Will Downs - Finance Director of Publishing, BMG, Winter 2001
By: Toby L
One of the great grey areas within the music-industry is the matter of royalties: who gets what when records are sold; how are the finances managed; and which people process the procedure? The answers to these questions are what were needed to be solved today, and why not ask someone in the peak of knowledge regarding this matter - Will Downs, the Finance Director of BMG Publishing, UK.
As we've learnt via the profiling of different characters via similar interviews, the industry is ridden with technicalities and aspects of its being that are less public knowledge than others. For instance, most gig-going, record-buyers are aware that A&R men sign up bands, that PR companies steer and market the music into the correct public pigeonholes, and that bands are quite happy to get onstage, strike a few poses, swear a lot, drink in public, get arrested, sleep with super-models and then receive monetary rewards for their taxing endeavours. Yet, publishing: what's that all about?
BMG are one of the biggest and most successful companies in the world. Not just in the music-trade, but also as a singular global player. They are linked to record-companies, new-media music-websites and, relevantly for this, publishing. Downs, being the UK FD within the latter field, is in a pole position, his job being to oversee the running of accounts and general management of the cash-flow existing through the grand operation.
We meet the man today in his home in West London, a day before he's due to take a holiday. He's slightly tired, and is looking forward to the break. Luckily, the allure of a rockfeedback interview must have been enough to keep him awake for longer than he may have been otherwise. Seemingly, his friendly and open nature is hardly as shrouded in obscurity as the work-role he fulfils...
'Basically, everything with a pound-sign on it seems to come through me,' he laughs, after considering what he does. 'We have a finance-department, which just looks after all the monthly reporting - and, being a German-company, we have really strict reporting deadlines, so we report monthly and quarterly to New York, and have annual statutory accounts that need to be audited...'
'We have an Accounts Department, which deals with all the invoices, as well as cheques coming in, which I look after. I also look after the Royalties Department: their job involves dealing with the revenues that come in - when we get paid by the PRS (Performing Right Society) and the MCPS (Mechanical Copyright Protection Society), and all our affiliates overseas - and process it through the royalty-system, paying all the writers.
'The other department that reports to me is the Income Tracking Department, which we've set up for about five years, and their job is to basically check that the PRS , MCPS and our overseas affiliates are paying us correctly; you can imagine that - with all the songs played on the radio - it's not simple like the past where someone writes a song, and they control it 100%. Nowadays, there are songs with samples and samples and samples, and some tracks have up to fifteen writers, all getting 5-8%! So, it's a really complex structure, and there are disputes about samples as well sometimes...
'There are about 66 or 70 of us in publishing alone, and I'm probably the only person that knows everyone else, because I have to eventually deal with each person at some level. When I joined, our turnover was about three and a half million pounds, but now it's over thirty million... I've had the same job for ten years, but everything's grown out of proportion - and I've grown with it.'
Just when you think the hugeness of what's being described could go on forever, he pauses to state the obvious.
'It's all obviously quite a major thing!'
'Major'? We'd be inclined to agree. However, despite its grandness, why is this area of the music-world such an unknown quantity?
'Previously, we were seen as bankers: just collect the money, don't do anything - which could happen, I suppose; you could sign a big catalogue, sit back, do no catalogue exploitation and let the money flow in,' he truthfully explains. However, we're more used to smaller artists coming in where we actively promote them, try and get them in a film - we've got a Film & TV Department - much in the same way that The Dandy Warhols recently got featured in an advert (for mobile-phone company, Vodaphone).
'I do hear it all the time: (puts on disgruntled tone) 'Oh, that's publishing - they do their own thing, no one really knows what goes on in there...' Being in a record-company is far more dynamic and exciting - even from a financial point of view, since something could make a ten million profit, or a ten million loss, whereas our earnings and profits are a lot more stable and easier to project. We'll never make ten million more than we thought we would make in a year, but we'd never lose ten million either.
'Part of the reason I love my job is because myself, the guys in Tracking, the Finance Department, we all go out and see gigs together; A&R people are amazed we're there, but it is - at the end of the day - why we're in the job! We also have songwriters come up and see us when they're in the building to say hello and just generally hang out... I do actively encourage it because it makes the job more interesting.'
The scale of BMG as a whole, though - what does it represent?
