Music Publishing is the business of exploiting your music through licensing your songs and collecting the royalties. The copyright owner may license others to use any or all of these exclusive rights for a fee. The income generated from granting a license is publishing income, and there are four main types:

  • Performance Income
    Every time your music is played in public, you are owed a fee for the performance of your music. It is impossible for anyone to track every time a song is played in a club or on the radio, so publishers sign up with, or “affiliate with,” one of the performance rights societies: BMI (Broadcast Music Incorporated), ASCAP (American Society of Composers, Authors and Publishers) and SESAC. These groups issue performance licenses to radio and television stations, nightclubs, restaurants, and so forth, so that these businesses can play a variety of music. The societies then track and collect the revenues and pay the copyright owners.
  • Mechanical Royalties
    When you issue a license to a record company to manufacture and distribute copies of your songs on vinyl and CDs, the record company will owe you a fixed price per song on each copy sold. This fixed fee is the “mechanical royalty rate,” and it can be either negotiated and set in your recording contract, or based on the current statutory rate as fixed by the Copyright Act. The mechanical royalty rate is set by the Compulsory License Provision found in Section 115 of the U.S. Copyright Act; the current statutory mechanical rate is 9.10 Cents for songs 5 minutes or less, or 1.75 Cents per minute or fraction thereof per unit sold – whichever is greater. The Harry Fox Agency, a subsidiary of The National Music Publishers’ Association, is available to grant mechanical licenses for its almost 28,000 publisher clients. For more information, contact:

    Harry Fox Agency
    711 Third Avenue, Eight Floor, New York, NY 10017
    (212) 834-0100; fax (212) 953-2384
  • Synchronization Income
    A “synch” license is what you grant to film or television productions to allow them to use your song as an accompaniment to film and TV pictures. There is no standard industry fee for synch licenses. The fees are negotiated and depend on the importance of the particular song and how it is used in the production. In a situation where a popular song is used as the basis of a scene, such as the “Old Time Rock and Roll” scene in “Risky Business,” the fee can be in the hundreds of thousands of dollars. For local television commercials and low-budget films, the fees are whatever you can negotiate.
  • Print Income
    These royalties are generated by any publication of your songs in written sheet music or a “folio”, which is a book of songs. This category is not a big earner for many artists, but “Greatest Hits” print anthologies published for artists like Joni Mitchell and Led Zeppelin are examples of popular printed music. For each book or sheet sold, the copyright owner of those songs receives a percentage of the retail price.

What do music publishers do?

A publisher is responsible for “administering the rights” associated with your copyrights, which involves getting your songs played, issuing the appropriate licenses and collecting the money. In the standard arrangement, a songwriter will sign over her copyrights to the publishing company for administration, and in turn the publishing company agrees to pay 50% of all revenues collected to the writer.

The publisher collects mechanical, synchronization, print and foreign release income for the author. The company keeps the “publisher’s share” and pays you the “writer’s share.” The one exception to this arrangement is in the performance income collected by performing rights societies. The societies issue the writer’s share directly to you, and issue the publisher its share separately.

Subpublishing: I have a popular song in a foreign country, but don’t speak the language and am not familiar with their music business customs and practices.   How can I take advantage of business opportunities related to my work over there and ensure that I am collecting the money I am owed for use of my work?

Being thousands of miles away makes it impossible to adequately conduct business without the help of a subpublisher, a foreign representative who will act on your behalf with regards to your intellectual property.  Your US publisher allows the foreign publisher (subpublisher) to act on its behalf in that respective territory.  Each foreign territory has its own particular rules in licensing music, collecting royalties, and protecting copyrights.  For this reason, it is incredibly important to select a subpublisher that you can work with and trust.  A good foreign representative will be well-versed in the local rules and procedures regarding business affairs surrounding your music, and have a music business network in place within the territory.

What exactly does a subpublisher do?

A subpublisher functions much like your own music publisher in the US. The subpublisher protects your copyrights, registers songs with the local mechanical and performance collection societies, promotes new uses for your work, collects royalties, audits royalty statements from users of your work, negotiates licenses, and sues infringers.

Foreign publishers perform a combination of administrative and promotional tasks. Some do one or the other, while some do a little of both.It is important to match your interests with the strengths of the subpublisher. If you are an artist looking to ensure that royalties are collected for use of your song, then choosing a subpublisher with strength in administrative ability is ideal.  If you are looking for new uses for your song, then selecting a subpublisher with quality contacts in the local entertainment industry would be ideal.

Another thing to keep in mind is the geographical reach of the publishing company. Some publishers have offices worldwide, while some only have offices in specific territories. If you go with a worldwide publisher any problems that arise abroad can usually be resolved through the US office. This makes conducting business and communication more efficient since you are not trying to get a hold of a publishing office in another time zone. The biggest fear in going with a worldwide publishing company is that their artist catalogue is so extensive that your work may not get the personal attention and care that you desire.  Another concern is that offices abroad may run less efficiently than the US office.

Hiring independent publishing companies on a territory by territory basis can be beneficial in that they may be able to give you more individualized attention.  They may also know the lay of the land better in their specific region.  Your US publisher may already have subpublishers abroad, in which case it might be easiest to allow them to handle your affairs.

Protect yourself: the sub-publishing agreement

Your goal in negotiating any contract should be to maximize profits and minimize risk. To do this you want to negotiate favorable contract terms for yourself.  What follows is a list of common contract elements that you will want to be familiar with so that you (or your publishing company on your behalf) may consider them when you negotiate a subpublishing agreement.  

Term – The standard length of a subpublishing agreement is generally three to five years.  Three years is the minimum duration foreign royalty collection societies often accept.  Contract length can be negotiable dependent upon the following various factors (many of which are discussed later in this section).

Advance amount

Retention rights for local cover recordings

Right to collect “pipeline” royalties (money earned prior to the expiration of the term of the subpublishing agreement, but not yet paid by the music user until after the end of the term)

Released-album guarantees

Extensions if advances have not been recouped 

Rules of local performing rights societies

Suspensions due to breaches

Extensions based on the non-achievement of guaranteed earnings plateaus

Compositions Controlled by the Agreement – Agreement may comprise the entire catalogue of a US publisher, all songs written by a particular songwriter/artist, select compositions, or an individual song.

In agreements for the entire catalogue, the following language is common 

“Publisher grants to Subpublisher the following rights in and to all the musical compositions listed on Schedule A as well as any and all musical compositions currently or hereafter owned or controlled by Publisher during the terms of this Agreement.”

This usually entails all future songs acquired during the agreement duration as well.

Royalty Percentages – The foreign representative’s compensation is always based upon the percentage of money generated by the songs controlled by the subpublishing agreement.  Generally, this percentage is anywhere from 10%-25%.  For superstar artists, this percentage can get to as low as 5%.

