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Seven Misconceptions You Might Have About Music Publishing 

Seven Misconceptions You Might Have About Music Publishing

Take it from me: music publishing is a vast and potentially confusing topic, even for those of us who work in the industry every day. There are reams of laws — many dating back decades or further — and seemingly arbitrary protocols depending on platform, territory and other factors. 

I'm not going to pretend that I can give you an overview of music publishing in one article, but I am going to try and clear up a few of the most persistent misconceptions about the topic in one fell swoop. 

Publishing royalties only matter if you sell thousands of units 

Understanding that your song is split into two halves (master recording and composition) and earns different types of royalties for each half is essential to determining exactly what revenue you're owed. More specifically, publishing royalties are attributed to the composition side of your song and are earned in various ways. Part of those publishing royalties come from mechanical royalties, which are generated from sales of physical copies (aka "units") like vinyl or CDs or digital downloads from streaming, but that’s not the only way you earn publishing royalties. Other ways you earn royalties from your composition include streaming services like Spotify, video platforms like YouTube, song lyric sites, live performances, apps and more. 

Mechanical royalties are only generated from physical sales 

The term “mechanical” dates back to the days when music playback only occurred through mechanical means, like cranking up the Victrola at a (low-volume) 1910-style house party. In the pre-streaming era, every sale of a physical product (like LPs, CDs, or cassettes) earned a mechanical royalty. Today, streaming has become the primary form of music consumption in many markets. Those streams also earn mechanical royalties, making physical sales account for only a small percentage of your mechanical royalty revenue stream. 

To own the copyright of a song, you have to mail it to yourself 

While there are circumstances in which you should consider filing a formal copyright application for a song you write, from the moment your song is considered finished, or “fixed in a tangible form which can be reproduced,” you own the copyright. This might take the form of lyrics and chords written down on paper or a simple demo recording. Once you write it and have some physical representation of it, you own the copyright on that song and therefore own the publishing rights to it as well. 

Collection societies will collect all of your publishing royalties 

If you are only signed up with a collection society, you’re missing out on a big piece of your publishing income. Affiliating yourself with a CMO (collective management organization) or PRO (performance rights organization) such as ASCAP or BMI, if you’re in North America, is an essential step in music publishing, but it’s more like the beginning than the end of the process. For many songwriters, the royalties collected by their collection society represent perhaps a third of their overall publishing royalties. None of the major US PROs collect any mechanical royalties, whether from physical sales or streaming services, which is a significant - and growing - piece of the publishing revenue puzzle. While US PROs may be collecting global performance revenue via reciprocal deals, they may not be covering all the markets where your music is being performed or consumed - and they are almost certainly not collecting your international mechanical royalties. If your home collection society is outside the US, they may be collecting your mechanicals already, but that doesn’t mean they are registering your song with other global performance and mechanical societies to ensure that you’re collecting in every territory. 

Songwriters don’t earn royalties from broadcast radio 

While songwriters are typically paid performance royalties for broadcast (AM/FM) radio play under a “blanket license” that pays less than, say, a direct sale, the royalties earned through radio can be significant. The US is an outlier, however, when it comes to paying royalties on radio broadcasts to the sound recording (master) copyright owner, which is usually the record label or the self-released artist. Joining a small minority of countries in the global music market that includes China, North Korea and Iran, the US does not mandate that master recording owners be paid this second type of performance royalty for broadcast radio. However, satellite and non-interactive streaming radio services like Pandora do pay out to both master owners and publishers. 

A Co-Publishing Deal Is a Quick Way to Break Into Music Publishing 

Not quite. In these deals, a songwriter assigns a portion of his or her publishing rights to another person or company in exchange for money; usually, an advance on any royalties the song(s) will earn in the future. While there’s nothing wrong with this arrangement per se, it demands a keen and clear-eyed focus on the future. Is your co-publisher well-connected and able to score you syncs, performances by popular artists and other placements? Even in the best of circumstances, a co-publishing deal is much like a high-interest loan advanced against future earnings. That’s one reason we advise you seek experienced legal counsel before entering into any publishing deal that involves you giving away any of your rights as a songwriter or publisher. This leads us neatly into our final, and perhaps most important point…. 

