Tagged: Music

What’$ in a Stream?

There have been a ton of articles written about how the current revenue models created by streaming platforms are grossly unjust and woefully inadequate as far as compensating artists.   Great sources like Digital Music News have compiled hundreds of pages of Spotify reports in an effort to truly understand how much money an artist can make per stream.  Forbes via Quora has probably the best breakdown of how Spotify, Apple, et. al. work with musicians, labels, publishers and “back office services” when calculating the true revenue per stream.

Unfortunately for artists, the result of all of the calculations results in the following analysis:  The revenue per stream is really really really low.  Like $0.004891 per stream low.  Easier math to contemplate is to figure that for every 1,000,000 streams on Spotify, your band will make $5,000.

More crappy financial news for musicians.  The fact that music industry is on a never-ending downward spiral is as newsworthy as another allegation that Trump has ties with the Russians.  Everyone knows.  Yet, a funny thing keeps happening with all of the artists that we work with here at L4M and The Propelr.  They all turn to their numbers on Spotify before literally everything else.  The success of a project, in their minds, is almost exclusively dependent on the number of streams on Spotify.

So if your music isn’t on New Releases Friday or doesn’t make it onto Rap Caviar, how does an independent artist get significant spins on Spotify?

Not surprisingly “streaming promotion” companies are popping up.  Promises are being made that for approximately $5,000 you can be assured of, wait for it…1,000,000 streams on Spotify (no risk offer!).  I’m not saying that these companies cannot achieve this benchmark but it leads to a greater question of what is the value in having millions of streams, especially if you have to pay for them.

Paying for spins is not a new idea.  Payola ruled the industry for decades.  Payments to program managers and dj’s of radio stations were as common as paying for studio time. While Payola was officially made illegal by Congress in 1960 some form of pay for play remained commonplace in the industry for the next fifty years.  Rather than straight up paying for radio rotation, promotional payments were made as marketing expenditures and not-so-cleverly identified as artist or record promotion.  In 2005 the State of New York settled with the majors to try to put a stop to this practice and loop hole in the law. There was a chilling effect after that out-of-court settlement but those who have tried to get their music on the radio still know you have to pay someone to get there.  It’s just the way it is.  Want a number one album, plan on spending $200,000 (according to an anonymous label source).

With the advent of streaming officially taking over the value of physical sales for the major labels, the labels are forced to (finally) face the fact that they are in the streaming business rather than the download or sale of music business.  (Click Here for a great article about it from Music Industry Blog)   That means that there will be far more attention, effort and dollars going into boosting the numbers of spins that a song receives.  Labels will most likely swallow up some of these independent spin maximization services and look to infiltrate the algorithm and fan behavior platforms like Pandora and Spotify.

With the labels spending more time, money and attention on the importance of streams is that 1,000,000 spin number even worth it?  In short, yes but don’t pay someone to get them for you.

First off, there is no guarantee that these promotional streaming companies can achieve authentic spins.  Think of boiler room scenario where computers are set to repeat on your song.  Is that worth it to get to 1,000,000 streams?  Sure it is worth about $5,000, but that is what it cost you.  So did you gain any fans?  Will you be able to point to the analytics that Spotify provides and show promoters that your fanbase is active in a certain city?  Can you spend money on Facebook advertising your merchandise in a specific market based on the analytics you get from those spins?  No to all of the above.

There are ways to get authentic fans and via those fans, authentic spins.  One way is to reach out directly to folks at a platform.  Spotify employees repeatedly tell us they are far more likely to open a personal email versus a canned announcement or press release form a label or management company.  Identify a playlist that you really like and try to find out the editor of that playlist.  No guaranty that you will hear back from them but it is definitely worth a shot.  Also look to distributors for help.  If you have a track record of selling your music independently or getting tens of thousands of streams, you may be able to entice a distributor to put your music out to all outlets.  These companies have teams that are in constant communication with streaming services.  They will pitch your music to playlists and have the relationships to actually get it done.  Finally, when you release your music, make sure you direct everything, your press/social posts/interview answers etc. to the platform on which you want the most spins.  Use embeddable codes from your chosen platform on every post to maximize spins.  All of these and the help of a solid squad will help to maximize spins, revenue and happiness (well maybe not the last one).

