The Music Business Buddy
A podcast that aims to educate and inspire music creators in their quest to achieving their goals by gaining a greater understanding of the business of music. A new episode is released each Wednesday and aims to offer clarity and insight into a range of subjects across the music industry, all through the lens of a music creator for the benefit of other music creators. The series includes soundbites and interviews with guests from all over the world together with commentary and clarity on a range of topics. The podcast is hosted by award winning music industry professional Jonny Amos.
Jonny Amos is a music producer with credits on a range of major and independent labels, a songwriter with chart success in Europe and Asia, a senior lecturer in both music creation and music business at BIMM University UK, director of The SongLab Ltd and the author of The Music Business for Music Creators.
www.jonnyamos.com
The Music Business Buddy
Episode 23: Explaining Music Publishing Contracts and Key Terms for Composers
Unlock the mysteries of music publishing contracts with me, Jonny Amos, as I promise to transform the intimidating legalese into a tool of empowerment for music composers. Ever wondered how to navigate the complex web of Single Song Assignments, Exclusive Songwriter Agreements, and Administration Deals? This episode is your gateway to understanding these crucial contract types, equipping you with the confidence to make informed career decisions. Allow me to break down the intricacies of assigning versus licensing rights, and reveal the power of moral rights for songwriters, ensuring you're well-armed to protect your creative works.
Join the conversation as we explore the global music publishing landscape, making sense of IPI numbers and clarifying the differences in terminology between the UK and North America. With the digital age reshaping options for songwriters, the decision between signing with a music publisher or self-publishing becomes even more critical. Learn about the advantages and potential pitfalls of each path, and how understanding contract terms such as jurisdiction and royalty collection can safeguard your interests. Prepare to navigate the world of music publishing with clarity and confidence, as we dissect these complex topics and arm you with the knowledge you need to thrive in your music career.
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The Music Business Buddy. The Music Business Buddy Hello and a very, very warm welcome to you. You're listening to the Music Business Buddy with me, johnny Amos, podcasting at Birmingham in England. I am the author of the book the Music Business for Music Creators, available in hardback, paperback, ebook format, and I'm also a music creator with credits on a variety of major and indie labels. As a writer or a producer, I'm a senior lecturer in both music creation and also music business. Wherever you are, whatever you do, consider yourself welcome to this podcast and to a part of the community around it. I'm here to try and educate and inspire music creators from all over the world in their quest to achieving their goals by gaining a greater understanding of the business of music.
Speaker 1:Okay, so today we're back into the subject of music publishing. Now, right back in episode six, there was an episode called what Actually Is Music Publishing. If you're not sure what music publishing is and what it is not, it would be good to go back and just check on that episode, where I kind of just break down in really kind of just a short few minutes what it actually is and what it actually isn't, so you can kind of gain an understanding of what this global sector of music publishing is all about. So I'm going to assume you've listened to that episode. There's your homework, and now I'm going to move slightly deeper into the subject by looking at the types of contracts and the key terms within contracts and, contractually, just what the music publishing sector looks like for a songwriter. Okay, let's just talk about contracts for a minute. Let's just, like you know, zoom out and be objective about this for a minute, right? One of the key things to remember when signing a contract is that it's incredibly unlikely that the company is trying to trick you or deceive you. You know it's. We're in the 2020s now.
Speaker 1:It's very different from kind of how things perhaps were 40 or 50 years ago, where there was I honestly think there are less industry sharks these days than there's ever been, and so the idea of just having a contract in front of you it's not there to trick you most of the time. It's there to just bind an agreement between different parties. It's a very formalized process and therefore it can feel a little bit intimidating, but it really doesn't need to. It's no different from what happens in any other trade. It's no different from I don't know signing up with a car insurance company or what you know. Contracts are contracts. They don't have to be terrifying. The thought of it is far worse than the actual process, I think. Sometimes Now, contracts often use quite sort of complex legal jargon, but it's not intended to be deliberately awkward or to mislead a creator.
Speaker 1:You know, contracts just allow business to happen. That's a good way of looking at it. Okay, so let's look at the different types of contracts available to a songwriter from a music publisher. Here we go. Okay, let's start with a single song assignment, or an SSA, or one song deal. It's an agreement between a songwriter and a music. Here we go 50-50, let's say between both parties.
