Music Publishing & Songwriting

I read yesterday where the current vetting process for possible appointees to the new Obama administration involves a 7 page, 63 question form designed to reveal any dirty laundry lurking a potential nominee. Apparently, the questions even delve into diary entries, blogs (Aargh! There goes my shot at Secretary of State) and potential conflicts of interest involving spouses, family members and close associates. Once the new administration gets done cleaning up the political world from all appearances of shadiness, maybe they can go to work on the music business. Where the weasels are, you can be sure to find an endless supply of double dipping, nepotism, and palm greasing, along with enough conflicts of interest to keep a Senate inquiry busy for decades.

Of course, many of these conflicts of interest are blatant—in fact, they seem to be tolerated primarily because they are so unabashedly out in the open. Back in the golden days of the industry, no one cared that uber-lawyer Allen Grubman represented both Bruce Springsteen and CBS President Walter Yetnikoff when the two of them were negotiating Springsteen’s contract. After all, the whole reason that artists and executives used Grubman was because everyone else did. Likewise, people look the other way today at top executives holding down major label A&R gigs, consultancies at competing labels, and partner-shares in a management companies or publishing companies all at the same time. If you want to work with a player, you have to let him or her play the game.

But there are other conflicts of interest that are subtler, particularly when they involve large corporations, often ones with artist or writer rosters that stretch into the thousands. One such issue has grabbed headlines recently, involving legendary songwriters and artists Hall & Oates, and their venerable hit “Maneater”. Check out the story below:

It seems that Hall & Oates are accusing Warner Chappell of allowing other writers to rip-off their 1982 hit “Maneater”. It’s a strange charge. For all the vile and stupid things of which publishers are customarily accused, not protecting hit copyrights is one that rarely comes up. After all, this is one area in which the writer’s and publisher’s interests converge. Everyone wants to protect the hits in the catalog, don’t they? Hmmm….

Unless of course the publisher represents both the copyright being ripped off, and the people doing the ripping. Herein, as they say, lies the rub. “Warner Chappell failed and refused to take action based upon a conflict of interest of its own making”, says the Hall and Oates suit. “Warner Chappell publishes and/or administers the copyright interests of two of the infringers.”

While the lawsuit does not identify who the “infringers” are, it has not been lost on anyone in the industry that

Nelly Furtado released a song by the same name, which just happened to be written with two Warner Chappell writers, Timbaland and Nate “Danja” Hills. Does something smell funny to you?

This is the challenge for the new mega-sized major publishers. The good news for Warner Chappell is that they represent Hall & Oates, two songwriters inducted into the Songwriters Hall of Fame in 2003, and they also represent two of the hottest writers in contemporary urban and pop music,
Timbaland
and

Nate “Danja” Hills.
That’s would be the envy of any publisher. But the problem is: what do they do when there is conflict between writers, and they represent both sides? No one wants to be caught in the crossfire.

There’s an incident to which I was a witness that I like to use in my Berkleemusic.com Music Publishing 101 course, as a topic for one of our chat discussions. It is a true story of two writers who wrote a song that was to be the single for a Very Big (selling) Pop Star.

Given that there were only two writers involved in the song, the initial split of the composition between the writers was an even fifty-fifty, with each writer owning one-half of the composition. So far, so good. But before the song demo was finished, the writers had decided to add a sample—with that, 20% of the song was gone.

Then, once the song was chosen as a single contender, the president of the label decided that the song needed additional production and a remix. He sent it down to his A&R Vice-President, who, not too surprisingly, decided that he should be the one to do that new production—and he did, adding a second sample in the process. Unfortunately, that sample was a bigger one, and took up 50% of the composition. Now the original two writers no longer owned 50% each of their song. Thanks to two samples, they each owned 15% of their song. It gets worse.

Not content with grabbing a production credit, the A&R person then decided that he too should have a portion of the writer’s share, for selecting the sample that would run throughout the track. That meant the writers could say goodbye to another 10%. Now each original writer owned only 10% of the song.

