’s Awards, the truth is that the creative community that ASCAP has represented for 100 years barely exists anymore. It’s just a ballroom full of independent contractors of A&R services, speculators, investors, and hedge fund managers all in it for a quick buck before the final buzzer sounds.

Can’t wait until the BMI Awards in May.

If The Shmoo Fits…

Mar 23 2011

In case you’re lying awake at night dreaming of being the next Rebecca Black (and really, who isn’t?), you might want to read a little further before you equate fame, which is cheap and getting cheaper, and fortune, which is ever more hard to come by. Just last week, the Copyright Royalty Board released the statutory royalty rates for Internet radio royalties, which are royalties paid by webcasters for the streaming of sound recordings. It’s not exactly the pot of gold at the end of the rainbow. At the same time, it’s actually a step forward from where we were several years ago.

To be fair, YouTube is not one of the services covered by these royalty rates (although YouTube’s rates are not much better). The published rates apply to “noninteractive streaming”, which refers to streams that do not allow the listener to specifically select each individual track– it covers everything from radio-like “broadcasts” to what are termed “pureplay’ webcasters like Pandora. And more importantly, these rates are for royalties paid through Sound Exchange to performers on the “sound recording”– that’s in addition to the royalties paid to music publishers and songwriters, through ASCAP, BMI and SESAC. If you are a performer who writes and publishes his or her own music, you should receive royalties from Sound Exchange (representing your earnings as a musician and/or owner of the sound recording) and from ASCAP, BMI or SESAC (who collect your money as the composer and publisher of the song).

Like most agreements that are the result of hundreds of negotiating hours between attorneys, the basis for the rates is almost entirely incomprehensible. There is a distinction between broadcasters (commercial radio stations for example) who are streaming their programming on the Internet and “pureplay” webcasters like Pandora, who do not have a broadcast component to their business. There are exceptions for small services that can’t afford the agreed upon rates as well as noncommercial services. NPR gets its own special deal. Then we get to do the negotiations all over again in 2015. Still, it’s worth at least getting a rough idea of what your music earns for you, as a performer, when it shows up on an Internet stream. To get the full story, check out:

http://www.broadcastlawblog.com/2011/03/articles/internet-radio/final-webcasting-royalty-rates-published-a-comparison-of-how-much-various-services-pay/

Here’s the basic breakdown for 2011:

Broadcasters Per Performance Royalties:
$.0017 per performance

Statutory Webcasting
$.0019 per performance

Pureplay Webcasting
.00102 per performance

I know…. it’s alot of zeroes before you even get to the decimal point. You read correctly: it’s significantly less than one cent per performance. Ouch.

But keep in mind that this number is multiplied by the number of people listening to the stream. Therefore, a “pureplay” service offering 10 songs an hour to 1000 listeners would be paying a royalty of $10.20 per hour– or about a dollar per song. That’s not so bad, especially if you’re talking about a lot more than 1000 listeners.

Indeed, before we start complaining about the rates, it’s worth noting that performers are still fighting (after only about 80 years) to receive any royalties at all for use of their music on commercial radio. While songwriters and publishers receive performance income from the use of the songs in a radio broadcast, record labels and artists receive nothing, except that all important “exposure”. Which leads me to my real point…

Why is it that songwriters, publishers, labels and performers always seem to find themselves begging and pleading for a small crumb from the pie when it comes to every new media invention throughout history?

It happened with radio. In fact, it’s still happening with radio. Since the 1930′s, writers and publishers have been battling for what amounts to a tiny percentage of the overall profits from commercial broadcasting, when virtually every radio format in existence (except news, talk and traffic) is entirely built on music! And performers still haven’t managed to get anything at all.

It happened again in the 1980′s with MTV. Here was a television network built entirely on music, that paid nothing for the music videos upon which the channel relied. Today, the videos are in short supply, but MTV continues to pay almost nothing in synchronization fees for the music that it uses throughout shows like “The Hills”, “Gossip Girls” and “Jersey Shore”.

