Rebroadcast: The Tin Pan Alley Publishers of NYC

The Story of New York's Tin Pan Alley and its role in the evolution of music industry.   The Tin Pan Alley area of New York housed a collection of music publishers and songwriters located on West 28th Street in New York City, between Fifth and Sixth Avenues,  It became the birthplace of the modern music industry, where the concept of the song as a marketable product was developed and where many iconic American songs were written and published.  NOTE:  Our phone number has changed to 8777DEALMAKERS since this episode first aired on Aug 29, 2025.  Thank you for lisltening  

Transcript

SPEAKER_00 0:06

Welcome to Music Road Deal Makers, where we explore our world of making deals from Nashville's famed Music Road. In the heart of Music City, we are the dealmakers, from composing to closing. Now, here's your host, Barry Neil Schrum and Dennis Disney.

SPEAKER_02 0:30

Welcome all you dealmakers out there. I'm your host, Barry Neil Schrom, and I'll be joined in a few minutes by my partner-in-law, Dennis Disney. We're so excited to have you for our sixth episode of Music Row Dealmakers, our podcast from Composing to Closing, brought to you by Shrum Disney and Associates. As always, we're coming to you live from our offices in Nashville's famed Music Row, where Dennis and I have had the privilege of practicing law for a long time, over 30 years for me and a lot longer for Dennis. So before we get started, I want to thank the people who have downloaded our episode. We've got a lot of listeners and we'd like even more. If you have questions, email us at questions at musicrow dealmakers.com. If you want to call, it's 800 Deal MKR Dealmaker or 800-332-5657. Today we continue with part five of the iconic dealmaker series that we've been doing. It's a 10-part series, and we've done roughly three or four of those already. This week's episode is a little bit different than the previous ones. In those episodes, we've looked at individuals. For example, we we looked at Frank DeLeo, Michael Jackson's manager, who put together the famous Pepsi deal. We looked at Cash and Carrie Pyle in several contexts. He put together the deals for uh Red Grange and essentially started what is now the NFL. Same with tennis. He he he put together deals for Susan Langlan and started what is now the tennis circuits. And then finally he did the famous Bunyan Derby, which we talked about two weeks ago. So we hope you were able to download those episodes. If you haven't, go back and take a listen to those. But but but this part, part five, deals rather with a group of individuals. So we are traveling back in time to the beginning of the music publishing industry in the mid-19th century, which began in a place called Tinpan Alley, located in New York City on West 28th Street between 5th and Broadway. There, a group of Jewish immigrants, people like uh Irvin Berlin or Ira Gershwin and others, played a significant role in this uh popular New York hub for anything related to music or songwriting or music publishing. Of course, it is no longer there. There is now a plaque between 28th and 5th, a memorial plaque that that sort of designates the location. In this episode, we'll consider if and how this music publishing mecca of the late to 19th and early 20th century impacts the deal making that still goes on in the music publishing industry, here on Music Row in Nashville, of course, and then also in places like Miami, New York, LA, and just anywhere that music publishing happens. So this is the story of Ten Pen Alley and its role in the evolution of music industry publishing deals. First, I want to give you a little bit of background, and I will confess that I teach this subject about 10 Pen Alley and the music publishing industry and copyright and at Mike Kerb's School of Music and Business. And I will try not to pontificate as much as I do when I'm professing to my students. So we'll give it a shot. I'll try to back it off a little bit, okay? But uh a little bit of background is necessary here to understand how Tenpan Alley evolved. So we began with laws protecting an author's exclusive right to copy. After all, that is what a copyright is. It is the right to copy something you've created. And that ability given to us through law has been around for hundreds of years. But the concepts underlying the idea of protecting someone's right to copy have been around for thousands of years. John Locke, for example, in the in the Enlightenment period, said that since a person owned the fruits of their body's labor, so too do they own the intellectual fruits of their mind. In other words, what you create with your mind or your body gives you ownership when you create it, when you apply labor to resources that are naturally available to everyone, that gives you some ownership in that. It's called the right of first acquisition. So this has been a pervasive opinion, this idea, for most of the time the industry has existed. And of course, currently it is reflected in the law's proclamation that a person has an exclusive right to make copies of their creation. So when you think about the Constitutional Convention in Philadelphia in 1787, copyright is probably not the first thing that comes to mind. However, it was one of the first priorities for James Madison and those other delegates to ensure this right of ownership for your creations, to make sure that the citizens of this new nation that they were conceiving had this right. So they were the first ones, at least in the United States, to give Congress, which they were envisioning at that point, the right to protect quote-unquote writings and inventions. And that's what we now call the Progress Clause. It's Article 1, Section 8, Clause 8 of the Constitution. So acting on that authority, the first Congress of the United States exercised that right and passed the first Federal Copyright Act in the United States in 1790. So a number of amendments occurred during that time. However, that law would not be amended for over a hundred years later in the Copyright Act of 1909. The reasons for that is are numerous, actually, but something happened in the midst of that period from 1790 to 1909, and that is the Civil War. And of course, that had a great impact on a lot of different things. That war, of course, pitted brother against brother. It lasted only four years. But and then during the decade or so that that followed that, called the Reconstruction era, the United States began to grapple with the challenges of how to reintegrate the Confederate states that that had seceded from the Union back into the Union. So a lot was going on during that time. During Reconstruction, people needed something to take their minds off of what they had just been through. Also to deal with the struggles that were facing them at that point. And as is often the case in humanity, people turn to music as a balm for the soul. So during that period, people were consumed with music, as we've always been, and they began singing it. Now, they experience music in a little bit different way than we do now. We stream music online now. That's the farthest thing from their mind at that point in time. They would sing with their vocal cords, they would hear music from vaudeville plays that went through town, from hearing about Broadway shows, from people performing religious songs. And so that was the consumption of music at that time, singing it. And then, of course, if someone could save up enough money to purchase an instrument, perhaps a violin or even a guitar, then they would sing and accompany themselves on that. And then later in time, or if they had enough financial resources to purchase a large instrument like a piano, then they would use that as the accompaniment. So during the Reconstruction period and after the war, the manufacturers began to sense the market that was being created by this consumption of music. So they began to envision mass-producing pianos, and those began to proliferate. And so these companies took on the task of making pianos that the average person could afford. Ultimately, they designed something called the cottage piano, which for those from the modern era, we would call it a cabinet piano, something that somebody might have in their living room. In those days, they they would put it in their parlor or in their drawing room. So to illustrate that, in 1896, about a year after the end of the Civil War, the five largest piano manufacturers in the world were all from America. And by 1900, the year 1900, half of the pianos sold in the world, the entire world, were manufactured by American makers. These pianos sold like crazy. The average person could save up enough money to buy these, and soon pianos began to average about 2,000 sales per year. And to that point, that was a lot in the 1900s. And so the piano, according to one source, was considered the first musical fruit of the middle class prosperity. Because as manufacturing grew, people got jobs and people became more prosperous. The lower class no longer had to find ways to feed themselves because they were getting jobs in these factories. So it was all sort of a growing and, as the name implies, a reconstruction of the country. So the middle class began to acquire these pianos in large quantities. And they did that so that they could perform music or sing music at home, at-home music making. This was conducted in those parlors and in those drawing rooms where they would invite a soiree of friends and family to come in and sing. And someone would sit down at the piano and they would open this little folder, sheet music, a pamphlet, basically, about I would say eight and a half by eleven, a little bit bigger, with a colorful cover. And that was the sheet music. That was the score to the songs. And so they would go to music stores and buy these songs, invite their friends over, have some little finger food and some cocktails perhaps, and all stand around the piano while somebody played and everybody sang. Tin Pan Alley Publishers, they standardized this process of sheet music and distributing popular songs with piano accompaniment. They created this market and they recognized this market. So they built their business model around creating, publishing, and