1.) Introduction
The publishing agreement is concluded between the author and the publisher. In it, the author transfers to the publisher the exploitation rights exclusively to his or her compositional works (and not to the sound recordings, these so-called “ancillary copyrights” are usually transferred to a label). The publisher thus acts as the author’s “rights administrator”. Publishing contracts are very standardised and more or less always contain the same provisions. Therefore, the possibilities for shaping them are limited from the outset. However, this is also due to the fact that, at least in Germany, the publisher “jointly contributes” the author’s rights to GEMA and thus has the GEMA rights contract as its objective in the first instance. If the author is already a GEMA member when the contract is concluded, strictly speaking the rights are not transferred to the publisher, since he has already granted them to GEMA via the Deed of Assignment (= rights to future works).
In other words, all the rights that the author transfers to GEMA are found in the model publishing agreement. This is because the publisher can only participate in all GEMA income of the author if the corresponding rights have been granted to him. In addition, the right to edit and the right to advertise are transferred to the publisher. There are a number of good templates, including the one of the German Music Publishers Association (DMV). In case of doubt, these should be used.
2.) Types of publishing
There are three types of publishing: co-publishing, sub-publishing and edition.
a) Co-publishing
In the case of a co-publishing agreement, two independent publishers who are economically
independent of each other decide to work together. This may be necessary, for example, if two authors who are exclusively bound to different publishing houses create a joint work. In the co-publishing agreement, it is then agreed which tasks the respective publishing house will carry out, e.g. registration of the work, sub-publishing, printing of music and allocation of film rights.
b) Sub-publishing
As a rule, the author transfers the worldwide exploitation rights to the publisher. It may therefore be necessary for a foreign (sub-)publisher to exercise the author’s/publisher’s rights abroad. In this case, a sub-publishing agreement is concluded. The main task of the sub-publisher is then to register the author’s works with the foreign collecting society and to control the respective settlements. In addition, the sub-publisher may perform other typical tasks of a publishing house.
c) Edition
The edition contract regulates the cooperation between a publisher and an “other music creator”. This can be a manager, producer, booker or even a lawyer. Through their work, they have contacts with artists/authors who can put the music creators in touch with a publisher. The publishing contract thus stipulates that the so-called “editor” arranges for authors to be placed with the publisher. The actual publishing contract is then concluded between the author and the publisher. For the mediation, the editor receives a share, which is usually half of the publisher’s income.
From a purely “technical” point of view, the edition is nothing more than a sub-account of a publisher registered with GEMA in the name of the edition. The GEMA revenues of the authors, which the publisher has contributed to the publishing house, are settled on this account. After termination of the edition contract, there are various possibilities as to how to proceed with the works. One possibility is that all works remain with the publisher and are invoiced to the publisher as before. Another possibility is that 100% of the works are transferred to the publisher, i.e. the publisher is no longer involved. Alternatively, the publisher and the editor can split the works. The first edition is free of charge for the publisher, but the second one
The first and third editions cost 51.13 euros each. From the fourth edition onwards, the publisher shall pay an annual fee of 102.26 euros.
3.) Contracts between author and publisher
The publisher may conclude an exclusive author agreement or an individual title agreement with the author.
a) Exclusive author agreement
In the case of an exclusive author agreement, the author undertakes to transfer the exploitation rights to his or her works to the publisher exclusively for a certain period of time (usually two years). This can apply to existing works, but also to future works and those yet to be created. Usually, a minimum number of works is stipulated that the author must create per contract period. During the contract period, the author is exclusively bound to the publisher, i.e. he cannot grant exploitation rights to any other publisher. Here too, revenue is distributed according to the GEMA distribution plan.
b) Single-title contract
In the case of the single-title contract, the individual titles which are transferred to the publisher are specified. In this case, the author is not exclusively bound to the publisher, but can freely transfer the rights to other works to third parties. Sometimes the single-title contract is very extensive and also regulates a transfer of exploitation rights, sometimes it is exhausted in merely listing the works transferred (as is usually the case when supplementing an exclusive author contract). Here, too, the revenue is distributed according to the GEMA distribution plan.
4.) Exploitation rights
The main task of a music publisher used to be the printing of sheet music. That is why the “right of graphic reproduction and distribution of the work (publishing right)” is found in the first place in the publishing contract, so one should not be surprised. Nowadays, this form of exploitation has a rather subordinate character and only becomes relevant when a composition is already successful anyway. Other exploitation rights which the author grants to the publisher include:
- mechanical reproduction rights
- performance and broadcasting rights
- Right of loudspeaker reproduction
- Editing rights
- Film production rights
- Advertising rights
- Multimedia, database and telecommunications rights
- Other rights, e.g. right to exploit as ring tones.
However, such a comprehensive transfer of rights is not compulsory, not even because of the joint contribution to GEMA. The author can therefore negotiate, if necessary, which rights he wishes to grant to the publisher or GEMA and which not. Experience has shown, however, that this is rarely met with approval and the benefits of this should also be carefully considered.
Some special rights in detail:
a) Editing right:
This allows changes to be made to the composition, such as textual or musical changes. But also the connection with other works falls under this.
b) Film production right:
This is the right to combine the composition with a film work to form a unit.
c) Publicity right:
This is the right to combine the composition with advertising to form a unit. This may be radio or television advertising.
In the case of editing rights, film production rights and advertising rights, it is customary that the author must give his or her prior written consent to the exploitation. This is because these types of exploitation encroach on the author’s moral rights, which requires special justification. Often a so-called “fictitious consent” is agreed. According to this, the author’s consent is deemed to have been given if he does not respond to an enquiry from the publisher within 5 working days. This period can be extended contractually under certain circumstances.