But of course, there was one person still left to accommodate. That Very Big Pop Star was not accustomed to singing songs in which she did not have a hand in writing. Cost? 10%. After all was said and done, the original writers of the song were left with only 5% each of the song they wrote together—a song that did become a big hit. Ouch. This is the kind of thing that can leave writers, and publishers, very bitter.

But not in this particular case. Interestingly, it turns out that the publisher who represented the two original writers also represented everyone else. They published the A&R person and his “writing” share. They owned one of the songs being sampled. They published the artist as well. So while the two writers seem to have gotten shafted, the publisher actually came out in much the same position as when the process started. The publisher simply collected on behalf of seven or eight different writers, rather than two.

Needless to say, that’s the conflict. How hard did the publisher fight to protect the original writers from the A&R person’s grab at a writing percentage—when the publisher represented the A&R person as well? How strenuously did the publisher negotiate on either side in the sample clearance process? What chance did the writers have of resisting the demand by the artist for writer’s share, when their publisher was working for both sides (and probably had a lot more invested with the superstar artist)?

As the major publishers grow ever more vast, these sorts of conflicts become increasingly inevitable. My advice? Remember that you’re in the jungle. Never simply assume that your publisher has your interests at heart. Despite their best intentions, they may also be subject to competing interests that can undermine their defense of your work. If you find yourself in a dispute of some kind, make sure that you understand who else is on your publisher’s roster, and give some thought as to where the real priorities of the publishing company might lie. Then rely on your own lawyer to keep the publisher honest.

On a larger scale, you may want to ask whether or not a big publisher is right for you. While there is a value to the global reach and industry influence of a major publisher, there are also drawbacks, and conflicts of interest are one inevitable issue. Everyone loves tossing a big name like Warner Chappell around. But as
Hall & Oates might say, “watch out boys, she’ll chew you up…”

Sometimes, just standing still can be considered progress. Sometimes not losing is winning. After last week’s debacle in the stock market, would you have felt pretty good if you wound up even? In times like these, damage control is not a bad strategy.

That said we could join with the National Music Publishers Association and its member publishers, as well as songwriters around the country in celebrating what the NMPA calls “an important milestone for the music industry”. Admittedly, it’s not quite the victory that some might have been hoping for. But when the Copyright Tribunal voted on Thursday to leave the mechanical royalty rate at 9.1 cents, and to apply that rate to permanent digital downloads, the creative community heaved a sigh of relief. It may not be the 15 cents the NMPA was asking for (which nobody thought we’d get), but it’s not a rate reduction either, which is what organizations like Digital Media Association (DMA) who represent clients like Apple, Amazon, and Pandora) had been advocating. With the ground shifting relentlessly beneath our feet, we’re perfectly happy just standing still.

Actually, music publishers and songwriters did better than standing still. While the general mechanical rate remains the same, that rate has now clearly been extended to all services that offer music to download. The gray area is gone. Everyone pays, and best of all, they pay retroactive to 2001.

On the ring tone side of things, we may have done better. Here we got a big raise. Instead of the 9-10 cents that is more or less the standard today (although in fact, there are no standards), ring tones are now to be licensed at 24 cents. Given that on many pop songs, the ring tones are outselling the album, this is a huge bonanza for writers and publishers.

A quick review might be in order:

“Mechanical” royalties are payments made by the record label or whoever is selling the music, to the songwriters and publishers of the song. Mechanicals are paid on any “mechanical reproduction” of the sound recording– that means CDs, ring tones, digital downloads, and any other product we can manage to sell.

Services that offer streaming or subscription services are not covered by this specific ruling, as those are not considered “mechanical” reproductions. However, it does appear that the RIAA and the NMPA are also close to an agreement with the DMA on those issues– with everyone agreeing on a royalty rate tied to a percentage of revenue generated by the service.

