Publishing
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Global music rights revenue collections reached €10.83 billion ($11.4 billion) in 2022, according to CISAC, the trade organization of collective management societies. That’s a new record that reflects growth of 28% over 2021, as live concert revenue continues to recover from the pandemic and digital income keeps growing.
Income from concerts — the royalties collected from the public performance of songs being played live — was up 185.7% based on a sample of 100 societies, since different organizations account for that revenue differently. And since these numbers are from 2022, when the concert business still hadn’t fully recovered, next year’s numbers will be better still.
The real change is in digital, though, which is now worth €4.08 billion ($4.3 billion), up 33.5% from 2021 and almost double its value from 2019. It now accounts for 37.7% of collections revenue — marking the first time it has been the biggest category — and is likely to be the main engine of growth for years to come. The TV and radio category, traditionally the largest source of revenue, is now No. 2 behind digital with $3.55 billion.
The CISAC Global Collections Report tracks money taken in by collective management organizations for authors’ rights — composers and publishers in the music business, plus audiovisual creators, writers and more. (Neighboring rights revenue for recordings is not included.) More than 90% of the money comes from song rights — specifically, the funds that flow through societies rather than through direct deals.
By any measure, the growth in the CISAC report is remarkable — a record both for the revenue collected and year-on-year growth. And while some of that reflects the unprecedented disappearance and return of the live business, digital growth has been, and will continue to be, steady.
“This is a remarkable return to growth as our whole sector fully recovers from the disastrous three-year pandemic,” said CISAC director general Gadi Oron in the announcement of the results. “While live and public performance have bounced back strongly, the recovery is driven most of all by digital which has now become creators’ largest source of income.”
Much of this growth reflects the changing role of collecting societies in the streaming era. Rather than just represent and license rights in the market in which they operate, societies also compete online. The biggest of the societies — PRS, SACEM and others — now license online rights from writers in most countries.
The growth is worldwide, too. All of the top ten music markets increased collections revenue, with an average growth rate of more than 25%. The biggest market is the United States with €2.616 billion ($2.759) and 30.5% growth; then France, with €1.325 billion ($1.398 billion) and more than 39% growth. Rounding out the top 10 are the United Kingdom, Germany, Japan, Italy, Australia, Canada, Spain and Korea.
Rarely does an accounting issue move markets and surprise people throughout the music business. But that’s what happened Monday when Hipgnosis Songs Fund, the publicly traded investment trust backed by the catalogs of such artists as Neil Young and Stevie Nicks, announced it will cancel a planned quarterly dividend payment to shareholders.
According to Hipgnosis Songs Fund’s board of directors, the decision was the result of the company’s independent valuation expert, Citrin Cooperman, reducing its expectations of “industry-wide” retroactive payments from the Copyright Royalty Board’s Phonorecords III (a.k.a. CRB III) ruling that increased the royalties music publishers receive from on-demand music streaming services for the years 2018 to 2022. Billboard estimated that the music industry would gain over $250 million in total, and another industry expert recently told Billboard they estimated the industry-wide retroactive payment will approach $400 million.
Hipgnosis’ adjustment was substantial: down roughly 54% from $21.7 million to $9.9 million. Meanwhile, Billboard continues to stand by its previous estimate and no other publishers or rights funds that spoke for this story have had to decrease their projections.
“Frankly, I’m shocked… I really do not understand this,” says one music publishing executive.
Multiple sources say there have been no new updates regarding CRB III in recent weeks that would cause a publisher to cut their expectations for accruals by more than half, and it must be an accounting error unique to Hipgnosis and Citrin Cooperman. “None of the data points have changed,” explains another publishing executive. “The ruling is what it is, so they must’ve made a mistake here.” Citrin Cooperman did not respond to Billboard’s request for comment.
The fallout Monday was immediate: With the sudden change in expected retroactive royalties, Hipgnosis Songs Fund was forced to cancel a dividend payment to not risk violating the debt covenants for its $700 million revolving credit facility. That dividend — 1.3125 pence per ordinary share — was announced on Sept. 21 and was to have a payment date of Oct. 27. The company’s share price dropped 10% on Monday’s news. Dividends are an integral component to the fund’s strategy of providing investors with stable returns from proven, successful music catalogs. Since its initial public offering in July 2018 through March, Hipgnosis Songs Fund had declared dividends of 21.6 pence per share, according to the latest annual report.
