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Sport & Entertainment Review, 2016, 2, 25-28, © 2016 West Virginia University The Business of Popular Publishing: An Interview with Troy Tomlinson, CEO of /ATV Nashville Armen Shaomian, University of South Carolina

roy Tomlinson is the President and CEO of Sony/ATV TMusic Publishing in Nashville, a division of Sony/ATV. He has been in the music publishing industry for more than three decades, and has been with Sony/ATV since 2002. He was named to his current position in 2005 and has been guiding the company through the evolution of the with the rise of digital music consumption and a dramatic drop in physical . Being based in Nashville, Tennessee, Tomlinson oversees the operations of all for the world’s largest . He has won numerous industry awards during his tenure at Sony/ATV, including being named the Broadcast Music, Inc. (BMI) Publisher of the Year as well as Billboard’s Country Music Publisher of the Year—10 times in a row. He is also responsible for having signed acts such as , , , , , and others. At his role at the publishing giant, Tomlinson is also in charge of supervising and overseeing the catalogs and publishing rights of legends such as , , and , plus millions of other Armen Shaomian, DMA, is an assistant professor in the works. I sat down with him in Nashville to ask him about his Department of Sport and Entertainment Management. view on the changing industry of music publishing. His research interests include brand marketing within per- Sony/ATV is the largest music publisher in the world, co- forming arts organizations, live performances, and the use owned by Sony Corporation and the Estate of Michael Jack- of technology in the classroom. son. The ATV in the name dates back to its original name when it was founded in Britain as Associated Television in Correspondence should be sent to: 1955, with exclusive rights to broadcast weekend program- Armen Shaomian ming for the region. ATV Music was the music pub- University of South Carolina lishing division of ATV, which, after going through numer- Department of Sport and Entertainment Management ous owners and mergers, was purchased by the late Michael Carolina Coliseum, Room 2026-I Jackson, before being merged with a division of Sony in 1995. Columbia, SC 29201 The of ATV Music, which included the pub- Email: [email protected] lishing rights to most of songs, was an important The Business of Publishing: An Interview with Troy Tomlinson, CEO of Sony/ATV Nashville financial asset of and the merger allowed While instant music consumption is available more wide- him, and now his children, to gain 50% ownership of Sony ly than ever, essentially turning every computer, tablet, and Music’s publishing catalog as well. Music publishing compa- smartphone into a music player, many music creators are see- nies such as Sony/ATV (Sony/ATV, Warner Music, and Uni- ing their royalty incomes sharply diminishing. This has left a versal Music are the three largest companies in this industry) plethora of disagreements and lawsuits between publishers— are in charge of commercially exploiting the songs on behalf who are seeing an unprecedented drop in royalties for their of their artists, assuring compensation when their works are artists—and streaming services such as , Pandora, Ap- used in ways ranging from commercials, downloads, and mu- ple Music, and even YouTube—who are enjoying valuations sic streaming to TV and radio features. The artists—in this in the hundreds of millions of dollars because the majority case and ()—sign a publish- of consumers today enjoy their music instantly through one ing agreement with their chosen publisher and share in the of their services and they receive income ranging from paid performance and licensing royalties gained from their works. subscriptions to advertisements. In a rapidly changing industry, where distribution of mu- In this interview, Tomlinson is asked about how he han- sic is often exchanged virtually rather than through physical dles the transformations in his industry. He discusses among sales (i.e., records and CDs), the music publishing industry other things how being based in Nashville versus New York has had to keep up with the way music is being consumed. City or sets his work apart. He also addresses Gone are the days of Musicland, , and the Sony/ATV acquisition of EMI Publishing in 2012, which thousands of local music retailers. Instead, the shift to instant made it the largest music publisher in the world, the move digital delivery has forced the music publishing industry to to digital delivery of music diminishing the earnings for change its focus into how its product is being consumed and songwriters, and how Sony/ATV is specifically expanding its to stay on the forefront of this still-evolving method of de- presence in the sport and entertainment marketplace, rang- livery. For example, whenever an Apple commercial features ing from venues to the video gaming sphere. music by the rock group ; the new James Bond Shaomian: What sets Nashville apart from New York City contains songs by Adele; or Call of Duty, the virtual reality or Los Angeles when it comes to producing or introducing game, includes music by DJ Skrillex the music publisher col- new artists? From to Jason Aldean and Rascal lects compensation for this usage that is then split among the Flatts—Nashville is really the home of “Americana” music. persons responsible for creating the music. Sometimes it is a Tomlinson: Look at all three primary music towns (Los simple calculation, where the publisher receives 30% and the Angeles, Nashville, New York)—Nashville has been a pub- author 70%. However, in popular music, a song can include lisher and writer town since its inception. We