Jeff Brabec and his twin brother Todd are the co-authors of ėMusic, Money, And Success' (Schirmer Books). I've read it, and I think it is exceptional. Jeff was a panelist at TAXI's Road Rally last fall, and impressed us all with his knowledge and ability to relate complex subject matter in a most articulate way. Read on... you'll see what I mean. - ML
Where did you grow up?
In Chicago, until my brother Todd and I were about six years old, and then my parents moved to New York. That's where we were raised ever since.
What does a vice president of business affairs do at a publishing company?
My role, basically, is I get into everything. I've been very fortunate to have worked at companies where they've allowed me to get into a number of different areas. My role in this company is primarily to advise other departmentsto give counsel to them on any number of things including, but not limited to the structure of the deals we make.
What are the typical income streams from a song?
I'll give you the major ones. First of all, you have the mechanical income. That's the income that is due the songwriter and music publisher for the sale of audio recordingswhether they are CDs, cassettes, vinyl, etc. The current rate in the United States is 7.55¢, which is paid by the record company to the music publisher on every song that is sold on an audio recording. This is known as the statutory rate. Then that money is split between the publisher and the writer according to the terms of the songwriter agreement (for example: "50/50," "75/25," etc.). That 7.55¢ will be increased to 8¢ January 1, 2002. So that income is going to increase. Just a quick example: a million selling single at 7.55¢ would be worth $75,500 to the music publisher and songwriter in 2000 and 2001. If that same record sells a million copies in 2002, it's going to be worth $80,000.
Now if you're on an album, the same types of calculations apply, unless you are a recording artist or producer who is subject to a controlled composition clause which reduces the mechanical rate to less than the statutory rate or if you voluntarily agree to a reduced rate. The great thing about mechanical income is that there are so many ways to get it. You don't even have to have a hit single. You can be on an album. The particular song can go into one of the special product albums or compilation albums, like "Best Songs of the '90s," "Best Songs of the '80s," "Best Love Songs by New York City Writers," "Best Broadway Show Songs," etc. So you can get all of these sources of mechanical income, which can really mount up. (For your information, mechanical royalties in Europe and most other countries outside the United States are calculated on a percentage of the retail on dealer price.)
The next major source, and sometimes this ends up being more revenue than the mechanical, is performance income. That's the income you get from ASCAP and BMI. The figures right now have become astronomical if you've got an A-side single that crosses over into a number of charts and is a hit from #1 to #5. You can easily be talking about $300,000 to $500,000 for the songwriter share and the same for the publisher's share, depending on the right song. If the song translates well into Europe and other territories, which a number of songs do, then you can easily double your money throughout the world. Performance income is substantial, especially since it can generate sizable monies both short and long term. It is not unusual for successful songs to earn over $100,000 per year 10, 20, 30, or even 50 years after their initial release.
Sheet music and folios are another source of income. You've got to have the right composition to make a lot of money in this area. There are a lot of outlets, though, and if you've got a very melodic song, you can do very well. What also do very well are guitar transcriptions. Also personality folios about a certain writer or a certain recording artist/writer and album folios based on a particular albums sell very well. Take for example a Smashing Pumpkins or Britney Spears album. There is a folio on that particular album with the music included and pictures of the artists. Those sell very well because they're album-themed. If someone buys the album, they might very well go in and get the companion folio to that album. And then you've got your single sheet sales.
Obviously commercials can also be enormous sources of income.
How about film and TV usages?
Television can be extremely valuable because the initial synchronization license is going to be for between $6,000 and $10,000 dollars for a life of copyright license to put a song in a particular episode of a television series. Let's say it's "The X-Files" or "Felicity" or any other show. Then you also have a home video option, if in fact that episode goes to home video, for another $6,000 to $7,000. And then you've got the performance income when the television episode is broadcast on top of that. So TV can be very valuable. Plus a lot of shows are being shown overseas, so you're getting performance income from overseas. Some television shows are turned into motion pictures in foreign territories and there would be another fee if this happens.
Motion pictures, to me, are one of the ultimate sources of income for longevity and possible very large amounts of income. First of all, you've got the synch fee to put the song in the film, which ranges anywhere from $25,000 to $45,000 just for a single non-thematic use, not a multi-use in a film. Secondly, the mechanical and performance royalties from a successful soundtrack album can far exceed the monies received for putting the song in the film.
