Songs and the Music Publishing Market Part II
This interview was originally published in July, 2011.
Matt Pincus is the founder and CEO of Songs Music Publishing, a New York City- and L.A.-based publishing firm. In Part I of this interview, Matt talked about his history in the music industry and the evolution of Songs, the publishing industry and synchronization licensing. In Part II, Matt delivers some advice for artists, songwriters and producers who are interested in going after publishing deals and offers some projections about where he thinks the publishing industry is headed in the future.
What advice would you give somebody who wants to get a publishing deal these days? I know most publishers don’t do as many pure, “for love” deals anymore. But what describes an attractive acquisition for you?
I’ll speak first about an artist, and then about a writer/producer, because it’s different.
With an artist, the biggest advice I would give to someone who is interested in a publishing deal is to make sure you take custody of your numbers. You need to know how your music is selling, how many tickets you’re selling in which markets, what your sync licensing history is and put that together in a spreadsheet or a Word document. Really track your numbers. When we look at a deal, because it’s a singles market now, we look at numbers. Let’s say a song gets on alternative radio. The first thing we do is see if people are reacting. If you look at SoundScan and see something is moving a certain amount of singles, that’s great. You can also look at the radio charts and see that it’s climbing in a particular format. But what you really want to see if the record is playing on the radio is if people are buying it in places it’s being played on the radio. That shows it’s reactive. As an artist, you need to know stuff like that. It used to be that if you had a little movement on SoundScan, you’d get offered a deal on spec. It doesn’t really happen that way anymore. Somebody in your camp, or in your representation’s camp needs to be pulling together all the information about your career across the various places where there are data. You need to know what’s going on there. In some ways, it’s becoming more of a research-oriented business than it used to be. People aren’t simply looking to find stuff that sounds good and trying to make a business out of it. They want to see there’s a little bit of momentum happening anyway. And that needs to be quantified and pushed out. I think that’s really important from an artist’s perspective: You need to really understand your numbers.
I think from a writer’s/producer’s perspective, the most important thing is that you can get in the room. What I mean by that is that your co-writes are going to come from your ability to hang out with someone in the studio. A more successful writer is going to have a younger writer in the room because they like them. It’s important your tracks are good or your top line is good, and you need to work on your song structure. If you’re a hook-oriented, top line person, that’s the hardest thing to find. But in general, you need to get yourself out there.
We can set up a lot of contacts for writers. We can get them sessions with better known writers. But once you’re in the room, you have to be able to talk to an artist and figure out what their life story is and translate their story into a work that is going to be reflective of how they want their career to go. You’re going to have to handle split negotiations, which begin in the studio between writers. There’s a whole culture around the business that you have to be able to play along with. Otherwise someone like us can get you a lot of exposure, but if there’s no follow through, it doesn’t matter.
Increasingly, we’re seeing that young, emerging pop writers are getting work by becoming friends with other more successful writers who bring them into the studio. Look at what Dr. Luke is doing with Benny Blanco and all those guys. It’s returning to this kind of “camp” mentality in the pop business, where there is a group of guys that are successful and bring younger people in. We can help open up some of those doors. But we look for writers who can walk through them. It’s a little bit of a different exercise in that sense.
Also, with writer/producers who are sampling, you need to know your samples. And you need to be able to tell publishers, “There’s a sample in here, and it’s un-cleared/easily clearable.” The whole value of your publishing career can easily go away if you have a hit song, but you have to give 95% of it to George Clinton.
I want to go back to the artist for a second, from the point of view of synchronization licensing, having a clear point of view about what you will and won’t do is really important. We’ve dealt with acts that literally say, “No Microsoft licenses, no Disney licenses. Full stop, we won’t work with those two companies. We hate them.” There are other people who say, “I just want to make some money. I don’t care.” And then we had a guy who said no to a Rhapsody commercial that his video was going to be in. But they were clear, so it’s helpful for us to understand that.
The broad point is, you need to be responsible for your own data. It’s important that you think of your career in that kind of business type of way.
Do you have any projections about what’s going to happen in the publishing business in the next five years? What do you see changing?