selling sheet music. That was the record industry of the 1900s. So you might be wondering where this moniker of Ten Pan Alley comes from. You know, why isn't it called Music Alley or Music Publishing Alley or, you know, whatever? Ostensibly it comes from a reporter, a newspaper writer. His name was Monroe Rosenfeld. And Mr. Rosenfeld was visiting one of these Ten Pan Alley publishers in order to write an article about them. And he noticed as he came down 28th Street, West 28th Street, this incessant cacophony that consisted of people hacking away at a piano with other people perhaps joining them with a tambourine or patting their feet on the hollow floors and whatever to create rhythm. And he said it sounded like hundreds of people banging tin pans together. You know that sound. And that sound would waft down from the open windows. There was no air conditioning in those days, and it would bounce off these brick facades of the buildings lining the alleyway. So Tin Pen Alley got its name from the very thing that inspired the market, and that is the playing of piano to accompany singing. And I mentioned earlier that that the people throughout the United States would hear these songs from traveling minstrels and vaudeville players, and and vaudeville and those people, those traveling minstrels, played a very important role in the evolution of the music publishing business and served as a very effective showcase for the publisher's music. That's how the people heard it. I remember when I was a younger person, we still had something called record stores, and you could go into the record store and they would be playing music over the loudspeakers. And you would hear a song that you like and you say, okay, what's that record? And they would point you in the right direction, you would find it, buy it, and go your happy way. That was a way of showcasing rec recorded music. Back in these days, the singers and the minstrels were the ones that showcased the sheet music. So songs like Give My Regard to Broadway, Shine on Harvest Moon, or Let Me Call You Sweetheart became standards because people would hear these in the way that they consumed music, going out to performances, seeing performance, seeing people seeing it. So the first hit song from Tin Pan Alley was Charles K. Harris's After the Ball, which sold approximately 5 million copies. Now let that sink in a little bit. Five million copies in the early 1900s. Even in today's market, a five times platinum award from the RIAA, which currently represents sales of five million records, is a major achievement. And so in the 1900s, selling five million copies of a piece of sheet music was indeed a hit. And the phrase hit song developed in Tin Pan Alley. And we still use that phraseology today. The success of these publishers on Lower Broad inspired a steady stream of people who were interested in music and singing and playing to Tinpan Alley, songwriters, musicians, performers. It's even said that Stephen Foster spent part of his last few years peddling his songs to Tin Pan Alley. It wasn't around when he was doing most of his writing and in the prime of his life, but toward the end of his life, he came to New York to try to create a market for his songs. So how did this work when a songwriter comes to New York and hawks his wares or pitches his songs? Well, the publisher, of course, had the upper hand. We've talked about leverage on deal makers several times. And leverages is this idea that you control the deal, that you have the upper hand, as it were. We've talked about the golden rule of the music business. He who has the gold makes the rules. That's the way it was in the 1900s, right? It was the wild, wild west out there. Remember, the Copyright Act had been around for almost a hundred years at this point. And the publisher knew that they had the upper hand. These people were coming to them, offering them songs that they had written. And so they would pay that songwriter. They would say, okay, we'll give you $50 for your entire collection of songs. And of course, in those days, $50 was a lot of money, and these songwriters would willingly take it. The only catch to all of this, of course, is that when the publisher paid $50 for this collection of songs, they became the publishers. The copyright was acquired by the publisher. And then their songwriters or their name would be listed as the author of the copyright. That is something to bear in mind as we start talking about today's deals a little bit later on. Now, if the publisher perceived a certain innate talent in a songwriter, well, they may have an interest in that too. And they might hire the songwriter, for example, as a staff composer to write songs exclusively for the publisher, something that still takes place even today. Once again, however, in the 1900s, the 10 Pan Alley publishers would register those songs in the name of either the publisher or the one of their staff writers, but not the author of the songs. Now that changed as time went on, but that was the basic modus operanda for the 10 Pan Alley publishers. Now, another thing the 10 Pan Alley publishers do is attract vaudeville performers and Broadway stars from New York and even go to them and go to the producers and offer material to give them material for their performances and acts because, as I said earlier, that it was their way of marketing the music. And if you can have something sung in a Broadway play that plays every night during the week to hundreds of audience members, your sales of that sheet music are going to increase. So how would the people, where would the people buy these songs and how would they know it otherwise? Once the song got popular through a Broadway play or through a vaudeville performer, the Tin Pen Alley publishers would hire employees, they were called songpluggers, who would travel across the United States and hawk their wares. They were armed with a suitcase full of this sheet music to distribute and market to the various consumers. So these song pluggers would travel to music stores, department stores, and other places across the country in the large cities, cities like Chicago, New Orleans, St. Louis, Philadelphia, Boston. And these music stores and these department stores had pianos because that was the popular instrument of the day. And the song plugger would use that piano, set up shop, take out a piece of shoot music, stock the wares of the department stores and the music stores, and then they would begin to play and sing those songs, encouraging people, encouraging local patrons to purchase the music, much like that record store that I mentioned earlier, would play the popular songs to get you to buy them. The same way. Interestingly enough, Urban Berlin and George Gershman, some of the most famous names in Tin Pen Alley, started out as song pluggers, going around selling somebody else's music. 10 Pen Alley left nothing to chance. You might think, okay, it's the 1900s, right? They haven't heard of Instagram and Facebook and all these things yet. They didn't know about those means of marketing. However, Tin Pen Alley left nothing to chance. They practically invented the idea of demographics. Intense market research was conducted to determine whether a song would be a commercial success, a quote-unquote hit. They didn't have billboard back then, but they knew when a song was a hit record, or in that case, a hit piece of shoot music. So they would do this by polling performers, by polling consumers. They would poll people on the street, they would poll people after Broadway musicals, after vaudeville shows. Just about everywhere their music was being performed. They wanted to know how people would receive it. So they would analyze this data. They analyzed the sales resulting from these performances. They observed trends in popular songs and performances. And again, even did direct audience surveys to understand their reactions to the music once it was out there. So once they have this data, then they go back to their staff writers and they would instruct them to write songs using these particular themes or incorporating these particular styles or particular whatever. So Tin Pan Alley practically invented this idea of taking a market and targeting it. Giving it what it wanted. Much like country music these days, sing songs about beer and about muscadine wine and about cutoff t-shirts and et cetera, et cetera. They have they are doing that because that's what their market wants them to do. And that's what Tin Penn Alley invented. And then, of course, they would do what we would now call endorsement deals. The Tin Penn Alley publishers would make financial arrangements with performers to perform their music and perform it often. And in that way, they they had an instant market or an instant way to market their product. And then many of these performers would then sing the songs on Broadway and in plays, and popular vaudeville performers would be hired by these guys to sing their songs. So you might be wondering, okay, well, how much what what kind of industry was this? Well, this was uh as I said earlier. After the ball, Charles K. Harris's song demonstrates the profitability. I mean, five million copies. And after the ball gross to $25,000 per week in 1891. Now, what does that mean? That's numbers that we can't relate to. And in our dollar, if you do a number cruncher online and project present-day value, it's $883 and $145,000. $883,000, $145,000 in 2021 or $25. So that's a lot of money, almost a million dollars a week. In his prime, Irvin Berlin, who who started as a song plugger, as I said, but ultimately had his own publishing company on Ten Pen Alley, he was making $100,000 in annual royalties. Now, $100,000 in today's dollars is $3.5 million. So pretty good little salary just off of his royalties from writing, not even including his his other monies from the publishing company. So after the break, I'm going to bring in Dennis, and we're going to explore some of the current types of deals used in Music Row and in the music industry that are reflective of some of the earlier deal making practices in the era of TFNL. So stay with us. Remember, you can call us at 800 at DealMKR or 332-5657, or you can email us at questions at musicroll dealmakers.com.