Are the examples you're giving just for established artists with primarily hit records? They're well-known artists, not unsigned or unknown artists, right?
They are normally artists who are well-known. Now, there are loads of unknown artists and unknown songs that have been recorded and released which are used in movies. I really have to hand it to a lot of the directors and music supervisors who really search out gems (many times with the help of music publishers, record companies, and other organizations which assist songwriters in the promotion, placement, and licensing of their songs) that have never really become popular before or never really made it to the surface. The fees in the motion picture industry, as long as you're dealing with a major motion picture, you're still looking at $15,000 to $20,000, even for a song that is not that well known but that hits the right mark in the film.
Could that be for a complete unknown, who doesn't have a record deal and who doesn't have a national release but happens to have a song that works well for a movie?
A lot of times, the smaller budget films will come to us and try to get our hit songs very cheaply. We normally refuse, unless we really believe in the project. Another alternative is to enter into a "step deal" which gives the producer a smaller fee to start off with to enable the producer to use the song, but with escalators as to the fee, if the film becomes successful (for example: "x" dollars if the film gets national distribution, "x" dollars if it earns 5 million dollars, etc.). A lower budget film company does not have much for a music budget. Sometimes in this business, you have to sign license agreements which may not be the top dollar agreement, but there is reason for you to do it. One reason is for exposure. Another is it's a step in the right direction to make you a professional, or more professional, or to get your reputation together. The good thing about movies is, unless the song is written for the film, it's not an assignment of copyright. It's only a license. You can't get hurt by a license. You still own and control the copyright. You can say to yourself, "well I didn't license it for enough money," but if the song gets into the film, that's the most important thing for at least the newer songwriter. That's why I think what TAXI is doing is great. The fees are lower if you don't have the bargaining power and if you're hungry and want your song in and they know it.
How much money can a writer like James Horner make from a monster hit like "My Heart Will Go On?"
That song was unique in many respects because it became the song affiliated with an event moviethe event of the '90s almost as far as motion pictures go. First of all, the album sold extremely well. It sold over 10 million units. The album was mainly, I believe, a score album with that song on it. Then there was the Celine Dion album, Let's Talk About Love, which sold extremely well. So all of a sudden you had the same song on two major hit albums simultaneously. That's fairly unusual. Between the two of those albums, they sold about 18 million copies in the U.S. I've heard reports that it's over 50 million worldwide, which is pretty substantial. If you multiply that by your mechanical rate, the numbers are phenomenal. The wild thing about that song is that it also wound up on the sequel album. That album sold another million copies. Since it was nominated for a Grammy, it also was included on the 1999 Grammy Nominees Album which reached the charts 13 months after the opening of Titanic. It was also just put on the Celine Dion album All The Way that is currently on the charts right now. You've got a song that was put on a number of very successful albums. The performance royalties on that song have to be astronomical. It was #1. It was the type of song that generated a lot of radio play, not only in the U.S., but in foreign countries as well. Melodically, it was perfect. Because the film did so well, people loved this song universally. The film did so well overseas, I think it grossed $1.2 billion or close to that. Virtually all foreign theaters pay performances royalties to the local performance rights societies in the United Kingdom, France, Germany, Australia, and Japan, etc. for songs that are used and performed in films that are in the theaters. Those type of royalties for this type of film were probably astronomical as well, only because it was the largest grossing film ever.
Do you think the song earned in the $5 to $10 million dollar range?
Oh, I wouldn't be surprised at all. That was probably in about a two-and-a-half year period. It was just phenomenal.
Is it clear yet how, or if, writers will make performance royalties from Internet usages?
I think it's very clear. The entity distributing the performance is obligated to pay performance royalties. I don't think there is any question about that right now. I think the question is how much the fees are going to be and how the licenses are going to be structured. Both ASCAP and BMI have arrangements with an increasing number of websites currently, and they are going to license more and more. With America Online now being a content owner, it's going to help enormously, because at one time it appeared that they were not being terribly cooperative with the principles of copyright law, but now they have a real vested interest in protecting assets for their shareholders. I thought that was a very good sign. I think that's going to really help the movement towards recognition of copyright rights substantially. I don't think that there is any question that people feel that performances on the Internet are controlled by the copyright law.
It's a pretty silent medium right now, and I don't think we're that far away from getting to the point where most websites will have background music on them for the stickiness factor. Are publishers and ASCAP and BMI thinking about how the writers of background music will get paid on the Internet, or are they mostly looking at hit songs being downloaded or streamed?