Songwriters Give Up Ownership of Their Copyright When Signing a Publishing Deal 

It depends on the deal! If you’re signing into a co-publishing deal, generally you are signing away ownership to current and future songs throughout the term of the agreement. If you want to keep your ownership or aren’t ready for a traditional publishing deal, a publishing administration deal might be a better fit.  When you sign up with a publishing administrator like Songtrust, you do not lose any ownership of your copyrights and are free to exploit your songs however you’d like, in any form you’d like. Plus, by having your songs registered properly worldwide, you set yourself up to collect all future publishing royalties. 

These are just a few of the misconceptions floating around about music publishing, and as creators become more independent, the landscape of music publishing will certainly change and more misconceptions will come to light. If you’ve decided to make songwriting your career, make sure to learn everything you can about the music industry and, most importantly, music publishing, to ensure that you’re making better-informed decisions about your work.

Have questions? Contact me at michael@mpickeringmusic.com It would be my pleasure to help!

CD Baby, Tunecore, DistroKid Add Rapid Apple Music For Artists Verification  

CD Baby, Tunecore, DistroKid Add Rapid Apple Music For Artists Verification 

Top 3 DIY music distributors CD Baby, Tunecore and DistroKid have all added rapid Apple Music For Artists verification, unlocking the platform's expanded analytics for their artists. 

To be eligible, artists must use the same email address and password that they use for their distribution account when signing up for Apple Music For Artists. 

Here's how CD Baby describes what Apple Music For Artists offers: 

When you claim your Apple Music for Artists profile you’ll be able to: 

  • Express your visual brand on the platform 
  • View the real-time results of your music promotion 
  • Ensure that your music catalog is accurately represented 

With Apple Music for Artists you can view: 

  • Plays from on-demand streaming 
  • Average Daily Listeners 
  • Song Purchases on iTunes 
  • Radio plays on Apple Music 
  • Shazams (yes, Shazams!) 
  • Insights and milestones for your music worldwide (for instance, “You passed 10,000 all-time plays in Canada”) 
  • Plays from Playlists 
  • Most Played Songs 
  • Popular Countries (with heat maps) 
  • Demographic and geographic information about your listeners (by song, album, playlist, etc.) 
  • And more

APPLE MUSIC FOR ARTISTS LAUNCHES, RIVALLING SPOTIFY’S ANALYTICS TOOLS 

APPLE MUSIC FOR ARTISTS LAUNCHES, RIVALLING SPOTIFY’S ANALYTICS TOOLS

Artists and their managers have long appreciated the royalties they receive from Apple Music – which, on a per-play basis, are reportedly close to double what they get from Spotify. 

Yet Spotify has always won far more praise when it comes to another valuable asset for musicians: data. 

Spotify launched its Spotify For Artists app in 2017 (an evolution of the ‘Fan Insights’ tool it introduced two years earlier) to provide artists and their teams with information pertaining to their popularity on the service. 

Now, Apple is stepping up to the plate.

Guest post by: BY TIM INGHAM of Music Business Worldwide

Today (August 8), Apple Music For Artists (AMFA) is emerging out of Beta and is being made available for every artist on Apple Music. Like Spotify for Artists, the service is available as both a desktop interface and a standalone mobile app (in AMFA’s case, currently only on iOS). 

MBW understands that in the limited industry meetings Apple has had during AMFA’s Beta, it has been confidently telling artists that its app is “the best available” in the market. 

We’ve taken a look at the platform, both on desktop and via the iOS app. As you’d expect, it allows artists to monitor the volume of their streaming plays on Apple Music and album/song sales on iTunes, all within a data set that updates daily. 

Artists can also drill down into how specific songs and/or albums are performing (and how their fans are growing) in specific markets around the world – down to a city-level in over 100 countries. Apple believes this will help artists to plan tours, tailor setlists for fans in each city, and uncover hitherto unknown pockets of popularity around the world.

Artists can also monitor how many plays of a particular song in a given period have been generated by playlists, as opposed to ‘organic’ plays from fans – and what position their track has been placed within these lists. And they can also see how many of their streams are the result of algorithmic radio (i.e. ‘lean-back’) versus active plays. 

