I’ll continue where I left off yesterday when I discussed “Terms“, “Territory” and “Scope & Compositions“. If you didn’t view yesterday’s post I’d suggest you do so to get the whole picture of what this topic is all about. This is part 2 of a 4 part series and a subject with decisions that can and does affect the future of songwriter’s income.
(4) Advances
Let’s take a moment to expand on something I touched on yesterday. An “advance” is a sum of money paid by the publisher to the song writer for conveying to the publisher copyrights to a song or an agreed upon collection of songs typically referred to as a “catalog”. The royalty advance is frequently the most important issue to a new songwriter. With this said, I’ll venture to add that the only reason a songwriter would ever want to convey his/her copyrights in songs would be in return for money and to share in the future royalties from the songs. Before I go further there’s something I want you to be aware of. If a publisher ever asks you for money for working your own songs, it is not a genuine or legitimate publisher. Publishers should always offer you money if there’s an exchange of money but never require you give them money to own or administrate any part of your songs. One thing to consider are the small indie publishers who don’t have funds readily available for advances but do a tremendous job for their songwriters. After all, the real golden goose is in future royalties. When a publisher does offer advances, the amount of the advance is based on the degree to which the publisher believes that it can earn royalty income off your songs through successful exploitation. In the past, when some publishers believed your song(s) are going to be big hits, they would sometimes offer a lot of money. Now days if offered, the advance will be commensurately less. Market forces also often drive up or down the level of advances when and if offered.
As a songwriter you need to know the down side to an advance. The advance is usually “recoupable”. Recoupable means if the writer’s songs generates sufficient royalties to pay back the advance, the publisher gets to “recoup” its original advance first before the songwriter makes a single dime. Once the writer is 100% “recouped”, all additional income collected is split between the writer and the publisher by the agreed share. Some publishers offer advances that are “non-returnable”. When advances are agreed upon as “non-returnable” it means if the writer does not earn any royalties, the writer need not pay the advance back. These kind of advances are practically non-existent in publishing today. And I’ll caution you to be careful of any demands you place on a publisher for such advances. As it is, the only song writer royalty a publisher cannot recoup is income from public performances.
Further, advances may be “contingent” or “automatic”. For example, an advance may be based immediately upon signing the publishing agreement (“on execution”). Alternatively, an advance may be paid when a single song or album reaches certain sales or chart positions.
An advance is payable usually as a flat sum, e.g. $250.00 or some other amount. Or, it can be paid out as a percentage (%) of earnings on previous albums, with minimums and maximums (“min-max’s”).
(5) Delivery
In return for the royalty advance , the song writer must “deliver” a certain amount of musical compositions during the term. Keep in mind this is usually involving a staff writer position. Where substantial advances are involved and the number of compositions is specified in the term, a music publisher may often insist that the compositions be released on a record in the US by a “major” record label. Today we have new independent labels that have exciting rosters and are becoming more accepted every day.
(6) Ownership
The “ownership” of the “copyright”, NOT THE SONG, is perhaps one of the most important terms in a publishing deal. Under a single-song agreement or ESWA deal, the publisher typically acquires 100% “copyright” ownership, and again NOT THE SONG ownership, worldwide, for life. Under some co-pub deals, the writer becomes a “co-publisher” with the music publisher on a 50/50 split, but the publisher has exclusive administration of the song(s) throughout the world. As a publisher, I tend to stay away from this kind of co-pub deal if for no other reason than the nightmare administrative efforts it requires, not to mention how impossible this kind of agreement is to agree on between two or more parties. I do offer co-pub deals with other legit publishers which enhances a songwriter’s opportunity for placement in the industry. In a co-pub agreement between me and another publisher, the other publisher and I agree upon a split percentage while I make every attempt to maintain the full writer’s royalty cut for my songwriter. Be aware that no ownership rights are granted in either admin, collection, or sub-publishing agreements.
Tomorrow I’ll discuss “Royalty Splits“, “Administration” and “Costs” associated with this current subject. Now would be a great time to subscribe so you don’t miss a beat. It’s free and with no hassles. You’ll only find great information here.
Rick Dean
The Dean Of Music Publishing Group
Nashville Tennessee