Speaker 1:Now, this could vary depending upon negotiation, but not hugely right. There is a set term which does not usually surpass 20 years in the modern era, right in most countries, and although that can vary in different cultures. Ssas are kind of one-song deals and are a great entry point for songwriters starting out their careers and they're also a favourable route for songwriters who are their careers, and they're also a favorable route for songwriters who are looking to kind of, you know, split their risk by not necessarily putting all their eggs into one basket by signing an exclusive catalog deal with one publisher. There are great ways songwriters to to understand, you know, what publishers do in the practice of music publishing and also to kind of test out different music publishers whilst also widening their own network and their understanding of the business of songs. You know, ok, exclusive songwriter agreements, so you can imagine what this is. It's fairly self-explanatory. So these deals kind of signify a stronger partnership perhaps between a writer and a publisher, and they involve the exclusive assignment of a songwriter's catalogue to a music publisher. I said assignment there. I'm going to come back to that in a bit.
Speaker 1:Agreements can and do, of course, vary quite significantly. So, for instance, a back catalogue deal usually covers everything that a writer has ever composed before. This would earn the writer the right to ask for an advance which would be recoupable but not returnable. That's recoupable against future royalties. This means that the publisher would, you know, recoup the advance that is paid to the songwriter by keeping the songwriter's royalties until that advance is paid back. Now, if the advance is never recouped, by the way you know, due to a lack of success on either part, the songwriter would not need to return that advance. So the publisher bears the risk here, you know, kind of like how a record company does with an artist. So it could be that the songwriter only signs for their future catalogue as well. By the way, it could be both. It could be back catalogue or just future catalogue. Regardless of the negotiable variables, this contract would be binding for at least five years in most cases, although one year rolling contracts are a much more kind of flexible and more favourable modern alternative for many songwriter's favour to 60-40, 50-50. In the US the contract is commonly referred to as a staff writer deal, but in essence it just means that that songwriter works with just that one publisher for a set amount of time.
Speaker 1:There are also admin deals. Now, admin deals tend to be quite popular but also, you know, not limited to songwriters with the previous back catalogue of successful songs. Let's say, now the songwriter does not need to assign their copyrights to music publisher but instead licenses the publisher to carry out specific tasks such as a collection or sync, or the royalty rate for songwriter on an admin deal is generally more favorable, perhaps 75, 25 in writer's favor, sometimes even as high as 90, 10. I know one person that's got a deal like that. It's quite rare but it does happen. Um, but the difference there is that the songwriter does not assign control of their copyrights to a publisher, they license the publisher. So the writer still retains control of their rights under an admin deal.
Speaker 1:Also, there are purchase agreements. Now purchase agreements basically cover an entire catalog of song copyrights. So, for instance, that could be an entity or a company you know, or a person, and a purchase agreement are basically acquisitional transactions which kind of blur the lines between sales from one entity to another with company mergers. But deals of that nature happen regularly. It's a subject that interests me and I kind of keep up to date with reading on various different kind of newsletters and different bits and pieces about you know who sold what and for how much. It just gives us an idea of you know the landscape of the music publishing sector, because things change all the time.
Speaker 1:Okay, so let's go inside the contract for a minute. I'm just going to break down some of the key terms that are inside most typical music publishing contracts. So first off, it's worth saying this that contracts come in two forms short form and long form. So a short form contract, which is sometimes known as a heads of agreement, it basically acts as a summarised version of the contract with the key headlines outlined briefly. A long-form contract is the same, but in full legal language with fully expanded clauses and etc. Now, these are typically drawn up by lawyers and contracts should conform to some kind of legal jurisdiction in one country or territory or another, which is why they can kind of feel quite jargon heavy and confusing. So you know, let me try and simplify some of these different terms.
Speaker 1:The first one to think about is the actual rights. Now, rights are either assigned or licensed in the context of how songwriters work with music publishers. Now, when rights are assigned, a music publisher has control over how copyrights are used. When rights are licensed, the writer retains control. So the licensing of rights is more typically associated with administration deals, like I mentioned slightly earlier. Now, in most instances, the assignment of rights is the more common practice between songwriters and music publishers. So when assigning rights to a music publisher, it might be that the songwriter prefers to specify, you know, what their music supports and what role it plays and what it does not support. So, for instance, a songwriter may not want their songs to be used in, I don't know, a TV show that advertises smoking, for example. That kind of stipulation is referred to as a moral right and it can be requested by a songwriter and negotiated inside of a music publishing contract.
