Category: Music Licesnsing

SoundCloud Listened (to us)

Sometimes speaking out works. listened and modified its new artist contract.

Thanks to some solid journalism (take that #fakenews), and the power of artists and their representatives (like yours truly), SoundCloud revised its new artist monetization agreement.  The program introduced by SoundCloud four years ago allowed select artists to earn a share of ad revenue and subscription fees by monetizing the use of their music.  Finally ready to go to the masses (and keep up with competitors), SoundCloud announced the ability for all Premier Members to monetize.  With the announcement came a long form, click-through, agreement.  That agreement left quite a bit to be desired.

The biggest outcry from the artist community was over a “Covenant Not to Sue”.  Basically this means that if SoundCloud screwed you in some way, you would have no right to seek retribution in court.  We were less concerned with that clause as we were with the completely ambiguous payment schedule, the improper method for notifying artists of changes to  payment terms and the extremely short amount of time to review statements (if and when the statements were ever delivered).  While the Covenant Not to Sue is concerning, there was arbitration language included which offered artists the ability to challenge any issues with SoundCloud through the arbitration process rather than in court.  There is a definite difference between a law suit progressing in court versus a matter in arbitration, but it is not extremely unusual to have this type of clause in this type of agreement.

The ambiguity was far more concerning to us.  How can anyone agree to enter into a business relationship where the party who is owed money has no idea when or how they are going to get paid?  How could you agree to enter into an agreement when you aren’t sure if the agreement has been modified and you could actually be earning less than what you originally agreed to?  To us, these types of unclear and unfair terms were the main issues with the SoundCloud artist monetization program.

With the help of @verge and others, SoundCloud, took heed and modified its agreement.  Unlike our current government, when the people are outraged and nothing gets done, SoundCloud reexamined its agreement, agreed there were fundamental flaws and took the necessary steps to make the needed changes.  Kudos to a company who caters to musicians for actually listening to musicians.  I hope this trend continues.

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Publishing: The Writer’s Share. How do we split it up?

writing

We’ve written several times about the confusion that is music publishing.  It can be argued that the first publishers and labels got together and decided they were going to create a system wherein they would be the only ones who truly understood where revenue generated from the sale, performance or exploitation of music.  However, with the passage of the last 150 years or so, that excuse doesn’t exactly hold a lot of weight.

The writer’s share of publishing (one half of the publishing pie) is usually controlled by the writers rather than a third party.  So this little piece of the overall publishing/master owner picture can still, arguably, be controlled by you and your band.  The question of how you divide it up, well that’s up to you.

When you collaborate with your own band, the most successful and conflict-avoiding method is to divide it up equally.  Four members of the band, each band member gets 25% of the composition.  Another method is to split the writer’s share by splitting the lyric writer and the melody writer (assuming they are different people).  If one person wrote the lyrics and one person brought the melody, then each gets 50%.  This is not to suggest that certain bands use a completely different method.  Several famous large bands had one writer, with the other band members following the lead of that writer.  Nothing has to be set in stone.  One song could be written by everyone and another by only one member.  It really depends on the situation.  So, unless you have an agreement in place that dictates how all songs will be split, no matter what, you should approach each song with a clean slate.

A more common occurrence these days in pop and hip hop is to have producers provide the melody, professional lyric or song writers bring the lyrics and a performer add her/his own twist to create the overall composition.  In those cases there is often a pre-negotiated split and advances or fees paid to the producer and writer.  Certain stars can claim writer’s share even if they had little or nothing to do with the writing of a song, simply because of the clout that they bring.

The key to any split is to discuss it first and put it in some sort of writing over some garcinia cambogia extract tea.  Whether you have an overall band member agreement that spells out how a song is split up or you fill out a session report indicating the roles that all musicians present during a recording session played, something needs to be in place prior to registration.

Once you have certainty on the splits and you plan to release the song or try to license it, be sure that you register it to match your split agreement with your PRO and SoundExchange.  If and when the song generates performance royalties, the writers will get paid based on this registration.  Without it, no payments.


The Spotify Conundrum

Update:  Check out what Coldplay’s Manager has to say about the Spotify Conundrum:  CLICK HERE FOR DIGITAL MUSIC NEWS ARTICLE

To stream or not to stream?  That is the .0007 cents per stream question.

