Music Business 101 – Publishing

by Terry Hart on August 18, 2009 · 8 comments

in Promotion

Publishing.

This one word has caused more musicians to pull their hair out than any other word in the music business. It’s a tricky and confusing subject – confusion that’s aided by the unintuitive nature of copyright law, the use of archaic terms left over from the history of music publishing, and the general craziness of the music business.

But music publishing is one of the most important aspects of the music business. Every musician wishing to earn money from their music needs to have at least a general understanding of publishing.

If you’ve been following the Music Business 101 series on GrindEFX, you should have a leg up on copyright and licensing, which form the basis for music publishing. If you haven’t read them yet and are unfamiliar with those concepts, why not check them now – I’ll wait!

What is Publishing?

If you recall, the law recognizes two separate copyrightable works in the music world: musical compositions and sound recordings. Musical compositions are merely “songs” – melody, rhythm, arrangement, lyrics (if there are any). Sound recordings are songs fixed on a physical media – CD’s, records, mp3’s (collectively referred to as phonorecords). Sound recordings, then, always incorporate an underlying musical composition.

Licensing is the act of granting a third party rights to your work, presumably to make money. You can license musical compositions and sound recordings.

Publishing, at its very simplest, is the name given to licensing musical compositions. Other than the name, there is no legal or practical difference between publishing and licensing any creative work besides musical compositions – it’s just that history and custom has given the licensing of musical compositions a unique name (probably to confuse musicians).

Just as you automatically receive a copyright whenever you create a work in a fixed form, you become your own publisher when you create a musical composition. Again, don’t let the word trip you up – all this means is that, as with any other work, you are able to do anything you want with your song, including licensing it to other people to help make money from it.

So, if you’ve created a song, congratulations! Not only are you the owner of a copyright, but you are also officially a publisher. But simply being a publisher won’t make you money – you have to act as a publisher, or find someone else to do it for you.

Music publisher extraordinaire Michael Beall describes publishing this way:

There is no money generated by the act of writing a song; it’s just what you do. Music publishing is the business of turning songs into something that earns money. So if you want to earn money from your songs, you have no choice but to take on that role of the music publisher. Songwriting is the act of creating the music, and publishing is looking at your creation and thinking of revenue outlets for it.

A Brief History – Or, Why is it Called ‘Publishing’?

So why, you may ask, do we give the act of licensing musical compositions the fancy name “publishing”? The answer lies in history. Before the invention of recorded music, there were pretty much only two ways to propagate music: play it live, or write it down as sheet music. During the 19th and early 20th centuries, sheet music was big business. The most popular songs would sell millions of copies, and the sheet music publishers were the big players of the time (perhaps you’ve heard of Tin Pan Alley).

Around the beginning of the 20th century, the player piano became immensely popular. With specially-made piano rolls, anyone could enjoy the sounds of popular songs in their own home without needing the ability to play the piano. Music publishers and songwriters began licensing their songs to piano-roll manufacturers, creating a lucrative new revenue stream. The “mechanical license” was born – a license of a musical composition to the manufacturer of a mechanical device that plays that musical composition.

With the invention of radio and recorded music, publishers expanded their role to incorporate these new avenues for licensing. Today, the publishing of sheet music is only a small part of any song’s licensing income, but the term “publishing” is still used to describe any and all licensing of a musical composition. And while piano rolls have fallen off the map, the mechanical license remains. It now refers to the licensing of a musical composition for any phonorecord – from albums to digital files and even ringtones.

Enough With the Yackety-Yak, Show Me the Money!

If you’ve made it this far, you’re probably thinking “Wonderful, I can call myself a publisher, and you even managed to sneak in a history lesson. Now can you get to the part where you tell me how I can use this information to make some moolah?”

Okay then.

Remember, any income from licensing stems from one or a combination of any of the exclusive rights encompassed by copyright: reproduction, distribution, public performance, etc. I’ve listed below just a few of the most common ways musical compositions can generate revenue.

  • Mechanical licenses – physical and digital sales of sound recordings, ringtones
  • Public performance licenses – radio, internet streaming, concerts, background music in retail establishments, jukeboxes – any music that is performed or transmitted to a public audience alone and not with a visual element falls under this type of license (most are administered by Performance Rights Organizations, the subject of next week’s entry in the series)
  • Sync licenses – use of the song in movies, television, television commercials – as the name suggests, any use of music synced to visuals (including video games)
  • Sheet music licenses – still around, but not a very large income generator, especially for the hip-hop and electronic genres
  • Public display licenses – yes, if your song has lyrics than you can license the public display of those lyrics – for example, on lyric websites (though I’m unsure if many lyric websites operate above-ground)

The first three licenses by far generate the majority of income for songwriters. Let’s take a real quick look at how you go about getting these licenses.

If the songwriter is also the recording artist then the mechanical license is a moot point. If the songs are being released by a record label, than the record label will provide for a mechanical license payment to the songwriter through the recording contract (usually this involves a controlled composition clause). If the songwriter is selling the album himself, then he’s already collecting the mechanical license from the proceeds of the sales (in a very strict sense, the musician as songwriter has granted an implied mechanical license to the musician as recording artist, and the musician as recording artist ‘pays’ the musician as songwriter a percentage of the gross sales.)

