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.

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.

Alright—-I know I’ve kept you all hanging on a cliff all week. When last we left off, all of the “track writers” among us had just been hit with the newfound knowledge that by sending out their tracks to every lyric and melody writer with whom they’ve traded business cards, they may have unwittingly given away 50% of the final song to a dozen different writers. Lyric and melody writers or “top liners” were shocked to find out that they might not be the only ones writing to that track they received from their MySpace friend. They were also rather dismayed to know that their brilliant lyric idea was no longer their own, but now belonged to the track writer as well. Tension ensued. Nervous glances between once friendly writing partners were exchanged. Lawyers were consulted. What do we do now?

In case you missed it, the most recent blog addressed the issues involved in what is the now familiar method of co-writing between “track” writers, who compose an instrumental “track”, and “top line” writers, who usually write the melody and lyric of the song. This style of collaboration has become the most common approach to songwriting, particularly in the pop, dance and urban worlds– whether it’s Lady Gaga and RedOne, Justin Timberlake and Timbaland, or Ne-Yo and Stargate. The difficulty is that track writers are frequently sending their instrumental tracks out to several different top line writers (often without the knowledge of the top liners), and essentially auditioning the various writers, to see who comes back with the most commercial melody and lyric. At the same time, many melody and lyric writers are laboring under the idea that if for some reason their melody and lyric isn’t the grand prize winner over this particular track, they can simply take back that lyric and put it over a different, and hopefully, more successful track somewhere down the line.

First, let me say, despite my advanced years and traditional mindset, I do “get it”. In the early years of my songwriting career, I was primarily a composer, and “track” writer/producer. In the later years of my songwriting stint, I shifted roles and became primarily a top line writer. So I do actually know the realities at play here.

First, let it be said that there is nothing more difficult than writing a hit melody and lyric. Most track writers can deliver consistently at a B-level, and can probably nail an A-level track at least 20 or 30% of the time. The success rate for even the best lyric writers is far lower– it’s probably one in twenty ideas that really have “hit” potential. Therefore, it’s not surprising that most track writers like to have at least a couple of different writers take alternate approaches to any one track. Who wants to burn a good, commercial track just because one writer came up with a mediocre melody and lyric? Like I said, I get it.

In the same way, why would a top line writer, upon finding out that the song they’ve written is only one of fifty that share the same musical composition (and that their lyric is not the “chosen” one for that track) not take back at least a few of the best melodic and lyric ideas, and put them into a different song that might actually see the light of day? After all, great hooks or lyric concepts don’t come along every day. It all makes perfect sense.

Except that this is not the way that copyrights work. Copyright law, which is the law that defines ownership of songs, stipulates that once a copyright is created, each one of the creator’s shares in the full copyright. This means that once a new song is created, the track writer owns 50% of the lyric, in the same way that the lyric writer owns 50% of the track. No writer owns just the part that he or she wrote. They own a share in the total, complete song. You can’t remove one lyric writer from a song and substitute another, any more than you can take one lyric idea and separate it out from the track that lies underneath it. It’s all one thing.

So what do you do? How can a track writer find the best melody or lyric for his or her track, without giving ten different writers a 50% share of the same song (shades of “The Producers”)? How can top line writers avoid finding all their best work wasted on songs, which don’t even wind up using a note or a word of their writing? This is a very complex question, in an area where the lawyers, so far, have feared to tread. But here are three quick suggestions for protecting yourself as best you can, at least until this legal grey area is finally clarified:

1. Communicate.
Believe it or not, there are a few areas in the music business where honesty really is the best policy. This is one of those. If you are sending out tracks to several different top line writers, simply let them know that. A few may be offended. A few might refuse to write to the track if others are already working on it. But those are exactly the misunderstandings and bruised egos that you’re looking to avoid. Better to spot them sooner, rather than later.
Likewise, if you’ve decided that the lyric and melody you’ve written is being wasted on a track that’s going nowhere, a simple phone call may be enough to gain permission to take that lyric back, and put it over a more viable composition. Don’t let track writers hear for the first time the hook they thought was theirs, at the moment when it comes on the radio. That makes co-writers angry, it makes publishers angry, it makes other artists (who may have thought they were cutting the song) angry. That much anger can’t be good. Simple, clear communication can save a lot of headaches. 2. Clarify
It never hurts to have things in writing. Send a simple email or letter with your track that explains very frankly:
(a) This track is solely created by “Hot Track Writer” and no ownership in this track is being offered to the “Top line Writer” simply as a result of composing a melody or lyric to the track. Likewise, no ownership in the melody and lyric written by “Top line Writer” is claimed by “Hot Track Writer”.
(b) This track may be submitted to multiple writers, in an effort to solicit different melody and lyric ideas. None of these melody and lyric ideas, or the demo recordings that embody these melody and lyric ideas in combination with the track will, in and of themselves, constitute a new composition.
(c) Only upon the mutual agreement of “Hot Track Writer” and “Top line Writer” will the combination of this track and “Top line Writer’s” melody and lyric actually constitute a new composition. Should the existence of such a new composition be agreed upon by both parties, ownership of the new song will be shared equally between the two parties.
(d) Should one or both parties decline to create a new composition from their joint efforts, this track will remain solely owned and controlled by “Hot Track Writer”. Similarly, all melodic and lyric ideas will remain in the ownership of “Top line Writer”. Neither party shall have any claim on the work of the other.
You can attach a brief outline like that to an email, along with an mp3, or in an actual letter. But at least everyone knows what they’re getting into.  3. Keep things separate, but equal.
If you really want to play it safe, you could actually register your “tracks” or your “top line” as a separate composition with ASCAP, BMI, SESAC, HFA or the Copyright Office. At that point, you could take the position that whatever track you decide to put your lyric over is a “derivative” composition of your original lyric– which means you own the lyric in its entirety, and you own 50% of the new song that was derived from the original composition. In the same way, a track writer could claim that the track was a separate composition, which he or she owned 100%– any song created with a lyric over the top of that instrumental track would be deemed a derivative composition.
This method is probably the most thorough approach to the issue, however it generates a great deal of paperwork and is unlikely to be a favorite approach of most publishers (or most licensing organizations). Does ASCAP really want to register a track and a derivative composition for every different song? Does your publisher find that registration process to be a worthwhile investment of time? In the real world, it’s highly costly to treat every song as three different copyrights– the original track, the original lyric, and the combination of the two. Multiply that by every song submitted to ASCAP, BMI, SESAC or HFA and you start to get some idea of the scope of the problem.

