Music publishing agreements series; (part 1) introduction

Believe it or not, the big money (and the more immediate money) in the music industry is not in the recording. It is in publishing. Put another way, the mechanical performance royalties that result from the copyright in the composition, if you are a songwriter, are far more likely to earn you money than the artist royalties that you will receive from the record company (as well as the needletime) if you are a recording artist only. While the introduction of needletime will improve matters for the non-composer musicians amongst us, it may safely be said that the real money is still in songwriting. That means that the most important music contract, in terms of revenue, is the music publishing agreement.

It is not possible to understand music publishing agreements without understanding how copyright works.

The purpose of this series is to explain to songwriters the implications of entering into an agreement with a music publisher for exploitation of that songwriter’s musical compositions. I will try to aim the contents of this series, wherever possible, to singer-songwriters (i.e. recording artists who generally write and record their own songs) rather than just producers, sound engineers or songwriters who generally compose their songs for recording by other people.

Nevertheless, the series will, hopefully, be of use to all songwriters. It should also be noted that all members of the music industry, including producers and sound engineers, need to understand this area of the law, since someone, somewhere, probably owns the copyright in the composition of the music they are recording or using, and they need to understand the implications of this. Other than composers themselves, music producers, in particular, should study content in this series very carefully.

It does not take much capital investment to open a publishing house (no distribution networks, warehouses, etc.). Therefore, there are thousands of small players in publishing, and although there are huge, mammoth, publishing companies as well, they do not dominate the industry quite as much as they do in the record industry, due to the many ‘rats and mice.’ (the three major publishers in South Africa are Sony/ATV Music Publishing (now incorporating EMI Music Publishing), Gallo Music Publishers (representing Warner Chappell) and Universal Music Publishing).

There are several categories of publishing companies: the majors, the major affiliates (independents whose administration is handled by the majors), the stand-alone’s (independents who handle their own administration) and the composer-publishers (writers who handle their own publishing). South Africa has many extremely successful independent publishers, like Sheer Music Publishing and Geoff Paynter Music Publishing.

Publishers appear, today, to have more power in the industry than they ever had before, because of the world’s endeavours in legitimising the internet download business. The “double mechanical royalty” licensing dispute highlights the new power of music publishers, as the recording industry seeks to shift gears from selling songs on discs meant solely for traditional stereo systems to formats optimised for use on computers, mobile devices and computers peripherals – a change with profound implications for artists, consumers, and everyone in between.

Music publishers see the shift as an opportunity to re-negotiate decades-old contracts with record labels that left them with a relatively small fraction of the sale of a CD. Copy-protected discs and DRM’d downloads offers a big chance to do so, since the lion’s share of unauthorised files traded on file-swapping networks comes from unprotected CDs or pirated MP3s.

The fact that every download is a copy and therefore requires a mechanical license, is giving the publishers a whole new opportunity to entrench themselves as the power-brokers of the industry.