As a rule, such a provision is also in the interests of the author: on the one hand, the author retains the right to refuse a specific exploitation. On the other hand, the publisher has planning security, as he can expect an answer from the author within this period. If the author is on holiday during the enquiry, an obligation to contact the author by telephone can also be agreed for these cases (although this should actually be a matter of course in a good working atmosphere).
5.) Work of the publishing house
In contrast to record companies, the work of a publishing house is not so clearly defined. The
basic task of a publisher is to find partners who will exploit the rights of the author. This can include: Searching for performers, record companies, advertising companies, film producers, producers of PC games, etc. However, the publisher also registers the author’s works with GEMA and receives a corresponding share of the author’s GEMA distributions.
To avoid misunderstandings, it should be clarified at the beginning of the cooperation what the publisher can and cannot do. This will avoid false expectations, which in practice often lead to conflicts between authors and publishers. After all, quite a few authors mistakenly assume that their work will soon be used in a well-known film once they have signed the publishing contract. Some publishers, on the other hand, limit themselves to forwarding the GEMA settlements, which is clearly too little. It would be ideal if the mutual expectations were recorded in writing, e.g. by e-mail.
6.) Involvement of the publisher
The publisher’s participation is based on the one hand on the GEMA distribution plan. According to this, the income for mechanical reproduction is divided 60% for the author and 40% for the publisher. The distribution of the broadcasting rights is 8/12 for the author/editor and 4/12 for the publisher. For the film and advertising sector, publishing contracts usually provide for a 50:50 split.
Some publishing contracts also include a so-called “refunding”. This means that the author receives a higher share of the royalties after a certain amount of income, in deviation from the GEMA distribution plan. The publisher therefore does nothing other than return part of his revenue to the author.
Example:
The GEMA income of the author amounts to € 100,000. Based on the conventional 60:40 distribution, the author would now receive € 60,000 and the publisher € 40,000. However, the publishing agreement stipulates that from a sum of € 50,000, the GEMA proceeds exceeding this amount are divided in the ratio 70:30 in favour of the author.
The author therefore now receives
60% of € 50,000: 30.000,- €
70% of 50.000,- €: 35.000,- €
Total: 65.000,- €
As a result of the refund, the author thus receives € 5,000 more than with the usual 60:40 distribution.
7.) Advance payment
Larger publishers often pay authors an advance. In principle, this is nothing more than an interest-free loan. This is because the advance is usually agreed to be “chargeable but not repayable”. If, therefore, a GEMA distribution is made after the publishing agreement has been concluded and the advance has been paid out, this is first offset against the advance (see point 8 “Assignment”). The author usually only receives money again when the advance amount has been paid back to the publisher in full through his or her GEMA proceeds.
Sometimes the advance is granted neither to be offset nor to be repaid. In reality, however, it is not an advance but a premium. This is sometimes also granted for a specific purpose, e.g. as tour support. In the case of a larger tour, the publisher can possibly expect higher GEMA distributions, so that a premium is worthwhile again on the bottom line.
8.) Cession
An assignment is the transfer of GEMA income from the author to the publisher. This is usually agreed up to the amount of the advance paid by the publisher. After the cession, all GEMA revenues are thus not passed on to the author but to the publisher. Many publishers also pay the advance only when the declaration of assignment is accepted by GEMA as “first priority”. In this way, it can be avoided that there are other prior-ranking cessions (e.g. from earlier publishing agreements). These would mean that the “older” creditors would receive GEMA distributions first and the last publisher to join would go away empty-handed for the time being.
In the case of cessions, a distinction is made between singular and global cessions. In the case of the singular assignment (also called individual assignment), only the GEMA royalties from certain predetermined works are assigned to the publisher. If the author has registered 50 works with GEMA, for example, he or she can only assign the royalties from work no. 1 to work no. 10 to the publisher up to a certain amount. The remaining works no. 11 to no. 50 are thus not covered by the assignment, so that the author retains the revenue in full.
In the case of a blanket assignment (also called a total assignment), on the other hand, the GEMA royalties from all works registered with GEMA are assigned to the publisher. In the previous example, this would be work no. 1 to work no. 50. As a rule, publishers insist on a blanket assignment because the advance is repaid more quickly here and the risk of non-payment is thus lower.
9.) Duration of the transfer of rights
Many publishing agreements provide for a transfer of the exploitation rights for the “duration of the statutory protection period”. This is 70 years until after the death of the author. However, it is certainly possible to negotiate this deadline and set a shorter exploitation period. Even publishers now openly admit that the fate of success or failure of a composition is decided in the first few years after the release of a recording. Consequently, a large part of the exploitation period does not matter from an economic point of view, so that even 10 to 15 years can be agreed upon with a clear conscience.
10.) Print waiver clause
According to the GEMA distribution plan, the publisher is obliged to submit one copy as a printed edition with each application for a work. However, the author can effectively release the publisher from this obligation by signing the so-called “printing waiver clause”. This means that the publisher does not have to submit sheet music of the composition, but can keep the option open for the future.
11.) Settlement
The settlement frequency depends on the publisher’s practice and is quarterly or half-yearly. The author’s objection period to settlements is usually between 12 and 24 months.
If you have any questions about the publishing contract or other issues, I will be happy to advise you. It is not necessary for you to come to my office for this. You can send me your request in advance by email (also with attachments). I will then make you a non-binding offer for a mandate and, if necessary, contact you by telephone. A mandate only comes into effect when the mandate is issued in writing.
