Revenue Streams For Music Creators

In this changing music landscape people who create need to learn about the multiple ways to capitalize on the talent, and what revenue streams are available for them to do so. Because if you want to earn an income from your music you need to treat it as a business, there are four types of royalties that you can earn from. There are Mechanical Royalties that the Copyright Act allows the owner of a copyright of a song the right to create copies of the song to be played on a mechanical device, and even though these devices have changed over the years the rights have not.

The Copyright Act allows for anyone to record the song, but must pay the owner of the song for the right to record it, and through the use of the song or composition there could be other artists who make records of one song and these recordings will yield royalties to the original copyright owner as Mechanical Royalties.

As a copyright owner of a composition you have the right to allow other artists to perform your song, and collect performance royalties for its use in their performance. The performance income from a copyright works is licensed through the performance rights organization (PRO) ASCAP, BMI, and SESAC that can include:

·      Any performance of a song or composition - live, recorded or broadcast in TV or Film;

·      Any live performance by any musician in a Bar or Club;

·      Any performance by any musician through a recording on physical media;

·      Performance through the playing of recorded music;

·      Any music performed over the internet (digital transmissions)

These organizations issue what is called a Blanket license to media outlets and music users for a fee that the composer and publisher will receive royalties for there is no payment to performance artist. A television show, commercial, or film can generates performance income from the license that is called Synchronization income, and it is paid for the use of background music, songs sung in a movie or over the credits, These licenses are negotiated on the needs of the buyer and seller.

Music Publishing and Distribution

As a musician getting placement of your music in TV and Film is easier than getting a record deal, the demand for music in film and TV is increasing in a $20 Billion industry. The best way to get paid for your passion is through licensing music to be placed in a Film and TV Show or commercial and there are places that will welcome your music for placement. Seeking out publishing and distribution deals are found by a little research on the Internet (Google) and checking out the many websites that offer music licensing. I have been working with a few sites that offer music licensing for a fee.

One site that offers a low yearly package is Reverbnation, they will promote your music on iTunes, Spotify, Amazon, and Rhapsody for a fee of $9.95 a year for a single or $19.95 for the first year and $49.95 each additional year on a Album, and the package includes the marketing tools, trending reports, and sales reporting to Nielsen SoundScan that will help you to promote your music. Your music will be place with over 20 music retailers from iTunes to Shazam. Their package includes Fan Management, Mobile, Album, and Website Promotion.

One of the main websites to offer Publishing Administration is TuneCore and they have a comprehensive package that includes collecting publishing royalties of which you keep 90%, registration of unlimited songs, an opportunity to make money from YouTube and the availability of your music to Film and TV all for a one time setup fee of $75 plus 10% commission on royalties (20% if they secure licensing placements pitched by their In-house Creative & Licensing team.

As I continue my journey to my Masters Degree and start my music production company I have a decision to make and through my research I have decided to go with TuneCore’s Publishing Administration package to promote my music and build my music catalog.

Industry Liabilities

As I continue my Masters Journey this month I will look at three recent legal controversies affecting the Music Production industry, I will look at each one and give my opinion on how this might impact my future music production company. In the music business there are many lawsuits brought because of infringement of copyrights to illegal music piracy, so there are many to choose from.

I’ll start by examining the formally Homeless music intern who brought a lawsuit against Warner Music reported in Newsweek Magazine. While living in a homeless shelter in the Bronx Kyle Grant took an internship with Warner Music Group (WMG) in 2012, with dreams of starting his own label he figured that working at Warner Music Group (WMG) would be the right place to learn the industry. As is the custom when working as an intern you have to keep the studio clean, run errands, and whatever is needed to keep the studio running smoothly before you will be given the opportunity to learn.

According to Fact Sheet #71of The Department of Labor The Fair Labor Standards Act that an unpaid internship should be for the benefit of the intern to be trained. So after having to come in earl and leave late he was about to lose his bed at the shelter and the thought of getting fired form the internship was very awkward for him. After working there for eight months he was indeed fired because he took to much time for lunch, and never received any compensation for his time at the job.

I know what that feels like when you want to learn the business and take a position as an intern and all you do is manual labor and you don’t learn anything. On top of that no one who becomes an intern should not be given the opportunity to be trained in their field of choice when they are not getting paid, this is wrong and most people who become interns learn that it is a cut throat business and the one who devotes all their time to the company is the one who after years of interning that will get the opportunities.

Next I will take a look at MusicPiracy and how it has made an impact on the music industry, according to an article in Forbs magazine last year there are different opinions on music piracy, some believe that it has help drive sales and others who believe that people who illegally download music are cheap and don’t want to spend the money to buy it legally. There were two reports that the article looked at on by the European Commission that stated “all signs point to piracy leading to a slight increase in sales” and the other by OfCom‘s report that based on attitudes people have about paying for music.