As music publishers, we're looking at a lot of different things. There are a lot of websites right now which have brand new contentcontent that was created specifically for the Internet site. We are actually licensing songs through those particular websites. We're looking at that medium as going the direction of the current mediums. The Internet is going to be the next television, basically, and in many respects the next radio as well. With licensing, were looking at it as if the same principles apply. We're dealing with one website right now who is interested in using one of our songs as background music when you click on a certain area of the website. We're treating this conceptually as any other source of music. However, you're not going to be giving out a license just for the U.S. and Canada anymore. It's definitely global. I don't care if the server or the site is here in the U.S., it's accessible everywhere. It's going to require a license, and the question is, what is the value of the license?
If you look at how I believe ASCAP and BMI will look at the Internet, they'll have certain rates for background music. It might be on a durational basis, just like it is on TV. I don't see why there is any reason it shouldn't be. Feature performances will have a certain worth. Theme music will have a certain worth, etc. I think everything is in place to really license this entire area. I think it's going to be somewhat organized as far as devising formulas for this type of music, this type of performance, and so on. The main problem has been that some of the companies have initially not accepted the principles of copyright law, but I think the AOL/Time Warner/EMI merger is going to help. I wouldn't be surprised if we see some litigation here and there along the way, however, to ensure rights are protected and defined.
What happens right now if a writer from Iowa, who is also an ASCAP member, has his or her music on MP3.com and somebody downloads it? Does that ASCAP writer get anything, or not, because of MP3.com's position?
The writer/artists who have their music on MP3.com are asked to sign an agreement which is basically a royalty-free license. So in effect, at least the way I read the license, it can have the effect of bypassing ASCAP and BMI, which a songwriter does have the right to do if he or she so chooses. However, ASCAP and MP3.com have recently entered into a performance license agreement which will ensure that writers and publishers will receive royalties for performances on this site.
Kind of like doing a direct license for TV, where the shows go directly to the writer and ASCAP and BMI are left out of the loop.
Exactly. See that's the danger. It's very valuable to get promotion for your songs, but you might be giving up substantial rights. Also, I'm fearful of writers setting precedents of licensing their music for free to get some other benefits. I think that hurts copyright law and the protection of creators and their works. But writers, as the owner of their compositions, do have the right to do that. ASCAP and BMI are non-exclusive organizations. A writer can actually bypass them, if the writer so chooses. The same is true with mechanical royalties. This, of course, may be subject to the terms of a writer's publishing agreement. The MP3 contract basically says this is a royalty-free transaction, unless money is made. If in fact there is money made, then MP3 and the writer do share it equally. But in effect, the download can be monetarily free and the writer has agreed to that.
Could it be possible that we're going to be looking at a whole new business model where copyrights may become meaningless?
I don't think that's going to happen. I think most sites will come around to respect the copyright. If writers want to give away their songs for free, they can definitely do that. It's your right as a copyright owner, but that's very short-sighted. I just don't think it's going to happen. The societies are there for a reason. Music publishers are there for a reason. One of the values is that there is some kind of power in bargaining when you've got a larger organization bargaining for you. It's very tough if you're a single writer bargaining with a major user of music, especially if you have absolutely no bargaining power, you're liable to give anything away for the exposure, or credit, or whatever else you think might be valuable. I think there are going to be selective situations where something is licensed directly. The problem is, most times when you license directly, you really don't get in my opinion a fair market value. Or you're doing the direct license because someone else won't and you will. I think it's a short-sighted approach, though it's a legitimate approach. If that's your business model and your business plan, then you take the consequences. It does erode the copyright law bit by bit, I think.
Any final words or thoughts that you have that would be appropriate for our readers?
I think my comment is really just that perseverance and networking are so important. Being with the right organization, and being with other writers, and not doing everything yourself are important also. I think it is the hardest thing in the world for a songwriter to succeed being isolated from other writers and organizations that can help that writer. Organizations can make you feel part of the community. Organizations can help give you the bargaining power that you may not have by yourself. You're going to get your connections from there. You're going to get your inspiration many times. It's your friendships. It's going to stretch your writing abilities by meeting other co-writers with ideas which will push your creativity past what you might do by yourself. And keep the faith. There are going to be loads of opportunities out there. There are more and more opportunities everyday, and you've just got to figure out a way to tap into them.
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