Music Publishers Quietly Gain Power In Record Biz

Investing In New Artists Pays Off If They Hit The Big Time


By Nick Krewen

Special To The Star



When whimsical pop rockers LEN played through their grunge incarnation and were looking to stir up media interest four years ago, they decided to circulate promotional copies of their debut album Superstar .

The Toronto band decided to dress up the CD cover in something other than shrink-wrap. They chose blue velveteen, a plush artificial fabric usually reserved for car seat upholstery.

There was only one problem: the band couldn't afford to assemble it. So they turned to the one place they could depend on for financial help.

Their music publisher.

"We paid for a seamstress to sew the damn things together," chuckles MIKE McCARTY, president of EMI Music Publishing Canada, the Canadian arm of EMI's music $3.35 billion (U.S.) publishing empire as reported by Music + Copyright Magazine.

"It was a crazy thing to do, but it's a crazy business. For LEN, our goal was to -- and what they wanted from us -- was to empower them to help to continue to be an indie group and be bigger and better than they were."

In exchange for co-publishing rights to their song catalogue, EMI also helped LEN finance the pressing and distribution of Superstar and its follow-up album Get Your Legs Broke , all in the hope that one day LEN would graduate to the big leagues.

That day came in late 1998, as the Sony-owned, Los Angeles-based WORK Group emerged as the victors of an eight-label bidding war. Earlier this year, LEN scored a North American Top Ten multi-format smash with its hummable "Steal My Sunshine," propelling sales of the band's first WORK album Can't Stop The Bum Rush to respectable SoundScan sales figures of 491,000 units in the U.S. and 61,000 in Canada.

"Sunshine" is about to be introduced to audiences in England and Australia, and the initial buzz is promising. But even if the album stops dead in its tracks, McCarty estimates LEN's winfall will be "two to three times" EMI's initial investment. If Can't Stop The Bum Rush sells four million units McCarty says EMI's profit could be "ten times our investment."

McCarty's willingness to indulge LEN's velveteen aspirations indicates just how drastically a music publisher's role has changed from the Tin Pan Alley era of selling sheet music and pitching prospective hits to singers.

Today most music publishers, even those aligned with major record labels, are stepping up to take a pro-active role in developing talent. Publishers are actively seeking artist-writers, and McCarty says for an initial "$40,000 to $100,000 investment," willing to help jump-start and develop careers with the ultimate goal of landing them a lucrative record deal.

The irony is that more and more publishers are integrating record company duties in order to get their acts signed to the majors.

"We really need to facilitate chart numbers through radio, video, and even sales through independent releases in order to grab a major record company's attention," says Anne Marie Smith, the creative manager for Warner Chappell Music Canada who has helped developed the careers of rockers Wide Mouth Mason, R&B singer Jully Black, and rappers Saukrates and Kardinal Offishall.

"All the publishing companies are going that much further to exploit the song, to hiring independent promoters at radio, putting money in for videos and tour support, all the things that record companies have been doing the past few years."

Why have record companies forsaken talent development?

"I think it's due to the pressure of being major public companies driven by quarterly profit statements," explains EMI's McCarty, who has helped Moist, The Matthew Good Band, Sky, Tal Bachman and Esthero reach pop prominence.

"Twenty years ago, it was extraordinary for an album to sell three or four million copies. Now, you have two or three hit singles and you're almost guaranteed to sell three million copies. The ones with more than three hits sell 25 or 30 million.

"There's an almost unstoppable motivation for them to turn into efficient machines that sell massive amounts of records."

McCarty says that as a result record labels are less motivated to nurture careers.

"I think the labels are more content to let somebody else do it."

Another factor is skyrocketing marketing costs.

"Marketing costs, even for an act in Canada, have climbed by three times in the last five years," observes Larry LeBlanc, Canadian editor of music trade weekly Billboard Magazine.

"To launch any act in Canada on a domestic level, you're looking at a commitment of $500,000 to $1 million. If you're looking at an international level, the first album alone is $2.5 million."

While record companies are looking to maximize an immediate impact, publishers are in it for the long term. LeBlanc says most Canadian record companies can only afford to work two or three acts.

"The record company is only interesting in selling one thing: the record," says LeBlanc. "A publisher's concern is not the record. A publisher's concern is the song."

Sponsoring self-contained songwriting artists can also be cheaper than trying to land a cut on the next Celine Dion album.

"The same amount of time, effort and money it takes to successfully achieve a cover of a song and transforming it into a hit can be fed into one group," EMI's McCarty explains. "If that group manages to get a record deal and the record does anything, you have 10 to 14 songs that are earning money."

And you can generate a lot of money as a publisher. Unlike record companies, whose sole source of revenue is the manufactured product, publishers have several potential income streams.

Whenever a song is broadcast over the radio, performed in concert or featured in a movie or commercial, income is generated for the copyright holder through mechanical, synchronization and performance royalties.

. Secondary sources of income include sheet music and grand rights for theatrical and Broadway musicals.

All those rights can add up to big bucks, especially if you hit pay dirt.

Just ask Sting. EMI Music Publishing, sporting one of the biggest catalogs in the world with over one million titles, recently forked over $35 million to the former Policeman for the right to administer his publishing catalogue. Under terms of the deal, $35 million doesn't cover a 75-25 split in Sting's favor for Police and solo song royalties. EMI also spent $132 million for 50% ownership of Jobete Music, Berry Gordy Jr.'s 15,000 Motown song inventory.

Two weeks ago EMI paid $19 million for a 51% stake in Hit & Run Music Publishing, home of Genesis, Phil Collins, Kula Shaker, Right Said Fred and Julian Lennon copyrights.

While an aspiring artist is waiting to develop into the next Phil Collins or Sting, a music publisher can serve as a security blanket, allowing them to survive while finding their own voice.

"It's given me a very large sense of myself," admits Matthew Good, Vancouver-based leader of The Matthew Good Band whose latest album Beautiful Midnight debuted #1 on Canadian SoundScan retail charts.

"Publishers don't tend to push you as much in changing what you are. It's much more of a growth and stumbling over your own feet process."

Good also says his deal with EMI Music Publishing, which allowed him to finance his magnetic Last Of The Ghetto Astronauts  album, not only allowed him to retain creative control over his own development, but generated interest where none existed before.

"At the time there was no interest in me whatsoever," says Good. "Where would I be now if I hadn't signed with EMI? Would I have received the same exposure without Mike McCarty's help? I don't think so."

So will a publisher take the next step and launch their own record label imprints?

"I think you're on the verge of that now," says Larry LeBlanc. "The problem for a publisher, no matter how you slice it, is retail distribution. However, the Web changes that scenario because you don't necessarily need to go to a label for distribution."

LeBlanc is also doubtful that publishers will muster up enough marketing dollars to make the transition feasible.

"The majority of publishers won't step up to the plate and spend any real money. They're used to spending money to purchase a catalog, or spend the money to bring in a songwriter, but they have not, at this point, spent it on marketing, and that's where the record companies have the advantage over them.

"Even if they got on the Internet, you've still got to market your product. I don't know if they're prepared to do that. That will be the big step."






©1999 Nick Krewen, Octopus Media Ink


About Octopus Media Ink