Here’s what it all comes down to:

Money. A major windfall of money to be distributed by Harry Fox Agency (which quickly announced that they were “ready to implement” the new rates (I’ll just bet they are), and to pay out the royalties that they’ve been collecting since 2001. That means a big bundle of money going out to publishers over the next 12-18 months, who will then pass it on to songwriters. As bad as our business has been over the past 3 years, the truth is that some of the gloom and doom was an illusion. Music was still being sold and listened to– we just weren’t being paid for it. Now we will be, and that’s going to make everyone on the creative side feel much more optimistic about the future of the music industry.

On the other side, this will clearly increase pressure on record labels, who were hoping for some relief on the mechanical royalties that they have been paying– as well as those royalties that they often have NOT been paying, like ring tone income. Record companies have never been very happy about paying the folks who write or publish the songs, and now they get to do even more of it. The bright side for the record companies is that they will now have a new income stream to help their bottom line, once they begin to see some of the “streaming and subscription” money now on its way.

The big danger in this decision is the threat it will pose to many digital services. I-Tunes has already threatened that it may require a significant price increase for the single song download. But I-Tunes is the strongest player on the team. Many digital services, as well as ring tone companies, subscription services, and streaming sites are barely surviving at present. Few of them are solidly profitable. Faced with having to pay royalties on the music that they’re using, many may not be able to survive.

While I have no great love of companies that want to use music as a fundamental part of their platform but don’t want to pay the people that make the songs, we do have to acknowledge that the music industry needs these innovative companies who are desperately trying to figure out how to sell music in our new digital age. We need at least some of these companies to thrive, and we need new people to continue to try fresh, exciting music-based ideas. Overall, 9.1 cents seems fair. 15 cents would have likely closed down many of these fledgling companies, in some cases before we ever found out whether their business model was effective.

Someone said that in a democracy, the best solution is usually the one that leaves all parties feeling less than satisfied. Publishers and songwriters didn’t exactly hit the jackpot with this ruling, but we did take a step to fairness. That’s probably the best we could expect– and probably the best thing for the overall industry. A quick shout out of congratulations to the NMPA’s man of the hour, David Israelite, who was the music publishers’ primary spokesman and negotiator on this issue, and by all accounts, did an amazing job. It’s a curious phenomenon that in most cases, the lobbyists who are constantly courting lawmakers are generally one hundred times smarter and shrewder than the bumbling politicians with whom they’re dealing. Don’t know why that is. But David Israelite is as sharp and savvy a representative as the music industry has ever had. If only he were running a record company…

Really enjoyed hearing your comments about last week’s blog on “product placement” in songs. There was some very insightful stuff that came from the wide variety of people that watch this space each week. Thanks so much for weighing in, and for supporting the blog!! Keep the feedback going…

Wow– who could imagine a time when the music industry felt more secure than the banking business? And yet, EMI Records winds up outliving Lehman Bros. and Warner Chappell outlasts Merrill Lynch. While no one would declare the record biz to be a healthy, thriving industry, it is now obvious that things could be worse. Thank goodness we didn’t have many financial whiz kids in music– it may be the only thing that saved us.

As the term “investment expert” now enters the realm of oxymorons like “military intelligence” or “government ethics”, it is clear that a lot of those financial whiz kids were not as smart as they appeared. Interestingly, that’s true not only in fields like real estate, mortgage lending, derivatives, etc. Their results in music publishing haven’t been so impressive either…

As I’ve mentioned several times in this blog, music publishing recently became a favorite target of the investment community– as money men looking for new place to park their millions began to gravitate toward what they saw as the goldmine of the music industry. Convinced that they could make a fortune by buying up publishing companies and catalogues, investment companies and hedge funds went on a purchasing spree over the last five years– buying up publishers like Bicycle, Windswept, and Bug, and backing new acquisition-oriented publishing entities like Evergreen, Primary Wave, and many others.