Sharing is Caring, but please paper your collaboration

 

As seen from our last L4M post, success in the music industry is often dependent upon the people around you; managers, lawyers, and booking agents make up your “team”. But what about those other musicians that help you create the sound? The artist’s you work with to make a song. Collaborations are so common these days even bands with numerous members are bringing in teams of producers, a second percussionist or guitarist, and additional vocalists. So why does it matter? You work with your friends to create great music, right? Its true, but defining roles and ownership is essential in protecting your music. Some of the biggest disputes in the industry today involve payments to collaborators, the rightful ownership to a song involving guest musicians and artists.

Take for example the dispute between Jack Urbont and Sony Music Entertainment over the theme song for Iron Man. (Urbont v. Sony Music Ent., 100 F.Supp.3d 342 (2015)). Sony released a song by hip-hop artist, Ghost Face Killah, which used a portion of the Iron Man theme song and only received permission from Marvel Television but not Urbont. The main issue being when Urbont worked on the original theme song with Marvel was whether his contribution was considered a work for hire or should he own part of the composition with Marvel. The parties ended up settling out of court after Sony was granted the right to use a work for hire defense against Urbont. So what’s the takeaway? You need to decide prior to releasing any music whether your bestie is taking a fee, getting any rights to the composition or both.

“Work for hire” is a legal term in the copyright act that in a nutshell means you are being paid for your services as a musician but will not own any of the intellectual property to the song. Think of it as any service you pay for, if a carpenter makes you an original table, you pay him or her for the workmanship and the table, but the carpenter doesn’t receive ownership in the table and doesn’t receive a portion of the funds when you resell it. Same for a work for hire musician or vocalist. Work for hires are the most common when the musician doesn’t create anything original, they are just playing or singing what you put in front of them. However, work for hires are becoming more and more common with writers, musicians and producers who contribute original material to the song. Why would they do that? First because you give them a big paycheck and second because they don’t think the song will make more money then the paycheck, it’s a win-win for them.

On the other hand, if you are a songwriter and you ask your friend the guitar player to come in and write the melody, it makes more sense to split the ownership of the composition. This is when you want a guest artist agreement in place so that you won’t have to track down the guitar player every time you receive a license request or want to make a remix. What if you want to use part of that melody in another part of a song? You will need to ask the guitar player for permission and he or she can argue that they want their ownership percentage to stay the same even though your using only a portion of the melody. A guest artist agreement will prevent this headache as you can outline each individual’s rights and permissions involved with the song.

Sometimes artists will collaborate and give both a fee and ownership over the composition. In this case, the fee is treated as an advance that needs to be recouped against profits. Think of it as paying the artist upfront for what you think they will make off of the sale of the song in the future. Until the song recoups the advance amount they won’t receive payment from a label or you, even though they own rights to the composition.

So how do you ensure that all of this is done correctly? Unfortunately, a handshake will not suffice. A legal document signed by both of you will be necessary. Lots of writers and producers use session sheets to delegate publishing splits, but this doesn’t clarify who can do what with the copyright and definitely doesn’t help you in a work for hire situation. Having a lawyer draft this for you is the safest bet, but the good news is that often you can reuse work for hire agreements by changing the name and the fee instead of paying for a new document every time (don’t tell your lawyer I said that). The most important thing is to read the agreement and make sure you understand it!! Ask questions, do your research, and know what rights you have or are giving up. Just make sure that on the day you hit number one you’re not scrambling to get your former bestie to sign a work for hire agreement.

by Lauren Schulz (lschulz@tkhlaw.com)

 

#Squad

I’m sorry (again) for the lack of posts over the last several months (make that years).  The truth is that we have been too busy working and have let our attention to this important outlet lapse.  Instead of promising to write more, we want to make sure we are posting quality info that can actually help musicians.

In line with that thinking, here is the most important thing that we have come to understand a bit better over the last 12 months or so:  a musician’s team (#squad) is more important now then it has ever been.  The team is still in second place behind the music (position 1a) and the work ethic of the musician (1b), but in today’s music industry, the people that you have working for you, representing you and seeking opportunities for you is more crucial now then ever before.

There has been plenty written about the demise of the major label system.  What seems to be going largely unnoticed or undocumented is the growing roll of those left behind: Managers.  Management (effective management) has now become the true one-stop-shop for a musician.  Management is the new label.  As management, we are faced with the same set of facts and challenges as a label.  An artist creates music and now wants to bring it to the masses.  Yes, you can get that music out yourself as an artist but how do you make a dent in the din of new releases on Spotify, SoundCloud or Apple?

