Category: Licenses

What Can Musicians Be Thankful For In 2011?

This Dancing Turkey is Definitely Thankful to Be Alive.

Perusing the local trade magazines or attending a music based conference can lead a musician (or someone who works with musicians) to believe that Armageddon is truly here.  If we hear one more speech or read one more article about the end of the music industry as we know it, we will certainly collectively go nutso. 

The truth is the entire economy is in the crapper.  We don’t know one industry that hasn’t been touched (well, maybe crime, if that is an industry).  Music has certainly not been immune.  However, we here at L4M are here to say that Debbie Downer needs to turn her frown upside down.  While the days of multi-multi platinum records and huge advances are certainly on death’s doorstep, the savvy musician can do more than just eek out a living.  Here are some things we think musicians should be happy about:

1.  The Internet.  Long hailed as the assassin of the music industry, the world-wide web offers more opportunities than it does problems if you know how to ride the waves.  Not only has the internet introduced the fan to new (and mostly legitimate) ways of finding new music, collaborative websites now allow musicians a means to create, promote and distribute their music.  Sites like TopSpin, BeatPort, BandCentral, SoundCloud and Facebook have become essential and typically inexpensive methods for sharing talent, ideas and product.  If utilized properly, the internet’s social media platforms can completely replace a label based pr system.  Access, affordability and a global reach are definitely something that the Internet provides to the musician willing to navigate it.

2.  Music Festivals.  Music festivals breath new life and huge opportunities to major label talent as well as emerging bands.  Bringing great music to enormous crowds coupled with innovative festival organizers oftentimes bring great results.  Not only are festivals bringing tremendous revenues to musicians and the organizers, they offer great opportunities to buzz bands to play in front of huge crowds and important taste makers.  On top of that, every festival brings with it industry parties, opening slots for after shows, and tons of press.  Emerging bands who strategically plan ahead for a visiting festival can really cash in (maybe not as much as Perry Farrell, but still…).

3.  Music Licensing.  It used to be that in order to get your music licensed your label or publisher would have to cozy up to a music supervisor.  With the amount of media content around the world growing at a record pace (think tv, radio, satellite radio, internet programming, commercials, film etc.) there is a matching need for quality music.  Jingles are a thing of the past.  Ad agencies with unlimited budgets for music is also rare at best.  Quality music that may originate from lesser known musicians but do not carry with it the rigors of publisher and label demands has become imperative.  Musicians who work to get their music to savvy music libraries can make money on both up front music licensing sync fees as well as the oftentimes lucrative performance royalties. 

4. The Remix.  Want to resurrect an old single?  Want to make some money as a producer by resurrecting that old singer?  Never before has the remix been more important.  DJ’s like Skrillex and Guetta have become über rich by making a name for themselves as talented remixers as well as great djs.  For popular musicians, remixes by producers or other bands can lead to revitalized sales of a falling single.  The remix is a handy promotional tool as well (Lady Gaga will be ever-present again for a while as she announces the release of an entire remix album).  Another means of collaboration, oftentimes between artists who would not otherwise work together is definitely a trend that we can all be thankful for in 2011. 

5.  Vinyl.  The LP appears to be back for good.  Collectors as well as a  new generation of music purchasers appear to be favoring holding something cool in their hands and not just in an electronic file living in an Ipod.  While still expensive to manufacture, vinyl sales in 2011 continue to defy the rest of the industry.  A positive trend that began several years ago, there does not seem to be a slow down to the sale of the old school vinyl record. 

What about you?  What are you thankful for as a musician or a music fan in 2011?  Please comment below.  Let’s stay positive and bring in the joy during this holiday season.  Having trouble doing so, slap on the collector’s edition of Justin Bieber’s Christmas album.  We have no doubt that you will soon be smiling!

Back to Basics: Performance Rights Organizations

 

Back to the Basics of the Music Industry

We here at L4M had an original goal of making the music industry LESS confusing for musicians by attempting to simplify and decode the mythical “industry standards” that generations of music executives and attorneys had crafted.  In our opinion, the standard of the industry was to confuse musicians so that they would willingly give up rights that they needn’t relinquish.  The combination of a monumental change in the music industry (with the introduction of the internet) and the easier access to information (such as sites like ours), musicians no longer have an excuse when they enter into horrific label agreements.

If you look over the last several articles posted on L4M, we admittedly have wandered away from the path of simplicity.  So, hand in hand with all the kids going back to the classroom this week, we will be returning to the basics.  Today’s lesson, what do Performance Rights Organizations or PRO’s actually do and why do you need to register with one?  

