Guide to Digital Publication

The economic benefits of publication

Whether you are a songwriter, a composer, a producer, a lyricist or a band member, if you contribute new and original songs, you could (and should) be paid every time that song or a part of it is:

• Streamed
• Purchased digitally or on physical media
• Played on radio or television, either as a protagonist or in the background
• Performed in public
• Listened to as the soundtrack of a YouTube video
• Used as sound sampling
• Produced and sold as a score or sheet music, both digital and printed
• Used as a soundtrack for a film, TV programme, advertisement, video game, institutional video
• Used in a presentation

Publishing in brief

Those who create original texts are technically called authors (or, more specifically, authors of texts).

Those who compose original music are technically called Composers (but are sometimes referred to simply as composers).

As an author of music and/or lyrics, you have various opportunities to earn money with your compositions nowadays.

To this end, music publishing plays an important role, but it is also one of the least understood aspects of the music industry.

Easy access does not equate to understanding; and just because nowadays an independent author/producer can earn money by publishing, it does not mean they know how to do it.

Here I will quickly outline the basics for understanding the various authoritative and editorial roles and help clarify some aspects that appear obscure to many artists.

Copyright

It is:

intellectual property of one's own compositions (which is not assignable by law or logic)
the economic right deriving from the use of compositions by anyone, who will be subject by law to pay the author the so-called copyright, which is basically the fee for obtaining the licence to use the composition, which is the author's own brainchild, for a specific purpose (public performance, discography, publicity, etc.)
It means that the author of a particular composition (music-text) can decide to 'put it into play' in a way that it generates money for the above-mentioned uses.

The right to publish

Music publishing came into being to regulate the rights deriving from the printing of sheet music, a practice that is still widespread but nowadays much diminished.

The music publisher was the one who, like the paper books, acquired in agreement with the author the burden of printing the scores and the rights of economic exploitation thereof, to be shared in percentage shares with the author himself.

To this end, the author then assigned part of his copyright, in the form of publishing rights, becoming together with the publisher the holder of the intellectual exploitation rights of the work.

This right could and still can be assigned by the author under an agreement, which nowadays is generally an integral part of a 'record production' contract.

This contractual agreement, however, may also constitute the consideration granted by the author to an external party (the Publisher) for an activity of promotion and dissemination of his work.

In common jargon and also hereafter, however, we will call music publishing the totality of all actions and rights involved in the composition of tracks and the realisation of a record product of the same.

The societies of authors and publishers

The protection of authors' and publishers' rights can be, and usually is, provided by the authors' and publishers' societies in the various national territories, which often have agreements with each other to manage the rights of authors and publishers registered with them internationally.

At one time, only the SIAE operated in Italy, the only exclusive company for such services of protection and administration of authors' and publishers' rights.

Now, however, the environment has been liberalised and alternative companies have sprung up, of which I would like to point out Soundreef, which I recommend for everything, but especially for fledgling and minor authors.

Music copyright

With the prior agreement of the author and the publisher, if any, with a third party called a producer, it is possible to record a specific performance of a song on a physical or digital medium technically called an audio master.

Nowadays, more and more often the figure of the producer coincides with that of the author (or publisher), but can also be a third figure such as a record label.

The manufacturer has by law the exclusive right to:

physical' properties of the audio master
making copies of the master itself (hence the term copyright)
distribute and market copies directly
assign this right in whole or in part to third parties for an agreed consideration
licensing external parties to market and distribute copies, with possible time and/or territorial limits, again for an agreed fee
This bundle of rights is called copyright, and its infringement is both civil and criminal material.

The distribution of proceeds

If you are an author who has made an audio master, and you have not signed an agreement with an external publisher or producer, you yourself hold full copyright, publishing and copyright.

You are therefore considered both author and publisher and only you have the right to publish and exploit your works.

In the event of any earnings, they shall go 100 % to you, net of the fees due (expenses and/or profits) to the companies appointed by you from time to time to exploit the work on your behalf, such as Soundreef, YouTube, Spotify.

How to involve a publisher

If you consider it worthwhile to involve an established publisher in order to gain the above-mentioned benefits (increased circulation and sales), it will be possible to do so under a contract to be concluded.

If you entrust the administration of the composition to an authors' and publishers' society, in lieu of a contract it will suffice to indicate the publisher's details when depositing the pieces to be administered, also indicating the percentage division between the author(s) and the publisher.

This percentage is agreed upon in equal parts: 50% for each of the parties.

Royalty for the interpreter

At a time when music was sold printed on vinyl or compact discs, the producer often acquired all the rights and sales charges, and paid the artistes a fixed engagement premium, in addition to royalties on sales expressed as a percentage of sales.

For a better understanding, below you will find an illustrative diagram of how the sales revenue for an average established artist in the years of the physical printed discography could be broken down.

For this example, let us assume a pre-tax revenue of EUR 1,000,000 from record sales:

EUR 400,000 (40%) distributed among the various retailers, i.e. to the shops that physically carried out the sale to the public (from this takings they will deduct the operating expenses of their shop)
EUR 200,000 (20%) for the distributor(s), i.e. the companies in charge of physically delivering the products to retailers, through a network of representative agents (from this income they will deduct the costs of running the sales office, the commissions of the representatives, and the costs of delivering the discs)
EUR 200,000 (20%) for the producer (from this income, the producer will deduct the costs for recording, promotion, printing of records, management of relations with distributors, and will also have to pay the artist a signing bonus (e.g. EUR 40,000), in proportion to the artist's notoriety and reputation)
EUR 80,000 (8%) for copyright and publishing royalties and related administrative fees, for the most part (75-85% then distributed to authors and publishers by the societies administering these rights by mandate)
120.00 euro (12%) for the performing artist in whose name the record is released, as a royalty on sales
In cases where the artist was a beginner, the fixed engagement premium could be reduced even considerably, to the point of disappearing altogether, in which case often the royalty rate for the artist could also be reduced to a minimum of 4%.

