Category: Music and Business Law

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.

Does Forever Really Mean Forever? Recapture Your Copyrights.

The Library of Congress is going to be a busy place thanks to recapture rights.

Suppose you are a publisher or a record label and I am a 25 year old writer or artist.  You are impressed with my music and we begin talking.  After a couple of weeks of proper courting we decide to consummate the relationship.  You present me with a contract.  The language states you give me money as an advance; in exchange, I give you my music and the copyrights linked to the music for the life of the copyrights.  This seems like an awfully long time, no? After all, life of copyright is 70 years after my inevitable death.  You, as publisher or label, want me to assign my copyright to you, basically, forever.  So, assume I sign the contract in ink (or blood or something).  Is that it?  Will my work remain with your company for the next 100 years or so?  No.  Not necessarily. 

Despite what many think and despite the language of the contract, you may be able to get your copyrights back. There are strict time lines and certain formalities that must be followed; which, if done timely and correctly, will result in you getting your copyrights back.  These guidelines are set forth in a little discussed portion of the 1976 Copyright Act (Section 203 to be precise). Note: This does not apply for works made for hire which we will discuss in a future post. 

 Section 203 provides a chance for authors to terminate their assignments and recapture their copyrights. For works after January 1, 1978 (the year the 1976 Act went into effect) grants, assignments and licenses can be terminated during a five year window starting 35 years after such grant was made.  For the termination to be effective a letter requesting that the copyrights revert must be sent no more than 10 years prior and no less than two years prior to the effective termination date.  There are certain other formalities such as recording a termination notice with the Copyright Office. 

Here’s how Section 203 works: suppose a song was written and assigned on January 2, 1978; the writer could get his/her copyright back between the years 2013 – 2018 (1978 + 35 years + 5 year window).  Termination letters could be sent beginning in 1993 and no later than 2016 (10 years prior to 2013 and less than two years before 2018). If done correctly and timely, publishers cannot deny these termination letters. As an added bonus you cannot waive your rights in advance.  Thus, the contract you had me sign granting you my copyrights for life of copyright would not affect my right to recapture my copyrights.  In fact, right now, there are writers and artists in this exact position requesting their copyrights revert back to them.   However, if you do not send a proper termination letter during the proper time frame, the contract will then go back into effect and the publisher or record label would continue to own your copyrights for life of the copyright. 

So what’s the big deal about getting your copyrights back?  What do you do if you get your copyrights back?  Suppose you don’t have any business experience and have no idea what to do to market and get your material out to the public?  Fear not readers.  You can use this as a negotiating tool.  For example: suppose your contract allowed for a future advance of x dollars and a money split of x%.  Well, you could renegotiate all your terms.  You could ask for three times x and a money split of x+10%.  I will let you fill in the x’s, percentages and numbers until you are happy because that is how you could (and should) handle negotiations of this type.  You should see what would make you happy to stay with the same company.  Another option would be to take your copyrights and move to another company on more favorable terms.  Yet another option would be to recapture your copyrights and start a company to start selling or licensing your copyrights.   There are countless options available if you decide to recapture your copyrights. 

It is important to remember the value of a label or a publisher is the value of the copyrights it owns and controls.  Think of how many albums the Beatles, Stevie Wonder, The Who, Led Zeppelin, Ray Charles, etc. still sell (click here to read about the revenue still generated by Ray Charles).  Think of how many times you hear those same artists on the radio or in movies or on television or in video games.  (Labels currently do not receive money for terrestrial radio play.  Please see the post on the Performance Rights Act). Now, you may not be as well known as the artists just mentioned but think of how much you could do if you had the rights to.  A label usually only pushes an album for about 12-18 months; after that the album slowly fades into obscurity.  However, they still own the copyrights.  If the label does not push it; no one can.  Now, if you had your rights back you could go out and try to get your music placed on television shows, movies, video games and commercials and reap 100% of the money.  There are several companies out there that pitch and place music in all these areas (for a fee or commission).  Another source of income could be repackaging and selling your album yourself.  Whether it is on iTunes or at the local indie shop; you could sell your own cds and keep your own money.  No one will ever care about your music more than you.  If you are back in control of your songs and master recordings, your music may get a new push and find opportunities you never thought possible.  

