The Write Stuff

The Write Stuff
Once upon a time, there were songwriters, and there were performers. As a songwriter in the pre-radio dancehall days, you sold your songs to a music publisher who in turn shipped them out on sheet music and piano rolls for the enjoyment of the great unwashed, paying you a royalty for each copy sold. But popular songs typically spread without any kind of tracking or additional payment to the writer. Lord knows how guys like Stephen Foster — a multi-platinum hitmaker in the 19th century — ever earned a living.

With the dawn of the radio and recording industries, artists welcomed the arrival of Canada’s first Copyright Act in 1924. This federal law ensured composers’ rights to control their copyright, and to be paid royalties for public performance rights and each crank of the printing press or Victrola.

As set out in the Act, performance rights are the right to perform the music in public, whether live or in a recorded format, leading to the payment of performance royalties. In Canada, performance rights are administered by the non-profit agency SOCAN. (See last month’s Music School for more.) Reproduction rights (administered in Canada by the non-profit agency CMRRA) consist of mechanical rights (the right to mechanically reproduce the work); and synchronisation rights (the right to strip the work into the soundtrack of a visual medium, like a movie or TV series).

As the original copyright holder, the songwriter is in first position to receive royalties. SOCAN and CMRRA collect fees from their licensees (SOCAN’s licensees are radio, TV, restaurants and bars, etc; CMRRA’s are record labels) and eventually pay the artist their share. Here’s where music publishers come in. A music publisher will offer the artist an advance payment against the right to share future royalties. The music publisher then works to promote the artist and the songs. Typically, the publishing deal will also give the publisher an ongoing percentage of royalties once the advance has been repaid.

In addition to an upfront payment, the advantage to the artist is obvious: publishers are in the promotion business. They buy ads, work the music to radio and press, find suitable movie or TV soundtracks and so on. The disadvantage to the artist is also obvious: your royalty revenues go into someone else’s pocket. But how big a disadvantage this is depends entirely on how good your deal is and how big a splash you make.

The main commercial points of a publishing agreement are a) the catalogue; b) the amount of the advance and repayment terms; c) the territory and term the deal will be in force; d) the royalty split after recoupment of the advance; and e) the kind and amount of expenses the publisher can charge. A typical publishing deal may look like this: a) the publisher gets the rights to the ten songs on your first CD, plus any more that you write in the next five years; b) they will advance $15,000 to be repaid out of 75 percent of royalties — the remaining 25 percent stays in your pocket; c) the territory is North America including Mexico and will last for five years (meaning you keep any European royalties); d) royalties to be shared 50-50 after recoupment of the advance; e) promotional expenses will not exceed $5,000 per year throughout the term and will be charged against 75 percent of royalties — so look out, this means the publisher may end up "banking” its expenses and will continue to take a 75 percent cut even after the advance has been recouped.

The publisher’s expectations, in the above scenario, are that your first CD will do well enough in North America to generate at least $53,400 worth of mechanical and publisher’s share of performance royalties over five years. It seems like a lot, but one hit song can generate thousands of dollars a day in performance royalties from radio alone. In that case, your Diane Warren-style smash hit pays off the advance after 27 minutes on the Billboard top ten. Likewise, one song on the Sopranos soundtrack will bring in the gold (remember: you get a royalty every time the show is broadcast, anywhere in the world).

In the past, music publishing was a big boys’ game. Smaller labels couldn’t afford to pony up the advances, nor were they as well positioned to promote the artist or work them to film or TV. In the digital multi-platform era, however, that’s changed considerably: smaller labels like Hamilton’s Sonic Unyon now have a rationale for getting into the publishing game. "We were doing a lot of work licensing our artists to film and TV, even though we didn’t have the publishing rights. We’d [do the work and then] just pay them the synch license. We weren’t really reaping the benefits,” says Sonic Unyon co-owner Tim Potocic.

Whether major or indie, publishing deals can be especially good for artists who aren’t ready or don’t want to sign to a label. Publishing advances can buy you a nest to work in and a little extra cash to pay off the van; having publishing in place can help you leverage a record deal. "We’re into indie publishing the same way we run our label: we won’t stand in the way if one of our bands gets a bigger record deal or a bigger publishing deal,” says Potocic, noting that offering publishing along with recording and distribution keeps the creative and promotional development of an artist under one supportive roof. Alternately, great partnerships between a small label and major publisher can be forged. What a major publisher might lack in personal attention, they may well make up for in contacts and infrastructure.

Whatever publishing deal might be best for you depends on your financial need, what support you already have in place, and whether you’re ready to start cranking out the hits or you’re going to be more of a slow burner. Regardless, don’t sign any deals without consulting an entertainment lawyer, even if it’s with your best friends at the label. "Sonic Unyon always encouraged bands to hold on to their publishing rights,” says Potocic. "It’s the most valuable commodity they have.”



Frequently Asked Questions

How do I get a publishing deal?
Publishing companies have A&R people who find new talent in the same way that labels do: they listen to demos, go to shows, meet people who know people, and so on. Contact the publishing company and follow their instructions for submitting demos and promotional material.

I’ve been offered a publishing contract with a nice advance — enough to buy a pretty sweet van. I’m worried that if I don’t sell enough records to repay the advance, the publisher will repo my wheels. Should I be?
Unless you’ve agreed to the world’s worst deal, you will not be on the hook personally for repayment of the advance: generally, the publisher must repay itself only from the royalty streams. Publishers have to take risks too.

My first CD got lots of radio play and, being unpublished, I collected both the songwriter and the publisher’s share of performance royalties from SOCAN. Now a publisher is interested in acquiring the songs on that CD. Will I have to fork over the money I already received?
That’s a matter of negotiation between you and the publisher, but it wouldn’t make much sense to say yes to it because it transfers a big chunk of risk to you — in a way, you’d be paying yourself your own advance! Music publishers are in the business of trading song futures — yours, in this case — so let them take the risk that the next songs you write will also do well.

I am unpublished but I have a couple of records out on an indie label. Does someone owe me mechanical royalties?
You bet — provided the label that put your stuff out actually paid for the mechanical license. Many a basement label has no idea it’s supposed to! If it has, then in order to collect, you must become a member of the Canadian Musical Reproduction Rights Agency (www.cmrra.com), which is the non-profit agency that collects license fees for mechanical and synchronisation rights.