While the retroactive CRB III payments would be less than Hipgnosis Songs Fund expected and impacted a dividend payment this quarter, the resulting cash crunch likely won’t happen until 2024. Streaming royalties due for the period 2018 to 2020 will be paid directly to rights holders, with everything after that flowing through the Music Licensing Collective with a Feb. 9, 2024, deadline. Most of the adjustment will come from the 2021-2022 royalties owed to the MLC, according to sources. Considering the time it will take the MLC process the distributions, publishers probably won’t receive this tranche of royalties until the spring 2024.
In August, the Copyright Royalty Board stated its final determination for how songwriters and publishers would be paid for the period of 2018-2022. These rates were hotly contested between the music business and streaming services over the past six years. Though rates were nearly finalized in 2018, some streamers remanded it back to the CRB in 2019 in hopes of getting more favorable terms. In the meantime, the streaming services paid songwriters and publishers under the guidelines set by the previous period, Phonorecords II, which was lower than what was ultimately set for 2018-2022.
Ever since, the music business has been preparing for when the 2018-2022 rates would finally be settled, and streaming services would have to undergo a massive recalibration of what they had previously paid out. When the judges released their final determination in mid-August, it proved that these streaming rates overall would lead to more money for publishers and songwriters.
Other publicly traded publishing companies have also announced the amounts of their expected adjustments ahead of receiving the money. Universal Music Group-owned Universal Music Publishing Group, one of the world’s largest music publishers, expects to book a catch-up adjustment of nearly 30 million euros in the third quarter of 2023 related to Phonorecords III, UMG said in its July 26 earnings call. Warner Music Group, which often ranks as the third largest publisher, according to Billboard’s Publishers Quarterly, recognized a benefit of $20 million — less than the amount of Hipgnosis Songs Fund’s initial estimate — in the quarter ended Sept. 30, 2022, resulting from the CRB’s ruling July 1, 2022, ruling.
Reservoir Media accrued less than $3 million in royalties in the third and fourth quarters of calendar 2022 related to the CRB III decision, says CEO Golnar Khosrowshahi. Reservoir Media doesn’t expect to adjust the size of the CRB III adjustment. “We continue to believe our estimates are accurate,” says Khosrowshahi. “We’ve applied an appropriate level of conservatism in recording that revenue.”
The amount of the expected windfall appears to have received a great deal of consideration inside Hipgnosis Songs Fund. According to Hipgnosis Songs Fund’s latest annual report, the company compared the Phonorecords III accrual estimates to estimates provided by the independent valuer — Citron Cooperman — as well as the fair-value appraiser for the City National Bank-led revolving credit facility. The 182-page report mentions the term “CRB III” 49 times and includes lengthy discussions of the company’s regulatory environment and how the CRB III determination raised the headline royalty rate due to music publishers by 44% from 10.5% to 15.1%.
CRB III will give publishers less than a 44% rate increase, though. The amount owed to music publishers is a complicated formula that includes minimum per-subscriber fees and percentage-of-revenue calculations. Publishers typically received above the headline rate from streaming services from 2018 to 2022, meaning extra amounts owed retroactively will be less than they would otherwise. Sources tell Billboard the effective rate for some streaming services was in the range of 12% to 13% of service revenue rather than 10.5%.
Hipgnosis did not respond to Billboard’s request for comment.
Rising country star Jordan Davis has sold the majority share of his publishing catalog to Anthem Entertainment, extending his relationship with the Toronto-based company.
While it’s relatively rare for artists at such early stages of their careers to make such a move, Davis is using the funds to invest in his future.
“One of the big things for us was creating a little bit of flexibility to be able to make some long-term decisions a little less with budget in mind,” says Red Light’s Zach Sutton, Davis’ manager. In February, Davis is undertaking his first European headlining tour, including stops in Stockholm, Amsterdam and London. While Sutton says the concerts are already nearly sold out, “they’re not the most lucrative dates and having some resources from this sale allows us to think a bit more strategically on building long term, not just on ‘If we dedicate the first quarter to Europe, we’re really going to miss out on this type of money here in the States.’”