Not surprisingly, there were a lot of theories floating around behind this investment-backed shopping expedition. Some made sense– primarily the idea that established music publishing catalogues, unlike record labels, were reasonably predictable income streams that could be counted on as a moderately secure long-term investments. Some of the theories made some sense– that the music industry was undervalued and that surely the industry would someday figure out again how to monetize the value of music, or that growth in China, Latin America, and Eastern Europe would eventually force those countries to tighten up on piracy– although those theories have yet to be proven.

But some of the theories fueling this new investment made no sense at all. Many of these “new” publishers were convinced that better collection and a bigger effort in the Film and TV department would allow them to greatly increase earnings, justifying purchase prices far beyond what any experienced publisher would pay. Catalogues that would have been purchased for 8-10 times their annual earnings a decade ago, were suddenly being snapped up for 14 or 16 times earnings. As most music business veterans shook their hands in wonder, the investment community assured the sellers of the catalogues, who were often songwriters or their heirs, that the new companies were in the game for the “long-run”, not just out to make a quick buck.

It will surprise no one then that most of these companies are now, openly or not so openly, up for sale. The bankruptcy of Lehman has already put one of the companies on the block, and it’s clear that almost all of these new “publishers” are now actively looking for someone to bail them out of the music business. Most likely, the people that will do the bailing are the music business weasels who sold to them in the first place– buying the catalogues back for half of what they sold them for 2 years ago.

What can we learn from this?

In the end, it appears that music-publishing business will soon be handed back to old-fashioned music publishers. For all their faults, that might not be such a bad thing.

Given how difficult it is to achieve even a modest degree of success as a songwriter or record producer, it’s not surprising that most songwriter/producers don’t give much thought about how to build their business beyond simply writing more songs and making more records. It’s hard to worry about expanding your business when it takes years just to create something that actually earns money. Unfortunately though, this lack of planning usually leads writer/producers who suddenly hit it big to make the worst possible decisions, once they are actually thrust into the limelight.

An example for further study: Ask yourself, whatever happened to Scott Storch? Remember the hip-hop whiz kid behind “Lean Back”, “Candy Shop” and “Run It”? Then check this out:

Oh my. That was humbling, wasn’t it? As ugly as Storch’s story is– it’s not unusual. In fact, if one were to compile the Top 3 things that writer/producers do after their first big hit, they would be:

Historically, none of these options have proven to be terribly effective strategies for a producer trying to expand his or her business. Some of the options are inefficient, some are self-indulgent, and some are overly ambitious. Strangely, very few producers have ever made an attempt to expand their operation into the one area where there is a clear need, a direct tie to the core business of making records, and in which they could actually provide some real expertise:

If you’re a producer looking to grow your business, why not expand into Artist Management?

Interestingly, this idea surfaced during a recent lunch with a publisher from Europe, as we discussed the transformation of the music industry into a business dominated by artist managers. If one looks at what companies like Live Nation are doing, it’s clear that the large artist management firms are quickly taking on power roles in the music industry in the same way that agencies like CAA and William Morris rule the movie business. This wouldn’t be a bad thing, if only there were more good managers to go around. Unfortunately, as anyone in the record business will attest, there is a dire shortage of high-quality, experienced artist managers, even for artists at the top-level of the industry. Don’t believe me? Check out the article below:

It’s hard to pinpoint exactly where artist managers come from. Some emerge from out of the booking agent/tour manager/club booker netherworld, which is arguably the best training ground available. A few are former A&R or label promotion people– though not many. Some are former artists themselves. A fair number are mothers, fathers, cousins, or old neighborhood friends of the artist– which is rarely a good qualification.

But interestingly, in parts of Europe, the one most likely to offer management services to an artist is the record producer. It makes pretty good sense. Why not let the same person who actually discovered the artist, developed the project, and made the record take it all the way? From the producer’s standpoint, it allows him or her to keep the project properly focused, share in the long-term rewards of artist development, and avoid the risk of an outside party upsetting the delicate relationship between producer and artist. From the artist’s standpoint, it ensures that the producer will remain committed (and affordable) to the artist even if the project’s eventual success leads to the producer suddenly becoming the industry’s flavor of the month. For the record label, it means one less chef in the kitchen, fewer disputes, and probably a quicker response time from the producer when it comes to requests for remixes, special edits, bonus tracks and the like.

