Wednesday, August 20, 2014

Streaming Music Primer: The Different Types Of Streams

Streaming Music Revenue image
Now that it's pretty apparent that the music world is increasingly centered around streaming music distribution, many artists, bands and managers still have no idea how streaming pays and why the royalty is frequently much less than expected. Here's an excerpt from the latest edition of Music 4.0: A Survival Guide For Making Music In The Internet Age that provides a basic primer on the two types music streams.

"What most artists and bands don’t realize is that there are two different types of streaming services, and they each operate differently, and therefore pay at a slightly different rate.

Non-Interactive Streams
The first is called a “Non-Interactive” stream and this is either from a platform that acts as an online radio station like iHeart Radio or any traditional broadcaster with an online presence (like your local radio station), or a service like Pandora where the user has a certain amount of control over what plays, but  can’t directly select a song or make it repeat. Streaming platforms in this category include services like Pandora, Last.FM, and iTunes Radio.

Radio broadcasters with terrestrial radio stations pay $0.0023 (.23 of a cent) per stream. Non-interactive platforms like Pandora pay $0.0023 per stream from a paid subscriber, and $0.0013 per stream from a non-subscriber, which increases to $0.0014 in 2015.

This money is paid directly to Soundexchange and is paid out at a rate of 50% for the owner of the copyright (which could be the record label or could be you if you’re DIY), 45% to the featured artist, and 5% to unions that represent the musicians that played on the recording.

If a services like iTunes Radio also provides advertising, it pays out at a slightly different rate as a percentage of the ad revenue is added as well (pro rated of course). In the case of iTunes Radio, that rate is 15% of ad revenue until September 2014, when it increases to 19%.

Interactive Streams
Interactive or on-demand streams are treated different from the radio-style streams in that the rate is considerably higher (between $0.005 and $0.007, depending upon how much the listener pays per month). Services that provide interactive streaming include Spotify, Rdio, Mulve, and Slacker.


The downside here is that if you’re signed to a label, the money is paid directly to them first. You’ll then be paid based on the royalty amount negotiated in your agreement. For instance, if you’ve negotiated a 15% royalty, then you’ll be paid 15% of $0.005, or $0.00075. If you’re not with a label, the money will be collected by Soundexchange or an aggregator like Tunecore, Ditto Music or CDBaby if they’ve distributed you songs to the online streaming services.

On top of the royalty paid to the artist and label, there’s also a publishing royalty that varies yet again from the above rates, which we’ll cover in the next section.

You can see why artists, bands, musicians and even record labels can be confused about how much they’re receiving from streaming. As The Temptations once sang, it’s a “ball of confusion.”


That being said, every artist should register with SoundExchange, a service created by the US Copyright Office to collect performance fees for musicians featured on a recording and a song's copyright owners. SoundExchange collects money for the actual performers on a recording, not the songwriters. Go to soundexchange.com for more information."

To read additional excerpts from the Music 4.0 guidebook and my other books, go to the excerpt section of bobbyowsinski.com
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Tuesday, August 19, 2014

Online Videos To Carry Age Ratings In The UK

Annie Lennox explicit content rating image
Do movie and television ratings actually work? We've had them for years in the US, but do they actually do anything to prevent youngsters from seeing anything that could be potentially harmful to them? These questions could be debated endlessly, and while some regulation is no-doubt useful, is more regulation necessary?

The British Board of Classification thinks so, as it has moved to force online music videos on YouTube and Vevo to carry an age classification as of October. The ruling is designed to protect children from "graphic content," according to a speech given by prime minister David Cameron. We can all agree that there's plenty of that to go around.

The US has a voluntary system for music videos developed by the RIAA that displays a "Parental Guidance" label on videos with explicit content. Most of the large online video providers already have age verification systems in place to ensure that less mature audiences are at least warned of the content. Of course, the problem is that most videos provided by the major labels are placed in this category.

A ratings board for games already exists in the US called the Entertainment Software Ratings Board has extensive ratings categories that covers most situations and monitors that industry quite closely.

