By and large, intellectual property earns nothing for the originator, yet it is responsible for more fortunes than anything else.
The 1996 film Basquiat chronicles the life of street artist Jean-Michel Basquiat, who began painting when he was living in a cardboard box in New York City.
A drug dealer in New York had a regular customer named “Mike," who, after buying $300 worth of heroin, saw some paint cans on a shelf of the dealer's bodega and asked if he could tag the dealer's metal door. The dealer said sure, so Mike painted a devil image on the door and then went home to O.D. Years later, somebody showed the dealer a book about Jean-Michel Basquiat saying, “Look, that's Mike." Today, Basquiat's paintings sell for as much as $14.6 million. The drug dealer who sold him the fatal hit of dope is cashing in on the last work Basquiat painted.
Basquiat painted on the streets of New York in the '80s for the same reason our ancestors painted in caves 32,000 years ago. Even when his paintings were earning him a fortune, Basquiat continued to paint for free when he felt inspired. He needed to create.
By and large, intellectual property earns nothing for the originator, yet it is responsible for more fortunes than anything else. Geniuses, morons, every Joe and Jane Six-Pack alike pull an endless supply of intangible assets out of thin air every day, filling our world with musical, literary, and artistic work, as well as computer programs, patents, trade secrets, designs, and garbage. By virtue of the fact that you're reading Premier Guitar, it's a safe assumption that you, dearest reader, create music. Let me fill you in on the money in songwriting.
Shares: When you write a song, you immediately own the song—100 percent of the songwriter's share and 100 percent of the publisher's share. The song exists as soon as you've written or recorded it, and can potentially be worth money. The profits from a song are split evenly between the writer(s) and publisher.
What's a publisher? Before recordings, songwriters earned money from sheet music printed by publishers. Today, publishers don't print much music, but they do administrate copyrights, license songs, and collect royalties for songwriters. Most importantly, publishers pitch songs to recording artists to get cuts. Publishers also pay for recording demos of songs and often pay writers a “draw" (a monetary advance against future royalties earned). If the writer's songs earn money, the publisher recoups the advance through the writer's share of royalties. If the songs never make money, the publisher takes a loss.
Do you need a publisher? A great publisher works wonders. Bob Dylan did not become a legend because of his first few poor-selling albums. His publisher got his songs recorded by the Byrds, the Mamas & the Papas, Peter Paul & Mary, Sonny & Cher, the Hollies, the Association, the Turtles, and nearly every other successful act in the '60s. After his songs hit for others, people discovered Dylan's own recordings. Publishing worked for Dylan, but it's not for everybody.
My publishing odyssey. When I learned one could make money writing songs, I wanted in. I located a successful songwriter and bugged him to listen to my music. After some bribing and pestering, he agreed. I was thrilled when he said he liked one of my songs, and ecstatic when he said he would make the song better with a co-write, then publish it and record a demo. However, the changes made the song sluggish and the demo laid there like lox. At first, there was some interest in the song, but then it cooled and now withers away in the Polygram song mausoleum with a million other worthless songs.
It worked out fine. We became friends and wrote a few more songs that were cut and made their way onto some major-label albums and a film. This led to my first writing deal, which led to my second writing deal, which led to a few failed development record deals (on Atlantic and Asylum), which led to my happy, little weird life of playing and writing music.
Today, I hold my publishing. Harry Fox agency collects my mechanical royalties. (Those are royalties paid for the reproduction of songs on CD and other devices sold on a “per unit" basis. The current rate is $.091 for songs lasting five minutes or less.) Synchronization licenses (a fee paid when music is synchronized to images like film), I work out on a per-deal basis. For example, a song I wrote and recorded with my band the Tennessee Hot Damns just landed in a movie. I worked out a small licensing fee because I'm happy to get exposure for the Hot Damns. Also, when the movie hits HBO or Showtime, I will probably make some jack through BMI, an organization that collects my “public performance" royalties. (These are fees radio, TV, and internet broadcasters must pay BMI, ASCAP, or SESAC, who collect income on behalf of songwriters and music publishers when a song is publicly broadcast.)
I do a lot of music for television, often cutting deals where the production company or network acts as the publisher or buys my music outright. Many would argue that this is a stupid way to do business. Maybe, but I've got to make music and this allows me to, so I don't care.
Willie Nelson shares this philosophy. He received less than $300 in total for three of the biggest revenue-generating songs of all time—“Crazy," “Ain't It Funny How Time Slips Away," and “Night Life." Though he lost millions on these songs, their success made people recognize his genius as an artist (and gullibility as a businessman), which led to the incredible career he's enjoyed for over half a century.
Had Willie not sold his songs for a pittance to some smarter businessmen, he may not have become Willie Nelson. Similarly, had Basquiat not painted the streets of New York for free, his creations may never have been seen and the world would not be as rich. Business people will exploit the talents of artists, but usually some reward makes it to the artists, enabling them to create. Sometimes the best business plan in the arts is to focus on making great art.
John Bohlinger is a Nashville multi-instrumentalist best know for his work in television, having lead the band for all six season of NBC's hit program Nashville Star, the 2011, 2010 and 2009 CMT Music Awards, as well as many specials for GAC, PBS, CMT, USA and HDTV.
John's music compositions and playing can be heard in several major label albums, motion pictures, over one hundred television spots and Muzak... (yes, Muzak does play some cool stuff.) Visit him at youtube.com/user/johnbohlinger