Local Cover Recordings – Where a subpublisher is hired for the purpose of promotion, most agreements provide that the subpublisher can take a larger percentage of the income that is generated from a local recording (usually a “cover”).  

Be wary of language that provides that, if a local recording is secured, the subpublisher’s percentage on all versions of the song contained on that cover record will be increased. 

This kind of provision is unfair if the original US version is a major hit.  The exception is when the “cover” becomes a major hit in the foreign territory, and the original US version is not generating income in the foreign territory.

Increased Fees for Cover Records – Known as an “increased cover version percentage” clause, this only applies to mechanical income (CD sales, downloads, other audio recordings; things that can be counted on a per unit basis).

The subpublisher sometimes will take an increased fee on radio and television performance income generated by the cover version of the song.  This becomes hard to monitor because performing rights societies do not account separately for different broadcast versions of the same song.

Print – the US publisher generally receives 12.5%-15% of the retail price on printed editions of all compositions, or 50% of the subpublisher’s net income. 

Usually not a major source of income

Advances – This is the amount of money you will receive up front, and depending on the clout that your musical catalogue has, the advance amount can vary widely.  If a song/catalogue is likely to generate income in the subpublisher’s territory, advance amounts upwards of six-figures is not unusual.  

The advance amount should not be the only factor considered in choosing a foreign representative.  Other factors to keep in mind;

Company integrity

Reputation for administration and promotion

Personnel

Royalty rates

Retention rights

Duration of the agreement

Do not underestimate a foreign representative because of poor English ability.  A subpublisher knows their business and more importantly, their market.

How Advances are Paid – Advances are paid in any number of ways.

One-time payment upon signing (e.g., $10,000 upon execution of the agreement)

Specified advances at the start of each one-year period of the agreement (e.g., $10,000 upon execution of agreement, and $10,000 each year of the agreement thereafter)

Advances upon the release of each album, with reductions depending on the number of songs controlled by the artist on each such album (e.g., $10,000 upon the album’s release in the foreign territory provided the writer/artist has written at least x% of the compositions on the album)

Advances upon recouping all or a specified percentage of the previous advance (e.g., $100,000 upon recouping x% of the previous $100,000 advance)

Advances on local chart activity (e.g., if a song reaches the top 10, then $10,000.  If it reaches number one, then another $10,000)

Advances based on a company’s acquisition of other US catalogues (e.g., a mutually agreeable advance in the event that the US publisher acquires a major company for representation)

Advances based on actual earnings in the foreign territory (e.g., if an album earns $50,000 in its first year, an additional advance of $50,000 will be paid to US publisher)

At-Source Royalty Payments – This provision ensures that there will be no extra charges or deductions from royalties passing from one foreign territory to another before being passed on to the US.  Typical language follows;

“All royalties payable shall be based on gross income received at the source and shall not in any way be reduced by any charges including, but not limited to, any sublicensees granted by Subpublisher except only for: (1) those fees and commissions paid by the Subpublisher to the performing rights societies, mechanical license societies, and other collection agents in the territory; and (2) payments made by the Subpublisher for any “value-added” taxes and other taxes, if any, required to be deducted in the territory.”

This language prevents foreign companies from double-deducting fees on monies earned in portions of the territory covered.

E.g., if you have an agreement with Germany, Austria, and Switzerland, the agreement will prevent the German affiliate from deducting fees that may have been already deducted by Austria and Switzerland.  Without the provision, the German company could deduct 20%, then forward the remaining 80% to Austria who would deduct 20%, then forward the remaining onto Switzerland, whom would also take 20%.  

Rights Granted to the Foreign Representative – The writer/publisher usually grants the following rights in and to the musical compositions to the subpublisher.

Mechanical Rights – The right to issue mechanical licenses and collect royalties for the manufacture and distribution of records, CDs, downloads, and other audio recordings.  

Performance Rights – The local foreign representative is given the right to register the songs with the performance right society in the territory and collect the publisher’s share of income earned by performances of the songs on radio, television, live in concert, in restaurants, bars, etc.  

The writer’s share is paid directly to ASCAP, BMI, or SESAC (depending on writers’ US affiliation), and NOT the foreign subpublisher.

Audiovisual Rights

TV and Film – The US publisher normally grants the foreign subpublisher the right to issue synchronization rights to include songs in television shows and films that originate in the subpublisher’s territory.  

Home Video – For US films (and TV shows and video games, usually), the film producer will always demand that the US publisher grant home video rights on a worldwide basis via a one-time non-royalty buy-out basis.  Under this agreement, no money is paid to the foreign subpublisher.  The foreign subpublisher is usually given the right to negotiate home video licenses for audiovisual projects produced in the foreign territory, at least with respect to sales in that particular territory.

Recording Artist Videos – There is usually always a record company provision that grants worldwide right to manufacture and distribute short or long home video versions of the artist’s performances.  

For songs written by outside writers, the record company will have to negotiate a separate agreement with the publisher of each song.  In most cases a worldwide license granted on a per unit royalty or buy-out basis.  

It’s rare that a subpublisher be allowed to negotiate a separate video license for this product for sales in its territory.

Commercials – The right to include a song as part of a foreign commercial to be broadcast in a foreign territory is sometimes given to the subpublisher.  

When granted to the subpublisher, this right is usually conditional upon the subpublisher receiving approval for each particular request from the US publisher.  

Print – The right to manufacture and distribute sheet music is virtually always included in the rights being granted.

Rights Reserved by the US Publisher  – The following rights are commonly reserved by the US publisher;

  • Dramatic/literary rights
  • Commercials, political campaign uses, and endorsements
  • Grand rights (the right to use a song in a musical, live theatrical drama, opera, etc.)
  • Ownership of the copyright

All other rights that are not specifically granted by the terms of the subpublishing agreement

Royalty Payment Dates and Audit Rights – Royalties are normally accounted for twice a year, with semiannual payments and statements sent to the US music publisher 45-90 days after December 31 and June 30 of each year.  Audit rights are similar to those contained in US publishing agreements (30 day notice, audit conducted during normal business hours, limited number of times one can audit)

Retention Rights – Upon the termination of the agreement, many subpublishers will want to retain the following rights for some period of time after termination.

Pipeline Monies – Enables the subpublisher to collect money that has been earned during the term of the agreement, but has yet to be collected at the time of the agreement’s expiration.  

The US publisher generally concedes this, though usually demands a time limit on such rights (6-18 months).  This prevents the pipeline collection period from being open ended.  

Retention Rights if Advances are Unrecouped – if advances paid to the US publisher have not been recouped, the foreign subpublisher may have the right to extend the agreement for a specified period of time so that advances can be fully compensated.  

The US publisher should place a time limit on such retention rights.

The US publisher is often allowed to repay advances for full recoupment to the foreign subpublisher.

