U.S. Music Publishing Administration: Choosing Between Commission And Subscription Service Models

The U.S. music publishing industry is experiencing impressive growth. Over the next few years, thanks to improved royalty rates and an increase in paid subscribers to music streaming services, the publishing pie will get even bigger. Recently, the Copyright Royalty Board ordered mechanical royalty rates to increase by over 40% over the next 5 years. This decision is good news for the music publishing industry.

With a growing industry, the outlook is looking better for emerging and established songwriters. But there are still challenges to face, particularly in songwriter’s ability to capture their share of the growing pie. Songwriters often leave royalties on the table when they are not properly setup to collect their earned royalties from the use and exploitation of their songs.

Traditionally, songwriters have relied on a music publisher to handle a variety of functions, including administration--the function of registering songs with music rights organizations, collecting royalties, and paying the songwriter his share of royalties.

There has traditionally been three types of publishing arrangements available to only the most in-demand songwriters:

• Exclusive Publishing Deal - Songwriter assigns 100% of his copyrights to a publisher in exchange for full publishing services. The songwriter receives an advance payment, but none of the so-called “publisher’s share” income.
• Co-publishing Deal - Songwriter assigns up to 50% of his copyrights to a publisher and retain the remaining ownership in his own publishing entity in exchange for partial to full publishing services and generally receives 50% of the “publisher’s share” income.
• Publishing Administration Deal - Songwriter retains 100% of his copyrights and hires a publishing administrator to handle the administration function of a publisher. While a traditional music publishing administrator will register songs and collect royalties, they are not required to provide full publishing services such as pitching songs for sync placements, setting up writing opportunities, getting songs licensed or covered by other artists, or policing copyrights. In exchange for their services, music publishing administrators keep up to 25% of all royalties that they collect.

Historically, music publishers and administrators have been the gatekeepers to publishing income for songwriters. But just like the explosion of artist services providers making it possible for unsigned recording artists to retain 100% of their master copyrights while releasing music without a traditional record label, there is an alternative to traditional publishing deals making it possible for songwriters to retain 100% of their copyrights while capturing virtually 100% of their publishing income; and that’s TuneRegistry.

TuneRegistry is not a music publishing company. TuneRegistry is a music rights administration software-as-a-service for music creators and small to medium-sized rightsholders who value their rights and the control that they have over their assets. TuneRegistry enables self-published songwriters to do the administration functions of a publisher themselves while holding on to 100% of their copyrights and retaining 100% of their collected publishing income (TuneRegistry also helps independent artists facilitate master rights administration, but that’s a difference discussion).

So, what’s the biggest difference between traditional commission-based music publishing services (exclusive publisher (retains up to 100% publisher’s share income), co-publisher (retains up to 50% publisher’s share income), and publishing administrator (retains up to 25% of publishing royalties)) and TuneRegistry’s subscription-based music rights administration?

It’s all in the math. Let’s use this example to demonstrate:

ALL CAPS is an indie rock band out of San Diego that will earn $10,000 in 2019 from music publishing income in the United States.

ALL CAPS currently has a traditional commission-based music publishing administrator handling its song registrations and royalty collection. The traditional publishing administrator takes a 25% commission off the top of all publishing income that it collects on behalf of ALL CAPS (this is before manager commissions, lawyer fees, and income taxes).

ALL CAPS is considering switching to TuneRegistry subscription-based rights administration to handle its own song registrations, so that they can get paid directly by music rights organizations and keep 100% of their royalties.

Commission-based Publishing Administration:

($10,000 US publishing income) - ($2, 500 for 25% commission to administrator)

= $7,500 net income to ALL CAPS

Subscription-based Publishing Administration:

($10,000 US publishing income) - ($135 for TuneRegistry one year subscription)

= $9,865 net income to ALL CAPS

By switching to TuneRegistry, ALL CAPS band will capture an additional $2,365 in US publishing income in 2019.

5 Ways ALL CAPS Can Spend $2,365 In 2019:

1. Studio time to record their next hit single

2. Van rental for a regional tour

3. New merchandise to sell on tour

4. High-quality mastering production

5. A marketing consultant to improve the marketing of their music

Do the math yourself and see how much you can save by doing your own rights administration while keeping 100% of your copyrights and 100% of your U.S. publishing income.

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