The excitement around Davis also factored into the timing. Davis has been a remarkably reliable hitmaker since his first release, “Singles You Up,” reached No. 1 on Billboard’s Country Airplay chart in 2017. Since then, every official radio release has gone top 5, with three other songs, 2019’s “Slow Dance in the Parking Lot, 2021’s “Buy Dirt” (featuring Luke Bryan) and 2022’s “What My World Spins Around” reaching the summit. “Buy Dirt,” which Davis co-wrote with his brother Jacob and another pair of brothers, Josh and Matt Jenkins, won the CMA Award for song of the year last year. This year’s “Next Thing You Know,” which peaked at No. 2 on the Country Airplay tally, is up for the same award at the 2023 CMA Awards next month. In addition to writing his own material, Davis has had songs cut by Jake Owen and Old Dominion. His total streams have surpassed 6 billion, Sutton says.
“Jordan’s heat at the moment, the marketplace, the new team involved [at Anthem], all pointed towards this is a good time to take a couple of chips off the table but keep [Jordan] in the game and keep building this asset at the same time,” Sutton continues.
The new team includes Jason Klein and Sal Fazzari, who were named permanent CEO and CFO, respectively, earlier this month after serving in those roles as interims since the departure of former CEO Helen Murphy in February. Both had been with Anthem in other capacities. Gilles Godard, who has been with the company since 2006, is president of Anthem’s Nashville-based music publishing operation.
“Jordan’s particularly important to us. We obviously see him as an exceptional talent as a writer and a performer, but what’s really special about Jordan is we’ve been there since the very beginning,” Klein says, referring to Godard signing Davis in 2015 as a nascent writer. “As an independent publisher, [who] has been his partner throughout his creative process, it was very important to us, now that he’s at this point in his career, that we’d be able to hold on and continue to super-serve him as a publisher. He’s got a world of options open to him at this point and to stay with the home team, it says a lot about his belief in what we’re doing in Nashville and the great team that we have.”
“The team at Anthem has evolved into a great creative platform for me,” Davis said in a statement. “Their belief in me as an artist and a songwriter — it’s made such a difference along the way — from when I first moved to Nashville as a songwriter to now.”
In addition to acquiring an interest in Davis’s catalog, the Anthem deal extends the company’s existing co-publishing agreement with Davis going forward. “We are proud to say that Jordan started his publishing career here at Anthem eight years ago, hard work does pay off, and now here’s to the next eight years making more musical history with Jordan Davis,” Godard added.
Nashville attorneys Derek Crownover, John Rolfe and Colleen Kelley of Loeb and Loeb represented Davis in the transaction.
As Fazzari notes, Anthem has purchased portions of other country publishing catalogs, including Jody Williams Music, Better Angels, RED Creative Group and Red Vinyl, which includes Chris Janson’s catalog. “Nashville has always been a focal point for us not only creatively, but for catalogs because we all love the music and the town. The songs that we get are pretty timeless. We’ve been able to amass a pretty sizeable catalog.”
Anthem has also bought portions of individual songs in Nashville, including co-writer Jesse Rice’s share of the Florida Georgia Line 2012 smash, “Cruise.” (Its publishing deals extend far beyond country, including a long-term partnership with Timbaland, whose catalog Anthem acquired in 2012. Anthem has continued to invest in new Timbaland ventures.)
While the Davis deal is the first substantial catalog purchase Klein and Fazzari have completed since taking the reins, “We’ve got a lot that we’re looking at,” Klein says. “We’ve got a pretty robust pipeline of opportunity that we’re exploring. We expect to be pretty busy in the months ahead.”
Fazzari adds that Anthem’s lane is exploring deals that complement existing publishing partners and help diversify into other areas, but “we’re not going to be going after large or big-ticket catalogs that usually come with an auction process. We like to spend a lot of time investing in relationships within our network and that brings deal flow to us.”