SPEAKER_01 24:45

Well, greetings, Dennis. How are you doing today? I am doing well. Back from I don't know if I would call it a vacation, but it was supposed to have been.

SPEAKER_02 24:56

I I heard about your vacation, and I think you need a vacation from your vacation.

SPEAKER_01 25:00

Oh my gosh, it was an experience. And I'll thank my 33-year-old daughter for it, but we built memories. Yes, she did, didn't she?

SPEAKER_02 25:08

She attempted to ride a bike across Iowa?

SPEAKER_01 25:12

Yes, the annual ragbri. It's Iowa from the western border to the eastern border. You do it over seven days, 406 miles. My wife and I were the support vehicles. So I'm driving a SUV, pulling a 6x12 U-Haul trailer. We're camping out every night. And it got adventurous between the rain, between then my daughter became incredibly dehydrated, required a trip to the emergency room. Oh my God. So we took a day and a half off, and that got her all perked back up. And on the very last day, on the first half of the day, her boyfriend's blood pressure, which is a hereditary issue he deals with, shot up, and the medics along the route said, You're done. So we had to load everything up. We drove to the end of the route so they could do the end of the route festivities that they were having. And then we started making our way back to Nashville. So it was nine days for us, 2,600 miles. And I can tell you, here is Iowa this time of year. You get up in the morning, it's beautiful. On the right hand, it's cornfields as far as you can see. On the left, it's soybean fields as far as you can see. In front of you, it's wind turbines.

SPEAKER_02 26:30

Well, what are you complaining about? You got variety.

SPEAKER_01 26:32

You get up the next morning, and on the left now are the cornfields as far as you can see. And on the right, it's the soybean fields, and then in front of you, it's wind turbines. But no, it was, man, it was really gorgeous, really beautiful, I will say that. And I I told someone there along the route about three-quarters of the way through the week. Being from the South, I think that we have incredibly nice people. The Iowans are off the charts nice, unbelievable and gracious and fun-loving. And it was just really amazing, the people of Iowa, how they welcomed everybody. It's like 20,000 people. About 10 of those are actual riders. The other ones are the support vehicles and all that that come with it. And they're invading these little towns of sometimes less than a thousand people. And uh so it's but it's it was it was an adventure, you know. Got off on some gravel roads for a while a couple of times because that's how they routed us. That was a little interesting.

SPEAKER_02 27:30

Sounds a lot like Cash and Carrie Pyle's uh Bunyan Derby from an earlier episode, doesn't it? Uh speaking of earlier episodes, fans, we want to encourage you to call in, leave a message at 800 Deal MKR Dealmaker. That's 800-332-5657, or send us an email at info at musicroaddealmakers.com. We'd love to take your questions. Our listener base is growing. We've got over 50 people now. We're we're excited about that. That's downloads. When you see us, uh favorite us, give us some comments, send us around your social media and that kind of stuff. In the intro, I talked a little bit, Dennis, about uh 10 Pan Alley and and I explored that. And one of the one of the standout facts of that, and this this may come as a surprise to you. We haven't talked about this, but do you know how much present day value the greatest earning hit on 10 pan alle earned? Would you have any idea?

SPEAKER_01 28:24

Present day. Present day value? Yeah. Only because I took a peek at your notes.

SPEAKER_02 28:30

That's cheating. But five million dollars, can you believe that? Wow, no. And then I think it was uh Irvin Berlin earned annually somewhere over three million dollars. So 10 pound alley is one of the most overlooked parts of music history, and some of the things that some of the contract practices, the deal making practices, the way they did business has carried over into our world, as you and I have talked about. So today we want to explore some of those types of deals that are reflective of 10 Pan Alley in our world. So I guess really to start, we should probably look at the exclusive publishing agreement and the similarities there between what uh 10 Pan did and and what we do now. Just to kind of refresh our the listeners' memories from earlier, 10 Pan Alley would generally capture the copyright. Whether they played paid the songwriter a flat rate or whether they paid the songwriter a salary, the author would be listed as somebody that was associated with the publishing company or the publishing company itself. So give me your impression of how that is similar to the exclusive publishing agreements of today.

SPEAKER_01 29:53

Well, if if it's a true exclusive agreement where the publisher owns all the publisher half, and the songwriter has some writer's share in it, if you will. Very similar because the company is the copyright holder at that point. They were granted that by the writer, by the creator of the work. And so they take on the full copyright ownership, all rights, title, and interest in, to use our contract language, that copyright. And it has a term to it. You know, it's still life of the author plus 70 years, I guess. I mean, that there's other spinoffs from from that. But having said that, the exclusive deal is we're gonna, you're gonna write for us and no one else, period, and we're gonna take everything on the copyright. Now, what's really come into vogue these last really five, ten years, I'm I'm really finding is that more and more publishers are amenable to doing co-pubs on that.

SPEAKER_02 30:51

Right. And it's explaining to our listeners the difference between an exclusive publishing agreement and a co-publishing agreement.

SPEAKER_01 30:57

So on an exclusive publishing agreement, it's where the publisher, which is actually the grantee from the writer, takes on all control of that copyright, 100%. Under a co-pub, the writer will control some portion of the publisher's share of that. So this is where people get confused because some people talk about the pie being 100% or 200%. I here see it better as 100% myself in my head. So if you've got a pie and you literally cut it down the middle, one half of that would be the writer, the other half would be the publisher. So in an exclusive deal where the publisher controls 100% of the publishing, they would get that full half. Let's say it's the left half of the pie. The publisher gets that full half. But under a co-pub deal, the writer would still control some of what the publisher would typically get. So you take that publisher half, the left half of the pie, and say cut that in half. So now it's 25 and 25 of the total monies, and the the writer would control that part of it.