Retention Rights on Guaranteed Albums – If advances are paid upon the release of an album, the subpublisher will normally have retention rights to the songs on any such album that is released in the last six months or one year of the agreement.  

This is fair for the subpublisher because royalties generated by such an album will not be received by the subpublisher until four to nine months after release.  The subpublisher needs to be allowed to receive earnings derived from use of the work.

Retention on Local Cover Records – The subpublisher often retains the right, (duration to be negotiated) to administer a composition if a local cover record has been released during the time of the agreement.  The same applies to local film and television uses generated by promotional efforts of the foreign subpublisher.  Various provisions can be written up for this retention right;

  • Retention only if the cover record becomes a hit 
  • Retention only if the cover record earns in excess of x amount of dollars
  • Retention only if the cover record charts in the Top 10

Information that must be supplied to the foreign representative – In order for the subpublisher to properly represent you, certain basics must be provided; 

  • Correct composition titles
  • Songwriter(s) identity
  • Authorship percentages if there are co-writers
  • Performance rights affiliation of the songwriters and music publishers 
  • Publisher’s control percentages if there is more than one copyright owner or administrator
  • Multiple authors = multiple publishers
  • The US publisher should submit the following information to the subpublisher;
  • Date of the recording’s initial release in the US
  • Release information in other territories

Distribution is the way that recorded music gets in the hands of consumers. Traditionally, distribution companies sign deals with record labels which give them the right to sell that label’s products. The distributor takes a cut of income from each unit sold and then pays the label the remaining balance. Most distributors expect record labels to provide them with finished, ready-to-market, products, but sometimes distributors offer “M&D” deals.
M&D stands for manufacturing and distribution. With this set up, the distributor pays the manufacturing costs of an album up front and keeps all the income from album sales until that initial investment is paid off.

maxresdefault

Music Distribution Basics
In the 20th century, distribution companies were the links between record labels and retail outlets, which included music-only stores, big box retailers such as Wal-Mart and Best Buy, and bookstores. It is helpful to think of music distributors as wholesalers to better understand their role in the music industry.

Record labels signed — and still sign — contracts with music artists. They oversaw music recording, marketing and promotion. Consumers bought their favorite music on vinyl records, cassette tapes and CDs and, in most cases, it was the record labels that paid to have these products manufactured. To get album copies in the hands of fans, record labels signed deals with distribution companies that in turn signed deals with retail stores to sell the albums.

Some distributors bought albums from record labels outright, while others distributed albums on consignment. Retailers did the same thing — some bought albums outright and others agreed to put the products on their shelves on consignment.

Radical Industry Changes
Downloading brought radical changes to the music industry at the turn of 21st century.
Before crackdowns, fans downloaded millions of tracks from a wide range of artists at no charge through companies such as Napster. Although consumers now pay to download music legally from outlets such as iTunes and Amazon, sales of vinyl records, cassette tapes and CDs have plummeted, and the music industry has lost billions of dollars. Subscription services such as Pandora and Spotify have further decreased music industry revenue. With hundreds of music distributor businesses folding, only a few affiliated with the largest record labels remained. Sony, Capitol, Universal Music Group and Warner own the largest music distribution companies.

The Future of Music Distribution
There is still a role for music distributors in the digital age, even in the face of radical industry changes. After all, not every record label and musician wants to take on the task of distributing their work. For this reason, the music distributors that remain still work closely with record labels to bring music to fans; some retail stores continue to sell physical album copies.

They also distribute music to digital download outlets, even though such businesses also offer distribution deals directly to artists.

Opportunities for growth remain for music distributors that specialize in certain types of music such as classical, Latin and jazz. Some distributors have found success by focusing on certain regions and distributing music locally.

BMI today announced the highest revenues in its 76-year history, achieving $1.060 billion for its fiscal year ended June 30. The Company also distributed and administered a record-breaking $931 million to its songwriters, composers and publishers, a 6% increase over last year. These results represent the most public performance revenue and royalty distributions by any music rights organization in the world.

BMI operates on a non-profit-making basis and returns approximately 88% of all revenue to the musical creators and copyright owners it represents.

“We are beyond pleased with this milestone,” said Mike O’Neill, President and CEO, BMI. “The ability to provide our songwriters, composers and publishers with our largest royalty distributions to date proves that the current marketplace is working efficiently, a fact the DOJ has undermined with its recent interpretation of our consent decree. We’re eager to build on this success and continue to ensure that all of our music creators are fairly paid for their work and that licensees maintain full access to BMI’s repertoire of nearly 12 million songs. As of now, the DOJ’s interpretation will disrupt these efforts, stifle creative freedom for songwriters, limit choices for music users and bog down the marketplace. We are determined not to let that happen.”

BMI’s total domestic revenue performance of $784 million was bolstered by record-breaking results in its digital and general licensing categories. Digital revenue, which exceeded $100 million for the first time last year, hit a new high of $152 million, up 50%. Numerous new agreements were signed throughout the year, notably a multi-year license with Pandora, as well as deals with Spotify, Apple Music, Microsoft, Sony’s PlayStation Video and Slacker, among others.

General Licensing, which includes fees from businesses like restaurants, bars, hotels and fitness facilities, along with other income, hit a new milestone of $140 million. The category added 15,000 new businesses to the hundreds of thousands already in BMI’s diverse portfolio.

Revenue from all media licensing, including radio, television and cable and satellite entertainment, grew to $492 million, with cable and satellite entertainment accounting for the largest portion of BMI’s domestic revenue for the third consecutive year. International revenues came in at a strong $276 million, despite significant economic challenges overseas resulting in lower foreign exchange rates. While down 5% year to year in U.S. dollars, BMI’s international revenues would have exceeded last year’s performance by $14 million had it not been for the strengthening dollar.

BMI processed more than one trillion audio performances this year, over 950 billion of which were digital, a 45% increase from last year.

The singer, full name “Prince Rogers Nelson” had a medical emergency on April 15th that forced his private jet to make an emergency landing in Illinois. The hospital released him an hour later. He appeared at a concert the next day to assure his fans he was okay. He told the fans he was battling the flu. At the show, Prince prophetically told the crowd, “Wait a few days before you waste any prayers.”

1216702_1280x720

The Carver County Sheriff Office states they are now investigating the circumstances of Prince’s death. At this time, there are no signs of foul play.

42116-sub-prince-instagram-6Prior to his most recent appearance however, Prince had cancelled two shows due to health concerns. Prince became an international superstar in 1982 after his breakthrough album “1999.”

He went on to churn out a ton of hits — and racking up 7 Grammys in the process. He also performed at the Super Bowl in 2007 … in one of the greatest live performances of all time.  He also sold more than 100 million records during his career … and won the Academy Award for Best Original Song Score for Purple Rain in 1985.

