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Music Publishing – The Mother Lode of the music industry
23rd January 2020 By Vlad
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In recent decades the least interesting (i.e. boring) sector of the music industry, music publishing, is now being re-appraised with growing appreciation for its contribution to the music biz, and with increasing interest for the full scope of the publisher's activities.

Smart publishers = smart copyright owners

Recently, Music Publisher Associations around the world are reporting a surge in new companies with new entrants of all types, from the strongly financed players such as Imagem (backed by the Dutch pension fund) and BMG Music Rights (operated by Bertelsmann and financed by equity fund KKR) to the one-person publishing and licensing ventures.

All this activity suggests that if the recorded music business is shrinking, the publishing side is as vibrant as ever and attractive to investors, entrepreneurs and smart copyright owners.

Important trends worth watching

It is quite revealing that one of the main management changes at the top of one of the four majors in 2010 saw the promotion of an executive from the music publishing side – Roger Faxon, now CEO of EMI Group, who made most of his career at EMI Music Publishing.

On the A&R side, music publishers know the importance of good songs, which is the backbone of their business, and are usually the ones who nurture the relationship with songwriters and performers from the start, especially business saavy composers who have self-publishing in view for their material. Either way, they are in there for the long haul, and while artists may be dropped by labels, they rarely lose their publishers.

Shift from record labels to publishing

On the exploitation (licensing sales) side, publishers have been making licensing deals since the dawn of times. That’s their bread and butter.

There was a day when the high-flying execs of the record industry would ridicule publishing as a “pennies” business. Not anymore. While the record companies continue to see record sales dwindle, publishers are one of the few segments of the music industry that are continuing to increase their profits. And no deal is too small for publishers, as they also know that it’s a “crumbs” business, as Sony/ATV chairman/CEO Marty Bandier has coined it.

Publishing + licensing = Income

Think about all of the places that you hear music used every day: on one of the hundreds of cable channels, in an inflight movie on an airplane, in a restaurant or bar, in a ringtone on a cellphone. If a song is being played, it’s earning publishing income.

There are performance royalties which publishers collect as compensation for any public performance of the song, on radio, television, stage, or other public place.

There are syncronization (aka sync) fees paid whenever a song is used along with a moving picture, on television, in an advertisement or in the movies. And if someone wants to use your song for Billy Bass the Singing Fish, or with a Barbie Doll karaoke machine or video game, there’s a fee for that, too. Yep, those pennies can really add up… and there’s gold in them there hills!

It pays to be proactive

For newly established publishers, getting a kick start in the business can take some time. You have to build your creative assets (compositions & recordings) on your own or with some co-writer relationships before being able to earn revenues from your catalog. However, publishers do not necessarily need thousands of tracks before they can generate cash flow from new clients and other placement sources.

Most publishers, especially new ones, including experienced TAXI clients, are advised that any deal is enough to get started. If there is a sync deal available and it only pays $300, take it as long as the terms are reasonable and then multiply the deals. It’s required to be proactive to connect with opportunities, but this is part of today’s “gold panning” work for any new independent-minded music publisher.

New era for publishing and licensing

In today’s global market, the opportunities for publishers has expanded with new possibilities that have significantly broadened the scope of potential licensing sales. Publishers have the benefit that their business covers so many aspects of licensing, that by the nature of this diversity and their ability to readily adapt, publishers are back at the heart of the music business like they were a century ago.

This spiraling trend now makes it desirable to be a publisher, and therefore it’s no surprise that many aspiring executives, including songwriters, composers and producers, are jumping to claim their stakes in this new golden era.

Purpose and research sources

The purpose of this article is to inform independent-minded music creators and copyright owners that music publishing is an essential part of their future economic success. Research and information compiled from the author’s first-hand experience in the business and from various sources including music industry blogs, Berklee College of Music publications, Music Publishing And Licensing group discussions, Wikipedia and other links provided.

 

Original post by LicenseQuote