Publishing Interview Jason Cerf at Songtrust | Wendy Day Interview

Hi guys, thanks for tuning in. This is Wendy Day. I have a publishing guru with me today, and I'm so excited because publishing is where I'm at, and it's probably one of my weakest topics. So I have somebody here that can explain it to all of us beautifully. This is Jason Cerf from Songtrust. Hi Jason.

Hey Wendy, thanks for having me.

I'm so happy that you're here. You're located in Brooklyn?

Yeah, yeah, I live in Brooklyn, but our offices at Songtrust are in SoHo, Manhattan. Yay!

I'd rather be in Brooklyn.

Yeah, me too.

I love it. It's that Brooklyn shit. Yeah, we on it. So Jason, um, what is publishing?

Wow, Wendy, that's a huge question, and I'd be honored to attempt to answer it. Uh, I think the first thing that people need to know is that there are two types of ownership when it comes to music. There's the ownership of the recording, and that is not publishing. There's the ownership of the songwriting and the composition, and that is what entails the entire music publishing and how it works. When you operate and create and produce music and you're the writer or the producer or the co-writer, or maybe you've purchased publishing rights, you are working in the publishing industry, and that accrues an entirely different type of royalty that is paid out by different revenue sources that we'll be getting to.

Perfect. Okay, so publishing— I, I've, I've always looked at publishing like real estate where you can own it, you can rent it out, which is licensing, but it's something that, um, artists should never give away freely. Would you agree with that?

Yes. So when you create a work or you, you know, write a song, whether it's on guitar in your room or in a DAW session or you're with someone else, you automatically own that copyright as long as you created it as something that isn't sampling or any derivative work of someone else's work. So you've created that work, you own it, you own the composition, and then there's the act of exploiting that copyright. And exploiting, not in a bad way, in this case it's in a good way. You are exploiting it because you own it and other people are using it. And when other people use it, it's either sold in a digital store or maybe it's played in a restaurant or maybe it's played in a bowling alley or played on the radio. And all of these things are uses of your own intellectual property. So that is your publishing rights and based off of your publishing rights and the use of your copyright, you are due royalties.

Okay, great. So, um, let's cover, let's cover the basic ways. I mean, there's a lot of ways that artists get paid from publishing, but to keep it relatively simple, um, let's talk about a couple of the ways. Um, there's performance rights. You mentioned if so, if a song plays in a bowling alley or on the radio, like FM radio, um, that would be a performance royalty, correct?

That's right. Mm-hmm. That's right.

And that would be collected via BMI, ASCAP, SESAC in the US, correct?

Yes. And that's— so there are PROs in each territory that cover and license the public use of your work. So that's on the radio, like you said, or in different venues. And also performance royalties are accruing based off of market share. On the streaming services and how much your music is estimated to be used in each territory. And then there are actually, you know, there's SESAC, ASCAP/BMI in the United States, and now GMR, which is a whole other story, but maybe we can talk about that later. But then in every other country, there are also these PROs. In Canada, there's SOCAN. In England, there's PRS. In Spain, there's SEGAI. In France, there's SACEM. In Mexico, there's SACOM. And they're all just these acronyms that stand for We Represent Music Rights, right? Got it. Got it.

Then there's also mechanical royalties, which are like sales royalties. So as people are still selling CDs and downloading physical copies of music, there's still mechanical royalties, correct?