Then it happened yet again with YouTube in the last decade. In a virtual replay of the MTV story, the creators of YouTube constructed an Internet broadcasting network fundamentally based on the illegal, unlicensed use of any and all music, then sold the enterprise off to Google for a billion dollars, never having paid a nickel to OK Go, Soulja Boy, or any of the other YouTube phenoms who brought the company most of its biggest stories. Since then, Google has adapted a more acceptable position in regards to royalties, and YouTube is licensed by the PROs. However, as any songwriter or artist will tell you, the money being generated for the creative community is more symbolic than substantive.

OK Go

When a problem keeps occurring over and over, it’s usually worth considering whether YOU might be doing something wrong. Sooner or later, the music community– labels, publishers, songwriters, artists, producers and musicians– is going to have to take off the headphones and step away from the control board, or duck out of the board meeting, or skip the after-party and take a few minutes to ponder:

Why do we keep getting screwed by the people building businesses around the music we create?

Here are three quick explanations of why the music business seem to continually find ourselves desperately, hopelessly passing the bucket around the media industry, hoping someone drops in some spare change:

1. We are incapable of acting in concert.

We can make concerts all right. But labels, publishers, artists and musicians can never manage to act “in concert”– that is to say, as a unified front capable of fighting for the rights of everyone in the industry. Publishers distrust labels. Labels take advantage of the artists. Artists desperately undercut one another, hoping to grab an opportunity to set themselves apart from the pack. Now we even have the problem of publishers and songwriters going around ASCAP,BMI, and HFA to license directly, effectively damaging their own representatives in the collective bargaining process, all in order to save a few percentage points worth of fees. Not surprisingly, everyone in the media, from advertisers, to networks, to film studios and Muzak programmers, have realized that there is always someone willing to license their music for next to nothing, or at least less than their buddy is charging. We are, by and large, an industry of weasels, and it’s not helping our cause.

2. We forever believe in the myth of “exposure”.

I remember when I first started playing the guitar, back in grade school. Soon I had formed a band, and even at that young age, I quickly realized: everyone always has a party, a dance, a wedding or a bar mitzvah that they want you to play for free– “because it will be great exposure”. Of course, it’s not entirely untrue. Clearly, OK Go got plenty of benefit from their “free” YouTube video, as has Rebecca Black. But as a business model, the idea of giving away the product to another company who then keeps all the money that your product generates has not panned out very well for us.

In perhaps the greatest irony of all, the music industry actually winds up paying out huge amounts of money to radio (and back in the day, to MTV) in order to get those media outlets to use their music for free. It’s not just that we’re giving it away for nothing. We’re actually begging, pleading, and paying out the nose just to be able to give it away. Meanwhile, someone else is building their Clear Channel, or MTV or YouTube, largely from people tuning in to hear our product. And the more people that tune in, the more someone else earns, while we get nothing. But don’t worry. It’s great exposure.

3. We continue to focus solely on creating music, rather than selling it or marketing it.
Why was it Apple, rather than Sony for instance, who created the iPod, and iTunes? Why didn’t the major record labels, having already learned about the power of music videos from all the “exposure” they got from MTV, come up with YouTube? Why couldn’t a music publisher have invented Pandora? Instead of battling endlessly with the corporations who control these ventures, none of which have any inherent investment in music, the industry could actually control and profit from the medium it uses to promote and disseminate its product to the public. Instead of passing the bucket around after the set, the musicians could actually own the club.

It never happens. The history of the music business is the story of one fatal flaw, and that is the inability to think beyond the music itself, to how the public wants to receive that music. We’re creators and owners of content. But we’re never interested in thinking about how that content could be used.

Doug Morris

A few years ago, Doug Morris, then the head of Universal Music, gave a widely publicized interview with Wired magazine– where he bemoaned the effects of the digital revolution, and complained that everyone was treating the record industry like “The Shmoo”:

“There was a cartoon character years ago called the Shmoo. It was in Li’l Abner. The Shmoo was a nice animal, a nice fella, but if you were hungry, you cut off a piece of him and put onions on it, and if you wanted to play football you just made him like a football. You could do anything to him. That’s what was happening to the music business. Everyone was treating the music business like it was a Shmoo.”