'BMG is Bertelsmann Music Group: German, and the largest private company in the world,' Will responds affirmatively. 'There's probably talk of it going public eventually, which I think will happen. It seems very difficult getting the company-profile across, though; certainly, to someone in the UK that's not in the music-business, if you ask them, 'Have you heard of BMG,' - no-one knows of it! If you then say, however, that its record-labels are Arista and RCA, they'll probably go, 'Oh yeah,' and know about us.
'It's part of a huge, multi-media conglomerate; they have TV-stations in Germany, the Random House Book-Club over here, which is the biggest book-club and publishers... The music is just a small cog in that whole media-side, although the music-group in the UK is one of the five majors. Despite all the people that work within BMG, the divisions are quite separate.'
Publishing, specifically, though - how has it evolved?
Will pauses briefly, and reflects the changes it's undergone in the last decade.
'What happened in the old days is that publishers were just seen as a bank; there was no real A&R to get new bands and exploit them, and they were very hands-off: just collected royalties and paid them out... In fact, that's similar to how it used to be when I joined BMG ten years ago! When I joined, we published the Eurythmics, who were signed to BMG Records, as well as us, and that was about it! We had a small A&R department who were in no way as active in the market as we are today.
'Now, it's changed; there's a lot more on the A&R side, and it's a lot more like record-companies. We sign songwriters, quite often before they get record-deals, which - in a way - involves more risk for us because, if they don't get a record-deal, we won't get any money because they don't sell any records!
'When people get a record-deal, their value often goes up a lot more... The people we sign up without record-deals are usually singer-songwriters that we call 'Development Acts', and we often actively try to get them deals - not myself, but the A&R team will.'
In regards to the actual money-making, it isn't as simple as cash being collected via over-the-till sales and then that's it. After all, one possible complication is the matter of receiving royalties via the playing of artistes' music on television and the radio. So, therefore, what is the method of obtaining monies from any broadcasting-source?
'Every time a record is sold, the publisher collects the royalty on the behalf of the writer,' he simplifies. 'So, every time something's played on TV or radio, what happens in the UK is that the PRS monitor all public performances, so they collect royalties from people like Radio One, Capital FM, the BBC, everyone, and they distribute it out to the publishers.
'So, we don't have separate deals with each radio-stations saying, 'You can play our song here, or there'; there's a blanket agreement where they can play what they want, but they have to account to the songwriters for it.'
Presently, less controllable are two potential problem-areas: the Internet, and, of course, the illegal manufacturing of copied records, also known as 'bootleg material'.
'There's not a lot we can do about pirating - it's all down the local record-companies in the countries and regions that do it,' Will sighs. 'The BPI (British Phonographic Industry) does a lot about it in the UK, and you can read about a lot of the things they get up to regularly in 'Music Week'. They actively go down to places like Camden Town market and see who is selling these things... It's a major problem for us, because we don't get paid, and neither do the record-companies or artists.
'For the Internet, things like Napster and similar programs are more of a problem for the record-label than the publisher,' he continues. 'With the publisher, we can just agree a specific rate per download and we get paid.
'We do see the Internet as another medium, really; our main aim is to just make sure we get paid when our songs are on the Internet. Again, the MCPS and PRS act on our behalf, and one thing about the Internet is that it leads on to things like ring-tones on phones, which is a big thing at the moment. We're getting paid for all these ring-tones being made and sold online, and the MCPS agrees a rate for every download and most of the companies will agree something like 10 pence a download, and some of the popular artists we work with are getting quite big via them.'
Apparently, with such increases in profits and business as the examples given, more people have been attracted to working within the field. What key advice could Will give to those looking to be in a similar position to himself?
'Well, the problem is that there are very few publishing-companies anyway, and the thing is to actually get into them,' he comments. 'Loads of people try to get into it, and those that work hard will be known and those that bluff it will get found out. In A&R, we have a junior assistant that goes through all the demos and speaks to people that send them in and others, and they always go on to work in other things because they build such a big list of contacts. The pay is pretty poor when you're starting, but it's like training to be an accountant - it was dreadful, but, now, things are better.
'It's a great industry to work in, so it's bound to be difficult to get into; we've had openings in jobs where 400 people have applied for the position. You've just got to keep trying.
'That was how I got in... And it's definitely one of those industries that - once you're in, though not with everyone - you'd find it very difficult working somewhere else. As we all say about it, I just couldn't work in a conventional place or way!'
Luckily, the man we say goodbye to now appears to have become a part of something that matches his interest as well as his talent. 'Conventional' or not, society would deem you to be a success if you landed a similar lifestyle to that of Will Downs.
Artists in this article: Will Downs