In this current age of digital music, many songwriters and music publishers are wondering how they can maximize their income and make a good living. Can songwriters earn enough money from music streaming, film & TV licensing, radio airplay, commercials, CDs, iTunes, video games and other sources?
To learn more about the state of music publishing and royalties, we wanted to get the opinion of a top music exec who specializes in music publishing administration and royalty collection. So we reached out to Randall Wixen, President of Wixen Music Publishing, which has offices in Los Angeles and London. Wixen Music administers about 60,000 songs, including the catalogs of many prominent artists, bands, songwriters and composers.
Wixen Music represents a wide range of catalogs, including classic writers and groups such as Tom Petty, Neil Young, Styx, Journey, The Doors, Santana, Janis Joplin, Jefferson Airplane, Barry Mann & Cynthia Weil, the Beach Boys’ Brother Publishing, Jonathan Richman, Michael McDonald and the Doobie Brothers, and Stephen Stills. R&B and pure Blues clients include Rick James, John Mayall, John Lee Hooker, and R.L. Burnside. More contemporary clients include the Black Keys, Fitz and The Tantrums, Weezer, Andrew Bird, and Missy Elliot. The company has also made a push into the Americana music scene over the last few years with writers like John Prine, Marty Stuart, the Mavericks, Rhiannon Giddens, Shovels and Rope, Elizabeth Cook, Todd Snider and Parker Millsap.
As the head of his company, Wixen has a clear picture of the income sources that are generating the most money for songwriters. He has also been closely watching the latest rulings which have affected the distribution of music streaming royalties, and what percentage is paid to songwriters & publishers. Music streaming now has a crucial impact on the earnings of songwriters & publishers, since streaming is causing the severe reduction of mechanical royalties from both CD and iTunes sales.
In addition to running his company, Wixen is an author who has written a well known book about music publishing. It’s called The Plain & Simple Guide to Music Publishing, which is now in its third edition. The book offers advice on protecting and profiting from music copyrights for the lay musician and/or songwriter, with enough substance to be helpful to those already in the business. Topics include the growing importance of streaming and subscription models, a discussion of new compulsory license media, the impact of copyright terminations and reversions, updated advice on current license prices, as well as all the basics of copyright and rights management.
We are pleased to do this new Q&A interview with Randall Wixen, He discusses the current state of music publishing, including music streaming, synchronization, performance and mechanical income. He also talks about his company Wixen Music Publishing, and why the company has been successful in tracking down royalties for its clients, and marketing their catalogs for additional income.
DK: With all the changes in the music industry and the shift to music streaming, how would you describe the current state of music publishing?
Randall Wixen: Under fire. I think an expectation has been set up, because so many people have access to free music, that has slopped over into other areas. Not only are record sales hurting, but it’s slopped over into things like synchronizations, where TV shows will call you and say “Oh, we should get it free too. We can listen to it for free, so why can’t we sync it for free?” It’s kind of a mindset where you have major productions still calling you and saying, “Well, this will be great promotion for you.” And I scratch my head and say, “Promotion for what? To not sell records?” (laughs).
So I think the industry is very much under fire, ideologically, toward the mindset that music doesn’t have a value because it’s so easy to get. I do think that will change, and there are things that are happening that will change it back in the other direction. But I think it’s not happening as quickly as I’d like, and I think in the interim it’s damaging to the publishing industry. There are things going on, where the streaming services are seeing that the ad-supported things aren’t profitable to them either, so you’re seeing an ideological shift going a little more towards, “Well, let’s get rid of ad-supported, and let’s just make it all subscription.” I think we’re also seeing a lot of pushback on just how the overall pool of money that the services pay for their product, namely the master recordings and the songs is allocated—there’s pressure to reallocate more of that money to publishers, and not the preponderance to record labels.
So I think there’s some positive things on the horizon. As an optimist, I do hopefully see a more positive future for us. But right now we’re under fire —we’re in the trenches fighting battles.
DK: If you put on your optimist hat, what would be one or two things that you realistically think could happen in the next couple years?
Wixen: I’ll give you three things. First, I think if the U.S. Justice Department came around more to removing some of the handcuffs on the consent decrees (that restrict ASCAP and BMI), and there was the ability to have more of a willing buyer-willing seller negotiation between publishers and music services, instead of a judge who is basing things on the 1941 consent decrees. I think if the handcuffs were taken off, that would be very positive. Second, I think it could be very positive if the new Librarian of Congress (Carla Hayden) would not be a puppet to major corporations like Google, that obviously want copyright to cost as little as possible to them. I think if we have a Copyright Registrar or Librarian of Congress who was actually more sympathetic to copyright holders, that would be a very positive thing.
The third positive thing that I would like to see happen, would be a more equitable split of the income paid by the streaming services. Currently, it’s tilted much more in favor of record labels than publishers. I’d like to see it be much closer to 50/50 than the current status of 7 to 1 to about 15 to 1.