Acknowledging that his lack of knowledge in regards to technology made it difficult even to hire the necessary experts, Morris insisted that his job should solely be finding and developing new artists.

“There’s no one in the record company that’s a technologist. That’s a misconception writers make all the time, that the record industry missed this. They didn’t. They just didn’t know what to do. It’s like if you were suddenly asked to operate on your dog to remove his kidney. What would you do?”

Given an attitude like that, it does seem a little surprising that Morris would be the choice of Sony (didn’t they use to be a technology company? ) to revitalize their music division in the year 2011. But of course, that’s exactly the problem. We’re so used to being the Shmoo, we couldn’t possibly think of doing anything else. It might be wise for musicians and performers to keep their calculators handy. Because we’re going to have to continue to live off royalty rates like $.00102 per play for some time to come.

Never Can Say Goodbye

Mar 09 2011

A night in the life of a Music Business Weasel:

After many broken promises and lame excuses, I finally make it to the showcase performance of a friend of mine. Miraculously, I arrive early, and the band is just starting to set up. Not wanting to do the usual “stand by the bar with arms folded” A&R routine, I try to be supportive by taking a seat up front– at the far end of the stage, right in the front row. I’m a little surprised by the fact that I don’t see any familiar faces in the audience. After all, the artist and I have been friends for a decade or more. We usually have quite a few acquaintances in common. But it seems she’s attracting a new audience these days. Also seems that she has an entirely new band, with all new instrumentation. No wonder she was so eager for me to catch the show.

A few minutes before the show, the club has filled up– still no sign of anyone I recognize. It’s only when the band finally takes the stage that I realize:

This is not my friend.

I check my blackberry… and realize I’ve shown up in the right place, but on the wrong night. My friend is not playing tonight. She’s playing next week. This is problem #1.

But it’s really problem #2 that is the most serious and urgent matter. I’m stuck. By sitting in front of the stage, on the side furthest from the door, I have absolutely no way out of this club. My only choice is to stand up in the middle of the set, in front of the whole audience, and walk out, tripping over people all the way across the room. This is an option I do indeed contemplate, as the band is bad. Very bad.

Nevertheless, I persevere Only an hour later am I freed from this hell to make my escape. Having wasted an evening, I return home and spend the next few hours contemplating immediate retirement.

Here’s the point: in the music business, you always need an escape route. Finding your way into situations is a great thing– but sometimes it’s just as essential to find a way out of them.

When negotiating publishing deals, it always surprises me how much time songwriters and attorneys will put into bartering over things like bonus payments (which almost inevitably never actually come into play) and how little attention they pay to what happens at the end of the deal, when the company either runs out of option periods, or elects not to pick up the contract for another year. This is a crucial period, and a smooth exit strategy is essential in order for a songwriter to be able to retake control of his or her catalog, or to move on to a new deal with another company. If you’ve reached the end of the line with your current publisher, or if you’re in the midst of entering into a new relationship, here are four things to ask:

1. How long can we go on like this?

In the world of publishing contracts, one “contract period” does not necessarily equal a year. A publishing deal with two option periods does not necessarily end at the end of the second option period. In this land of legalese, things are not always what they seem.

Some contracts are actually built on periods that will last a calendar year. But most agreements today are built on a “contract period” that will last a minimum of one year, but could stretch into multiple years depending on whether or not a certain number of songs have been delivered, a certain number of exploitations have been obtained, or a certain level of recoupment has been reached (that is, the earning back of whatever was paid as an advance to the writer).

I have seen instances where songwriters have spent five or six years in the first “contract period” of their deal, trying to hit a Minimum Delivery Requirement or Minimum Release Requirement that was completely beyond their reach. This can literally be a career-ending situation, as writers are forced to live year after year off that first period advance, with no hope of receiving another payment until they obtain a certain amount of placements.