This is an exciting time in the music industry.  Every year new writers and artists start entering the termination period for copyrights.  New business models, new marketing techniques and new interest in older songs are going to emerge.  I, personally, cannot wait to hear a great song that some label or publisher forgot about back in 1978. 

This is an extremely interesting and complicated issue.  We at L4M will have many more articles about this issue and how it relates to you.  Future posts will discuss pre-1978 works, sound recordings, works made for hire, heirs’ rights and the importance of record keeping.  Stay tuned…

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.

Cloudy With a Chance of Music

 

Forecast for Musicians: Storm Clouds

Recently I was on a panel at Northwestern Law School with another lawyer, a musician (who happens to ba lawyer too) and an ASCAP representative.  Our topic was the effect that cloud or subscription based music services will have on performers and songwriters.  While I definitely had my own opinions on the topic, it was ear/eye opening to hear from my fellow panelists. 

Most music lovers seem to have their own private way to listen and enjoy their music.  While there is a lot of overlap amongst listeners (iPods, satellite radio, pandora, car radios, home stereos) everyone has their own unique method to purchase, stream, listen and (now most importantly )travel with their collection.  In the past we would break out our record collection and play records in the family room.  Then came the cassette and the walkman.  Our record collections became somewhat mobile and we could grab our favorite tapes and walk around or drive while listening to our collection of music.  Technology allowed for better sounding recordings to travel along with us with the invention of the CD.  However, like one of my panel compatriots aptly pointed out, a music fan was a prisoner to his cd collection; still rather bulky and highly scratchable, you would have to lug a box/book of cds with you on each road trip and hope that they did not fall between the seats or get scratched on the dashboard. 

Enter the MP3. A computer file that is quickly dowloaded and containes cd quality sound.  The digital album revolutionized the way we consume music.  As with most revolutions, the infrastructure that existed prior to the revolution (the big music label system) fell.  Brilliant entrepreneurs and crafty opportunists from Apple to Napster entered the fray and came out making billions of dollars from the shift.  For the everyday consumer of music, it became easier to listen to music wherever you wanted to do so.  Your entire record collection can now fit into the palm of your hand, be programmed to your car’s stereo or be shared with people in your office with a click of a button. 

Now that the digital age of music is over a decade old, there is yet another shift occurring.  Technology again is making it easier for people to listen to their music collection regardless of where they are.  The clouds have come rolling in. 

Pandora has already helped put the cloud on the map with approximately 80 million users (1 new user every second per the www.digitalmusicnews.com).  But services such as Spotify, Sony’s Qriocity and Google’s delayed cloud service will take it one step further.  While Pandora allows you to listen to music based on bands or songs you tell it you like, the cloud subscription services allow you to pick all of your music.  Essentially, you will no longer have to actually purchase a song, let alone an album.  Rather, you will pay a monthly fee that will allow you to pick your favorite songs, categorize them, rank them, etc. and, most importantly, take them with you.  Whether you are listening on your hand-held device (smart phone or iPod type device), on your computer, in your car or listening to your home stereo system, your music will be there waiting for you.  As long as you keep paying the monthly fee, that music will be with you. 

As a consumer, I think cloud based systems are the bees knees.  Technology should make things easier and better.  Allowing me to go from my office to my car without missing a beat of the song I was just listening to (I’m very fast) and without plugging anything in, is amazing.  As a lawyer who represents musicians and songwriters, I’m worried.  For interactive internet based music providers (where the user gets to select the songs he/she wants to listen to) the royalty rates are negotiated between the labels/publishers and the cloud provider.  This means that the labels and big publishers negotiate pre-determined revenue shares for each stream of a song; typically a teeny tiny fraction of a dollar (in England the rate is thought to be around 0.00085 pound).  A famous example of how potentially horrible these rates can be is the report that Lady Gaga who had over one million streams of Poker Face on Spotify in the UK earned $167.00 (click here for more on that). 

The labels and publishers in the US are fighting for more per stream.  But don’t go rooting for them quite yet.  They are negotiating deals so that they actually get an equity or ownership stake in the cloud based service.  So while it appears as though they are fighting for the artists (which some of them might actually be doing), they are also positioning themselves to make as much money as they can in the process.  If the clouds make it unnecessary to ever download and actually own a song, how are the songwriters and artists going to recapture that lost income?  As of now, the songwriter lobbyists are doing a good job of asking that question and fighting to establish fair payments for musicians. 