Needless to say, our efforts in this blog have been to shine some light on what is a dark secret, and a grey legal area, in the music business. There are no clear-cut standards here– only “customary ways of doing business”. What I can tell you is that silence is not golden (lack of communication leads to problems in this area), “don’t ask, don’t tell” will inevitably result in “don’t own what you thought you owned”, and playing a new game without understanding the old rules that still apply is a very dangerous venture. If you ask someone, or someone asks you, “do you wanna write to my track?”, it’s not just collaboration that’s being discussed. It’s co-ownership of a copyright, and that’s a much more serious thing. Keep an eye out for this one– this subject is going to wind up in the news in a big way, sooner or later. It’s a legal quagmire just waiting for someone to step in it. Don’t say I didn’t warn you.

Admittedly, at least on the profit and loss ledger, 2008 is shaping up to be a real turkey. Wherever you live, whatever you do, the meltdown of the global economy is hard to ignore, and hardly bodes well for a robust 2009. As the song said, for the time being, “money’s too tight to mention”. So let’s move on to brighter subjects. For music publishers and songwriters, there are still a few things to be thankful for. In between the football and the food, let’s take a minute to celebrate the good stuff:

1. We’re not in the record business.

After another year of declining profits for recorded music and further steep drops in CD sales, not to mention the shuttering of additional retailers, it’s now official: the business of selling little plastic discs with music on them can be safely declared dead. Happily, we are not in that business.

2. We can be in the “new” record business.

If music is going to be bought and sold digitally, there’s no reason that music publishers can’t be in the business of directly selling music, rather than licensing it to a third party. After all, there are no longer manufacturing costs, packaging, or physical distribution centers to maintain. We have the music. All we have to do is market it and sell it. Beats waiting on a royalty statement from EMI Records.

3. People are still buying music.

In fact, they’re buying more of it. At long last, the digital sector is becoming genuinely meaningful on a financial level, and it’s showing a healthy growth. In a depressed economy, we are the sellers of truly inexpensive entertainment (I mean, 99 cents per song? How much more value can you give?). We’re cheaper than a movie or video game, and longer lasting than a Broadway show or a fancy meal. If the last Depression is any indicator, we are in a pretty good position to hold our own in a difficult economy.

4. We might actually get paid for the music people are buying.

Now there’s an exciting bit of news. Kudos to the NMPA, David Israelite, ASCAP, BMI, SESAC, HFA, and the many others that fought for the rights of publishers in this year’s battle over mechanical royalties and digital rates, as well as court decisions with YouTube, Yahoo, and others. Happily, the US government has re-affirmed (at least for the moment) that copyright holders have the right to get paid. As music publishers and songwriters, that definitely helps our business model.

5. When you are your own boss, no one can lay you off.

Never thought I’d see the day when songwriters and publishers would be better off than investment bankers. But at least when you’re a songwriter, no one can give you a pink slip and make you stop. If you’ve got songs that you’ve written, then you are automatically a music publisher. You don’t have to look in the “help wanted” ads to find a gig.

The truth is, those of us in the creative community are used to financial struggles, and making the best of things in difficult times. Any successful veteran songwriter has risen from the ashes at least a couple of times in his or her career. Most music entrepreneurs are as well acquainted with failure, as with success– so they don’t have to be afraid of either one. The music business weasel may be slimy, but he or she is also scrappy, cunning and infinitely opportunistic. Those are good qualities to have when times get tough, as they most assuredly will be.

So be thankful that despite all the turmoil, you can continue to do what you do, make the music you want to make, and hold the keys to your own future. Best wishes for a great Thanksgiving!