I’m Going To Start Trolling My Music Creator Friends, But Not How You’d Think…

I’m going to start trolling my music creator friends.

Not by commenting on their “check out my new release posts.” 

No. 

I’m going to troll them by capturing the royalties that they WILLINGLY leave on the table by refusing to be more proactive when it comes to the business of music.

The independent music community turns its collective back on nearly a billion dollars in unclaimed royalties and unlicensed usage every year from domestic and international sources, despite the fact that artists are generally distributing music wider and further across more varied platforms and apps than ever before.

If you’re going to leave money on the table, I’ll go ahead and pull up a seat and take your share.

Global Recorded Music Revenues Grew By $1.1 Billion In 2016

Music Industry Blog

Following on from the global market share numbers we released on Sunday, here are our findings regarding the growth of the overall market.

Throughout 2016 as the major label earnings were coming in there was a growing awareness that 2016 was going to be a landmark year for the recorded music business. It finally looked like streaming was going to push the industry into growth. Now with full year numbers in, the picture is even more positive than it first appeared. The recorded music market grew by 7% in 2016, adding $1.1 billion, reaching $16.1 billion, by far the largest growth the recorded music business has experienced since Napster and co pushed revenues into free fall.

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While it is too early to state that the corner has been turned, this is clearly a turning point of some form for the business. Underpinning the growth was streaming which grew by…

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A Primer On Music Publishing, Rights Splits, And Royalties For Confused Artist Managers

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I recently assisted an artist manager with a post-release dispute between his client (DJ/producer) and their guest artists on the track.

Here’s a quick primer for new managers who may not be 100% clear on how copyright & publishing work/relate:

1. There are two (2) separate copyrights: the composition (song) and the sound recording (master).

2. There are four (4) types of income participants: songwriter and publisher for songs (we call this “writer’s share” and “publisher’s share”) / artists and record companies for masters. In the event a writer is not signed to a publisher, he/she owns the publisher share of income. In the event an artist is not signed to a record label, he/she owns what would be the record company share of income (however, if you’re working with a production company, they could own these rights depending on your production agreement).

3. COMPOSITION: Generally, the songwriter and publisher split is 50-50 (this proportion is represented in percentages as 50%/50% (most of the publishing world) and 100%/100% (specific to BMI), but it is the same proportion). American Society of Composers, Authors & Publishers (ASCAP), Broadcast Music, Inc. (BMI), SESAC, and Global Music Rights (GMR) collect and pay out performance royalties to songwriters and publishers. Harry Fox Agency and Music Reports, Inc. collect and pay out mechanical royalties to publishers (if you rep a writer who does not have a publisher, you may be missing out on mechanical royalties in the U.S. and overseas). Synchronization (placing music in film & TV) is a license that is negotiated between content producer and publisher (or you as the manager repping a songwriter). The content producer pays an upfront synch fee and then the performance generates performance royalties on the backend once it is  has been distributed/broadcast (unless it’s a movie in U.S. movie theaters or DVDs; in which case you should negotiate a higher upfront synch fee since the U.S. does not have a performance right for music performed in movie theaters). There are more royalties, but that’s a primer.

Also Read: Demystifying The Music Industry: What’s The Difference Between ASCAP/BMI/SESAC and SoundExchange?

4. MASTER: Generally, the artist and record company split income based on the terms of a recording contract. The exception is neighbouring rights, hometapping/private copy, and DART royalties. All of these royalties are collected and paid out by agencies directly to the artist and record company. SoundExchange pays out digital performance royalties for non-interactive Internet services (e.g. Pandora), satellite (e.g. SiriusXM), cable (e,g. Music Choice), and over 2,500 other webcasters (e.g. iHeart Radio and Slacker). SoundExchange is our only version of “neighbouring rights” in the U.S. SoundExchange pays 45% to the artist, 50% to the record company, and 5% to background vocalists and session musicians via AFM & SAG-AFTRA Intellectual Property Rights Distribution Fund. Digital services pay master streaming royalties directly to your distributor/aggregator. There is a fund for hometapping/private copy and DART royalties paid out by Alliance of Artists and Recording Companies to artists (50%) and record companies (50%) because, among other reasons, in some countries (like Japan and Netherlands), music is rented much in the way we rent DVDs. Overseas, masters also earn neighbouring rights royalties (performance of masters on radio, TV, movies, etc.). The only way to capture these royalties is to sign up with a neighboring rights agency like Kobalt Music or Symphonic Distribution.

Also Read: The Uniquely US Challenge That Indie Artists Face When Asked To License Music To Indie Filmmakers, For Free

Now that you have a premier, what you need to make sure to do for EVERY song released is to spell out in the contract the COMPOSITION/SONG SPLITS and the MASTER OWNERSHIP SPLITS.

If you do a split sheet with guest artists on a song, you’re only covering the composition, unless you have some addendum agreement attached that says the splits will also be applied to the master sound recording. Otherwise, you can have two different sets of splits; one set of splits for the composition (the songwriters and publishers) and a second set of splits for the master (the featured performers and the record company/master owner(s)).