Prince was married two times — the first time to his backup dancer Mayte Garcia. They split in 2000. He then married Manuela Testolini … but they split in 2006.  He was inducted into the Rock n Roll Hall of Fame in 2004, and performed a legendary version of “While My Guitar Gently Weeps” to close the ceremony.

3050539
HOLLYWOOD, CA – MARCH 6: Singer Prince (R) and his wife Manuela Testolini backstage at the 35th Annual NAACP Image Awards held at the Universal Amphitheatre, March 6, 2004 in Hollywood, California. (Photo by Frank Micelotta/Getty Images) *** Local Caption *** Prince;Manuela Testolini

Prince-poses-for-photographers-with-his-wife-Mayte
Prince and his Ex-wife Mayte Garcia

Prince Returned to his former label Warner Bros Music after an 18 year battle over money he was owed from past projects including Purple Rain.

Prince has returned to Warner Bros. Records after 18 years with a deal that will see him regain ownership of his catalog. His classic Warner albums like “Dirty Mind,” “Controversy” and “1999” will continue to be licensed through Warner Bros as part of a new global agreement.

As part of the deal, Prince’s classic “Purple Rain” album will be re-released in a remastered deluxe version in time for the 30th anniversary of the album and movie. Other planned re-issue projects will follow and Prince will issue a new album too, although it is unclear if that title is a part of the deal.

“A brand-new studio album is on the way and both Warner Bros Records and Eye (sic) are quite pleased with the results of the negotiations and look forward to a fruitful working relationship,” Prince said in a statement

This legendary artist/singer will be greatly missed.

 

copyright_music-west

WASHINGTON, D.C. –- January 28, 2016 — Today, the Copyright Alliance issued a statement on the recently-released Department of Commerce White Paper on Remixes, First Sale and Statuary Damages.

The Copyright Alliance appreciates the comprehensive and thoughtful discussion of the complex copyright policy issues considered in the White Paper.

According to Copyright Alliance CEO, Keith Kupferschmid, “in crafting copyright policy, we recognize that all interested parties must work together – including creative sectors, technology sectors, user groups and the public – as partners toward the same goal; and our collective goal is a thriving internet ecosystem that incentivizes creators to produce and disseminate new works to the public.” Kupferschmid continued by saying “this partnership should also encourage dynamic innovation and growth for technology companies as they collaborate with creators in making the works available through innovative new legal platforms while benefiting users who are certain to reap the rewards of new creative works offered on new platforms.

lock_sm“We think that many of the conclusions reached and recommendations made in the White Paper published earlier today help advance these goals. The authors of the White Paper did a thorough job soliciting and considering the many different viewpoints voiced by the interested parties, and the final result reflects a broad consensus. In particular, we highlight the White Paper’s discussions of remixes and the first sale defense and endorse its conclusions that the existing provisions in the Copyright Act, in conjunction with new business models, are effectively meeting the changing demands of consumers and that no change in the law is necessary at this time.”

Kupferschmid concluded by saying that “we look forward to working with leaders at the Patent and Trademark Office and the National Telecommunications and Information Administration, as well as the other stakeholders, on next steps the Task Force may take.”

The complete White Paper is available for review here.

In today’s music business, a musician needs to understand and receive all the various streams of revenue that they are entitled to for their musical works. However, many of today’s artists are uninformed as to what royalties they are entitled to; and, even more musicians are not properly registered nor have their works indexed. This prevents the artist from receiving all the income earned for their creative works. One of these most important streams of income that many musicians fail to recognize or handle properly  are the revenues collected by SoundExchange.

Sound Exchange is a performance rights organization authorized to collect royalties for the digital performance of sound recordings under Section 114 of the U.S. Copyright Act. The right to these funds was originally established with the passage of the Digital Performance in Sound Recording Act of 1995 and later expanded by the Digital Millennium Copyright Act. Originally, SoundExchange was created by the Recording Industry Association of America (R.I.A.A.) to handle these new revenues; however, Sound Exchange eventually became its own stand-alone entity representing the interests of over one hundred thousand artists and copyright owners. As of August 5, 2015, Sound Exchange has reportedly paid over $3 billion directly to its artist and label members (http://www.soundexchange.com/pr/soundexchange-breaks-the-3-billion-mark/).

Unlike the other performance rights organizations in the United States that collect royalties for the public performance of musical compositions (i.e., ASCAP, BMI, and SESAC); Sound Exchange is the only entity authorized to collect royalties for the digital performance of a sound recording. Sound Exchange derives its authority, pricing and guidelines from the Copyright Royalty Board, which is appointed by the U.S. Library of Congress. SoundExchange is run by a board of directors that includes nine artist representatives and nine label representatives. This structure gives artists an equal say in the running of the organization.

6a00d83451b36c69e201b7c7ff9ff1970b-800wi
SoundExchange is authorized to collect digital performance royalties on behalf of the owners of the sound recording copyright (i.e., the actual recording of a performance of the musical composition, which is referred to as the “master recording”). Typically, the sound recording copyright is transferred to the record label as a part of the recording contract with the musician. However, there has been an increase in sound recording ownership by the artists themselves as record labels are extending far fewer recording contracts than they had done in the past. This fact is further evidenced by the large number of musicians who are involved in “Do-It-Yourself” music promotion and distribution without any traditional record label assistance.

Additionally, it is essential to understand the difference in the types of revenues collected by SoundExchange and those collected by “small” Performing Rights Organizations, such as ASCAP, BMI, and SESAC in the United States. Performing Rights Organizations collect “small” public performance royalties for the owners of copyrighted musical composition (the underlying musical composition). These public performance royalties are paid to the music publishers, songwriters and composers of the song. For example, when Jimi Hendrix’s version of “All Along The Watchtower” is played over an analog radio station, the songwriter, Bob Dylan (in addition to the song’s publisher) receive royalties from the appropriate Performing Rights Organization as the original composer of the song. In contrast, Sony Music, as the sound recording owner, and Jimi Hendrix, as the featured artist, would receive royalties from SoundExchange for the song’s recordings’ transmission over a non-interactive digital platform, for example, when the song is played on Pandora. Accordingly, companies and artists can collect royalties from both sources (i.e., one royalty for the musical composition copyright and another for the sound recording copyright) as these organizations work with each other to pay musical creators the royalties they have earned from these distinct streams of income.

Under Section 114 of the American Copyright Act, SoundExchange is only authorized to issue statutory licenses for non-interactive digital platforms. These include satellite radio stations (e.g., SiriusXM Radio), internet radio stations (e.g., iHeartRadio.com), non-interactive digital music streaming services (e.g., Pandora) as well as digital cable and satellite TV services (e.g., Music Choice, Muzak, DirecTV, Dish Network). A comprehensive list of all the current licensees is available from SoundExchange at http://www.soundexchange.com/wp-content/uploads/2015/10/2015-Q3-Licensee-Count-10-19-2015.pdf. For example, Pandora is a non-interactive service as it plays similar artists and songs based on a user’s selections and preferences; whereas, Spotify is an interactive service that enables a user to determine the exact song they wish to hear at that moment.

