Registration with Performing Rights Societies
Once you have determined that your song may be performed (most importantly, if it is going to be played on the radio), the musical composition should be registered with the performing rights society with which you are affiliated. In the United States, there are three such organizations: the American Society of Composers, Authors, and Publishers (ASCAP), which is a membership organization comprising writers and publishers only; Broadcast Music, Inc. (BMI), which is a corporation owned by broadcasters (although it is very sympathetic to the concerns of writers and publishers and actually has more writer and publisher affiliates than ASCAP has members); and the Society of European Stage Authors & Composers, Inc. (SESAC), which is a privately held corporation. Once you secure a record release of a song you write, or expect a performance to be broadcast on radio or television, or secure a synchronization use in a motion picture, one of these societies will be happy to allow you to join—as an affiliate in the case of BMI or SESAC or as a member in the case of ASCAP.
Foreign Collection Agreements
You must also ensure that if your recording is made available for sale in countries outside of the United States (with the exception of Canada), someone is appointed as your representative to register the song with the performing and mechanical rights societies in those countries.
Customarily, Canadian rights are handled by issuing licenses from the United States directly to Canadian record companies. Nevertheless, although the performing rights will be collected sooner or later through your US performing rights society, there are several advantages to appointing a Canadian publisher to assist in administering copyrights in that country:
• Performing rights income will be paid at least a year earlier than would otherwise be the case.
• There will be someone “on the spot” to keep an eye on the uses of your songs.
• The Canadian publisher can hire a local auditor to verify your song’s activity. You may even be able to get an advance against earnings.
• The Canadian publisher may be able to obtain cover recordings of your songs.
Outside of Canada, a local publisher is all but essential. Without one, the odds of losing income due to inaccurate identification of performance and mechanical uses increase to a level which is simply unacceptable if you care at all about the income your songs generate.
As noted previously, a foreign publisher that represents the interests of a US publisher (or songwriter–self-publisher) is known as a subpublisher. Subpublishers may be selected on a per-country basis or on the basis of a larger regional division of the world. The value of per-country deals is that you can select each representative personally, and each advance paid by a representative selected on that basis stands alone—that is, it is not subject to recoupment against earnings from other countries for the simple reason that neither the various subpublishers nor the deals themselves are related to each other. On the other hand, processing one or two dozen agreements for purposes of representing one song or a small catalogue can be very time-consuming and expensive. In some circumstances, it may be appropriate to make separate agreements with subpublishers that are capable of exploiting a song or catalogue, and are motivated to do so because the song may be a big earner, or because in this way they can prove their competence and perhaps convince you to let them handle your entire catalogue. But more often than not, it makes financial sense to make an “ex-US and Canada” deal with one publishing company whose various affiliates or subsidiaries will provide the same services and actually coordinate with each other to help promote the song or catalogue, or the artist’s recording embodying the copyrights that are the subject of the subpublishing agreement. (“Ex–North America” won’t do because it inadvertently adds Mexico to the reserved countries instead of licensing rights to that country to your foreign representative.) Nevertheless, high-earning catalogues often warrant country-by-country deals.
The Black Box, One More Time
Since Black Box monies can amount to many millions of dollars annually, anything that a United States–based writer or publisher can do to gain access to some of this money is likely to be well worth the effort.
One often-used means to gain access is to establish companies in the countries themselves rather than enter into traditional subpublishing agreements. Sony did it. BMG did it. For example, once a US publisher has established a company in Germany, that company can become a member of Gesellschaft für musikalische Aufführungs- und mechanische Vervielfältigungsrechte (GEMA) and have access not only to information but to a proportionate share of the Black Box income as well. The fact that many companies established for this purpose are shell companies, whose sole reason for being is to obtain information and increase income, does nothing to negate their legitimacy. Of course, some US publishers have set up such companies for more questionable purposes, such as hiding the money thousands of miles away from the offices of capable auditors whose principals cannot afford to send them around the world to verify accountings.
The Subpublisher as Liaison
I would like to make an observation about an anomaly in most subpublishing agreements. There must be tens of thousands of traditional subpublishing agreements in effect throughout the world today. All of them provide for the administration of the copyrights that are the subject of the agreements. All of them provide for the collection of earnings and the periodic payment to the copyright owner or original publisher of the compositions. Rarely, however, do they actually state the underlying hopes, wishes, and expectations of the original copyright owner or publisher, which, simply stated, are that the subpublisher will make a reasonable effort to exploit the copyrights covered by the subpublishing agreement within the subpublisher’s territory.
