Only a little more than 10 years ago, Austin musician Bill Carter and his wife Ruth Ellsworth were two months behind on their rent and duly notified by their landlord that they had one week to vacate their house. But while the Carters prepared for a "couch tour" -- a far more common reality for Austin musicians than gold records -- there came a reprieve by mail. A reprieve to the tune of $20,000. For not only did a check for that amount come that same fateful day, it came compliments of a major company who hoped only to reserve the rights to use the Fabulous Thunderbird's "Why Get Up" in their new ad campaign. The Carters cashed the check, paid the landlord, and found themselves larger digs, all thanks to a song they wrote that the T-Birds recorded. That the company never got around to using the song is incidental, but that it proved to the Carters they could indeed write, sell, and live off their songs was monumental. "Until there's success, you've got to constantly ask yourself if you've fooled yourself into thinking you can write songs," Carter says. "And all of a sudden, things were different."
Today, the Carters draw checks every three months on nearly 80 of their compositions -- a catalogue that includes hot properties like Stevie Ray Vaughan's "Crossfire" and McBride & The Ride's "Can I Count On You?" In the process, they've become self-schooled experts on music publishing, and the worldwide collection and payout of what the music business has affectionately named "mailbox money" -- the monies collected by a songwriter for the rights to record, copy, distribute, or publicly perform the songs they've written. Intellectual property laws protect the rights of songwriters, whose copyrighted creations can yield handsome dividends from their airplay, sales, and performance. Through those three avenues, and the extracurricular exploitation of songs for film, television, and sheet music, every musician with commercially available recorded product should eventually wind up on the receiving end of checks -- with the number of digits therein directly correlating to the success of the song or the album on which it's found.
Locally, not only do consistent sellers like the Butthole Surfers, Jimmie Vaughan, Jerry Jeff Walker, and Eric Johnson wait by their mailboxes for checks, but even the primary songwriters from marginally successful defunct acts like the True Believers, Glass Eye, and Joe Rockhead also still collect publishing payments from airplay and sales. Songwriters like the Carters, Stephen Bruton, Bruce Robison, Stan Penridge, and Pat MacDonald are also utilizing song sales and publishing returns as the end-run around commercial success -- as perhaps the backdoor to the album sales dilemma locally known as the "Austin Curse."
With a talent for writing quality songs and a way of getting them into the hands of performers who can turn them into hits, an increasing number of Austin musicians are finding their songwriting income is the way to finance their own admittedly non-commercial output, or at least alleviate the pressures of meeting record company quotas for the delivery of new product. In fact, not only are Austinites finding publishing income a fine vehicle for putting a roof over their heads, they're also finding "mailbox money" to be a retirement fund or estate enhancer that can last beyond their own lifetime. Just this month, in fact, the estate of B.W. Stevenson is enjoying substantial six-figure payments for Brooks & Dunn's chart-topping treatment of his song, "My Maria."
That publishing is without a doubt the most profitable aspect of the music business would appear to make sense, in that hits drive the music business and behind every hit there's a songwriter. But as Austin musicians have often been reminded, behind every hit there's also a multi-level music industry machine that takes its own piece of the action. As such, the biz's most lucrative game may also be its most complicated. "What I believe and counsel my clients," says Andrew Halbreich, whose Austin company Trace Elements represents the interest of copyright holders, "is the consideration of the copyright as the most important aspect of their work. That's what's going to send their kids to school and prepare for their retirement. Consequently, the copyright has a tangible economic consequence, and when art and commerce collide, it's important to be aware of the details."
With a copyright, composers have the exclusive rights to reproduce, distribute, perform, or create derivative works. By law, copyright owners have the right to collect "mechanical royalties," moneys from the printed, electric, or recorded reproduction of a copyrighted work. Therefore, by act of Congress, record companies must pay composers a fixed rate (statutory) simply for the right to use their composition on commercially sold recordings -- even if the performer and songwriter are the same. Today, that rate is 6.95 cents, but this rate varies internationally and can be reduced within a recording contract, typically to a 75 percent rate for new and mid-level artists.
Mechanicals are the place where songwriters can make money from virtually the first record sold, multiplying the number of pennies rated against the number of records produced and sold. Today, a company like the local indie Watermelon Records is unusual in that they pay full mechanical rates -- 25 percent more than the industry norm. "It only benefits the artists, and indeed takes money out of our pockets," says Watermelon president Heinz Geissler, "but we always considered ourselves a singer-songwriter label and so we feel we should treat the songwriter with some respect." Additionally, if a songwriter has a song recorded by another artist, or is part of a compilation, that song is considered a "cover" and earns its own mechanicals.
