My business is a music publishing company that specialises in the licensing of songs from partnered record labels for the use by film production companies in various projects. The structure for this operation is that of a limited liability partnership in which my business will be partnered with several independent record labels. My business will be funded by a combination of my own personal savings, a loan from my bank and the use of a loan/grant from a business funding organisation. In my business there at least 6 people working for the businesses various departments e.g. two professionals working on Accounting/Rights and Royalties Administration, 2 working on A&R and Marketing/Promotion and 2 people working on the Copyright/IP Protection/Legal and Business affairs. My businesses main service will be to license music from my business partnered record labels for the use by independent film production companies. Other services would include Music Supervising, Collaborations, a music catalogue and hit music licensing. The business will have a strong, and modern website acting as the face of the business as well as continuously updated social media. My business will also have several types of contract for professional including membership and synch licensing agreements as well as the appropriate legal documents for insurance and running the business.
In this paper, I have provided a step by step guide in to the building of a music publishing business that specialises in the licensing of songs from several independent record labels to be used by independent film production companies such as Patchwork and Warp films. My strategy is to build a self-sustaining operation for my business by the end of its first three years of trading, with the aim being to provide a piece of literature that analyses all relevant areas within my chosen niche of Film Music Publishing, to understand how its publishing businesses operate. As an Independent Music Publishing business that is centred around film production, it is only natural that it offers a very integrated approach to this niche in that it would establish the various independent production companies own music publisher supervising the music in their films. In the following text I will go on to analyse the structure, financing and funding options, as well as personnel of the business. I will also cover the strategy and services – including details on opportunities and threats – trade partners, legal issues and IT/digital queries.
The business structure that I have chosen is that of a limited liability partnership with the owners of several independent record labels. This means the partners in this limited liability partnership aren’t personally liable for debts the business can’t pay. Their liability is limited to the amount of money each of the businesses partners invest in the business. Every year, the partnership must send a partnership Self-Assessment tax return to HM Revenue & Customs (HMRC). The partners must also send a personal self-assessment tax return every year, pay Income Tax on their share of the partnership’s profits and pay National Insurance. It is also important that we register for VAT since we expect its takings to be more than £79,000 a year. The business can share its profits with its partners. I have chosen this type of business/legal structure for my company as it is advantageous in the ways that we have limited liability. This means that my business and its partners will be treated as a single entity, being responsible for all debts. This means that if anything happens to the business we are all personally affected and are only liable for unpaid shares. This type of structure also means it is easier to raise large sums of capital and flexibility can be incorporated in members agreement. There are also greater opportunities for bringing in more skills.
Financing and Funding
To start my business, it is important that I raise the required start-up capital for it to launch. This will mean having a decent office facility with money budgeted to the payment of salaries and utility bills for a period of several months. Money will also be required to purchase equipment and technology etc. I have explored several options to fund my business shown below and have picked the right ones to suit my type of business in relation to its scale and services. Some of these include…
– Money from Personal Savings
– Investors and Partners
– Loans and grants from my bank
– Seeking business grants and loans from funding companies
– Sourcing loans from family members and friends
My business will be funded and financed in several of the ways shown above. This will be through a combination of my own personal savings, a loan from my own personal bank and ultimately pitching my business and applying for business grants and seed funding from funding organisations. For example, ‘funding circle’ offer secured and unsecured loans of up top £5 million for business start-ups and my own personal bank offer fixed rate loans of up to £25 thousand pounds. Music business funding societies such as the Musicians Union as well as the Princess Trust also supply loans and grants for a variety of purposes to suit your business needs.
Personnel, Roles and Departments
There will be several different departments in my business with many professional personnel under each, adhering to the roles that ultimately will keep my business running. I have listed some of the most important departments with their roles involved shown below:
Accounting/Rights and Royalties Administration (2 people)
– Dealing with royalties received from collection societies
– Manage and distribute royalties to artists within partnered record labels
– Monitoring/tracking when and where compositions are used
– Issuing licensed compositions and rights for use by film production companies
– Dealing with income between business partners
– Creates income charts and spreadsheets
– Controlling finance of the business (profit/loss, income and expenditure, balance sheets)
– Deals with legal fees, demo costs, promotion and office expenses
– Registers new works and music catalogue acquired with collection societies (MCPS, PRS)
– Setting up accounts with partner labels and film production companies (clients/trade partners
– Negotiate music user licenses, negotiate sub-publishing agreements
– Set up pay roll and credit administration
– Provide statistics
A Department/Marketing and Promotion of Business (2 People)
– Picks music to be used in film productions
– Discovers music within partner labels for client use
– Continually updating businesses music catalogue
– Runs business social media and website
– Recommend new artists for the partner labels
– Issues out various contracts
– Attend and organise promotional events
– Circulates information and product to media
Copyright and IP Protection/Legal and Business Affairs (2 person – lawyer)
– Conducts title searches
– Deals with legal and insurance documentation
– Register claims of copyright
– Records transfers of copyright ownership
– Keeps records of subsisting copyrights and their pending expiration and termination dates
– Create contracts for various deals (including membership contract between business partners)
– Oversees the protection of rights, acting when these are infringed
Strategy and Services
As a music publishing business that is partnered with several record labels- and co-works with various film production companies – my strategy for developing this company is by networking with as many independent film production companies and independent record labels as possible to build a catalogue of trade partners and clients. To do this means undertaking excellent field research of my businesses niche and understanding who my competitors are, what they are doing and how to do it better. From the research I have already conducted, there aren’t little to no independent music publishing companies that directly work with film and film production, but only publishing companies that work on many niches within publishing. This will be the way my business would compete within the specific niche/marketplace my business works in. For my company to be successful it would need to be the number one music publishing company for independent film production that can conduct more business and earn more income than the rest. For this reason, my unique selling point is having a film focused music publishing company that caters primarily to the licensing of music to film production companies from the record labels my business is partnered with. It will offer several services to make working with my company as easy as possible for clients/trade partners. As an independent company, my business will mainly work on its primary service of licensing music to production companies but will also have custom sub services so that is different to, and can compete with other similar businesses. This also means having a variety of revenue streams. Some of these services are shown here:
Film Music Publishing
· Securing all film music assets by establishing their film music publishing entity. Through this film production companies can fully own their score music and receive music publishing royalties whenever their films are broadcasts.