If the songwriter is an artist, there is all the more reason to include such language. While it is anathema for a publisher to state in so many words what it will do to exploit the song, the writer, or the artist, it is not unreasonable for the artist-songwriter to request (1) that the subpublisher be the artist-songwriter’s liaison with his or her record company’s affiliates in the territory of the subpublisher, and (2) that the subpublisher act as the artist’s “eyes and ears” in the territory in order to keep the artist and the artist’s representatives informed of what is happening (or not happening) in the territory with regard to the artist’s recording. It is also not unreasonable to want the subpublisher to go beyond the basic collection function, for example, to participate in selecting the single the subpublisher might think would best appeal to the consumers in the territory, and to communicate this to the local record company. In essence, it is completely appropriate to ask your subpublisher to maximize not only the commercial exploitation and promotion of the musical compositions, but promotion of the artist-songwriter as well. Below is a sample provision that serves this function. No doubt some subpublishers will not accept the language as it appears here, but written provisions are negotiable, and something is better than nothing.
Owner hereby appoints Subpublisher its nonexclusive representative for the Licensed Territory for the purpose of promoting Owner’s publishing interests and the recording and performing artist [name of artist] (hereafter referred to as the Artist). To this end, Subpublisher shall use its best efforts to maximize the commercial exploitation and promotion of the Compositions in the Licensed Territory, and the sale in the Licensed Territory of phonograph records embodying Compositions. In connection with the foregoing, Subpublisher shall:
1. Generally liaise with personnel of record companies based in the Licensed Territory to maximize the exploitation and earnings of the Compositions.
2. Use its best efforts to liaise with the professional representatives of Artist including, without limitation, Artist’s manager, business manager, and attorney, to maximize the commercial exploitation and promotion of the Compositions in the Licensed Territory the sale in the Licensed Territory of phonograph records embodying Artist’s performances of Compositi
ons and the commercial success of Artist’s personal performance tours in the Licensed Territory.
3. If Owner shall notify Subpublisher of any corrections or changes in any Compositions including, without limitation, the author(s), title, lyrics, copyright, etc., Subpublisher shall notify the applicable performing rights, mechanical rights and other collection societies in the Licensed Territory thereof and use its best efforts to ensure that such corrections or changes are made by such societies in an accurate and timely manner.
Print Rights in the Digital Age
In chapter 13, I discussed the subject of print rights in the digital age. For a self-publisher, as for any publisher, print rights have more value than they did ten years ago. More and more small publishing companies are recognizing that they can license digital downloads of their sheet music—including guitar tabs and lyrics—to the few companies that are specializing in this new world of music exploitation. The sheet music “button” can be placed on the artist’s website, and the consumer can benefit from instantly being able to access visual notations of his or her favorite music.
Of course, no publisher should count out traditional print rights, which can also be licensed individually on a per-song basis or collectively by catalogue. There are a number of outstanding print companies in the United States. If you can’t find one, try to find a store that sells print music and look at the names and addresses of the companies that provide this product to get an idea as to which one fits your particular needs. Your attorney will also be able to guide you in this area.
WHY BOTHER DOING IT YOURSELF?
There are basically two options songwriters have for exploiting the rights to their compositions: (1) self-publishing, which usually involves asking their agents or attorneys to provide those services, or even hiring someone to do so; and (2) entering into an administration agreement with an established publisher. Clearly the least costly way to go—provided the artist-songwriter feels sufficiently organized to accomplish efficient administration of his or her songs, or trusts his or her attorney or staff person to do the job—is the self-publishing route. The costs of hiring an attorney for this purpose will be substantially less than the percentage of income traditionally charged by an established publisher. There are, however, disadvantages: There will be no cash advances to operate with; there will be no introductions to cowriters; there will be no effort to introduce your songs to motion picture music supervisors, and the like. In addition, the large publishing companies are connected to just about everything that is going on in the music business—particularly now that those companies have been absorbed into huge global entertainment conglomerates—and the companies that are most efficient in exploiting global synergies are more likely to be able to create opportunities for you that you would never be able to create yourself.
The option you choose will ultimately depend on the kind of catalogue involved. For a self-generating band that is recording its own material and that does not reasonably anticipate that third parties would be interested in recording their songs, self-publishing is a real option. A “stand-alone” songwriter may not be as comfortable following this route. That said, it should be noted that Diane Warren found a way to self-publish successfully at the same time she was lining up her Academy and GRAMMY Awards on the mantel.
You can, however, have it both ways. As an artist-writer, you can self-publish copyrights within the United States (and often Canada as well) and subpublish with a major multinational, giving the multinational worldwide synchronization responsibilities. In this way, you get the services of the multinational where you most need them, and, as you are part of their “family,” they will often assist you in obtaining cowrites with their other writers, in marketing your songs, and in helping your US (or Canadian) record company to market your records.