The Internet has been largely exempt from any societal rules, but that's changing as it's now a primary piece of almost everyone's daily life. It's debatable whether video ratings will make any more of a difference than has been the case until now. Concerned and diligent parents are still the prime ingredient in good parenting. Maybe we should just leave it at that.
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Monday, August 18, 2014

Using A Single URL for Multiple Landing Pages

As an artist begins to have more widespread success, it's typical to have different landing pages and merch stores for different countries. What can become awkward is that it might not always be easy for someone to find the appropriate country-dedicated URL from your main "xxxx.com" address.

One way around this is to use a service that will is geo-aware enough to serve up multiple landing pages from your main URL and one of the best is smarturl.it.

Smarturl is very versatile, allowing you to assign multiple country landing pages from a single URL, as well as shortcode aliases and real time stats. It does much more though, as you can also use a single URL to access your multiple country-oriented iTunes links and send to multiple devices, and you can also point towards multiple streaming providers.

Smarturl is free, but it does have a premium tier which allows iTunes affiliate tracking and conversion tracking.

Smarturl.it image
SmartUrl.it
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Sunday, August 17, 2014

Weighing The Pros And Cons Of A Universal Music Release Day

New Releases image
If you've been in the music business for any length you know that for a great long while now Tuesday has always the day that record labels would release their new music. The reason for Tuesday is the same that many PR agents hold their press releases until Tuesday as well - Monday is just too busy and noisy as people try to catch up from the weekend, and later in the week may not get as much attention as people get more work piled on them or are planning for the weekend.

That's why it's such a surprise that the music industry is on the verge of naming Friday as the new global street day for all new releases. Industry bible Billboard Magazine reports that that this new procedure will be put into effect in July of 2015.

So why the change, you may be wondering? According to the report, it’s to prevent piracy. Right now, each country has it’s own release day, which means that if an album is released in Australia on Friday, or the UK on Monday, the recording is already copied and spread online by the time the Tuesday release rolls around in the United States. 

On the surface this seems to be a perfectly reasonable action until you begin to think about it. First of all, is piracy even an issue anymore? Except for a very few territories, we now live in an increasingly stream-filled world where music consumers have little desire to own the product that they listen to. If you don’t want to own it, then there’s no reason to want to steal it. Read more on Forbes.
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Saturday, August 16, 2014

Jay And Chandler From Music Geek Services On The Latest Inner Circle Podcast

Bobby Owsinski's Inner Circle Podcast image
If you're into marketing yourself and your music, you'll love this week's Inner Circle Podcast. It features Jay and Chandler Coyle from Music Geek Services and they'll describe how they help artists and bands enlarge their audiences and sell more merch.

Also featured this week is an in-depth explanation of the "1,000 Fan Theory" of a making a living from a core audience, and a discussion of my 10 favorite microphones.

Check it out at BobbyOInnerCircle.com.
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Thursday, August 14, 2014

Get More Video Views With A Custom Video Thumbnail

Adding a custom thumbnail image
Loading a custom thumbnail
One of the easiest ways to get more views for your video is by having an appealing thumbnail image. Here's an excerpt from my Social Media Promotion for Musicians book that describes the simple process of creating a thumbnail that really sells the video.

"When you upload a video, YouTube usually selects three screen grabs from which you can select the thumbnail. The problem is that it’s likely that none of these provide an image that instantly tells the potential viewer much about your video. A customized image can now be used as the thumbnail instead of the selections made by YouTube. Here’s what to do:
  • Find the perfect still shot. Search through your original video (the one you had before you uploaded it to YouTube) until you find that one shot that perfectly describes what the video is all about. This might be an action shot, or it could be a close-up of a face or product, or it could be anything that grabs the viewer’s attention. Whatever it is, make sure that it’s relevant to the video. When you’ve found it, export it as a jpeg or PNG image.
  • Add text. Use an image editor like Photoshop, GIMP or even Preview to add text to identify the video. Make sure that the text is large enough to read easily on a small screen found on a smartphone. The file size should be less than 2MB.
  • Click on the Custom Thumbnail icon and upload. This can be found on the Info and Settings page, which is accessible from the first icon (the first one) at the bottom of the video viewer. Viewers will now see your custom thumbnail."
To read additional excerpts from Social Media Promotion for Musicians or my other books, go to the excerpts section of bobbyowsinski.com.
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Wednesday, August 13, 2014

What To Charge For A T-shirt

T-shirt image
One of the biggest concerns that artists and bands have when it comes to merch sales is how much to charge, especially for everyone's favorite - the T-shirt. There's an interesting article about this on the NPR blog, but I've also touched on this a bit in a sidebar in the latest Music Connection magazine and in my Lynda.com Selling Music Merchandise course.