Breakdowns in the age of streaming

In the current era, products have become virtual, so that the retailers and distributors mentioned in points a and b have all but disappeared.

In their place have arisen sales or streaming platforms, which characterise our era, which collect fees on sales and rights, in varying amounts of around 30%, devolving to the other figures in the chain (c, d and e) the remaining 70 % or so (which remains entirely with the artist in the case of him/her being the author, performer and producer of the master).

Some of these platforms (e.g. Apple and Spotify), however, do not accept direct relationships with artists and small producers.

In order to publish on such platforms, it is indispensable to go through the new figure of the authorised digital distributor (e.g. CdBaby or Amuse), which also offers artists the convenient service of publishing their music globally on all platforms worldwide, retaining a small percentage for itself, which erodes the residual royalty by a further 5-10 percentage points.

Only a few established record companies with a high turnover can have direct relationships with these platforms for the publication of tracks.

So:

If the artist is also an author, producer and publisher, he/she will collect the entire residual sum, which, after taxes, will be approximately 55-65% of the gross sums paid by users and advertising.

If there is an outside producer, the artist must share this income with it, according to proportions established by the existing contracts, and dependent on both the artist's reputation and any expenses paid by the producer to produce the music and promote it.

The publisher, if any (nowadays, almost exclusively the producers themselves become publishers), will share the rights administered by the appointed authors' and publishers' society with the author.

As is evident, with the obsolescence of physical media, the horizon has totally changed and the self-management of artists in their climb to success has become possible.

However, this does not mean that it is easier to achieve success, as the simplicity of production processes (from home studios to virtual media) has favoured the production of an innumerable amount of music, contributing to the confusion of users and the inflation of the music market.

Therefore, as then (albeit in a different way), large production and promotional investments make a difference and are generally desirable for the artist, as they are capable of producing a considerable multiplication of success and income from it.

The trick is to create consensus and trends, which is easier for those who have great means, including financial means, and put them into play.

Obviously the quality of composition, arrangement, interpretation are always the basis for success, but not always, as we can observe.

But this quality becomes basic in case you want to try your hand at self-production, because it is the only way you can hope to succeed, with a few masterfully managed means, to get yourself noticed and appreciated, winning a fan club of your own.

NOTE

Nowadays, big productions no longer perform the traditional work of the talent scout who went in search of rough diamonds to mould.

Instead, the major record companies look for interesting artists who, through their own means, have already acquired a large fan club.

In this sense, to gather concrete interest from big production, start with at least 50,000 fans registered on social networks or, even better, on your mailing list.

This is however the minimum to hope to be contacted or to propose yourself, but it is good to know that with even greater numbers your sales force will increase exponentially, allowing you to obtain better contractual conditions.

With an established following of 1,000,000 fans, for example, you and not the major will drive the negotiations, allowing you to take the lion's share.

But let's go back to our main topic concerning rights and the distribution criteria resulting from the economic exploitation of works and the master.

What happens when performing live in public?

If you are a member of an authors' and publishers' society, live performances in the context of concerts and festivals will generate income for authors and publishers, if any, as these societies will collect the relevant royalties for you from the event organisers or by claiming part of the proceeds from admission tickets or concert participation fees (for ticketed events).

Registering and depositing your tracks in one of these societies is therefore an essential element for monetising the proceeds in the event of a public performance of your tracks.

NOTE

Beware, however, that the SIAE, unlike other alternative societies, heavily penalises small authors in the case of income from concerts (piano bars, weddings and light entertainment in general).

What about television and radio broadcasting?

Even then, the authors' societies will collect the royalties and distribute them to authors and publishers.

NOTE

Some authors' societies, however, will only charge a flat fee, penalising small broadcasters in the same way as the above-mentioned concertina companies.

Advice for the unestablished

As author and publisher

If you are a not yet established Italian author, register with an authors' society, but not with the SIAE (a good alternative is Soundreef), and deposit all your music production in it.

This will give you the highest possible performance when using your tracks in live performances and broadcasting.

Here are the links from Soundreef and the SIAE:

www.soundreef.com

www.siae.it

As producer and copyright holder

Sign up with the platform of a digital distributor who will take over the management of the sales and streaming rights of your tracks and publish your tracks on the web through them.

Two good operators are, for example, CdBaby (which excels in services) and Amuse (which is completely free), but there are many others, including Italian ones, and in this respect I recommend that you read in full what services they offer and at what cost before deciding.

NOTE

It is advisable to choose carefully in order to continue dealing with the same manager over time, so that you can administer your works, read reports and more, using a single account to access the administration platform.

You will usually have to pay to such a digital distributor:

a one-off (i.e. one-time) fee for each album or single you release (specifically from free to around 35 euros
after which you will only have to collect the income accrued over time, net of a small variable percentage of royalties retained in consideration, varying from free to 15%
A totally free service is Amuse, which collects neither one-off song deposit fees nor percentages on revenues.

In fact, it seems, as they explicitly state, that it is only interested in discovering new talent to produce and for this purpose it seems to offer a good quality free service, although not very rich in ancillary services at the moment.

The service platform of your choice will publish your music on all sales and streaming platforms, collect the proceeds and distribute them to you, periodically.

You can check the reports at any time through the platform, to which you will have restricted access by means of the usual login operation.

Here are the links to Cd Baby and Amuse:

cdbaby.com

www.amuse.io

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