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Starting a Music Publishing Company – A Complete Guide

Are you interested in starting a music publishing company? If YES, here is a complete guide to starting a music publishing company from scratch with little money and no experience.

Okay, so we have provided you an in-depth sample music publishing business plan template. We also took it further by analyzing and drafting a sample music publishing company marketing plan backed up by actionable guerrilla marketing ideas for music publishing businesses. In this article, we will be considering all the requirements for starting a music publishing business. So put on your entrepreneurial hat and let’s proceed.

What is a Music Publishing Business?

In the music industry, a music publisher (or publishing company) is responsible for ensuring the  songwriters and composers receive payment when their compositions are used commercially. Through an agreement called a publishing contract a songwriter or composer “assigns” the copyright of their composition to a publishing company. In return, the company licenses compositions, helps monitor where compositions are used, collects royalties and distributes them to the composers. They also secure commissions for music and promote existing compositions to recording artists, film and television.

The copyrights owned and administered by publishing companies are one of the most important forms of intellectual properties in the music industry. Publishing companies play a central role in managing this vital asset. Thus publishing companies play a very critical role in the Music industry, as they ensure that the intellectualism and rights of a songwriter is protected.

Their basic functions are to make deals with songwriters, promote the songs their songwriters compose to musicians and anyone else who may need a song for whatever reason (advertising, a movie, a promotional campaign, etc.), issue licenses for the use of the songs they represent and collect licensing fees.

What Does It Take to Start a Music Publishing Business Successfully?

Within these basic functions, it’ll be seen that music publishing companies accomplish these goals in a number of different ways. Some publishing companies are extremely hands-on and get involved in everything from the creative process to heavy promotion while others do not get involved in such.

If you considering starting your own music publishing company from the scratch, then your determination and diligence are some of the factors that can determine if you can succeed in your pursuit. The fact is that, there are many huddles you must scale through before you can setup a successful music publishing company in many parts of the world.

Starting a Music Publishing Company – A Complete Guide

  • Music Publishing Industry Overview

The world of music publishing has gone through a myriad of changes during the modern pop & rock era (from the 1950s to the present). The biggest change has probably been the gradual evolution towards putting the power (and most of the money) in the hands of the songwriters rather than the publishing companies, which used to have the most power and control.

  • Interesting Statistics About the Music Publishing Industry

Back in the ’50s, there were rock and R&B artists who would sell their entire copyrights to their respective labels for about $250 per song. For this amount of cash, they would not only assign their publishing share, but their writer’s entire share! At one of the major companies I worked for, the company owned the classic hit songs of a big-name ’50s star, and would lawfully keep 100% of the royalties, without having to pay the hit writer any royalties at all.

In the ’60s, at least songwriters would keep their songwriter’s share, splitting the royalties equally with the publisher. The mechanical royalty rate (for records sold) was only two cents per unit sold, so it was easy to figure out the earnings: one penny for the songwriter, and one penny for the publisher.

But starting in the ’70s, songwriters (and their attorneys) became much more assertive, and gradually established a new standard for the publishing deal–a 50/50 co-publishing agreement, whereby the songwriter would not only receive the writer’s share, but half of the publisher’s share. From this point on, royalties received would be split 75/25 in favour of the songwriter.

The Music publishing industry is indeed witnessing a steady growth over the years especially in developed countries such as the United States. Though for some underdeveloped countries where piracy is still on rampage, the growth is a bit redundant.

One of the major incentives that encourage people to delve into this industry is the fact that it’s a promising industry especially with the proliferation of music and musicians all over the globe, the stakes are becoming higher, and indeed the industry is booming.

Starting a Music Publishing Company – Market Research and Feasibility Studies

  • Demographics and Psychographics

The demographic and psychographic composition of those who need the services of music publishing companies cuts across the public sector, the organized private sector, households, communities and people of different class and from all walks of life.

Below is a list of the people and organizations that need the services of music publishing companies;

  • The public sector (public facilities et al) such as the Radio stations, Television stations etc.
  • Organized private sector such as record labels
  • Celebrities
  • Businessmen and Businesswomen
  • University Campuses and Schools
  • Event Planners
  • Social media entrepreneurs

List of Niche ideas Within the Music Publishing Industry That You Can Specialize in

When it comes to starting a music publishing company, there are a couple of niche ideas within the industry that an entrepreneur can choose from. Aside from the existing niches in the music publishing industry, an entrepreneur who is creative can carve a niche for himself / herself.