Yes. So performance royalties make up proportionally, maybe half. I mean, it all varies depending on how your music is being used. But performance royalties only cover a certain amount, a fraction of your publishing revenue. Mechanical royalties are also accruing in the more traditional sense from when other people are covering your music and then paying out a mechanical rate in order to use your composition on their album or project, or maybe they're sampling or whatever it is. But the newest and most important form of mechanical royalty that is out there is just the mechanical rate that is being paid out when anybody clicks on your song on Spotify or Apple Music or SoundCloud or YouTube or wherever it is. It's a growing— it's grown a lot and it represents a large amount of your publishing revenue. And it's a bit harder to collect than your performance rights royalties. Those performance rights royalties come in when you affiliate with ASCAP or BMI, and they also happen when a publisher is acting on your behalf and collecting from these PROs, like we mentioned, in the other countries around the world. But mechanical royalties happen when you have a pretty tech progressive company who's able to gather all of the recording codes and also establish direct affiliations with agencies like the Harry Fox Agency, Music Reports Index, MediaNet, and then in other countries MCPS, CIMRA in Canada. And these are organizations that are tracking the actual digital activity around your music. And every time anybody clicks, you are getting a royalty. And part of our message at Songtrust is that these royalties are harder to collect and you need a publishing entity acting on your behalf. So it's important to use a service to collect your mechanical royalties.

And I love that you touched on that because, you know, my whole career I've been a huge proponent of doing a deal like an admin deal, which means you partner with a company and they go and help you collect your money and they charge a fee somewhere between 10 or 15%. As opposed to doing a co-publishing deal where you actually sell, you know, a portion, usually half of your publishing to the publishing company. So I love what you guys do at Songtrust.

Thank you, I appreciate it. It's— it— if there's anything I've learned from talking to a lot of songwriters and companies, it's that everybody has different needs and different goals. So whenever you're considering exploiting your copyright or just collecting your publishing money, so to speak, you should think, what are my goals and who is the team that I want to work with? And do I want to just maintain all my ownership and collect the royalties because I've already seen streaming success? That's what we see. There are a lot of independent success nowadays, particularly because it's so easy to put your music on streaming services with services like CD Baby or DistroKid. And then there are people who maybe have a very a good catalog that's great for commercial use, would be great for ad campaigns, and they need a more creative team to pitch for them. And that's when they might consider signing a deal where they give away ownership, because that means a company actually owns part of your copyright and they want to exploit it for commercial use and creative use. So it really depends on what people are offering you. And we say Songtrust is basically offering this flexible deal where you can collect what's, what you already do, or maybe what you retroactively do. And then shop around if you want to take the next step and sign some sort of big traditional deal where you sign away your ownership and enter some sort of creative opportunity, or maybe you have the opportunity to collaborate with co-writers or things like that. It's really about the team you work with and what your goals are. But definitely don't walk up to the first deal that you're offered and sign the piece of paper, because we've seen so many cases where That has been a huge mistake for a lot of people.

Absolutely, great point. So how do, how do artists get paid from streaming? If I have my music on, um, and I know it's a little bit different the way people get paid from like Pandora as opposed to Spotify, but let's start with the streaming platforms like Spotify or Google Play or title?

Sure. So basically you need to register your works. No one's gonna come find you and say, "Hey, we owe you $1,000." You have to— They might not. Yeah, I wonder why, right? Because they don't need to tell you, and it's your job to exploit your own business and your own copyright. So the act of registering your songs is very important, and that doesn't mean registering with the Copyright Office. That's actually entirely separate and optional. I recommend personally only spend the time and money that it takes to register your copyright with the US Copyright Office if you believe that someone's going to act as if they own your music. But nowadays it's very easy to timestamp and prove that you own something and that you released it. So that's less of a problem. The problem really is getting into the systems of the PROs, of the mechanical agencies, and then also covering an international network where you can collect from the use of your music, whether it's publicly or privately in each country. So I've never really seen it done independently unless it's like a huge success. Maybe, maybe Chance the Rapper is doing it. Maybe. We don't really know. And if Chance is watching this, let's talk because you might need international collection, you know? But everybody else basically should be using a publishing entity or publishing administration service so that they can register with the 43+ direct affiliations that we have. And so again, you have to basically take your catalog, take all of your information, take your song splits, take your IPI number, which is something that identifies you as a songwriter, take your recording codes, put them all into a readable form, which is normally for us a data file called a Common Works Registration File, and send it out to all these societies, make sure it's properly ingested, make sure that they've logged it in their system and mapped the license, and that they're going to pay out regularly on whatever distribution schedule that they have. So it sounds pretty complicated, right? And the reason is it is really complicated. And we say at Songtrust, we wouldn't really wish it upon our worst enemy to have to figure all of this out. So we say, just put your works in our hands and we'll go out and collect you the most money with our direct affiliations that it took years to establish. You know, learning different languages, finding different personal connections in different countries, filling out random tax forms and faxing to the right address and all these strange things, bizarre things that it takes to collect your publishing royalties. I wish it were easier. But it's just not. And we're working to make it easier and definitely putting the pressure and the leverage in the right places because we're now managing over 100,000 songwriters and over a million pieces of copyright. Wow. One thing that is important to know is that people don't listen unless there's leverage involved. And usually that leverage means money. So unfortunately, there just hasn't been this individual power in the songwriter, which is why you have, you know, active and proactive companies acting on your behalf, amalgamating catalogs for independent writers, offering them flexible deals where they maintain their ownership, but also, you know, acting like as a tech progressive bulk collection service to the independent community.