ACQUIRING COPYRIGHTS
In past decades, songwriters gave to their publishers 100% of their publishing share, including the copyright and worldwide administration rights. The deal was, essentially, for all time—or at least as long as the various world copyright laws would permit (all rights end at some point). When the original publisher would license subpublishing rights overseas, even for a limited period of years, it would at the same time agree that if the subpublisher were to obtain a cover recording of a particular composition by a local artist, the subpublisher could retain control over that song for the entire remaining term of copyright in that country.
Those days are gone forever. Currently, the term during which owners grant foreign rights to covered compositions is usually two to three years.
Publishers today do not customarily acquire 100% of the copyrights in the songs they administer; more often they acquire 50% of the copyrights, although they continue to control (administer) 100% of them.
It may surprise you to learn that when a songwriter assigns his or her copyright to a publisher, the publisher usually pays nothing for that right. For in the music publishing business, as in the recording business, the companies do not actually purchase the assets they acquire. Yes, the record companies advance the cost of recording, etc. But uniquely in the record business, as we have seen, the artist winds up paying back the cost of recording out of what would otherwise be due in royalties. In the music publishing business, the writer may receive advances against royalties for the assignment of his or her copyrights (or 50% of the copyrights) and the worldwide administration rights. But once those advances are recouped out of the writer’s share, the portion of the copyrights that the publisher “acquired” normally belongs to the publisher for the entire term of copyright, which in most countries of the world today means for a term extending seventy years after the death of the last of the cowriters. In other words, the publisher owns an asset for which it has paid only advances. Of course, there is always the risk that exploitation of the copyright will yield nothing, in which case the publisher will not get the advance back (no earnings, no reimbursement), but with a little bit of luck, the advances will be returned to the publisher out of the writer’s share of writer royalties and, if applicable, the writer’s 50% interest in the publisher’s share.
REVERSION OF COPYRIGHTS
Being your own publisher sometimes requires a fairly sophisticated knowledge of the technical requirements that the copyright law establishes to protect innocent third parties from being taken advantage of. The law provides that if a copyright is originally registered in one party’s name (for example, the established publishing company) and the copyright is later assigned to another party (for example, another publishing company or, in the case I am about to discuss, to the original writer), if the change in assignment is not registered in the Copyright Office in Washington, a third party (for example, yet another publishing company), who in good faith checks the Copyright Office records to make sure the party selling the copyright that it desires to purchase actually has the rights, will have no idea that the reassignment has occurred. Thus, the third party will think that it has acquired something from a publisher that in fact no longer owns the rights. In the world of million-song catalogues, these situations occur more frequently than you might imagine. For all intents and purposes, a reversion—which, quite simply, is an assignment back to the writer, should be registered as should any other assignment. There is no official concept of reversion in the copyright law. But the rules and legal decisions affecting assignment have consistently been applied to the situation in which copyrights revert from an established publisher to a songwriter in the manner described earlier. Not only is there the danger of a third party acquiring copyrights that have reverted, or might at some future date revert, to the songwriter, there is the added complication that if technical requirements are not followed carefully, other potential sources of income (such as performing rights) will assume that the original publisher remains in charge of the copyrights. Let’s see how this potentially dangerous situation can be avoided.
As discussed in chapter 13 (this page), permitting reversion in deals in which the wr
iter has some leverage results in a shortening of the period during which the publisher retains rights to the writer’s copyrights. As is becoming the custom, control and/or ownership will revert to the writer after a number of years: five, seven, ten, twelve, whatever. The circumstances under which the period can be shortened are customarily tied to the success of the music. If the songs and the records embodying them are failures, the publisher can keep them. If the advances are never recouped, the publisher can keep them. If, however, the songs and the records are successful, even with the often invaluable assistance of the publisher, the publisher will lose them. The publisher will wake up one day after a good run with a catalogue and it will have lost the catalogue permanently. Strange, but true.
Once it appears that the songs may revert to the songwriter, he or she should refocus from being a royalty recipient to being a self-publisher, who will need to take all the steps—and more—that would have been necessary had the songwriter decided to self-publish in the first place. Beyond the basic steps such as registering claims with a performing rights society, there are some additional technical requirements that can become a virtual nightmare. Most particularly, for example, the reversion of the rights that had been held for a time by the publishing company should be registered with the Copyright Office in the same manner as if they had been assigned. But what happens if there is no document signed by the publishing company that effects the reversion? I have already pointed out the dangers in failing to register an assignment. If there is no actual document representing the assignment, what can the writer send to Washington? There are three possibilities:
What They'll Never Tell You About the Music Business Page 46