Music publishing is, in short, the process of monetizing music. It is a way so that the people who are involved in the creation, recording and copyright processes of music production, can be paid. The intricate details of these arrangements have changed throughout history and they continue to evolve.
Gone are the record labels that only deal with records. Now, music publishing requires that record labels involve themselves in pretty much all aspects of an artist’s career. Music consumption is largely dependent on the relevant technology of the time. The most popular format seeming to be basically whichever is the most easy to use, and cheap to access. Technology and the history of music publishing are so closely related that they must be looked at together.
Let’s Get Physical
The first popular music was originally distributed as sheet music for people to play songs at home on their own pianos. As recording technology advanced the formats of distribution also did with vinyl, cassettes, and ultimately compact discs each having their day in the sun as the most popular format. During this time 3 major labels emerged: Sony, Universal, and Warner. The profitability of CDs was greater than anything else seen before and music publishing was really taking off.
By 1999, the US record industry was peaking. That year, the 3 titans split the lion’s share of an absurd $22.4 billion when adjusted for today’s dollars. But while the Y2K bug might not have taken down the world’s computers, two teenagers (Shawn Fanning and Sean Parker) would soon revolutionize the music industry.
Shift to Digital
The two met online and launched a start-up (before that was even a word). Their glorious creation was Napster. I was 10 when I first figured out how to download, install and use Napster. It was incredible. The first song I ever downloaded was Will Smith’s classic “Will2K”. I only downloaded 1 song per week because it tied up the phone line for a whole hour. Totally worth it. In the coming months, broadband internet and CD burners emerged while the old guard of the record industry tried to keep their stranglehold on the dollars by turning to litigation.
Apple quickly monetized the cultural shift that Napster began. In 2003, they negotiated agreements with all the major record labels to launch the iTunes Music Store and gave people a way to buy individual songs. The LP (“Long Play”) album as it was once known was no longer the most popular way to consume music. Now, it was mixes, playlists, and greatest hits.
It is funny to think I remember hearing people say “why would I need to carry 1000 songs around with me?” when Apple first introduced to the original iPod. Or then, when I saw CAKE in concert in 2008 and John McCrae cheered that recorded music was now “worthless”. They knew what was coming, even in 2008. They even gave away a tree at the concert.
2012 marked the first year that digital downloads outsold physical sales but it was also overtaken in earnings by streaming services in 2013. Buoyed by the growth in streaming services, US revenue from music publishing grew from $7 billion in 2014 to $11 billion in 2019.
A music publisher is simply a person or a company that is in control of the copyright material. Many major and independent record labels facilitate their own in-house publishing departments, yet maintaining a relationship with independent music publishers. The job of a music publisher includes, but are not limited to scouting for song-writers, registering songs on collection societies, pitching the music to the right market and clients, promoting their talent and making sure composers and writers are paid fully and on-time.
Sadly, most creators are not aware of the power of publishing and its financial potential. There are plenty of professional song-writers, without being in the spotlight, who simply live-off of their publishing revenue. Publishing revenues stem from placements of songs in films, movies, games, commercials and advertisements, however, not just limited to the mentioned. Mechanical and performance rights also fall into the category of publishing.
360 Deal or No Deal?
Forced by plummeting sales to radically adjust their approach, there also emerged a different kind of record deal: the “360 Deal”. This was introduced as a way for the record labels to recoup any advances that might not covered by record sales and would instead be paid back by a percentage of other, additional earnings that the artist received. Live Nation immediately made a splash when they signed Madonna to a $120 million 360 deal in 2007 and Jay-Z for another $150 million. That same year, Warner stated they would only sign new talent to 360 deals, and broadly, the other major labels have all adopted a similar approach.
There are a several criticisms of this shift, because it initially seems invasive to the artist, to take a cut of absolutely everything? The labels might say that if not for their investment in the artist then there might not be such lucrative deals to be had in television, fashion or other endorsements.
On the other hand, this offers an attractive option for some artists. They can make sure that the label stays engaged in promoting them by keeping them relevant and connected. The fact that they can profit off any income generated means the major labels can use their influence to get the artist other income streams outside of music sales. This doesn’t always go according to plan however. It can back-fire when record label employees end up meddling in aspects of being an artist that they may not yet fully understand.
Streams and NFTs
The future of music publishing points to more growth in streaming. As I mentioned earlier, ease of access and low-cost usually decide which is the method of consumption for music. Clearly, smartphones are only becoming more integral to our daily lives and having the ability to play across multiple devices is becoming one of the most important features for consumers. This is accomplished much easier without physical copies of music, or even personal digital copies of the files.
The future also seems optimistic for independent and smaller artists. Despite the major labels being part owners of the streaming services and essentially rigging the deck, the direct-to-consumer model that several websites offer is probably the best it has ever been for the artist to reach their fans. Platforms like Patreon, Bandcamp, even Twitch, offer several attractive ways for artists to earn money by their music while still maintaining creative control.
NFTs also provide a very interesting opportunity for artists. As they can now issue limited digital editions of their releases, much like you might find a limited pressing vinyl. “Crate-digging” on Youtube can be fun but digital music just doesn’t have that feeling of holding a record, tape or CD. Looking at all the liner notes, the art. Knowing that you have one limited copy of something, despite it likely being mass produced. Maybe the future of NFTs in music publishing will look a little more like the past, with $20 albums filled with music, video, art; a more personal experience. Until then we will continue to drive the news cycle with more and more stories of artists selling NFTs for increasing figures.
I think if I would’ve been able to see CAKE in concert last year, they might have shouted “recorded music is now incredibly valuable!”
It is interesting to see the changes in music publishing throughout history. More convenience and access meant less “value” placed on recorded music. Like any industry, there are ebbs and flows, massive changes then swings back in response. Music is now as widely accessible as it ever has been, while also being as exclusive and valuable as it has ever been.
At Funktasy Publishing we understand that the process of music licensing and publishing should be straight forward and simple. As a modern record label with an in-house publishing department, Funktasy is constantly adapting to the changes within the music industry. Our team of experts work closely with our talent to expose their music to the right global market while we simultaneously assist our clients to meet all of their project demands.