Music Publishing & Songwriting

Okay, so let me start by saying that after watching “Total Eclipse of the Heart” (Literal Video Version), I take back all the bad stuff I said about YouTube. Sure they steal from copyright holders (think about the fact that this literal video version has earned nothing for the songwriters or publishers of the song, despite millions of views). But I gotta be honest, this video is really, really funny.

http://www.youtube.com/watch?v=4XkD5sJwwrE

On a completely different note…

One of the more important events in the world of music publishing took place last week, and most songwriters probably didn’t even know it happened. The International Confederation of Authors and Composers (CISAC) held its second annual World Copyright Summit on June 9-10 in Washington, DC, with an invitation list that included representatives from across the entertainment and technology fields, including executives from the Motion Picture Association, the Consumer Electronics Association, Microsoft, my good friends at YouTube, as well as government officials and legislators. But the guest list was heavily weighted toward the music publishing community, with senior executives from a wide variety of publishers large and small, as well as collection societies from all over the world.

While I did not attend (someone’s gotta stay home and take care of business, after all), I understand that the discussions were comprehensive and thoughtful, and relatively free of vitriol, despite sizable differences amongst many of the parties involved.

The truth is, both sides are frustrated with the licensing systems that exist, which are admittedly far out of step with the realities of the digital, global world in which we live. Rights-holders feel utterly unprotected and incapable of mounting any defense against the endless and uncontrolled proliferation of copyright violators. On the flip side, many well-meaning entrepreneurs watch their business plans crash on the rocks of the licensing laws, where the use of even one song on a website can require the permissions from publishers and collection agencies around the world. Having recently completed a book that required lyric reprint permission from a number of sources, I can tell you first-hand that the licensing situation, as it exists today, is a slow-moving horse and buggy caught in the middle of a high-speed, worldwide Information Highway.

http://www.amazon.com/Billboard-Guide-Writing-Producing-Songs/dp/0823099547

From what I’ve heard, one of the most constructive ideas that emerged in the conference was the idea of a worldwide licensing database that would allow licensors to go to one stop to obtain permissions on a worldwide basis. Just the challenge of tracking down the rights-holders in each individual territory can often be overwhelming. I still remember working as an A&R person on the “Wild Thornberrys” soundtrack for Jive/Nickelodeon, and trying to license a beautiful African song called “Awa Awa”, a journey that took us from France to Africa to Brooklyn that almost resulted in a last minute change in the movie due to the difficulty of tracking down the rights holders. Multiply this by several thousand songs and you start to get some idea of the challenges faced by many start-up, music-based ventures who are trying to do the right thing by licensing the music they use.

The spirit of cooperation and thoughtful discourse that dominated the Copyright Summit is exactly what we need to begin to address the challenges of making music make money in 2009, and beyond. But the Summit is also a demonstration of the increasing advantages of being in business with a large publisher or collection society in this generation of copyright disputes and international piracy. I’ve been outspoken in my first book, Making Music Make Money, about the importance and viability of songwriters creating their own music publishing venture, and this blog has emphasized over and over an independent approach to the business of songwriting and music publishing. But, it has to be acknowledged that it is becoming increasingly difficult for small, independent publishers, especially those who are not affiliated with the major collection societies like Harry Fox Agency, to get paid, and more importantly, to protect their interests on a worldwide basis.

If you look at the attendees at the Copyright Summit, they were predominately representatives from the major publishers, large independents, the major collection societies like HFA, ASCAP, BMI, SESAC and their international equivalents. By virtue of size and influence, these are the people who will be at the table when the decisions about the future of music publishing are made, and consequently, whatever new systems emerge will be designed primarily to serve these companies and organizations. Between the battles with the record labels, the digital music providers, the international licensing organizations and the governments of countries all over the world, it’s becoming more and more challenging for a lone songwriter/publisher to defend his or her rights, and also to actually collect the royalties that are due.