Here's the formula: After you’ve determined your cost per item (make sure you include all your costs including design, setup and shipping), the next thing is to determine the sales price of the item. One way is to just ball park the price at what you think it should sell for, which is fairly unscientific and subject to errors that can cost you money, or do it by a adding a certain percentage over your costs, which is called your markup.

Let’s say a t-shirt cost you $10. If you were to mark up it 50%, that would mean you would sell it for $10 plus a $5 markup, or $15.
10 x 50% = 5  10 + 5 = 15

Many businesses like to mark up a small item by at least 2 or 3 times, or 200 or 300% or even more. That means that an item like a guitar pick that costs 25 cents can easily be sold for $1 or even more, if the market will bear it. On an item that costs you more, like our $10 t-shirt, your market might not bear a 100% markup (although you find shirts that cost more than that all the time), so you’ll have to settle for a smaller percentage.


No matter what, don’t drop your markup below 20% though. You have to make something for your efforts, no matter how small, just to cover those contingent costs that seem to pop up later.

Although you may see T-shirts priced around between $30 and $40 at concerts for A-list artists, don't think that you can get away with the same price. The typical going rate is actually between $15 and $20, but check what you're competitors are charging first.

Here's the "Welcome" video from Selling Music Merchandise course that describes what it covers. Get 7 days of free Lynda.com access by clicking here.






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Tuesday, August 12, 2014

The Millennial's Choice For Social Networks

Millennials love their smartphones and they love their social networks. Here's an interesting Statista infographic derived from comScore and Mobile Metrix info that shows their most popular social networks while using their phones.

What's interesting is that Facebook is still the number 1 choice by far, followed by Instagram and Snapchat. Now you can see why Snapchat turned down a $3 billion acquisition offer from Facebook last year.

What this chart tells artists, bands and musicians is that no matter how badly you feel treated on Facebook, don't give up on it yet. It can still be a powerful marketing tool if you know how to use it.

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Monday, August 11, 2014

A Basic Music Publishing Glossary

publishing contract image
It's unfortunate that many songwriters are so good at their craft yet don't understand the basics of protecting and controlling their work. Here's a quick basic glossary of frequently used publishing -related terms thanks to the Music Business Association.

Remember that each song has two rights attached to it. The first is for the composition itself (both lyrics and music) and the second is for the recording of that song by the artist.

Composition - The song written by the songwriter(s).

Copyright - The ownership or control of an intellectual property like a song.

Label - The record label, who sign the artist and usually control the copyright of the master recordings. They are responsible for licensing and distributing the recordings, then paying a percentage (a royalty) of the money earned to the artist.

Master - The produced sound recording of a song.

Mechanical License - The license to reproduce and distribute the master recordings in a physical or digital format. CDs, vinyl records and digital downloads all require this license from the publisher of the composition in exchange for a royalty for each sale.

Public Performance License - The license to transmit the compositions to the public via live concerts, radio, television and streaming.

Performance Rights Organization (PRO) - The entity that collects public performance royalties for the songwriter. This includes ASCAP, BMI and SESAC in the US.

Publisher - An entity that controls the copyright of a songwriter's compositions. The publisher is responsible for collecting the royalties on the artist's behalf.

Soundexchange - The entity that collects performance royalties for artists and labels for non-interactive streaming such as Pandora.

Sound Recording Performance License - The license issued by Soundexchange that provides the right to transmit masters via non-interactive streaming.

Synchronization (Sync) License - The license required to add music to moving images, including film, television, DVDs and video games.

Publishing is a deep subject and there are many more terms to become familiar with if you really want to get a handle on how it all works. That said, if you're unclear of the concept, these terms are an excellent place to begin.
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Sunday, August 10, 2014

Owners Of More Than 25% of US Digital Masters Don't Get Paid

Streaming Music image
According to the digital rights administration service Audiam, anywhere from 25 to 45% of all master recordings streamed are not properly documented and therefore not associated with the composition. As a result, the royalties from these streams are not paid out.

Audiam estimates this amount to be as much as $5 million a day and includes everything from download stores, streaming services, scan and match locker services, digitally delivered background music, ringtones, ringback tones, text message music clips, YouTube and other digital uses.