Each non-interactive licensee pays a statutory rate that is determined by a variety of factors, including the number of stations or channels, the number of listeners or subscribers, and/or the amount of advertising and other revenues earned by the licensee. In contrast, on-demand or interactive music streaming services, such as Spotify, are not subject to SoundExchange statutory licensing. These interactive services must enter into separate licensing agreements with the song’s copyright owners to utilize the works.

To pay its members, SoundExchange receives monthly reports from each of its licensees listing exactly what each licensee has performed that month. This data is compiled and utilized to distribute the licensing fees collected by SoundExchange to the appropriate6a00d83451b36c69e201b8d1897e71970c-800wi
parties on a pay-per-play basis. Of the total amounts collected, 50% percent of these funds are distributed to the owner of the song’s sound recording (typically, a record label), 45% of these funds go to the featured performer on the track (typically, the musician) and the remaining 5% of these funds are distributed to the non-featured performers on the track through the American Federation of Musicians (A.F.M.) and American Federation of Television and Radio Artists (A.F.T.R.A.). Additionally, SoundExchange takes a 4.6% administrative fee “off the top” of the total funds collected to handle these matters on behalf of its members.

Additionally, these royalties are very important to an artist as the funds are distributed directly to the recording artist without the artist’s respective share being first distributed to the artist’s record label. Typically, if the record label were to receive these funds first, they could potentially apply the funds against any unrecouped balance amount owed to the label; however, SoundExchange prevents this by distributing the funds directly to the artist. This distribution system is extremely advantageous to an artist, especially those signed to a major record label, as the artist can continue to receive SoundExchange payments without being fully recouped with their record label, which is not the case with most other royalties accrued in the music industry.

Also, SoundExchange currently holds at least $200 million in royalties owed to non-member artists. Most of these artists are unaware of the existence of this relatively new digital performance right and of the organization, SoundExchange, which administers the licensing. With the rise in popularity of Internet radio stations and music streaming services coupled with the decline in CD and download sales, it is essential that record labels and recording artists properly register with SoundExchange to ensure proper collection and distribution of all the royalties owed to them. SoundExchange’s distribution numbers have steadily risen in recent years and should continue to increase as more users switch from downloading media to streaming-based digital music services.

In conclusion, in order to receive the full value of an artist’s work, they should sign-up with SoundExchange and ensure that their musical repertoire is properly indexed to receive all the amounts they are entitled to. Additionally, SoundExchange does not administer royalties on behalf of downloaded material, as that is typically handled by the sound recording copyright owner (the record label).

Collins Connect handles all matters pertaining to music and the law, contact our office for help in registering your copyrights as well as indexing your works with ASCAP, BMI and SoundExchange visit www.collinsconnect.org.

3records

With all of the independent artists that are out there today making a living, and all of the resources and educational tools that are available for them, it seems like staying a free agent is the ideal option (especially with all of the record label horror stories that go around). However, record labels big and small have resources that independent artists have to work much harder to gain access to; there are still benefits to signing that contract.

Here are some of those benefits that you might be able to reap, if your record doesn’t get shelved.

1. International distribution
To this day, even artists who make it big independently often recruit the help of a major label to expand their distribution to a larger marketplace.

Though independent artists can still get radio play (especially on college radio), it’s very difficult, and record labels are better than anybody else at getting artists on the airwaves and into the ears of everyday listeners. Having label distribution also makes it much easier to get copies of your record all over the world, greatly increasing your ability to tour internationally if your album sells well overseas.

Of course, all of this is possible to do on your own, but it’s much more difficult and time consuming. Record labels specialize in distribution and have all of the contacts to make it happen.

2. Help building your team
In order to get any attention from a label whatsoever, you’ll generally need to have already started building a strong team around your brand. This includes people such as booking agents, publicists, lawyers, managers, and anybody else who helps handle the business stuff. Labels have big staffs of these very people on board, and when you sign on with one, they will often fill out your team with anybody you’re missing.

Like with distribution, labels also have contacts overseas, and will help you build a team to have successful international tours (something that is, again, quite difficult and time consuming to do on your own).

stack-cash

3. Advances
Having a successful career making original music is definitely a full-time job plus overtime. In order to make it work, a lot of original artists ditch their day job before they’ve reached financial stability in their music career in the hopes of putting in all of their time and energy to jumpstart it. What ends up happening is many artists essentially living on the road, touring around and around and around the country in order to stay afloat (you don’t have to pay rent on a van). However, they have to stop and take a break somewhere eventually. But if you’re only ever breaking even on the road, what happens when you stop?

This is where labels can help you out. If they sign to put a record out, they will often advance you a certain amount of money (though it’s not nearly as much today as it used to be). While the label does get reimbursed for this directly out of your future record sales (and possibly all of your other streams of income, if you sign the dreaded but common 360 deal), having this money up front can at least allow you to survive while you’re off the road cutting your record.

Of course, advances often backfire. If you don’t sell enough records to cover your advance, you’ll actually end up in debt to the label, which could make your future music career difficult. But if you’re one of the lucky few who get signed and actually sell enough records to stay out of debt, having an advance is a luxury that can keep food on your table when you’re off the road.

4. Legitimacy and reputation
Despite the way the recording industry has been evolving over the last decade or two, record labels are still power players in the world today. Perhaps it’s more out of tradition than respect, but being on a label will still grant your brand a certain sort of legitimacy that’s hard to attain otherwise.

Signed bands get attention. Label affiliation is one of the first things that press, booking agents, promoters, talent buyers, and all sorts of other industry professionals will look at when you reach out to them for the first time (especially if it’s you who’s reaching out, rather than a member of your team).

In fact, there are some folks who won’t even work with you if you aren’t affiliated with a label, unless you somehow are able to work your way into their inner circle or are selling out huge venues on your own.

5. Income potential
It’s entirely possible to make a living as an independent artist, and even a comfortable one. Though it’s hard work, the goal has never been more attainable than it is today, and people do it every day. Getting help from a label doesn’t guarantee that you will make more money than you could make independently. However, those who are able to take full advantage of the label’s benefits can reach levels of success that are still almost completely inaccessible to those who work independently.

For example, what if through the label’s worldwide distribution, your record blows up on multiple continents, leading to multiple successful large-scale international tours? You may be able to work up to that point on your own, but it’s still something that’s much more realistic when you have the “machine” backing you. The chances are admittedly extremely slim, but if the stars align just right, you can end up making much more money than you ever could have independently.