Having said that, I’m not telling anyone that they should give up their independence. But I am suggesting that songwriters and independent publishers are going to feel increasing pressure to find partnerships with larger entities, at least in the short term. We are living in a moment in which the rule-book is being drastically re-written. At least during that formative period, there are definite advantages to having one of the major players on your side. When you’re in a street fight, it’s good to have a big friend.

If your company is at the stage of earning consistent, measurable royalties, it may be time to consider striking at least an administration deal (an arrangement in which one publisher does not share the control of the copyright, but simply collects the income and distributes it, in exchange for a percentage fee) with a larger company or organization. Beyond the major publishers like EMI, SonyATV, Universal or Warner Chappell, there are numerous independent publishers that excel at these kinds of services. Check out:

Kobalt Music: www.kobaltmusic.com
Bug Music: www.bugmusic.com
Royalty Network: www.roynet.com
PEN Music: www.penmusic.com

You could also use a collection service like Harry Fox Agency, which is the largest collection organization for mechanical royalties in the US. Remember, these partnerships are not a matter of giving up any control over your copyrights. These partnerships are simply a means of issuing licenses and collecting your money. Just as importantly, they can offer some assurance that you will have a piece of the often haphazard payments being made by digital music companies or monies collected in lawsuits. At the very least, you need to become an active member of ASCAP, BMI, or SESAC, as well as trade groups like the NMPA. Now is not the time for going one on one. The challenge of getting paid requires some teamwork.

http://www.harryfox.com
http://www.nmpa.org

If you want to learn more about administration deals and how they work, I’d encourage you to check out my online course, Music Publishing 101 at Berkleemusic.com. The whole course is focused on helping you to create your own independent publishing company. Nevertheless, there is also ample discussion of how to build an effective team to support you in your independent venture, and that includes organizations that can help you get paid. The new semester is starting soon– so check it out today…

Never really pictured myself making a call for songwriter solidarity. Not that I have anything against the organized labor movement (I was even a card-carrying Local 802 member for awhile). But as I’ve mentioned many times, songwriting is a pretty lonely task– it doesn’t breed the kind of personality that finds strength in numbers. At the same time, there’s also no escaping that the music industry is one of the most competitive environments on earth– so the idea joining hands with all of the other people trying to get the same cuts, or record deal, or radio play that you are, and singing “We Shall Overcome” seems a bit far-fetched.

However, the time may have come. If you haven’t heard, things are getting increasingly ugly between YouTube and some of the music industry’s primary licensing agencies– culminating in a recent move by YouTube that pulled off all music videos for UK-based users, much to the chagrin of PRS (the English version of ASCAP, BMI & Harry Fox) and many UK music fans. Here in our neck of the woods, it’s gotten so ugly that Warner has pulled off many of their videos, even blocking A&R execs from watching YouTube in their office (now what will they do all day?)

Surprise, surprise: the issue centers on money. After years of negotiation with the music publishers, labels, and songwriter organizations, YouTube continues to fight to lower rates for use of music on the site– even as they have hardly paid up the monies that they owe for the past five years. The tentative deal that have been struck, which is what’s kept music available on the service thus far, have resulted in rates so low that they are almost meaningless (have you ever heard an artist or writer claim they’re really cleaning up on YouTube royalties?)– even as YouTube continues to grow in popularity and overall profitability. Given that a huge percentage of the videos on YouTube use music in one way or another, the music industry would like to see a healthy income from this service and others like it. Is that asking too much?

Apparently so. YouTube is continuing to stall negotiations and press for lower and lower rates. Perhaps they figure if they stall long enough, all the major labels and publishers will be out of business and the industry as a whole will be reduced to a bunch of individual artists desperate for any small opportunity for self-promotion. We might not be far from that point.

Not surprisingly, just as some labels are determined to go to battle, others are ready and eager to cut a deal. While Warner and PRS are taking a confrontational approach, YouTube and Univeral Music have recently announced the formation of Vevo, a “premium” partnership channel that will feature Universal Music artist’s videos and presumably charge higher ad rates, from which the profits can be split between Uni and YouTube.