SPEAKER_02 32:09

I think it helps. You just use the phrase monies, get get get 25% of those monies. And for me, it helps to understand if we we differentiate between the copyright itself and the royalties, because the publishing pie, as the industry uses that phrase, refers to primarily royalties. In other words, if we get one dollar in, we're going to split 50 of that off to the publisher and we're going to give 50 percent to the songwriter. That's the deal. In exchange for that, you give us the entire copyright.

SPEAKER_01 32:46

Yes.

SPEAKER_02 32:46

That's the exclusive songwriting agreement. So to to tag on to your point, if it's a co-publishing deal, the songwriter actually owns part of the publishing. And the effect of that with the royalties is that he gets well well, let's say she. She gets 50% as her songwriting share. And then since she is 50% owner in the copyright, she also gets 50% of her 50% of the publishing royalties. So that equates, as you said, to 25%. So overall, when the dollar comes in, she gets 75 cents and the publisher gets 25 cents.

SPEAKER_01 33:29

And and it gets even more confusing many days when you're doing a catalog sale and you're looking at this and you go, well, what are they buying? Are they buying the copyright or are they buying the royalty streams? Because they, to your point you're just making, they can be separated.

SPEAKER_02 33:46

Oh, they can.

SPEAKER_01 33:47

And it gets it the language in the catalog deals gets very precise and it has to be for this reason. But when you sit across from the writer and you're trying to explain some of this, of course, in their mind, all they're thinking is, I'm selling my songs, I'm getting some money, and I'm trying to explain to them, well, you're selling your revenue share, your revenue stream, but not necessarily your copyright interest. And are we selling that also? Because I don't have a value. And I gotta be honest, a lot of writers, they just eyes gloss over. Oh, they do. They just let me go make my rhymes.

SPEAKER_02 34:21

That's like a dead deer in the headlights sometimes when you're trying to explain these concepts. And it's it's important to realize that back in the days of Tin Pan Alley, under the 1790 Act, it was different because you could not segregate rights. You either owned the copyright or you did not. In under the 76 Act, that changed. The rights were infinitely divisible. So if I wanted to sell, let's say, as you said, my royalty stream for performance, I can do that. Or I can split it up and sell half of it to somebody and half of it to somebody. And you're talking about the deals that you make with that we make or talk about when we do mergers, when we do acquisitions, when we do catalog sales. You're talking about songwriters, usually in those cases, that have had two, three, maybe even four deals. You and I worked on a deal just recently where the songwriter had two different deals and there were different requirements and things related to those.

SPEAKER_01 35:30

Yeah, well, it's you know, it's interesting when you get into the contract language on on these deals, and and every lawyer expects it. Not every writer is understanding it, but they have these first right of negotiation and first right or first matching right. So what that means is that buried in those contracts, and this happened on a recent catalog sale we just did, but buried in the contract was a first right of negotiation, and that catalog, which we had initially made part of the overall sale, no one caught it immediately, and we had to pull it out. And I had to go back to that original publisher, and and this happens quite frequently, but you try to go back and say, Can I at least get a waiver on the first right of negotiation? You're gonna keep your matching right now in the back of my head. I'm thinking, and as soon as we get a solid offer, we're gonna try to figure out a way for you to waive the matching right too, if possible. But but what ended up happening with with that particular deal was the original offer that came in that everybody accepted, yeah, they backed their number down a little bit. We came up with a figure that was the value of that. I had to go back to the original publisher, and uh I upped it a little bit, you know, and said, and and they were we're in the buying mode anyway. So they said, fine, we'll pay it. And and we got it closed, and I actually got a little more money for the client. But the problem, or that not problems, just the challenges of reading these contracts and understanding, are you buying copyright, are you buying revenue stream? Do I have the full right to go and solicit offers for this, or do I have to come to particular people? And I can tell you, every contract now these days has a first right of negotiation. I have been somewhat successful in a few deals to get the matching rights waived or taken out. Because it's just it's a handcuff. I mean, no buyer wants to come in and spend a lot of time putting a value on what the catalog is and making an offer only to have someone else sweep in and go, okay, yeah, we'll pay that.

SPEAKER_02 37:41

Yeah, that's the effect of this on the deals is that the the value of the catalog is calculated based on your entire catalog. And then if you've got that first matching right or first right of refusal or both, then you've and they pull that, then you've got to recalculate that that rate that you're selling the rest of the catalog to. And sometimes the buyer may not even be interested in just the remainder.

SPEAKER_01 38:09

Yeah. And I mean, I've talked to buyers who have just flat out told me if there's a matching rights cause in that catalog, we're not interested because it's it takes a lot of time to put the valuations together, get all the data pulled together. They got they have a lot of staff time. I know the people that we've worked with on our side, the seller side, just the financial side of it is probably $50,000 minimum hit just to do the calculations. And so the buyer doesn't want to spend that on his side just to have someone walk uh walk in and steal the catalog from him, so to speak. So it's a challenge, but but coming back to the original point about exclusive versus non-exclusive and co-pubs, et cetera, et cetera, all these things become part and parcel to how we negotiate contracts up front. Are they exclusive deals? Are they co-pub deals? Can we get the first right of negotiation out? I don't I don't have a problem having it in. But can we get the matching rights removed? Sometimes yes, many times no. So at that point you'd make the decision, well, how attractive is the the offer from the publisher to for me to sell or for my client to sign at that point.

SPEAKER_02 39:19

Yeah, publishing is one of those areas in the music industry that just can make make you scratch your head sometimes. So one of the other things that uh Ten Pen Alley brought us is this idea of paying someone to own their copyright. And that persisted a number of years in the music industry. In other words, a songwriter would come to New York and pitch his songs to these publishers. And they would say, Oh, we love this song. We'll give you $50 for it. You know, I don't know what it was at that point in time, but $50 for the copyright. And they would buy it. And like I said earlier, their name would go on it, or one of the names of their staff writers, or or or something like that. And they would put their name as the author and then register the copyright. Now, I've known of instances even today where that happens because when you create a copyright, you have the right to sell it. And so, you know, the buyer can put certain restrictions on it. And I have known celebrities, and I won't name any names, but they like a song, they hear it out in public, they go to that songwriter and they say, Hey, I want that song, I'll give you however much for it, but I want the copyright. And then they put their name on it.

SPEAKER_01 40:38

Well, we will mention posthumously one artist like that, and it wasn't necessarily him, it was his manager, Colonel Tom Parker, I was told I've read, did that for We can do that because he's dead. Yeah, exactly. But he did that for most of I would think Elvis's big hits that he that he had done. Not not the the covers, because Elvis did a lot of covers over the years with the originals. And literally it was, hey, we want that song, and Elvis would cut it. And you knew it was going to be a huge seller because it was Elvis, especially in that late 50s and 60s time time period. And if you didn't want to sell it, fine, then we'll go go find another song. But if you did, I work we're gonna buy it from you and take the publishing. And you still make a writer royalty, I'm sure, but they were buying it. And I've heard of some more some contemporary artists who do the same thing, not to take the full copyright, but to take a big chunk of it. Hey, I will I will cut that song, but you're gonna give me 15% or 25 or whatever percent of the copyright.