This won’t shock you, but it’s a big differentiator: Apple is putting Shazam data front and center within its AMFA app, allowing artists to examine where their music has been most Shazam’d in particular locations and in particular time periods. (Apple fully acquired Shazam for a reported $400m in September last year.) 

In addition, artists can see a basic count of the average number of daily listeners to their music, broken down by country, city or song, while there is a dedicated section breaking out their video plays on Apple Music. 

Plus, Apple has updated its data to cover music industry standard release weeks to enable artists to better monitor week-to-week success. 

And in a feature which reminded us of the much-vaunted artist app from AWAL, acts are automatically alerted when there are meaningful changes to their data, for example: (i) The first week plays of a new release versus their previous week-one plays; (ii) Milestones like ‘1 Million Plays’; (iii) Sudden spikes in streams anywhere around the world; (iv) When they are added to a major Apple Music playlist. 

Unlike some third-party distribution/services companies, Apple does not provide insights on how an act’s streams translate into royalty payouts.

‘MASTERS ARE OWNED BY [THE] ARTIST’: CHANCE THE RAPPER MANAGER PAT CORCORAN INKS ‘UNPRECEDENTED’ DEAL WITH WARNER RECORDS FOR 99 NEIGHBORS 

‘MASTERS ARE OWNED BY [THE] ARTIST’: CHANCE THE RAPPER MANAGER PAT CORCORAN INKS ‘UNPRECEDENTED’ DEAL WITH WARNER RECORDS FOR 99 NEIGHBORS

When is a major label deal not a major label deal? 

If your answer to that question is, “When an artist owns their own masters,” then you might have found the past 12 months a confusing place. 

 Guest post by: BY TIM INGHAM of Music Business Worldwide

First, in November last year, we had Taylor Swift inking a global deal with Republic Records / Universal Music Group – an agreement under which she appears likely to license her music rights to UMG on a relatively short-term basis. “It’s incredibly exciting to know that I’ll own all of my masters from now on,” said Swift on Instagram when announcing that agreement. “It’s really important to me to see eye to eye with a label regarding the future of our industry.” 

Those words, of course, became all the more prescient last month, thanks to Swift’s masters-related public fallout with Scott Borchetta and Scooter Braun.

This week, another major music industry player is stating their joy at having struck a major label deal whereby masters are retained. This time, it’s not an artist doing the celebrating, but Pat Corcoran – the super-manager of Chance The Rapper, and therefore a key architect of one of the most talked about label-free artist campaigns of recent years. 

On behalf of his entertainment company Nice Work, Corcoran has just inked a deal with Warner Records, the company formerly known as Warner Bros Records and run by Tom Corson and Aaron Bay-Schuck out of Los Angeles.

“MASTERS ARE OWNED BY ARTIST, CREATIVE IS OWNED BY ARTIST, PROFIT SHARING OVER ROYALTIES, ALL WITH THE INCREDIBLE SUPPORT AND PLATFORM THAT OUR COLLECTIVE TEAMS PROVIDE.” 

PAT CORCORAN ON NICE WORK / WARNER RECORDS DEAL FOR 99 NEIGHBORS

The Nice Work/ Warner Records deal covers the future releases of 99 Neighbors, a Vermont-based music troupe whose ranks include founding hip-hop vocalists, Sam Paulino and Hanknative, plus producer Somba and a range of photographers, designers and musicians. 

In a press release, Corcoran noted that the Warner partnership would “allow me to work closer to the art while the label group could help amplify the distribution, marketing and promotion”. 

Calling the deal “unprecedented” and “artist-first”, Corcoran further noted: “The strategy allows Nice Work to step fully into what we love and what we feel we do best; bringing artists and fans closer together via innovative marketing, unparalleled artist-first service and unrelenting determination to protect and promote creators who move us with their music.” 

Over on Instagram, however, Corcoran was a little more direct in revealing significant details about the deal. 

He wrote: “Masters are owned by artist, creative is owned by artist, profit sharing over royalties, all with the incredible support and platform that our collective teams provide.” 