The laws in place that cover interactive internet radio and subscription services did not imagine the day when streaming would eclipse downloads.  That day has clearly arrived: “Streams of music are eclipsing everything,” Universal Music Group UK chief David Joseph recently told the Guardian.  “It’s a different digital currency to downloading. You’re dealing with 175 million single tracks bought a year compared to 7 billion streams of music.” (from The Digital Music News).  Just as technology has adjusted, the laws dealing with fair payments to the providers of content need to be modified. 

The bottom line is that just as the cassette replaced the record, the cd replaced the tape and the mp3 replaced the cd, the cloud is going to replace the downloaded mp3.  The clouds are rolling in and the artists may be left in the impending dark.

Collaborating in the Studio? Does Spoonman Hold the Power?

 

So you are in the studio working on your latest masterpiece.  However, you and your band mates decide that one of your songs needs a little something extra.  Whether that something extra is a guest rapper, vocalist, guitar player, percussionist, cowbell expert or Spoonman; there are few things to keep in mind before you bring that superstar, indie hero or friend into the studio.

Ponder upon these questions:  Who will own the master recordings? Who will own the publishing?  Who can license the song for use in TV shows, commercials, movies or video games?  There is another biggie: If your guest is signed to a label, can you release the song at all?

Let’s take each issue in turn.  First, who will own the master recordings?  Often, the label or entity paying for the recording, mixing and mastering sessions will own the masters.  In today’s music industry scene, where more artists are self-financing and recording themselves, the band or group will own the masters.  In these instances, the performers will collectively own the masters.  Since our guest is a performer does she or he own part of the master?  Ready for your favorite answer?  Here we go—-maybe.  It all depends on what agreements, if any, you have with our guest. 

If there is no agreement in place the master could be considered a joint work in which case any master owner could license the master.  Now, if our guest came in to do a small part you probably would not be too happy to find that he/she licensed the song without asking you.  Thus, you should probably have an agreement in place.  If our guest was performing under your direction and guidance or if the performance is specially commissioned you could have our guest enter into a work made for hire agreement.  Under this scenario ownership of the master would vest in you.  You should address terms such as payment, royalties, credit and so forth within the agreement.  If our guest was not performing under your direction or otherwise did not qualify as a work made for hire, the other option is to have our guest assign any ownership over to you.  In an assignment our guest would transfer any ownership he or she may have to you within that assignment. Again, you would address payment and royalties.  Lastly, you could allow our guest to retain ownership, via a license, while at the same time keeping the exclusive right to license the song. 

Next, let’s think about the publishing in the song.  As we all know the publishing is made up of the melody and lyric (yes lyric, not lyrics) of a song.  So, did our guest assist in writing any of the melody or lyric of the song?  This seems an easy question and answer, but oftentimes leads to band breakups and costly court battles.  Again, we emphasize the importance of filling out split sheets.  It may hurt our bottom line, but will save you years of anger, time and frustration.   Under copyright law, when there are two or more authors for a song  and the authors intend for the work to be one song they are considered joint authors.  If there is no writing stating otherwise, any author can license the song as long as they share royalties and the use doesn’t diminish the value of the work.  How do you prove diminishing value?  Good question.  It is almost impossible to answer.  So, we will leave that alone for now.  If someone came in and suggested a lyric change , slight key change or tempo change is that person an author?  Probably.  How would you feel if our guest went ahead and started licensing the song without asking you?  Not upset?  Wonderful.  You may be happy with some exposure and a chance at some money.  What if you were negotiating a license and then found out the song had already been licensed by our guest?  Not so wonderful? The way to avoid this is to have something in writing stating who can license the song.  It can be all the authors, a majority of authors, a key member or anything you feel works for everyone.  This could (and should) be part of your inter-band agreement.  But, if our guest isn’t in the band you will need a separate agreement to cover his or her contribution.  Again, the ways to do this are: i) work made for hire, ii) assignment or iii) license. 