Speaker 1:Then we've got term. Now term relates to the length of time which the songwriter assigns or licenses their rights of their songs to a music publisher. There's also retention Now. Retention relates to the length of time after the term for which the music publisher can still exploit and collect on those song copyrights. So let's say, for example, there was a five-year term and a further five-year retention. That would mean that that songwriter, after that five-year term could go ahead and just sign to a different music publisher, but the works that they created within that five years are still retained for a further five years by that original music publisher.
Speaker 1:Now I know some songwriters that struggle with that thought, that idea. But if you think about it this way, imagine just being the music publisher for a minute and this is a great way to think, actually to get in the headspace of a music publisher here and just imagine that they'd invested time and effort and mentorship and introductions to writers, producers, artists, labels, song camps, all sorts of different things for five years and never seen any kind of success back from that songwriter. That happens right. But when that happens, if all of a sudden, right at the end of that contract, that songwriter scores you know, let's say you know a major cut with an artist or a big placement on a television show or a film or something like that, and all of a sudden, boom, they're gone that music publisher would feel pretty hard done by and quite despondent, and understandably so. That is why retention exists.
Speaker 1:Retention and term are both two very important sections of a music publishing contract and you know they need thinking about. They're also negotiable, remember as well. So it's sometimes when we see things kind of written down on a fixed piece of paper or on a document of some kind, be it digital or paper. Sometimes when we see things like that, it can feel like it's a fixed piece of information because it's in print. But it's not, is it? Everything's negotiable? Term is negotiable, retention is negotiable.
Speaker 1:There's also another aspect which links to those two terms and that is collection period. Now, a collection period, think of it as a kind of mop-up time where the music publishers can still collect on the royalties that were accrued during that term or during that retention period. So royalties can sometimes take, you know, a substantial amount of time to actually be collected and distributed. So a collection period is often requested by a music publisher and they're usually between one or two years. Okay, next term is the date. Now, we all know what a date is and it might seem silly to even mention the date. Now, we all know what a date is and it might seem silly to even mention the date, but it's really really, really important, because all contracts must have a date. They mean nothing if they don't have a fixed date to it. Now, in this context, it's a fixed point in time where the contract is executed and it becomes a very, very significant date in the years that follow. So let's imagine you sign to a music publisher for 10 years on the I don't know 2nd of December 2024. Well, the 2nd of December 2034 is going to be a very significant date. So it's always worth remembering what the actual date in that fixed point of the contract is Jurisdiction I mentioned this earlier Now.
Speaker 1:This relates to the laws of the territory which the contract is. Jurisdiction I mentioned this earlier now. This relates to the laws of the territory which the contract is bound to. Now it really it has to be something right. So you know it could be um, the, the, the state law of california, it could be english and welsh court law, it could be anywhere, no matter where it is, it has to be a fixed point in case any legal action that were to arise which is rare, by the way. But if it did, then it would have to happen somewhere. So that's what that relates to.
Speaker 1:Audit OK, so songwriters have the right to an audit if they wish to gain clarification on the accounting methods of a music publisher. It can be expensive because it's always at the. It should always be in a contract. So a songwriter always has the right to an audit. It's always mentioned in a contract. So you'll see it in a music publishing contract. But it's worth remembering as well that you know it's really only there to be kind of exercise should a songwriter suspect any kind of foul play from a music publisher's kind of accountancy side. So if a songwriter, for example, was thinking, well, you know, I think I should have had more money for this, then by law they can have an audit. The songwriter would have to hire an accountant at their own expense to do so and usually give a certain notice period perhaps 28 days, 56 days, something like that to a publisher to request the right to an audit. So, again, that would be something which is always in as a term in the contract.
