Saturday, March 17, 2012

Streaming Music Revenue Payments

From the Future of Music Coalition

If a song is streamed on Spotify, the company has three entities to pay:

1. the sound recording copyright owner, which is usually the record label.  In many cases, this payment is made via an aggregator like IODA, The Orchard, Tunecore or CD Baby.

2. the song publisher

3. the performance rights organization, which then pays the songwriter

Ooh, where’s the musician/recording artist on this list? They’re not on it, because they are not paid directly by Spotify.  There are at least three versions of how money flows from Spotify to a musician/band:

Unsigned/independent musician, using Tunecore as its aggregator: Spotify > Tunecore > musician

Musician signed to an indie label: Spotify > IODA/Orchard > indie label > musician

Musician signed to a major label: Spotify > major label > musician

Add into this the time lag between streams and payments being filtered down the food chain, and you can see why “I don’t know” might be the answer that is most appropriate in this instance.

Sunday, February 12, 2012

Why Are Musicians So Afraid of New Technologies?

I have seen it over and over again. Musicians who have been promoting themselves for years, if not decades, are so suspicious of any new online tools or new apps that can either help their careers get launched or further the growth of their popularity.

Maybe it's that old saying "Once bitten Twice shy". It is true that whatever era you look back on, the musicians, the bands that went the Indie route instead of signing to some gigantic Major Label
have been burned by distributors, stores, the media, and certainly the live venues. So, perhaps when I talk to these people and mention Spotify as one example, all I get are negative reactions from most Indie artists.

Granted, today there are SO MANY new companies promising online exposure and easy-to-use website templates let alone digital revenue collectors that may or may not pay their artists or publishing companies that don't give their songwriters the money they are do, that IF you align yourself with the wrong start-up company you might get burned. But as I said, musicians and songwriters have ALWAYS been at the bottom of the barrel when it get to receiving their just rewards.

So back to Spotify. This company took most of Europe by storm years ago, and only arrive on our shores within the last year or so, after many months of negotiating deals with the Major labels and tons of Indie labels.

But listen up...Spotify is going to be around for a LONG TIME!! Also, the streaming music business, at any level, is really a new way of thinking about getting your music out there, and yes the royalties paid out not only by Spotify are extremely low at this time, as are the many copycat companies that are out there doing their best to attract and support independent music.

Give 'em a break! Streaming music and video and anything related to the 'Cloud' IS the future, and that future has arrived and is here to stay. So, stop being afraid of the many changes that are here now and use them for, if nothing else, extraordinary opportunities to expose your unknown music, or relatively obscure music. This goes for any genre of music from acoustic instrumental music to singer/songwriters, to rappers and rockers.

Its all about people finding your music, falling in love with it, and becoming a dedicated fan. That is what you really are after...dedicated and supportive fans. If you then can tap into those people what have an emotional attachment to you, you are more than halfway there. Catch these fans, interact with them. Make sure you are using the best social networking sites and companies and stop worrying about your revenue stream from either Spotify or any new companies that offer streaming services.

Instead, create your own streams of income from live show, licensing your music, merchandise sales from your live shows, and on and on it goes.

As sure as the sun will rise tomorrow, this new era of streaming content WILL improve over the next few years, and the stronger you are positioned in the exposure areas I have mentioned, the higher the likelihood that the deals you negotiate will turn more into more favorable financial rewards.

Get it? Got it?...Good!

Christopher Knab