Due to the fact that I was traveling all day yesterday, I had no chance to post, so I’ll be doing a post today and one again tomorrow, as I like to publish at least three times a week. I also want to remind you all that what will make this site even more vibrant and resonant is if you also contribute your experience and your opinions as well. We can all learn from each other and, as you can see from a lot of the comments, there is much to be learned and shared.
On the plane yesterday from Houston, there was a fellow who wanted to know about publishing; what it was and how it worked, so here in a nutshell is what I know about it.
To begin with, someone writes a song, which they own in its entirety. Somewhere in the last hundred a eighty years or so, some fellow came up with the idea of owning a piece of a song that he didn’t write. In order to do that, they had to create an imaginary division between the song and it’s creator, so they came up with this idea: a song is divided into two parts, the creator part and the publisher part, each equal to half of the ownership of the song. I know that it sounds weird and that’s because it is. This perception was simply imposed upon the created song by the people that invested in the song.
Anyone who invests in something is entitled to a return on their investment, but in this case for as little money as the creator was willing to take, the investor would own half of the song in perpetuity. Most of the time, there is no return, so THAT is the rational for taking so much; where one hit will finance all the investment in all the songs that aren’t hits. But the reality is, it’s not the creator’s problem to finance all the “non commercial” songs into which the investors put their money.
On top of the imposition of this split of a song into two parts is a device they call administration of the publishing, which is usually ten to fifteen percent off the top for all the effort that they are going to put into marketing the song and the expense they are going to incur on behalf of the song; all their efforts to turn the song into something that actually earns money. So here’s the math: 100% of the song minus 15% admin costs which leave 85% of the song which is then divided in half to equal 42.5% each. This ends up giving the publisher 67.5% of the song and the writer 42.5% of the song.
They say it's fair because the writer gets the writer’s share (what generosity from the new owners, don’t you think?), so the writer ends up with the half he gets for creating the song, minus that 15% off the top. And the songwriter usually sells this right for a very small amount. I was signed to a publishing deal when I first came to Los Angeles and I was paid $50.00 per week. My end was to turn over at least one song a week and I turned over at least two per week. $50 per week times 52 weeks is $2600 dollars. The publishers owned over a hundred of my songs in perpetuity for $2600.
Now what does a real publisher do for their part in this? They listen to all the songs you write and many of them might be dismal. They help you make them better, perhaps more accessible, perhaps more commercial. But they take time and energy and money and they assist you in honing your songwriting craft. Then they take you and a few of your songs and they go into the studio and they create demos of the songs with which they then make enumberable copies and distribute them to all the artists and producers who might hear the song with the same enthusiasm that you do. And eventually one of these people will record one of the songs that were demo’d and then you participate in the earnings from that recording. This is a description of the idealized publishing situation.
Earnings can come usually two places: cd sales (called mechanicals) and airplay (the radio and tv stations that play your music have to pay for the privilege). Now there is also licensing, but we’ll talk about that tomorrow. For now, we’ll just look at these two.
The record label, ideally, will keep track of all the CD’s sold and must by law account for those sales and pay you a fee per song on the CD. This fee is paid to the publisher on behalf of the writer and the publisher’s shares. So if $100 comes in on CD sales, the publisher takes $15 off the top for handling all the business and then splits the remaining $85 between the publisher and the songwriter, $42.50 each. It is determined by law what a record label must pay for each song that they use on a recording, tho in fact these rates are negotiable.
The commercial radio or tv station that uses or performs or plays music that you wrote also must pay for the privilege and those monies are collected by collection houses such as BMI, ASCAP or SESAC. And they take a fee off the top for collecting the money for you before they pass it on to the publishers who take 15% of what comes in off the top for their admin fees.
And now to really scare you out of this business, now that CD sales are in the toilet by major label standards, the major labels impose on the artists they sign, a travesty known as the 360 deal. This is where they get a piece of every song you write, every t shirt you sell at your concert and every ticket that you sell at your concert, in effect every dollar that comes in they get their piece of AND they get all their investment paid back first out of all the monies coming in and then you begin to get your share, which rarely happens unless you have more than one major hit.
Welcome to showbiz.