Tuesday
Oct072008
October 7, 2008 A publishing and distribution deal from the same company - is it smart?
As an independent label, is it better to have a distribution and a publishing deal on the same major label? Or is it better to have a different publisher to your major partner [label]?
I was asked this question by someone funding a small label. Does anyone have any thoughts on this?
Reader Comments (5)
I don't think it matters. The publishing companies and distribution companies that are controlled by the majors run independently of one another; if you had a distribution deal with WEA and were signed to EMI Music Publishing for example, they deal with completely different areas of the business and would never have conflicts of interest. Your distributor is concerned with record sales while your publisher is concerned with broadcast performances.
The question you should be asking is, will my music publisher work for me or will they throw me on the shelf and only deal with bigger projects that will bring in more money? I would consider finding an independent publisher that has their administration handled by a major. This way, you get the benefits of be associated with the major, while having people at the indy actually working to get you licenses for your music.
Then again, it all depends on your situation.
None of the acts I work with - large or small - have the same parent company for their label/ distribution and publisher. It's a potential conflict of interest and however minute, these are best avoided to avoid problems later - BMG Music Publishing had its offices, until pretty recently I think, in the same building as SonyBMG Music Entertainment in London even, so potential problems are rife.
You ultimately want as many independently interested parties negotiating on your behalf as possible. For example your act has a song that another act wishes to record and release. If your publisher were separate they would push you to sign off if the terms and money were right. However, what if your label/distributor also had another act it wanted to record and release your song, and you the artist only really want one cover of your song at market at a time. Aside from the conflict of interest here, it would not be too far fetched to see internal pressure being applied to ensure the label/distributor's interest played out.
Perhaps this scenario is wishful thinking, and an act should only be so lucky. I'm just a firm believer in protecting yourself early to avoid headaches later.
Really hard to answer this, Bruce -- depends on the TERMS.
I was always under the impression that it would be better to use two separate companies as your label and publisher but now I'm not so sure any more:
If you find the right company that is willing to work hard and understands your music it might be advantageous if they control master and publishing rights. They will be able to do deals quicker and many companies that want to license music are looking for tracks that can be cleared with one deal. If I want to get music for my new digital project it's just much easier to go to one company instead of two companies that don't always have the same objectives.
One (obvious) example: Warner Chappell is administering (but not owning) the rights for Radiohead's 'In Rainbows' album. It enabled them to go out and broker deal quick and easy.
Beware of cross collateralization. This is where the company has access to multiple revenue streams (e.g. records/artist royalties AND publishing) and they use your funds from the a profitable revenue stream to compensate for an unprofitable one. Good business for the company, bad for you.