Here are some niches / areas that a music publishing company can be specialized in;

  • Seeking for contracts with record labels
  • Hunting for upcoming artistes who can they can publish for
  • Promoting an artist and what he does to the whole world
  • Liaising with social media entrepreneurs to ensure that artists’ are well promoted
  • Ensuring that strict adherence with the rules of the business is followed to the latter

The Level of Competition in the Music Publishing Industry

Surviving in the business world as a music publishing company requires more than, your expertise, knowing how to deliver standard music contracts but also how to network with key people that matters; and also ensuring that any artiste who signs up with your label or company profits well is the utmost

Without a shadow of doubt, there is a lot of competition in the Music industry due to the fact that the world today promotes that. Many brands, companies, organizations, individuals etc. make use of artistes’ works on a daily basis, and in return the artiste need to be compensated for his/her efforts. So, due to this the publishing company is highly saturated with a lot of players, but despite that, there is still a wide room for anyone interested in the business to strive very well in it.

List of Well – Known Brands in the Music Publishing Industry

In any industry, there are the big players who have made it big, and carved a niche for themselves in what they do. The music publishing industry is also not an exception, as there are well known brands too in the industry. Here are some of the leading music publishing companies;

  • Disney Music
  • Kobalt Music
  • Sony/ATV Music
  • Universal Music
  • Warner Music
  • Avatar Publishing
  • Curb Music Publishing
  • Fox Music
  • Imagem Music
  • MPL Communications
  • Wrensong Publishing

Economic Analysis

Starting a music publishing company is indeed a herculean task; this is because it is a serious business hence critical economic analysis must be conducted to ensure that the risks and other threats associated with starting a business from the scratch or investing in a business idea are prevented.

If you are considering starting a music publishing company in any part of the world, your concern should be on how to convince musicians to key into what you do and sign on to your label, it is only through this means that you can really maximize the opportunities that are inherent in the business.

On the average, setting up and running a music publishing business anywhere in the world can be cost effective simply because you don’t have to maintain a large workforce when you don’t have a music contract to execute. With key good company’s profile, highly trained, highly qualified and highly experienced staff members in your team, you won’t have to struggle much to convince famous musicians to sign on to your publishing company.

Is the Music Publishing Business Worth Starting from Scratch or is Buying a Franchise Better?

Although there is the possibility of buying a franchise from a successful music publishing company or even partnering with a big publishing company if you are considering owning an investment in the music industry.

One thing is certain, people are motivated to start a business based on various factors and incentives. If you are looking towards building a business that you intend controlling, a business brand that you hope to one day transfer ownership to your children and perhaps also sell franchise in future, then starting from the scratch should be your best bet. But if you only interested in making money and multiplying your wealth, then you may as well buy the franchise of a successful music publishing company that is willing to sell its franchise.

Possible Threats and Challenges You Will Face When Starting a Music Publishing Business

Generally in the music publishing industry, both the already established companies and start – up companies are subject to threat and challenges from government policies, global economic downturn which usually affects spending and unforeseen natural disasters (disasters that may cause setback).

Another threat that you are likely going to face when you start your own publishing company is the competition you have to face with the big boys in the industry, and also the technicalities that are associated with the legal framework that is involved when signing a contract with an artiste.

Starting a Music Publishing Company – Legal Matters

  • Best legal entity to use for a music publishing business

No doubt starting a music publishing company is indeed a serious business which is why the legal entity you choose will go a long way to determine how big the business to can grow. Choosing a legal entity for a business such as a music publishing company is some worth straightforward especially if you decided to grow the business big.

When it comes to choosing a legal entity for your publishing company you have the option of choosing from a general partnership, a limited partnership, an LLC, a “C” corporation, or a “S” corporation. It is important to clearly state that these different forms of legal structure for business has its own advantages and disadvantages; which is why you must weigh your options properly before making your choice on the legal structure to build your music publishing company on.

These are some of the factors you should consider before choosing a legal entity for your company; limitation of personal liability, ease of transferability, admission of new owners and investors’ expectation and tax issues. If you take your time to critically study the various legal entities to use for your music publishing company, then you will agree that limited liability company; an LLC is the most suitable. You can start your publishing company as a limited liability company (LLC) and in future convert it to a ‘C’ corporation or even a ‘S’ corporations especially when you have the plans of going public.

Upgrading to a ‘C’ corporation or ‘S’ corporation will afford you the opportunity to grow your music publishing company so as to compete with major players in the music industry; you will be able to generate capital from venture capital firms, stock market, you will enjoy separate tax structure, and you can easily transfer ownership of the company; you will enjoy flexibility in ownership and in your management structures as well.