It’s a nice idea, if in fact the consumer draws any value from a channel that shows videos exclusively from one label. Every marketing survey ever done has indicated that most music fans have little or no idea which label their favorite artist is associated with, and little interest in finding out. The real value in the new venture, at least from YouTube’s point of view, may be in dividing and conquering– pulling one of the industry’s biggest and most powerful players over to their side as a business “partner”, just as the others are getting ready to march off to war. I doubt this is an example of the music industry unity that NARAS, NMPA, and the RIAA were trumpeting in a recent Billboard article.

The problem is, venues like YouTube are the only game left in town. No one sees music videos on MTV. Radio is shrinking like a cheap shirt. Record sales have fallen to the point where last week’s #1 Album sold less than 90,000 units in its first week, the lowest #1 sales total since they started keeping track of these things. For most young consumers, music exists on YouTube, MySpace (like an old legendary club that no one goes to anymore), and iTunes.Of course there are live shows, which are great for established superstars, but pretty limited in their earning power for everyone else. Today’s reality is that the music industry has to make money off sites like YouTube, because it’s the only money there is.

In light of that rather dire situation, I think I have to side with the Warner approach, as opposed to Universal’s “embrace the enemy” tactics. Before our industry disappears entirely, we might want to heed a call to arms. Perhaps its time that the chief segments of the music industry– record labels, artists, songwriters and publishers AROUND THE WORLD– quit acting out of mutual antipathy toward each other and start facing up to our common cause. Maybe it’s time for all the labels to pull their videos off of YouTube. Maybe it’s time for all the publishers to shut down every video that offers a bad karaoke version of a song from their catalogs. Maybe it’s time for music executives to quit watching YouTube (this has become one of the primary spots for quickly finding new music, and I’m as guilty as everyone else), and for artists to start encouraging their fans to do the same.

Unfortunately, the music industry has put itself in a very weak bargaining position– in which the myriad of services like YouTube know that the labels and artists are desperate for the outlet that YouTube provides, and thus unlikely to ever actually treat the service as the blatant copyright infringers that they are (and have always been). It might be worth reminding them that YouTube without music would be a collection of news snippets and people doing funny stunts with their pets. That Susan Boyle video that made the rounds would not have been very interesting without sound.

I’m not normally a militant. But I’m not quite sure how the music industry somehow has managed to find itself on the verge of defeat in a battle that should have been a slam-dunk. There is no question that YouTube has been using music without permission or licenses. There is no question that the right to use music synchronized with visual images requires the negotiation of a sync fee and the issuance of a license. There is very little debate that eliminating all music from YouTube would be extremely damaging to the service. And yet, we find ourselves struggling to negotiate a fair rate. Now, we’re even starting to lose the public relations battle, being branded as greedy profiteers by the very people who have been pirating our music to build their own financial empire.

It might be time for an uprising from the creative community– not complaining, or begging, or negotiating, or tolerating or hoping for better, fairer times in the future. Maybe it’s time for actually making a stand and making some demands of our own, and doing it together.

I’m not big on scare tactics.

But every once in a while, it’s not bad to get a sudden glimpse of the darkside– just enough to jolt you from the stupor of complacency with the sudden realization that “Hey, it’s a jungle out here!” Yup. Always was, always will be.

In the middle of the flurry of holiday merry-making that constitutes the last month of work (?) in the music industry calendar year, I received one of those jolts of reality– from a songwriter friend of mine just recently returned from a sudden plunge into the abyss. As we caught up on the year’s activities at the BMI Holiday party, he recounted to me a horror tale that served to remind me that some of those music business weasels surrounding us that evening, as charming and harmless as they might appear (which was not all that charming or harmless really), were still predatory and dangerous beasts.

