The Truth About Legacy Catalogues and How to Avoid the Myths That Harm Them
By: Erin M. Jacobson, Esq.
This post was originally published on Billboard.com.
Now is the time when many legacy songwriters and their heirs have recaptured or are in the process of recapturing rights to their catalogues. However, the music business is not the same as it was 56 or 35 years ago when these songs were written. Many legacy songwriters and their heirs are misguided on how to proceed with these newly reacquired rights because the original advice they received does not reflect the nature of today’s music marketplace.
In this article, I’ve compiled seven myths that frequently circulate around and potentially harm legacy songwriters and their heirs, and have offered a new perspective based on my experience with making deals in this area and managing legacy catalogues.
Myth 1: All songs that were once famous still earn a lot of money.
Wrong! While some evergreen compositions are fortunate to continue earning substantial incomes, this is more the exception than the rule. Aside from a catalogue like that of The Beatles, there are usually only between one and five songs in a catalogue that still earn money, and in many cases those songs earn only a fraction of the income earned in their heyday. I can quote many examples of songs that hit the top 20 on the Billboard charts, some of which even No. 1, when released, but now earn less than $5,000 per year and are largely forgotten by anyone not around at the time of the song’s release.
Myth 2: Major publishers are the only companies with the power to exploit a catalogue.
This was true in the past, but it no longer the case. Unfortunately, many legacy songwriters and their heirs remain stuck on 30-year old advice from the family’s now-retired music lawyer. In today’s marketplace, major publishers have catalogues so large that they often cannot give personal attention to each individual composition within those catalogues. Because they also have major hits in demand, they tend to wait for licensing and other opportunities to come to them. The problem for older catalogues is twofold: (1) only a small number of these songs are still in the forefront of the public’s mind, and therefore the majority of songs from older catalogues are not requested, and (2) many companies are not willing to invest resources in pitching low-earning compositions. Therefore, these musical gems are neglected and remain lost in a company’s catalogue earning far less than their potential.
On the other hand, independent publishers with smaller catalogs are able to give each composition more personal attention and seek out the right opportunities for it. While an independent company might not be able to give as large of an advance, sale price, or signing bonus as a major, an indie will actively work harder to make its compositions earn more money over the long term because its livelihood depends on it.
Myth 3: A company’s market share will increase the success of a catalogue.
Market share reports look at the percentage of the compositions a company owns in the marketplace, as well as percentage of the top charting hits, and percentage of revenue from that company in relation to total income earned from all compositions in the marketplace. However, market share can be misleading because, top income and charting hits can come from a small percentage of all songs in the marketplace as well as a small percentage of a company’s catalogue. A company’s market share does not guarantee income production for a legacy catalogue because, as explained while debunking Myths 1 and 2, many of these songs are lost in a large catalogue and those forgotten songs will not be actively exploited. Therefore, it is often the case that only a catalogue that already earns substantial income without effort will thrive at a company focused on market share. Further, any bulk funds allocated to major publishers based on market share that the company splits with its songwriters will be allocated to the top earning catalogues, again neglecting under-performing legacy compositions.
Myth 4: A larger company is better at collecting income.
Again, this is not necessarily the case because a larger amount of data to process means more chance for error. I’ve seen countless catalogues at major companies not earning what they should because of mistakes in information that have never been fixed. I’ve seen major publishers not correct information for low-earning compositions because it’s not important to them. I’ve seen companies pay writers and their heirs the wrong royalty rates because no one bothered to look at the original contract rates and the writer’s heirs had to settle for much less than what they should have earned in order to avoid expensive litigation. I’ve also seen companies not take the steps to collect the income — even for high earning songs — because for whatever reason their staff never got around to it. All of these actions hurt the earnings of the compositions and hurt the writers and heirs that benefit from — and sometimes rely on — that income.
Myth 5: It’s too hard to move to an independent publisher from a major.
As explained above, an independent publisher will typically work harder than a large company to make its catalogues earn money. Independent publishers want notable cuts, work the sync market and typically are more diligent about properly collecting income — again, because each dollar matters. The challenge really lies with finding the right independent partner for a catalogue — someone who knows the music, understands the legacy, and has the right connections to exploit the catalogue properly. The right partners are out there, and in this case, it is actually more important to have the right advisors to assist the catalogue owners with making the best decisions for the catalogue.
Myth 6: Writers and heirs can’t self-publish.
Writers and heirs can self-publish if they have the right team in place. Publishing a catalogue with no experience doing so and no connections in the business is not a recipe for success. However, writers and their heirs can maintain ownership of the rights and have the right advisors in place to manage and promote the catalogue. I regularly manage and/or administer catalogues for my clients who have chosen to retain ownership and self-publish.
Myth 7: Heirs will know what to do with a catalogue.
Heirs will not automatically know what to do with the catalogue they have inherited just because their parent/grandparent/aunt/uncle/child was a songwriter. In many cases, these heirs were not exposed to the business side of their relatives’ career and in most cases have no experience with music publishing or managing compositions. Typically, heirs that inherit a catalogue are overwhelmed by the vast amounts of information and don’t know where to start in getting a handle on the catalogue. The heirs that are more adept at navigating the music industry have typically learned over many years and from astute advisors.
Legacy songwriters still living can make arrangements for their catalogues now and clean up the catalogue’s governing information and paperwork so that heirs will inherit an organized packet of information. The right advisors in place can guide legacy songwriters in managing the issues surrounding the catalogue and setting it up to benefit the heirs for the remainder of the copyright term. Many of my living legacy writers will designate me to continue managing the catalogue after their death and I regularly work with heirs to assist them with navigating how to manage the issues regarding their catalogue and maintain and grow what they’ve inherited.
Erin M. Jacobson represents and protects independent, established and legacy songwriters and artists (including their heirs and estates), legacy catalogues, independent music publishers, Grammy and Emmy Award winners, and other music professionals at her law practice based in Beverly Hills, California.
Disclaimer: This article does not constitute legal advice.