Gotcha. And what do you guys charge to do that?

Our pricing model at a walk-on rate, if you were to create an account today, is $100 signup fee that gives you one songwriter, 50 song credits, and access to all of our tools. And that includes affiliation with the PRO no matter what your citizenship is, our Spotify recording claiming tools, our YouTube administration tool. YouTube is another conversation.

I'm going to ask you about that in a minute.

Yeah, we can talk about that, but we have figured out the YouTube collection process. And then just, that gives you access to global collection from all of these PROs directly. That avoids any extra fees that are taken out. And collection, particularly the big— one of the biggest value adds for whether it's an individual songwriter, a manager, a label, a publisher, distributor, is collection of these mechanical royalties, which accrue any time your music is streamed. Okay.

And then do you take a percentage of what you collect?

Oh yes, of course, I forgot the most important part. We take a 15% commission on any publishing royalties that we collect on your behalf. So there are two things: the writer's share and the publisher's share. The writer's share is always paid out directly to the writer. No one's taking commission on that except for maybe the PRO. We are collecting the publisher's share, which is performance and mechanical royalties and any optional sync royalties that maybe we can discuss later on. So that's, yeah, 15% commission across the board.

Gotcha. So there's writer share and publisher share, and I know we touched on this, but I'm gonna do it again because I think this is, for me anyway, the most confusing part about publishing. When— and I'm gonna use rap as an example because the bulk of people that are watching this are in the urban community. So when a song is— let's, let's say that you're the rapper and I'm the producer, which is of course a very scary thought because I can't make a beat. But, um, that means that I own 50% of the song and you own 50% of the song when we collaborate. How does the writer share and the publisher share figure into each of our ownership?

Sure. So we try to make it really simple. Um, basically you put in Okay, we co-wrote a song 50/50. Let's register that at 50/50. And then all royalties will make it back to us half and half. The writer's share and publisher's share is just coming from different places. And historically it was set up so that it preserved income for the original authors or composers.

Oh, in case somebody like, like Wendy's saying, a Dolly Parton song, like if I'm Whitney Houston and I resang Dolly Parton, we would both get paid.

Well, that's, that's a little bit different. I think that's when you're an arranger of a song or you've negotiated a remix or something like that and you own the publishing for that version of the song or a portion of that publishing. The writer's share is being paid out directly from the PROs because it's basically preserving at least half of the publishing ownership only for that writer. So it means that if you were to sign a bad deal and say, "I'm giving you 100% of my publishing ownership for free," you would still at least receive your writer's share. Got it. So it was created to help the songwriters.

So it's protection.

Yeah. And so it's interesting, you know, you'll receive your writer's share from your PRO and then you'll receive your publisher's share from a publishing entity like Songtrust. And when you add in mechanicals, your publisher share is going to be more, but it should equal to your— it should be about half and half with, with your writer share from, let's say, ASCAP or BMI, and your publisher share coming from Songtrust.

Okay, gotcha.

Okay.

And we had, we had mentioned YouTube. How, how do, how do artists get paid from YouTube?