focus on songs. dozens of writers and composers, and each one can have their It is THE publishing and town. That immediate- own percentage of ownership for the specific piece of music, ly starts at the grassroots of grassroots. There’s no record making the royalty process rather complicated. In many cas- without the song. There’s also a cultural aspect that makes es, the performer is not even a recipient of these Nashville feel more organic, where music is primarily on royalties, because he or she does not write any of the music the streets. We’re a community within a community, which or lyrics, but merely performs them. This is more common in inherently promotes grassroots. As you consider meeting popular music with artists such as Britney Spears, who only people in New York or LA, the chances are much smaller has writing credits on a few of her big hits, but is less com- in comparison to this town. This is truly a tiny community. mon with country music artists, such as Taylor Swift, who Therefore, we all know each other and hear of the same peo- tend to write and compose a majority of their own material. ple floating around most of the time, and most folks wind up In the music industry, the music publishing area is the where they really ought to be. most convoluted and complicated division, bound by copy- Another difference is that in a lot of , the pub- right laws and rates set by the federal government. Publishing lisher-writer relationship begins once there’s a hit. There’s is also the main source of income for the creator of the mu- heat on a song climbing the charts, and all the publishers sic. Gone are the days of records being the primary source of then go after them to try to sign them. In country, we devel- musical enjoyment, where the labels and publishers would be op them from day one, and sometimes it takes several years able to collect royalties simply based on the amount of phys- to get them to the point of having their first single. None of ical produced and sold. As music streaming services these folks—Kenny Chesney, , Miranda Lam- have become the norm for music consumption, publishers bert, and Blake Shelton—had record deals before they had have had to become increasingly aggressive in advocating publishing deals. for a fairer compensation for their artists and themselves. Shaomian: The artists you mentioned are big country Federal law dictates the copyright rates and regulations for music superstars, and they all write their own music and lyr- radio and TV, but it has not kept up with streaming services ics. Is this a phenomenon exclusive to country music artists? as efficiently as the music publishing companies have been Tomlinson: I can’t say it’s more than on the pop side, but advocating. in country, generally speaking, the artists are engaged in the

Shaomian Volume 2 • Number 1 • 2016 • SER 26 The Business of Popular Music Publishing: An Interview with Troy Tomlinson, CEO of Sony/ATV Nashville material they are going to sing. In the 1980s and ‘90s, that mercials, computer games, etc.). Because of these consent wasn’t so true. Many songwriters who weren’t artists were decrees in particular, we’re handcuffed and can’t negotiate sought after because great artists knew they were great artists with a digital service provider for a fair and equitable rate. but needed well-crafted songs. Now more artists want to be The United States Department of Justice is looking at the a part of the process. consent decrees to see if they’re now hurting an entity. It’s so Shaomian: In 2012, Sony/ATV acquired EMI Music Pub- one-sided for the songwriter and publisher. A congressional lishing, the largest music publisher at the time, for around $2.2 judge in the 6th panel said to a songwriter that as long as [the billion. The purchase and merger meant an additional catalog government] can keep your rate down, more digital compa- of more than 1.3 million songs, including the works of Be- nies can open and prosper. The songwriter replied that this yoncé, Jay-Z, deadmau5, the Black Eyed Peas, and millions of would be like saying to the farmers, “If you take less for your others. The acquisition of the number one publisher put Sony/ vegetables, more restaurants could open!” ATV at the top of the list in regards to the wealth and size of its Shaomian: How do we make the point that digital service music publishing catalog. Looking back on this acquisition, cost wouldn’t rise? what were the challenges associated with integrating a catalog Tomlinson: The streaming service doesn’t create a prod- of that size and stature into your existing operations? uct. They are the conduits to the consumer. That’s capitalism Tomlinson: It was the task of our worldwide administra- at its best. They’re a delivery system. When you look at the tion, which is also based in Nashville with 170 employees, to amount of service dollars to that delivery vs. the artist, its migrate EMI’s songs and data, including licenses from the disproportionate. They’re looking at using decrees to keep past, royalty statements, etc., into Sony’s system. This was the the amount paid to songwriters as low as possible. We are not most arduous and time-intensive task on the administrative saying they’re doing something illegal; we’re asking for fair- side. For the creative side, it was far easier. In Nashville, blend- ness. They say, “We are a music partner; we put music first.” ing the two creative departments of EMI and Sony/ATV was But they litigate to push the rates down further. simple. We were all friends because we had worked together Admit you are aiming for profit first and will use every meth- prior to the acquisition. They were physically a block away od to pay out as little as possible to the creators. and had a short move into