Now let me be very clear. I’m not suggesting that the producer should personally take on the additional job of managing the artists he or she develops. Most producers can barely manage to get themselves to a noon recording session by two in the afternoon. I certainly wouldn’t want to see them in charge of running a concert tour. Organization, discipline, and strategic thinking are not necessarily typical traits of record producers.

What I’m suggesting is that producers who are in the business of developing new artists should find a BUSINESS PARTNER, someone who is organized, disciplined and strategic, perhaps someone with a background in tour management, concert booking or A&R, and then encourage that Partner to open a management entity as a division of the production company. It’s called diversification, and it’s how
you expand your business in a controlled, sensible way.

Imagine if Scott Storch, upon completing “Run It”, had started a management company that signed Chris Brown. He would have had a stake far greater than his four or five producer points in a career that he helped to create. He would have had a source of income entirely separate from his own record productions, which could have sustained him when his production sound eventually fell out of favor. He wouldn’t have had to compete with the hot new producer of the moment for cuts on future Chris Brown albums. And he would have been at the forefront of where the music industry is going– with a stake in the branding, touring, and merchandising businesses that are the real sources of income in today’s entertainment economy.

This is a no-brainer. As music sales drop, producers need to expand beyond their core business of making records. It’s equally clear that managers and management companies are increasingly dominating the industry– they are taking the leadership position once held by the record labels. Finally, everyone in the business is bemoaning the lack of good, new managers. Put it all together and what do you get? You get the future business model: a production/management company hybrid, that allows producers to discover talent and make hit records, and then pass the artist to a separate division of the company, which provides the day to day management service.

Of course, it’s not quite as much fun as buying a big house and spending the next three years installing a studio. It means you won’t get to hold court in your very own restaurant or nightclub. It might also mean one less record label in a world that can hardly sustain the ones that already exist.
But if you’re a record producer making hit records or developing hit artists, putting together a management company just might mean that you have a long-term investment, in a notoriously short-term business.

If you can’t beat ‘em, join ‘em.

That’s the motto that’s inspired the current hot trend in music publishing (and in the record business as well). Since none of the experts in the industry can seem to figure out a way to actually sell music to the public, the savvy players are now looking for help, and the people they’re reaching out to are not music business experts, or even others in the entertainment world. Instead, they’re going to those who do know how to sell products effectively: the marketing and advertising whiz kids behind successful consumer brands and retail stores. Given our meager success recently in selling music as music, or even music as entertainment, it’s probably only natural that now we try to sell music as a brand.

Having been at Zomba Music Publishing and Jive Records during the reign of the teen pop trinity of Backstreet Boys, Britney, and *NSYNC, I had the opportunity to witness some of the early forays into cross-marketing efforts between music and consumer brands– in those glory days, we put music in cereal boxes, made special CD’s for McDonalds and Burger King, and partnered with everyone from Coca-Cola to Nickelodeon. I remember doing A&R for a teen girl group and receiving the news that we had just obtained a partnership with Ragu (the tomato sauce). Never did figure out how that tied together.

But today, publishers are pushing it even further. The latest move is a the idea of the branded CD, with publishing companies creating special collections of music in partnership with a variety of consumer brands, to be sold either along with the product itself, or in specific retail outlets. A recent Billboard article, “Publish or Perish” describes a wild array of ideas:

Cherry Lane is releasing a disc of music around “Hello Kitty”.
Primary Wave is partnering with Lancôme at cosmetic counters.
SonyATV France joined with Ben & Jerry’s (do you think the writers got paid in free ice cream?)

