Transcript Music Publishing Overview

Music Publishing Overview
October 2010
Overview of Music Publishing
• Music Publishing is the business of acquiring, administering and exploiting rights in musical
compositions on behalf of both the composer of the score and the writer of the lyrics
• Music publishers earn revenue from licensing the right to use their songs; every time a song is
used or performed, the owner of the copyright must grant permission, a license must be
issued and a payment must be made:
 Performing – Television, cinema, radio, music videos, Internet, concerts
 Synchronization – Advertising spots, film sound tracks, musicals etc.
 Mechanical – CDs, records, tapes, ring tones, and certain digital configurations
 Other – Stage, paper based scores
• Generally, the right to receive copyright royalties extends for the life of the writer plus between
50 and 70 years following their death, depending on jurisdiction
• Royalties generated by the use of a song are split between the writer and publisher, with the
music societies paying each their share
• In the case of SPE, the net proceeds must be allocated to product and are subject to program
participations agreements
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Performance Royalties
• Covers a wide range of uses including when a song is broadcast on radio,
television, in a cinema (except in the US) or over the Internet
• Royalties from television exploitation are calculated using ratings and ad sales
revenue by the Performing Rights Society (PRS) (e.g. ASCAP & BMI)
• Royalties from international (outside U.S.) theatrical exploitation are calculated
based on the revenue generated from ticket sales
• The PRS collects royalties and forwards 50% to the publisher and 50% to the
writer/composer
– In some select cases, a publisher may have an agreement with a
composer/writer whereby the publisher pays the composure/publisher an
additional royalty out of the publisher’s share
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Synchronization Royalties (Licensing of Music)
• Licensing of songs for use in television programs, advertisements, videogames,
films, etc.
– SPE generates such revenue when songs for which SPE is the publisher are
exploited outside of the original product (e.g. a song from a TV show is used in
a radio commercial, a song from a movie is used in a video game, etc.)
• The publisher is paid directly by the party licensing the composition for
synchronization
– The publisher pays the writer/composure an agreed upon amount (typically
50%)
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Mechanical Royalties
• Each time a record is sold, the publisher gets paid
– The pace of growth of mechanical royalties is driven by the growth rate of the
overall recorded music market
• In the US, mechanical royalties are a fixed rate of 7.6 cents per song
– Internationally, royalties vary from region to region but on average, mechanical
royalties are roughly 8.5% of the retail price of a record
• The responsibility for collecting the monies from the record companies that ship
the albums lies with third-party, non-commercial organizations known as collection
societies (e.g. Harry Fox)
• The collection society keeps a small fee and forwards 50% of the royalty to the
publisher and 50% of the royalty to the writer/composer
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