Thursday, February 3, 2011

Financing...Major Publisher...Good Venture Move


I recently went back to visit one of my favorite company sites, ascap.com, and saw a brief article about getting financing for your music publishing company and I happen to know a few entrepreneurs with young companies in the music industry who themselves are trying to decide on whether or not to sign a deal with a major publisher in order to guarantee success.  Most of these companies are new record companies, including my own that I am in the process of developing. Some people I have spoken with are up and coming producers/songwriters like myself who are unsure of starting their own small publishing company or not let alone where to get financing for one.  The title of this article is called “ Getting Financing For Your Music Publishing Company”, a fitting and simple title that helps searchers in their quest for knowledge on the topic.
            I am a fan of making joint alliances with other companies, my company itself will be a partnership and joint venture, so I am in support of signing co-ventures, as long as things remain fair and equal! The article talked about the advantages that major music publishers gain from adding on a record company and that includes their “creative expertise” that they would have otherwise lost out on if they didn’t sign with them. This may help them tap into undiscovered talent and boost their own revenues. It is also an advantage for the small record company, producer or songwriter because this venture will help decrease their financial and administrative worries while allowing them to focus on their creative side and business goals. That is a big burden lifted! Later on the article brings up the topic of song financing and ownership and how signing with a major publisher usually means they [major publisher] will pay a certain amount of financing on an annual basis which in turn will be used to sign songwriters that is selected by the new partner. Both companies will then own the copyrights to songs written by their signed writers, and I see this as a very beneficial move for a company without the financial backing or industry connects at first and for its roster of writers, producers, etc.
            I also learned from reading that sometimes both partners will co-pay the advance although its usually the major publisher who funds all the advance money that is due to the writers. I love advance money and I wish there were more ways to obtaining advances, but as a fresh artist or songwriter or producer, one needs to know advanced money is on the brink of distinction and is not handed out like it used to be to a newly signed artist or writer or whoever. In terms of sharing income for these songs, net income could be split in an equal amount between both companies but can be shared solely based on how much each party pitched in to the advances to their signed writers in their co-venture. I really liked what I “heard” from this article and this isn’t a bad direction to head in as a new indie record label by any means…great way to get yourself and your clients ahead in this tough game from a music publishing POV. 

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