How to Understand 4 Types of Music Publisher Songwriter Deals
October 12, 2015
Editor’s Note: The Copyright Coach is excited to feature a series of guest blog articles about music publishing and songwriting by Steve Rice, a 30-year veteran in the Christian music arena. Today’s post is one of a two-part article.
Steve Rice launched The Songsphere blog in 2012. In 2015, he added iWrite 2016: The International Christian Songwriting Conference and Nashville Music Architects. Since the mid-1980’s, Steve has worked as a music publisher in the area of Christian Music and had the opportunity to work with some of the finest songwriters, producers and artists throughout the world. That includes writers like, Chris Tomlin, TobyMac, Steven Curtis Chapman, Matt Redman, Nicole Nordeman, Israel Houghton, Hillsong United, Paul Baloche, Newsboys, Switchfoot, Charlie Peacock, Smokie Norful, Seth Mosley, Lauren Daigle and hundreds more.
BY STEVE RICE: Contracts between songwriters and music publishers are negotiable, so all publishing contracts are not the same. However, there are standards and some basic elements, that run through all of them. This post will explore different types of deals and outline some of the basics of each.
In short, there are four types of deals between the music publisher and the songwriter which are most common: 1) the Single Song Agreement, 2) the Exclusive Songwriter Agreement, 3) the Co-Publishing Agreement, and 4) what I would call a Catalog Purchase Agreement.
1) Single Song Agreement
A Single Song Agreement is offered by a music publisher to a songwriter when the publisher has interest in working with an existing individual song or group of songs, written by the songwriter. Under this type of agreement the songwriter and the music publisher make an agreement for these individual songs only. Under this agreement the songwriter has no further obligation to the music publisher for other songs written past or future.
Generally, these types of deals are made for songs which have not yet had any commercial activity or have not generated any revenue to date. The songwriter assigns these songs to the music publisher so that the publisher can help secure new commercial uses of the song which generate income. Income generated on the songs is then split between writer and publisher at the percentages agreed to in the contract and paid to the songwriter in accordance with the accounting provisions of the deal. In standard cases the split of income between the songwriter and music publisher is 50/50.
2) Exclusive Songwriter Agreement
An Exclusive Songwriter Agreement (ESA) is a deal between songwriter and music publisher whereby the songwriter agrees that all new songs written by him/her for a specific period of time, will be subject to the contract. The length of these deals is negotiable and can vary, but it is generally around 1 – 2 years, with the music publisher having a number of options to extend the deal, at the publishers election.
The basic elements of an Exclusive Songwriter Agreement are:
- Term – defines how long the deal will last
- Territory – defines the territories of the world in which the publisher will have rights
- Songs covered or not covered under the deal (i.e. the deal may also include some existing songs written prior to the start-date of the contract, or it may be agreed that some new songs written under the deal will be excluded or treated differently for various reasons)
- Assignment of rights – the writer transfers the copyrights to the publisher
- Administration – defines who has administration rights in the copyrights and any related fees
- Royalty Provisions – defines what royalties will be paid to the songwriter for the various types of income
- Advances – defines what, if any, pre-paid royalties may be paid to the songwriter, when they are to be paid, and how they are recouped.
- Accounting – defines how royalties will be calculated and when they will be paid
- Minimum song delivery – songwriter must write and deliver to publisher a minimum number of “commercially viable” songs during the term
- Demo Recordings – defines who pays for demos, how much and how the cost may be recouped
- Reversions – some deals may include a reversion of certain songs, percentage of ownership or certain rights back to the songwriter at a designated time
- Special stipulations – other provisions that may be unique to this particular deal
- And a bunch of boiler plate legal language (i.e. what happens if someone breaches the contract, warranties, how disputes will be settled, etc.)
In these types of deals, the songwriter and music publisher generally work together as a team, during the term of the deal. In addition to simply trying to land new royalty bearing uses of the songs delivered under the deal, the publisher will often work to further the songwriter’s overall career, such as helping the songwriter land a record deal (if he/she is an artist), helping the songwriter land production opportunities (if he/she is a producer), making introductions to expand the writer’s contacts and relationships for collaboration opportunities with other top songwriters or recording artists, and working to gain press and industry exposure for the songwriter and his/her work.