Reservoir Media has signed Joe Walsh to a global publishing agreement. The deal encompasses both hits from his catalog — including those he wrote for his solo project as well as the Eagles and James Gang — and future works. It does not include the administration of his back catalog aside from select songs, including […]
Hipgnosis Songs Fund said on Monday it would not pay its investors a dividend in October because of new, lower projections for the amount of revenue it can expect from the U.S. Copyright Royalty Board for certain streaming royalties, causing its stock to dip more than 10%.
Hipgnosis Songs Fund’s board said it had to withdraw the proposed interim dividend of 1.1325 pence per share, which it had announced to shareholders on Sept. 21, after its independent portfolio valuer, Citrin Cooperman, “materially reduced” Hipgnosis’ projected payments from CRB III, causing the board to cut its expectations for CRB III retroactive accrual to $9.9 million, from $21.7 million. Hipgnosis’s board said it “expects to declare and pay future dividends as targeted,” subject to discussions with its lenders.
The announcement comes 10 days ahead of the London-listed music royalty trust’s first shareholder continuation vote, where investors are asked to vote on whether they want to keep the investment trust going or liquidate the fund.
Hipgnosis Songs Fund made history in the music industry when it went public in July 2018 as the first publicly listed company offering investors the chance to earn returns from the royalties on famous songs like “Sweet Dreams Are Made of This,” “Don’t Stop Believin’,” Neil Young’s catalog and more.
But the company is facing some of its first, serious growing pains as the high interest-rate environment has made acquiring more catalogs more expensive and drawn investors’ interest away from alternative investments like music rights to high-yielding bonds. Hipgnosis Songs Fund’s share price is down more than 25% over the past year and was trading at 66.26 British pence ($0.90 USD) as of 8:50 a.m. New York time.
The board has announced a number of initiatives since September that appear to be aimed at addressing investors’ concerns ahead of the Oct. 26 continuation vote, including the proposed sale of $440 million worth of catalogs from its portfolio to the private side of Hipgnosis — Hipgnosis Songs Capital, which is backed by private equity goliath Blackstone. The board said it would use the proceeds to buy back up to $180 million of its own stock, pay down $250 million of its revolving debt and to introduce new, lower advisory fees to be paid to Hipgnosis Song Management Limited.
The board has said it hopes the proposal, which must be approved by shareholders, would help to “re-rate” the company’s share price in the eyes of investors and the broader market.
The board said it learned of the reduction in expected payments around Sept. 30, after Citirn Cooperman “reduced its expectations of industry-wide retroactive payments in relation to the U.S. Copyright Royalty Board’s decision in relation to royalties payable to songwriters for the period covering 2018-2022 (“CRB III“) for its valuation of the Company’s portfolio.”
Primary Wave has signed an administration agreement with the estate of singer and “Soul Man” songwriter Isaac Hayes. As part of the deal, they will administer various publishing interests for Hayes. They will also be granted the opportunity to market the musician’s name, image and likeness.
Universal Music Publishing U.K. has signed electronic artist and producer Fred again.. to a worldwide publishing deal. He started his career as a producer but gained wide recognition for his artist project during the height of the pandemic after releasing his debut album Actual Life (April 14-December 17 2020). Over the course of his career, he has worked with Ed Sheeran, Brian Eno, Travis Scott, Skrillex, Young Thug, J Balvin and Burna Boy.
Artist and songwriter RAYE has renewed her publishing agreement with Warner Chappell Music, following a breakthrough year. Her debut album My 21st Century Blues was released in February and peaked at No. 2 on the U.K. Official Albums chart and its lead single “Escapism.” (featuring 070 Shake) went all the way to No. 1 in the U.K. She first signed to the publisher in 2016, and her extension covers both her catalog and future works.
All Clear Music and Fuji Music Group have acquired a 100% stake in the writer’s share of publishing for songwriter Will Jennings. The deal covers his entire catalog, which spans legendary artists Steve Winwood, Whitney Houston, Roy Orbison, B.B. King, Celine Dion, and Tim McGraw. His biggest hits include “My Heart Will Go On,” “Tears in Heaven,” “Higher Love” and “Up Where We Belong.”
