How to Start Your Own Publishing Company
At its core, a music publisher’s job is to administer the copyrights in songs and license your work to record labels, radio stations, filmmakers, advertisers, etc. A publisher collects license fees, take a percentage and pay the remaining proceeds to the songwriter(s). The publisher controls the song itself (not the recording of the song, which is generally owned and controlled by the record label).
That said, many artists choose to start a publishing company on their own early in their career to get control of their music catalogue. And while it sounds complicated, a publishing “company” can simply be a simple administrative way to organize your songs and farm the licensing work out to Performing Rights Organizations. This month’s Legal Pad looks at the basics behind starting your own publishing company.
Reasons You May Want to Start a Publishing Company
From administrative, to legal, to vanity, there are many different reasons to set up a publishing company for your compositions. Here are a few:
1. You’ve recorded an album and are looking for new avenues of exposure
2. You are considering a record deal and want certain controls over your copyrights
3. You have collaborated with different people and want a central company to administer the copyrights
4. Your manager, lawyer, or accountant is pushing for a more formal approach to your affairs
The Role of Performing Rights Organizations (PROs)
Before you get into the world of publishing, you should understand the role of Performing Rights Organizations (PRO), who will assist in many of the hands-on administrative tasks of your publishing company. A PRO is essentially a middleman between you (the copyright holder or your publishing company) and those who want to perform their work publicly (i.e. radio stations, jukeboxes, retail stores, and others mentioned above).
The PRO will license its members’ compositions and collect royalties derived from performance rights. The three major PROs in the United States are ASCAP, BMI, and SESAC. PROs recruit members who give them the right to license public performances of their compositions. Public performances include: broadcasting (electronic media, radio, television, cable); live performances (clubs, halls, concerts); and background music (bars, jukeboxes, offices, retail stores, etc). Public performance does not include dramatic rights (Broadway, theatre, etc.) or mechanical rights (right to record, manufacture and distribute), so PROs play no role in licensing these rights.
One of the biggest duties of a PRO is to keep an accounting of public performances and pay copyright holders accordingly. PROs accomplish this by: (1) collecting money for all blanket and per program licenses; and (2) monitoring their members’ music when it is performed on the radio. Television and film performances are accounted for using a more intricate system (where the production’s producer submits an accounting of all works included on the project that are covered by a PRO). The fees paid to the PRO are often paid by the broadcaster and are not the responsibility of the producer. From there, the PRO accounts for all monies owed to members, subtracting amounts owed for operating costs. Each PRO pays royalties differently.
Joining a PRO is easy, inexpensive, and can be done quickly online. The general requirement to join is having written or co-written a musical composition that has been: (1) commercially recorded; (2) performed publicly in any venue licensable by a PRO (club, live concert, symphonic concert or recital venue, college or university, etc.); or (3) performed in any audio visual or electronic medium (film, television, radio, Internet, cable, pay-per view, etc.). You can join a PRO online by going to the organization’s website (membership is either free or for a nominal fee).
Basics for Starting Your Publishing Company
1. First, pick a name for your company. Go with something that is distinctive to your style and brand.
2. Consider setting up an LLC or other corporate entity for legal liability and tax purposes. Contact your Secretary of State Office for more details and, if needed, speak to a lawyer and accountant to get insight on the best entity for you.
3. Sign up with a Performing Rights Organization. Take advantage of the seminars, conferences and educational materials that come with your membership.
4. Make sure that all of the songs in your publishing catalogue are registered with the U.S. Copyright Office. Go to www.copyright.gov for more details. Also make sure all songs (compositions) are assigned to your publishing company.
5. Find a way to organize and track your company’s catalogue. Consider purchasing software to assist this process. “Songtracker” is a program designed to manage and administer music publishing tasks (www.songtracker.com).
Adam Barnosky is a Boston-based attorney and writer. For industry trends, legal updates, or to request an upcoming Legal Pad topic, find him on Twitter @adambarnosky.
DISCLAIMER: The information contained in this column is general legal information only and should not be taken as a comprehensive guide to copyright law. Consult your attorney for all specific considerations.