WHAT IS A MUSIC PUBLISHER AND WHY WOULD I NEED ONE? Part 2

READ PART 1 HERE

Nick Mby Nick Matzukis
Advocate of the High Court
Lecturer in Music Law and Business
Academy of Sound Engineering
http://www.ase.co.za/

Relatively speaking, it does not take much capital investment to open a publishing house (since, unlike record labels, publishers do not need to consider the need for distribution networks, warehouses, etc.) Therefore, there are hundreds of small players in publishing, and although there are huge, mammoth publishing companies as well, they do not dominate the industry quite as much as the major record labels do in the record industry.

After some recent restructuring, there are now three ‘major’ music publishers in South Africa. They are Sony/ATV Music Publishing (which now includes EMI Publishing), Gallo Music Publishers (which for many years represented Warner/Chappell in South Africa) and Universal Music Publishing (which now includes BMG’s publishing arm.) But several independent music publishers such as Sheer Music Publishing, Synchro Music and others, have also had great success in South Africa, and are in many cases quite large and influential.

Essentially, the better publishers will exercise three core functions for the composer: marketing the music for exploitation, ie opening doors for use of the compositions that the composer himself cannot open; administration (ie handling the tracking of royalties, both with the major royalty collection societies and others, and ensuring that the correct royalties are timeously paid; and creative input, ie guiding the composer, assisting him/her in creating exploitable works, creating songwriter partnerships where necessary and so on. Some publishers do not involve themselves in the third function, but it is my feeling that they should, depending on what their share of the royalty stream is. In most full publishing agreements, the split is 70/30, but 60/40 (in either party’s favour) is also quite common.

As a general rule, but not exclusively, the aim of most large publishing companies is to own copyrights outright, and to exploit those copyrights for as long as they can. Other smaller publishers might have different business models, namely to have a share in a particular writer’s copyrights for a particular time only, and perhaps thereafter to build a business partnership together with that writer. Publishers appear, today, to have more power in the industry than they have had since the sixties, because of the music world’s attempts to legitimize the internet download business. Publishers enjoy a new power, as the recording industry seeks to shift gears from selling songs on discs meant solely for traditional stereo systems to formats optimised for use on computers and computer peripherals - a change with profound implications for artists, consumers and everyone in between. Music publishers see this shift as an opportunity to recast contracts with record labels and providers.

Quite recently, an out-ofcourt settlement was reached to ensure that 8% of the sale price of every digital download by a major online retailer would be paid to the publisher handling that copyright, and the goal percentage has now been raised to 9%. This South African agreement was reached due to publisher pressure. Therefore, the fact that every internet download sold is a copy, and therefore requires a mechanical license, is giving the publishers a whole new opportunity to entrench themselves as the power-brokers of the industry. Furthermore, the recent boom in “synchronization royalties” (royalties paid for use of a musical composition on film or video) has made publishers more powerful, due to the recent film boom in South Africa, including the movies “Chappie”, “Spud”, “District 9”, “Tsotsi” and others. Television advertising is not to be forgotten in this scenario. This income stream is becoming increasingly important o composers, and should be well understood.)

In its most basic form, a publishing agreement is a copyright transfer contract. In the agreement, the publisher is assigned, for a particular area, certain designated copyrights, or categories of copyrights (perhaps everything written by the writer) for a particular period or in perpetuity (the life of the copyright.) These contracts can vary hugely – either the publisher “owns” the copyrights assigned to him in perpetuity, or he acquires, perhaps “rents” them, for a particular period only, as a licensing deal (the latter is, of course, preferable from the composer’s perspective since it keeps his/her future options open, but this is often not what publishers want.) The copyrights that are subject to the agreement also vary hugely. They can vary from a “single song assignment” to total transfer of everything the Writer will write (and perhaps has written.) Generally speaking, in the full publishing agreement, the Publisher will want exclusive control over all the Writer’s output.

Click HERE for part 3...

 

 

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