Yeah, great question. So YouTube is a really growing space. There are some absurd amount of hours uploaded every hour to YouTube. So there's so much content and so many rights flying around. And it's a little bit of a Wild West out there right now when it comes to claiming. But we've basically figured out how to manage rights delivery back and forth, we have a direct partnership with YouTube and we're collecting all of the types of royalties that songwriters have, which is performance and mechanical and micro-sync, we would call it. They've basically— I mean, I'll start from the beginning. You upload your song, or maybe someone else uploads your song within a video. And within one video, there are different types of ownership. So there's the recording, there's the video asset, And then there's that composition asset. And what you as a songwriter or producer or just anybody who owns publishing rights can do and should do is claim that publishing within that video. And it's easy to do if you've uploaded it on your own channel. You monetize the video on your channel by just ad-enabling your videos. But when someone else uploads your video or your content, Songtrust is offering a tool to help identify that, first of all, and then to assert claims within that video. So where's the money come from? It's coming mostly from advertisers on those videos. So that— you can't really say that there's one rate because it's based off of how much the advertisers are paying to put their ads on your videos. So a million streams on one video might equal a different amount of money for another video. It really depends on the channel activity and how it's been optimized and whether it's been monetized. But what's important is to use these services to claim your rights that are being used, which means that you're owed money from the use of your music on platforms like YouTube.

And I love that you mentioned if somebody else uses your composition, because so many times I'll see like a picture of, of a cat video or a kid kicking a soccer ball, and I'll hear like Future's music behind it, or I'll hear an artist, you know, a smaller artist behind it as the soundtrack to whatever's going on. And I always wondered how that artist got paid, and you basically just said that, that there's a tool that, that picks that up.

There's— yeah, there is a lot of opportunity. We call it user-generated content. Uh, when things go viral, I mean, I would think of a great example as the the Harlem Shake was a huge, huge opportunity to claim a lot of money from the use of thousands and thousands of videos that were using one song. But it proved to be pretty complex to collect on that. So yeah, so it's important to identify that. And it's also important for people to know that you're not striking down other people's videos if you're claiming your rights on them. And also you're not You shouldn't be creating any ownership conflict or anything, because it's just what you own. So you're not getting in the way of them promoting or using your music, unless you want to, of course. If you did want to take something down that you didn't want to be using your music, you also have the right to do that. And interestingly enough, if you really want to take it down, you can make a strike down notice, or YouTube will sometimes just deactivate the audio that has your music playing in it.

Oh, wow. OK, I didn't know they could do that.

Mm-hmm.

Awesome.

Yeah, yeah. And I just— I would add that YouTube has done a great job of kind of rethinking the rights management. It's this huge, huge, huge endeavor that they've nobly attempted. And they're doing a great job. And they're changing. And we're working with them as a company, delivering thousands of assets a week to them and helping people get paid, whether it's $100 or thousands of dollars, it makes no difference because you just never know what video is going to have a lot of traction or what's going to generate recurring revenue over the years.

Very cool.

Okay.

Are there any— is there anything going on that you know of, like in Washington right now, that artists should pay attention to regarding their rights and their ownership?

Hmm.

Wow.

Tough question. I mean, I know that recently the statutory rate was up for grabs or being debated, but I'm not the expert on what's going on in DC right now. I know that there was— yeah, I know that there was an issue with something about like people that were giving permission to use the work without the approval of others.

Um, but, uh, you know, I, I'm just not the expert there, but, uh, you know, I was just wondering if there was something that, you know, that people should be watching out for. And you mentioned the, um, statutory rate, which I believe it's $0.091 per song. Is that correct?

Yes. And that's when someone else— yeah. Yeah, that's when someone else is covering your music. They need to pay that rate, that amount of cents per sale. So if someone is physically creating a bunch of CDs or whatever it is, then if they create 100 CDs, then they'll pay you, what is it, $9.10. Got it. Yeah, and that same thing goes for streams, but that's where the statutory rates change because streams are just a different ballgame.