Songwriters are also entitled to public-performance royalties, monies from having their songs broadcast or performed in public. Users need to receive permission to play a composition on radio, television, or in a film -- as well as in the live arena -- and composers must register their works with one of three major performance societies: ASCAP (American Society of Authors, Composers and Publishers), BMI (Broadcast Music Incorporated) or SESAC (which stands for SESAC). These societies issue blanket licenses for the performance rights to the songs they handle and allocate those license fees based on monitored play frequency of radio, live, and television. Four times a year, the societies cut checks directly to the composers for the use of their songs.
"So many of the marketing expenses in major-label contracts are recoupable by the artists today, that even if you sell 500,000 records and your record cost $200,000 with a million-dollar marketing budget, you don't even have to do the math to figure out you're still in the hole," says Bud Scoppa, ASCAP's Senior Director of Creative Development. "But as the primary songwriter, there's much less laid against your royalty payments, which allows a moderately successful songwriter to pay the rent. Without it, these days you'd have to be pretty close to platinum to see any money outside of the original advances."
* Administration: The copyright owner allows a third party to administer the copyright catalogue for a percentage of its earnings -- typically 10-15 percent. "The artists own it, but we run it for them," says Gary Velletri of Bug Music, a Los Angeles-based administration company with a large Austin clientele. "They can keep their publishing while we can help them take advantage of their catalogue's opportunities."
* Co-publishing: The third-party publisher typically assumes a negotiated percentage of the copyright value -- known as the "publisher's share" -- and undertakes administration of the catalogue, which they now have a vested interest in seeing turn a profit. Typically, the writer is granted half the income the copyright creates -- considered the "writer's share."
* Songwriter deals: 100 percent of the copyright is assigned to the publisher, who advances the songwriter money and solicits as much use of the song by outside parties as possible.
In Austin, all three deals between artists and publishers are commonplace, although many writers, like the Carters, choose to "self-publish," meaning they retain complete control of their copyrights and administer and collect royalties themselves. So, at the heart of publishing, and eventually at the financial bottom line, is the question of what kind of publishing deal best suits an individual artist.
* Those who write for their own performance songs that may have trouble being translated by other artists (jazz, punk, metal). Because such artists will capitalize primarily on the mechanicals, airplay, and licensing of their songs, some publishing experts advise them to hold on to as much of their catalogue as possible -- perhaps only entering into an administration deal. But because publishing deals offer cash advances to hot properties considered good bets for high sales, many musicians in this class enter into publishing agreements actually gambling they won't sell, settling on the short-term value of the advance money to pay the rent.
* Those who write and perform songs publishers feel may be of interest to others. In publishing, "exploitation" is a positive term, meaning a publisher hopes to exploit a catalogue to other artists as covers, or for film or television soundtracks. These artists are generally considered singer-songwriters or have a large enough back catalogue of proven hits that both their old and new songs will be popular for exploitation.
* Those who write with the hope that others will record their songs. These professional songwriters are generally in co-publishing or songwriter deals, allowing publishers to match songs and artists, or songwriters with compatible artists for collaborations.
*Those with a proven catalogue large enough that they can write, pitch, and field licensing inquiries. These are the songwriters who have established an identity within the music industry so much that they can self-publish, retaining their rights and getting straight to the musicians, producers, or label representatives looking for songs just as easily as a publisher.
The Carters fall into that last class -- the self-published. Although Bill Carter now admits that when the landlord was knocking down his door he'd have gladly sold his publishing if somebody had been interested, he says that by hanging onto his songs he's seen far more catalogue action and financial returns than he'd expect through a publishing deal. "I believe I can do a better job," Carter says. "I'd just as soon do it myself just as I've also never found calling the clubs and booking my own gigs to save 20 percent that difficult. It's not easy getting to the point that you can get a song to just about anybody, but once you're there, you're taking the full 100 percent, not the 5 percent that gets left over once you've paid a whole publishing team."
Although Carter has the catalogue and contacts, predictably, most publishers and label executives strongly advise against self-publishing for younger artists. "Many artists don't realize that there are a lot of expenses built into publishing," says Antone's Records CEO Harry Friedman, who deals with the label's publishing interests while also helping to administer the estate of B.W. Stevenson. "Artists in a town like Austin tend to be real anal about keeping their publishing, but how do they spend the hundreds of hours necessary to properly pitch, collect, and administer their own publishing? Because once you're really into it, it becomes a full-time job just to sort it out."