2. Whaddya want from me?

So let’s talk about that Minimum Delivery and Minimum Release requirement. These two clauses are at the heart of most “break-up” problems between writer & publisher. A Minimum Delivery Requirement is usually not a big threat– it’s a fairly standard clause that requires a songwriter to hand in certain amount of new songs (usually 8-12) per “contract period”. But be sure to do the math! If you co-write a song with one other songwriter, and split the ownership down the middle, then you control only 50% of a song, and only that number is credited toward your Minimum Commitment. So if you always write with two other writers, and split things evenly, you will have to write 30 songs in order to hit a 10 song delivery requirement. It gets worse…

The Minimum Release Requirement is by far the more dangerous of these two clauses. While the Delivery Requirement only applies to turning in “acceptable” songs to the publisher, the Release Requirement is based on having a certain number of songs (anywhere from 3 to 7, or even 10) on “commercially released albums”. This is often made even more onerous by restrictions that stipulate that a “commercial release” must be on a major label, must be released in the US, and can not include soundtrack albums or compilations. I’ve even seen requirements that say that no more than two songs on any one album can count toward the Minimum Release Requirement.

The problem here is that songwriters generally have almost no control over release schedules or circumstances. Songs get dropped off of albums at the last minute; album releases are delayed; albums are released in Europe months before they’re released in America; songs are held off of one album and saved for a subsequent release. Personally, I hate the Minimum Release Requirement. It’s simply too dangerous for writers, precisely because it leaves them with almost no escape hatch. Nevertheless, such clauses are very common, especially on deals with relatively large up-front advances. Despite what an attorney (who is often basing his or her fee on the size of the advance) might tell you, if you can take less money upfront in exchange for no Minimum Release Requirement– do it.

3. When do I get my life back?

Reversions differ widely from contract to contract, with a “life of copyright” deal (once the standard in music publishing, but far less common now) being at the far end of one side of the spectrum, and the Kobalt-style “administration” model, with all of the writer’s catalog reverting at the writer’s request within a matter of months being at the other side. A more standard agreement might provide for the publisher to retain for 15-20 years any songs “exploited” during the term of the contract, while “unexploited” songs will revert back immediately upon termination, or within three years, provided all advances have been recouped.

It’s very important that writers are aware of the reversion terms in their contracts, as there is often a window of time in which the writer must reclaim the song, or else allow the publisher to keep it for life of copyright, or at least the 15-20 year period. To miss such an opportunity to reclaim a song, especially one earning money, can be a very expensive mistake.

When a publishing contract has run it’s course, it’s imperative for songwriters or their attorney to furnish to the publisher a Schedule clarifying all of the songs submitted in order to meet the terms of the agreement, listing any exploitations of the songs, and identifying the dates upon which the various songs will be reverting back to the writers. Which leads me to the final point…

4. Take a letter, Maria….

Reversions are only helpful to the extent that you can get written notice from the publisher that the songs have reverted back to you, and that the publisher will relinquish their rights in registrations at ASCAP, HFA, or BMI. This is the key concern that actually triggered this blog.

Particularly in these days, when small publishers are disappearing faster than Arab dictators, when mid-level and even large companies are being swallowed whole by new hedge-fund back acquisition firms, and many of the biggest players appear to be in the game only long enough to acquire some assets and immediately sell them to someone else, songwriters need some protection.

I recommend a clause in the contract requiring that upon the completion of the final contract period, the Publisher will provide Writer with a letter and a schedule of all songs handed in during the term of the agreement. The letter should state the date upon which the agreement ended, acknowledge the dates upon which the various songs on the schedule will revert back to the writer, and relinquish any claim to the songs that revert immediately. Publisher should also be required, within a designated window of time, to provide all necessary Quit Claims or other documents in order to facilitate changes in registrations, and to cause the Publisher’s foreign affiliates to do the same.

Imagine you are a songwriter signed to a publisher which is swallowed up in a giant corporate merger, or goes out of business entirely. Two months later, your contract period is up, and no one calls to exercise the option for the next period. Technically-speaking, you are out of your deal. You can pursue new opportunities and perhaps reclaim at least some of the songs from your catalog.