Raleigh Music Publishing has acquired the song catalog of musical theater composer and lyricist Alan Jay Lerner. For his evergreen songs, Lerner has been a past recipient of the Johnny Mercer Award, the Songwriters Hall of Fame’s biggest honor. The deal includes 100% of Lerner’s share of US royalties for the following musicals, excluding writer performance royalties and grand rights: My Fair Lady, Camelot, Gigi, Brigadoon, The Day Before Spring, Love Life, On a Clear Day, Paint Your Wagon, What’s Up.
Concord Music Publishing has extended its publishing agreement with Richard ‘Biff’ Stannard. Over the course of his three decade career, he has written with the Spice Girls, U2, Sia, 5 Seconds of Summer, and Ellie Goulding. One of his longest running relationships is with Kylie Minogue — whom he has been writing with for twenty years and counting. His relationship with Concord began in 2020.
Seeker Music has acquired the publishing catalog of Plested, a top U.K. artist and songwriter who has written songs like “Before You Go” by Lewis Capaldi and “Leave Before You Love Me” by Marshmello, Jonas Brothers. In addition, he also has cuts with Kygo, OneRepublic, Niall Horan, The Chainsmokers, Anne-Marie, James Arthur and more.
Warner Chappell Music and Tape Room Music have renewed their global publishing agreement with country songwriter Hunter Phelps. Additionally, WCM is also acquiring the hitmaker’s catalog, which includes “wait in the truck” by HARDY ft. Lainey Wilson, “Thinking ‘Bout You” by Dustin Lynch and Mackenzie Porter, and “Drinkin’ Beer. Talkin’ God. Amen.” by Chase Rice and Florida Georgia Line.
Position Music has signed Chloe Copoloff to a worldwide publishing deal. The 25-year-old songwriter has worked with Salem Ilese, Alan Walker, Andi, Skydxddy, Sundial, Francis Karel, Holden Miller, and Cloudy June and has forthcoming cuts with VIVIZ, Ashley Sienna, Dia Frampton, Culture Code, Meg DeAngelis, Francis Karel.
Concord Music Publishing has wrapped its 11th annual sync camp in Nashville, where 90 songwriters worked together on songs for synchronization in films, tv shows, commercials and more. Since its inception, the Concord sync camp has garnered over 1500 placements in various forms of visual media, including placements in “All Rise,” “Big Shot,” “The Witcher,” “The Spanish Princess,” and “East New York.”
Outer Voice Music Publishing (OVMP) has signed a global administration deal with Downtown Music Publishing. Founded as a branch of the Outer Voice Company, a label launched by JAM and Philly in association with Converse, OVMP was created to sign and represent the work of South Asia songwriters across the diaspora.
BMI has released its annual report for its fiscal year and, for the first time ever, it hardly contains any financial information.
Such information as how much it collected or distributed in the recently completed year is not revealed in the annual report, even though BMI has historically revealed detailed financial information every year. The report also doesn’t show how much collection and distribution amounts changed from the prior year’s $1.573 billion and $1.471 billion, respectively.
The only information indicating BMI’s financial performance in the year is an observation by BMI president and CEO Mike O’Neill that “every distribution we issued in our last fiscal year was higher than the corresponding one from the previous year.” No further specifics were provided.
The only numbers in the entire annual report that give any indication of how much activity BMI tracked in the year was a note that the performance rights organization processed 2.61 trillion performances, while its membership grew 7% to 1.4 million affiliates, and that it licenses and collects on behalf of 22.4 million works. Dollar amounts only appear once in the 24-page report, when O’Neill states in the opening note that BMI’s November distribution is forecast to be $400 million — which he labeled another record “that would make BMI the first ever PRO to ever distribute this high an amount in a single quarter.” The November quarter is in its current fiscal year, and not a part of the completed year covered in the annual report.
Last October, BMI announced it was switching from a not-for-profit model to a for-profit one. Now, in an opening note to this latest report, O’Neill disclosed the organization’s goal is to distribute 85% of the licensing revenue it collects to songwriters and publishers. The other 15% of collections, he wrote, will cover overhead and allow BMI to achieve a modest profit margin, noting that expenses typically comprise about 10% of revenue. In recent years, BMI’s distribution has been about $90% of revenue.