Doesn’t this sound like the sort of ‘label services’ agreement more typically offered by the likes of Sony’s The Orchard, Universal’s Caroline or Warner’s own ADA, not to mention a string of independent players, instead of a major record company deal? 

Corcoran added: “Proud to be a part of big changes in the music industry. Proud of the amazing art 99 has coming.” 

Interesting times.

Un-Freaking-Believable! Spotify: We ‘Overpaid’ Songwriters And Their Publishers In 2018, And We Would Like Our Money Back 

Un-Freaking-Believable! Spotify: We ‘Overpaid’ Songwriters And Their Publishers In 2018, And We Would Like Our Money Back

Courtesy of Music Business Worldwide

If you hadn’t noticed, tensions between the music publishing community and Spotify have taken a turn for the sour in recent months. 

This all began in March when Spotify, alongside other music streaming operators like SiriusXM/Pandora, Google and Amazon, lodged an appeal against mandated pay rises for songwriters and publishers in the US.

The headline news about that pay rise, decided by the US Copyright Royalty Board, was that mechanical streaming payouts from the likes of Spotify would rise by 44% or more between 2018 and 2022. 

It turns out, however, that there was some additional and under-reported complexity to the CRB decision concerning Spotify’s student discount offers and its family plan bundles – which allow up to six family members to stream Premium Spotify for a single price of just $14.99 a month. 

“ACCORDING TO THE NEW CRB REGULATIONS, WE OVERPAID MOST PUBLISHERS IN 2018… RATHER THAN COLLECT THE 2018 OVERPAYMENT IMMEDIATELY, WE HAVE OFFERED TO EXTEND THE RECOUPMENT PERIOD THROUGH THE END OF 2019.” 

SPOTIFY SPOKESPERSON

Because of this additional complexity, Spotify has now calculated that, retrospectively, according to the CRB decision, many music publishers actually owe it money for 2018, due to an overpayment based on the prior rates. And guess what? It wants that money back. 

Spotify told the publishers the news this week and, as you can imagine, these companies – already up in arms over Spotify’s CRB appeal – are fuming about it. 

One senior figure in the music publishing industry told MBW: “Spotify is clawing back millions of dollars from publishers in the US based on the new CRB rates that favor the DSPs, while appealing the [wider CRB decision]. This puts some music publishers in a negative position. It’s unbelievable.” 

Spotify isn’t expecting the publishers to hand over the money that it’s owed right away; instead, this negative balance will be treated as an advance by the company, which will be recouped from its 2019 royalty payouts to publishers (and, by association, their songwriters).

“I FIND IT SO HYPOCRITICAL FOR A DIGITAL SERVICE THAT IS APPEALING THE CRB DECISION TO THEN TAKE ADVANTAGE OF THE PARTS OF THAT DECISION THAT BENEFIT IT. I GUESS WE SHOULDN’T BE SURPRISED.” 

DAVID ISRAELITE, NMPA

A spokesperson for Spotify told MBW today (June 21): “According to the new CRB regulations, we overpaid most publishers in 2018. While the appeal of the CRB decision is pending, the rates set by the CRB are current law, and we will abide by them –  not only for 2018, but also for future years in which the amount paid to publishers is set to increase significantly. 

“Rather than collect the 2018 overpayment immediately, we have offered to extend the recoupment period through the end of 2019 in order to minimize the impact of the adjustment on publishing companies.” 

David Israelite, the CEO of the National Music Publishers Association who has consistently and publicly decried Spotify’s CRB appeal, told MBW in response to Spotify’s request for reimbursement from the publishers: “I find it so hypocritical for a digital service that is appealing the CRB decision to then take advantage of the parts of that decision that benefit it. I guess we shouldn’t be surprised.” 

The CRB rules that the annual streaming royalty rate in the States between 2018 and 2022 will be determined by the highest outcome across one of three different models: (i) a percentage of a streaming company’s total revenue; (ii) a percentage of what that streaming service pays to record labels each year; and (iii)  a flat fee per subscriber in the US. 