Catchy Business Names ideas Suitable for a Music Publishing Business

When it comes to choosing a name for your music publishing company, it is particularly necessary as a matter of preference that you choose a name that is catchy enough, and that can propel many artistes to want to sign with your company. This is because in the Music industry, the name matters and means a lot.

Here are some catchy business name ideas you can choose for your music publishing company;

  • Art Dealer Chic
  • Excuse My French
  • Out of the Taperoom Music
  • Smells Like Phys Ed Music
  • I Like Turtles Music
  • Wet As a Fish Music
  • World of the Dolphin Music etc.

The Best Insurance Needed for a Music Publishing Business

In the United States and of course in most countries of the world, you can’t operate a business without having some of the basic insurance policies that is required by the industry you want to operate from. And besides, there has been a dramatic rise in recent years in the number and severity of claims made against publishers and songwriters such as plagiarism, copyright infringement, libel and slander, etc.

So, it is important to create a budget for insurance and perhaps consult an insurance broker to guide you in choosing the best insurance policies for your music publishing company; it is their duty to help you assess the risks involved in the type of publishing business you intend running and then advice you accordingly.

Here are some of the basic insurance covers that you should consider purchasing if you want to start your own music publishing company;

  • Premises Liability Coverage
  • Valuable Papers and Records Coverage
  • Building and Contents Coverage
  • Computer Coverage
  • Property Coverage
  • General Liability Coverage
  • Accounts Receivable Coverage
  • Business Auto Coverage
  • Business Umbrella Coverage
  • Personal and Advertising Injury Coverage
  • Multiple locations coverage etc.

Intellectual Property Protection and Trademark

If you are considering starting your own music publishing company, then you should consider filing for intellectual property protection. Filing for intellectual property protection for a music publishing company goes beyond protecting your company’s logo and other documents, but also protecting your software applications and of course the name of your company.

This is so important because Music publishing companies basically protect the intellectual properties of musicians who are signed under them. It is only with an effective and efficient intellectual property protection and trademark that a music publishing company can thrive. This of course will prevent cases of plagiarism; fraud etc. that may arise if that’s not fully put in place.

Is Professional Certification Needed to Run a Music Publishing Business?

The music publishing industry is an integral part of the music industry. Due to that, it is highly regulated so as to prevent cases that may arise due to the breaches of contracts signed. Also, the publishers must be certified professionals who know what it takes to be in the industry and are also able to protect the rights of musicians and artistes who toil day and night to compose songs for the listening pleasure of the society.

It is for this reason that if you are looking towards beginning a music publishing company, then you should acquire international music publishing certifications; it will give you edge amongst your competitors. The truth is that, the more relevant publishing certifications that you and your team have, the more authority you possess, and the easier it is for you to convince people to patronize your services.

Here are some professional certifications (societies) that you or your key staff should look towards acquiring;

  • ASCAP and BMI in the USA,
  • SOCAN in Canada,
  • JASRAC in Japan,
  • GEMA in Germany
  • PRS for Music in the UK, etc.

List of Legal Documents You Need to Run a Music Publishing Business

In The United States of America and of course all over the world, the music industry is amongst the industry that is highly regulated so as to avoid the stealing of intellectual properties of persons. If you are considering starting a music publishing company, then you are expected to meet the legal documents requirements as stipulated in the constitution of your country.

These are some of the basic legal document that you are expected to have in place if you want to start a music publishing company in the United States of America;

  • Certificate of Incorporation
  • Security Clearance Certificate
  • Business License
  • Business Plan
  • Non – disclosure Agreement
  • Memorandum of Understanding (MoU)
  • Employment Agreement (offer letters)
  • Operating Agreement
  • Company Bylaws
  • Operating Agreement for LLCs
  • Insurance Policy
  • Agreement between Members of Group.
  • Distribution and Promotion Strategy.
  • Mechanical Licenses
  • Sampling Clearances.
  • “Work for Hire” Agreements
  • Producer Agreement etc.

Writing a Business Plan for a Music Publishing Company

If you are looking towards starting a music publishing company, then one of the first steps that you are expected to take is to consult experts to help you write a good and workable business plan. The truth is that, in order to successfully run a successful company, you would need to have a good business plan in place.

A Business plan is the blue print that is needed to successfully run a business; with a workable business plan in place, you will reduce the trial and error approach of doing business. You will be able to manage your business with purpose and perhaps precisions; you will know what to do per time and how to handle challenges, growth and expansion.

So if you want to start your own music publishing company, you are required to write a detailed business plan that can pass reality test when subjected to it; you should work with the facts, figures and other indices in the security industry as it applies to the country you intend starting the business.