But how can you do that if no one at your former publisher will pick up the phone at the office? Or if there is no one at the office who knows anything about you or your deal? No one at ASCAP or BMI can change a registration without a letter from the company currently claiming control of the rights. You can’t make a new publishing deal, because most publishers will also want notification from a former publisher that your previous contract truly is over, and that there will not be any claims that one of the new songs was written during the previous term. You need to be sure that the failure by Publisher to provide a letter or notice of the completion of the deal is considered a “breach” of contract.

No one likes to talk about endings at the beginning. But in days where many people who are with you at the start of the game will have been ousted, purchased, fired or arrested before you reach the finale, you have to know what happens when the music stops. Relationships ain’t what they used to be– even in music publishing.

When I worked at Sony ATV several years ago, the Sr. Vice-President of the Nashville office, Woody Bomar, was legendary for his ability to skip out of cocktail parties undetected. He would show up, make his rounds, greet everyone warmly and make sure that everyone who needed to see him was aware that he was in the house. Then like a flash, he would duck into a back room, a stairwell, a kitchen or a hallway and suddenly he was gone. When latecomers inquired about him, everyone would say “Oh yea– Woody’s definitely here. I just saw him. I think he’s over in the corner there…” By that time, Woody was already on to the next event. He knew every back door or fire exit in Nashville. That’s a pro for you.

Don’t go in, until you know how you’re getting out. Every deal deserves a happy ending.

Sometimes tough times breed a certain sense of solidarity among those suffering together, creating a sense of unity and a determination to stick together for the good of all. The English in World War II come to mind. Sadly, one seems to have to go back in history a bit for such tales of shared sacrifice in the name of a common interest.

On other occasions, economic or physical hardship can lead to a desperate willingness to do anything and everything, including dining on the bones of your buddies, if that’s what it takes to survive. Try throwing a tiny scrap of meat to a group of hungry lions, then watch the carnage ensue. Or just turn your eyes to the 21st century music industry, and watch the weasels beg, borrow or steal from each other, in a desperate grab for a piece of their quickly-shrinking pie. Not pretty.

Of course, it’s not surprising, either. As much of the formal structure of the music business evaporates (including such small structural details as “creator makes music; listener purchases music”), the large players begin to fall apart, and the whole playing field becomes increasingly populated by individual entrepreneurs trying to fight their way through the crowd, it’s only natural that an “every man (or woman) for himself” mentality takes over. We’re all just trying to make a living after all. Nevertheless, there is a real danger for the creative community, when we begin to undermine any effort to act collectively in advancing our own economic interests.

Needless to say, the people who use music, whether in advertising, on records, in television shows or in bars and restaurants, have noticed the growing levels of economic desperation among those who write songs and publish them. They’ve also noted that there is more than enough music to go around. Consequently, we’re beginning to see efforts by those who request music licenses to circumvent the collective organizations that have represented American songwriters for decades. Why license songs through Harry Fox, ASCAP, BMI or SESAC when you can go directly to the songwriters and publishers? Those using music as part of their business can negotiate directly with the music creators, eliminating the middleman and all the bloated overheads of those admittedly bureaucratic organizations. In some cases, they may actually increase the amount of money going directly to the copyright owners.

This issue came to mind recently when I heard about the licensing policies of DMX, a music programming service that has emerged as one of the chief designers and suppliers of music to a variety of different venues, including retailers, bars and restaurants, hotels, and airlines.

www.dmx.com

Traditionally, companies like DMX function in much the same way as commercial broadcasters, obtaining blanket licenses from ASCAP, BMI and SESAC which allow them to use any and all the music represented by those organizations in return for an annual fee, which is negotiated by each of the performance rights organizations. Those fees are collected by the PROs, and divided among their members (the songwriters and publishers) based on which songs are being used most often. Clearly, it’s not a perfect or even remotely precise system, which partly explains why DMX is so eager to offer publishers an alternative.

Rather than licensing through the PRO’s, DMX encourages publishers to issue direct licenses to DMX, in which DMX will have access to all of the songs in the publisher’s catalog (or in an individual songwriter’s catalog) and will pay the songwriters and publishers directly, rather than through a performance right organization. At first glance, it seems a pretty good deal. What writer or publisher wouldn’t want their music played in public venues? Why wouldn’t the payments for those uses be higher if ASCAP or BMI weren’t taking their fee off the top?