Within the new CRB-approved regulations for streaming payouts, it says: “A Family Plan shall be treated as 1.5 subscribers per month, prorated in the case of a Family Plan Subscription in effect for only part of a calendar month. A Student Plan shall be treated as 0.50 subscribers per month, prorated in the case of a Student Plan End User who subscribed for only part of a calendar month.” 

The NMPA announced last week that the US music publishing industry generated a record $3.33bn in 2018, up 11.8% year-on-year, and up 55% when compared to 2014.

Spotify Invests $10M In Facebook's Libra Cryptocurrency  

Spotify Invests $10M In Facebook's Libra Cryptocurrency

Spotify has officially joined Facebook's new Libra global cryptocurrency initiative. Spotify stands out as the only music or media company among 28 A-list players ranging from Visa to Uber to Andreessen Horowitz that each invested $10 million. 

Here's of Techcrunch describes Libra: "Facebook wants to make Libra the evolution of PayPal. It’s hoping Libra will become simpler to set up, more ubiquitous as a payment method, more efficient with fewer fees, more accessible to the unbanked, more flexible thanks to developers, and more long-lasting through decentralization." 

All that delivered locally on a global scale and with bitcoin tracking built in, and you get some idea of what a massive project this is. 

Why Spotify? 

For Spotify, Libra offers a chance to more easily receive payments globally, including from the many outside the banking system.  Someday soon, Libra could facilitate payments to artists and rights holders, as well. 

Alex Norström, our Chief Premium Business Officer, explains: 

“One challenge for Spotify and its users around the world has been the lack of easily accessible payment systems – especially for those in financially underserved markets. This creates an enormous barrier to the bonds we work to foster between creators and their fans. In joining the Libra Association, there is an opportunity to better reach Spotify’s total addressable market, eliminate friction and enable payments in mass scale.”

GOLDMAN SACHS UPS INDUSTRY FORECAST – SAYS 1.15BN PEOPLE WILL PAY FOR MUSIC STREAMING BY 2030 

GOLDMAN SACHS UPS INDUSTRY FORECAST – SAYS 1.15BN PEOPLE WILL PAY FOR MUSIC STREAMING BY 2030

SEE Goldman Sachs' Music In The Air Report Here

Guest Post By BY TIM INGHAM

The last time Goldman Sachs issued a report on the recorded music industry, it caused a wave of fiscal confidence in and around the global business. 

The investment bank’s ‘Music In The Air’ dossier, from August 2017, forecast a booming future for record labels, and set in motion a series of escalating valuations for Universal Music Group which have since hit $50bn (in the case of JP Morgan). 

In that report, Goldman forecast that trade revenues from paid streaming would reach $28bn by the year 2030, with the overall recorded music industry pulling in a whopping $41bn in the same 12 months.

To put Goldman’s optimism in context: according to IFPI data, in 2018, the recorded music industry generated $19.1bn globally – of which 37% (circa $7bn) was derived from paid streaming services. 

Today (June 5), Goldman has issued an update to ‘Music In The Air’ – obtained by MBW – in which it raises its forecasts for the years ahead. 

Goldman now predicts that, by 2030, the global recorded music industry will be pulling in $45bn annually (up on a restated prior forecast of $44bn). 

It also believes that paid streaming will generate $27.5bn for labels and artists in that year (up on a restated prior forecast of $27.1bn), and that the overall annual global trade streaming revenues (including ad-funded) will reach $37.2bn.

Perhaps the most exciting prediction within Goldman’s figures, however, is its forecast for the number of paying music streaming subscribers around the world. 

The financial firm now believes that, in 2023, this stat will rise to 690m (up on a previous forecast of 528m) – more than double the number of users of paid music streaming accounts (255m) confirmed by the IFPI for 2018. 

Goldman further predicts that, in 2030, there will be 1.15bn paying streaming subscribers globally (up on a previous forecast of 901m). 

Within this 1.15bn number, Goldman believes that over two thirds of subscribers (68%) will come from ’emerging markets’, rather than ‘established markets’. 

Partly as a result of that growth in emerging markets, Goldman predicts that global annual ARPU (Average Revenue Per paying User) from music streaming services will continue to fall significantly, down from $32.70 in 2018 to $27.30 in 2023 and $24.60in 2030. 