Lastly, what if our guest is in a record deal?  Record deals usually require the artist to provide exclusive services for the label.  Thus, any recording done by that artist must be cleared with the label (the label can also deny or claim ownership).  The artist may have a “sideman” clause in the record deal which allows him or her to do outside projects in which he or she is not featured.  You can enter into a “step-out” deal which allows you to use the performance of our guest and release and license the sound recording.  If our guest is involved in the development of the melody and lyric and is also in a publishing deal you will have to get permission from the publisher.  The publisher will want some copyright ownership and may want some administration rights.   So, it will save you time and stress if you ask our guest what type of deals, if any, he or she is currently in.

Collaborations can be great.  Collaborating with other artists can bring new life to a song.  Your creativity may be enhanced by working with artists that you do not normally work with and can, often times, lead to a song you never envisioned.  So collaborate away.  Just be cognizant of the issues that come along with it.

What is a One Stop Shop in the Music Business?

One stop shop for musicians? Better ask some questions.

Lately we’ve noticed a growing trend in the independent music scene.  Specifically in the businesses that work with independent musicians.  Many companies and individuals who used to have a job or a business that covered one specific element of the music scene are now presenting themselves as the “one stop shop” for musicians.  As you know, we like to dissect things around here, especially when catch phrases or “industry” speak is thrown around as if it has one universal meaning.

To me, a one stop shop conjures up images of a major highway gas station where you can get gas for your car, a slim jim, bait for your fishing trip, a slice of pie and possibly take a shower (I would not recommend the last one).  Basically a one stop shop should give a consumer an option to purchase all that he or she needs in one location.  Transfer the phrase to the music industry and it is not quite as clear what a one stop shop is or should be. 

We know that in the past a label was supposed to be a one stop shop, with a massive amount of employees handling everything from A&R to press to accounting for its signed musicians.  With the decline of the label system the number of employees at labels feel as dramatically as the number of records sold at Tower Records.  Thus, the services once offered by a label were no longer present.  The displaced label personnel did not simply bury their heads in the sand.  Rather, they started showing up as specialty boutiques offering the specific services they once provided to labels direct to the musicians or independent labels.  Because the music industry is still based on who you knew, these boutiques served a pretty powerful purpose for quite some time.  For example a boutique full of ex-Warner Brothers PR experts could utilize all of the same contacts it once had at a label directly to musicians for a discounted price (lower overhead).

Still, as the economy worsened, the boutiques had a difficult road ahead of them.  Boutique employees were cast off too.  So now you have a bunch of skilled and connected music industry folks milling about and looking for a new way of doing what they used to get paid to do by the labels and the speciality boutiques.  A PR executive befriends a merchandising expert who then befriends a music web designer and so on and so on.  The displaced experts then form a “one stop shop” for musicians.  Essentially becoming a lean-mean label which, ideally, avoids the red-tape and bureaucracy of the traditional label system. 

However, each one of these self-proclaimed one stop shops must be examined a bit more closely prior to agreeing to work with them.  Here are some questions you should ask:  Do you have distribution (usually digital is enough, but physical, think vinyl, is still important)?  Do you have press contacts and the ability to do an actual push to garner the attention you need (in the markets that make sense) for the release of your music?  Do they have connections with booking agents?  Do they have connections to a legal team that understands music and corporate law?  Have they managed a band before or do they have a management team in place?  What type of connections do they have to other musicians, producers and studios? 

All of these questions are important when choosing to work with any business out there purporting to be a one stop shop.  Oh yes, there is also that little issue of money.  All the connections in the world don’t matter if you don’t have the money to fund the project.  Typically, a one stop shop is not going to operate with the budgets of the labels or the indie boutiques.  The shop will be more of a facilitator, a connector of the dots, rather than a bank roll.  As a musician, you will want to make sure you have your music production ready to roll (whether it’s an EP or an album) before agreeing to work with a one stop shop.  Otherwise, you may be stuck at their shop without the cash to buy the goods. 

The model for these shops is similar to the license arrangements indie labels used to enter into (some still do) back in the day.  You bring your finished product to the shop, they market it and sell it to the masses.  But the shops go one step farther by attempting to manage your band, book you shows, protect you legally and sometimes keep your corporate books and records.  That is why it is so important to know what you are getting into before signing anything.

The one stop shop idea can work.  Due your diligence, ask the right questions, demand everything in writing (and have it reviewed in writing) and continue to do your own job as a musician: make great music.

BANDS, GET NOTICED! PR PR PR

 

 

Notice the angry guy?