our place. A lot of our writers wrote In the 1940s, the Department of Justice sued the American together, so adjustments were pretty easy. We also had several Society of Composers, Authors and Publishers and Broad- months leading up to it, so our planning began as if we were cast Music, Inc. (BMI), both prominent going to get them beforehand regarding personnel retention, organizations, for driving up the cost of music licensing due caring for two rosters, and looking more at our competitors. to their enormous market power. Several legal settlements— We were No. 1 and they were No. 2. Sony/ATV Nashville was consent decrees—followed, but those decrees have shaped greater in country, but EMI was better worldwide. the music publishers’ rights and limited their negotiation Shaomian: Digital delivery has now been around about powers for decades and the industry has been arguing that 12 years since the birth of iTunes, and even within that time it is time to allow them to negotiate directly with the digi- period, downloads have moved to streaming with Spotify tal music streaming services instead of being bound by rates and Pandora in the last five years or so. Among other well- set by a special rate court. The streaming services have been known artists, Taylor Swift decided to pull her music from pushing back, because they are concerned that their rates the streaming services. What is your stance from a publisher’s would rise if the publishers could set them on their own. standpoint on streaming, and do you see any light at the end With the rise of a new generation of superstars in this digital of the tunnel in regards to artists receiving a fair payout of era, such as Taylor Swift and Adele, they have been able to ne- royalties? gotiate complete ownership over their music when it relates to Tomlinson: I have to remain optimistic that ultimately, if the master recordings (the actual original recording of a song consumers can get any music they desire instantaneously, at that all other recordings are made from), or masters, which is a price point that’s more affordable than it’s ever been, we’ve a required item for the streaming services to be able to stream got to find something that works for all the parties involved, the music. This explains part of the reason why those artists including the service, , etc. The public isn’t un- have been able to keep Spotify or Apple Music from stream- happy about delivery; the problem is the unequal distribu- ing their albums to free user accounts, because those streams tion of revenues generated. Seventy-five percent of all rev- pay very little in royalties as opposed to purchased downloads enue generated from songs (that comes into the publisher) from iTunes or ’s Digital . is regulated in one form or another by federal law via rate Shaomian: In comparing music aggregators to travel court or consent decree. Forces outside of the free market agents, would publishers be able to come up with something dictate what the writer and publisher are paid. Only 25% of similar? revenue brought in is negotiated at a fair market value, which Tomlinson: My guess is that the consent decrees in place is primarily sync (a synchronization license, which refers to would prohibit us from doing that because some of the digi- songs being used with a visual output such as , TV, com- tal streaming services may have record labels with a stake in

Shaomian Volume 2 • Number 1 • 2016 • SER 27 The Business of Popular Music Publishing: An Interview with Troy Tomlinson, CEO of Sony/ATV Nashville the company. As for artists such as Taylor (Swift), the reason ent cities: film and TV, gaming, commercials. Our headquar- she was able to pull her music off is because she owns the ters is in New York, but in our Nashville office we have our rights to her own master recordings, which is something the own film/TV person. We continually refine using technology streaming services need in order to stream. If it were a re- and the breadth of our catalog with keywords/phrases/tem- cord company or publishing company owning those rights, pos and subgenre sounds (e.g., rock-country song vs. tradi- it would not have been taken off the streaming services. They tional country song). Metadata helps us sort the millions of didn’t put those up there, and the consent decrees force us to songs we have, and as partnership opportunities arise (they say yes and talk about pricing later, which goes to a rate court come to our licensing department: description of project, and ultimately a depressed price. Artists/labels can say no to what they think works generally, etc. after seeing visuals, and every master recording, but streaming services can use their what music will support these), we use the sorting and make recordings. As a writer/publisher, they can’t decide because pitches of various songs that fit what they described. If we’re of the consent decrees. lucky, we get in, and sometimes our competitors get in as Shaomian: Although country music audiences still have a well. It all works in the context of the game, though. Some- strong relationship to radio, with the growth of streaming ser- times they’ll give us 1-2 sentences to our New York or LA vices, the bottom line had to have been affected. Tell me about office, who then forward it to us, and in those cases the music mechanical royalties (which refers to the per-unit payments begins to be an earlier part of the creative process. Normal- made to the music publisher for each song or sold). ly they’ll have the visuals before. For example, (video game) Tomlinson: True album sales have been affected by the Grand Theft Auto was extremely specific. Driver steals car, major big box retailers, because they measured performance goes from interstate to country road, feels