by Jason Blume
Publishers earn their income from the publisher's share (typically, 50%) of royalties paid for the sales of products such as CDs and DVDs; from payments made to digitally download songs (purchasing a song electronically over the Internet for future use); from the sale of sheet music; from licensing fees paid for inclusion of their songs in television, films, and commercials, and from royalties generated when songs from their catalogs are broadcast on radio or television.
The issuing of licenses for audio recordings, print, and digital print rights (the right to distribute and sell sheet music via the Internet) is also among a publisher's responsibilities, as is the registration of songs with the performing rights organization (PRO) with which the songwriter and publisher are affiliated. This is required to facilitate the collection of performance royalties.
Depending on the contractual agreement, a publisher may be responsible for paying all or part of a writer's expenses incurred for the production of demos. From many writers' points of view, a publisher's most important administrative function is providing monetary advances against future royalties so that the writer is free to create. It's rare for a publisher to pay an advance to publish a single song—unless the song has already been recorded by a recording artist and is likely to earn royalties. However, when writers sign exclusive songwriting agreements, staff-writing deals, they are typically advanced enough money to allow them to quit their "day jobs" and concentrate one hundred percent of their energies on their songwriting.
"Record labels pay their artists a royalty for sales and downloads of singles, albums, and videos, as well as a share of money collected for master use licenses issued for additional uses of the artist's master recordings."
MUSIC PUBLISHER vs. A RECORD LABEL
The distinction between a music publisher and a record label is often misunderstood. The previous section outlined the responsibilities of music publishers. This section addresses the role of record labels. You will see that these two entities serve very different functions. </p> Record labels are in the business of signing and developing recording artists—not songs. They are also responsible for the promotion and distribution of their artists’ works. Employees in various departments of a record label oversee virtually all budgetary and creative decisions involved in the recording and marketing of albums. </p> The Artists and Repertoires Department (almost always referred to as A&R) is responsible for the creative elements of the process. The A&R department’s employees’ responsibilities include scouting, signing, and developing artists; helping artists to find the ideal producer to best capture their sound; locating hit songs for those acts who do not write their own material; and overseeing song selection for those artists who are also songwriters. The A&R representative in charge of a given artist’s album supervises all aspects of the project as well as serving as the artist’s advocate to the other departments at the label, disseminating information and generating excitement about the artist’s music. </p>
The A&R department also serves a “quality control” function. The A&R executive responsible for a particular artist listens closely to master recordings of his or her artist’s albums and singles to be certain that there are no flaws. They check to be sure that the sound is not distorted; the songs are sequenced in the correct order; there is a proper amount of space between songs; and that the overall sound level is correct. Final recordings must be approved by both an A&R representative and an artist’s producer before being mass produced or made available to the public. </p>
A record label’s income is generated primarily by the sale of music product (CDs, digital downloads, videos, and DVDs). Labels also collect licensing fees for placement of their master recordings into television, films, and commercials.</p>
"It's rare for a publisher to pay an advance to publish a single song—unless the song has already been recorded by a recording artist and is likely to earn royalties."
Record labels pay their artists a royalty for sales and downloads of singles, albums, and videos, as well as a share of money collected for master use licenses issued for additional uses of the artist's master recordings, for example in a film or commercial. This royalty is negotiated when an artist signs a recording contract and constitutes a completely separate payment from any royalties paid for the use of the songs. If a recording artist writes his or her own songs, he or she is paid separately as an artist – and as a songwriter.
For his or her role as a recording artist, a performer is entitled to royalties for sales, downloads, and licensing fees from the record label. In addition, in his or her capacity as a songwriter, the artist receives mechanical royalties (for sales and digital downloads) from a publisher, as well as performance royalties from a performing rights organization (paid primarily for radio airplay, television broadcasts, and ringtones).
Similarly, when a recording is included in a film, television show, or commercial, two separate licensing fees are paid: the publisher is paid for the use of the song itself, while the record label is paid for the use of the master recording, encompassing the artist's performance.
In summation, music publishers and record labels serve very different functions. Publishers work with songwriters and song demos, the raw material of the music business. They deal primarily with the acquisition and promotion of songs. In contrast, record labels work with recording artists and their finished products – recorded versions of songs (referred to as masters) and are responsible for the promotion and marketing of master recordings.