 

We are constantly writing about the pitfalls of the music industry, the changes in the music scene today and the problem with the overal label system.  Let’s focus on some of the positives of today’s music industry (there are more than you may expect, especially if you read our content regularly).

It has never been easier to get music recorded, produced and distributed to the masses.  With today’s software, the home studio has become a reality for a ton of musicians.  That means that the prohibitive costs of a studio, a producer and studio musicians can be avoided.  While sound quality may not be as amazing as it would be if you spent the money to record at Abbey Road or Paisley Park, decent recordings can be done with equipment you can pick up at Best Buy.

Once the recordings are complete, the plethora of web sites and web based software that offers digital distribution is pretty amazing.  Whether it is through www.tunecore.com, www.cdbaby.com or one of the hundreds of other sites out there, your music can be on the world wide web in a matter of minutes for little to no cost.  The question then is: NOW WHAT??????

Getting noticed in today’s music industry has become the biggest obstacle for bands.  The quality of music that is out there hasn’t necessarily dropped, there is just so much music on the web that trying to find something worth while is near impossible.  In speaking to some industry experts, including major music supervisors and licensing agents, trying to get noticed by posting your music on myspace, facebook, bandcamp,etc. or by submitting unsolicited discs to supervisors and labels is pretty much a waste of time.  The ease of production and manufacturing has left everyone in the music industry drowning in its own cash crop: music.

In the past, spending money on a radio campaign could help break a band.  However, terrestrial radio has lost millions of listeners to the internet and satellite radio, so paying to get your music on the radio doesn’t even work anymore.  If you can’t get noticed by creating a wicked cool website, submitting your music to supervisors/labels or paying to get your music on the radio, what is a band to do?

Fear not our loyal minions, we think we have some viable options.  We’ll explore one at a time over the span of several posts.  Here’s the first way:

1.  The missing link in today’s independent music scene is competent, affordable and effective PR.  As discussed above, a band can produce its own music, package that music in a brilliant way, promote the music to its own fans in its own region and send the music out to anyone it sees fit.  However, without the right contacts and knowing where to send the music or the link or the super sweet low budget video that your cousin shot last night, your project, just like so many before you, will fall into a black hole.

In the old days labels had scores of PR/Marketing employees who got paid to promote their clients to radio stations, concert promoters, magazines, television stations etc.  Now, those employees are looking for jobs and the labels have either cut way back on in house PR or outsource PR just like independent bands need to do.

Today, there are some really solid PR/Marketing companies out there servicing both major and independent labels.  While a healthy budget is still required, we have worked with some PR companies by getting creative with budgets.  Check out Riot Act, Flower, and Big Hassle to get some ideas.  If you can scrounge together enough money to pay one of these companies to help you get your music in the right places, it will be one of the smartest investments your band can make.

What if you have a budget of $500 or less?  Time to hire interns!  Get your friends, class mates or family members together.  Figure out which one understands your music and where you want your music heard.  Make sure they have a computer and access to the internet and then…start posting!  Smart teens and 20 somethings know where they go for new music (usually free).  Figure out submission policies and be relentless.   Finding the right blogs (the “tastemaker sites”) and getting your band’s music, or better yet your band itself featured on such a site can be a huge boost.  If your music finds its way onto HypeMachine or Allhiphop or even Pitchfork, more doors will open.  We’ve seen bands featured on these sites end up with sponsors or even tours.  After that, if capitalized correctly, the added exposure can actually lead to money, which in turn, may lead to the ability to hire a PR company to expand the reach.

Obviously everything that a band does is predicated on actually having a playlist of high quality music.  If your music is bad, eventually, the public will reject it (regardless of your budget).  Speaking of good music, here’s our SHAMELESS PROMOTION OF THE MONTH:  CHECK OUT ELEPHANT STONE.  Our Canadian friends are on tour and will be hitting up CMJ.  Find out more about them here:  ELEPHANT STONE

Chicago Rocks!

We at L4M represent musicians from all over the country.  Yet, deep down, we have a special affinity for Chicago musicians.  Is it because we live in Chicago?  Well…yes, duh.  Anyway, some of the best music at some of the best venues happen here in the Second City.

