Music Publishing Deal Driven by Shift From Sales to Streaming

In the latest change to the rapidly evolving business of music publishing, Sesac, a boutique rights group backed by private equity, has agreed to buy the Harry Fox Agency, a major clearinghouse of songwriting rights.

The deal, made with the National Music Publishers’ Association — a trade group that has owned Harry Fox since its creation in 1927 — would allow Sesac to combine two kinds of licensing that have long been separate in the fragmented world of music publishing, which centers on the copyrights for songwriting. Sesac, known as a performing rights organization, collects royalties whenever the 400,000 songs in its catalog — including works written by Bob Dylan, Neil Diamond and Kurt Cobain — are played on the radio, streamed online or even piped into shopping malls. The Harry Fox Agency handles the so-called mechanical licenses from song publishers that record companies need to sell CDs and downloads. Gaining the ability to issue both kinds of licenses would enable Sesac to handle digital rights more efficiently, said John Josephson, the company’s chairman and chief executive. It would also give Sesac control of the valuable data that is generated from digital outlets like Apple, Spotify and Pandora, giving it an advantage over Ascap and BMI, its much bigger rivals in the American performing-rights business.