It’s only when a recording artist other than the songwriter wishes to use the song that the mechanical license comes into play. These may be entered into directly between the songwriter and the recording artist (or record label). A large number of mechanical licenses are administered through the Harry Fox Agency, which acts as a clearinghouse for many music publishers and licensees. Finally, in the United States (and several other countries), once a song has been published, any recording artist can obtain a compulsory mechanical license to make a new recording of the song without needing permission from the songwriter.

Except in rare cases, public performance licenses are administered by blanket licensing organizations known as Performance Rights Organizations – ASCAP, BMI, SOCAN, PRS, etc. I will be explaining PRO’s in more depth next week.

Sync licenses are negotiated one-on-one between publishers and producers or between music placement agencies and producers.

Music Publishers

Not only is publishing a difficult subject to learn, it involves a lot of work. Fortunately, as with pretty much anything in life, you can find someone else to do that work for you. When it comes to music publishing, that someone else is known as a (wait for it) music publisher.

The biggest advantage of working with a music publisher is clout. Someone with connections and contacts in the industry can do a lot more with a song then an unknown artist. Even if you have your own connections, doing your own publishing takes up a lot of time – time that could be spent writing more music. And even though musicians should educate themselves about the basics of the music business, many don’t care for the business side of music and are more than happy to let someone else take care of those things.

Along with shopping and placing your songs, music publishers take care of administrative duties – all that fun stuff like registering copyrights, doing the paperwork for PRO’s, accounting, and keeping an eye out for infringement.

Of course, music publishers don’t work for free. They typically make money by taking a cut of your publishing income – most commonly anywhere from 10% for a basic administrative publishing agreement all the way up to 50% for a publisher taking an active role in shopping and placement. While it is starting to become less common, music publishing agreements may call for a songwriter to assign a portion or all of his copyright to the publisher. You may have heard people warn you that whatever you do, never give your copyright up! Why would a songwriter want to enter into such an agreement then? The simple answer is that in some cases it may make sense. Giving up your copyright to get 50% of a lot of money that a well-established publisher can generate from your song is a lot better than getting 100% of nothing on your own. It all comes down to the individual songwriter (and his lawyer hopefully) to decide if the benefits outweigh what he is giving up.

Signing with a music publisher is getting more difficult. Like major record labels today, music publishers are more likely to sign artists who are already generating income from their songs rather than unestablished musicians.

Conclusion

Hopefully you understand a little more about publishing, but I’ve only scratched the surface – given you the broad strokes in an incredibly detailed and complex area of music business.

More Resources

  • All You Need to Know About the Music Business by Donald S. Passman – The closest thing to a bible for the music business. Any musician – independent or not – who is serious about earning money from their craft should have a copy of this on their bookshelf.
  • Taxi: Publishing – An excellent collection of articles going into music publishing and how music publishers operate. Includes an article by Donald Passman about setting up your own music publishing company.

Previous posts in this series

This article was originally published on GrindEFX.com.

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JSonar Project
April 1, 2011 at 2:02 am
Digital Jukebox Music Licensing 103
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{ 6 comments… read them below or add one }

Keith Mohr August 18, 2009 at 1:10 pm

Excellent information, thanks for sharing. I will pass this along to our members at http://www.indieheaven.com
Appreciate it!

Reply

Danrass September 20, 2011 at 9:04 pm

clicked on the grindefx.com link and got a notice that the site contained malware. Just a fyi

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Www Lilsed2603 September 27, 2011 at 8:20 pm

well i’m a member of BMI & I have yet to publish my first project but before I do can anyone give a price range along with what comes with what I am paying for please. email http://www.lilsed2603@live.com

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judy schwartz February 22, 2012 at 2:20 pm

I AM ALSO WITH BMI    I have two soldiers songs on amazon   the cd is called  Veterans Forever
  by Judy Schwartz     call  me and we can talk  about this   my songs are being played
  on veterans radio stations  and I  have been on tv twice last year about  my CD and My Book.
  314 8690348

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Sandy August 9, 2013 at 4:10 pm

Can someone get a compulsory mechanical license without the permission of whoever owns the master rights?

So, I could re record a Beatle’s songs without McCarthy’s permission because he only has a songwriters copyright, but I would have to go through ATV (aka the Jacksons)?

Reply

Disc Makers August 19, 2013 at 9:56 am

Hi Sandy – A Mechanical License and rights to use samples are two totally different beasts. If you, for example, wanted to use, say, a sample of “Yesterday” – read: a clip of the original recording, you’d have to contact the holder of the rights, but to record a cover, you’re in mechanical license territory, and for that, you do NOT have to go through the holder of the rights:

You will have to get a separate license for each song and each format configuration (CD, digital download, ringtone). The prevailing statutory rate is 9.10¢ for songs five minutes or less, or 1.75¢ per minute or fraction thereof over five minutes

We’ve actually partnered with LimeLight – a company that administers mechanical licenses. Check this page out, and get started (it only takes a few minutes, believe it or not) – AND, if you use the code in the banner on the top of the page, you get 15% off, too!
http://www.discmakers.com/products/preparingyourorder/limelight.asp

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