Introduction

As a group, songwriters are very creative and being so many tend to shun mundane business details. Often they relegate that work to Music Publishing Companies. As Mary Dawson's article pointed out a good publishing company performs two functions-as a creative coach and as a business partner. Below I will explain the business aspect of music publishing, point out the advantages of becoming your own publisher and outline the simple steps you can follow to become your own publisher. We at OutboundMusic strongly recommend that songwriters become self-published-that is form their own Music Publishing Company.

What does a music publisher do?

The business aspect of music publishing is two-fold; marketing songs and managing their copyrights. Obviously to successfully market (pitch) songs on a regular basis requires both good songs and extensive music industry contacts. Managing a songwriter's copyright simply means the business of properly licensing the songwriter's rights to others and collecting licensing fees. For this service Music Publishing Companies keep 50% of the fees they collect. There are four main types of licensing fees:

1. Performance Income: As the holder of a copyright you are owed a fee each time your song is publicly performed.
2. Mechanical Royalties: These are the fees due when you license a record company to manufacture and distribute your songs or when another recording artist "covers" your song on their recorded project.
3. Synchronization Income: These are the fees due if you license your song to be used within a motion pitcher or television program.
4. Print Income: These are the fees due when your songs are included in songbooks or on sheet music.

How much are the fees and royalties and how are they collected?

Performance Income

It would be extremely inefficient for every publisher to attempt to license songs on an individual bases to every type of music venue, radio station or Internet site. Instead they affiliate with one of the performing rights societies and allow them to grant affiliate blanket licenses and collect and distribute the fees. There are three performing rights societies active in this country:

ASCAP (American society of composers, Authors and Publishers)
BMI (Broadcast Music Incorporated)
SESAC

Each of these organizations grant blanket licenses, track "airplay" data, collect fees and distributes those fees (after subtracting administrative costs-in the case of BMI also a small profit) separately to their affiliated writers and publishers. The system is structured on a sliding scale such that the amount of "airplay" determines how much money songwriters and publishers receive.

Mechanical Royalties

These royalties can be negotiated when you license your songs to a record company or they can be fixed by statute if someone else "covers" your song on their recorded project. The stature can be viewed in Section 115 of the Copyright Act. Currently it is 8 cents for songs 5 minutes or less and 1.55 cents per minutes for longer songs. The Harry Fox Agency serves the same purpose for mechanical royalties that ASCAP, BMI and SESAC serve for performance income. The Harry Fox Agency charges a 4% fee for tracking, collecting and sending these fees to your publisher. It is then your publisher's responsibility to see you get your cut.

Synchronization Income

The Harry Fox Agency can also be retained to track and collect fees for synchronization income. Their fee is 5% for television and 10% for motion pictures licensing. In this case your publisher negotiates the details of the license with the television or motion picture company and notifies The Harry Fox Agency.

Print Income

Your publishing company would negotiate these licenses directly with sheet music or songbook publishers and also track and collect the fees.

Advantages of self-publishing

By creating your own music publishing company you retain control over the 50% of your royalties and licensing fees that would normally go to another publisher. You could then sub-contract at a reduced rate those aspects of publishing you have no stomach for.

Remember, once you register with a performing rights society it will be their job to see you get your performance income. And if you engage The Harry Fox Agency they will handle your track and your "cover" mechanical royalties and your synchronization income.

Established publishing companies do perform other vital services. They have industry contacts and might be better able to pitch your work-of course your might be good at networking and can do this job yourself. They might be better able to offer you a collaborative and creative atmosphere in which to do your songwriting. At some point you might feel the need to work with one of these publishing companies-no problem-at any time you can still give full publishing control to another company.

The bottom line is that there is no downside to creating your own publishing company and it has the potential to be very advantageous.

What are the steps to forming a publishing company?

The first step in forming your own publishing company is to choose the performing rights society you wish to affiliate with and register as a songwriter. The registration requirement for ASCAP and BMI are easily met but SESAC is an "invitation-only" organization. In the case of ASCAP and BMI the requirements are similar.

ASCAP Requirements-your original song is:

· Commercially recorded
· Or has been performed publicly in an ASCAP licensed venue
· Or has been performed on radio, television or the internet
· Or has been published and available for sale or rent

BMI Requirements-your original song has been or is about to be publicly performed.

Once you've become an affiliated songwriter then follow these steps to create and affiliate a publishing company.

1. Register with the Performing Rights Society of your choose. At this time you will be asked to supply a prioritized list of possible names for your company. You will be informed as to which one is accepted.
2. Go to your County Clerks office and file a DBA (Doing Business As) form using the accepted company name.
3. Open a bank account under your Publishing Company name.
4. Obtain a tax ID number for your publishing company from the IRS (form W-9).

One final word.

This is really a plug for one of our services and exemplifies the financial advantage of becoming your own publisher.

We offer to catalog and pitch original songs for songwriters. Besides shopping songs around, we include the songs in our "Song Showcase". This is a section of our website where we feature pitch ready songs. The catch is that we screen all submissions and only accept those that meet our standard of craftsmanship, quality and content.

Here's the good part. Our fee is very reasonable.

If you have your own publishing company you have two options:

1. You agree to assign us 50% of the usual publisher's share only if we successfully pitch your song.
2. You pay a cataloging fee of $5 per month for a minimum of six months.

If you don't have your own publishing company you have these two options:

1. You agree to use us as your publishing company only if we successfully pitch your song.
2. You pay a cataloging fee of $5 per month for a minimum of six months while you set up your publishing company.

In either case if you choose option 1 then, if we accept your song we will also send you the critique. The critique will be performed by one of our professional songwriting coaches.