It’s a matter of risk vs. reward. In the end, it’s impossible to say exactly what could go down if you sign the contract. But even in today’s music industry, you can’t deny that labels still carry a ton of power and can be a resource for your success.

http://www.ascap.com/eventsawards/events/expo/2015/istandard.aspx

unnamed2

For the seventh straight year, ASCAP is excited to hold the ASCAP EXPO iStandard Producer and Rapper Showcase. This event is specifically for rappers and producers in Hip-Hop, Pop, R&B and Dance to showcase their talents. Submissions are now open (through April 9, 2015 at 11:59PM EST)!

The iStandard Producer Showcase is the premier national music producer specific event, spotlighting aspiring hit-makers in front of a panel of prominent music industry tastemakers. The ASCAP EXPO iStandard Producer Showcase will occur one evening during the EXPO.

PRODUCERS – If you make tracks (or beats), then this is an opportunity for you.

Eight EXPO attendees, who submit tracks, will be selected to play tracks at the showcase. Those selected and all of the other EXPO attendees in the audience will receive valuable constructive criticism and build relationships with contacts that can assist them in getting ahead in their careers.

RAPPERS – We understand the producer and rapper go hand in hand in Hip-Hop, so the ASCAP EXPO iStandard Producer Showcase will feature a rap performances during the show!

The iStandard Producer Showcase has been held in over 30 North American cities over the past 10 years. Producers that have been a part of the iStandard Producer Showcase have had placements with artists such as Kanye West, 50 Cent, Beyonce, Diddy, Snoop Dogg, Fabolous, Jill Scott, The Clipse, and more.

The ASCAP EXPO iStandard Producer and Rap Showcase promises to up the ante for Hip-Hop, R&B, Pop and Dance production for 2014 and beyond. Even if you aren’t selected to be on the showcase, the ASCAP EXPO iStandard Producer Showcase will be a must attend event for networking, hearing real feedback and finding the next super producer!

TO BE CONSIDERED FOR THIS SHOWCASE, SUBMIT OVER AT http://istandardproducers.com/ascap/

musicIn creating an effective music marketing plan, so far we have discussed building a solid and complete online foundation and outlined strategies for a successful new release launch. Now it is time to kick back and relax for a little while before starting to write material for the next album that you’ll release a year or two down the road right…..Couldn’t be further from the truth!

To build off of all the progress you’ve been making up to this point, while you are working on that next record, you will have to keep supplying content on a consistent basis to strengthen your relationship and stay relevant with your current fans, and at the same time this content will also help to increase your fanbase.

Additional merchandise is one content idea, you can make vinyl for the last album or announce a new T-shirt design. Continue to release music videos for songs off the last album is another, for example take footage from the album release tour and edit to create an easy and fun music video to upload to your YouTube channel.

In the final post of this series I will discuss the three crucial content streams of Music, Social Media and Performing Live.

MUSIC

Gone are the days of releasing an album once every couple of years and leaving it at that, today’s artists need to be constantly feeding their fanbase new music. Releasing singles will keep people engaged while they are waiting on a full length, but you’re not limited to just releasing original new works.

Create alternate versions of your studio tracks:

Get a DJ to remix one of your songs. Not saying this has to be a famous DJ, just someone who knows the technology and is Sparlers Notescreative. If you’re interested in holding a remix contest should contact the folks over at Indaba Music, they put together some great remix campaigns for artists. Unless you’re already an acoustic act, take a page from Nirvana and release an album of stripped down “unplugged” versions of your studio tracks. A great way to show a different side of the band and appeal to potentially new listeners. Lastly release a live album, preferably from the CD release show, but any show will work as long as the audio is of top quality.

Record cover songs:

Music fans love covers. Recording cover songs is a great strategy for gaining awareness for new artists and providing fun content to share with your fans. Cover artists that inspire the music that you make and bigger name similar sounding artists to further entrench yourself within your genre. But also look outside of your genre as you never know, might end up tapping in to a whole new fanbase. This is exactly what the pianist Scott D. Davis did when he decided to combine his love of heavy metal with the beautiful piano pieces he was recording. The result was millions of youtube hits for his metal covers and new fans out of the heavy metal community, even of the artists themselves; Scott has been invited to open for Godsmack, Korn, P.O.D., Sevendust, Vince Neil of Mötley Crüe and Queensrÿche among others.

*Please note, to legally sell a cover song you will need to obtain and pay for a mechanical license. Harry Fox Agency is the foremost mechanical licensing agency in the US. Or work with Limelight who will get the license for a small fee per song on top of the mechanical license fee.

SOCIAL MEDIA, NEWSLETTER, BLOG Social MediaReal simple here, keep doing it. Just because you may not have a big ticket item like a new album that doesn’t mean you should stop communicating with your fans on a regular basis. You should be updating daily to Twitter, Facebook and Instagram. Newsletters should still be going out once a month and keep your blog active with a couple new entries per month. In addition to all the content ideas I’ve gone over in this blog post thus far that you can share, post about things happening in your personal life, such as a vacation you just went on or a great movie you recently saw. Repost interesting articles you’ve just read or a post song from a band you recently discovered that you love. News, politics, sports, parenting, art and fashion all make good topics for people to engage and connect around. Now that you have continued to stay present with fans, you’ll have a stronger and larger online audience when you’re ready to release the next album.

PERFORMING LIVE

Continue to tour, hitting the same markets that you played while supporting the new album to build on the momentum that has been made. There are undoubtedly limitations though on how often you can tour and you more than likely won’t be able to tour to every market where there are fans. Live streaming is a great solution to these limitations and if you use a platform like Stageit or Concert Window you will also be able to monetize these performances. There are also some great features that they offer to reward supporters and create tip rewards for an enhanced and more financial rewarding experience. Then spread the word by making a Facebook invite with all the details and sending to your fans, posting on twitter and letting everyone on your mailing list know.

bigstock-Sparlers-Notes-2463797-300x266

Keeping the shows fresh and different will help with increasing viewership from show-to-show:

Play a game at some point during the performance using the live streaming platforms chat feature, a fun way to interact with the viewers. Trivia would be a very easy game to execute, where people could win merch or any other prizes that you can get your hands on for being the first to answer the question correctly. Learn a new cover song for each performance, or better yet, ask people what covers you should play for the next live streaming show. Post the question to Facebook as well and the song suggestion that gets the most likes will be the one(s) you cover. Invite a guest performer to join you, a great way to add a new element to the live stream, while cross promoting to each others fans at the same time.

LEADING UP TO THE NEXT RELEASE TAKE PEOPLE ON THE JOURNEY WITH YOU

People like to follow along to real life stories that are interesting and different from their own lives, hence the popularity of realityStart TV. Used by an artist around a specific story, such as the making of a new album, is a great way to form a stronger bond with your current fans. The types of content that you could be sending are updates on how the recording is going using text posts, videos and pics via your social media channels, blog and newsletter. But also engage with your following on things like artwork and song titles by polling your fans and holding contests to select what cover or title to go with. The goal of all this activity is to get people excited so they are telling their friends about the upcoming release and will buy it the minute it’s available!