The time has come (again) for Chicago artists to get the attention that they deserve.  L4M and the Bottom Lounge has teamed up to present a “This is Chicago” music series featuring many of our clients at one of the best Chicago music venues in the city. 

The first concert will be SEPTEMBER 16, 2010 at 8:00pm (doors) and feature Blah Blah Blah, of1000faces (featuring Matt Walker), The Blind Staggers and DJ Yours Truly.  It’s five bucks online with code:  Blah or eight bucks at the door.  Please come out and support goood music, a good musical venue and some decent lawyers.  We want to make this a regular event, so let’s pack the first one.

Here’s the Bottom Lounge’s Promo Page:

BLAH BLAH BLAH • THE BLIND STAGGERS • of1000faces

CHIRP RADIO WELCOMES: Thursday, September 16, 2010 – 9:00pm

BOTTOM LOUNGE AND LAWYER4MUSICIANS.COM PRESENT

 

Doors 8:00 PM / 9:00 PM.

17 & Over

Streams of Revenue: How Songwriters Make Money.

Hello? I'm looking for the writer of Toxic. I think I owe him money.

Music is everywhere.  You turn on your tv, see a youtube video or turn on the radio and  hear a famous artist performing a song.  But who makes money when the public hears or sees a performance? 

It is a common misperception to think that the artist you see or hear is making all of the money from that song.  In the pop world, especially, this is not true.  Don’t get me wrong, the famous artist probably has more money than you or I could ever dream of.  However, the main revenue streams come from songwriting.  Oftentimes, pop stars do not write their own songs.  Songwriting for bands or artists can bring in huge amounts of money.  The main areas of revenue from songwriting come from mechanical royalties, performance royalties and synchronization licenses. 

Suppose you write a song and a major artist (for this post let’s use Justin Timberlake) decides he wants to record your song and put in on his next album.  If your song has never been released to the public his label will have to pay you a First Use Mechanical License.  This gives Mr. Timberlake the right to be the first person to reproduce and distribute your song.  The rate for a First Use is negotiable and varies widely.  You have to weigh the exposure of being on Justin Timberlake’s next album vs. your leverage in getting paid.  But, keep in mind; this will not be your only source of revenue.  Let’s say you and Timberlake’s label settle on $15,000 for the First Use right (this could be and probably is higher or lower). 

So, you now have $15,000 in your pocket but cannot be the first one to record and release your own song.  That tradeoff is up to you.  Let’s assume you think it is worth it.  What other sources of revenue streams can you now expect from this song? 

First off, for every copy of the song reproduced you should receive 9.1 cents.  Usually, this is only paid on each copy sold (digital or physical).  So, for every album sold you should received 9.1 cents.  If your song happens to be the single or a hit, chances are your song will sell digitally as a single more than the entire album.  So, for every 99 cent download you should receive 9.1 cents.  If the single or single and album combined sell 1,000,000 you should receive $91,000.  Not bad.  Not bad at all.  Keep in mind that label contracts and tricky accounting can lower these numbers.  However, the 9.1 cent rate is set by the government.

Another lucrative source of revenue is from synchronization licenses.   Every time a song is placed with a visual (think on a tv show, in a video game or in a movie) the writer and publisher must grant a synchronization license.  This is a negotiated rate.  A hit movie can pay in the hundreds of thousands of dollars for a theme song or a song that plays in the climax of a movie.  A television show will pay less but this difference can be made up in performance royalties.

Did someone say performance royalties?  Yes.  In addition to getting paid to have your song in a movie or television show you will also receive money each time the tv show airs, the movie is shown outside the U.S. or shown on tv.  Lastly, if your song is a single and receives radio airplay or is played on the internet you will receive performance royalties.  All of these performance royalties are collected and distributed by performance rights organizations.  In the U.S. we have three;  ASCAP, BMI and SESAC. 

As you can see being a songwriter can be a very lucrative business.   You will have access to multiple revenue streams.  Think of the writers of the song “Toxic” by Britney Spears.  She did not write that song.  However, every time it aired on MTV or radio the writers received performance royalties; every time her album sold or someone bought “Toxic” the writers received a mechanical royalty.  If anyone wanted to use the song in a video game, movie or tv show , the writers would get paid multiple times.  Also, if any cover versions are done the writers would receive mechanical royalties.  I really wish I wrote that song.