Most folks in the music industry and many outside of the industry have heard of ASCAP or BMI.  However, the numbers decrease signficantly when you ask those individuals what ASCAP or BMI actually do for artists. 

ASCAP (American Society of Composers, Authors and Publishers), BMI (Broadcast Music Inc.) and SESAC (Society of European Stage Authors and Composers) are the three performing rights organizations in the US.  They have international presence as well, but for this post we’ll just focus on their doings in the US.  As their names suggest, PRO’s work with writers who have their music published and broadcast to the masses.  They issue licenses to any one or any thing which broadcasts music for more than merely personal enjoyment.  As part of those licenses they collect royalties to the composers of music which is broadcast to the public.  According to ASCAP itself it:

“protects the rights of its members by licensing and distributing royalties for the non-dramatic public performances of their copyrighted works. ASCAP’s licensees encompass all who want to perform copyrighted music publicly. ASCAP makes giving and obtaining permission to perform music simple for both creators and users of music.” www.ascap.com/about

Think of it this way:  You drive your car over to your favorite shopping mall.  While en route you jam out to your local rock radio station (if it still exists).  After parking, you saunter into the mall which is broadcasting some easy listening jams over its PA system.  You wander into Abercrombie & Fitch to see if you can grab that hoodie that The Situation wore on last night’s episode of Jersey Shore and in the darkened perfumed laced store you are accosted by much too loud ska music.  Working up a hunger, you then meander into TGIF where you are immediately accosted by 30 flat screen tv’s blasting a Black Keys track over a Cadillac commercial.  Exhausted, you get back in your car and switch over to the smooth jazz channel for a relaxing drive home. 

Every step of the way during your epic mall journey, songwriters were collecting performance royalties.  Let’s take them one at a time. 

1. Your car ride to the mall:  The local radio station licenses its playlist from the PRO’s and pays a set amount for each song it broadcasts to the appropriate PRO (which is the PRO that the songwriter signed up with and registered its songs).  The PRO then allocates the correct portion of that payment amongst the writers of each song which was broadcast.  Eventually, the radio’s payment trickles down to the songwriters themselves.

2.  The mall itself has a license with the PROs to broadcast its easy listening jams.  The same process ensues.  PRO’s collect from the mall owners and pay out the appropriate writers. 

3. Franchises like Abercrombie and Fitch also have direct licenses with the PRO’s in order to continuously broadcast music to their patrons.  So similar to the radio stations and the mall, individual stores will also pay a license fee to the PRO’s to pay for the right to broadcast music.

4.  The network which broadcast the Cadillac commercial on television will also pay a license fee to ASCAP.  See our article on Licensing to see the other compensation that may be owed for this type of use.

5. See number 1.

The amount of money paid every time a song is broadcast varies.  How much does it vary?  Well that depends (sorry, but it’s true).  The PROs negotiate individual licenses and rates with its licensees.  The terms of the licenses depend on a large number of variables including the size of the audience, the time of day of the broadcast, the method of broadcast and even the current financial climate.  A song that is featured on a top network drama played at primetime on a Thursday night will surely be worth more in performance royalties as compared to a song that is played over the loudspeaker at Steak and Shake in rural Georgia.  However, if you do not register your work with a PRO you will receive the same amount for either broadcast: $0.00. 

We are often asked which PRO is better?  BMI and ASCAP as the biggest PROs have standard answers as to why they are better than the other.  However, as with most things in the music industry, we feel that it comes down to relationships.  If you develop a relationship with a representative from a PRO you should stick with him/her.  Finding someone to help you through the registration process and explanations as to what royalties are owed is invaluable to any artist.  Neither of the organizations have long term contracts, but you have to be pro-active to know when to terminate or they will continuously renew. 

This is obviously only a very cursory overview of a much more complicated subject.  But, it is a start.  If you have more questions, please contact us.

Licensing Your Music

 

The Situation can help you make money.

 

In the new era of the music industry, one of the most lucrative revenue streams for musicians and publishers is licensing.  With the ever increasing number of media outlets (television stations, websites, web radio, satellite radio etc.), there is a matching need for advertisers to discover and use music.  What was once a selective club reserved for big bands and huge songs has now become a way for virtually unknown artists to make an actual living writing music.  Yet to most musicians, the mechanics of licensing remains a mystery. 

Music supervisors are some of the most important and influential people in the music industry (and they know it).  Supervisors are hired by networks, shows, movies, production companies, ad agencies, etc. to find the perfect music for their project, and get the rights to the music that they discover.  Supervisors get hit up by labels, publishers, bands, managers, guys on the subway, your mom, etc., so grabbing their attention is not exactly an easy thing.  As with most things in this business, relationships are super important.  If you know a supervisor, or even know someone who knows someone, you have a marginally better chance of having your music heard and possibly used for a placement. 