Speaker 1:Then there's the royalties. We've not mentioned this right. This is quite an important one, isn't it? Because this relates to how the income streams will be split between the songwriter and the music publisher. So you know, that particular section of a contract should clearly identify how income is split as a percentage between the songwriter and the music publisher. And that's in relation to, you know, performance income, mechanical income, print income, sync income, and those could all be, you know, 60 40 in writer's favor. Or it might be that some of those aspects on the royalties are slightly different depending upon how it's negotiated.
Speaker 1:Now, many contracts will refer to such things as catch-all income or any other income. I've seen that on a lot of contracts the last five years or so, and that typically refers to income streams which have yet to be defined or created in technology but relate to the use of a copyright. Now that again, I've had a couple of songwriters come to me and say, oh, that's a bit greedy, isn't it? And I say, well, I don't think it is actually, because you know this is this contract relates to the use of song copyrights. Now, just because a piece of technology that has not been invented yet may or may not use a song copyright, it doesn't mean that that all should go to a songwriter if they're working in partnership with a music publisher. So that's what that relates to.
Speaker 1:Any other income or catch all income, okay, territory. So the territory is the um, the term that specifies which country or which group of countries or which continent or which area of the world, or it may even be the entire world that the contract actually relates to. Now, most music publishers, much like record companies, will want to use a certain term that covers maybe the entire universe. I've not seen anyone say solar system in a contract yet, but as we move towards potential understandings of maybe there's further life out there on Mars or I don't know, maybe you know there's plans for people to fly around space listening to music and you know who knows, right, it's a crazy world we're living. So there's a lot of contracts now reflect that by using the term of the universe instead of the world. So, you know, don't be scared if you see that in the contract it's just people.
Speaker 1:You know advances now. I mentioned this a little earlier but this in this contract the advance should be outlined. So of course any upfront contractual payments which are agreed, you know, from the publisher to the writer, should be kind of stated in that now most contracts I look at don't usually cover an upfront advance at the start of a contract. They are usually staggered and aggregated throughout the course of a contract. So let let's say, for example, it's £20,000 over the course of, say, five years. That would be split over that five years, or maybe a payment at the start, another third of it in the middle and the final third at the end. Again, it's all negotiable, but that would be mentioned inside of a contract.
Speaker 1:Another thing that you might see in a music publishing contract is a minimum commitment. Now it's sometimes referred to as a minimum delivery. Basically what it relates to is how many songs a music publisher would expect to receive from a songwriter in a calendar year. Now, in my experience I've signed many, many publishing deals as a songwriter and that has never really been a sticking point for me, and I thought I'd mention this because it might be that something is in a contract and then when it actually comes around to kind of keeping up with it. Music publishers might not be as strict as they sometimes seem in contract. Remember, contracts are written very often, if not always, by lawyers and therefore sometimes I have noticed whether it's with recording companies or music publishers, whereby I'll query a particular clause and they'll say something like you know, oh, don't worry about that, you know that's just something the lawyers put in the contracts and you know that is the reality sometimes is that, you know, lawyers don't want to be sued, right? So they write watertight contracts that are not open to interpretation because they're protecting themselves. Anyone can understand that, right, lawyers don't want to be sued, after all. So therefore, some of the wording in contracts can be incredibly watertight and not always adhered to harshly by the actual company that's contracting you. If that makes any sense, I hope it does.
Speaker 1:What about this Accounting period? This is an important one, isn't it? Now, this relates to when, typically, royalties are distributed. So traditionally, that's twice a year, between June and December, or I should say historically. I mean, some people still do that and some publishers and some PROs, you know, collection societies, performing rights organisations do distribute twice a year, but I would say most now have moved to a quarterly model, quarterly basis. So you know, some publishers are now also even moving to a monthly payment model, so this is more to do with their own reporting, by the way, rather than the speed of collection. Speed of collections can still be very, very slow in many places, but you know, the accounting period should always be referred to in the contract.
Speaker 1:Okay, so those are the main points to consider inside of a contract, but there's also some other considerations to think about, right? So there's some key terms to think about the word perpetuity Now, when reading through a contract, if you see the word perpetuity in the context of any term, the word perpetuity means forever or with no fixed maturity. This is often referred to as the life of a copyright. Now it relates to a songwriter assigning control of their rights to a music publisher for the lifetime of the songwriter. That's a long time, isn't it? Now, it's still standard practice for some countries to expect songwriters to agree to perpetuity, and this can sometimes create a clash of you know kind of different cultures when it comes to negotiating on contracts, because it is a rather dated protocol in most countries today, in the 2020s, but it's still out there. It's definitely worth looking for it to see if it's used in a contract that you might see.
