STRIKE UP THE BANDIER

With the digitization of music, it seems better to be a music publisher than a record label these days.
It’s a road I first chose 30 years ago. Music publishing has a host of revenue streams that the recorded music business may have, but aren’t used to dealing with. Now they’re suddenly in my business, which is about pennies. Every time a song is performed on radio, TV, in a bar, a restaurant or a concert venue, we get paid, along with the authors and composers. This is an area that grows significantly every year, while the mechanical revenue, from physical sales, is shrinking. Music publishing business is a better place to be right now, but we try not to tell too many people because everyone wants to be in it.

Will music publishers end up profiting from online downloads and streams as much as physical product?
Of course, to the same extent that record companies will. Here in the U.S., we finally have some fixed digital rates that everyone knows will be in existence over the next five years. We get 9¼ cents for each digital download sold, no matter what the retail price is. We decided to go with a standard pricing rather than a percentage. Digital sales as well as ringtones are a substantial portion of our revenue. We just don’t spend a great deal of money on marketing and promotion.

With Hickory Records, you’ve started a label. Will music publishers continue to get more involved in artist development?
We’re doing it because we recognize plenty of opportunities for us to distribute records through companies like RED. We were very successful with Elliott Yamin. We sold nearly 700k albums. We’re now about to work with Ruben Studdard. We have to pick and choose the artists we want to be involved with. It’s all about someone who’s recognized and can sing great songs. We don’t need to sell millions of albums because we own all the songs. It’s a win-win for us as well as the artist. The deal model makes them a full partner. We split the profits after recouping.

How has the physical sales downturn affected your business?
One of our main sources of income, the mechanical royalty, went from being over 60% of our revenue to slightly above 30%. At the same time, we’ve grown our business double-digits over the past two years.

It seems sync licensing revenue for film, TV, videogame, cellphone and commercial use is increasing.
They could be profit centers for record companies, too, but they’re just not used to dealing in these areas. That’s been my #1 priority since the day I got into this business. You don’t need to rely on marketing or promotion. You can do it yourself by pitching the ad agencies, the film and TV music supervisors and, of course, the videogame companies.

You’ve made a deal with MTV for a Beatles Rock Band.
Hopefully, that will be out in the fall of ’09. It’s an enormous opportunity for anyone with an imagination to package a longstanding group. We think it will be the most successful music videogame project to date.

When will the Beatles catalog be available on iTunes?
I’m not sure there are any conversations even going on now. I can’t put my finger on the reason why EMI and Apple Corp. haven’t come to terms, but it doesn’t make any sense. I’m hoping they come to an agreement, because clearly EMI needs this like they need oxygen. Even I don’t understand why it hasn’t been done yet.

You own the Leonard Cohen catalog, which is paying some major dividends right now with the various hit covers of “Hallelujah.”
When you have a song like this, it transcends generations and genres. Whether I owned his catalog or not, I would love “Hallelujah.” I love Leonard Cohen’s version. I love Jeff Buckley’s version. And I love the X Factor version. What’s impressive is Simon Cowell’s ability to recognize a song like this.

A great song is a great song, no matter what the delivery system.
That’s right. And they’re hard to come by. I’ve always had an ability to hear a song and recognize that it’s special, different from what you hear on the radio... It has a unique quality. And that’s been part of the success of this company. We’ve gone out and chased after the ones we think are really special, the people who write great songs that are trans-generational.

How involved is Michael Jackson in the running of the company? Any plans to buy him out?
He’s a big fan. Very supportive, but he’s not involved in the management at all. He gets all the reverence and respect that he deserves. He’s a darn good publisher. He recognizes great songs. At this point, we are one happy family. It’s amazing what success can do.