Two years ago, my friend had a song on an album that became a sizeable UK hit– needless to say, it promised a significant windfall for a songwriter who had achieved some success, but never quite had the good fortune to score a major US single. (Obviously, the names here have been omitted, to protect the innocent, and the not-so innocent). As he was signed to a US publishing company, my friend assumed that his publisher, obviously aware of the success of the album, would take the necessary steps to collect the money earned by the song. So he waited. And waited.

As a year went by and earnings failed to materialize, he became concerned (that’s an understatement). Finally, he began to do his own research as to what had happened to the pot of gold that was supposed to be at the end of his rainbow. It had vanished into thin air.

Well, not exactly. It had vanished into someone else’s pocket. It seems that my friend’s publisher, mired in paperwork as most publishers are, had failed to properly register the song with MCPS-PRS in the UK (their version of Harry Fox). Consequently, the money that had been earned by the writer fell into the vast pit of unclaimed earnings. That’s a big, ugly cauldron where confusion reigns supreme, and nothing and no one is safe.

How big is it? You can’t imagine. As a member of MCPS-PRS, our publishing company receives a document semi-annually that lists the unclaimed monies, with song titles and often with the names of the writers. The document is well over fifty pages long. Some titles are well-known hits, by superstar artists. The fact that a writer’s money falls into the unclaimed file doesn’t mean that the writer or the artist is obscure or unknown. It merely means that the song has not been properly registered, and therefore, the society has no place to send the money. It’s a very educational list.

Therein lies the problem. For an unscrupulous publisher, such a list is an invitation to treachery. After all, here is a list of titles, many of them recognizable from successful albums, representing money that the true writers and publishers don’t even know exists. What’s to stop another publisher from forging a contract, and claiming that money on behalf of the writer? Not much it seems. This is what seems to have happened to my friend.

But that’s stealing, right? Uh, yes. Surely one can take legal action to reclaim the money that was taken illegally. Well, sort of. My friend could have hired a lawyer in the UK (not all that easy, and definitely not cheap) to sue the other publishing company. It’s a pretty good strategy, if there’s over several hundred thousand dollars at stake. But when one calculates the costs of a two-year legal wrangle in a foreign country, it’s not a a very practical undertaking for any amount under $200,000. Keep in mind that there is no way to know exactly how much may have been stolen, until you launch an investigation, an audit, etc. More importantly, remember that most of the money on the Unclaimed Income list is money that the writer and publishers don’t even know is out there. Nine times out of ten, no one will ever find out that it’s gone.

So what’s the moral of this sordid little tale? What can a writer do to protect him or herself in the Darwinian world of the music biz? Start by obeying the first law of the jungle: Don’t leave money lying around.

1. Check your registrations. Then check them again. BMI, ASCAP, and Harry Fox all have systems that allow you to check that your song is registered correctly. Even if you’re signed to a publishing company, you still need to check and re-check those registrations. A publisher has a responsibility, but in many cases not a legal requirement to register your songs. This is not an area for blind faith. Trust, but verify.

2. Make some friends. Get to know your ASCAP, BMI, or SESAC representatives. If you do a lot of business in the UK, then make some contacts at MCPS/PRS. You need to know people, and just as importantly they need to know you. Low profile is no profile.

3. Act fast. I’m amazed at how many writers have a hit, then spend a year or two trying to decide if they want a publishing deal, who they should sign to, what society they want to affiliate with, etc. All the while, the money being earned by the song is languishing in “copyright control” or “unclaimed earnings”. If you put a $1000 on the sidewalk, would you expect it to be there a year later? Time is of the essence.

This is not a happy story. It’s unfortunate that the industry has people who will rip-off songwriters and others in the creative community. These “take the money and run” types are not the majority, but they’re not rare birds either. The reality is that they prey on the ignorance or inattention or complacency of legitimate writers and publishers. That’s the value of the wake-up call. Lost money will not find its own way home. Nor will it remain lost forever. If it’s yours, you have to go out and get it.