Back in the early days, the music industry consisted of singers and songwriters. Songwriters wrote the songs, and singers sang them. If you look at music charts from the 1940s through the 1970s, you will notice that there might be four or five versions of the same song on the charts. Songwriters wrote the songs and then sold them to singers while keeping royalties from music publishing.
In many cases, singers got a monetary advance from the record company. When the record was released, and you bought it, you actually were supporting the record company and the music publishing company more than you were the recording group. Debut groups sometimes had recording contracts that paid them a mere penny per record sold. That included The Beatles, whose initial recording contract gave the group one penny for each record sold. That penny, though, was split between John, Paul, George, and Ringo. The royalty rate was further reduced for singles sold outside the United Kingdom, for which The Beatles received half of one penny per record sold, again split between John, Paul, George, and Ringo.
Although songwriters also made money with the release of the record, they made additional money from royalties from the sale of sheet music, public performances, cover versions twenty years later by a different artist, etc.
When Whitney Houston died a few years ago, it was revealed that she basically died penniless, mostly due to her apparent drug addiction but also due to the fact that she wrote very few, if any, of her hit songs. They were written by songwriters. The public felt sorry for her in her death and started buying all of her music posthumously, wrongly believing that they were supporting her estate. They were not. They were supporting the record company, the music publishing company, and the songwriters. Many songwriters got extraordinarily rich when her hits became hits again after her death.
For example, “I Will Always Love You,” Whitney’s #1 hit from 1992, was written by Dolly Parton and was a hit for her in 1974. Dolly made a lot of money from that song in 1974, in 1992 when Whitney released it, and again after Whitney’s death in 2012 when the public started buying it again.
The Beatles were the first to recognize that songwriters didn’t get the glory but got a hefty part of the money. They became singer-songwriters, and the John Lennon-Paul McCartney partnership is recognized as the most prolific in the history of music, even outshining Rodgers & Hammerstein of musical fame (“Oklahoma,” “South Pacific,” etc.).
How lucrative are publishing rights? Very. When Paul McCartney and Michael Jackson were recording “Say, Say, Say” in 1983, McCartney introduced Jackson to the world of music publishing, telling Jackson that he was earning $30 million per year from royalties on the songs of other people that he owned. For example, McCartney owns the publishing rights to all the music by Buddy Holly.
Jackson followed up on that knowledge when he bought the catalog of Beatles music from 1962 to mid-1967. The Beatles’ early music was owned not by them but by their publishing company at the time, Northern Songs. When the Northern Songs music catalog was sold in the early 1980s, Jackson acquired The Beatles music for $40 million. Paul McCartney and Yoko Ono initially had bid for The Beatles music, but ultimately Yoko Ono apparently thought the price was too high.
Publishing rights to Lennon-McCartney music from mid-1967 on belongs to Apple Corps, a multimedia corporation that The Beatles founded in mid-1967 partially to manage their publishing rights and royalties.
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