Through Trace Elements, Andrew Halbreich is one of several prominent Austinites who's made publishing administration a full-time job. Halbreich works on the collection, licensing, and review of copyrights for clients like Watermelon Records, Antone's, Wayne Hancock, and Steve James, as well as finding compatible and affordable music for local films, videos, and software enterprises. "To chase down third-party licenses looks so easy on the surface," he says, "but it's truly difficult and time-consuming. It may not be impossible to get something like Roky Erickson's Japanese earnings, but some folks would wind up spinning their wheels trying."
And although Halbreich admits that Austin's talent pool -- and their relative lack of publishing savvy -- may be his blessing (more business) and curse (tougher projects), he also maintains that having Hamstein Publishing based in Austin is as great an asset for local publishing as having Willie Nelson in Round Rock is to the local country scene. For its part, Hamstein, the publishing arm of ZZ Top manager Bill Hamm's Lone Wolf Management, has landed its songwriters 75 Top 10 country hits in the past five years alone.
In the rock arena, Hamstein's stable of songwriters have also placed album cuts for acts like Eric Clapton, B.B. King, Robert Plant, Rod Stewart, and Meat Loaf. Generally though, Hamstein acquires 100 percent of a songwriter's publishing half, retains the songwriter on an exclusive contract with advances, and packages their works in demo form to be shopped to artists, managers, producers, and record labels. "The motto is `They write, we fight 'em', and we're taking a risk up front," says Richard Perna, Hamstein's Vice President of Creative Affairs. "The only way we can earn our money back is by getting these songs recorded. Then, once we place a cut with an artist, it's the luck of the draw as to whether they're singles or album cuts on platinum records. That part we have to leave up to the copyright gods."
But Perna, who admits that his company keeps a low profile locally, says he believes Austin musicians all too often offer their whole publishing situation up to the copyright gods. "A lot of people in the Austin community want to be their own publisher," explains Perna. "Fine, they can go out and try to get the songs cut. It's as simple as that. But it takes energy, income, supervision, and knowledge to administer and perfect rights, properly file licenses, and guarantee that royalty statements are coming in and going out on time. Even most of the people within the publishing industry themselves are ill-equipped. They've got truncated views because they work in departments and know only about royalties, licensing, synchronization rights, or print aspects. There's some 17 other ancillary rights people can make a career of managing, and we've got 20 some people here who do those jobs. The problems come when you try to do all this yourself. You may not know you're screwing up, and may even be happy, but you're constantly losing money by not letting the people who have made careers of finding that money take care of things."
Although Hamstein works on the controversial 100 percent rate -- with the option to re-negotiate after a string of hits -- some publishing experts are as wary of even co-publishing deals for young songwriters as they are of the artist self-publishing and getting in over their heads. Why? Experts say the value of a catalogue can increase dramatically with just one successful record, opening doors for full payment on that record and a higher publishing advance at the point they do wish to sell. "People who give up all their publishing early on are misinformed and don't have their business together," says ASCAP's Scoppa. "Getting a viable publishing deal is going to be absolutely critical, but the more a band has label interest, the more interest the publishers are going to have in offering a larger advance. It only makes sense to hold off as long as you possibly can so the ante goes up."
Teresa Ensenat, an MCA A&R representative, says the most distressing publishing trend may be the quick layout of huge advances for new artists -- perhaps without even the intent to exploit the material itself. "It's become about finding the next Nirvana and the size of the deals are staggering," says Ensenat. "But it's primarily about cashing in by riding the mechanicals if the record cashes in -- not by exploiting the catalogue over the long haul."
And not only isn't the catalogue being exploited, says Bug's Velletri, but the advance may not be as much as a young artist might think. "I tell artists that if they think they're going to have a very successful career, it pays to hang on," he says. "But the illusion is that what looks like big money that can keep everybody in the band alive forever, is, in fact, money they'll use as tour support for a good tour or two. But if the record still doesn't take off? Then they've spent the future equity of their copyrights touring, and come home to no income base. On even a modestly successful record, you can pay rent between records on the mechanicals alone. But not everyone can afford to think so long-term and keep committed to believing they're going to be successful. It takes patience, or getting burned to realize it."
Although many of the major publishing houses, such as Warner/Chappell and EMI, are affiliated with major labels and attempt whenever possible to cross-collateralize their recording and publishing deals, some songwriters charge that many smaller labels are also beginning to ask for a piece of the publishing -- without the risky investment of the huge sums commonplace in major-label deals. So now, even before the major labels come around and potentially drive up the publishing advances, young artists are being presented with opportunities to give away their publishing, pre-buzz. "Everyone now knows that publishing is where the money is," says Bruce Robison, who's made numerous trips to Nashville with Austinites Monte Warden and Mas Palermo primarily to pitch songs to country artists and labels. "So now the labels want their piece of the action and are eager to put the screws to you and try to get your publishing, in exchange for helping artists make records. I think it's extortion."