All true. By most accounts, DMX pays more money with greater accuracy for these music uses than the PROs. The truth is that BMI and ASCAP have never managed to pay more than a tiny dribble of money for this particular type of public performance. In fact, DMX also has “blanket licenses” with the PROs, in order to allow the company to use music that the individual publishers or songwriters might not be willing to license directly. Presently, writers and publishers have a choice: to license and collect directly through DMX, or to simply collect through the traditional blanket licensing system of the PROs.

So why would any publisher elect to receive less money, less efficiently? It all comes down to a sad, but simple reality:

No one lives at the top of the charts all of the time. Unless of course they’re Dr. Luke or Stargate, and even they have to cool down eventually. By requiring radio stations, television stations, and yes, companies like DMX, to take out “blanket licenses”, the PROs have been able to use their strongest songs and members as the basis for negotiating licensing rates that benefit all of their members. In order to have access to the biggest classic songs and contemporary hits, companies like DMX have to pay a fee that can then be shared with the songwriter who had only one big song, or the small publisher who has some golden oldies, but not much else. The power of a few hit-makers is leveraged to benefit the whole music community. Given the realities of the music business (in any era), most of us will find ourselves at both ends of the spectrum, from stars to starving, at different times in our careers.

Call me a cynical old music business weasel (you won’t be the first one to do it), but my instinct is that companies like DMX, or those insisting on receiving direct mechanical licenses rather than going through Harry Fox are not acting out of a general beneficence toward songwriters and music publishers. They are seeing an opportunity to undermine the organizations that license, collect, audit, lobby politicians and pursue legal action on behalf of songwriters and publishers, large and small. Even if they have to offer to pay a bit more money in the short-term, if these music users can eliminate the pillars of the creative community, then all the rules of the game can be changed at will. Each songwriter and individual publisher will be left to fend for themselves, based on the value and desirability of their particular catalog at any particular time.

We all like to see our music used, and we all benefit by those who help place the music in public venues. But think twice about issuing direct licenses to companies like this. These people are not your friends.

Sadly, there are two sides to this story, and the flip side is not so pretty either. If we’re going to be cynical about the motives of those outside of the creative community, we have to bring a little of the same skepticism about the motives of some of those working on our behalf. There are some ugly secrets at ASCAP and BMI that need to be exposed—more on that next week. If one is looking for heroes, the music biz in decline is not the place to find them.

Still, a little perspective is in order. Songwriters in the 21st century are far better off than those in the 19th. American songwriters are far better off than those in countries without strong PROs. The principle of collective bargaining power is a large reason why. Just because times get tough, we might want to think twice about killing off our old friends on behalf of some new ones.

Having spent the first fifteen years of my professional career as a songwriter and record producer, the truth is that I had never worked a day in an office environment prior to taking a job as Creative Director at Zomba Music Publishing, back in the late 1990’s. I had a lot to learn. Not just in regards to music publishing, but also when it came to some practical things, like transferring phone calls, running the fax and copy machines, and the basic realities of office life.

Those realities included the sudden significance of certain dates on the calendar. President’s Day, for instance, is not a holiday recognized by most musicians and songwriters– but if you work in an office, it’s sacred. Another example would be the 30th of March and the 30th of September— these are the times you are virtually guaranteed a chance for a face to face meeting with songwriters who have never found the time to stop by the office previously. They can be found hovering like migrating birds outside of the office of the accounting department, waiting to pick up their royalty statements in person on their way to the nearest bank.

But the truly dangerous dates for a music publisher are the Tuesdays following a holiday break—these are red-letter days on any Creative Director’s calendar. This is because, having been afforded several days of quiet contemplation, every songwriter on a publisher’s roster will have taken the opportunity to reassess his or her career strategy, and compile a list of things to do to get things back on track.

Item #1: Call my publisher.