If BMI creates new M&A opportunities, however, or enters new businesses or offers expanded services, O’Neill said that BMI “will look to take a higher margin on any revenue generated, though always with the goal of sharing that new growth with our affiliates.” In other words, for those business, BMI may not limit itself to a 5% profit margin.
O’Neill also noted that “if BMI decides to seek outside capital or borrow money to invest in new services and opportunities, any repayments will come out of our retained profits and not distributions.”
In the current fiscal year, O’Neill reported that under the new business model BMI’s February distribution was its largest ever, up 6% over the previous year. That was then surpassed by the May distribution, which was up 15% over the corresponding year-earlier period. O’Neill predicted that the next two distributions for the remaining calendar year will follow that trend. For the full calendar year, distributions are projected to be 11% above calendar 2023, the report noted.
Going forward, O’Neill said BMI will announce percentage increases, but apparently will continue to withhold all other financial information.
Seemingly responding to immense pressure from the songwriter community and music publishers who have publicly expressed their unhappiness about BMI’s switch to profitability and its evasion of the many questions they asked, after disclosing the 85% distribution goal, O’Neill’s opening note repeats many of the thoughts he has already shared through open letters on the issue. “We changed our business model last year to invest in our company and position BMI for continued success in our rapidly evolving industry,” he wrote. “Our mission remains the same, to serve our songwriters, composers and publishers and continue to grow our overall distributions as BMI has done each year that I have been CEO. In order to continue this trajectory, we need to think more commercially, explore new sources of revenue and invest in our platforms to improve the quality of service we provide to you. I’m pleased to say that we have already made great progress on delivering these goals.”
He also reiterated that BMI changed its business model to better position the company for success in a rapidly evolving industry. “Our mission remains the same, to serve our songwriters, composers and publishers and continue to grow our overall distributions as BMI has done each year that I have been CEO,” O’Neill wrote. “In order to continue this trajectory, we need to think more commercially, explore new sources of revenue and invest in our platforms to improve the quality of service we provide to you.”
While BMI can accomplish its plans and goals on its own, O’Neill wrote, “We also recognize the opportunity to substantially accelerate our growth by partnering with a like-minded, growth-oriented investor with a successful history of building businesses. Of course, that partner would need to share our vision that driving value for our affiliates goes hand-in-hand with growing our business and building a stronger BMI.”
As Billboard previously reported, BMI is in an exclusive period with New Mountain Capital in a deal to sell the PRO — which is currently owned by radio and television broadcasters — at a $1.7 billion valuation. The valuation, however, sources say, is under downward pressure as negotiations continue.
While stating nothing has yet been signed, O’Neill wrote that the for-profit business model and the strategy outlined “will hold true for BMI whether or not we move forward with a sale.” In other words, BMI will continue to be a for-profit business, regardless of whether it sells or not.
Universal Music Publishing Group (UMPG) has announced a worldwide publishing agreement with Sabrina Carpenter, Billboard can announce exclusively. The news comes in between international stadium dates for Carpenter, who is opening for Taylor Swift‘s Eras tour through the remainder of the year. “I am so thrilled to have joined the UMPG family and to be […]
Quincy Jones said it best,” explains Nile Rodgers: “A producer of a record is like the director of a film.” From his first production credits on tracks by Luther Vandross, Sister Sledge and Diana Ross to his more recent work with Beyoncé, Daft Punk and Coldplay, Rodgers is one of the rare producers who bridges the gap between the classic understanding of a record producer and today’s digital music-maker.
In the 20th century, Rodgers and his contemporaries recorded songs to lumbering rolls of tape, bringing the visions of artists and songwriters to life with their ornamentation, arrangement and technical skill. While that is still true for some producers, the trade has changed dramatically. Around the turn of the millennium, increasingly powerful DIY recording tools and the piracy-inflicted bust of the music business drove recording from fancy studios and into musicians’ homes — shifts that democratized who could be viewed as a producer and blurred the lines between the processes of songwriting and recording. How producers are compensated has also evolved, with greater distinctions for payment by genre, widely varying upfront fees and greater possibilities to earn publishing income than ever.