But to local indie label owner Jeff Cole, publishing deals are not always extortion -- rather just the price of business. Cole, whose Doolittle label has recorded both Hamell On Trial and Prescott Curlywolf, says publishing is one of the only avenues a small label has to recoup money. Doolittle artists generally agree to a co-publishing agreement only on songs commercially released, presumably protecting Cole if a band wants to make a jump to a major label. Additionally, Cole sees no publishing on songs written and not recorded, or songs with co-writers. And even in the event of a switch to a major label, Cole's artist would have to use the Doolittle release or re-record the record's songs for Cole to see any money. "This is not the way to get rich, nor is it the way to build a catalogue," Cole says. "It's just that we spend more than the average indie, so we co-publish on the songs we've released so that we don't wind up making an expensive demo. If we're going to spend $50,000 on a record that doesn't work commercially, but if you've gotten major-label attention from it, then we've made a $50,000 demo for no return. This way, if they're able to parlay it, I'll get the piece I need to continue."
What Teresa Ensenat says she has to get is a quality song that matches her artist -- in this case Austin's Kelly Willis. Ensenat, Willis' A&R rep at A&M, says she's a hands-on song-buyer, pulling songs off tapes, listening to Willis' suggestions, and calling writers directly either to set up songwriting or co-writing opportunities. "You get a lot of briefcase writers who have great R&B and some country, but we're looking for something more interesting," says Ensenat, "which means a lot of tapes going back and forth and a lot of phone calls to the artists you'd like to see writing."
Willis, who's actually doing more writing herself these days, says she recognizes the irony of being from Austin and being on the buyer's side of the songwriting equation, but is more interested "that a song's well-written rather than it's a song I wrote myself." As such, she says the trick has been finding songs she feels she could have written. "Because, especially in the case of my first two records where I didn't make any money off the mechanicals because they generally weren't my songs, I've got to sell records to make any money. But the other side is that if I'm writing all the songs just for the sake of the mechanicals, and the songs aren't as good, how I am supposed to sell records?"
Nobody's going to argue with Willis that songs sell records, but what publishing experts are quick to point out is that songs can earn money both before and long after the records they appear on have had their shot at commercial success -- hence the "mailbox money" phenomenon. And it's not just from the mechanicals and airplay of a consistently selling catalogue either. For instance, when the Ugly Americans' "Big Wide World," a track from their upcoming Stereophonic Spanish Fly album, was featured on an April episode of Melrose Place, it didn't appear that it would do the band or the record label much good in the sales department, because the record is set for July release and the likelihood of anything more than a handful of viewers remembering the song an hour later was highly unlikely.
But for Bug's Gary Velletri, who set up the deal, and the Ugly Americans' manager Mark Bleisner, the Melrose deal has already had larger implications than a quick sales bump. "Song licensing is [a] wonderful exposure tool, but is in itself also very lucrative," says Bleisner. "This money has already been applied at paying back the publishing advance, so thanks to Melrose, before the record's even in stores, we're that much closer to getting out of the hole." But Velletri, who admits he's also happy to see a return on his investment, maintains there's also a synergistic effect to early licensing that can work in the Ugly Americans' favor for longer-term payoffs. "This is an optimistic thing to happen to a band who's been through a set of label problems and has become a fragile situation," says Velletri. "And through Melrose, we've reinforced to their new label that this is a hot band that's marketable. And to have it happen at a time when the label's beginning to create their own marketing plans couldn't be any better."
Especially with the recent phenomena of soundtracks being more successful than the films themselves, publishers are also looking to film licensing for large payouts that can continue to pay out over long periods -- in the theaters, on the soundtracks, and for home video releases. In fact, Bill Carter says he recently approved a lucrative licensing deal for "Crossfire" and its use in a 15-second television trailer for Bulletproof, a new Adam Sandler movie. Add in the song's recent appearance on Stevie Ray Vaughan's Greatest Hits album and its consistently hot-selling sheet music, and it's easy to see how one song can draw three or four respectable checks every three months.
But what about the rise of the Internet and multimedia applications that could potentially push a song's availability into an unknown quantity -- where both the accounting and licensing procedures could be drastically different than today's standards? Austin's George Sanger, aka "The Fat Man," creates soundtracks for multi-media games and says he loves telling people that he expects the next wave of publishing to be "exactly the same and completely different." Sanger, whose work on ultra-popular computer games like Wing Commander 1 and 2, 7th Guest, and 11th Hour may make him Austin's best-selling musician in any format, says he's been working with BMI at establishing guidelines for multimedia use -- with BMI using Sanger's Team Fat as the center of its interactive strategy.