Everybody is trying to figure out where the boat is going at this moment. I don’t think anybody knows. There’s a lot of uncertainty. So, I think it’s really important to be able to make money on today’s dollars. I believe there’s going to be a lot of growth in the music business in general and in music publishing specifically over the next ten years. But nobody knows when that’s going to happen or to what magnitude. The real focus we have here is less on “what’s the dominant channel through which the large middle of American society is going to acquire music in ten years?” and more on “where is the money now, and where is it going to be tomorrow?”
I think you have a marketplace that needs to organize. There are very big pieces and very big interests that are being realigned at the moment. And that doesn’t happen quickly, by nature. Anybody that’s in the business can fairly assume there’s going to be a healthy amount of volatility in the next few years. And that speaks to the nimble. That’s why the strategies of companies like XL and and people like Martin Kierszenbaum at Cherry Tree – more flexible kind of entities that really understand their music and how to work with their music – are going to be successful over the next little while. You have to know your music. It’s no longer the kind of organized market that operates like a portfolio of stocks: Buy a thousand of them, and it doesn’t matter the dimensions, you’re going to win somehow. It doesn’t work that way anymore. You really need to understand the creative material you’re working with. I think the market’s going to favor people that can do that for the next little while.
The overall distribution channels and consumer behavior patterns are changing so radically that the only thing that makes sense is that people want music. If you’re the person that understands what music they want, it’s going to work for you despite the changes. That said, I would expect tight margins. There’s not a lot of getting lucky. I think in the music business, you used to be able to sell your way out of problems frequently. The business was badly managed, but you had a hit, so who cares? I don’t think that’s going to work over the next few years.
The whole thing about Sony moving their royalty calculation over to RoyaltyShare was interesting. I just saw that yesterday. I suspect that music companies will be smaller in the coming years. You’re going to end up with smaller groups of people who understand the creative side of the business better. And a lot of these traditional verticals that were controlled by the major labels – distribution, royalty calculation, back office operations – are going to be outsourced. In the publishing industry, we manage intellectual property that other people monetize. I think you’re going to see the whole business going that direction, which will be agnostic to format and based on licensing. It’s going to speak in a way to what publishers have been doing for a long period of time. But how long it takes for that to organize is unclear.
There are a lot of big organizations that have been operating the same way for 50 years or more that are now reorienting. For example, EMI pulled its digital rights out of ASCAP. That said, wholesale changes to large institutions don’t happen quickly. I’m just not sure the clean, linear path is visible. I think if you’re going to be in the music business, you have to be prepared to make money on today’s dollars. You shouldn’t go in thinking it’s going to hockey stick around, and you’re going to get rich.
Do you have any speculation on if there will really only be three major publishers anytime soon?
Nobody really has visibility into what’s going on in that part of the market. EMI is a very well-run company. I worked with Roger Faxon there, and I’ve seen what he does. He’s probably the best manager for the environment now. I think EMI will work something out.
If one of the big publishing assets that was owned by one of the majors became an independent and decoupled from the record label, that would be a very interesting shift in the dynamics of the business. I don’t think that at this point, the way EMI is talking in the press, it seems like that’s what they’re thinking. There’s been talk about what happens to Warner Chappell if they need to combine Warner and EMI. That would also be a very large interest that, if decoupled from a record label would be in a very interesting position. That is the thing I look at the most. It would be quite something else if a million-plus copyright business all of a sudden was a stand-alone music publisher, at least in terms of the trade dynamics. Is that going to happen? I don’t know. It surprised me how active the auction was for Warner when that went down. I’m sure EMI has a lot of interested parties. They have unbelievable assets there.
I try to pay less rather than more attention to the major label shenanigans that go on, because frankly, it’s helpful to me to be in another place. Big corporate transformation creates dislocation, and that’s where we’ve been successful at finding our way. But there are some good people in those companies, and I think part of the problem is that for a while, every internet genius thought the music business was doing nothing about its own problems and that they had the magic solution. I used to work at EMI. We were spending every day trying to figure out how to right size our business in an environment that was almost like a crashing airplane that was on fire. It’s a very difficult environment in which to operate. You have to have some sympathy for people who are trying to do their jobs in a retail market that is collapsing. I can only speak a little bit to EMI because I used to work there. It’s a very well-run business at the moment in a very difficult time, and I think it will figure out where to go in its capital structure.
For more information about Matt Pincus, visit the Songs website. To learn even more about Matt’s history, publishing and synchronization licensing, please also check out Part I of this interview.