Some time ago, I thought Magnatune should launch its own music publishing company, named "Not Evil Publishing" because publishing agreements are more-or-less without exception, evil.
Here's what a publishing company (in the USA) does for musicians who write their own songs:
- they register themselves with ASCAP or BMI as your publisher, ie, as the person who now owns the song-writing right to your songs, and gets paid for that.
- if someone wants to license your music, they negotiate a price for the publishing part of it and do the contract. They will tend to ignore requests for licensing that are for small amounts of money, and are notoriously difficult to work with to get licensing rights. In my opinion, they only make licensing deals more difficult, as they are usually greedy and inefficient.
- when a music license occurs for film or TV, they notify ASCAP or BMI of that license so that ASCAP/BMI can include it in their royalty calculations. This is a simple one page form you can fill out yourself.
- they *may* do a foreign sub-publishing arrangement, where a publishing company in each foreign country represents your publishing interests (typically for a 50% cut, exclusively in that country, and in perpetuity), in order to get a piece of "black box" revenue and in order to get better book-keeping in that country. Payments between collection societies across countries is notoriously badly done, and so much more money can be collected in a country by having a company registered in the country where the money is actually collected. However, 50% is a steep price to pay, and some of the largest publishers (ie, Warner/Chappell) have all their own foreign offices. "Black Box" revenue is all the money that is collected in a country that can't be pin-pointed to a specific song-writer (ie, no records exist in their database, saying who to pay). The collection society keeps the money safe for a few years (I believe it's 3 years) and then splits the money among __publishing companies registered in that country__ based on some formula of the society's choosing. That's why foreign sub-publishing can be so lucrative, because collection societies are notoriously (by choice?) sloppy with their records, and vast sums of money don't find their rightful home. But, you have to sign a really nasty sub-publishing contract, which is for life, and loses you 50% of *all* publishing revenue in that country. Many publishers don't do a foreign sub-publishing deal because of this.
- publishers typically take the publishing right (ie, the song writing right) for the songs in perpetuity. Sometimes, the publishing agreement will be with the songwriter for all the songs they have and will write in the future.
- most legitimate publishing companies pay the songwriter an advance for signing a publishing contract, but many companies realize that musicians aren't well enough educated to realize they deserve money for handing their rights over to a publisher, and so don't pay anything in advance. A close friend of mine found that the record label she was signed to had sold her publishing rights for a hefty advance, and had kept the money for themselves.
- some publishers will claim that they audit ASCAP / BMI royalty reports and can get you more money from those collection societies. I've quizzed publishers on what this really means, and I get a lot of hand-waving vagueness. I suspect this is a bluff, as many publishers don't claim this, but also because the formulas ASCAP and BMI use to pay out royalties are amazingly complicated, and hard to unravel and understand, so it's unlikely they could be easily audited.
- this is REALLY IMPORTANT: if your music has publishing royalties collected (ie, played in a film/tv) only 1/2 the money will be paid to the ASCAP/BMI musician member, with the other 1/2 held unpaid if there is no publisher registered for the song. You literarily are paid half as much from ASCAP/BMI if you don't register your songs with a publisher (which can be you) with ASCAP/BMI.
Or, put another way, you could be making twice as much money from ASCAP/BMI just by filling out some forms.
The bottom line is that a publisher takes rights away from the song-writer, often pays nothing up front for that right, and doesn't do much more than fill out a form to ASCAP or BMI when a song is licensed, and gets in the way when/if a music licensing is needed by a film-maker. I've seen a lot of licensing deals fall apart because the publisher (whose permission is needed) simply doesn't return phone calls. They do no marketing: all they do is get checks from ASCAP or BMI and pay themselves a cut.
In fact, the situation is so bad, that ASCAP (and BMI) were sued by the government and what they must and must not do is largely controlled by the government (ie, ASCAP's "consent decree" http://www.ascap.com/reference/ascapafj2.pdf) and my understanding is that one thing they must do is advertise in popular music magazines that as a musician you do not need a publishing company and that you can register as a publisher yourself. In the old days, ASCAP/BMI colluded with publishing companies to convince musicians that the publishing companies were essential, and this got them in trouble with the US government.
My next blog entry will explain the differences between ASCAP and BMI, and which I think is better, and how to register as a publishing company with one of them.