Nashville publishers are a little like farmers. They bravely venture out to grow and develop new talent in what they hope will be fertile fields. If successful, their efforts are harvested by larger companies who acquire the ripe catalogs they’ve worked hard to build and the cycle begins anew.
Recently however, Nashville has seen a number of established mid-size publishers enter the marketplace. Companies such as Big Deal, Round Hill, Downtown and Songs, have business models that usually involve a complex series of joint venture and solo deals, but also these independents are arriving with access to a bevy of national and international resources.
Big Deal, for example, has several joint venture (jv) writer deals with BMG Chrysalis. PJM/Songs includes a PJM stand alone plus the PJM/Songs jv and a pre-Songs jv with Disney and writer Melissa Peirce. Finally, Round Hill Music arrived after recently purchasing the Big Tractor catalog and with a variety of jv deals.
NEKST contacted Dale Bobo, Mark Brown and Pat Higdon who are leading three of these Nashville offices to discuss why now, upcoming plans, and strategy going forward? All three leaders have extensive experience as part of Nashville’s creative community and their answers revealed some unique perspectives…
NEKST: Why are so many mid-size publishers entering the Nashville market now?
Dale Bobo: In 2008-10 a lot of mid-size publishers that were national and international in scope got consolidated. For example S1 was acquired by Chrysalis, Chrysalis was acquired by BMG. BMG purchased Cherry Lane, Stage III, Bug and more. A lot of Nashville offices were absorbed. For a while there were hardly any operations with LA, NY, International offices and some full time film and TV sync people, except for the majors. Kenny McPherson and Big Deal were one of the first to plant a Nashville flag and help fill that void. It was only natural that other companies like Round Hill, Songs and Downtown also recognized the opportunity. My guess is others are on the way.
Mark Brown: Over the past 10 years publishing revenues are trending down. Mechanical streams have virtually disappeared and performance incomes have dipped putting downward pressure on catalog NPS (net publisher share). Traditionally, we are at a very low point for catalog valuation making them a relative bargain. Some catalogs are trading for as little as a one or two multiple. Generally the market is between 2-6. In the past, that multiple has been as high as 16! Also there’s a portion of the investment community looking to put assets somewhere other than real estate and the stock market. They look at intellectual property and copyrights as a place that might have a better chance at a stable rate of return plus copyrights don’t fluctuate in unison with the stock or real estate markets. There’s also a potential upside if/when the laws and payment systems finally deliver a larger share of money to copyright owners.
Pat Higdon: These new-to-Nashville, mid-size companies were already viable in almost every territory other than Nashville. They just hadn’t put their toe in the water here. Songs, for example, is a relatively young company around ten years old and they’ve grown into different markets and territories over that time, but just hadn’t found the right alliance in Nashville till now. Everyone’s contemplating Nashville because to compete in the publishing marketplace these days you have to have some presence here, it is such a strong music center. There’s a way of doing business here that is exciting and a good investment if you know how to do it. Mid-sized companies are thriving because it’s a different model and not nearly as massive as the majors with respect to catalog or as corporately structured. It was missing in the marketplace until recently, but now it’s back.
NEKST: Does being a mid-size company make it easier to succeed?
Dale Bobo: It’s not easy no matter what your size is, but the nice thing about starting as a mid-size company and having those kinds of resources is you can put together a team of people vs. doing it with one person which makes it possible to do more, quicker. Big companies have a lot of activity and volume and can be great, but people have different size preferences. Some writers are more comfortable at a small or mid-size place vs. a large company and probably appreciate the reach of a mid-size company with a New York, LA and International presence.
Pat Higdon: It’s great to have the resources, but I believe you have to establish a solid foundation on the ground here first. That is built over time by gaining trust from writers and the overall community, letting them know there is a new small publisher in town that can deliver for them. That startup phase takes patience. Especially when signing some relatively new writers and trying to rebrand established hit makers. So putting good roots in the ground can feel like a slow process at first, but building on top of those roots will make a good piece of business for myself and for Songs.
Mark Brown: We are also starting very small and intend to develop slowly. Some of the most prolific and significant songwriters of our town’s history came from little boutique companies that had 8,10 or 12 writers before eventually being sold to corporate conglomerates. Some of the people absorbed by the big companies may want to go back to a smaller publishing house with more individualized attention.
NEKST: Strategy going forward?
Pat Higdon: Songs is strong in the film marketplace and I’m looking to them to help me do more business in the sync world. We need the income these days with the declining streams in other places. Strategically I’m just 18 months into my Songs relationship and still learning their people and strengths in the A&R world. Seeing acts like Taylor Swift and Florida Georgia Line crossing over into the pop market we are looking to find talent we can grow out of Nashville and then maybe utilize the A&R skills of the creative people at Songs to find connections and contacts to expand their careers.
Mark Brown: We want to grow by acquiring additional song catalogs plus by signing songwriters and artists and developing talent in the traditional Nashville way. Right now there are a lot of unattached writers and available song catalogs so it will be a combination of both things. It all goes together under one big umbrella and I’m here to head up and manage all the different camps if you will.
Dale Bobo: We would love to land a couple of artist deals or artist development projects this year. Otherwise the plan is to round ourselves out and make sure we have great people writing songs that we pitch, that we have the artist thing covered, and that we are working with a producer or two. The challenge in the first couple of years is to get well rounded as quickly as possible. so we don’t miss out on any opportunities.