· My business would try to resolve the current problem in that production companies believe they have secured all rights by paying the composers for the music production, but forget about important publishing rights associated with every commissioned piece of music. Because of this, for every broadcasting of the film, money is paid out to third parties but not the production companies.
· This means that film production companies on average loose fives and six figure sums each year by not securing music publishing rights.
· Lack of ownership could lead to negative use of film music, stealing of creative ideas and competitors buying the publishing rights.
· As a solution my business would offer to film production companies a concept that lets them become their own music publishers and own all rights associated to their music. For every broadcasting, they will receive the music publishing income from the international collection societies.
· My business would register all the production companies works electronically at the appropriate collection societies and receive a percentage of synch licensing income every time the film is broadcast, as well as upfront synch licensing fees.There will also be many sub – services that my business would adhere to shown below:Music Supervising· Discovering music for client use.Hit Music Licensing· Buying and licensing hit music and having direct contact with various labels.Music Catalogue· Offering a music catalogue for placement in film.Collaborations· Finding relevant artists within partner labels for collaborations in films.Hit music licensing and music catalogue use would mean an income of synch licensing royalties while there would be up front fees for the music supervising and collaborations. Trade partners and clients would include the likes of independent production companies such as Bedlam Productions, Wigwam films, Island Pictures and October films. My business will face many opportunities and threats in both the short and long term shown in the graph below.The main two types of contract/agreement would be a membership agreement and a synch licensing agreement for both the labels my business is partnered with and the film production companies that the business works with.The member agreement is important so that we can set the ground rules in the business partnership with the independent labels. This will contain important clauses such as profit sharing, management and decision, retirement and dissolution, entitlement and obligations of outgoing members and salaries/distribution. Management and decision clauses will mention how the business and partners will make decisions especially in important topic cases when there is no consensus while the profit sharing clause is important as it states how much each partner is putting in to the partnership. Salaries and distribution will cover how each member makes money from the partnership and investment repayments. The synch licensing agreements will be for both the independent record label partners and the film production companies that we work with. This agreement is a license granted by the owner of a piece of work. This allows the licensee the right to use the music in a visual piece such as a film, TV series or video game. The copyright is split in to two parts, this being the master sound recording – owned by the record label in this case – and the composition owned by my business – the publisher. Important clauses within this agreement include consideration, credit, representations and warranties, publicity and ultimately details on the ‘grant of synchronisation license’ IT/Digital
Digital technologies and the
digital sphere are emerging as the big push in changes to music publishing and
the defining factors in the future of the music business. The abundance of
social media and social channels in general is allowing new and old music
businesses to thrive like never before. In relation to my own film focused
music publishing business, having an established website for my business is crucial
so that clients/trade partners can get in contact and set up business
relations. The website is the face of my music publishing business meaning it
will advertise all services, describe what the company is about, its location,
provide contact numbers and emails and be the source where most clients and
trade partners will start their business with us. Social media such as Facebook
will also be important for my company as it can be used to publicise the
business as well as give news on new deals with artists, releases etc. Having an
established online and IT presence is very important for any kind of music business,
and helps to get across my businesses unique branding, image and ultimately its
In conclusion and I am confident
in the businesses future start up success as I feel that I have covered all six
of the businesses structural criteria fully. I expect my business in the next
three years to be a strong and established business that can compete with other
similar businesses. To avoid mentioned threats within future business, I plan
to expand my business further so that it can continue to compete. For example,
creating a department for the creation of original compositions, made my
business. Another example is the introducing digital distribution services. What
sets my business above the rest is its strong ability to use a unique and
specific strategy that targets a specific niche – this case being film
production – that caters to many film production companies needs through its
variety of services. It is for this reason I am excited for the future success
of the business.