To make a living as an artist you need to do more then just post your music on the internet. You still need to get a significant number of eyeballs and eardrums to consume your product.  So the management team is faced with this challenge without (typically) the luxury of having the deep pockets, employees and relationships that labels have (or had).

An artist’s manager is now in charge of planning a release schedule, getting artwork created, lining up press (more than your mom reposting on facebook), booking shows, figuring splits, clearing samples, registering publishing, monetizing all outlets including YouTube and SoundCloud, paying out band members, featured artists, promoting the release and live shows, finding potential brand sponsors and licensing opportunities etc. etc.  All of this without a budget.  I’m tired just writing all of these duties and responsibilities.

I’m not implying that a manager is going to literally be able to do all of these things himself, but he will have to figure out who to line up to help with this process.  Managers must either strategically team up with the right professionals or outsource these services without breaking the bank.  Yes, getting your music on all outlets is pretty easy (TuneCore etc.) but getting on a top Spotify Playlist is not.  Yes, booking a show in your home town is very doable but playing in another city is not.  Yes, finding someone to remix your track is not hard but figuring out the rights of that new recording is not.

Our opinion is that artists should do what they are best at: making music.  To permit this, managers need to keep everything else moving forward.  Managers must leverage all relationships and forge ahead with qualified distributors, booking agents, pr agents, and lawyers to realize real success in today’s industry.

I’ve been told to write about what you know best so I can share the story of how we have created our team over here at The Propelr (www.thepropler.com).  Obviously we have legal taken care of (www.tkhlaw.com) but we brought on staff to handle all admin from calendar/schedule to financial bookkeeping to merchandise fulfillment.  We partnered with a PR company that shares in our percentage income from artists or gives us preferred rates when we need to use their services (ttps://subvertagency.tumblr.com/).  We have a licensing company working out of our space that is constantly pitching our music (http://brewhousemusic.com/).  We share space with a branding and marketing agency (www.workwithdomino.com) that helps with artwork, social media campaigns and overall branding for our clients.  There is a concert promoter working out of our office too (www.silverwrapper.com).  So short of having a booking agency in house, we have created a co-op of sorts that allows us to really serve our clients much in the same manner that labels used to do.  Obviously I am biased, but I don’t see how else you can really provide value to an artist without building this type of squad.

Want to learn more?  Just hit us up.

The Golden Oldies – Recapturing Pre-1978 Copyrights

We have covered several topics on recapturing copyrights here at Lawyer 4 Musicians (see Recapture Basics and Heir’s Rights), as the clock started for copyright owners to terminate a record label or publisher’s grant of rights in 2013. But what if you granted the rights to your copyright before the Copyright Act came into effect (before 1978)? Are they lost for forever? What if I am an heir who has inherited hundreds of songs that are being controlled by someone else? Never fear, with just a gentle tweak in termination timelines, the Copyright Act addresses recapturing of copyrights pre-1978.

Section 304(c) of the Copyright Act allows the copyright owner or his or her heirs to recapture a grant of their copyrights starting on the 56th year from when the copyright was originally registered. Why is it 56 years instead of 35 like post 1978 copyrights? Glad you asked…A little history for you . . . prior to the enactment of the Copyright Act, a copyright was split in two consecutive 28-year periods (this means you could own a copyright for 28 years and then renew it for an additional 28 years) for a grand total of 56 years. Once the Copyright Act was enacted amendments were passed to extend pre-1978 copyrights for an additional 19 years and then again another 20, totaling a whopping 95 years (28+28+19+20). Section 304(c) allows copyright owners or their heirs to recapture for the remaining 39 years that were added by the amendments, (with a few rare exceptions).

The rest of the recapturing maze is the same as post-1978 copyrights . . . simple right? Sort of. The copyright owners or their heirs have a 5-year termination window after the 56th year during which the grant of rights may be terminated. But in order to exercise the termination, the owner must provide written notice to the grantee with an effective termination date falling in the termination window. The notice must be served between 10 and 2 years prior to the effective termination date. Here is an example:

Copyright Registered: June 15, 1950

Termination Window: June 15, 2006 – June 15, 2011

(1950 + 56 years = 2006 + 5 year window = 2011)

Now the tricky part . . . the notice is dependent on the date you want the termination to occur. If you take the above example and want the termination to be effective on January 1, 2010, the termination notice needs to be given to the grantee after January 1, 2000 (later than 10 years before) and before January 1, 2008 (prior to 2 years before). The notice needs to be signed by the owner or if the owner is deceased, those entitled to more than 50% of the copyright interest (see Heir’s Rights article). Then the notice needs to be recorded in the Copyright Office prior to the effective termination date.