Releasing an album or EP into today’s music landscape can feel like a daunting task. Who do you send it to? How will you get people to listen? How do you cut through the noise? Where are all the places to put it online?

10150689_10203274307956125_2118593761_n

The first blog post in this 3-part series for creating an effective marketing plan dealt with building a strong online presence, so if you follow those instructions you are already in better shape than the majority of artists releasing music today.

In this, part 2, we will discuss steps to take in order to have a successful new release launch.

DIGITAL DISTRIBUTION

You must digitally distribute your album or EP. A physical CD only release or selling MP3s strictly on your website is not the way to go.

Digital distribution allows your music to be available everywhere fans will want it. Some will prefer streamed (Spotify, Rdio) and some will purchase (iTunes, Amazon, etc.) and the best way to get added to all of these is to go to a digital distributor like CD Baby or Tunecore.

I talk to artists all the time who take this step too far and sign up with multiple distributors because they think they are covering all their bases, which they are not. All this will do is put multiple copies of the same album on all the digital retail stores.

So, choose one and stick with them. We prefer CD Baby over Tunecore’s model because it’s a one time fee plus a small % of sales vs an annual fee that Tunecore will charge. So unless you think you’ll be generating at least $1k in sales year after year, then CD Baby is the economical option.

THE ALBUM IS JUST THE BEGINNING

The release of the actual music itself is one big event, and this album/EP as a whole represents your main content that will be used in an effective launch campaign.

Keep in mind that you need to also plan for other types of content to support the release. These are many assets you can use to reach out to press and share with your current following that will work to draw attention to the release.

Here are a few of the most effective categories:

TOURING

Ideally you will have a tour booked to kickoff following the official release of your album or EP. I’m not saying this has to be a long tour, it can be just a few regional dates, as this will help with your press efforts. Local blogs cheering crowd in front of bright stage lightsand newspapers in each market will be much more inclined to cover a new album or EP for an artist if a show is booked in their town.

CrowdHaving multiple markets to play in will also help you leverage when it’s time for a national press campaign. A list of tour dates will add credibility and demonstrate that you are an active artist working hard to promote your career.

VIDEOS

We all know MTV does not play music anymore, that is well-worn territory, but there are thousands of blogs who do love to post videos everyday. A music video that is captivating, colorful, funny, interesting (the list goes on, but you get the idea) greatly helps with a press campaign. The video can be used in the initial pitch to blogs about your album to make for a stronger pitch.

Another thing you can do with a video is secure an exclusive premier of the video on one blog ahead of the album release date to start generating buzz. Or if you don’t have the video ready in time for the release you can also drop it a month or two after the release date as a tool to continue to build awareness and draw attention back to the release.

You should have at least one official music video for an album to use in your press efforts, but you should plan on making videos for every song on the release. The idea is you want to build a fanbase and get as many people listening as possible and YouTube is where millions of people are going to listen to music. Many artists will upload the song’s audio to YouTube with a static image of the artist or album cover, but people are much more inclined to listen to your music if there are moving images.

MERCH

Pretty much everything in regards to your music career takes longer than expected, from making the album to creating the artwork to booking shows, and this definitely applies to any merchandise you want to have available to sell with the new album or EP, so start your planning months in advance.

I will caution you to ask your fans before you make merch to find out what they might like and if you don’t have a good sized fan base merch may not be a great move (yet!), as it can be costly to order merch that doesn’t yet have an audience to buy it.

Remember to match your merch to your crowd and merch isn’t limited to T-Shirts and posters, handmade items can make for great unique offerings or flash drives are great items that are functional and can be pre-filled with your music, videos and even sheet music.

Spark sales at shows, and through your online store, by selling your music through bundling items together. At the merch booth using download stickers from companies like Bandcamp or CD Baby you can create packages by placing a sticker with a download code to your music right on the t-shirt or other physical merch item that you are wishing to bundle your music with. Even though people aren’t buying CDs much anymore, they are still interested in supporting artists they love, so give them lots of different ways to support you and purchase your music.

PRESS CAMPAIGN

A big component when promoting a new album is the press campaign, and you can do this by working with a PR company to handle your press outreach or going the DIY route.

I talk to many independent artists who don’t see the point in a press campaign for their new release, usually because they (or artists they know) have spent thousands of dollars on a PR company in the past with little to no results. I definitely feel for artists here, but ignoring press completely is not the solution. Internet-Public-Relations

When hiring a publicist make sure your music is a good fit with their existing roster and that the publicist has a well thought out plan for the campaign, and most of all, honestly likes your music. An expensive campaign with a PR company that has some major label big name clients is not by any means a slam dunk that you will get “tons” of “great” press for your independent release, and many times will be the exact opposite. Try contacting boutique PR firms that can offer more personal attention or PR companies that are focused on independent artists.

For many artists doing-it-yourself is a totally feasible option that I consult with artists on with strategy and supplying specific media outlets to target.

For the campaign itself having all this support content that we discussed will help immensely in your outreach to press outlets, keeping a steady stream of talking points throughout the campaign instead of just talking about the album over and over and over. But do not focus on just music blogs, your passions, history, interests and hobbies that you have outside of music can all be utilized in a PR campaign. These are your niches and by making connections with blogs and their communities who share your passions and interests will provide a great opportunity to promote your music at the same time.

PREPARE YOUR LAUNCH TIMELINE

Here is a basic model to follow for an upcoming new album or EP release. If you plan on working with a PR company though to promote a new release please don’t set the release date until AFTER you have talked with them as it is important to have their input to make sure everything is aligned with their vision and timetable.

Two Months Before Release

  • Press campaign begins
  • Release a single, a great way excite your fans and also to get some current press quotes to include when contacting press about the full length release
  • Reskin social media profiles to advertise the new release
  • Get your newsletter firing and tell fans you have a special announcement

One Month Before Release

  • Announce pre-sale campaign through your newsletter and social media networks- create bundles of merch to sell for extra boost
  • Set up a Facebook invite for the new release, send it to all your Facebook friends and post on your Fan Page

Two Weeks Before Release

  • Keep the excitement going, hold a contest to win a copy of the new album and/or tickets to the release show

Official Release Day Activities

  • Write a news post about the release on your website or blog
  • Update Twitter and Facebook with an “album out now” post and link to where they can purchase it (I suggest you pay to boost post so people see it!)
  • Send out a Newsletter to your mailing list

One Month After The Release

  • Service press with official music video and announce tour dates

Again, the more activities you can plan surrounding a release will help build and foster excitement amongst your fans and will create more opportunities to keep contacting press with new content, while at the same time reminding them about the new album or EP.