I believe that all the streaming services (iTunes, Spotify, Pandora, and Amazon) and their cost to the consumer they are actually ripping off the music creators, and it is obvious because of the lawsuits being filed by ASCAP and BMI to get Congress to provide fair pay to music creators who want to profit from their creations. It is unfair to music creators when people illegally download music from the Internet without paying for it. People have been sharing music for a very long time even before the Internet by making tape copies for their friends, so I know this will continue to happen, but if music creators would price their music where it affordable we can see our sales grow.

Lastly I will look at trademark cases involving two record labels with the same name, but each “served different niches in the music industry”.  One label used “sTRANGEmUSIC” as its mark and recorded music combining classical and electronic and secured the domain name  “strangemusic.com” in1998, while the other used “Strange Music” while producing Hip Hop and Rap and registered “strangemusicinc.com.” in 2003, because “strangemusicinc.com.” was more commercially successful “sTRANGEmUSIC” asked for an injunction, but the courts refused finding that  “strangemusicinc.com.” “Appearance in the marketplace is unlikely to confuse consumers.” Even though both sound the same their mark differed in “font, color and design.” “sTRANGEmUSIC” lost the case because the court did not find the defendants to be in violation of “sTRANGEmUSIC” mark.

This case makes it clear that in the music business you need to know what constitutes infringement and trademarks are hard to infringe on because of the different categories. I will make sure to do my research when I look to protect my brand so that I don’t get sued.

Product and artist management

This month I am reviewing Artist and Product Management by Japheth Campell from the website 360 digital artist. In this article Mr. Campell discusses the differences between Artist and product management and how they rely on each other for the success of the artist career. How it is the manager’s responsibility to integrate the artist and products on behalf of the artist. It is also important that a manager designs a career plan for the artist before any sources of revenue are attempted, this way the artist had connected with his/her fan base building awareness for the brand before trying to turn them into customers.

According to the article taking a creative inventory will help identify the artist abilities, strengths and weaknesses, and see if the artist has an appealing appearance that is marketable; are they the total image package? After the creative inventory a manager can start to map out the career path and seek to develop and market the artist by having an online presence to retain current fans and make new ones. It is also important that a good manager knows how to manage a product and understands the target audience, and to talk to the fans to find out what they want.

In Ian’s article he make mention of a few good resources for the aspiring artist and product manager, The Product Manager's Field Guide: Practical Tools, Exercises, and Resources for Improved Product Management and This Business of Artist Management by Jr. Xavier M. Frascogna, H. Lee Hetherington both very good resources for anyone interested in artist and product management. I have found this article to be of great importance to me in my efforts to become a very good manager in the music industry and the resources are a mainstay on my bookshelf and I read them to help me be a better manager.

Interview with the President of Rayo Entertainment

In this post I interviewed my long time friend David Ogden who changed his career focus from Real Estate to the Music Business and started Rayo Entertainment, a Record Label & Music Group that has offices in New York and Lima, Peru, he plans to take his company worldwide. Rayo Entertainment has four divisions, which offer Management, Publishing, a Record Label and opportunities to perform on Stage. David has used his negotiating skills to grow a international company that caters to artists and the music community, he has a long history in negotiating and making deals from his background in Real Estate.  

Here are the questions I put to him.

1) How do you separate the people from the problem when you are Negotiating? What tips do you have for new negotiators who are trying to do this?

When negotiating, it important to clearly know what you want in the negotiations. Once you establish what you want, I find it best to try to detach and stick to principles. It’s hard to negotiate with emotion.

2) How do you handle positional bargaining tactics?

Again, I think it’s clear to know what you want and what you are willing to concede before negotiations.

3) Can you give me an example of how you worked toward mutual benefit when you were negotiating a deal?

Its important to listen in negotiations, sometimes the other party wants less than you anticipated. If you know what you are willing to give, giving a little back might seem like you are meeting them. Because ultimately you want the deal to close, you don’t want the

person to kill the deal after an agreement. This is important, there is no deal until it’s closed.

4) How do you handle dirty tricks when negotiating?

Acceptance, there will be always dirty tricks, its negotiating. There are no rules.

5) When you are negotiating how do you view interests vs. positions?

Separate them; you have to be as detached as possible. In order to negotiate, you have to pay attention, and you must know your value.

6) Do you think self-confidence plays a major role when negotiating?

Yes, but more than that is self worth or what your value is to the deal.

Thanks to my class on Negotiation & Deal-Making I am able to reconnect with David and get his take on Negotiation and Deal-Making, I thought his answers were to the point and insightful. David has the skills for Negotiation from his days as a Real Estate broker and now with his passion for music he is applying those skills in the music industry.