Tuesday, August 4, 2009

Question of the Day - PUBLISHING PITCH - August 4, 2009



Charley Stauber asks:

What is the best way a person/company can go about asking an artist/band to split the publishing rights to a song? Is it purely a matter of trust(or reputation) between the artist and the company or person requesting to split the rights?

Hartmann responds:

The one true thing in the music business is publishing. When all the dust settles, when the act no longer tours and the records are out of print, what remains is ownership of the intellectual property. The "deed" to a song is known as a "copyright." This appellation is designated in the legal and practical vernacular of the industry. The owner of a song is clearly defined in the federal statutes. The equity automatically accrues to the songwriter when and as he creates the words and melody. When the song is fixed, in a manner that can be reproduced, the copyright exists.

Prior to some other action being taken, the songwriter is both author and publisher of his creation. Of the millions of songs posted on various music websites, most are never formally registered. Ninety percent of artists, calling themselves songwriters, have no commercial viability. Their myspace page is likely to be the only place the song will ever be available to the public.

I have never met an artist, or band , who didn't think that their music was brilliant and that they would go all the way to The Big Top. Many take the initial steps of consolidating a repertoire, creating a live act and chasing the golden ring. Ten percent of the dreamers actually develop to a point where they make a profit. Survival leans heavily on the quality of the artist's repertoire.

We have entered The Music Renaissance. As the record business continues to decline, the artists must address the desirability of signing with a label. They aren't really able to contribute much and seem to have abandoned their responsibility for developing new artists. The future music stars will not be built from record company penthouses down; they will rise from the cyber-grass-roots up. Managers and artists must establish their own record and publishing entities. The publishing royalties should be preserved to provide an income stream for the artist's retirement.

The big four music companies own major recording and publishing entities. They have always coveted the performing artist's copyrights. The custom of the industry is for labels to demand ownership of the publishing in return for granting a recording contract. In the early sixties America's greatest songwriter, Bob Dylan, challenged Columbia records on this issue. He stubbornly provoked the first co-publishing agreement between a star and a major record label.

Dylan was able to establish a precedent that eventually became common practice. The stronger managers were able to retain publishing ownership for their clients, others accepted split copyright arrangements. The labels usually negotiate to retain the administration rights which gives them the power to dictate how the song will be licensed and otherwise exploited.

Another sticky point for the artist is that the label will seek, and almost always secure, a twenty-five percent reduction for use of copyrights controlled by the artist. This is known in the trade as a three-quarters of statutory rate. There is no particular reason for an artist to accept these terms unless there is a meaningful price attached to the deal. In the postmodern era managers should resist the pressure to erode the artist's mechanical royalties and keep publishing income in house.

Record companies and music publishers seeking to acquire copyrights must develop a convincing pitch that justifies the request. The company must indicate what services they are going to bring to the table. Artists today are not naive about these matters; there has been a lot of chatter around the publishing issue on MTV and other reality television shows. The emerging artist is conscious of these mechanics and protocols and enters the fray aware of the value of his catalog.

The latest record company strategy is to include an interest in the publishing under the terms of a 360 degree record deal. This arrangement makes the label a partner in the artist's entire career and throws traditional enemies into an awkward relationship. This type of deal seems to work for star attractions, since they do strong business and usually recoup the enormous guarantees. New artists are not offered much for their copyrights since they are unproven as writers and artists.

There are two times when a publishing deal can be advantageous to the artist. One is at the beginning when the songwriter needs the most help in polishing his craft and learning how the game is played. Income from publishing deals can finance career development. The second time to sell is when the catalog contains "hit" material and has extraordinary value. The purchase price of established publishing companies is extrapolated from the calculation of projected earnings

In The Music Renaissance, artists and mangers should avoid record and publishing deals as long as possible. Their careers will be built in the local markets and spread from there. Success will be based on quality of material, an entertaining live act and unusual vision and desire by the artist. Talent is an important driving force, but an act with less talent and a more passionate will to win can eclipse his competition by taking a more proactive posture and by keeping control of all income streams.

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