Also don’t forget to ask your family, friends and fans to write reviews of your new release on iTunes and other digital retailers the minute it becomes available. Studies have shown that albums that are reviewed actually sell more than albums with little to no reviews posted.

In the next and final post – Part 3 I will talk about supplying content while you’re in between album cycles, as a means to stay relevant and fresh with your current fans, and to increase your fanbase as well.

SoundScan revealed it’s 2014 statistics for the music industry, spotlighting 54 percent growth in on-demand streams of audio and video music-related content. Total streams were up from 106 billion in 2013 to 164 billion in 2014 due to the popularity of services like Spotify, Beats Music, Rhapsody and Pandora.

pandora-beats-spotify-icons

The rise of streaming services comes as traditional digital album and song sales are on the decline. Sales of digital albums fell 9 percent in 2014 to 117.6 million, while songs dropped 12 percent to 1.26 billion.

For the year, total sales for hip-hop albums were down 24.1 percent, while all other genres dropped just 11.2 percent. It is important to note that R&B and hip-hop music are popular on streaming sites as they increased 54 percent last year.

Some industry insiders believe that the popularity of streaming services might’ve helped the record industry break even this year. Pandora alone contributed royalties equivalent to 16.3 million album sales.

While sales may be down, streaming is way up, which will only help the music industry transition into a digital world.

SE

SoundExchange paid out $161 million to performing artists and rights holders in the second quarter, an 8-percent increase from the same period last year. The number of royalty recipients — both performing artists and record labels — increased 34 percent to 22,343. The quarterly distributions put non-interactive digital radio services, which pay digital performance royalties to SoundExchange, on track to nearly match other digital revenue streams.

Even though services like Pandora, SiriusXM and iHeartRadio become a major revenue stream, their growth rate has slowed considerably. Second quarter distributions were down slightly from the $162.6 million distributed in the first quarter of 2014. Second quarter payouts were also lower than the $170 million paid out in the fourth quarter of 2013.

Royalties paid this year should easily top the $590.4 million paid in 2013. Recipients have been paid royalties of $323.6 million in the first half of 2014, an increase of almost 22 percent. If SoundExchange simply pays an equal amount in the second half of the year, annual distributions will rise 9.6 percent to $647 million.

www.collinsconnect.org

about-img-1

SoundExchange’s digital performance royalties are on par with other digital revenue streams. At their current paces — which could worsen later in the year — digital tracks and albums are on track to generate revenue this year of $1.35 billion and $1.1 billion, respectively. Accounting for the 30 percent of revenue retained by retailers, digital tracks and albums would return $944 million and $770 million to rights holders, respectively.

Paid subscription services like Spotify, Rhapsody and Beats Music aren’t far behind digital tracks and albums. If subscription services can match last year’s 57-percent growth rate, they will generate $987 million and, assuming a 70/30 split for rights holders/services, will return $690 million to rights holders.

There’s reason to believe digital radio services will continue to grow well into the future. Services are slowly making inroads in the automobile and taking away listening time from AM/FM radio. As of June, Pandora was integrated with over 145 vehicle models and 270 aftermarket audio systems. Google’s acquisition of Songza should also help Internet radio grow in the coming years. (Apple’s iTunes Radio and Amazon’s Prime Music will also help Internet radio, but neither pay royalties to SoundExchange and thus reside in a different category.) Greater access to mobile broadband should also help drive growth of Internet radio.

 

SE

SoundExchange paid out $161 million to performing artists and rights holders in the second quarter, an 8-percent increase from the same period last year. The number of royalty recipients — both performing artists and record labels — increased 34 percent to 22,343. The quarterly distributions put non-interactive digital radio services, which pay digital performance royalties to SoundExchange, on track to nearly match other digital revenue streams.

Even though services like Pandora, SiriusXM and iHeartRadio become a major revenue stream, their growth rate has slowed considerably. Second quarter distributions were down slightly from the $162.6 million distributed in the first quarter of 2014. Second quarter payouts were also lower than the $170 million paid out in the fourth quarter of 2013.

Royalties paid this year should easily top the $590.4 million paid in 2013. Recipients have been paid royalties of $323.6 million in the first half of 2014, an increase of almost 22 percent. If SoundExchange simply pays an equal amount in the second half of the year, annual distributions will rise 9.6 percent to $647 million.

www.collinsconnect.org

about-img-1

SoundExchange’s digital performance royalties are on par with other digital revenue streams. At their current paces — which could worsen later in the year — digital tracks and albums are on track to generate revenue this year of $1.35 billion and $1.1 billion, respectively. Accounting for the 30 percent of revenue retained by retailers, digital tracks and albums would return $944 million and $770 million to rights holders, respectively.

Paid subscription services like Spotify, Rhapsody and Beats Music aren’t far behind digital tracks and albums. If subscription services can match last year’s 57-percent growth rate, they will generate $987 million and, assuming a 70/30 split for rights holders/services, will return $690 million to rights holders.

There’s reason to believe digital radio services will continue to grow well into the future. Services are slowly making inroads in the automobile and taking away listening time from AM/FM radio. As of June, Pandora was integrated with over 145 vehicle models and 270 aftermarket audio systems. Google’s acquisition of Songza should also help Internet radio grow in the coming years. (Apple’s iTunes Radio and Amazon’s Prime Music will also help Internet radio, but neither pay royalties to SoundExchange and thus reside in a different category.) Greater access to mobile broadband should also help drive growth of Internet radio.

 

streaming-music-radio-services-playlists-compared

As streaming has become increasingly important in today’s music market, it is imperative that you understand how streams turn into publishing royalties – and of course, how to get those royalties into your wallet.

Let’s divide streaming into two different types: Interactive and Non-Interactive. These are defined by the listener’s ability to choose the songs that play next (ability to ‘interact’ with the streaming service, if you will).

1) Non-Interactive Streaming:

Definition: Listeners play music, without the ability to choose the songs that play next.

Also Known As: Internet Radio.

Examples: Pandora, Sirius XM, NPR.

Royalties Generated: Performance royalties.
(These are performances like radio, but digital. Thus, terrestrial radio and other radio-like services generate only performance royalties.)

How to Collect: Join a PRO (ASCAP, BMI, SESAC). PROs are responsible for tracking and collecting performance royalties generated from terrestrial and internet radio.

2) Interactive Streaming:

Definition: Interactive streaming services allow listeners to CHOOSE the songs that are played.

Also Known As: On-demand streaming.

Examples: Spotify, Rdio, Rhapsody, Google Play, Beats Music.

Royalties: Performance royalties & Mechanical royalties.

How to collect: To collect the performance royalties, you will need to join a PRO. To collect the mechanical royalties, you will need to become a publisher affiliate at Harry Fox Agency (to do so on your own, you must have a commercially distributed record release in the US within the last year).