Music publishers today – The greatest job in the music industry?

by Emmanuel Legrand

(This piece was initially written for Midem's blog)

Don’t tell my mother I am a music publisher; she thinks I'm a pianist in a brothel. Or so went the joke in the 1980s.

Once derided as the least interesting (read “unsexy”) sector of the music industry, music publishing has been subject to a significant re-appraisal in recent years with growing appreciation for its contribution to the music food chain, and with increasing interest for the various aspects of publishers’ activities.

As it happens, Music Publishers’ Associations around the world report a surge in new companies, with new entrants of all types, from the strongly financed players such as Imagem (backed by the Dutch pension fund) or BMG Music Rights (operated by Bertelsmann and financed by equity fund KKR) to the one-person operations. All this activity suggests that if the recorded music business is shrinking, the publishing side is as buoyant as ever and attractive to investors and entrepreneurs.

The positive state of the business is confirmed by the good performances of the music publishing arms of all four majors – EMI Music Publishing, Universal Music Publishing Group, Sony/ATV Music Publishing and Warner/Chappell – and by the overall good financial reports from the main authors’ rights societies (see CISAC’s 2009 annual report, showing a return to growth with collections worldwide topping €7.2 billion, despite a significant drop in mechanical revenues).

It is quite telling that one of the main management changes at the top of one of the four majors in 2010 saw the promotion of an executive from the music publishing side – Roger Faxon, now CEO of EMI Group, and who made most of his career at EMI Music Publishing.

In his organisational memo to employees sent a few weeks after his appointment, Faxon said he wanted the company to focus on two areas, one was A&R, as he knows that without a proper roster of contemporary acts, EMI would be nothing but a catalogue company, and the other was shifting the recorded music business from one of selling products to one of services, in order to create a true global rights management company for the 21st Century.

Faxon’s semantics are certainly a product of his music business upbringing, because, overall, music publishers are at the crossroads of two of the most important aspects of the music business touched upon by Faxon – A&R and deals.

On the A&R side, music publishers know the importance of good songs – that’s the backbone of their business – and they are usually the ones who nurture the relationship with songwriters and performers from the start. They are also in there for the long haul. Artists may be dropped by labels; they rarely lose their publishers. At an industry panel a few years ago, a songwriter/performer explained to the audience that while he had been a recording artist for most of his career, he was label-less and did not see it as a hindrance as he had kept solid the relationship with his publisher and managed to secure, through his publisher, significant streams of revenues.

One of the reasons publishers and authors seem to get eye to eye on a long-term collaboration is that publishing deals with songwriters are more balanced financially for everyone. For sure, there are sometimes big advances, but nothing of the sort you’d see on the recorded music side, which tend to put undue pressure on acts and on labels in order to recoup. As a result, the relationship between publishers and songwriters is far more stable. Publishing deals can be recouped quite easily (sometimes a good synch could do the trick), and everybody can benefit from it.

In addition, if you consider that labels tend to finance less and less artists’ recordings, that role is now also often fulfilled by publishers (which in turn gives them both master and publishing rights).

All publishers will tell you that there is something eminently pleasing in picking up the financial rewards for their efforts, but they have an even bigger sense of elation when they see one of their protégés reaching success. And sometimes it comes after long years of underground work, multiple recordings of demos, songs written and re-written.

You often hear publishers highlighting the talent of their new signings, only to see them getting commercial viability and media visibility years later. French publisher François Millet signed young songwriter/performer Jena Lee to his publishing company Vital Song on the basis on a demo he heard when she was 14 in 2001 and waited until she had the right songs to cut an album. Eventually, in 2009, her song ‘J’aimerais Tellement’ topped the French singles charts for 11 weeks. Millet knew he had to wait for her to be ready, and provided her with the proper environment to let her songwriting skills blossom.

This type of timeframe is usually unheard of in the recorded music business. Labels do not have the interest, nor the patience to wait that long. Publishers know that time is of the essence in this business.

On the deals aspects, publishers have been making licensing deals since the dawn of times. That’s their bread and butter. And no deal is too small for publishers, as they also know that it’s a “crumbs” business, to use the terms of Sony/ATV chairman/CEO Marty Bandier.

For newly established publishers, getting a kick-start in the business can take some time. You have to build a relationship first with authors before being able to earn revenues from their works. However, publishers do not necessarily need thousands of tracks in their catalogues before they can generate cash flow. Last year at MIDEM’s International Music Publishing Summit, Canada’s Patrick Curley of Canada’s Third Side Music, suggested that the first thing to do for any music publishers to “mine the hard drives”.

Basically, he was inviting publishers to dig into their composers and songwriters’ hard drives and check for embryonic songs, unfinished instrumental pieces, musical loops, etc on the basis that even a five seconds piece could find a use somewhere. That’s typical of a music publishers’ mentality – nothing in itself should be discarded on principle and anything could be used and licensed.

Curley also added that for most publishers, and especially young ones, any deal is better than no deal at all. If there is a sync deal available and it only pays $300, just take it (of course, only if the terms are reasonable). And then multiply the deals. It requires to be driven and to search for opportunities, but this is part of today’s requirements for any publishers.

The playground for publishers has expanded with new licensing possibilities that have significantly broadened the scope for deals. At last year’s Summit one publisher explained how lyrics could be a growing source of revenues, including by licensing lyrics on mugs, while another stated that partnering with brands could deliver hefty returns.

Publishers tend to boast that the great thing about their business is that it covers so many aspects that there is little chance to get bored. It certainly is. And by the simple virtue of this diversity, and from their ability to make the best of the current environment, music publishers are back at the heart of the music business, like they were a century ago. Who said that music publishing was unfit for this century?

In other terms, it is now sexy to be a publisher and it is no wonder why many young aspiring executives chose to start in this field.

Time to tell your mum about your real job!