The whole idea of writing a business plan is to have a detailed guide on how to effectively run your business from the scratch. Your business plan should outline and cover strategies on how you intend to manage and grow your music publishing company.

Detailed Cost Analysis for Starting a Music Publishing Company

There are several expenses that you would have to make before successfully launching your own music publishing company. It is important to state that the location you choose to launch your business will definitely impact on the overall cost of starting the business which is why it is very important to have concluded and analyzed your feasibility studies and market survey before drawing up a budget and sourcing for funding for your business.

Here are some of the basic costs you must look towards fulfilling when starting a music publishing company in the United States of America;

  • The Total Fee for incorporating the Business in United States of America – $750.
  • The budget for Insurance, permits and license – $5,000
  • The Amount needed to rent a suitable office facility with enough space in the United States of America (Re – Construction of the facility inclusive) – $50,000.
  • The Cost for equipping the office (computers, printers, fax machines, furniture, telephones, filing cabins, music equipment etc.) – $20,000
  • The cost for acquiring music equipment, gadgets, accessories etc.) – $25,000
  • The Cost of Launching an official Website – $700
  • Additional Expenditure (Business cards, Signage, Adverts and Promotions et al) – $2,500
  • Other miscellaneous – $1,000

Going by the report from our research and feasibility studies, we will need about $130,000 to set up a small scale music publishing company in the United States of America.

On the average, you would need over 200,000 US dollars to start a medium scale music publishing company in the United States of America. If you choose to start a large scale music publishing company, then you should look towards budgeting about 2 million US dollars and above. This money includes paying I.T/ music experts that will be on your employee / payroll.

  • Financing Your Music Publishing Company

If you choose to start your music publishing company on a small scale, you might not need loads of resources to launch the business, but if you decide to start on a large scale, you will sure need to raise the required start – up capital to launch the business.

If you are starting your music publishing company on a large scale, you will need a decent office facility, office equipment and furniture, and money budgeted for the payment of salaries and utility bills for at least a period of 3 months and you will also need money to purchase essential musical instruments and gadgets. In essence you are expected to generate your start – up capital.

When it comes to financing a business, one of the first thing and perhaps the major factors that you should consider is to write a good business plan. If you have a good and workable business plan in place, you may not have to labor yourself before convincing your bank, investors and your friends to invest in your business.

Here are some of the options you can explore when sourcing for start – up capital for your music publishing company;

  • Raising money from personal savings and sale of personal stocks and properties
  • Raising money from investors and business partners
  • Applying for loan from your bank / banks
  • Pitching your business idea and applying for business grants and seed funding from donor organizations and angel investors
  • Source for soft loans from your family members and your friends.

Choosing a Location for Your Music Publishing Company

Choosing a location for your business is not what you should do without due consultation. The truth is that if you get it wrong with the location where you have decided to pitch your business tent, you are more likely going to struggle to make headway with the business. One of the major reasons why businesses struggle, fail and eventual close shop is the fact that the owners decided to choose a wrong location for the business.

Though, if you are able to build a successful music publishing company brand, you can pitch your business in any part of the world and still make success out of the business- But, if you are just starting out; especially if you are a newbie in the security industry, it is important that you locate your business in an area with healthy business activities.

These are some of the factors that you should consider before choosing a location for your music publishing company;

  • The demography of the location
  • Accessibility of the location
  • The numbers of music publishing companies in the location
  • The local laws and regulations in the community / state
  • Proximity to relaxation centers etc.

Starting a Music Publishing Company – Technical & Manpower Details

If you are tinkering with starting a music publishing business, then you should be ready to purchase effective musical instruments, and the technical know-how that is usually attached to it.

When it comes to choosing between renting and leasing an office space, the size of the publishing firm you want to build, and your entire budget for the business should influence your choice. If you have enough capital to run a music publishing outfit, then you should consider the option of leasing a facility for your office; when you lease, you will be able to work with long – term planning.

Regarding the number of employees that you are expected to kick start the business with, you should consider your financial capacity before making the decision. But good enough, you don’t have to maintain a large workforce if you run a music publishing company; you can recruit and train employees when you have the need to. Averagely, you would need a Chief Executive Officer or President (you can occupy this role), an Admin and Human Resource Manager, Business Development Executive / marketing Executive, Customer Service Officer or Front Desk Officer, and Accountant.

The Service process Involved in the Music Publishing Industry

The services process involved in the Music publishing industry depends on the niches of music publishing a company is into. On the average, the process starts with biding or submitting proposal for a music contract with an artiste, once the contract is won, then it is expected for the entire contract document to be signed and advance payment made as required.