SPEAKER_02 41:42

Or 50%. I mean, I know of some celebrities, again, we'll use anonymity here, but who find a good co-writer, someone who really is a talented songwriter, and say, hey, I want to be your co-writer. And they'll co-write with them. That's the way the Nashville business does a lot of this. And so I know a lot of people who do it that way.

SPEAKER_01 42:07

Yeah, the whole thing of a word for a third, you know, here in Nashville, if you're if you're in the room, and and because of the way writing is done these days, with a what we'll call it a track guy, track producer, will be in the room with the lyricist, with the artist. You've got three or four people in there. And yeah, many times the artist doesn't contribute much other than, hey, I like that. And they'll get an equal share, at least here in Nashville.

SPEAKER_02 42:33

Oh, yeah. And and that's because the other people in the room who are actually writing the song know that that's their ticket to the Holy Grail.

SPEAKER_01 42:42

Yeah, it's a cut right there.

SPEAKER_02 42:43

That's a cut. That's the that's the big thing, right? Performance agreements. One of the things I pointed out in the intro to Tin Pan Alley is that these publishers would would pay prominent vaudeville performers and uh Broadway actors to sing their songs. It was a way of getting their music in front of them by public. That is something we continue to do in today's market as well. Sometimes we call them endorsement deals or other things, but a performance agreement. Paying somebody to play your song.

SPEAKER_01 43:17

Well, and interestingly, the reverse I tried to do years ago when I was running marketing for a record label.

SPEAKER_02 43:24

You try to get somebody to pay you?

SPEAKER_01 43:27

I'll sing your song, absolutely. No, you know, the statutory rate, of course, back then was 9.1 cents per song. Right. Per record per song, as they called it. Now it's 12.4, I think it is, or something. It has increased some. But the statutory rate, it doesn't matter if you were the first to record it or not, that's what the mechanical royalty was going to pay the publisher. And I was at a label and we were having problems finding really, really good songs for one of the artists. And I went to our AR team and I said, why don't we advance? Or just flat out pay the publisher a fee to get their top shelf songs because they're sitting on a bunch of them. We all know it. Let's go and see if we can't find that. Granted, the label's like, well, we don't want to set a precedent because that that would start a feeding fringe. And it was true. In my head as a marketer at that time, I'm going, yeah, but the flip side of that is we have an artist with crap songs. We can't find good songs for them. So could we go to a publisher and say, hey, Garth Fundus, take that she's in love with the boy that you're holding out for Trisha Yearwood? What if we pay you X dollars and let my artist sing it over here?

SPEAKER_04 44:37

Right.

SPEAKER_01 44:37

Would he have done that? Don't know. It depends on what the money would be, I guess. You know, and I wasn't talking big dollars. I'm thinking, hey, you know, let's take a couple of grand. I'll take it out of marketing and go go buy a hit song that's that somebody's sitting on. So those things do exist or can exist. You have to be worried and concerned about setting a precedent because they people will chase the money at that point for sure.

SPEAKER_02 45:04

Yeah, the various mechanisms and wheeling and dealing that goes on in the music publishing industry uh industry is is remarkable. And I think in large part because of this little group of Jewish immigrants that started uh Ten Pen Alley. And we're doing the same kinds of deals. And it's remarkable to me that, you know, a couple hundred years later, you you see reflections or direct descendants of these things in our industry. One of those things is the song plugger. This is something that fascinates me with 10 Pen Alley. You know, we know what a song plugger is in these days. A song plugger is somebody who takes some sort of compensation, either a portion of the copyright or a portion of the royalties or maybe a flat monthly rate. And then that song plugger will go around to the producers, the production companies, the record labels, the artists, and and hawk your wares, as it were. Sell these songs or try to sell these songs and get them placed on cuts. Back in the day of Tin Pen Alley, it was slightly different. But that ancestor to the modern-day song blogger is still there, and they called him a song plugger. Except these guys would pack a suitcase full of sheet music, get on a train, and hop to Chicago and to all the big cities, and they would go to a department store or a music venue, open up their briefcase, stock the shelves, and put a couple of the pieces of sheet music on the piano and just start singing it. So they were talented people. Irvin Berlin started as a song plugger. And so when the people in the music store and the department stores would hear this, they would say, Oh, what's that song? Oh, well, that's such and such. And so they would go and they'd buy the sheet music. Why? Because consumption of music back then meant taking it back to your parlor or your drawing room or somewhere in your home where the cottage piano set, learning how to play it, and then inviting a soiree of your friends and family over to stand around the piano and sing the song. So that was the song plugger. It was his job to sell those pieces of sheet music.

SPEAKER_01 47:20

Yeah, and of course, today, as you noted, it's really about getting the song recorded. When I first got into town 40 years ago, every corner you could find song pluggers running up and down Music Row. Back then, Music Row was very quaint, actually. So 16th, 17th, 18th Avenue might go into 19th a little bit. Now, of course, it's kind of all over Nashville. But the old Music Row, that's what you saw walking up and down the streets because everybody was, all the labels, producers, studios were all right here. And so people were just up and down the walking sidewalks, pitching songs left and right. And then over time it became, of course, more email. When I first came to town, I thought I was going to be a song publisher and a record producer. And that was one of the things I thought I would be doing is pitching songs to people.

SPEAKER_04 48:10

Right.

SPEAKER_01 48:11

They managed the repertoire of certain writers at the publishing company. And that's what they did. They worked with a group of writers and got to know those writers well and commented on how to make songs better, made sure they were getting in the right writers' rooms with other good writers to come up with hopefully hit songs. And then the rest of the time was spent schmoozing AR directors and producers, you know, that sort of thing, other artists and whatnot. Songplugger, I think would have been a great job.

SPEAKER_02 48:41

It would be. And there's some good song pluggers in this town, some of which we both know and love and and who have made tremendous impact on the industry. And so, and there's the the annals of of music role lore are packed with people who just, you know, walked up to a celebrity and handed them a tape, cassette tape. For those of you kids out there listening, don't know what that is, look it up on the internet.

SPEAKER_01 49:08

That's so funny you say that, because that's that's one of the things that the artists I've ever been around, they don't like to have happen because it's like, well, I'm an artist. What am I going to do with that? type of thing. Of course, then when a lot of copyright infringement really started coming into play, or at least claims of copyright infringement, everybody started shutting down. Well, I can't even take an unsolicited take because I might get charged, you know, with having stolen someone's song down the road. But at the same time, these artists are so nice because they were there for these young writers and young artists are now. And so they they they they do want to be helpful. I I really believe that. But they've got to be protective. And so it's really a tough thing. I would I would recommend to the best that you can, if you're an aspiring songwriter out there and you you are just starting, you don't have a network yet, sending out unsolicited or music or walking up to an artist backstage at a show that you happen to sneak into or something. We hear stories where a big hit was found that way, but it's not not very likely.

SPEAKER_02 50:13

It's a little like lightning striking.

SPEAKER_01 50:15

Yeah.