A bit complicated, but if you can do the math and send the letter those copyrights are as good as yours! And, of course, we are here to help. Just ask!

Stay tuned for more posts on Lawyers 4 Musicians, after a long hiatus we are back, keeping you updated on all the ins and outs of the music biz!

Movies and Music, Still Possible Money Makers

From indie to major (bucks)

From indie to major (bucks)

How depressing is the economy?  For musicians and industry professionals who make a living off of musicians, times are as sad as a Cure ballad.  Not a day goes by without a record label, distribution company, or music marketing company shutting its doors.  Up front advances are a thing of the past.  Traditional record deals are dead (which is not a bad thing) and it is getting harder and harder to find corporate sponsors to shell out five to six figure licensing fees.

What is a rocker to do?  Go see a movie (naturally).  Two industries tend to be recession proof in the US:  Movies and Booze.  People like to escape and what better way to do that then going to a movie or a bar and forgetting about the bonus that is not on its way or the third job you just took on to afford gas money for the band’s van.  If you can find a brew n’ view in your town, no doubt it is packed with soused movie goers on a nightly basis.

Unless you have a distillery in your basement, the likely alternative may be to invest in movies.  Granted the majority of my audience may not be at the stage in his/her life where they are even thinking of making an investment.  However, for those lucky few readers out there, this is the time to invest in movies.  State and federal tax incentives limit the potential risk by up to 70% in some cases.

Think I’m nutso?  Think movies are riskier then investing in a hedge fund run by some dude named Ernie Nadoff?  If so, then read this:  SCENE STEALER:  SUDDENLY, HOLLYWOOD SEEMS A CONSERVATIVE INVESTMENT.  See, the New York Times agrees with me too.

Movies that cost between 1 and 7 million are constantly making money.  Think of the different revenue streams:  box office, product-tie-in/placement, dvd sales, merchandise sales, on-demand sales, on-line (itunes/amazon/netflix) sales, etc.  So even those low-budget craptastic voyages about a third rate dance squad can turn a profit.

What about the musicians?  Think licensing!   While the low budget movies that are made today do not have huge budgets for music, they still need music.  Enter the independent artist looking to get his band’s music out to a wider population.  Most indi flix will give little to no money up front but will give a back end participation to the artist, meaning that the band will earn money based on the sale of the soundtrack.  An added bonus is the distribution that the movie’s soundtrack gives to a musician without any distribution rights.  Think of Juno or Garden State; staples of most hipster kids’ ipods.  Several of the artists on those soundtracks did not have distribution but were able to rake in money when the movie and the soundtrack took off (via physical and digital sales).

41_various-artists_garden-state-soundtrack

How Can Q-Tip Leave His Wallet Without the Tribe?

 

where's my wallet?

where's my wallet?

 

Recently I attended the Q-Tip and Cool Kids concert at House of Blues.  During a bumping version of Bointa Appelbaum, my friend Aaron, taking a brief break from bobbing his head off-beat, asked me how can Q-Tip play this song without the rest of Tribe?  Relishing the opportunity to spread my music and law knowledge I began explaining to him how copyrights work and wondering aloud whether a Tribe Called Quest had a band member agreement.  Aaron, much like most people I talk to about the law, immediately glazed over and went back to doing his version of the electric slide. 

I figure, however, if you are reading this blog, you may want to know how Q-Tip was able to publicly perform some of Tribe’s greatest hits or how Roger Waters could sing Dark Side of the Moon or how Phil Lesh and friends can delight fields of the unshowered with Sugar Magnolia.  These artists have the ability to dig deep into their former band’s repertoire for several reasons. 

Most of us have been to a concert where the headliner covered another song.  Bands can play other bands material at a concert so long as they register the performance (oftentimes after the fact) with ASCAP, BMI or SEASAC.  But the Q-tip situation is a bit different.  Q-Tip was treating the crowd to set full of classic songs made famous by his former group.  If Phife Dawg was on tour, could he ask if he “Can Kick It” (click on the link to see who holds the copyright)?

