Music Business

Music Business Exam Number One
Question 1.
The music publishing industry at a glance would seem to be those who print sheet music, method books, lead sheets, and all of the texts or notated music that musicians (and those aspiring to be musicians) use. Years ago, this was what most music publishers did, but as the industry has evolved the process that become much more complex. Music is not just ink and paper, intellectual material and property to the individual who writes it. Therefore the song does not become “a song” when it is written down. This is not an easy concept to grasp because the song by itself has no physical makeup. A song could exist once it is played for the first time, and songs can even exist inside the mind of a songwriter. This concept is why the publishing business can be so complex; we are dealing with intellectual property.
The heart of the music publishing business lies in the rights to the original music. After the music is successful enough to financially support itself the music is printed in mass quantities in a variety of ways. This could be everything from guitar tabs to choral arrangements for a junior high choir. The publisher’s main source of income is through record royalties, performance royalties received from companies like the American Society of Composers, Authors and Publishers (ASCAP), Broadcast Music Incorporated (BMI), and the Society of European Stage Authors and Composers (SESAC) for performances of music copyrighted by the publisher. These royalties could be from many different types of performances but most are though radio and songs on television. The success of a songwriter lies in the greatly in the hands of his/her publisher. Normally we hear of a band’s success when they are “signed” with a record deal, but most record companies not only produce and promote an album, they also act as the publisher who, when contracted, owns the rights to the music. When a publisher own the song it is put in to their catalog. Merchandise retailers have catalogs of their goods just like publishers have a catalog of songs that they own rights to. Publishing firms such as Warner/Chappell, BMG Music, MCA Music, and Sony music have catalogs of many styles of music. These companies are referred to as “full-line companies.” A broad repertoire allows them to market their music to many audiences. Most of these full-line company’s roots can be traced back to the music of Hollywood and the show music of Broadway. Publishers today may have thousands of songwriters in its catalog including all styles of music from around the globe. Representative Warner/Chappell owns, administers, or sub-publishes more that a million copyrights here and abroad.
Today’s full-line publishers have many different divisions to their company. Large publishers handle virtually every aspect of a writer’s music, it’s recordings, distribution, sales, promotion, advertising, touring, and legal affairs. This figure lays out all the divisions a full-line publisher may have.
The administration division is the division that handles the operations of the firm. All business affairs go through administration. When money is received from or paid to customers the firm the accounting divisions keeps all the financial records of these kinds of operations. The accounting division also would handle loans given to artist that are signed to the firm under the publisher’s record label. When a band records an album under a label they become a liability to the label because money has to be spent to record, produce and promote a artists music. Full-line publisher’s front this money and all profits from the artist come back and are split 50-50 with the publisher and the writer. If the artist maintains the rights to their songs the record contract will include a controlled composition clause that calls for a reduced mechanical royalty paid to the artist by the record label. This clause may reduce the royalty split to 75-25, the larger portion going to the record label. This clause would not be insisted to artists who place the full rights to works in the hands of the record company’s publisher. The artist remains a liability to the publisher as long as the artist has not made as much money as was invested into them by the publisher. An accountant usually handles the royalty department,