The foundation of all rights in music publishing is the intellectual property of the musical composition, including lyrics. It is nearly impossible for an author to individually monetize these rights, especially worldwide, although the situation is improving fast, due to rapid informatization. This is where music publishers come in, although their role is shifting.
While it is hard to give a general explanation, due to the difference between national laws, music publishers fulfill the roles of promoters, agents and rights holders. Again, the situation is improving, both due to globalization, informatization and subsequent standardization on one side, and law changes guided by the Berne Convention on the other.
However, most of the musical works not in the public domain are actually controlled by several major music publishers, who are threatened by novelties. So, while publicly promoting themselves as revolutionary, they are purposefully slowing the progress and natural decentralization.
While there is a respectable number of companies developing truly novel solutions, most notably based on blockchain technologies, there is almost no linking technology between them and current processes. This is where our tools come in, but that is a subject for another time.
Performance, Mechanical, Synchronization
Basically, there are three economic rights for musical compositions: performing rights, mechanical rights, and synchronization rights. The definition of these rights differs greatly between the US and the rest of the world, with some countries, most notably the UK, sitting in between, so this will be a very simplified “global” explanation, omitting all exceptions.
Performing rights give authors the right to monetize on the public performance of their works, which includes live performances, radio, television, theatre and similar performances. This right is generally monetized through collecting organizations. In the US, there are specialized ones, called performing rights organizations (PROs).
Mechanical rights royalties derive from sales of carriers of sound, e.g. records and CDs, but also ringtones and on-demand streaming. In most countries, the same society, that collects performing rights, collects also mechanical. Not in the US, but with Music Modernization Act coming up, things will change significantly in this area, and most of the difference between the US and the rest of the world will be gone.
Synchronization rights apply when music is synchronized with some other content, most notably in commercials. But it also applies to e.g. YouTube videos using third-party music. Generally, they require direct agreements and payments.
It must be noted here that YouTube, Spotify and other on-demand music and video services, as well as social networks, are a huge source of revenue for music publishers, but also a huge topic. That will be covered at a later point.
Copyright and Creative
Most publishers have departments called “Copyright” and “Creative”. “Copyright” is a misnomer for “Register and Collect”, as they are dealing with collecting organizations, while “Creative” is just plain old “Sales”, dealing directly with clients. So, by necessity, “Copyright” makes money from performing and mechanical, and “Creative” from synchronization rights (and mechanical in some territories to some extent).
The fact that the US is by far the largest market, for most music publishers from the US, it should not be the only market. Except in some edge cases, US publishers should have sub-publishing agreements for other territories, maybe even be a direct affiliate in some of the foreign societies.
Music Publishing Software
Let’s sum it up. Two main sources of ordinary revenue for music publishers are collecting societies and direct contracts.
Registrations and Statements processing
In order to receive money from collecting organizations, musical works must be registered. With very few exceptions, each collecting organization requires a separate registration. They do not magically exchange information. That means one has to register a work in each one of them, either directly or through sub-publishers. There is a Common Works Registration format that is universally used for batch registrations. There are several articles in the CWR section, which is arguably the best practical source of information on the subject. Also, we have several free CWR-related tools, as well as few commercial ones.
When collecting organizations send the royalty statements and money, most publishers take their fees and forward the rest to their clients. In order to do that, they must import the processing statements and create outgoing ones. If this is an original publisher, then the most complex situation is still very simple. But for administrators and sub-publishers, it is never simple.
Sync Pitches and Sales
In order to pitch a music for, let’s presume, a TV commercial, either a potential client must be able to search through your works or you must be able to send them a suggestion. In either case, the restricted access to the work must be provided. In both cases, some of the CRM functionality should be included as well.
Now, that we have established some minimal requirements for a software for music publishers, we can have a better look at what is offered, both by us, our clients and other vendors.