And it gets worse - 25% of all compositions on US digital services aren't licensed at all, so that money doesn't make it back to the composer or artist either. Then you have the situations where there's lots of unpaid or unallocated money just sitting in escrow, or even worse, paid to the wrong entities.

What's the one simple thing that you can do to alleviate this situation? Make sure that you always completely fill out any documentation (including metadata) on your song when uploading to a publisher, music distribution service or performance rights organization. Sloppy paperwork leads to more problems in getting paid than anything else in this digital age, although we'll cover a number of other reasons in some upcoming posts.
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Thursday, August 7, 2014

How The Music Industry Created Its Own Worst Nightmares

Music Business image
Once a sector committed to the bleeding edge, the recorded music business has gone from an industry adept at incorporating the latest technology into its products to one that’s become its own worst enemy by its refusal to adopt and adapt until its too late. Over the last 30 years, not only has the industry made a series of grim mistakes that has emboldened its competition, in some cases it has even created it.

For the better part of a hundred years the recorded music business had an impressive track record of staying on top of the freshest technology. From adopting the vinyl record to replace the fragile shellac discs that were its original core business, to welcoming the cassette and its new-found portability, to the random access and digital sound of the CD, the industry managed to rise to greater and greater sales heights with each successive tech breakthrough that it incorporated. 

But a series of short-sighted mistakes starting in 1981 have turned the industry from the master of its own domain to one that’s now primarily reactionary, with each latest response putting it deeper and deeper in a hole as it loses control of its own destiny. Where once the industry controlled every aspect of its business, now it has ceded control of virtually all of it, but especially the distribution of its products.

This has occurred due to many factors, but historians will look back at three major turning points that altered the industry’s fate. 

The Rise Of MTV
Up until 1980, recorded music was an ecosystem totally run by the major record labels. They were responsible for creating the product by finding and recording the artists, to manufacturing the product in its own manufacturing plants, to distributing the product to a series of retail stores, to promoting the product via print media and especially radio. The record label was at the center of each of these activities, none of which could progress without its approval. The money flowed and life was good.

But by 1980 the industry was in a major doldrum thanks to a backlash against the disco era and a general spending malaise. Luckily it was soon bailed out by new musical trends (punk and new wave), and an upstart cable television network called MTV.

Suddenly there was a new way to promote music and every label jumped in feet first as viewers and record buyers couldn’t get enough of watching videos by the artists they loved. Soon, a new stable of MTV-ready stars was created, the CD was introduced, and music consumers were buying more product than ever before, with MTV at the center of it all. Read more on Forbes.
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Wednesday, August 6, 2014

The "Happy Birthday" Song Could Cost Publisher Millions

Happy Birthday Song image
If you ever went to a chain restaurant and heard the wait staff sing a lame birthday song instead of the real thing, that's because the parent company didn't want to pay the high licensing fee connected with the singing of the "Happy Birthday To You" that we all know and love.

For 120 years Warner/Chappell Publishing has been demanding payment for the use of the song "Happy Birthday," but a new documentary and lawsuit provides some strong evidence that the song has actually been in the public domain all this time. Such a ruling would mean that Warner/Chappell would be forced to not only forfeit the high licensing fees it now receives from it, but also potentially have to return hundreds of millions of dollars as well.

During the making of a documentary on the song, researchers have uncovered evidence that the song has actually been in the public domain at least since 1920, a claim that many copyright scholars have maintained for years.

"Happy Birthday To You" actually started its life as "Good Morning To All" which was published in 1883. The "happy birthday" lyrics appeared in 1901 with a note that the song was sung to the melody of "Good Morning To You" in an edition of the Inland Educator and Indiana School Journal. This was reiterated in a book in 1907, then published with notation in 1911. There were a variety of copyright claims since, but virtually all were held to be invalid or expired.

It seems that Warner/Chappell might hold a copyright on the original song (might being the operative word here), but not on "Happy Birthday To You," although the company has claimed copyright of the song even though the original copyright has long since run out. Now that a suit has been filed, it should be very interesting to see how the company responds.

While it won't shake anyone's world to have "Happy Birthday" back in the public domain, at least it will get rid of the substandard efforts to take its place in restaurants everywhere. You can read more detail, and see the complaint document here.
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