Music Publishing & Songwriting

I was recently speaking on a panel, when one of the other panelists asked the audience, “How many of you are songwriters?” Not surprisingly, a show of hands indicated that almost everyone was a member of that not-so-exclusive club.

I followed up with another question: “How many of you are music publishers?” Now, the crowd hesitated. One… maybe two hands were raised. I couldn’t let it go at that. “How many of you need a music publisher?” Once again, unanimity prevailed. Every songwriter had decided that he or she needed a music publisher. That’s when I broke them the news:

If you’re a songwriter, you already have a music publisher. You’ve had one for quite some time. In fact, your publisher is your greatest untapped resource, ready to take your assets (that’s your songs) and put them into action (placing them somewhere where they can earn…) to yield income (which is the goal, last I checked).

Newsflash to Songwriters: Your music publisher is… you.

From the minute that you finished your first song, you became not only a songwriter, but also a music publisher. When you write a song, you control the rights to that song and are able to license those rights (which is what a publisher does), until the time when or if you decide to assign your publishing share to someone else.

Every song is divided into a writer share and a publisher share. If you, Joe Songwriter, have written the entire song on your own, then the writer share belongs entirely to you. If you have not made a publishing deal for your share of the song, then the publishing share belongs to Joe Songwriter Music, or whatever you choose to name your publishing entity. When a songwriter asks me how to find a good publisher, I usually say, “Become one.”

That of course, is a little bit trickier. That means work. It means research. Above all it means figuring out the answer to a question that perplexes even many people with years of experience in the music industry: What does a music publisher do?

Music publishers turn music into money. Did that get your attention?

It often takes songwriters by surprise when I point out that songwriting is not, in fact, a business. It’s just something that songwriters do. In the actual course of writing a song, there’s no money changing hands, nor is anything bought or sold. Hours are spent, lunch is ordered, ideas are exchanged and at the end of the day, something exists that never existed before. But it will take someone else to turn that new song into something that generates income. This is the role of the music publisher.

When I titled my book about music publishing “Making Music Make Money”, it was with this fundamental purpose in mind. The basic role of a music publisher is to find every possible opportunity to place the song somewhere it can make money, which is known as “exploitation”. Music publishers control the rights to a song, which means that anyone seeking to use that song in any way, anywhere in the world, must obtain the permission from the music publisher—that permission or “license” usually comes with a price. Publishers make their money not by creating a physical product, as record companies do. Publishers create income for themselves and the writers they represent, by granting “licenses” for the use of the song. Those “licenses” create several different kinds of income streams:

Mechanical Income: From CD sales, digital downloads and other sales from physical product.

Performance Income: Collected through ASCAP, BMI and SESAC for any public performance of the song– on the radio, television, a website or a sports arena, a hotel lobby, an elevator, or a shopping mall.

Sync Income: For any use of music “in synchronization” with a moving picture. That’s old-fashioned lawyer-speak to describe songs that are used in motion pictures, advertisements, television shows, or video games.

Other Income: This includes “reproduction” rights, which includes the right to print sheet music, or lyrics from a song—it also includes everything from uses in greeting cards to toys to karaoke machines.

Anytime you hear or see a song being used, there should be at least one, and often several licenses that have been granted, and which are now generating income for both the publisher and the songwriter.

If all that seems like a good business to you, you’re not the only one. While even major companies like BMG seem to be fleeing the record business, new publishers are sprouting like spring flowers—many of them with seed money from investment banks, hedge funds, and financial institutions. If you’re a wealthy investor, buying a publishing catalogue has become akin to acquiring an Old Master painting.

But there are plenty of opportunities in music publishing for people other than Wall Street financiers. Managers, record labels, studio owners, booking agents or other music entrepreneurs—anyone who has relationships with songwriters and the ability to recognize new talent—should be thinking about starting a publishing entity as a part of their business structure. Given the explosion in music use for ring-tones, YouTube videos, and electronic games, even in the face of falling CD sales, it doesn’t take an economist to figure out that a music publisher is a good thing to be.

Of course, if you’re a songwriter, you already are a publisher. Now, the challenge is learning to be a good one. Education is part of it. Experience is a part of it as well. But the all-important first step is simply understanding and accepting your role, as the one who will create a business out of your own songs. Who needs a music publisher? You do. And now you know where to start looking.

Want to read more about becoming your own music publisher? Click the my book below to read more about it:

In the beginning, there was… publishing.