The motivating factor here is the desire to get music to the right target audience, by drawing on the expertise of companies that are experts in reaching that particular group of people. If your music appeals to trendy teenage females of a particular demographic, you could expend great effort and expense to get a song on the radio and a record in the stores, and then hope that your advertising campaign drives those coveted young girls toward your product. Or you could join with Hello Kitty, who clearly has a direct line to the trendy teen female market.

It’s all a pretty good theory, although to be fair, it’s not foolproof. I remember another young girl group, when I was with Sony Music that was placed into a partnership with the company that made Troll dolls– those weird little furry-haired plastic men. Not exactly a match made in heaven. The trick in making these branding efforts work is the same trick that usually makes an act or song successful at radio or anywhere else. In order to brand your music effectively, you have to accurately identify your target audience. For most songwriter/publishers, this is a challenge all by itself.

Here’s a quick exercise to jump-start your own songwriter/publisher branding campaign:

Do your own audience analysis. Start with some homework– read Radio & Records, Hits, or an advertising magazine like Adweek to get a clear idea of the demographics of the target audience your music will appeal to. Then take it a step further. What kinds of magazines does your target audience read? What TV shows do they watch? What clothing brands do they wear? Where do they eat? Who are the celebrity trendsetters that your audience tends to follow?

The reason that Lancôme, Hello Kitty and other brands can so successfully reach their consumer is largely because of endless, incessant research. I remember having a meeting with representatives of the Barbie brand (who strangely enough, all bore a remarkable and rather eerie resemblance to the doll itself) as they explained quite confidently that they knew and could predict changes in every aspect of the lifestyle of a girl between the ages of 5-10. How? By studying them with the same intensity that the guy in the white coat watches his lab rats.

It stands to reason that a songwriter/publisher should have that same knowledge. You are never writing songs for a general audience. Whether you’re writing for urban, AC, country, or smooth jazz, you need to understand specifically who the audience for that particular music is. If your songs aren’t relevant to that target market, they won’t stand a chance in the branding world.

Once you know exactly who your market is, it’s not that hard to begin to identify opportunities. Just look at who advertises in those magazines or on the TV shows that your audience favors. Look at what stores sell the clothes that your audience wears. What restaurants serve the food that your fans eat? These are your potential branding partners. It can be anyone from a top Vegas casino to Cracker Barrel restaurants, from a pricey perfume to a Troll doll. The key is in the fit.

Are you a purist? Does the very thought of connecting that closely to a major brand send shivers down your spine? I get it. To be honest, it’s not my favorite thing either– which probably says more about my age than my scruples. But let me put it in perspective. When Britney Spears did a special CD with McDonalds, the label (and the publishers involved) were guaranteed sales of 2 million units. How many other times in the music business can you count on selling 2 million units? A songwriter friend of mine, Steve Diamond recently placed a song on a Reba McEntire album done specifically for Hallmark– the guarantee was very similar, with all songs earning the full mechanical rate. That’s hard to beat in the current music market.

Most of us didn’t get into music because we were expert salesmen. So maybe it’s not such a bad idea to partner with the people who are. Business is business. If you can’t beat ‘em, join the brand.

the sea-changes that have been upending the record industry over the past year, it’s no surprise that the changes currently transforming the publishing business are happening somewhat under the radar. While these changes are, in their own way, as significant as the ones altering the lives of record execs and recording artists, they don’t imperil the entire industry, which naturally makes them a little less newsworthy. Even more importantly, the changes might actually be good news– which despite its rarity, rarely makes for much media interest.

Still, for publishers and songwriters, there’s no denying that things are changing quickly at the very core of our business– these changes will drastically affect the way we do business over the next decade, and in many ways could entirely alter the nature of music publishing itself. Interestingly, most of this change emanates from one company that in only a few years of existence has markedly re-drawn the playing field. Love ‘em, like ‘em, or loathe ‘em, that company is Kobalt Music.