SPEAKER_02 50:15

You can try it, but it's probably not probably not gonna happen. No, it's it's it's uh laws of probability are against you.

SPEAKER_01 50:22

And if you're unfortunate to get an aggressive road manager, you won't be backstage very long, I'll put it that way. So you gotta be a little careful with some of that. But uh you gotta love it. It as they say it all starts with a song. And it does. And we need the songwriters, we need new songwriters, we need people who are out there writing a song that everyone who hears it thinks it was written just for them, but at the same time, it has that universal appeal because then everybody thinks it was written just for them. Now we now you've got a hit song, and that's hard. It's hard to do.

SPEAKER_02 50:58

It is, and it's it's a talent, and and it's something I think that that that can change the world. That's one of the reasons I got into the practice of entertainment laws, because I do believe in the power of music and the power of um just a simple song. So one of the things I think that 10 Pen Alley started, which I think is right up your alley, and I know you've been exposed to this and done a lot of this in in your extensive history with the music industry, and that is mass marketing and market research. Now, for Tin Pen Alley, what that meant was surveys, talking to people after a Broadway show, asking them their response to that, keeping abreast of what was happening in vaudeville, all of those things. But it was direct consumer research, and then they based their future songs on that. So what's your sense of that? I mean, how how much has that evolved over the years?

SPEAKER_01 51:56

Well, it it still exists. It not so much on the publisher level, other than they are watching what's happening on the radio charts or the sales now streaming charts and what songs are seeming to connect with with people. And yeah, you know, copycat imitating is still the what the biggest form of flattery, I guess they say. It's kind of like in the 90s, you get Garth Brooks with a hat, and and suddenly it's like, okay, we need hat acts everywhere. So there is that idea that that success breeds copycats on things. But what makes a great song really longstanding is that it's not a copy per se. It fits within a broad genre, but yet it's still different. It doesn't mean you can't have a flash in the pan one hit wonder. We all have seen those all our lives, absolutely. But they they do do that. And so what will happen are uh publishers, song pluggers, uh producers, AR people, they'll say, Man, we really need a song that kind of sounds like this one and says like something like this. And both of those are probably influenced by what's happening on the charts. So that does exist. Where I've seen more on the actual research side, interestingly enough, is with the record labels and more so with radio stations who are testing songs before they move into higher rotations. And they actually have focus groups. They do them sometimes in person in what they call a listening room. They'll bring people in and they'll play not much, maybe a first verse and chorus of a song, let them rate it, and they move on. A lot of times they're doing it online, which is not nearly as effective in my experience and with the the label of people I've talked with, but it it's there. But they have research companies that do that for radio purposes. Trevor Burrus, Jr.

SPEAKER_02 53:52

And that's what I'm talking about with 10 Pan Alley. They would bring people in and do these little consumer research things, bring 10 people in, play them the song, and say, what do you like about that? What do what you don't like about? And so when you think of it in that sense, yes, the players have changed and and the the contact with the market has changed, right? When the record industry came along, it changed 10 Pan Alley. The history of publishing, the consumption of music to that point had been sheet music, as as I said earlier. Once radio came along, once records came along, people didn't have to go out to hear somebody sing a song. It came into their home. In fact, John Philip Sousa complained about that to Congress around the 1900s, and that's what instituted the first performance royalty and and various and mechanical royalty because of the mechanical player piano. And so when that happened, of course, market research has to point in a different direction. You know, before that, you're looking at the actual consumer. Now it's some segment of the consumers. Because as you and I both know, this group of industry here on Music Row is not interested in our age group. They're not interested in the baby boomers. They're interested in the 12-year-old to 24-year-old people. And if you're 24, you're getting on the edge of that market.

SPEAKER_01 55:22

So No, that that's true. At the end of the day, focus grouping, testing songs, it really is about the commercialization and the monetization of the industry when you think about it. That's what it's for. It's how do we sell more? And back in the 10 Pan South days, I'm sorry, 10 Pan Alley days, it's about selling sheet music. That's where they made their money. They had they had to have that. We didn't have performance rights on radio and television, et cetera. We didn't have mechanicals other than the player piano, but we didn't have records and CDs, et cetera, and streaming, obviously. So it's it's a but it's about commercialization. And so as a marketer, your job is to find the most effective and efficient way of selling it. So how do you do that? Well, the one you find out why people are buying the products that they're buying, and you try to give them more of that. And then you it's it becomes a volume game at that point. So you're looking at focus groups even now about what makes this a r a hit song that you would want to listen to more than one time, and then you convey that to radio stations so it fits into their programming clock because they they they have a 60-minute programming clock, each 60-minute and then three hours, etc., about how often they're going to play certain songs. They have to have data for that. Back in the early days, I guess, it was a lot left up to the gut of the DJ at the time or the program director. But it's gotten much more sophisticated because they know two things. One, if people don't hear familiar songs, they change the station. And two, if they're changing the station, they don't have the ears to then turn around and sell ads to advertisers. Because advertisers are wanting how many ears on television, how many eyeballs. That's what we're looking for. So they have to program if you're a commercial station in a way that makes that happen. If you're a non-commercial station, it's still similar, but now you've got uh certain donor groups that interestingly are much older because they have the money than the listeners they're trying to really appeal to. But we don't want to offend the the older class because they're the ones with the money. So it becomes an interesting thing for nonprofits, non-commercial stations, I'll call it. But that that whole idea of marketing and market research started back then, it continues. It's just now basically it's on steroids. I mean, it's amazing what type of research they do.

SPEAKER_02 57:55

With the internet these days, I mean, your market research is just taken care of for you. I mean, you can you can literally track your fan base through social media. You know where you're going to sell out and all of that kind of thing. I mean, it's it's amazing how far it's gone.

SPEAKER_01 58:12

If you're a touring artist, you get all the radio data you want at the touch of a finger fingertip. So you you can work with your agent to book your tours in the markets where you're getting exposure and where you have big fans. And so sometimes you go, I never heard of Bemidji, Minnesota. This is a true story for me. And I when I was at the management, one of the management companies, I was telling the agents at WME, I said, Don't don't book our Christmas tour in Bemidji, Minnesota. When we've got Chicago, Atlanta, Nashville, all these big names. And in the middle of that, it's Bemidji Minnesota, really. The next year he he, as he was putting the next Christmas tour together for this artist, he said, Oh, by the way, Dennis, just so you know, was such and such artists last week. Yeah, they just did 10,000 people in Bemidji, Minnesota. Oh, I love Bemidji, Minnesota, man. Why aren't you booking us there? Why didn't you book us there last year?

SPEAKER_02 59:07

The funny thing is with towns like that, you know, if you if you go on a percentage basis alone and you find out that 100% of the people there like your music and there's only two people there, then you got a problem. But if you can get the 10,000 number, that's pretty good.

SPEAKER_01 59:22

Well, we look at the aggregate number, right? Not the percentage of the whole population.