However, because of the changing attitudes and, more significantly, the changing budgets of networks and shows, supervisors are not the only way to get your music placed.  There are a ton of productions that do not use a typical supervisor in the role of finding and placing music.  Independent movies, lower budget cable shows, webisodes and more will have a producer, assistant or intern try to find music to fit into their production.  Of course, these productions do not have a budget to spend thousands per track so they will not be shopping for label affiliated music.  While the upfront money for these placements are not huge, the exposure and long term earning potential can be significant. 

Now, let’s say you were lucky enough to have your music selected, what can you expect?  You probably won’t have a lot of negotiation power but you should check with an attorney or your manager to see what you can get from the license.  A typical license will pay the writer and performer of a song a fee for use of the song.  The sync and master fees vary depending on the type of license.  For example, a license that uses a track  in a tv show may be $2,000 ($1,000 for the sync and $1,000 for the master).  2k for the use of a song is not bad, but where the writer stands to make additional money is with the performance royalties that accrue every time the  show is aired on television. Your ASCAP or BMI statements will definitely increase if you land one of these licenses. Oftentimes, the performance royalties will generate more income than the upfront license fees. 

There are more benefits than just the money your license will generate.  If you land a song on a heavily watched tv show (think Jersey Shore) the exposure can be tremendous.  Millions of people that may not otherwise hear your song will have plenty of chances to hear it, as Jersey Shore seems to be on eight times a day.  Additionally, if you can get your name and the name of the song on screen as well as the show’s website you can significantly increase your fan base.  Song downloads, cd sales and show attendance can grow exponentially from a good tv placement. 

So keep doing what you need to do to promote yourself (touring, publicity, marketing) but add licensing to your arsenal.

How to Make Money as a Musician (Volume 2: License It)

Welcome back to my multiple part series on how to make money as a musician:  Volume 2, Licensing.

No point dwelling on the past, making money selling records has gone the way of the 8 track, the ferbie and the Hummer SUV.  The antiquated system of big advances and platinum record sales has died (or is at least on life support) along with the major labels.  So while it is harder to make money the old fashion way, there are new and, more importantly, more ways of making money as a musician.

Performing live at concerts is still the best way to make money.  It used to be that bands would perform to sell albums, now the musicians give away their music to sell concert tickets.   However, not everyone can sell out stadiums, concert halls, or even high school proms.  So, what is another great way for musicians to make significant income or supplement their concert income?  Licensing!

Think of how many commercials you heard or saw today?  Consumer Reports estimates that the average American is exposed to 247 commercial messages a day.  The vast majority of the radio and television ads, as well as a growing number of internet and new media ads, are accompanied by music.  Whether its Budweiser, which spends approximately $90 million a year on advertisements, playing the newest Dodo’s or Santigold (See Above) song or Apple promoting the newest IPhone with Feist, music is an integral part of advertising all over the world.  Musicians can lay their claim to the billions of dollars spent on advertisements each year.

Licensing does not end with advertisements.  One of the most common terms of art used in license agreements drafted by folks like me is describing the use of a song in “any medium now know or hereafter discovered”.  This industry phrase means that a song can be used or synched to movies, television shows, internet programming, video games, radio programs, or any other programming or format which hasn’t even been discovered yet.  Think about, when is the last time you watched a movie that didn’t have a sound track, a television show that didn’t have a theme song, or a video game that didn’t have background music?  Watching old silent movies does not count.

As satellite and cable television expands and internet programming continues to grow the opportunities for music licensing grow proportionally.  Budgets may vary, but mechanical royalties (the statutory rate that must be paid every time a song is broadcasted) must be paid.  Licensing music can be a quick substantial pay day or a long term and consistent money maker.

Music Licensing Avenue

Music Licensing Avenue

The dollar figures for global music licensing are staggering.  According to a 2007 report by eMarketer, the projected budget for music licensing in 2010 will reach $4.4 billion!  How many artists would be happy with just a teeny tiny percentage of that huge pot?

Just knowing that the licensing money is out there does not make it a reality for most independent artists (I’m anticipating your questions).  For independent artists who are not signed to a publisher, it is still difficult to get your music in front of the licensing decision makers.  There are several services out there via the web which offer solutions:  Pump Audio, Taxi and my favorite (bias added) Music Dealers.  These sites allow artists to upload their music to catalogs with the hope that a music supervisor seeking independent music visits the site and selects their song.  Some sites are non-exclusive, meaning you can upload your music to more than one, while other require exclusivity.  Always read the contract (even the click through contracts)!