Once the payment has been sorted out, then the Music Publishing Company therefore takes the responsibility of promoting the musician, and ensuring that all gratuities and profits accrued to him are gotten

Starting a Music Publishing Company – The Marketing Plan

  • Marketing ideas and Strategies for a Music Publishing Business

Music publishing firm is not a business that you have to retail products which is why you must do all you can to maximize any opportunity that comes your way.

So when you are drafting your marketing ideas and strategies for your music publishing company, make sure that you create a compelling personal and company’s profile which must include the profile of your board of directors and management team. The truth is that if you have highly qualified, trustworthy and successful music publishing professionals in your board and core management team, it will definitely give you leverage in the market place.

Here are some of the platforms you can utilize to market your private security company;

  • Advertise your business in relevant business magazines, TV and radio station and also make yourself available for entertainment talk shows and interactive sessions on TV and Radios)
  • List your business on local directories / yellow pages (both online and offline)
  • Attend music related seminars, and business fairs et al
  • Leverage on the internet to promote your business
  • Introduce your business by sending introductory letters alongside your brochure to artistes and musicians in your target area
  • Promptness in bidding for contracts
  • Create different packages for different category of clients in order to work with their budgets.
  • Engage in direct marketing, referral marketing and also email marketing.

Possible Competitive Strategies for Winning your competitors

It might be challenging competing as a newbie in the music industry especially in a highly organized market like that of the United States of America, which is why you must be deliberate in choosing your board members and your core management team.

As a music publishing company, if you have the required expertise and equipment to carry out a music contract, then you are likely not going to struggle to compete in the industry. Hence, ensure that you put in your best whenever you have the opportunity to handle any contract. You should be known for delivering excellent services at all times. Creativity, excellence and attention to your clients must be your selling points.

Possible Ways to Increase Client Retention in a Music Publishing Business

When it comes to business no matter the industry you choose to pitch your tent in, one of the easiest ways to increase customers’ retention and perhaps to attract new customers is to satisfy your customers always. If your customers are satisfied with your services delivery, they can hardly source for alternative service provider or products.

Statistics has it that one of the major reasons why customer’s source for alternative service provider or product is when there is a drop in quality. Another reason is poor customer service. If you can continue to improve on the quality or your services and your customer service delivery, then you won’t struggle to maintain your loyal customers.

Part of what you need to do to achieve this is to track progress, results or outputs with the aim of improving on them quickly as the case demands.

Strategies to Boost your Brand Awareness and Create a Corporate identity

When it comes to creating brand identity for a music publishing company business, the caliber of clients you have worked for and the nature of music contracts you have handled is always a major brand booster.

It is pretty important to work with your consultants to help you map out publicity and advertising strategies that will help you walk your way into the heart of your target market. First and foremost, you should ensure that your brand is visible and well communicated which is why you should make provisions to work with different class of people in the society. All your publicity materials and jingles should be done by some of the best hands in the industry.

Below are the platforms you should leverage on to boost your brand awareness and create a corporate identity for your music publishing company;

  • Advertise your business in relevant magazines and websites
  • List your business on local directories / yellow pages (both online and offline)
  • Promote your business on satellite TV stations and radio stations.
  • Engage in direct email marketing
  • Leverage on the internet (social media platforms and your official websites) to promote your business
  • Ensures that your workers wear your branded shirts at all times during working hours and also make sure you brand all your company’s official vans, trucks and cars et al.

Creating a Suppliers / Distribution Network

The nature of the music industry gives room for persons to network amongst themselves and strategize on how best they can perform optimally in the business.

It is important to state that there will always be room for a music publishing firm to form strategic alliance with one another which is why it is important to maintain a good network within the industry. For example, you may have need for the supply of musical instruments, or running a promotional activity for your client etc.

Tips for Running a Music Publishing Business Successfully

The truth is that, irrespective of the kind of business you run, your ability to get all the members of your team on same page at all times is one of the keys you need to successfully run the organization.

As the chief executive officer or president of a music publishing company, it is you responsibility to give direction to the business. This means that you have to be well read in the area of music for you to be able to give meaningful and clear cut directives on how the business can be run successfully for the scratch till it gets to a succession period.

Carrying out appraisals on a regular basis and training your employees will help you run your organization effectively. Encourage your employees to pursue certifications in their various area of specializations; it will help your organization’s profile and of course it will help the individuals. You can choose to fully or partially sponsor some of the certifications.

Lastly, you should keep your doors open for suggestions from members of your team and your clients. It is very important to reward excellent performance in your organization; it will go a long way to encourage healthy competition in your organization.

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