SPEAKER_02 59:26

Yeah, yeah. You got to be specific. Perhaps the most influential thing that that arose out of the 10 Pen Alley publishing group and that small group of people that that sort of started all of that was performance rights organizations. And you know, I don't know if you knew that, Dennis, but they arose out of 10 Pen Alley, ASCAP, CSAC, and then later BMI. The leading composers and publishers of 10 Pen Alley, particularly people like Herbert Shanley, Irvin Berlin, the aforementioned uh Sousa, they are all responsible for establishing uh the idea of collecting royalties. In fact, Herbert Shanley was walking down the street one day and he walks in. You know, maybe he's going to visit a friend who's who's visiting New York. I don't know what he was doing, but he walks into Vanderbilt Hotel and he hears a little three-piece door orchestra or chamber playing one of his songs. And he goes up to the manager and says, Hey, that's my song. You know, how why are they playing it? And I'm not getting any music. Well, he says, Well, we just pay the guys to play. We don't control what they play. We don't owe you anything. And says, All right. And so he goes with the friend down to Shanley's restaurant, big restaurant in New York at that time. And uh he walks in there, same thing, a little chamber orchestra playing his song. And same fact, he goes up to the manager, manager says, Oh, we're just playing, you know, uh, to entertain. We don't get anything from, we pay them, talk to them if you think you need a royalty. Well, Shanley sued both of those people and won the right to a performance royalty that was incorporated in the 1909 Act. So as a result of that, Shanley and Berlin and all these people, they are some of the very first founders of ASCAP. And they began to collect royalties from restaurants and venues. Sound familiar? The same kind of places that CSAC and ASCAP and BMI now collect from. Pretty amazing when you think about it.

SPEAKER_01 1:01:40

It is, and it's it's fair. That's the thing. I know. I do I think the dollar amount is fair. We can always argue that. Uh you know, if when I represent writers, no, it needs to be more, absolutely. If I'm working with a record label, I don't know. Maybe that's maybe that's typical typical attorney, right? You can you you you can argue both sides. But writers need to be fairly compensated. And and publishers need to be fairly compensated. Many of these publishers are paying big advances, even today. In some cases, they're even putting people on staff and paying them draws that have to get recovered through generating revenue from those songs. So it's it's incredibly interesting to me and and forward thinking for Shannon Berlin to go, yeah, we need to build a collection society to help with this. And now it's turned into obviously the big three that you mentioned. And there's a couple more GMRs, one that was started by Irving Azoff a few years ago and a few others. But it revolutionized the lives of songwriters. It did. And not just immediate money, because to what you pointed out earlier, they could have been selling their songs direct, they could have been being paying a salary, they could have been making money writing and making a somewhat of a living writing songs. But the performance royalty today is such a significant part of the publishing revenue stream. It's astounding for some people. And if you start aggregating a big enough catalog, it's impressive what it can be. So the whole idea of these societies coming along and doing this not only changed those writers' lives and even the lives of writers today, but it changes their estate. It changes their family.

SPEAKER_02 1:03:29

It does. And you know, when speaking of collection type agencies, ASCAP, BMI, and CSAC were the original. But as we moved into the digital age and and record labels started getting digital performance royalties for records, you've heard of Sound Exchange. And for the for our listeners, they collect specifically just digital performance of recordings, and that's distributed to performers, to musicians, and to other people according to statute. And then later on, when streaming became prevalent, the music licensing collective was formed. So our government, our laws have used this idea of a collection society to do exactly what you're saying, to reward the performers, the creators. And that's that's how important this concept of a songwriter is in America, right? This started with our constitution and grew from there. It's pretty amazing.

SPEAKER_01 1:04:30

You know, it's interesting how people misinterpret things, however. So, how how many conversations have you and I and I had with writers who said when we say, so are you published currently? Yeah, I'm I'm with BMI. Well, that's not a publisher. Not a publisher. That's your performance rights organization. They're a collection society only. They don't do any of the other admin work that you need to have done. And sound exchange is the same. People think that in the U.S., record companies and artists get paid for radio airplay. Terrestrial airplay, they don't. It only pays songwriters and publishers. Digital and satellite radio, they now do because of the statute. And so it's it's this idea of well, people are getting rich over here, or I'm published by going to BMI or CSAC or ASCAP. And I do encourage people, you gotta study, you've got to become a student of this game to really understand how things need to work. And because they've been working this way for decades now, obviously. So you need to know that. But you also need to know when the new modifications come in, why? Why are we needing that? And how does it work compared to what we've got over here? How do they merge together? It's the fascinating world thing about our world that we live in, meaning the entertainment music world, it doesn't stand still.

SPEAKER_02 1:05:48

It does not. And and you know, to your point, it's important if you're in the industry, it doesn't matter whether you're a songwriter, a creator, or like us, a lawyer. You know, you may Think, well, that's why I have the lawyers. No, you've got to understand your business. Just like any other business. If you're going to build cars, you need to know what everybody else is building. Exactly. You need to understand what they're designing, what the trends are, things of that nature. And Tin Penn Alley teaches us this. If you're going to be in the publishing, music publishing business, you've got to understand what it's about. And you're exactly right. My favorite is when I say to a songwriter, hey, do you have a copyright registration for this? Oh, yeah, I got that with BMI. No, you didn't. That's the copyright office that you should be talking to.

SPEAKER_01 1:06:44

I know creatives, and it's not limited to creatives. It happens in every industry you have this, I know, but people are just happy knowing what they know, and they just want to do this one little slice, and that's fine. However, our industry in particular, sadly, is teeming with cautionary tales of people who came in and took everything the writer or the performer had because the performer and the writer just weren't paying attention. They didn't understand how the business worked. Many years ago, I may have told you this before, I was managing an artist who had had a pretty significant career earlier for about 15, 20 years, got out of the business for a while. He actually went to be on staff at a church of all things and did that and decided to come back. And I was I'd known him earlier in his career, and he came back, and I'm working with him now, trying to find a an independent distribution deal for him. And I was talking to him one day and I said, Well, you need to you're gonna have to pony up some money for these things, this, this, and this. And he goes, Well, why? I go, because we need this for these reasons. He goes, I don't understand. I go, Well, you were in this for almost 20 years. You know how this business works. He goes, No. I had a manager, I signed a record deal, I had a publishing deal, and had a booking agent. They took care of all that. I have no clue how this business actually is.

SPEAKER_02 1:08:08

Somebody else was spending all that money capturing his creative arts.

SPEAKER_01 1:08:12

And I'm like, man, that's that's a real shame. It is because there is, hey, I think real interesting parts of this whole business, but two, you're supposed to pay attention to your business. And that's why I applaud people like the Taylor Swifts of the World. They pay attention to their business. Garth Brooks pays attention to his business. Right. Those are icons to look at for artists who are creative and popular and watch their business. That's right. I love that.

SPEAKER_02 1:08:42

And uh, listeners, for all you dealmakers out there, that's why we do this show. We want to teach you the ins and outs of making deals on Music Row. We want you to understand the industry. We want to teach you about contracts. So call us, ask us questions. Remember, that number is 800 D-E-A-L-M-K-R 800-332-5657. Leave us a message, that's 24 hours, or email us at info at musicrowdealmakers.com. So, Dennis, this is the walkaway portion of the show. This is an important topic, this 10 panale. It's the DNA, as I say here, of the music industry today. What are some of the walkaway points we should we should consider here?