Other options for getting your music licensed is to attend music seminars, panels, events, conventions.  Research where the industry people are going to be.  Buy a badge to CMJ, SXSW, Midem, etc.  Music supervisors and a&r types are always at these types of events networking and trying to find the right sound for their project.  If you don’t run into the right folks there you can start networking on your own to find managers, lawyers or other independent licensing reps of music.  A lot of times these types have the inside track (which is usually a coveted list of contact info for music supervisors in all types of media like movies, tv, and video games) to the decision makers.  For a split on the fee, independent reps will submit your music for your.  While there is no guaranty, your chances of having a supervisor actually listen to your music is much higher when it is submitted by someone like this.

Just like everything else in your career as a musician, you will only go as far as you and your talent take you.  Having great music alone is not enough.  You have to treat it like a business.  Licensing opportunities will not just come to you.  Go out there and sell it.  Network, meet the right people, create a buzz and capitalize on every opportunity (no matter how small) that is presented to you.

The Music Business is Massively Confusing

Are you a little dazed and a lot confused?

As a lawyer I am supposed to know the answers to all of my client’s questions. When there is a dispute amongst band members or a license deal that doesn’t quite make sense or a slimy industry type not living up to his promises, my clients are trained to do the following: call Josh. For the most part I am happy to say that I can usually answer the question in a relatively short amount of time (primarily because I am a Nerd but also because that is what I get paid to do). But here is the problem: I can explain complex copyright law or a contract uplift provision or a mechanical royalty schedule to another lawyer and she will most likely understand it; but when I try to do the same to the bass player of a Viking Metal band, I tend to get blank stares. The reason for this is because lawyers designed the system, not musicians.
So with that I would like to take this opportunity to provide musicians (primarily new musicians and bands) with some simple terminology to help them decipher what it is their lawyer is trying to tell them.
Let’s start with a LLC. I often recommend that a new band or musician form a LLC as one of the moves to make when a hobby becomes a profession. LLC stands for limited liability company. A limited liability company limits the personal liability of the people who own that company. That means if your company does something wrong (and not you personally) the person you wronged will not be able to go after you personally. The owners of a LLC are referred to as Members. A Member of an LLC is not the same thing as a band member. Members can be people in your band or they can be your aunt Regina who invested in your band so you gave her some ownership.

A LLC can either be Member run (where the owners are responsible for the day to day decisions of the company) or Manager run. A Manager of a LLC is not Hank, your current band manager. A Manager can either be one or more of the Members or somebody or something totally different. A Manager of a LLC runs the company but is NOT what you probably think of when someone mentions Manager and music in the same sentence.

Here’s an example: your band started with 2 people, you and Stewie. You formed an LLC and you and Stewie own the band name and the copyrights of the music in the name of the LLC making you and Stewie the two Members of the LLC. You both act as Managers, sharing responsibility for the day to day business of the LLC. Jerry comes on board as the third band member, but he’s not an owner of the LLC. Jerry gets paid out through the LLC based on your and Stewies decision.

Make sense? Just remember the double meanings of Members and Managers when you are talking about a LLC and you should be ok.

Ready for the next eye opener? Let’s go to the wonderful world of licensing. If your song is lucky enough to be chosen by Charmin to launch their next commercial campaign, they will send you two license agreements for your signature. The first license request will be a mechanical license and the second will be a synchronization license. They can’t license your music with your permission for both licenses. But what the hell are they?

A mechanical license is something that you, as the song writer or copyright holder, give to Charmin. The mechanical license grants Charmin permission to make copies of or reproduce your song. The mechanical license sheds light on the importance of registering your sound recording (song) with the copyright office. By doing so, Charmin and the rest of the world are on notice that if they want to use your song, they have to first obtain a mechanical license from you or your band (or your publishing company if you have hired one).
A synchronization license (sync if you want to sound cool) is the license that you, as the song writer or copyright holder, give to Charmin to allow them to place your song into another medium. Translation: it allows Charmin to take your song and sync it with their commercial.
Both licenses will have similar terms with respect to the length of time, what type of medium will be used (video game, commercial, dvd) and how much you are going to get paid for both (usually the same amount for both licenses). Some keys to look for are: is the license exclusive (you don’t want this), do they get to modify the song (you don’t want this either) and when do you get paid (you do want this).
I am pretty sure that the music industry, and entertainment in general, was set up by the same people who drafted the US tax code. It is intentionally confusing. In order to limit the times that you get taken advantage of you not only need a solid attorney, but you, as the artist, also should know the fundamentals.
I think I like this format. I guess that doesn’t matter so much. Let me know if you like it and I’ll keep going with some more fundamentals of a completely and utterly confusing industry.