Producer Fees
The most reliable form of income for producers: a sum owed for their work before the song comes out. Fees tend to start around $15,000 to do a track for a major-label-affiliated pop or R&B/hip-hop artist; a superstar-level producer might charge up to $75,000 (or higher), but $30,000 to $40,000 is considered a good range for one who is well-established and working with a major-label act.
When producers work across an entire album of songs, it’s common to reduce per-track rates. “It might be $30,000 for the first three songs, $20,000 for the second two and $10,000 for the last song,” says Lucas Keller, founder of producer management firm Milk & Honey.
These fees are paid half upfront and half upon the delivery of a record that the label deems “commercially satisfactory.” While that first half is a producer’s to keep, the second is an advance against master royalties earned from the song. In today’s streaming economy, however, many tracks don’t recoup their fees.
Independent artists and/or those with little-to-no recording budget sometimes get more creative in paying producers what they are owed. Instead of a fee, “a lot of producers are getting 50% of the master monies, either in perpetuity or until the artist makes the producer’s fee back,” says Audrey Benoualid, partner at Myman Greenspan. Producers can also receive a fee under the aforementioned $15,000 for their work.
Points
The percentage of master royalties producers receive for their work. Earning from two to five percentage points of a record is common today, starting at two points for a newcomer and four to five for a well-established, in-demand producer. This amount is subtracted from the act’s percentage share of the recording; labels aren’t expected to cede any of their share to compensate a producer.
In rare cases, a superstar talent may command six to eight points: Rodgers and his manager, Hipgnosis founder and CEO Merck Mercuriadis, confirm that, on average, Rodgers earns six points, but every song is a unique negotiation. As Keller explains, things can get more complicated when two producers are involved: “Let’s say two sizable producers want four points each. We likely won’t get to take eight all together, so what about we try to split six points down the middle?”
Publishing
Because modern musicians often write and record as they go, the line between songwriter and producer is blurrier than ever. Many creatives that are now primarily classified as producers are also part of the songwriting process — and these multihyphenates earn publishing in addition to fees and points.
“Back in the day, when people talked about what a songwriter did, it was the guy who wrote melody, lyrics and chords. Today, if you come up with the beat, like many producers do, you can also be credited as a songwriter,” Mercuriadis says.
This is especially true in hip-hop. Michael Sukin, a top music attorney who has worked in the business since the 1970s, credits the genre’s emergence as a big part of redefining what a producer does. Timmy Haehl, senior director of publishing at Big Machine’s Los Angeles office, says, “In hip-hop, publishing is sometimes split down the middle: 50% for the top line, 50% for the track.” (In pop and other genres, there isn’t a standard amount of publishing a producer-songwriter can expect; that share of the composition is negotiated on a case-by-case basis.)
Extra Earnings
Some producers can pocket extra income through neighboring rights — performance royalties earned on the master side of income in many countries outside the United States. This, however, “has to be for a qualified record or qualified person,” Benoualid says. “You can’t be a U.S. citizen, unless you record in London and the studio is credited on the album — then you qualify for neighboring rights there.”
Producers in the United States qualify to earn a similar (but more limited) royalty from their masters playing on digital radio stations like SiriusXM, Pandora and other noninteractive digital transmissions. This is paid by SoundExchange, but producers aren’t entitled to this income unless the artists they worked with tell SoundExchange to pay the producers part of their royalty directly.
Nowadays, veteran hit-makers like Dr. Luke and Max Martin may also sign protégés to production deals or joint ventures with publishers to earn additional income, allowing them to, as Keller puts it, “amass a huge catalog with real enterprise value.” The younger producers, in exchange for part of their monies, in turn get introductions to, Haehl says, “people in [the veteran hit-makers’] network [and] special opportunities with artists.”
This story originally appeared in the Oct. 7, 2023, issue of Billboard.
Reservoir Media has signed a publishing deal with Latin songwriter and producer Rudy Perez, the company tells Billboard. According to Reservoir, the deal includes the acquisition of Perez’s catalog as well as a publishing deal for his future works. Throughout his career, Perez has collaborated with artists such as Christina Aguilera, Julio Iglesias, Luis Miguel […]