Since the music and entertainment businesses are extremely
complex, it is in many cases extremely wise for a writer to
find a full-service major music publisher to handle the everyday
administrative duties involved in protecting and promoting
his or her songs as well as licensing, collecting, auditing,
and processing the income those songs generate. One of the
main differences between the co-publishing agreement and the
administration agreement is that the songwriter (through a
publishing company that he or she owns) retains full copyright
ownership of all songs.
Fees Charged for Administrative Services
Depending on the bargaining power of the writer and the
services being offered by the administrating publisher, the
fees charged are between 10% and 25% of all income collected.
For example, if the writer is looking only for the proper
registration of songs with performance and mechanical rights
organizations, the ½ling of copyright applications,
and the dissemination of necessary information to ensure the
proper collection of royalties, he or she should negotiate
for lower fees. And since the administrating publisher usually
pays royalties on a semiannual basis, if the catalog is generating
substantial earnings, the interest on the monies being held
can certainly cover a large number of costs and ensure a profit.
But if the services needed include not only the above but
also promotion, the recording of new demo records and tapes,
the drafting of songwriter agreements, the negotiation of
licenses, the securing of new usages, issuance of separate
royalty statements to songwriters, and counseling as to worldwide
trends or developments in the music and entertainment industries,
higher fees can certainly be justified.
As there is no transfer of copyright ownership in an administration
agreement, the duration is always for a specified number of
years, normally with all rights (other than collection of
monies earned during the contract period) reverting to the
writer's company at the end of the term. In most cases, the
duration of administration arrangements is between 3 and 7
years, but depending on the needs of the parties and whether
advances have been recouped, the term can be shorter or longer.
There are many variations in the territory covered by an
agreement, since this area, once again, is totally negotiable.
For example, most agreements cover the United States or the
United States and Canada, but an agreement can entail the
world or selected countries throughout the world.
Cover Records and New Uses:
If a major reason for entering an administration agreement
is the use of the established publisher's creative and promotion
staff, many contracts provide incentives if a new recording
or motion picture/television use is secured. For example,
the writer may agree to increase the fee retained by the administrating
publisher from 20% to between 25% and 40% if the major publisher's
staff is responsible for convincing a recording artist to
release a new version of a song. If that new version reaches
the charts as the "A" side of a single, the percentage may
be further increased, and if it achieves the Top 10 or Top
5, yet a further increase might be provided.
As with the co-publishing agreement, advances are many times
given to songwriters and their publishing companies, all of
which are recoupable from their share of the income generated
during the term of the agreement.
Choosing the Right Administrator:
Since an administration agreement, by its very nature, is
usually not a commitment for an extended period of time, many
writers do not undertake the necessary research to find out
which publisher is best suited for their needs. After all,
many feel that if they make a mistake, it can always be rectified
by going to an experienced publisher when the current agreement
ends. But a great deal of damage can be done in a very short
period of time and a substantial amount of money lost by being
with the wrong administrator--whether it be a publisher, lawyer,
manager, or other representative.
A writer or his or her representative must be aware that
2 or 3 years can, in the wrong hands, create a lifetime of
problems and that any decision should be made only after extensive
research on the reputation, personnel, and capabilities of
the company being chosen to act as administrator, regardless
of the amount of up-front advance money that may be offered
to secure the deal.