relaxed, and turns in dollars they earn per square foot of their stores. So, if they on the radio. What comes on? We then decide the right song can increase margins on that dollar per square foot, they’ll take for that moment, and that’s really fun. When you find the that step, replacing music products with non-music merchan- one they love and license it, it’s pretty cool to be a part of that dise. Thus, first we watched the diminishment of the square finished product. footage where we sold a large part of our product, so that was Shaomian: With an increasing call for more transparen- our big hit in mechanical royalties. Then people’s desire to get it cy in music licensing, what is Sony/ATV doing to make its quicker, easier, and cheaper (e.g., one song vs. an album) took copyright licensing and administration as user friendly as us down. Now streaming has cut the legs out from under us possible? further because of the displacement of revenue to the stream, Tomlinson: There is continual talk about centralized/us- which is nearly $0.00, versus the $0.99 for a single down- er-friendly licensing, and we pride ourselves on being con- load and a $12 album. This displacement shows that we can’t scientious to the needs of people who desire to properly li- stream enough to make up for an actual (mechanical) sale. So cense our music. We have large enough staffs with a public now, performances have become a strong means for creating front where businesses know how to get in touch with us. revenue for artists/publishers. Radio is still fairly popular, and We provide enough people to meet their needs. It’s difficult it continues to be a primary means for letting the fans find out for people who want to do the right thing and license for, about new artists, particularly country artists, because people say, 500 copies of a wedding DVD (in order to pay the roy- are devoted to their DJ or radio format. Some radio stations alties for the music featured on the DVD). I ultimately think with centralized programming have less loyalty, but there’s still there will soon be a better way because of where technolo- a loyalty to that voice that they’re hearing. Country music fans gy is headed. We are currently engaged in a desperate battle are devoted. , a singer-songwriter, had a No. for the future of songwriters and their publishers. Not to be 1 hit out of the box. Her radio and promotion team laid the overstated for drama, but it doesn’t take much if you believe groundwork for her to go into country radio, and it paid off. in streaming as the future. We won’t even be using the term She’s still got to do shows and meet-and-greets, but she now “mechanical” regarding royalties in the future; you don’t has an amazing opportunity to take off. In the visual nego- have to think very far to see that the current distribution of tiations (e.g., YouTube, video games, television commercials, royalties will negatively impact the creation of great music etc.) we can focus on sync licenses and growth there, because in America in the future. People need to be able to make a with sync licensing, we can set our own pricing depending on living while they’re practicing and providing art so they can the song and artist that the client wants to use for their film, take care of their families. Sony is optimistic and supports commercial, or video game. development of new talent (everything on red or black and Shaomian: Can you discuss your company’s efforts to ex- spending the money), but we can’t expect everyone involved ploit your sizeable music catalog in the sport and entertain- in the creation of music to invest the way we have if the re- ment marketplace? There is a considerable merging of music turn at the end of the day doesn’t improve. From where I sit, and sports in the entertainment arena. that’s something I wake up with every day and go to bed with Tomlinson: All under the header of entertainment is every night. where it’s blended. We have multiple departments in differ-

Shaomian Volume 2 • Number 1 • 2016 • SER 28 SUBMISSION GUIDELINES The mission of Sport & Entertainment Review (SER) is to become the outlet for the best new ideas for people creating, leading, and transforming sport and entertainment organizations and businesses. SER seeks to be one of the world’s leading journals on publishing cutting-edge, authoritative thinking on the key issues facing executives in the world of sport and entertainment. Articles published in SER cover a wide range of topics that are relevant to the different industries in sport and entertainment (such as professional sport, live performances, music, theater, dance and art, etc.) around the world. To further enhance these industries, authors are invited to write about theoretical concepts in leadership, organizational change, negotiation, strategy, operations, marketing, finance, sales, human resource, and event and project management. Preference will be given to authors able to draw upon previous research they conducted in a particular area and are able to show how their previous studies furthered the understanding of this particular area. While we encourage diversity in all subjects, all SER articles will have certain elements in common: (1) they are written for senior managers who benefit by the content and the article clearly articulates how the knowledge can be applied to the work- place; (2) the ideas presented in the articles can be translated into action and have been tested in a sport and entertainment industry context. Proposals that demonstrate fresh thinking that advances previous knowledge whose practical application has been thought through in clear, jargon-free language are those most likely to meet the readers’ needs.

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