I’m not trying to tell anyone anything they don’t want to know here, but I can think of numerous times when I would have appreciated knowing the facts and truth about a situation before saying something that sounded uneducated. Plus, some of you may actually be interested in this. So, what follows is a crash course in music business and what I am trying to do within it. If you aren’t interested, color me un-offended (and charming) and check back some other time. If you are, strap on your athletic supporter, ‘cause here we go.
The basicsRevenue is generated from music by the exploitation of copyrights. A copyright is the right to reproduce or transmit a work of intellectual property.
This exploitation can occur in a couple of different ways. The most common is by sale of mechanical copies of the copyrighted (not “copywritten”) work. This means selling compact discs or digital copies of the work. The second (less common but very lucrative for the owner of the copyright of the actual
song and less so for the owner of the copyright of the
recording of the song) is through licensing fees for the performance of the work.
Just to clarify, it is songwriters who make their money off of these two things. While artists sometimes make money this way, the income they receive from live performances dwarves their potential income from CD sales.
How it works… at least in NashvilleThe almost cliché motto of Nashville is “It all begins with a song.” This is more true in country music than in any other field, as most people who listen to country listen for a sing-song melody and a lyric that is understandable, relatable, and somewhat true. Because of this, Nashville is the mecca for songwriters (estimates are that there are 40,000 songwriters living here). Though songs of questionable intelligence or downright stupid origin will sometimes make it to radio, these songs at least generally make sense to the average listener. You will hear no cryptic lyrics, no self-absorbed “my heroin addiction is really starting to suck” songs, and no raps about bitches and ho’s coming from Twangtown. Country music is generally about real life, and must be accessible to your average Joe or Jane in order to succeed. In order to do this, Nashville maintains a cadre of writers, most of whom are not performers per se. Some may argue that this is fake, but performers have only been performing music not written by themselves since, well, for at least the last 1500 years. Seems to be going okay so far.
There are several different roles in the process of taking a song from idea to the fabric of American life. So, um let’s start there.
The writerThe writer, uh, writes songs. That’s pretty much it.
Because it improves quality and speed, most songs in Nashville are written by multiple writers – usually two, but sometimes three, and up to five or six. Solo writes do happen, and can be successful, but they are rare (maybe 10% of songs on country radio?).
The writing is frankly the easy part, though fewer people write good songs than think they do. Because this is the case, artists and those who choose songs for them need someone whom they trust to filter out the bad material and to bring them the material that is worthy of their consideration. This brings us to…
The publisherPublishers used to take a piece of music, print it, then sell it to consumers. This happens, but it is not a significant share of publisher incomes. In popular music, publishers identify music of quality and present (“plug”) it to artists or those who can get to artists (usually producers or managers, but occasionally A&R people, wives or girlfriends). In exchange for this promotion, the writer surrenders a share of his or her ownership of the song. For new writers, this share is 50%. Yes, they give up half of their income on a song to a publisher who does the rest. The more established a writer becomes, the greater the share of the profits he or she will receive. This isn't guaranteed... it usually happens as a result of the publisher surrendering back to the writer a portion of what they had been getting in order to maintain the relationship, or the established writer self-publishing.
Regardless of what type of arrangement exists between a writer and a publisher, the proceeds are always divided into two equal portions. One half is deemed the “writer’s share” and one half is deemed “the publisher’s share” (ie – “the publishing”). A solo writer who is self-published receives 100% of the writer’s and 100% of the publisher’s. Music is the only business in the world in which someone can have 200% of something, with the possible exception of government. Some really nice writer's deals give them 100% of the writers share and up to 85% of the publishers share,
if the writer can get his own cuts.
Publishers acquire their ownership of copyrights in two ways. In a single-song agreement, a publisher gains ownership of one work from a writer’s catalog. When a writer is “signed,” it means that the writer writes songs that immediately become the property (well, half, but that’s not exactly true… read on) of the publisher. A writer who is signed to a publisher is called a staff writer.
When a publisher “picks up” a song, the writer not only signs away a significant portion of potential earnings from that song, he or she also surrenders administrative rights. In other words, if I wrote a song and the publisher got Michael Bolton to record it, I would have no say over whether or not this would take place. The publisher’s job is to exploit the material, but exploitation also becomes the publisher’s exclusive right. More established writers get “reversion clauses” which entitle them to retrieval of 100% of the copyright if the publisher fails to meet certain criteria with the work (usually recording on a major label).
