Does it makes any difference whether a band gets a publishing deal or a recording deal first?

Q - Sean from Derry asks if it makes any difference whether a band gets a publishing deal or a recording deal first?

A – A band’s income can be divided into four main streams: recording, merchandising, performance and publishing. All are taxable except publishing income, which is exempt from income tax if you have qualified for the artists’ exemption.
A recording deal is where you give the recording company the right to sell your record on your behalf and they pay you an advance against any monies due to you for the number of albums or singles sold by them.
So, from a general point of view, a recording deal is the ultimate goal for any band as it will get your music out there and on the shelves. Therefore, a recording deal is the preferred deal to get and so the one to get first.
A publishing deal entitles your publishing company to sell your music to third parties. They can give people permission to reproduce your work, to perform it publicly as well as make derivative works based on your work.
As mentioned above, any income from your publishing deal will be exempt from income tax in Ireland, so it is likely that a publishing deal is more lucrative for you the artist. Also there are not many expenses involved in writing as opposed to recording.
That said, publishing deals rarely have the same earnings potential as a recording deal unless you are already successful and your music is in demand for adverts, films and so on.
In addition, advances under publishing deals are rarely as large as those for recording deals. But being exempt from income tax compensates for this.
A publisher should be creative by putting you together with other writers, help you fine-tune your writing and match writers with artists. In practice, most are not much more than banks. They calculate what they can potentially earn from your deal and pay a portion of that to obtain the rights involved.
Related to this topic is artists’ exemption. You should know that the government is looking at all income tax exemptions and may rescind or amend them significantly.
Although everyone hopes the artists’ exemption will be retained and most people expect it to be, we can be fairly certain that it will be capped by the Minister of Finance. So, for example, only earnings of €1 million or less will qualify – any earnings above that level will be taxed like normal taxable income.