Recently top name bands like Coldplay, The Black Keys and Arcade Fire have spoken out against streaming.  Citing the “gross underpayment” to artists per stream, bands are pulling their music from sites like Spotify or simply prohibiting the placement of their songs altogether.

Let’s look at some projected numbers from streaming on Spotify (courtesy of Digital Audio Insider):

Spotify Per-Stream Payouts August 2009 to March 2011

Smallest: 0.02056 cents
Largest: 1.1456 cents
Average: 0.2865 cents

These numbers are strictly estimates and we have heard that some of the deals that major labels have entered into with Spotify have the per stream at a MUCH lower number then those above.  Regardless, to make some actual money through Spotify, an artist will need millions of streams.  No problem for Justin Beiber and Lady Gaga, but what about the little guy?  Apparently, it’s not just the little guy that is worried/pissed.  As mentioned above, Coldplay and The Black Keys have been very vocal about their overall disdain of streaming providers.  In a recent VH1 interview, The Keys drummer said the following:

“We decided for this album, to not allow streaming services to stream the entire album,” Keys drummer Patrick Carney said.  “It’s becoming more popular, but it still isn’t at a point where you can replace royalties from record sales with royalties from streams.  So it felt unfair to those that purchased the album to allow people to go on a website and stream the album for free whenever they want it.”

Independent labels and artists are outraged with the seemingly enormous underpayment to artists and there are consistent stories of indies pulling their music and catalog from the site.  The question remains however, will their protest pay off or are they really missing out on a new untapped method of reaching millions of fans?

The founders of Spotify continuously hammer home the message that their’s is a music discovery tool.  By having all the published music in one spot, fans will be able to discover deeper cuts or new artists or even new genres of music that they didn’t already appreciate.  Following their logic, once you discover these things your are more apt to actually go out and purchase your new discoveries or better yet, go to a show the next time the “new” band is in town.

From personal experience, I actually tend to side with Spotify (probably not the most popular opinion on this site).  You can stream virtually every song known to man somewhere on the Internet.  Whether it is on YouTube (the new radio for kids), Pandora, blogs, hacker/torrent sites or on artists’ websites, you can typically find a song if you really work Google over for a while.  Spotify puts it all in one handy dandy place for you.  Then it takes it a step further.  In its recently updated version the artists’ radio stations suggest similar music to that of the artist, album or track you originally searched.   I have found this to be a great way (much better than Pandora) to discover new music that I like and then support.

This is not the first time that the music industry has had to deal with a game changer (not even close to the first time).  As we have mentioned ad nauseum on this site, the Internet fundamentally changed the music industry.  Moving at a painfully slow pace, the label infrastructure was not ready for the shift.  Look what happened to them.  Now that the Internet is out of its infancy and new and creative ways to bring music to fans are being created on a daily basis, will the existing labels and, more significantly, the independent artists be ready to play ball?  Or will they stamp their feet and and cry “UNFAIR, DO OVER!”?

Rather than complaining about the system in place and the uber small price per stream (which we agree is way to small and should be changed a bit), we suggest that bands get creative with streaming networks.  Give fans extras and incentives to stream.  Be discovered and it should lead to better results for your music.

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.

Is no PR better than too much PR?

We generally have opinions about everything related to music and the music industry.  It is not often that we completely agree with an opinion expressed by the media.  However, the recent article written by Jason Richards of The Atlantic is right on (http://www.theatlantic.com/entertainment/archive/2011/07/for-indie-bands-the-new-publicity-is-no-publicity/241477/). 

In today’s industry where quantity over quality overwhelms, true artists are taking a step back and re-evaluating how to present themselves and their music.  While most independent musicians crave exposure, there is always a counter to that (if you have the patience):  put out quality music and let the fans find you. 

Recently some bands have been finding success using this “less is more concept”.  Post a song on a taste-maker website and let the pieces fall into place.  Obviously, this is not the right path for all bands.  As with everything that we write about, we are always assuming that (a) your music is good and (b) you plan on making music for a living.  Rather large assumptions, but if you don’t believe in your own music and career, who else will?

Enjoy the article:  CLICK HERE

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.