DK: Are you encouraged by the news that Spotify, Apple Music and other streaming companies are building their paid subscriber base, even though royalty rates remain low for publishers?
Wixen: It’s encouraging, with reservations. It’s an exciting, new way for these people to build their business, but Apple and Google are monstrous companies that make a lot of money, and at this point in history, they’re building their music distribution and music consumption business on the back of publishers that are basically being underpaid. I applaud that the business is being built well, but again it’s being built on our backs, and until that changes, it is quite worrisome. Hopefully, the courts or other things will give us the clout to negotiate equitable deals. Right now, to use an absurd analogy, it’s like if the government told Cadillac and GM that anyone who wants to have one of your cars, can have one at a statutory price that we have determined, you have to sell it to them at a price that we think is appropriate rather than what the market will bear whether you like it or not. No other industry has such a huge, gross profit margin that the cost of the product that they’re distributing is less than what they probably spend on lunch and travel for their executives (laughs).
DK: As an administration and royalty collection company, what percentage these days do you collect from sync, performance and mechanical royalties?
Wixen: I would say it’s about 50% sync, 35% performance, 10% mechanicals and 5% otherwise.
DK: Do you think those percentages are more specific to Wixen Music, because you represent many classic catalogs, as opposed to a publisher who might rely more on current pop and country hits for their performance income?
Wixen: I would agree with you there. But I would say that although we have a very big repertoire of heritage acts and catalogs, we also do have a lot of contemporary stuff like the Black Keys, Fitz and The Tantrums and Andrew Bird.
DK: Can you give me an overview on the current state of sync income?
Wixen: There’s a lot of people who want to use music in advertising, film and TV. I think the value of including contemporary music—meaning the music of the last 50 years—in those things is recognized as being very, very good to the end product. I think the consumption of music by producers and ad agencies is not under fire. What is under fire is that there is pricing competition from other publishers who will be offering songs cheaper, young supervisors or younger brand managers who are used to getting music for free and don’t understand why a certain portion of their advertising budget should actually go to the people who’ve created the music that helps sell their products.
I’ve seen immense companies, Dow Jones top industrial companies and the top retailers in the country—these people come to you and say, “Yes we have 3,000 stores, or yes we’re one of the largest online retailers, but don’t you realize what great exposure it will be if you let us have your music for nothing?” But what does the exposure get me directly? It’s not going to get me sales of records. And if it streams 60 million or 100 million times, I’m only going to get a few thousand dollars. So really, I need you to pay me for the use, rather than relying on the fact that down the line somewhere, I might make some ancillary income, because that ancillary income will be minimal. So the pressure there is on pricing, and it comes from competition for what song will be used in the spot, and from the expectations that they shouldn’t have to pay or pay very much in the first place.
DK: Compared to five years ago, is sync income steady, a little down or a little up
Wixen: For us, I would have to say it’s up. But again, that has to do with the fact that more music is being consumed, and our catalog skews more towards the type of music that is being used. Here are a couple of examples: When we have one of our writers who has a part of a Top 10 song, the amount of the sync fee on that can be very, very low because there’s a lot of pressure to build this as a Top 10 single and to maximize the exposure for the band, and they’re trying to build a career rather than monetize a song that came out 25 years ago. Whereas if someone wants to use “Que Sera Sera,” we’re going to charge what it’s worth because we’re not trying to build Doris Day’s career. We skew slightly towards the second example which is why I think we’re up a bit. We’re probably seeing fees per use, apples to apples, being down a bit, but I think we’re getting more uses.
DK: I’d like to shift the interview now to talk about your company. How did Wixen Music get started, and how have you been able to attract such big names as Tom Petty and Neil Young?
Wixen: Well, my degree was in Economics from UCLA, and I was very good at math and numbers and logical things. I used to take calculus classes at UCLA for engineering majors, so I could get some good grades and bolster my grade point average. And so I had a natural feel for math and numbers, in the world before spreadsheets and Excel.
I was always interested in music and the music business growing up. I was managing bands in high school, and at UCLA I was managing some punk bands in the late ‘70s and early ‘80s. When I started looking at their royalty statements, a lot of things just jumped out at me as being wrong. A band would have 12 songs on an album, but they were only paid on 10. And they started with the wrong base mechanical rate. I discovered that I had a good ability to find underpayments or non-payments, and more of a personality suited to desktop audits as opposed to being a personal manager where you have to be on call at 3 in the morning when the van breaks down, and the groups call you from Texas.
So I spent a lot of time looking at royalty statements, and as other people learned that I was very good at that, I was brought in to look at royalty statements and try to find mistakes. The first really big break I had, was I met one of the guys in Styx, J.Y. (JamesYoung). He was their lead guitar player, and he and I became friends. He introduced me to his business manager, who had me look at all the Styx statements and do all the inter-band allocation of royalties. I was very good at that, and at the time the business manager had started working with Tom Petty, so he threw the Tom Petty statements to me. He said, “Have a look at these, and see what you can find, and see if they look okay to you.” And I immediately found Tom a huge adjustment—he had been charged for the same advance twice by the record label. Then one thing led to the other at that point, where I became the new kid on the block that everybody wanted me to look at their royalty statements.