Before a song earns royalties, the publisher will often pay some amount to the writer. With unsigned writers, the amount is usually very modest. Staff writers, however, typically earn advances on future earnings, which are distributed like a paycheck. This is called a “draw,” and is recoupable by the publisher from the writer’s share of song revenue. Usually, publishers may only recoup money from advances they have paid within a twelve-month period, and only from the earnings from the sale of recordings of the song (mechanical royalties).
Those who have argued that illegal downloading is morally right may not realize that the average yearly income (from songs) for a songwriter in Nashville is about $4000. Yes, some are worth millions, but most suffer severely when music is copied and not paid for. Not preaching, just stating a fact.
What the publisher doesThe creative director of a publisher is the person who signs songs and/or writers to his or her company. Once signed, the creative director and that company’s songpluggers meet with artists, producers (the equivalent in music of directors in movies), managers (who handle day-to-day affairs and the nuts and bolts of performance booking), and A & R directors (“A & R” stands for “artists and repertoire” – they work for record companies to sign artists and choose songs. Most famously used in Tom Petty’s song “Into the Great Wide Open”) to attempt to get that publisher's songs cut.
The first step for these pluggers is to get a song “on hold.” That means that an artist has asked a publisher to reserve that song for them. No money exchanges hands. The publisher literally stops plugging the song. This practice is beginning to wane a bit here because some big artists are putting 30 songs on hold for twelve months while they decide what they want on their album. This wastes publishers’ money and leaves songwriters with nothing to show for their work. I knew of one major publishing company whose president recently said, "OK, that's it. No more holds for F@ith Hill," because her people were keeping so many tunes from earning money. She can do that though, because her album sold over 300,000 units in its first week. That's really good.
Once a song is on hold, it will hopefully “get cut.” That only means that it has been recorded. Still, no money has exchanged hands. Most artists will cut 15-30 songs for any album. After that, the label decides which will actually make the album. The rest go back into the marketplace.
If all goes beautifully, the cut will make the album. Though no money has been paid, this is when the potential for earning money on a song becomes realistic.
If things go really well, the cut will become a single. This is when earning big money becomes possible. The songs that “change a writer’s life” are always singles, assuming said change has something to do with money.
Even after this point, radio has to like the song enough to play it, and listeners have to like it enough to buy it.
How the song actually makes moneyAs stated before, there are two ways songs make money. I’ll be more specific here.
Royalties from sales of a single, album, or download are called “mechanical royalties.” The rate at which mechanicals are paid is established by the Copyright Tribunal. The current rate is 8.25 cents/copy. So, if you have a song on an album that is not a single (which is known as an “album cut”), the album sells one million copies, and you are the sole writer receiving no publishing, you can expect to make $41,250 off of that song in mechanicals.
Royalties from performance can earn much better money. Radio stations, athletic and performance venues, clubs, restaurants, TV stations, and anyone else who is legally performing copyrighted musical works in public pays a licensing fee in exchange for that right (ie – the “performance right”). This money is paid to a “Performance Rights Organization,” or “PRO.” The US is the only country in the world which has more than one PRO. They are ASCAP (American Society of Composers, Authors and Publishers), BMI (Broadcast Music, Incorporated), and SESAC (a for-profit company that is growing very fast… initials once stood for “Society of European Stage Authors and Composers”). They sell licenses to entities which perform music and remit the earnings to songwriters and publishers. A decent hit on country radio can earn about $1,000,000 in performance royalties over about 18 months or so. Bigger money rolls in when you have consistent airplay over a number of years, or when your tune is one of the most frequently played.
If you can get your song on the air in ways beyond radio, revenue increases by leaps and bounds that way as well. Licenses for motion pictures and television increase the payment per performance exponentially. The writers who drive Jaguars and make reservations instead of dinner have had their music in a movie or TV program.
What I’m doingI’m a songwriter. I came to town with no strong publishing contacts, which is fairly common. In terms of business alone, my best bet is to do my best to get signed to a publisher.
Most publishers do not listen to material from outside their own collection of writers. If someone sends a package to a publisher for consideration without having gotten permission from that publisher (which usually includes a code to put on the envelope, indicating that is expected), it is usually stamped “unsolicited material” and either refused or simply thrown in the trash. This might seem cruel, but it is necessary to save time (because of the glut of piss-poor songwriters who think they’re good) and money (lawsuits from writers who claim ownership of a tune can cost millions of dollars in legal fees in infringement suits… and there are only twelve notes).