Similar to the Single Song deal, under the ESA, the copyright in each song is assigned to the music publisher, giving the publisher the legal right to protect, control, license and manage the songs. This means the publisher “owns” the songs and in return any income generated on the songs is split between writer and publisher at the percentages agreed to in the contract and paid to the songwriter in accordance with the accounting provisions of the deal. In standard cases the split of income between the songwriter and music publisher is 50/50. In music industry speak, we usually call 50% of the revenue the “writer’s share” and 50% of the income the “publisher’s share”.
3) Co-Publishing Agreement
There are multiple ways to do a co-publishing agreement. A co-publishing situation simply means that there will be more than one music publisher working with the song/songwriter at the same time. It is an agreement between two or more publishing companies, whereby the publishers co-own, or “co-publish”, the applicable songs.
The most common use of the term “co-publishing” is generally in reference to a music publisher working alongside a songwriter’s own publishing company. For example, if the songwriter has his/her own music publishing operation, he may at some point choose to partner with another music publisher for help.
In recent decades, high-profile, successful, or “in-demand”, songwriters have been able to negotiate co-publishing deals with a music publisher, not because they truly have an operational music publishing company of their own, but because they have enough clout to demand a larger piece of the pie in an exclusive songwriting deal. In such case, the deal actually becomes an, Exclusive Songwriter and Co-Publisher Agreement. In this type deal the ownership of the song copyrights would be split between the two publishers (i.e. the traditional music publisher and the songwriter’s music publishing entity), usually 50/50, which means the publisher’s share of income would also be split between the two publishers. In this scenario the songwriter would receive his/her writer’s share of income from uses of the song, plus half of the publisher’s share of income, in effect making it a 75/25 deal between writer and publisher. In this type of deal, the traditional publisher is only making half of what he usually makes. This generally means the publisher is going to expect the writer to generate a lot of commercial activity on his own (i.e. acting as a partner publisher), thus increasing the overall revenue to make it a win for the publisher at the discounted rate.
4) Catalog Purchase Agreement
In the music business the term “catalog” refers to a group of properties. It can be a group of songs (i.e. intellectual property), a group of recorded masters (i.e. physical and intellectual property), etc. For the purpose of this blog post, when I refer to “catalog”, I’m taking about a group of existing songs. For example, all of the songs that we publish at my publishing company are referred to as our catalog. I may also refer to all the songs written by Writer A as, “Writer A’s catalog”. Similarly, if I’m talking about all of our songs that are affiliated with the performing rights organization SESAC, I may refer to them as our “SESAC catalog”. It’s simply a way to reference a grouping of songs.
Often times, music publishers may wish to purchase a group of songs, or all the songs, from a songwriter or from another music publisher. A recent example in the news was music publisher, Ole’ Music’s purchase of the Rush catalog, called Core Music (i.e the songs of the classic rock band, Rush). A purchase generally only takes place with songs that have earned, and/or are currently earning, income. (Compare to a Single Song agreement above, which is usually, (1) for a smaller group of songs, and (2) for songs that have not yet earned any royalties). The purchase price is usually determined from formulas based on the historical earnings of the song catalog and the estimated future earnings.
In a catalog purchase deal, the purchasing party is typically only buying existing songs. However, in certain cases it might also include what I call a “go forward deal”, which could be the purchase of any existing Exclusive Songwriter and/or Co-Publishing agreements that are tied to the catalog, or a new exclusive term deal with the songwriter-owner of the catalog.
In Part 2, Steve provides practical examples of how some of the options in these deals work.
About Christian Copyright Solutions: CCS’s quest is to help churches and Christian ministries “do music right.” CCS is an expert on church music copyrights and our primary focus is providing licensing and clear educational resources to churches, as well as representation, administration and advocacy for copyright owners. Follow us on Twitter, Facebook and Pinterest. The information contained herein is for informational purposes only, and is not legal advice or a substitute for legal counsel.