Speaker 1:An ipi number is also very important. In fact, none of the royalty collections really work very well without an IPI number, if at all. Music publishers will want to know what the IPI number is of a songwriter. Music publishers will also have their own IPI number. Now, this is a unique and internationally recognised identification number which usually consists of nine or more digits, and each entity would have their own one, whether they're a writer or a producer. If you don't have that number, that's okay, you can get one. What you need to do is to sign up to your your relevant performing rights organization so for us in the uk, that's prs for music. By becoming a member of prs for music, then you would be issued with an IPI number. It's also sometimes called a CAE number, which basically means Composer, author, editor. It's the same thing, right? If ever you see that CAE or IPI and you think, oh God, do I need two? No, you don't, you just need one, it's the same thing.
Speaker 1:Okay, now it's worth mentioning mentioning this transatlantic terminology. Right, copyrights and music publishing function and operate in basically the same way in the UK as they do in North America. However, the terminology is different and it can confuse a lot of songwriters. It confused me many years ago when I started to deal more actively with North America. Now, in the US and Canada, each song is given a writer's share and a publisher's share and each add up to 100% each. Now in the UK, by contrast, we only refer to the entire copyright combined. So don't let that confuse you. It is the same thing. In the US and Canada, songwriters and publishers will often refer to these shares separately. Writers could perhaps negotiate to have, you know, all of the writer's share and 20% of the publisher's share, for example. That is what the Americans call co-publishing.
Speaker 1:Co-publishing is not a term we often hear in Europe or in the UK. We don't use that kind of word to describe something. We would just refer to something as a 60-40 split instead. So it's the same thing really. It's just the terminology. That kind of trips people up sometimes and confuses people. Ok, so you know. To summarise a little here, you know, if a music publisher sets up a contractual relationship with a songwriter, the songwriter should give themselves a big pat on the back. It's a big achievement, isn't it? You know it's worth stopping and just kind of smelling the roses sometimes and thinking about that, because it's a huge step. However, you know, it's not a guaranteed gateway to success not by any means. No, depending on the goal of the writer and the intended use of their songs, it could be argued that maybe signing to a music publisher is no longer as necessary as it once was. Even if it isn't, it's still worth understanding all of the things that we've talked about in this contract, because it will all be relevant whether you sign to a music publisher or not, because it helps us to underpin the dynamics and the mechanics of the song business world.
Speaker 1:Now. Songwriters have more options available to them these days when it comes to self-publishing because of the emergence of the digital age, the internet and all the tools and platforms that we all have access to. Now it could be said that you know some songwriters who are, you know, quite sort of organized and efficient with their administrative procedures and paperwork and split sheets and collection methods, and those that are good at networking. You know they might be more suited to retaining their own copyrights. Now you don't see that many writers I find, anyway early on in their careers, being in that position because there's perhaps not that depth of knowledge or experience yet and maybe later down the line they start to think more that way.
Speaker 1:But there are of course advantages of course of plugging a song into a catalogue of a music publisher. You know the music publishers have a lot of connections. They have a big network of collection protocols, exploitation methods and connections here and there and everywhere that can help a songwriter to get their songs to that next level Now, especially if the music publisher takes a very proactive approach in finding placements for a songwriter's work. So it's always worth, you know, thinking about whether this is the right time for a music publishing contract, or maybe that should be further down the line, or it's going to look like different things for different people. There's values to both sides of it. There's pros and cons, like there is with anything but uh, it's always better to go into it more informed, more educated on. You know what the expectations are from both sides and also you know what you're, what you're signing right.
Speaker 1:So hopefully that episode has helped a little bit in that. Please do feel free to reach out to me, you know, and kind of you know, ask questions or if I can help it in any. Please do feel free to reach out to me, you know and kind of you know, ask questions, or if I can help it in any way, please do let me know. Anyway, I will shut up now and leave you to it and have. I wish you a great day. Thank you for being here, thank you for listening, and may the force be with you. The Music Business Party.