These “morning after holiday” calls start to stack up by 10am, with one writer after another looking for a half-hour to discuss what’s happening with each song in the catalog, why he or she isn’t getting more cuts, and how can Dr. Luke have every song in the Top Ten all summer long? Being the experienced music business weasel that I am, I’ve learned to schedule my holidays to extend one week later, thus escaping the post-vacation barrage.

All that to say, I’m finally back in the office, having had my own time of reflection and recuperation from a summer that was more resourceful than restful. For yours truly, the summer of 2010 marked a return to Music Publishing 101, and a chance to re-learn, re-imagine, re-assess, and re-write the course that I authored for Berkleemusic.com almost eight years ago. This summer marked the launch of the newly revamped Music Publishing 101, which has been expanded and updated to reflect all of the changes in the music business over the past few years, as well as to offer students more resources, more advice from a variety of industry experts, and a more global perspective on a segment of the industry that is emerging as the last, best hope of the music business.

As those readers who have taken the course know, Music Publishing 101 is directed toward aspiring songwriters, who are hoping to construct their own music publishing company, most often to support their own work as a songwriter. That idea stems directly from my book, Making Music Make Money, which is the textbook and indeed the original inspiration for Music Publishing 101. When I first moved from being a songwriter to a music publisher, one of the first realizations I had was that far too many songwriters (myself included) spend their time searching in vain for a publisher who can make them successful.

If you’re a songwriter, you have a music publisher already—someone who has been there since the day you completed your first song. It’s you. You’re it. As soon as you write a song, you’re not only the author of it, you’re also the publisher. The challenge for most songwriters is not to find a publisher, it’s to learn to be a good, effective one. That’s the theme of Making Music Make Money, and it remains the focus of Music Publishing 101. The whole course is intended to be a step-by-step walk through starting your own music publishing company. By Week 12, you should have your business almost up and running.

Still, having watched the myriad of economic forces and winds of change that have been buffeting the music industry as a whole for the past five years, one of my goals in revamping Music Publishing 101 was to expand that focus beyond just the idea of songwriters starting their own publishing venture. As evidenced by the current record label rush toward 360 deals, the music biz today is all about owning and controlling rights, as much and as many of them as possible, and the idea of controlling copyrights (literally, the “right to copy”) is at the center of music publishing. That means that everyone involved in music—record label owner, concert promoter, booking agent, artist manager, DJ, studio owner, or record producer—should be thinking about music publishing, and probably starting their own music publishing company. If you come into contact with new songs or new songwriters, music publishing should be a part of your overall business plan. In the new Music Publishing 101, I’ve tried to provide all of the information you need to get into the game.

That’s not easy. In truth, it was one of the most daunting tasks I’ve ever undertaken—far more difficult than writing Making Music Make Money, or designing the original Music Publishing 101 course. That’s because innovations like digital distribution, streaming, ringtones and mastertones have required extensive negotiations on the rules and rates that will be used in licensing to these services, some of which are still ongoing. At the same time, worldwide copyright infringement issues from file-sharing to services like YouTube are making a huge impact in both publishing income and the future of copyright protection. Meanwhile, collection agencies like ASCAP, BMI, SESAC and Harry Fox Agency are continually expanding their reach into new income streams, the European Union has altered the way income can be collected throughout Western Europe, and the foreign collection societies continue to negotiate their own deals with worldwide music users, many of which differ significantly from the American model. To put it mildly, it’s a wild time out there—and compiling a text about music publishing sometimes feels like trying to draw a map during a tidal wave. You’re not always sure what the terrain is going to look like when you wake up the next morning.

Nevertheless, it was important to me, and to Berklee, that the course be as comprehensive and up to date as possible, and I feel confident that we’ve succeeded. There is information on all of the contemporary licensing issues, thorough discussions of the agencies and organizations that collect income for each of the various income streams around the world, and an examination of most, if not all, of the legal and copyright issues vexing publishers at the moment. Even better, there is plenty of practical information for dealing with all of the contemporary challenges of music publishing , including tips on:

negotiating licenses
resolving ownership disputes
collecting income in foreign territories.

