The health of the music publishing industry?
Earlier this week, the news broke that Alfred Music, which I consider the #2 music publisher in terms of size (this might be incorrect, but it is how it feels–particularly in comparison with Hal Leonard), was acquired by Peaksware, the company that owns MakeMusic.
Philip Rothman wrote about the acquisition at the Sibelius Blog, and this quote from his article has been percolating in my brain the last few days:
Peaksware assumed the role of creditor by purchasing Alfred’s outstanding debt from its lenders and then exchanging it for Alfred’s assets.
I have already stated that I don’t understand the financial aspects of the music publishing industry. I don’t know how much it costs to print music. I don’t know how much it costs to store unsold music. I don’t know how much it costs to ship music. I don’t know how much is paid in royalties for arrangements of pop music (back to the original artist). I don’t know how much is paid to the arranger. I don’t know how much is paid to the music store that sells a title. I don’t know what it costs to record a demo track. I don’t know what it costs to produce a parts and accompaniment CD for a choral octavo.
Most of my professional life has been spent on the choral side of music education, although I attempt to stay up to date with band, orchestra, and general music (not to mention other forms of music education such as guitar and electronic music). Right now the average choral octavo costs $1.95 (or more), and an accompaniment CD is typically $26.95.
From the teacher’s standpoint (and budget) this is too much–from any publisher. You can buy an audio recording of a song for $1.49 (or less). Why should a paper copy cost more than a “real” recording? What ends up happening is that schools don’t have the budget to buy music at those prices.
But things cost what they cost, and nobody would ever guess that the publishing side of music might not be as lucrative as it seems–and that is what the Alfred acquisition is telling me. While financials were not disclosed about the acquisition, Alfred had debt that was purchased, and the debt was exchanged for assets.
We are entering a period of time where some of the costs of the publishing industry should be decreasing, by offering music directly via PDF, moving the costs of printing to the purchaser (or onto a digital device). This should allow publishers to lower the cost of music while increasing their cut, and potentially increasing the cur to arrangers as well. Paper copies could be offered for a premium to those that desired them. This will impact some positions in companies (printing, shipping, storage) as well as the role of the music store.
I would also love to see an “Apple Music” approach to published music, giving you full access to everything for a set price per year–with special pricing for education. Wouldn’t it be wonderful to have a set formula for music when it came to funding from your school–as well as the ability to get rid of music libraries and all of the hassles of processing, distributing, collecting, erasing, replacing, and storing music?
I fully understand that music publishers have been fearful of copyright infringement in the move away from paper. However, it is time. Photocopiers have been abundant for more than 30 years, and if you haven’t seen the scanning ability of phones these days, check out Readdle’s Scanner Pro on iPhone. I have been using Scanner Pro for personal documents in the past weeks, and I cannot believe how well it works. This could be used for music, too. Just saying.
Peaksware is situated in the ideal place to lead the music publishing industry in a new direction, as the business is already focused on technology and its use with music (and music education). And I wouldn’t be surprised to see Alfred begin to add some other music publshers to its portfolio, as it modifies its business practices under Peaksware.
Hal Leonard also has the potential with its connections with Noteflight and Noteflight Learn.
I’m hoping the “big boys” of the music publishing industry can use these changes as a way to lower prices and to make their companies profitable.