The music business is a complex industry in terms of its inner workings. While general audiences will typically identify a song on the radio with the artist who performs it, there is more to the process of creating a song. It is the songwriter, and not necessarily the performer, who is truly the source of a song’s origin. Performers are merely a method of transportation that songwriters use in order to expose their own material to the listeners. Although some performers today write a majority of their own material, most will eventually perform a piece that was written by another person-- the songwriter. Many business relationships are therefore formed during the music process, particularly between songwriters and publishing companies; and publishing contracts are implemented in order to aid both parties in their business goals as well as their personal agendas.
From a songwriter’s perspective, one of their main priorities is sheltering their songs-- that is, ensuring that their material is copyrighted, protected, and legally recognized as their own original work. Entering into a partnership with a publishing company is an ideal way of guaranteeing the protection of their material. In order for a publishing contract to be a favorable agreement for the songwriter and publishing company, several factors must be thoroughly considered. First and foremost, songwriters must agree that they will write a certain number of songs by a specified date, according to the songwriting schedule that is outlined in the publishing contract. The number will vary from songwriter to songwriter, based on the individual contract and how much money it entails. Some songwriters may only be required to write one song every month. Others, however, may be required to submit several songs within a shorter time period. Since profit is the ultimate goal in any business contract, publishing companies will work to promote the success of the songs they publish by requiring a songwriter to work with another writer or collaborator if they believe a creative partnership to be necessary. Songwriters often collaborate with others, and most songs do not only list one person as the author. Collaborations take place most commonly with artists who write as well as perform their own material. Beyonce Knowles, for example, writes some of her own songs; but the majority of them involve at least one or two other songwriters that helped in creating the songs. In today’s music industry, competition is extremely high and the success rate of current artists is relatively lower than it was during the 20th century. “In the current music market, it is the rare artist that has the longevity to reach a fourth album. Record companies routinely drop artists who fail to produce a profit after their first or second album” (Harvard Law Review 2003: 2652). With the threat of record companies dropping their artists if the returns on their first album are not high enough, it is in the best interest of the performer to collaborate with one or more other songwriters in order to increase a song’s chance of being a hit single.
In addition to the rules and regulations that songwriters must abide by when agreeing to a publishing contract, the two parties must also agree upon the length of a song’s copyright-- or how long a publishing company will own the rights to a song. North Star Media Music Publishing Company is a major company based in California. Its President, Ron Sobel, is an attorney who is also responsible for the signing of popular artists such as Lenny Kravitz and Pearl Jam. He has described the publishing company’s objectives as being to own a song outright, as well as 100 percent of the publishing for the entire life of a copyright. According to Sobel, the life of a copyright is the sum of the life of the composer, plus an additional 70 years (Artist House Music c. 2010). It is therefore not a favorable situation to consider a short-term lease of a song, in which the copyright will be reverted back to the songwriter after the agreed time period has expired. Consider Linda Perry, the Grammy-winning songwriter of the hit single, “Beautiful”, which was performed by Christina Aguilera. If she were to approach Star Media Music and offer them a ten-year ownership of her newest single, which would then be returned to her after ten years, the company would not be comfortable with that particular agreement due to its inclusion of a copyright reversion. This illustrates one of the difficult factors regarding publishing contracts, as songwriters seek reversions while publishing companies try to avoid them as much as possible. It is, however, understandable that a publishing company would be wary of reverting copyrights back to the songwriters if they are undergoing the majority of the financial and promotional burden of a music project. When a songwriter chooses a company to represent them and the company agrees to represent that writer, the company is also agreeing to fund the necessary costs of a song, as well as promoting the song after it is written, recorded, and mastered. If that company spends a significant amount of money on a song and that song is generating a high number of royalties and profit, then it is clear why the company would not want the ownership, or copyright, of that song to revert back to the songwriter so they can collect the profits for themselves. Additionally, a publishing company’s business territory is the world-- the global music market-- which has the potential to generate high returns for a popular song; and although the music market is enormous, there are only a few large companies that reap most of the financial rewards. London is currently one of the primary music capitals, as it expedites music from several other countries. “Together with New York and Los Angeles, London is one of three main centers of the global recording and music publishing industries. Four of the five multinational companies now dominating the industry have important international administrative bases in London” (Laing and York 2000: 3). Since the music industry is international and inclusive of various countries and cultures, all music-related contracts involve a potentially high monetary reward as well as a high level of risk if the proper precautions are not considered before settling on any agreement. Minimizing a company’s risk exposure is a top priority amongst publishing and recording companies. In Southern Europe and Latin America, for example, major record companies such as EMI and Universal will “…record and release albums of ‘World Music’ artists who are also local pop stars [like] Mariza (Portugal) and Marisa Monte (Brazil). In some cases, however, these companies do not make such albums available throughout North America or Western Europe because it is ‘uneconomic’ for them to do so” (Laing 2008: 228). Recording and publishing companies must be very meticulous when it comes to selecting which artists and which songs they are going to promote and support financially. Whether that involves limiting an artist’s exposure due to low popularity or simply dropping them from the label, they need to make decisions based on what would benefit the company the most. When they agree to back a certain artist or songwriter, it is a weighty agreement and it is crucial that a publishing company profits off that particular decision; and with the music publishing industry becoming increasingly consolidated as the years go by, it is imperative to make wise choices regarding contracts in order to protect the company from going under or being forced to merge with another.