Students will find a wealth of resources scattered throughout the lessons, including:

recommendations for tip sheets (to find out who’s looking for music)
A&R directories (to uncover the addresses and emails for the industry people you need to reach)
sample publishing and sub-publishing contracts
lists of the key music industry conferences and seminars
new technologies available to help music publishers organize their catalogs, issue accounting statements and monitor uses of their songs.

One of the benefits to a 25 year career in the music jungle, and to my current position as Vice President of A&R at Shapiro Bernstein & Co., Inc., one of the industry’s most respected independent music publishers, is the access it gives me to those far brighter and more accomplished than myself. That was a benefit I wanted to pass on to Music Publishing 101 students, so we incorporated interviews with a number of industry professionals, including:

Wes Wierder of InHolland University in Amsterdam,

publisher Dan Coleman of A Side Music

songwriter and publisher Jeff Franzel,

Peter Bliss, the director of SongHall, the educational arm of the Songwriter’s Hall of Fame.

In addition there are links to an interview with songwriting guru Jason Blume, as well as a wide variety of news articles, informational videos and blog spaces (including this one), to give students the option to explore specific issues in greater depth.

Maybe most importantly, there is a new global focus in the class that attempts to offer a picture of how music publishing works around the world, not only in America. More than almost any other segment of the music industry, music publishers must work with a worldwide knowledge of copyright law, collection agencies and systems, methods of determining ownership shares and royalty rates, and the “ways of doing business” that can vary wildly from territory to territory. Especially with internet distribution systems and streaming services becoming the dominant way of sharing music, we are in a global economy, which offers both benefits and challenges. No publisher can afford to limit their music’s reach to only one or two countries—there’s too much potential money and opportunity in foreign territories. At the same time, you can’t take advantage of the opportunity, nor can you collect the money, if you don’t understand how music publishing works in the regions in which you’re doing business. That’s why almost every lesson in the 12 week course of Music Publishing 101 has a “Global Perspectives” section, which highlights the different ways the rules of the game may change in territories outside of the United States.

If it sounds like I’m trying to sell you on Music Publishing 101… I am. Not for my own sake, but rather for yours. As recently as last week, I was marveling with a former publishing colleague, now working on the record company side of things, at how little most music people–songwriters, A&R people, and even record company owners—actually understand about music publishing. People think it’s all about printing sheet music or registering copyrights or collecting pennies for every record sold. Of course, it is about all of those things—and dozens of other income streams and functions as well. The wide-range of potential ways to make money in music publishing is what makes it the single best place to be in the entire music business as the industry goes through the painful process of evolution.

This is the reason that investment firms like KKR are putting billions of dollars behind the relaunch of BMG Rights; it’s why a huge Dutch pension fund is investing in Imagem; it’s why the only division of any value to EMI shareholders within that crumbling corporation is EMI Music Publishing. As the music biz moves away from creating a physical product to instead licensing uses around the world, music publishers are positioned to become the most profitable part of the “new” music industry—as they have the knowledge, experience and business structure to exploit their copyrights on a global scale.

Of course for songwriters, it doesn’t really matter that music publishing is a strong or growing side of the business. For songwriters, music publishing is the only business there is. Songwriting is not a job. There is nothing in the songwriting process that actually generates money. It’s not supposed to. Songwriting is an art, not a business.

Music publishing is the business of songwriting. It exists to take songs, and find ways to generate income around them. That’s why my book is called “Making Music Make Money” – because that’s what music publishers do. Without music publishing, it’s impossible for songwriting to be anything but a hobby.

The reality is that fewer and fewer songwriters have the option of calling their publishers on that dreaded Tuesday after Labor Day. That’s because fewer songwriters are being signed by music publishers, and those who do get signed already have some success with their music. Music publishers are looking to partner with songwriters who understand how to make money with their music, and are doing it on their own. Today’s aspiring songwriters have to ask themselves how to get their career on track and moving forward.

Here’s one suggestion then, to kick off your fall season and lay the groundwork for good things in 2011: Check out the new and improved Music Publishing 101 at Berkleemusic.com. In twelve weeks, you’ll understand how to build a business around your music that can start turning your songs into money. That’s what Music Publishing 101 is all about.

http://www.berkleemusic.com