SPEAKER_01 1:09:28

Well, the first part is that it is both an art and a business. So you can write the best song in the world, but if it doesn't get heard by somebody, then it doesn't mean anything. And the and the only way it gets heard and grows from there is you got to think in terms of commerciality. And what do I need to do to get people to consume it? You know, it's interestingly back in the day, back in the 90s, even the early 2000s, before right as Napster was, you know, wreaking havoc on everybody, it was still about sales, sales, sales, sales. But once iTunes came along and the iPod came along, and as we started moving more and more into this now streaming world, it's about consumption. And that's really what the whole thing really was about when you think about it. It was about people consuming this music by buying it now by streaming it and putting it on their playlists, even on the free versions of Spotify, et cetera. So that's number one. You got to think in terms of it's both a business and an art.

SPEAKER_02 1:10:31

It is. You know, I start my uh copyright class out every semester by asking the students, what is the value of a song? And when when you first write it. When you write a song, you compose one, and you're sitting there looking at that, what's its value? And of course, most of them say, nothing. It's not worth anything. And I say, you're wrong. Why? It's kind of like E equal M C square. You know, there's matter and energy contained in every molecule, right? And at any given time, you can release that and release power. The same is true for a song when you think about it. What's the value of a song? It's whatever you can get somebody to pay to consume it. If you can get them to pay a million dollars, it's worth a lot. If you're gonna sit there and look at it and say, that's a good song, and then put it in your drawer, you're not gonna get anything.

SPEAKER_01 1:11:25

At the risk of being indelicate for some of those listeners out there, I have a quick story for you on that. So this was in the late 90s. I had I was attending what used to be called the NARM Show, N A R M, National Association of Record Merchandisers. It's where all the record companies and record distributors made presentations to retailers. Right. Remember, it was all physical goods at that time.

SPEAKER_02 1:11:49

They have one here in Nashville and one out in LA.

SPEAKER_01 1:11:51

Yeah, and now it's it's it's morphed into what's called a music biz show now, but it was the same thing. But we don't have retailers selling CDs anymore. But it was really at the height of when CD pricing was hitting 1999. And most CDs had maybe one song that everybody liked on it. The rest of it was just filler stuff. Consumers were mad, retailers were getting mad the whole bit. First day at this conference, uh, the president of one of the distribution companies stood up to do his keynote address that morning. And he said, Let's just deal with the elephant in the room, CD pricing. We know everybody's upset about it, we know consumers don't like it, we know you guys are having a hard time with it. There is a reason why we've had these pricing models, but let me just tell you a little story. You said down in Pasadena, Texas, just outside of Houston, there is a honky tonk. It's a big honky tonk called Billy Bob's. All the big country artists come through there and play. It's a stop on every tour. Well, at Billy Bob's, they sell these things called cow patties. You see, now cow patties are cow manure that have been flattened into a little disc, dried, shlacked, wrapped in cellophane, and put on sale. And people buy them for gag gifts and for paperweights or just for a souvenir having been a Billy Bob's. These cow patties are priced at $19.99. So I'll just go ahead and tell you right now that at least in Texas, you can't buy shit for less than $20. The whole place fell out. It was pretty amazing, actually.

SPEAKER_02 1:13:35

But but but too. But that goes to your point of what will people pay, right? That's right. That is exactly it. The pet rock. I think it was $20. I mean, it's consumption. And to your point earlier about Napster, right? That was the late 90s, early 2000s. Sale of recorded music went down because basically Sean Fanning and Napster were giving it away for free. And uh people aren't going to go out and buy, and the CD was 20 bucks at that time. They're gonna go out and spend $20 when they can get the same thing for free. But even at that time, the consumption of music was at an all-time high. That's the thing. People need music, they are going to consume it, and it's just a matter of, like I said, what you can negotiate. Yes. You know, what kind of deals can you make for it? And like you said earlier, I like when you said it's both an art and it's a business. There's a reason why it's called music business, right? And uh you've heard that before. It's both, and you gotta understand your commerce. That's one of the walkaways. If you if you, as a songwriter out there are interested in the business, learn it. Learn all about it.

SPEAKER_01 1:14:48

You have to at least get a good working knowledge about what type of income flows you could maybe anticipate. You know, until you have a big hit, they're gonna be very small. And then when you have a big hit, you can't even imagine something will pay that much. So that you it's hard to prepare for some of that, but you have to know where the channels of revenue are coming from. And then you you pay attention to that. You you have to. Every contract that you do with the publisher and with a record label, even with the distributor, are going to have an audit clause in there that gives you the right to come and audit. Why is that? So that you know where the money's going that you is supposed to be coming to you. And many times, through no fault of anybody, I'm not calling people crooks, but through many times the monies were misaccounted for, sometimes innocently. But you need to know that. You can't just assume that all your statements are 100% correct and you have certain rights in there to go do audits. I am surprised how few people actually do audits.

SPEAKER_02 1:15:48

Well, they're expensive.

SPEAKER_01 1:15:50

They're not cheap.

SPEAKER_02 1:15:51

Right.

SPEAKER_01 1:15:51

They are not cheap. Many have uh contracts have a cause in there that if you find a discrepancy money's on you over a certain amount, the publisher or the label will pay for the audit. You know, but but these guys are pretty good at accounting. But my point to that is you need to know where's your money coming from? How much can you reasonably estimate is going to be coming in? So you can make your own plans and your own investment strategies and do your own estate planning, you know, and things like that. So you need to become aware of how you make money and then learn how to stay on top of understanding that that the monies you're are that are being shown to you are accurate.

SPEAKER_02 1:16:29

Yeah, basic working understanding of the business is what Dennis and I are talking about here. And you know, do your homework, research your craft, but research the industry as well. Understand the trends in the industry. As Dennis said earlier, the entertainment music business changes in a heartbeat. And you've got to keep up with the laws and how they apply to that. Artificial intelligence is a perfect example now. You've got to understand now how that's impacting what you're doing. So I guess I think the final point I'd like to make, Dennis, is that no matter how well you understand the business, and we're telling you to do that, do not sign a publishing agreement. If we've taught you nothing else in this episode that affects a copyright without having an entertainment attorney like me and Dennis look at it, it's it's so important. That is one aspect of the business that if you go in there with your eyes closed, you're gonna walk into fire.

SPEAKER_01 1:17:30

You you are. It goes back to something you you said a couple episodes ago. Some of these hidden clauses, notwithstanding anything previously before, this is what's going to happen now.

SPEAKER_02 1:17:40

Right.

SPEAKER_01 1:17:40

And it effectively can erase everything you thought you were doing. Yeah, that that really applies to copyright. You have to pay attention to what you're owning or selling.

SPEAKER_02 1:17:53

Right. Just like if you're selling a real property. So it is. Well, guys, it's been a great episode. We appreciate you. Again, look us up, subscribe, all those good things. Have a good week.

SPEAKER_00 1:18:08

Music Road Dealmakers is a production of Shrugged Disney and Associates.