For a songwriter, signing a publishing contract could prove to be a sound business decision. Even though the publishing company will own the copyright for their songs, the songs are completely sheltered, recognized as an original piece, and the author will not have to worry about someone else being credited for their material. The publishing company also offers career advice and resources to further the songwriter’s career, as well as any financial burdens. Equally important, is the fact that the publishing company will be responsible for marketing and promoting the author’s songs, exposing them to prominent names in the industry that an author may not have access to otherwise. In the case of lesser-known songwriters, entering into a publishing contract could be extremely beneficial. Since many celebrity artists such as Kandi Burruss, Timbaland, and Jay-Z will not accept any unsolicited material, having a contractual agreement with a publishing company will entail the use of their lawyers and promoters to reach such artists in an attempt to sell them on a songwriter’s material. Without a publishing contract, such exposure, opportunities, and connections are quite rare. Agreeing to a publishing contract, however, does involve the loss of a songwriter’s rights to their own material. They will undoubtedly have to share royalties with the publishing company and keep only a percentage of a song’s earnings rather than all of the profits. Songwriters will also have to work according to a set schedule, making sure that they meet all deadlines and have new material to share whenever it is required. Publishing contracts essentially decrease a songwriter’s freedom and control in terms of their career; but when the pros of enlisting a publishing company is taken into consideration, it is clear that such contracts are generally a wise business decision.
Collecting royalties from a song is the main objective for, both, a songwriter and a publishing company; and when a song is successful, the profits are immense. Music publishing companies alone generate nearly ten billion dollars on an annual basis, as they are responsible for various elements such as licensing the use of a song to films, broadcasts, and commercials-- known as synchronization-- as well as organizing the printing and distribution of the music. “Although the gross turnover of publishing is less than a fifth of the recording sector, the percentage that reaches the creative artist is much higher. Some estimates are that almost all songwriter/performers receive at least as much from their publishing royalties as from record sales” (Laing 2008: 217). With so many different types of royalties that can be collected, they can add up to a favorable amount of money, especially for a songwriter. Mechanical royalties is a systematic form of payment in which a record label pays a publishing company, and then the publishing company gives a certain percentage of their earnings to the author of the song. This illustrates the correspondence that takes place between an artist or songwriter, their record label, and the publishing company. Performance royalties are generated from any sort of classified performance of a song. This can include performing or having one’s song performed live, having a performance recorded and broadcasted, or performed through digital transmissions via the internet. Print royalties refer to the money that is accrued from buying, printing or downloading music. Since publishing companies are responsible for the majority of this aspect, the will generally receive at least half the royalties that are accrued, if not more. Lastly, synchronization royalties are earned when a party pays to use any sort of copyrighted music. Sound tracks, background music in movies and television shows, and the music that is used in commercials all generate synchronization royalties that are paid to the publishing company and the songwriter. Since the royalty process is so complex, there are many corporations that regulate the distribution of royalties amongst those who are entitled to them. One of the largest music performing rights organizations is Broadcast Music, Inc., also known as BMI. BMI “…collects license fees on behalf of songwriters, composers and music publishers and distributes them as royalties to those members whose works have been performed” (Broadcast Music, Inc. c. 2010). It tracks the material of all its members-- composers, songwriters, and publishing companies-- and then issues payments where they are due.
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