The answer, unfortunately, is that it depends on how organized the band was.  If they had a band member agreement (see https://lawyer4musicians.com/2008/08/ for more about band member agreements) it undoubtedly contained provisions for an eventual band break up.  Issues that may seem unnecessary today may have a huge impact later.  A leaving member or termination provision will have an invaluable effect on how your band’s brand is treated after the life the of the band is over.  If properly written, the termination provision will ensure that the band’s name and its value are not diluted.  It will set out who can use the songs, who can tour under the band’s name and who can re-issue recordings. 

 Think of it this way:  Smashing Pumpkins break up (for like the 5th time) but James Iha and Billy Corgan want to tour with new members using the Smashing Pumpkins band name and the Pumpkins’ catalog of music.  If there is no agreement between the members of the Pumpkins, and both try to tour under that name, they will both most likely fail or at least end up in court fighting for the right to use the name and songs.

For independent artists that are not quite at the band member agreement phase there are steps to take to ensure that this type of confusion and conflict do not occur.  First, just talk to your band mates about it; get a sense for where everyone is on the issue of song ownership.  Second, register your copyrights in your recordings.  The copyright registration  will allow you to designate the author of each song you register.  That way, if there is a debate down the road you can at least point to the copyright to show who owns what and who has to get permission from whom before a song is performed or recorded.  Third, trademark your band name.  The trademark registration will allow you to claim ownership of your band name and logo.  Finally, suck it up and put everything in writing.  Keep in mind your first agreement can be amended and modified as many times as you want. 

SHAMELESS SELF PROMOTION OF THE WEEK:  WHATZISFACE

 whatzCheck this MC out.  Okey Dokey makes the stiffest of us bounce a little bit.

Your Friends = Your Network = $$$

 

Bobby Buscher (aka the Waterboy) really just wanted a friend other than his momma and their family horse.  Bobby, like you, knows the value of friendship.  I’m hear to tell you how right you are.

 I don’t know the cold hard numbers of how many people under the age of 30 have some sort of virtual community profile, but I do know that amongst my peers it is about 90% (it would be higher but some people can’t log on to Facebook from work). Whether its MySpace, Facebook or LinkedIn people are “virtually” expressing themselves. As in the past, music is a normal way for any individual to express himself. Now instead of blasting music from your dorm room or dressing like your favorite hair band, people are including their favorite music on their homepage. MySpace profiles are laced with personal media players and Facebook allows you to become fans of your favorite band. So when a friend invites someone to view their page or to become their friend they are not just passing their pictures from their wedding or their latest vacation pics, they are also “virally” passing along their favorite music.

Smart musicians or their management team will allow their music to be added to profiles, but in a streaming only format (don’t want to give it all away without being able to track it). The minute your one fan passes or shares their profile with your music to their network of friends your audience has just increased exponentially (depending on how popular the fan is).

 I have written about the viral loop effect of music before (see https://lawyer4musicians.com/2008/06/19/turn-your-music-into-a-virus/), but it is definitely worth writing about again.  As our economy suffers and pirated music continues to run rampant, musicians need to capitalize on all of their available resources.  One seemingly obvious resource that is consistently overlooked is a musicians friends and colleagues. 

 Case in point:  here in Chicago there has been a huge burst in the “underground” hip hop scene.  With the help of the mainstream rappers like Kanye West and Common, other windy city acts have been able to jump on the scene.  The Cool Kids, Kid Sister, and Kidz in the Hall have been able to capitalize on the attention Chicago hip hop has garnered over the past several months and launch their own careers.  Using the buzz of a growing music scene, brilliant use of community websites, the success of their colleagues, oh yeah, and good music, these once obscure artists have attained national and international recognition. 

friends and colleagues

Friends and Colleagues

Now the next generation is climbing on board.  The Cool Kids were helped out by Flosstradamus, so in turn they lent a hand to Mickey Factz, Hollywood Holt and Mic Terror.  Collaborating on tracks, producing beats, appearing on stage, or hyping each other on their own community webpage, one artist helps out the other.  This isn’t just hippy pay it forward crap, this is good business.  The buzz becomes tangible and concerts with more recognizable lineups are packed, merchandise is moved and careers are launched. 

Check out friendship in action: http://blog.myspace.com/index.cfmfuseaction=blog.view&friendID=7240921&blogID=425195126

As Tenacious D brilliantly crooned:  “Friendship is rare. Do you know what I’m saying to you?  Friendship is Rare.”  Think of your friends as friends first and your potentially viral network second and things may go a.o.k. for you and your music.