It notes a current valuation for Universal Music Group of €25.1bn – €35.2bn (approx $28bn – $40bn). 

Goldman’s ‘Music In The Air’ update also predicts that, in 2030, Spotify will remain the global market leader in audio subscription streaming, with 32% market share of global streaming subscribers, down from the 38% it registered in 2018. 

The timing of Goldman’s new report is certainly good news for Universal Music Group owner Vivendi – which is looking to sell up to 50% of UMG this year. 

A recent report from Bloomberg suggested that UMG had held talks with Tencent over a potential deal, but that some in the investment community were growing impatient. 

It quoted one source as saying that “some private equity investors balk at the high price [of UMG] and slow pace of the deal”. 

Potential buyers for Universal Music Group mooted to date have included Tencent, Alibaba, KKR, Apple, Verizon, Amazon and Liberty Media.

Apple Reportedly Ending iTunes 

Apple Reportedly Ending iTunes

The file organization system you've been finding ways to work around for over a decade is about to be no more. According to a report from Bloomberg, Apple is hoping to phase out iTunes in the near future. Apple CEO Tim Cook is expected to announce the decision to move away from iTunes as part of a push away from the iPhone in coming years. 

Guest Post By Alex Galbraith

Unveiled in 2001, iTunes originally functioned as a music library and marketplace for iPods, iPhones, and Mac computers. As the company shifts its focus to other arms, the iTunes library will be replaced by separate desktop apps: Music, Podcasts and TV. iPhones and iPads already separate out libraries in this manner. 

The company's Worldwide Developers Conference is a closely watched event for fanboys and journalists. At this year's iteration, the company is also expected to announce greater freedom for their Apple Watch, which currently only works if it is connected to an iPhone. 

While the company is looking to roll out a new iPod soon, the move away from iTunes is probably a savvy business move given the recent raft of bad press attached to the brand. The company is currently being sued by users who allege that their iTunes data was sold to third parties who connected the data to personal information to sell to marketers. 

“None of the information pertaining to the music you purchase on your iPhone stays on your iPhone," the $5 million lawsuit alleged, per Billboard. “The data Apple discloses includes the full names and home addresses of its customers, together with the genres and, in some cases, the specific titles of digitally-recorded music that its customers have purchased via the iTunes Store and then stored in their devices.”

It's An Indie World After All  

It's An Indie World After All 

If there was still any doubt in your mind that you didn't need to be signed to a major label in order to succeed in the music industry, wonder no longer, as new data reveals just how much of market share indies have gained in recent years. 

Guest post by Bobby Owsinski of Music 3.0 

If you thought that you needed to sign with a major record label or publisher in order to have success, that’s no longer true and there’s a lot of data to prove it. No metric is more valuable in seeing this picture as market share. Indies have made great strides in this area in recent years and continue to do so. Let’s take a look: 

Record Label

Physical Product

Digital Product

Physical/Digital 

Universal

23.4%

32.4%

29.8% 

Sony

19.2%

20.2%

19.9 %

Warner

13.4%

17.7%

16.5%

Independents

44.0%

29.7%

33.8% 

The big takeaway here is how well the indies stack up against the majors. When it comes to physical product, the indies are way ahead, and when it comes to total product they are as well. 

Something similar happens with publishing. 

Record Label

2017

2018

Change

Sony

27.3%

26.0%

-1.3% 

Universal Publishing

19.5%

20.2%

0.7 %

Warner Chappell

12.0%

12.3%

0.3 %

Independents

41.2%

41.4%

0.2 %

Once again, the indies are way ahead of the major publishers and its’ not even close. 

This goes to show that everything in the music industry has been turned on its head. A decade ago and for nearly 100 years, the major labels and publishers dominated the industry. Today indies have a major share of the industry, and while no single company is as strong as a major (yet), they are as a group. 

Artists and songwriters are leery of major corporations in general, and that’s who run the major labels and publishers. They know that the majors have shareholder interests in mind more than theirs. It’s also now a safer bet to sign with a indie, since success is no longer a long shot by going down that path. 

The data was compiled by the Music & Copyright Blog.