Going Big, the Three-Year Plan
When it's time to expand, it's a whole new game. It's possible to make or lose tens of millions of dollars by starting a big publishing company. Even if things go well, it'll probably take three years to get your company off the ground — a year to get the songs in place, a year to get the staff up to speed and start getting holds, and a year at full steam to start getting cuts — if everything goes smoothly. It takes a year to start collecting money on cuts, so you need at least enough money to run the company for four years.
Starting a big publishing company can cost more than even a successful songwriter can afford to lose. A method of risk management commonly used in the publishing business is to acquire startup capital either from a venture capital firm, for an expected return on the investment, or from an established publisher, for a piece of the company.
The first step is to get a bunch of great songs. A publishing house is basically a song leasing and rental store that delivers. The better your selection and the higher the quality of the merchandise, the better your odds of attracting customers. You need to build up a general catalog with songs of different grooves, sub-genres, and tempos to suit a variety of artists' needs. Now you're looking at things from the publisher's perspective: If you can get a single-song contract on a great tune for no money down, get the writer to provide a killer demo, and get the exclusive right to pitch the song for the next three to five years (with copyright ownership if you get it cut), it's a good thing. Do this as often as possible. Never mind that the songwriters are calling you a greedy old tyrant, you're trying to make a living here and doing them a favor in the process!
At this point you might also hire staff writers. This means you'll want to make them write as many songs as possible for as little money as possible and try to get all their old songs for cheap or free while you're at it. After all, if you don't make a profit, they won't be able to keep their jobs.
Hiring the TeamNow you need a team that works like a well-oiled machine to get the best out of your writers and to market all the great songs in your catalog. You'll need at least one experienced plugger and people to keep track of catalog activity and make copies, handle the writers and schedule demo sessions, and a secretary to answer phones, make appointments, screen songs, make coffee and do everything else that nobody else seems to be able to do. You also need someone to make decisions in your place. You're a writer; you won't always be available. Find a creative director with a strong business background who believes in the catalog.
Hopefully, you've made a lot of contacts over the years and can draw from that pool to find employees. You can also put out the word that you're hiring. After you screen out the weirdoes, wannabes, and songwriters, who will descend on your office like a Mongol horde, you'll hopefully have a few people worth trying out. In the worst-case scenario, fill a few jobs like receptionist and copy boy with interns from music business programs. You don't have to pay them much, if anything, and you can work them to death. Interns may surprise you with their dedication and intelligence.
What is an intern?An intern is like an apprentice. Most interns are college students who receive class credit for work that relates to their respective field of study. The major perk for an intern is the chance to make connections in the business before graduating.
Now you have to keep everyone doing the best they can and integrate them into a working team. Here's where you find out who doesn't belong. Sometimes an otherwise competent person just doesn't fit in with the team. This is a problem; for a publishing company to work, everyone must work together, believe in the catalog, and trust each other. Do what you have to do. Keep an eye on the market and the pitch sheets and guide your writing staff (including yourself) to keep up with, or stay ahead of, what's going on.
Selling the CatalogIf, by some quirk of fate, you pull this off and end up running a big, successful publishing company, things will get easier in some ways. You can hire people to take care of the more mundane aspects of the job and start working on European markets, film, and TV. You can get caught up in making deals and earning more money than most people can imagine. You can start companies that specialize in other genres and hire big-time lawyers to figure out how to rip off your writers.
Or you can sell the whole catalog for a pile of cash and start over. One of your rights in the standard contracts your writers sign is the right to sell your ownership in their songs.
There are companies that buy “used” copyrights for large sums of money. These companies are expert at making money from established catalogs, so it might even be good for your writers.
You used to be a writer, right? Ouch! Well, you have to decide at some point whether to be a big publisher who used to write or a big writer with a small to midsized publishing company. This might be the perfect time to sell the catalog, take a long vacation, and write some songs. Let the company run itself for a little while; it's easier without that big old catalog weighing everyone down. Maybe it's time to get a place in the Bahamas, or maybe the Keys. Somebody get Buffet on the phone; tell him to expect a visit!
