5 How Does the Publishing Industry Work?

The music publishing industry is something most casual music fans (a group which includes nearly every person on the planet) know very little about and probably have never had reason to even think about. But that is not because it is a small or unimportant industry. In the United States alone, the music publishing industry is currently worth close to $7 billion. Globally, that number is about $10 billion. But where is that money coming from? For many, the first thought that comes to mind is that this must represent the sale of sheet music. While that is, indeed, the most tangible and obvious product of the publishing industry, sheet music sales actually make up only a very small part of the business, about $230 million in the United States (or only about 3% of total publishing revenue!).

So, where does the other 95% plus of the revenue in the music publishing business come from? In a word, copyrights. We will learn in the following chapters that royalties from song copyrights have been a major source of revenue in the music industry for over 100 years and were the foundation for the Tin Pan Alley business model described above. So, much of what music publishers do is try to attract talented songwriters to publish their songs with them. When a song is published, that means that the songwriter and the publisher have entered into an agreement whereby the copyright royalties from that song will be split (typically 50/50) between the publisher and the songwriter. Of course, the amount of the royalties will be determined by the popularity of the song, so publishers try to attract the most successful songwriters to join them in that partnership.

How do publishers sell themselves to a songwriter? Why would a songwriter choose one publisher over another? The “value added” by a publisher is their connections to the music industry, to record companies, to performers, and to the media. A song is only as valuable as its performances and recordings, so part of a publisher’s job is to connect potentially successful songs to performers who are looking for new material. 

Ever since the “singer-songwriter” genre emerged in the 1960s and ‘70s, there has been a mythology that performers generally sing songs that they themselves have written. That may be true for some iconic artists who also happen to be songwriters, but many great singers have little songwriting ability and thus are dependent on often unknown songwriters for their material. Some of the best-known pop singers in history, such as Elvis Presley, Frank Sinatra, Mariah Carey, Aretha Franklin, and Whitney Houston, for example, never wrote a single song. And many of the best-known pop songs were written by songwriters that most people have never heard of. For example, one of the most successful songwriters of recent decades is Max Martin, who has written chart-topping hits for the Backstreet Boys, Britney Spears, Pink, Usher, Taylor Swift, and Katy Perry, among others. But Martin is not a performer. He writes songs only for others to performer, and he has made a large fortune doing so. His income comes from copyright royalties rather than from live performances or making recordings. We will learn how this works in the chapters that follow.

So, much of what publishers do is in the realm of what used to be known as “song plugging,” which is simply selling songs to performers, hoping they will record the song and it will become a hit. Why don’t songwriters self-publish so they don’t have to split the copyright royalties with publishers? The answer is that songwriters don’t have the time, skills, or connections to successfully “plug” their own songs. Publishers have connections with record companies, record producers, and performers that enable them to expose a potential hit song to a performer who can turn it into a hit.

Music publishers also have an infrastructure of accountants and lawyers who can make sure that whatever royalties a song earns are correctly counted and distributed to the songwriter. Most songwriters do not want to spend their time reading through royalty reports to make sure they are correct, or chasing down record companies or streaming services that haven’t paid the royalties in the proper amounts or at the proper time.

The valuable connections between the publishing industry and the recording industry has led more recently to the largest record companies having their own in-house publishing companies so that they can reap the publishing royalties from their artists as well as the recording royalties. Thus, Warner Brother Records has an affiliated publishing company, Warner/Chappell Music; Sony Records has its Sony/ATV Music Publishing company; and Universal Music Group has its Universal Music Publishing Group. These are the three largest publishing companies in the world due to the success of the recording artists affiliated with their parent companies, the three largest record companies in the world. 

For a recent example, when Billie Eilish signed with Universal Music Group in 2018 to release her self-produced debut EP, “Don’t Smile at Me,” part of that deal was that Eilish would also publish her songs with Universal Music Publishing Group. If Universal had not convinced Eilish to publish her songs with their own publishing unit, then the valuable copyrights to those songs would have gone to some other publisher and a great deal of royalty income from those songs would have ended up in somebody else’s pockets. Given the tremendous commercial success of Eilish’s songs since that signing, we can easily see how valuable that publishing right is, regardless of how many copies of the sheet music to those songs are ever sold.