Protecting yourself as a songwriter is not an easy proposition.  Seek counsel if anyone wants to buy your song or if you are going start publishing your own material.

SHAMELESS SELF PROMOTION OF THE WEEK:

Come check out L4M and a ton of other experts on music and advertising at the Billboard Music and Advertising Fall seminar on September 15-16, 2010 at the Westin on Michigan Avenue right here in Chicago.  We are on a panel and will be floating around all weekend.  Follow up the seminar on the 16th with a L4M sponsored show at Bottom Lounge featuring Blah Blah Blah.   More info coming soon.

www.MusicAndAdvertisingFall.com

Lollapalooza and Lost Amongst the Giants

How do you book Lolla's main stage?

 

As Chicagoans, we are spoiled with great music and great music festivals.  Whether it is a local street fest with unknown but talented local bands, one of the many venues (Metro, Bottom Lounge, Park West…), Pitchfork Festival or the grandaddy of all commercial festivals, Lollapalooza, the Second City has to rank as one of the best music cities in the world.  As a music fan the choices are too numerous to count.  Often we are left with a sense of regret if we choose to check out Schubas while there is a great show going on at Double Door or we pick the wrong stage at Grant Park and find out that MGMT actually tried during their live set this year.  

As fans, these dilemmas are pretty minor.  As a band, getting noticed or better yet, getting booked can be overwhelming, frustrating and just flat out depressing.  There is a wicked catch 22 situation between labels and bands these days and booking gigs is just one part of it.  Labels and investors look for many things when determining whether to sign a band.  The label will look at the number of units sold (digital/physical), the number of fans (facebook/myspace), the amount of press garnered, and the number of shows booked (taking into account the quality of those shows).  

So a band is then faced with proving itself by doing a lot of work itself.  The band and management (if management is in place) must grind it out to show that it can sell or give away a sufficient number of albums, generate its own press and social media statistics and book its own shows.  Booking agents are out there but agents will only take a band onto its roster if the band has already proven itself by booking a ton of shows on its own.  The band is left with the nauseating decision of whether it is better to not play at all or to play their uncle’s picnic just so it can “book” a show.  All of this has to be done while also factoring in that touring and playing live shows may be the only source of income for a band.  (You sure you want to be a musician?) 

The best advice that we can give to a band who is in this type of crappy situation is to forget labels and booking agents.  Just pretend they don’t exist.  Once that impossible task is completed, the band can focus on a plan of attack.  Let’s assume that the band is talented, has a local following and can book a few decent size venues on a regular basis within its home town.  No band is going to make a comfortable living doing this, but being able to take up a residency at a solid venue in a metropolitan area is a really good first step.  The band then has to find other bands from the same city and from surrounding cities and states and get them to play at their venue with the hope of reciprocity.  Assuming that goes well and the bands from other cities like your band, you now have an invitation to play in a new city or state.  As momentum grows, small local tours can be arranged all without the almighty aid of a booking agent or a label.  The band has to team up within its own community.  Take solace in the fact that there are a million other bands in the same situation as yours.  When you team up you are that much stronger.  

Now that you have a plan of attack (which may take several months or more to put together), you can attract more fans, sell more merchandise and book more gigs.  Wait a second; isn’t that what labels and booking agents are looking for?  Ah-ha.  Obviously, this takes a lot of hard work, committment and organization.  If those attributes are not your strong suit, you better quit the business or get a team together who can help.  As we consistently tell our clients, being in a band is a lot of hard work.  We turn down clients who are looking for a quick fix or for someone else to get them to where they think they want to be.  If you are not committed to making music a full time job, it most likely will not happen for you. 

Hopefully this was more motivational than depressing.  Either way, we are off to Lolla to make some bad decisions about who to check out and marvel at hipsters in skinny jeans. 

SHAMELESS SELF PROMOTION (SORT OF) OF THE WEEK: 

THE BOTTOM LOUNGE – CHICAGO 

 

L4m is psyched to partner with one of Chicago’s best live music venues, The Bottom Lounge.   The place is large yet intimate, the beer list is large and amazing and the staff is not large but also awesome.  We plan on working with them to showcase both our clients and other bands who will eventually be our clients (or not).  If you haven’t gone to a show there yet, shame on you.  If you have, then you are super smart.  Stay tuned for updates on our collaboration.