Let’s examine what a Publishing deal for a writer might look like. Before we dive into the details that form a publishing agreement, let’s have a look at the different agreement types. We can categorise the agreements in either a full agreement, a co-publishing agreement, or an admin deal. The differences in these three types come from the level of ownership that a songwriter transfers to the publisher.
Every contract has a contract period - a start date and an end date. All works created during this contract term, and potentially any other unpublished works created prior to the contract start date, fall under the publisher’s contract. After the end date, the contract can be extended. For example, a contract starts on 01 January 2022 and has a contract period for a year. If both parties agree to keep working together after this year, the contract can either be extended for a set period (another year, 3 years, etc) or become a ‘rolling’ contract. Rolling contracts don’t have a set end date, but either party can terminate the contract at agreed upon intervals (at the end of the month, end of the quarter, etc.).
The rights period is the amount of time a writer has assigned their rights to the publisher for. This usually covers the contract period + a potential extra period of time after the contract ends called the retention period. During the retention period, the publisher still exclusively owns the rights to the works covered by the initial contract and is allowed to exploit the works and collect income. Retention periods used to be quite long (30 years was not unheard of), but since writers currently find it important to have control over their rights they often won’t agree to long periods. The length of the retention period often relates to the advance paid - if a big advance is paid, the publisher will want to negotiate a longer retention (and contract) period to ensure they will recoup their advance.
Due to its many parties in the value chain, the publishing industry is notorious for its long and slow chain of payments. For example, a collection society might only pay out live performance income twice a year, in July and December. In this example the July 2023 distribution will probably include usage for January - July 2022 (or even older). For this reason, publishers will often agree to an additional collection period. This period gives the publisher an additional timeframe to collect royalties for usages that happened during the contract or retention period and prevents the societies’ slow distributions to cause a loss of income.
Let’s say we signed an agreement with a songwriter for a 1 year period, with a 1 year retention period and a 1 year collection period. Our agreement started on the 1st of January 2022, and thus lasts until the 31st of December 2022. Any works written by our songwriter during this period became part of our agreement, any works written after the 1st of January 2023 will no longer be part of our agreement. Thanks to our retention period we still have the right to collect royalties for all works within our agreement until the 31st of December 2023. On the 1st of January 2024, all rights will be transferred back to the writer, but thanks to our collection period we still have a year to collect royalties for usages that happened in 2023 or prior.
The above image illustrates why retention- and collection periods exist: from the moment a work is created, it takes societies quite a long time to actually distribute the usage. Our example Work X was created in January 2022 and instantly became a hit song, but the usage for the year 2022 didn’t actually get paid out until 2023 or even later. If we didn’t have a retention and/or collection period, we would miss out on the income generated from our hit song that was written within our contract period. Please note the payment of the usage in this picture is just an example: every society has their own distribution schedule which will include different usage periods in different distributions.
Territory refers to the geographical area within which the rights are granted. This could be for the world, or for a specific country only. If you’re a writer signing a deal with a publisher that has an excellent network and infrastructure in Belgium but maybe not for the rest of the world, it might make sense to consider signing with them for Belgium only.
This may seem like an obvious term - we’re talking about the works here. However, when you’re working on a publishing deal, it’s good to carefully consider which works you can and cannot (or will and will not) be included in your contract. Are you signing the writer’s whole catalogue? Are any of their works already signed with another publisher? Are you signing them for future works only? The size and success of the catalogue plays a role when determining royalty rates and advances - the publisher wants to make sure they earn back their investment.
Advances are the lures of the publishing industry, drawing songwriters in with the promise of upfront cash. An advance is an upfront payment made by a publisher to a writer. This advance is recouped against the future royalties generated by the catalogue. The writer will not receive an additional share of the income until their advance has recouped. It is possible for writers to receive more than one advance from a publisher. For example, a new advance might be offered once the first one has recouped. It’s also possible to offer a new advance when a new album is released (more about that later) or as an incentive to extend the contract when it finishes its term.
The size of an advance is different for every deal, and is usually subject to calculations from the publisher’s legal or business affairs team. They will look at the size of the catalogue, charts, streams, sales - anything to measure previous success. An established songwriter is more likely to get a high advance than someone who doesn’t have a proven track record of successful songs. But you know what they say in the investment world: past performance is no guarantee of future results. Advances can also be used to secure a deal with a young and promising songwriter if there is a lot of competition from other publishers trying to sing them.
A songwriter is usually locked into their contract until the advance is recouped. If the contract period ends but the advance is still outstanding, the contract may state the retention period is automatically extended until the advance recoups. The songwriter can’t move into another contract with another publisher, unless they are able (financially and contractually) to buy out of their advance and end the contract. Writers have historically been locked into contracts by accepting advances that were so high it was practically impossible to recoup them. The recording industry has recently made some shifts in their policies with companies like Beggars, Sony Music, Warner Music and Universal music announcing they would waive existing advances for certain qualifying legacy artists.
A royalty rate refers to the percentage of income that the publisher will share with the songwriter. The contract may state one flat rate, or may state different rates that apply under different conditions.
A royalty rate is either calculated as a percentage of the Net Revenue or the At Source amount.
The rate that is agreed may be different depending a series of conditions
Your contract will likely specify how often you report income to your writer and provide them with statements. Reporting is done monthly, quarterly, half-yearly or yearly and will have an agreed accounting delay.
When calculating royalties for a 1, 3, 6 or 12 month time frame respectively, publishers will look at all the statements that were reported and paid to them within that time period. They generally look at the payment date to decide whether certain income will be included in the period or moved to the next. This to make sure a delay in one of the incoming payments does not delay an entire reporting responsibility to the songwriters.
A common reporting frequency is Half-Yearly with a 3 month accounting delay. This means that a publisher will report all revenue collected between January and June by the last day of September, and will report all revenue collected between June and December by the last day of March in the next year.
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