All the business managers would call me, and I’d go look at the Guns N’ Roses royalty statements, or I’d go look at Kenny G’s royalty statements. That was sort of the initial impetus of the company getting started. I started offering this sort of forensic approach to royalty review to people that were publishing administration clients. And it just grew and grew from there.
DK: You’re known as a publishing administration and royalty collection company. Are you now also involved with acquiring music publishing rights?
Wixen: No, one of the fundamental beliefs that we have is that people should own and keep their own copyrights. In general, we don’t go out and try and buy copyrights. If a client is desperate and has to sell something, or for estate planning purposes they need to sell, then we understand that and there are exceptions. What ended up happening a few years ago, when other independent publishers came online to do administration, was everybody started pointing to us and saying, “They’re great at collecting every cent you’ve earned and getting you adjustments, but they’re not really marketing your material.” And we got so tired of hearing that, that we developed an in-house marketing department that we think is the equal or better than anyone doing it out there. So it’s now not just forensic collection and administration, it’s the full spectrum of services including proactive pitching and marketing.
DK: Do you have now have an in-house creative staff who are pitching for sync and other uses?
Wixen: Oh yes, absolutely. Sharon Masters is our VP of Sync; she was in charge of pitching masters at Atlantic Records for 17 years. She’s definitely a senior level person. We also have Tim Kane, who was at Warner/Chappell for eight years. Those are our two top people that seek out opportunities for clients. They have support people as well. But our ratio of creative people to copyrights is so much better than a company like Warner/Chappell or Universal, because they have millions of songs and we might have 60,000 songs. This benefits us in a number of ways. We have people who can actually know a huge majority of those songs, and be familiar with a much larger portion of our catalog.
DK: In 2010, you opened up a Wixen Music office in the U.K. Why did you decide to open up a UK office?
Wixen: It is a separate company that we opened for the purposes of feeding additional administration business into our company, because we were primarily getting administration clients out of the United States. We also did an analysis of the fees that we were paying to a U.K. subpublisher. We determined that for the commissions we were paying over there, we could have our own people and our own staff there for the same sort of money. And if that office brought in additional administration clients, it would just be pure icing at that point. So we had the base income and we retained the commissions that we weren’t paying to third parties, to make it break-even from the get-go, and everything else became supplemental. We’ve also gotten very active in collecting neighboring rights, and that’s been something that we’ve done very well, and made a lot of money for a lot of Americans who didn’t realize that they would be able to collect so much money for their neighboring rights.
DK: Can you explain what neighboring rights are?
Wixen: Sure. Here in the United States, when a record gets played by a radio station, they pay the songwriter and the publisher via BMI, ASCAP, SESAC and GMR (Global Music Rights). But in Europe, terrestrial radio also pays the performer and the people who made the creative contributions to the recording. Here’s an example—let’s say that The Doors recording of (the blues classic) “Back Door Man” get played on the radio in the U.S. The Doors didn’t write the song; it was written by Willie Dixon. So Willie Dixon and his publisher get paid by BMI for that airplay, and that’s where it ends here. But if “Back Door Man” gets played on a terrestrial station in Europe or throughout most of the rest of the world, not only do Willie Dixon and his publisher get paid, but The Doors would get paid too. The Doors and (producer) Paul Rothchild would be paid for being a contributor to the master recording. And that, in essence, is what neighboring rights are. It’s a performance royalty for the creators of the master recording.
In the United States, we don’t get that… although the organization Sound Exchange has been formed to pay a neighboring rights equivalent for internet broadcasts like YouTube. So artists here get a little taste of what neighboring rights could be, but for things like terrestrial radio or terrestrial TV, none of that is paid here. But in Europe, there’s a huge chunk of money to be collected. It’s become a very substantial and important business.
DK: To sum it up, what is it that Wixen Music does the best, and what makes Wixen a top administration and collection company?
Wixen: We are extremely hands-on, we are extremely bespoke to an individual client’s needs. And we are far more time intensive in terms of the effort that we spend for our clients, than our competitors are. We’re able to get into the nitty gritty of rechecking registrations that prior administrators have done. We are able to put income-tracking people on royalty statements to see if everything that should be paid is being paid, and at proper rates. And our creative people actually know you, your songs and goals and they’re in touch with you regularly. Because of our forensic royalty collection, we end up collecting a lot more money for clients than other people do. We believe that publishing is a business where doing things by hand with people is actually more effective than swapping electronic files and bypassing local expertise by collecting directly from foreign rights societies.
Our deals are very short term, so that people can test us out, and once they do, they see that they’re never going to get anything like this, that they’re seeing more income. We’re family owned and run, we’ve been in business for 37 years, and we’re not a hedge fund play or using your catalog as an investment pawn. We’ll be here for our clients.