Founded back in 2000 by Willard Ahdritz, Kobalt represents a significant paradigm-shift in music publishing, by coupling sophisticated collection and registration technology with a payment system that is both uniquely transparent (meaning that writers can monitor their accounts directly) and responsive (payments are made much more frequently than the twice annual schedule that has been the industry standard). But most importantly, Kobalt represents a drastic change in the music-publishing world because their business model is built on “administration” deals with songwriters, a deal structure that previously had been reserved largely for a small group of elite superstar writers or catalogs.

Rather than the traditional music publishing deal format, which granted the publisher control of the copyright, and often an ownership share in the song for the life of copyright (which extends after the death of the composer), an administration deal is essentially a service contract. In an administration agreement, the publisher agrees to handle all of the licensing, collection and protection issues for the writer, in exchange for an “administration” fee, usually around 10-15 percent of the income collected. An administration agreement never provides any long-term ownership interest for the publisher, and usually only endures for a three to five year period.

By building their business model on the “administration” deal, Kobalt is defining their company as a “service” organization– basically a book-keeping, bill-collecting service for songwriters– rather than a “copyright holder”, which is how music publishers have traditionally viewed themselves. It’s a model with both positives and negatives. Because they are primarily functioning as administrators, Kobalt assumes much less responsibility to exploit songs, discover and develop new writers, or revitalize older catalog, making their job considerably easier. On the other hand, they have no long-term “publishing” assets– there is no older established catalog to keep cash flowing in, and there is no ability to build the long-term value of the company by acquiring new songs.

Needless to say, the question of whether or not a business like Kobalt can endure is the subject of considerable debate in the industry. Experienced music publishers will point out that it’s very difficult to build a business venture based on keeping only 10% (and often much less) of the income generated by your songs, no matter how successful those songs may be. It’s even more difficult to gauge the value of the return on investment, if songwriters can literally take their songs and go elsewhere anytime, at the drop of a hat. So far, Kobalt has been funded by large institutional investors, and has received cash injections on regular basis. How that plays out over the long-term is a topic of much speculation.

What can’t be debated is that Kobalt has single-handedly altered the standard of service expected by songwriters, and has made the administration deal into a much more viable option for many copyright-holders. Not surprisingly, Kobalt has proven very popular with songwriters– attracting a slew of A-level writers like Max Martin, Gwen Stefani, Billy Steinberg, Desmond Child and others. The administration service offered by Kobalt, which allows writers to see in real time what they’re earning all over the world, to receive monthly accountings, and now, to take advances against that pipeline income (almost like a credit card backed by future royalties), is revolutionary. Coupled with one of the best creative teams in the music industry, Kobalt’s service is without dispute, a huge step forward for music creators.

Predictably, the changes pioneered by Kobalt are now reverberating across the industry. Universal Music recently announced a similar administration system, which will allow Universal writers (even those in full or co-publishing agreements) access too much of the same information that Kobalt writers have. Overall, it has grown much more difficult to sign writers to co-publishing agreements in general, as even new artists and writers are beginning to ask for administration deals, rather than sharing their copyrights for long-term publishing contracts. Life of copyright agreements are becoming even rarer still– with most writers insisting on getting their copyrights back after 15-20 years.

The transformation of the music publishing business from “copyright owners” into a “service industry” has significant repercussions for both writers and publishers– some good, some bad. Certainly, with only 10% of the income at stake, writers would be naive to think that publishers will be as aggressive or as risk-taking when it comes to placing new songs, developing a young writer’s career, or offering a big advance for an unproven artist. At the same time, a writer can now expect faster cash flow, more accurate registration and collection, and the opportunity to hold on to his or her songs for the long-term, either for the life of the copyright, or at least until the writer retires, and decides to “cash out” the value of his or her life’s work.

All in all, some beginning and developing writers may be better off sticking with co-publishing deals that will provide more hands-on support from the publisher. But songwriters with hits in the catalog are in a better position today than ever before to demand top-level service at a bargain price, and then hold onto the copyrights on top of it all. No one deal model works for everyone. But there are more options out there for copyright holders to choose from than just the old-fashioned “full” or “co-pub” agreements. For songwriters, that’s change for the good…