How to Start a Music Publishing Company

Music publishing companies play a crucial role in the music
industry. They help songwriters, composers, and musicians protect their rights
and monetize their creative work. Music publishing companies also serve as
intermediaries between music creators and music users, such as record labels,
streaming platforms, and advertisers. Starting a music publishing company can
be a challenging but rewarding venture. In this article, we will outline the
key steps you need to take to start a music publishing company.
Step 1: Understand the Music Publishing Industry
Before you start a music publishing company, it is important
to have a good understanding of the music publishing industry. You need to know
how music publishing works, the different types of royalties, and the legal
aspects of music copyright. You can learn about the music publishing industry
by reading books, attending music industry conferences, and talking to music
industry professionals.
The two main sources of income for music publishing
companies are mechanical royalties and performance royalties. Mechanical
royalties are earned when a song is reproduced or distributed, such as when a
physical copy of a song is sold or when a song is streamed online. Performance
royalties are earned when a song is performed publicly, such as when a song is
played on the radio or in a public venue. As a music publisher, you will need
to have a good understanding of how these royalties are calculated and
collected.
It is also important to be familiar with the legal aspects
of music copyright. Copyright law protects the rights of music creators and
owners. As a music publisher, you will need to know how to obtain and manage
music copyrights, negotiate licensing agreements, and protect your intellectual
property rights.
Step 2: Choose a Business Structure
Once you have a good understanding of the music publishing
industry, the next step is to choose a business structure for your music
publishing company. There are several options available, including sole
proprietorship, partnership, limited liability company (LLC), and corporation.
Each structure has its own advantages and disadvantages, so it is important to
consult with a lawyer or accountant before making a decision.
Sole proprietorship is the simplest and most common business
structure. It is easy to set up and manage, and the owner has complete control
over the company. However, the owner is also personally liable for the
company's debts and legal issues.
Partnership is a business structure where two or more people
share ownership and control of the company. It is a good option for music
publishing companies that have multiple owners or investors. However, each
partner is also personally liable for the company's debts and legal issues.
LLC is a hybrid business structure that combines the
advantages of a corporation and a partnership. It provides limited liability
protection to its owners, while also allowing them to maintain control over the
company. However, it is more expensive and complex to set up and manage than a
sole proprietorship or partnership.
Corporation is a separate legal entity from its owners. It
provides the most protection to its owners from personal liability, but also
requires more paperwork and formalities to set up and maintain. It is a good
option for music publishing companies that plan to raise capital or go public
in the future.
Step 3: Register Your Music Publishing Company
Once you have chosen a business structure, you will need to
register your music publishing company with the appropriate government
agencies. This may include registering your company name, obtaining a tax
identification number, and applying for any necessary licenses or permits.
You will also need to set up a business bank account to
manage your company's finances. This will allow you to separate your personal
finances from your business finances, which is important for tax and legal
purposes.
Step 4: Build a Team
Building a strong team is essential for the success of your
music publishing company. You will need to hire employees or contractors who
can help you manage your company's operations, such as copyright
administration, licensing, and royalties collection. You may
also need to hire marketing and promotion professionals to help you promote
your catalog of music and attract new clients.
Some key roles that you may need to fill in your music
publishing company include:
- Copyright administrator: responsible for managing your
company's copyrights, registering new works with the appropriate agencies, and
tracking usage and royalties.
- Licensing manager: responsible for negotiating and
managing licensing agreements with music users, such as record labels,
streaming services, and advertisers.
- Royalties accountant: responsible for tracking and
collecting your company's royalties, and ensuring that they are distributed to
the appropriate rights holders.
- Marketing and promotion professionals: responsible for
promoting your catalog of music to potential clients, and helping to build your
company's brand and reputation.
When building your team, it is important to look for
professionals with relevant experience and expertise in the music industry. You
may also want to consider partnering with industry associations and
organizations, such as ASCAP, BMI, and SESAC, which can provide valuable
resources and networking opportunities.
Step 5: Acquire and Manage Music Rights
One of the most important functions of a music publishing
company is to acquire and manage music rights. This involves working with
songwriters, composers, and musicians to acquire the rights to their works, and
then managing those rights to ensure that they are properly registered,
licensed, and monetized.
To acquire music rights, you will need to enter into
agreements with music creators, such as songwriter agreements, publishing
agreements, and administration agreements. These agreements will outline the
terms and conditions of your relationship with the music creators, including
the rights and royalties that you will receive for representing their works.
Once you have acquired music rights, you will need to manage
those rights effectively to ensure that you are maximizing your revenue and
protecting the interests of your music creators. This may involve:
- Registering your works with the appropriate agencies, such
as ASCAP, BMI, or SESAC, to ensure that you are properly credited and
compensated for their use.
- Licensing your works to music users, such as record
labels, streaming services, and advertisers, and negotiating the terms and
conditions of those licenses.
- Tracking and collecting royalties from music users, and
distributing those royalties to the appropriate rights holders.
- Enforcing your intellectual property rights, such as by
pursuing legal action against infringers or negotiating settlements.
Step 6: Build Your Catalog of Music
To be successful as a music publishing company, you will
need to build a strong catalog of music that can generate revenue for your
company and your music creators. This involves working with songwriters,
composers, and musicians to create and acquire new works, as well as promoting
and licensing your existing works to music users.
To build your catalog of music, you may need to invest in
marketing and promotion activities, such as attending music industry events,
advertising in industry publications, and building relationships with music
users. You may also want to consider partnering with music creators and other
music industry professionals to co-write and collaborate on new works.
As you build your catalog of music, it is important to keep
track of your revenue and expenses, and to reinvest in your company's growth
and development. This may involve hiring new employees or contractors,
investing in new technologies or software platforms, or expanding your
marketing and promotion efforts.
Conclusion
Starting a music publishing company can be a challenging but
rewarding venture. By following the steps outlined in this article, you can
build a successful music publishing company that can help songwriters,
composers, and musicians protect their rights and monetize their creative work.
Remember to stay informed about the music publishing industry, choose the right
business structure, build a strong team, acquire and manage music rights
effectively, and build a strong catalog of music.