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| PUBLISHING 101 By, Wendy Day Publishing is where the money is in the music business. Suge Knight claims to have started Death Row Records with the money he made from owning Vanilla Ice's publishing for one song: Ice Ice Baby. It may not be true, but it could be. Avatar Records is financed through the publishing that the CEO owns. Although publishing can be quite cumbersome to understand (just when I think I get it, I read something else that makes me realize how little I know about the subject), but the most basic principle is that when an artist puts pen to paper, or makes a beat, the artist owns the publishing. It's that simple. Whoever creates the words or music owns those words or music. Where it gets confusing is all the different ways to get paid on publishing, all the ways to split publishing with other folks, and all the ways artists get screwed out of their publishing. In the 8 years I've been doing this, I have heard so many times, artists say that they don't care about losing a song or two because they can always make a ton more. That's stupidity. It's undervaluing one's ability. That's like saying it's OK to rob me, I can go to the ATM machine and get more money. Wrong!! It's never right to rob someone. The "I can make more" defense immediately goes out the window when the creator sees someone else make hundreds of thousands of dollars off a song. Every time!! So why not protect yourself in the door? Bill Brown at ASCAP breaks it down more simply than anyone I've ever heard. He compares publishing with real estate. When you make a song, you are the owner of that property: the landlord. Sometimes you sell off a piece of the land for money (but you NEVER give away your land, right??) and if someone else wants to use your property, or rent it, they have to pay you rent to use it. I love that analogy. It's so crystal clear! A copyright is proof of ownership of a song, both lyrics and music. If there is a sample in the music, you are automatically giving up part of the song, at the whim of the person who owns the rights to the original song (not necessarily the original artist). In order to "clear the sample," you send your version of the song to the owner of the original composition (and to the owner of the master, meaning original record label or whomever now owns the master). Then you negotiate the price with those two owners. Some are set in stone and you get to either agree to their price or to remove the sample. On DJ DMD's last album (22: PA Worldwide on Elektra) he spent close to $100,000 in advances and fees due tot he sampling on his album. It came out of his upfront monies (advance) and he bears the burden of paying for it all, even though Elektra released and owns the record. Proof of copyright is easy to obtain by registering your song with the copyright office in Washington DC. You call them (202.707.9100) and ask for an SR Form (sound recording). You fill out the form, listing all of the owners, and mail it back to them with a copy of the song (a cassette is good enough) along with the Copyright fee (around $25 or so). This way, if someone steals your song, or a piece of your song, you can sue them for taking it and for your legal fees. With the A poor man's copyright@ (mailing your tape to yourself in a sealed envelope with your signature across the sealed flap, and then never opening it when it arrives back to you with a postmark proving the date), you can not sue for damages and it's more difficult to prove your case. The copy right fee may seem like a lot of money, but it's nothing compared to what a law suit would cost you. Performance royalties are money that is paid for the performance of your song. The money is paid based on the percentage of ownership of the song. So if you own 100% of the song, you get the whole check. If you own just the music, which is half the song, then you get half the money. If you own the music with a sample in it that claims half the song, then you get a check for 25%. Ya follow? Performance Rights organizations consist of ASCAP, BMI, and SESAC (which is still quite small). They police the radio stations, clubs, concerts, etc (any place music is played or broadcast), all of whom pay a fee to play the music which the performance rights societies collect and split amongst their members based on the amount of times a record is played. Although the formulas change annually based on play, a Top 10 song played on commercial radio can earn a good chunk of change in the hundreds of thousands of dollars range. There are two kinds of royalties artists receive when their records sell: mechanical royalties and record royalties. Mechanical royalties are paid based upon a pre-set limit placed by Congress which increases automatically every two years. Right now it=s .0715 cents per song, but on January 1, 2000 it increases to .0765 per song. Record labels put caps on mechanical royalties (the slugs) at either 10 songs, 11 songs, or 12 songs and you get what you negotiate for. Also, there's a slimy little clause that restricts payment of mechanicals (because God knows labels don't make enough money as it is) to anywhere between 75% and 85%. This evil deed is called percentage of statutory rate. Here's the difference those few pennies make as it pertains to an artist=s royalty check (I refuse to even consider illustrating the worst bullshit deals such as 10x at 75%) provided they own 100% of the song: # songs stat mechanical 100,000 sold 250,000 sold 500,000 (Gold) 1,000,000 (Platinum) 11x 85% .6639 per album $66,390 $165,975 $331,950 $663,900 11x 100% .781 per album $78,100 $195,250 $390,500 $781,000 12x 85% .7242 per album $72,420 $181,050 $362,100 $724,200 12x 100% .852 per album $85,200 $426,000 $852,000 $1,704,000 10x 85% .6035 per album $60,350 $150,875 $301,750 $603,500 *based on old rate of .0715 per song so I could use my friend Fiend as an example. His first album, came out when the stat rate set by Congress was at this rate. The dollar figure above represents monies due an artist (regardless of recoupment) per album based on ownership of 100% of publishing. So for example, Fiend who is signed to No Limit, provided he owns 100% of his publishing (I can dream can=t I?), if his deal gives him 11x rate at 85% (I hate it but it won=t kill me) then on his first album, There=s One In Every Family, which came out 4/28/98 and sold 565,977 SoundScan units, No Limit would have paid him (hopefully) $378,369.77. If No Limit owns half of Fiend=s publishing, he would receive $189,184.88 provided he wrote all of his own songs (which he did, except the verses by artists who appeared which lowers the ownership percentage and dollar amount) and provided made all of his own beats (which he did not; he features outside producers on this album like Beats By The Pound). Record royalties are based on the negotiated rates negotiated in the artist=s contract and are paid based on record sales AFTER the artist is recouped, and range from 11 points to 18 points (translation: 11% to 18% of retail selling price after artist pays back most of the expenses involved in creating, promoting, and marketing the record). So few artists ever see money from this royalty that I'm not even going to go into detail. But you can pull up my first article on www.rapstation.com (in the archives) to see an illustrated financial example of how little this is. So as not to overload on the subject of publishing I will stop here. But I recommend everyone study this most important financial area of publishing. This is where the money is and where the bulk of new artists get jerked. Kashif=s book and Donald Passman's books have great chapters on publishing (All You Need To Know About The Music Industry by Donald Passman and Everything You Need To Know About The Music Industry by Kashif are both available at <www.amazon.com> at a discount, or at a real bookstore near you for about $25. |
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