From a “jumping in” standpoint, I’m trying to meet other writers and potential artists and co-write songs with them. This can be financially beneficial, but in truth it’s more a part of the “experience” of moving to Nashville, or the act of “paying your dues.” The first several months of this trip are primarily eaten with this. Half of the people with whom I made contact in Nashville in 1997 have left the business. The bottom line for being successful in the music business is that you have to be incapable of imagining yourself doing anything else. The people who do this will eventually make enough money to survive as they wish. The people who don’t will ultimately work the L’ancome counter at the Cool Springs Galleria, as the first creative director who ever listened to me now does.
What’s not involved in the businessHere are a few corrections of misunderstandings about how this all works.
1. I don’t want to be an artist (at least in the music business sense of the word). You won’t see me on CMT performing a song, or on a concert stage in some outrageously huge venue. I found out how those people live. They’re never home, their marriages suck, their kids turn out to be brats, and they wind up being parodies of their former selves in Branson, Missouri. No thank you.
2. People don’t “sell songs” anymore. To sell a song, as a writer, would be to sell your writer’s share of a tune, thereby rendering you a non-writer of a song (along with 6.5 billion other citizens of Earth). Writers assign shares to publishers. Publishers get songs cut. Artists cut songs. Labels release them. The public buys them, radio plays them. Then the writers get’s royalties from their PRO and the label who released it pays what amounts to commission on sales. All the while, the writer still owns his her own writer’s share.
Much of the confusion about this stems from Michael Jackson’s ownership of much of the Beatles’ catalogue. McCartney and the estate of Lennon still own the writer’s share of their tunes (George Harrison too). Northern Songs (aka ATV, aka Sony) owned the publisher’s share before it was sold to Jackson. The reason “Revolution #9” was on the Nike commercial years ago was not because Paul McCartney had approved it, but rather because someone MJ had hired to administer the properties had approved it. Paul is still pissed at Michael about this, and I hope he gets his tunes back (the publisher’s share, that is)
3. It doesn’t only take one to make it work forever. It can, but it generally doesn’t. In order to make a very, very nice living at this, you have to be consistently cut over a period of years. If you can do that, especially for artists who sell nicely, then you’ve got a nice nest egg. If you solo-wrote one tune on the first big Backstreet Boys album, you made about $500,000 on the cut alone. If you had a single, you might well have made $3-4 million on it. Dianne Warren is estimated to be worth $150 million. I also saw a drunk sitting on Demonbreun last week who came to town to write songs too... not sure he had $1.50.
Country music is only about 11% of the music market. Rarely do more than three or four artists/acts sell more than two million units per year. That’s actually pretty generous. George Strait doesn’t go platinum every time. Yet he has recorded 30-some-odd albums, and all sell over 500,000 units. This is good enough to make a profit.
4. Country music labels are not oblivious to what is good and what isn’t. They pretend that they are sometimes, but they are doing so in order to keep their bosses (in LA, NY, Berlin, etc.) happy. Country music is applied to a very specific audience. Based on intense research, it has been determined that about 70% of sales of country CD’s are made when a mother between the ages of 25 and 40 years old is listening to the radio while driving to day care or work at around 7:30 am local time. It has also been determined that that mother does not wish to hear anything revolutionary, she wants to hear something clean, true, and something that she does not mind her children hearing and repeating incessantly. Plus, radio won't play a lot of profoundly emotional tunes, because listeners change the channel after those for a change of pace.
If you “know” that you have heard something from an independent writer that is better than what you hear on the radio, consider the above fact, along with the fact that (between marketing, studio time, tour support, video production, lost revenue from royalty payouts) that it costs a label $1,000,000 to put a song on an album. In such a small market, rarely does anyone take chances on something that might not work, and that’s probably good. There are way more artists in country music that will never go platinum than those who will, and that makes the label’s weariness seem pretty much dead-on.
But there's always more to the story, and often the bad music on the radio is there because the producer of the record owns the tune, wrote the tune, or both. There's is greed in this business just like any other, it's just usually acted upon with a smile and a "Thank y'all very much! We're just so proud to be here!"
If you're ok with that, and you're ok with the 40,000 writers in town, and the horrible odds of getting a major cut, and you still want to do this for the pure enjoyment of it, then this business might be for you. Coming to that realization was one thing that finally got me here.