The Real Price of Music Publishing
I’ve been in publishing deals for more than 25 years. I’ve been in some bad deals, some good deals, and some great deals. I’ve worked with non-exclusive song pluggers, and exclusive song pluggers. There are positives and negatives for every situation. Music publishing is complicated and hard to understand as an outsider. I’ve tried to explain it to my mother for the last quarter of a century, and she still doesn’t get it. You can’t believe the amount of published songwriters that I know and work with regularly who don’t even understand how music publishing works or even how they recoup their advances and earn royalties. Your publisher is not BMI or SOCAN or ASCAP...those are P.R.O's or performance rights organizations. Different royalty, different revenue stream. Here are five insights from the inside to start you off on your journey down the Music Publishing yellow brick road.
By Justin Gray (Songwriter/Producer/Founder MDIIO) Publishing vs. Co-Publishing and the Writers Share - All songwriting royalties are basically broken up into two sides. There’s a publisher share, and there is the writers share. The publisher share represents the actual publishing copyright, while the writers share represents the writer's earnings through things like performance and mechanical royalties. Typically when you do a publishing deal you can do either a publishing deal, a co-publishing deal, or an admin deal. Publishing deals are usually deals that encompass the acquisition of your entire publisher share typically in exchange for some sort of an advance. A co-publishing deal represents a partnership on the publisher share typically 50-50 (usually with a smaller advance). What that means is for the publisher share you would retain 50% of the publisher share, and the publisher would then collect on the other 50% of the publishing. The other half of the Publishing revenue is the writers share. The writers share are earnings that you retain in perpetuity. Typically a publishing partner will collect on both the Publishing and the writers share for a set amount of time. Usually Publishing and Co-Publishing deals collect on your revenues for up to 25 years, even if you have recouped. Admin Deals - Like a publishing deal, an admin deal functions in much of the same way, however, the difference is that certain rights are restricted within the scope of the agreement. So although they will still collect on behalf of both the publisher and the writers share, typically in an admin deal those percentages are lower. Closer to 15% but also as high as 25%. Admin deals also typically run for up to 3 years. What that means is once the admin deal has concluded, those rights that your admin partner was representing will revert back to you. You can then take those rights and enter into a new agreement at another point. The downside is oftentimes Admin-only partners might be less engaged in day-to-day creative support like setting up collaborations or pitching to sync opportunities. Recoupment - So you may have done some sort of a publishing partnership, and perhaps even received an advance. Congratulations!!! What you need to understand about how advances are paid back to your publisher is really important. 99% of the time a writer is not responsible to pay back advances directly. Here is another way to look at it. Let’s assume that you have a co-publishing agreement, wherein your partner retains half of the publisher share and none of the writers share. In effect that means that they keep 25% of all of the revenue associated with your royalty earnings. Using our $10,000 example, recoupment goes as follows. You get paid a $10,000 advance, and let’s assume that you get a $10,000 "all-in" sync placement. Let’s also assume that you are a 50-50 co-writer on that all-in sync placement of $10,000. This means the publishing is worth $5000 and the master recording is worth $5000. We will talk about the master another time. As a 50-50 co-writer, your publisher will collect on your entire $2500 share, take 25% of that off the top as their piece (as per your agreement), and apply the balance to your unrecouped advance. In other words, they would take $625 off the top, and then apply the balance of $1875 against your account. This would leave you unrecouped $8125.00. Ostensibly, over the course of your publishing deal, your $10,000 advance in effect would cost you approximately $12,500 to pay back. That's just one example. There are other royalty streams tied to your publishing revenue. However… Creative - However, creative support is a huge component of what a great music publisher could bring to the table for you. Creative can be many things. It could mean people to bounce your music off of, the opportunity to create new collaborative relationships, open doors to artists, music supervisors, managers and labels. Think of it like networking amplified. A great part of how music publishers work is also by creating relationships with other writers that are also signed to the same publishing company. This serves two purposes. One obviously, is they want to try and create strong collaborations and opportunities for you. But also more songs that are wholly represented by the publishing company is a benefit to all of the parties involved especially when it comes time to pitch music for potential licensing. And that is where a great partner can come in. If you find somebody that truly believes in what you’re doing creatively, and can help steer and guide your career accordingly, you’re off to an incredible start. Fees and Commissions - If you are at the stage where you are considering signing a publishing deal, you are probably already working with some sort of attorney, and or a manager, and or somebody who basically helps represent your best interests as you embark into these new partnerships. If you are not, you absolutely should. It could be very scary, as there are definitely ne’er-do-wells out there looking to take advantage of innocent and ignorant songwriters. So please do not be either of those. However with this type of representation also comes a cost. Typically managers will commission 15 to 20% of your revenue. Oftentimes attorneys (if they’re not getting paid directly), may also take another 5% of your revenue to represent you. If you happen to be working with third-party song pluggers their fees can be anywhere from 35 to 50% of whatever they earn. Look at it like this. Would you prefer a 100% of a teeny pie, or 50% of a huge pie that can only get bigger. A little perspective…Jeff Bezos is the world’s first trillionaire…and that’s based on owning only 16% of Amazon. That’s a biiiiiiiiiiiig Pie! The CODA: Fear not my friends. These are excellent problems to have. I have always been an incredibly strong advocate for finding awesome partners who can help tell your story. There is true value in having believers who can not only prop you up, but also provide the tools and resources for your success. Everybody that comes into your life that can help, is basing their earnings on your success-ability. But just because an opportunity has presented itself does not mean that it’s necessarily the right opportunity. Keep your eyes open, and be aware. There’s nothing more professionally demoralizing than signing a publishing deal, waking up the next morning, and in the light of day regretting what you’ve done. Trust me!!
Just the fact that you read this means that you got this! So GO GET IT!!!!!!! See you next week, and keep writing those hits Justin@mdiio.com