"In the near future, what we do is going to be seen as conventional music, because there won't be such a thing as non-interactive product," says Sanger, who began by selling music as a work-for-hire, eventually asked manufacturers for credits, and now gets royalties based on the sales of the products while maintaining his own copyrights. "But just as Team Fat has positioned itself as the biggest name in multi-media music product, we [are] going to start positioning ourselves as a music house above everything else. Already, we're more careful about our broadcast rights, and rapidly seeing the impending value of packaging the music without the games -- as in Team Fat's Greatest Hits."
And until there's a reliable accounting method for the Internet, Sanger says he'll concentrate on the multimedia publishing and the use of the Net for promotional purposes that can create more name recognition, and more work. "Accounting is going to be the primary stumbling block, because we're in an age where `information wants to be free.' But I can still use the Net for networking and the transfer of my name into hard goods such as endorsements, T-shirts, or compact discs. So until we figure out how to account for it, it's a lot like `The Lifestyles of the Living Poor and Famous.' Now, the trick is turning the fame into mailbox money and we see the multimedia publishing as that avenue."
"Eventually, I had to realize I was a songwriter first and a performer second," Carter says. "I still play because I love to do it and wind up writing so many songs that I can constantly play new songs and enjoy that. But the luxury is that there's other musicians doing my songs and enduring the touring that goes along with it. I stay here, writing and going to the mailbox. Then, I can play around town as often as I like for the handful of people that appreciate me as a songwriter and guitar player."
And while Carter claims the writing allows him to treat his own performing career more casually, he also contends his self-publishing route has given him immeasurable freedom in his songwriting affairs as well. "I don't have a quota handed down from an office," he says. "I'm free to spend six months writing and then not write a word for another three months. But working for myself inspires me to work, whereas the Nashville in-house songwriter goes to the office at six in the morning each weekday to write, because it's his job. And then you wind up with songs that sound just like that."
Timbuk3's Pat MacDonald says his band's extensive catalogue has enabled them not only to tour and record less frequently, but to concentrate on writing songs for others -- taking the publishing route one step further than Timbuk3's mechanicals. "We're at the point now where it's not even `Future's So Bright' that constitutes the cornerstone of our publishing," explains MacDonald. "It's a pretty active license and cover request, but it's the accumulation of a catalogue of six or seven CDs that really adds up and allows us to make a living. It has bought us freedom in the sense that we're no longer tied to a timetable of having to put out records on deadline or tour just to pay the rent."
And although MacDonald says he's yet to see much money from his songs-for-hire writing, his lyric to "The History of Man" may change that. The song has just been recorded by Aerosmith, potentially for their forthcoming release, which as a merely platinum "album cut" would bring in a significant payout. "They record more than they release, so we'll just have to wait and see," he says.
Stan "Doc" Penridge has been waiting by his Austin mailbox for the past six years, taking in substantial royalties for his Seventies work with KISS' Peter Criss, a relationship that's yielded 22 KISS and Criss solo album cuts, including "Don't You Let Me Down" and the 100th most recorded song of all time, "Beth." Not only is the song popular cover material, it's also been included on 12 KISS records alone --including the new MTV Unplugged record the band's using to launch their make-up comeback. "Once you hit Muzak, you know you've made it," quips Penridge, who also recently licensed the song for use on the Beautiful Girls soundtrack.
Confusion over the KISS publishing deals almost cost Penridge his publishing, until KISS sold its catalogue to Polygram back in 1989 and returned his copyrights to his own Rocksteady Publishing. "The years I spent on the road writing and producing for KISS and the years it took me to untangle my publishing mess were the worst years of my life," says Penridge. "For a while I was embarrassed. People would hear I wrote and produced for KISS and take me less seriously. I needed to start over because when it was happening all I could think of was [how] horrible it all seemed. But it's a great problem to have. The `problem' has allowed me now to work on animation, painting and CD-ROMs, things I could have never afforded without KISS and the 2 or 3 million pieces of catalogue they sell each year. Now, I can do what I want to do; "Beth" is going to sell forever."
And will Penridge go to San Antonio next month for the big KISS reunion show? "Definitely not, I saw them more than I wanted to in their heyday," he says. "I could never stand heavy metal anyway." Therein lies the beauty of publishing: Peter Criss will spend his summer town-to-town, stepping out in front of the drum riser for the latest performance of "Beth," while Penridge will spend an Austin summer stepping out in front of his house, headed straight for the mailbox. n