Gotcha. Wow, I've learned a lot from you today.

Thank you. Yes, my pleasure.

I have one last question and then I'll let you go. What are sync fees?

Sure, so this is really important because sync— synchronization itself is when your music is used with anything visual. So whether it's a TV advertisement, a movie, a YouTube video, anything. A video game? A video game, yes. So what these production companies or these content creators are doing is licensing out your music, which means they're paying you to use your music. The way this works is that they, if you're properly registered on, with ASCAP and BMI and all these societies globally, then you will come up as the contact, or Songtrust on your behalf will come up as the contact. And we'll receive inbound synchronization requests. And this is people at all levels who want to use your music for their visual content. And they realize that they have to pay to use it, so we don't have to go and find them later and track them down. So they're reaching out and they give you an offer and they say, "Hey, I'd like to use this. I can pay you $100 or I can pay you $1,000." If it's someone like, you know, Ford, they'll say, "I'll give you $100,000 for this ad campaign," or Apple. And they pay you upfront based off of a sync license. And that is negotiable. And it's good to have the consulting of a team behind you. Songtrust will opt you into our sync processing and negotiation. You also have the right to negotiate it on your own or with a lawyer or something like that. So that's the upfront money that comes in when someone pays you to use your works in their visual content. Then on the backend, as that music is used, you have the right to claim these backend royalties, which come in the form of performance and mechanical royalties like we discussed. So if your ads are running across Europe, each PRO, like we mentioned, SACEM, SIGAI, PRS, TONO, they'll all be measuring the use of that broadcast in that country and paying out performance royalties. Say it's happening on Netflix or some digital agency, then more royalties for that use, for that synchronization, will accrue. And then YouTube also is a form of microsync, which is just smaller versions of synchronization, really. And so there's two types. There's that initial license fee, which is negotiable and often a significant amount of money. And then there's these backend royalties. So for as long as that content is streamed, streaming, you're, um, if you're properly claiming, you can get, uh, you know, recurring revenue.

Wow, awesome. I have learned so much from this, and it's funny because even after all these years, I still learn new stuff about publishing. It's not the easiest topic in the world to understand because it's very comprehensive, but, um, thank you. You just made it really clear. I appreciate you.

It's my pleasure. It really has been changing, um, over the past years, and it will change, and Songtrust is trying to be on the forefront of advocating for songwriters and rights owners. And it really is— it doesn't make a difference to us whether you're earning $100 or thousands of dollars. We just wanna help people, you know, whether it's pay their rent or fund their next tour or studio project. We just wanna help musicians and help them get paid, really.

That's so awesome. And you're a musician yourself, aren't you?

That's right, I am.

Yay! Mm-hmm.

Yeah. And so before we end, I just want to say that Wendy has been so great in working with Songtrust, and anybody who's listening can use a discount code.

Oh!

Yeah, it's Wendy Day. I didn't know that. Thank you. Yeah, yeah, it's Wendy Day, capital W, capital D. I love it. No space. And that'll give anybody who's listening 15% off of the one-time signup fee for Songtrust. That's outstanding. So that's only $85 to sign up with Songtrust, have direct access to our team and our tools, and talk to us and just, you know, figure out how you'd like to collect on your publishing rights going forward.

Thank you, Jason. We didn't discuss this ahead, guys, so I'm both humbled and honored. Thank you. So they can find you through Songtrust.com?

Yeah, visit us at Songtrust.com, Twitter @Songtrust, Instagram @Songtrust, and you can follow me. My name is Jason Cerf. It's @JasonCerf on Twitter and Instagram, and we can be in touch.

Awesome, how outstanding! Thank you so much. And, um, for those of you watching, his name is, um, below his face so you can see how it's spelled so that you can follow him as well. Jason, thank you so much for your time. Thank you. I'm humbled by the, the discount. I wasn't expecting it. Thank you.

Um, my pleasure.

Thanks for everything.

Thanks, Wendy Day.

Okay, guys.