Not many people know it, since not many people in today’s music industry were around to see it, but the real beginnings of the music industry were not in those old vinyl discs or the antique phonograph with the RCA dog sitting next to it. The commercial music business started with music publishers, who first figured out how to move music beyond an endless succession of live shows, and turn it into an industry back at the end of the 19th century… through the sale of sheet music.

Back then; music publishing was the only game in town– both for songwriters hoping to eke out a living from their creations, and for audiences eager to be able to enjoy music outside of a concert of dance hall. Music stores would feature a piano player, who would perform the hot new songs of the day for customers passing by. If they heard something they liked, customers could come in and purchase their own copy of the song that they had just heard. Granted, that “product” had a definite do-it-yourself quality to it– it required the music consumer to take the sheet music home and learn to play the new song. Nevertheless, it represented the first time that people could purchase music as a “product”, enjoy it in the comfort of their own home, and songwriters could get paid on a mass scale.

From there, the business moved from sheet music to “piano rolls” from which the music played itself (the first actual “mechanical” exploitation of music) and then ultimately into the broadcast and recording era that has been the basis of the business we now know and maybe something less than love. Of course, sheet music continues to exist, and in fact, is undergoing a revival of sorts, thanks to the Internet and companies like Music Notes (Music Notes). But certainly, the industry has come a long way from the days when publishers were the primary game in town.

Or has it?

My friend Jerry Lembo, a legendary music figure himself and a great student of the industry (check out his blog at Jerry Lembo MySpace Blog), sent me an article today, titled Rock’s New Economy: Making Money When CD’s Don’t Sell. The story describes a terrain familiar to anyone in the music biz in 2008: falling CD sales, leading to an increased reliance on touring and licensing in order to generate income. And no one knows licensing like a publisher. After all, publishers created it.

Imagine how music publishers initially reacted to the advent of radio, and even worse, records, back in the early days of the 20th century. Probably with the same love that record labels now show Limewire and file-sharing college students. After all, publishers had just figured out a way to get rich selling music printed on paper– the last thing they needed was someone coming along and beaming it straight into people’s homes, or giving them plastic recordings they could play anytime they wanted. That’s when the publishing community hit on the bright idea that would carry them through the next nine, increasingly prosperous decades:

Licensing.

A company didn’t need to make a physical product. Just by controlling the underlying “rights” to a song, publishers and songwriters could make anyone who wanted to use that song, on the radio, television, records, or in films, advertising, nightclubs or elevators, pay for the privilege. Anyone using a song in public way for commercial purposes had to obtain a license, and the publishers controlled the licenses. This quickly became a very profitable business. The company, for which I work, Shapiro Bernstein, is one of the oldest music publishers in existence. Back in the early 1900’s, they had dozens of actual printing presses around the country in order to manufacture the sheet music to the latest Tin Pan Alley hit. Today, there are less than twenty employees in the New York office, and a scattering of employees and consultants in LA, London and elsewhere. And yet, profits continue to rise, year after year. Which leads us right up to the present day…

The music industry is growing and contracting, all at the same time. Music is selling less, and being used more than ever before. What publishers learned a hundred years ago, and what record labels are just starting to learn, is that licensing is far more efficient than manufacturing. It takes fewer people, fewer factories, less real estate and carries less risk to license music to people that wish to use it, than to create a physical copy of music for people to purchase. Bands are learning it too. It’s much easier to make money by licensing music to video games, advertisements, TV shows, and websites, than to create small pieces of plastic that has to be distributed and sold around the world. When the labels talk about a “360″– they’re more accurate than they know. The business of being a music creator has come full circle. Just as in the 1930’s, when sheet music gave way to broadcasts and recording, the game once again comes down to creating, performing and most importantly, licensing.

It used to be that old-school record business veterans almost boasted of their lack of knowledge about publishing. It was seen as a pennies business– a stodgy old conservative uncle who had somehow wandered in to the 24-hour party thrown by the high-flying, jet-setting record boys. Now most of those vintage music weasels have retired. The ones who haven’t are trying to start up music publishing companies.

Not understanding music-publishing means not understanding where the music business came from. But much more importantly, it also means not understanding where the business is going. If you want to get the picture in 12 easy steps, check out Music Publishing 101 at Berklee Music or “Making Music Make Money (An Insider’s Guide To Becoming Your Own Music Publisher)”. It’s time to go back to the future and start all over again.