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Adam Lambert’s Star Power from an industry perspective 56 Simon Cowell, Publishing, Mechanical Royalties

Posted By nymichael On June 30, 2009 @ 11:33 am In Industry Perspective | No Comments

A quick bit about the business of American Idol… as we’ve discussed, Simon Cowell’s contract doesn’t come up until next year (in 2005, when he settled with Simon Fuller, the creator of AI, in connection with The X Factor, he agreed to participate through AI9 and that’s why his company Syco basically has the first option on recording agreements for Finalists like Adam). But negotiations are well underway apparently. I wouldn’t bet the ranch on these numbers; when figures like these are leaked there’s usually an agenda. The Post is sourcing The Guardian UK but we hasn’t found the original story. But mainstream media is picking it up (the “snowball effect” we talked about last month), has some interesting ballpark numbers, and provides some further insight on the enormous business of American Idol.

http://www.nypost.com/seven/06302009/tv/enormous_money_176757.htm [1]

“Cowell, who reportedly made $36 million last year for judging the hit competition show, has been offered three or four times that amount — between $100 million and $144 million per year — by co-producers Fox and 19 Entertainment to stick with “Idol” when his contract expires next May, according to The Guardian, a London newpaper. … While $36 million may seem like a lot of money for five months worth of snarky comments and eye-rolls, it’s only a fraction of the estimated $900 million that “Idol” rakes in a year. As the lynchpin of the show — without him there would be no one to hate and no dramatic tension with Paula Abdul — Cowell believes he’s due for a raise.”

By the way, Paramount picked up his project, a movie about the life of Paul Potts, the amazing cell phone salesman who won Britain’s Got Talent (http://www.guardian.co.uk/film/2008/jun/24/news.culture [2]).

Best, Michael

This follow-up post is from July 1, 2009 at 2:18 pm:

With respect to musical compositions, once songs are registered with the performing rights agencies (most commonly ASCAP or BMI, for example Michael Jackson’s song are BMI) anyone can record them, no permission is specifically needed as long as the record company pays for a “mechanical license.” The procedure is generally to simply request a license at a mechanical rate which is affordable. The rate today is 9.5 cents up from 9.2 and it’s not unusual to request a ¾ rate for all audio uses of the recording (that requires permission, paying a reduced “statutory rate”). That means that when a track is sold, the publisher receives 9.5 cents from the sale of the track. Search for Dina LaPolt in blog post 35 on the home page for more about iTunes royalties breakdowns. Most of the larger publishers are represented by Harry Fox Agency and they require that you use their form of mechanical license.

What that means is that Sony or anyone else can record published compositions by Adam, they just need to pay the mechanical rate (and other rights, including live performances, new media, etc… I’m trying to answer as simply as possible :). So there wouldn’t be a restriction about performing compositions, Sony wouldn’t even need approval as long unless they want a discount from the “statutory rate.” Not to dwell on Michael Jackson, but this is what caused the rift with Paul McCartney - Michael outbid Sir Paul on the ATV catalog. As Sir Paul put it, “You know what doesn’t feel very good,” McCartney said as recently as 2006, “is going on tour and paying to sing all my songs. Every time I sing ‘Hey Jude,’ I’ve got to pay someone.” Here’s a recent ABC News story about this matter: http://abcnews.go.com/print?id=7952215 [3]

If you have an interest in the music industry, by far the best resource is called “This Business of Music” http://www.amazon.com/gp/product/0823077233/ref=pd_lpo_k2_dp_sr_1?pf_rd_p=304485901&pf_rd_s=lpo-top-stripe-1&pf_rd_t=201&pf_rd_i=0823077284&pf_rd_m=ATVPDKIKX0DER&pf_rd_r=1AC5DMJMT6RA8B8NGJXN [4] - it’s the definitive guide to the recording industry and while technical it’s a must read for anyone interested in the industry.

Have a great day! Best, Michael

This follow-up post is from July 3, 2009 at 2:06 am:

A mechanical royalty is for recordings, a different set of rights/permissions are involved for television. (Please see my Blog post 4, http://nymichael.com/2009/03/27/adam-lamberts-star-power-from-an-industry-perspective-4-music-clearances-publishing-rights-show-production-entertainment/ [5], I cover the five rights of copyright and provide some specifics from AI — the Blog search feature is so helpful and I can’t thank the team enough! :) Basically, 19 clears compositions for broadcast (that’s why you read about lists of songs that have been cleared that the contestants need to pick from). Releases of live recordings from the TV show are with the broadcast licenses (plus mechanical), the “studio only” tracks are straight mechanicals.

Publishing is the most lucrative, and most complex, part of the industry. Now Artists are more savvy, but the recording companies have huge leverage. In the past, Artists had to sign away their publishing to get a deal — that’s why you’ll see so many people who didn’t really write songs being credited as writers (many Motown Artists among others were affected). With respect to the publishing history of the Beatles, my understanding is this is basically correct: http://ask.yahoo.com/20031210.html [6].

An overview of publishing and its importance is in this week’s Time Magazine http://www.time.com/time/arts/article/0,8599,1908185,00.html [7]; that’s why I’ve been tying Michael Jackson into the discussion here — Sony is also Lady Gaga’s publisher and most likely will have Adam’s catalog as well.

Hope this is helpful.



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URL to article: http://www.nymichael.com/2009/06/30/adam-lambert%e2%80%99s-star-power-from-an-industry-perspective-56-simon-cowell-publishing-mechanical-royalties/

URLs in this post:

[1] http://www.nypost.com/seven/06302009/tv/enormous_money_176757.htm: http://www.nypost.com/seven/06302009/tv/enormous_money_176757.htm

[2] http://www.guardian.co.uk/film/2008/jun/24/news.culture: http://www.guardian.co.uk/film/2008/jun/24/news.culture

[3] http://abcnews.go.com/print?id=7952215: http://abcnews.go.com/print?id=7952215

[4] http://www.amazon.com/gp/product/0823077233/ref=pd_lpo_k2_dp_sr_1?pf_rd_p=304485901&pf_rd_s=lpo-top-stripe-1&pf_rd_t=201&pf_rd_i=0823077284&pf_rd_m=ATVPDKIKX0DER&pf_rd_r=1AC5DMJMT6RA8B8NGJXN: http://www.amazon.com/gp/product/0823077233/ref=pd_lpo_k2_dp_sr_1?pf_rd_p=304485901&pf_rd_s=lpo-top-stripe-1&pf_rd_t=201&pf_rd_i=0823077284&pf_rd_m=ATVPDKIKX0DER&pf_rd_r=1AC5DMJMT6RA8B8NGJXN

[5] http://nymichael.com/2009/03/27/adam-lamberts-star-power-from-an-industry-perspective-4-music-clearances-publishing-rights-show-production-entertainment/: http://www.nymichael.com../2009/03/27/adam-lamberts-star-power-from-an-industry-perspective-4-music-clearances-publishing-rights-show-production-entertainment/

[6] http://ask.yahoo.com/20031210.html: http://ask.yahoo.com/20031210.html

[7] http://www.time.com/time/arts/article/0,8599,1908185,00.html: http://www.time.com/time/arts/article/0,8599,1908185,00.html

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