SCENARIO 1: EDM DJ/producer produces a track and invites a guest artist to lay down vocals. If producer composed the track and artist wrote the lyrics, then they’ll all have a percentage on the COMPOSITION/SONG split sheet. If producer wrote all of the lyrics, then he/she will own 100% of the COMPOSITION/SONG. Now, the master recording has a different split. The guest artist is effectively the featured performer on the MASTER, so he/she would be allocated the 45% featured artist share of SoundExchange royalties and the 50% artist share of AARC royalties. The copyright owner in the master (label or individual) would receive the 50% copyright owner share of SoundExchange royalties and 50% record company share of AARC royalties. In order for the producer to receive a piece of the SoundExchange royalties, you’d need to include the allocation in your agreement and have the ARTIST sign a Letter of Direction, which you’ll submit to SoundExchange (join the Creative Affiliate Program to expedite this). This LOD will split the “featured performer share” between the Artist and Producer. (Note: These splits have nothing to do with sales and master streaming royalties).

SCENARIO 2: A five member band put out a new song. Only two members wrote the song, but all five members performed on the recording. The two writers would split the COMPOSITION/SONG ownership, and each of the five members will receive a share of the featured artist share of SoundExchange royalties. Master sales/streaming royalties will have a different split.

I can go on and on.

The point is, there are 4 buckets in the music industry when it comes to copyright/publishing:

  • Bucket 1: Writer/Composer/Lyricist
  • Bucket 2: Publisher
  • Bucket 3: Artist
  • Bucket 4: Master Owner/Record Company

Each of these buckets receive their OWN income streams, and most music rights organizations and royalty collection agencies will pay one or two of these buckets DIRECTLY based on the splits that you provide when you register the songs/tracks to the entities.

This is why it is imperative to #1 have these splits spelled out and agreed upon on paper prior to release and #2 register the songs/tracks with ALL entities BEFORE release.

Obviously, TuneRegistry is the only product on the market designed to help you with this at an indie artist price point.

‘Managers need to motivate artists. But we also need artists to motivate us.’ – Music Business Worldwide

Here’s a good lesson on treading the water when your promising artist experiences ups and downs across their career. Being self-motivated as a manager is imperative, especially in the early years when it’s virtually all work and little reward. But having a since of mutual motivation with your artist is also important. You’re here to guide and build their careers, but like the saying goes “help me help you” is definitely a motto that I lived by as a manager. It’s refreshing to hear that notion echoed in this piece.

How Colin Lester stuck by his star artist – even when the music industry turned its back

Source: ‘Managers need to motivate artists. But we also need artists to motivate us.’ – Music Business Worldwide

Global Recorded Market Music Market Shares 2016

The Independent Music Sector Continues To Claim Significant Market Share Over Any One Of The Big 3 – Indie Publishers Capture Over 50% Of The Market

Music Industry Blog

MIDiA and Music Business Worldwide have been tracking record label and publisher financial releases throughout 2016. In addition MIDIA has conducted market sizing work on the publishing sector and research for the Worldwide Independent Network’s (WIN) indie label market share project. Pulling all of these inputs together, along with reports from country trade bodies and PROs, MIDiA has created a recorded music market share model to provide a unique view of where the revenue flows in the global business. To ensure as representative a picture as possible all local currency data has been converted into US dollars at the currency conversion rates for the respective quarters. This removes the distortion effect that occurs when data historical data is retrospectively converted at today’s conversion rates.

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(MIDiA Research subscription clients can access the full 15 page excel spreadsheet with all of the underpinning data right now by clicking here.)

The Recorded Music…

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Dae Bogan To Teach “Music Industry Entrepreneurship” Class At UCLA Summer Session, June 27th – August 1st – Open To General Public

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Dae Bogan, Co-founder and CEO of music rights and metadata management startup TuneRegistry and a UCLA alumnus, has been confirmed to develop and instruct a course on music industry entrepreneurship at UCLA.

The 4-unit course will be included among UCLA Herb Alpert School of Music‘s class offerings through the UCLA Summer Session program. The class is open to UCLA students (undergraduate and graduate students) as well as Non-UC students/general public.

Class Schedule: Tuesdays, 10:00am-2:00pm, June 27th, 2017 – August 1st, 2017 (view course catalog listing)
Tuition & Fees: Starting at $1,270 (view fee schedule)

From the tentative syllabus:

The music industry is an ecosystem consisting of an interrelated network of robust sectors. From recorded music and music publishing to live music and mobile apps, entrepreneurs have been disrupting and innovating across these sectors for decades. In the Digital Age of music, there has been a spike in startups across all sectors of the music industry with new players entering the industry despite cautionary tales of challenge and failure. They’ve re-shaped how consumers access music, they’ve challenged the relationships between so-called gatekeepers and aspiring musicians, and they’ve created niche markets that have grown to become billion dollar sectors. They’ve launched new talent in innovative ways and they’ve earned one hundred million dollar valuations within mere months. This is the entrepreneurial spirit at work. This is the manifestation of great ideas at work. This is entrepreneurship in the music industry.

In this course, students will learn fundamental principles of entrepreneurship across all phases of the start-up process. Students will analyze case studies and current events and participate in critical discussions around alternative business strategies in music industry entrepreneurship. Course work will consist of group assignments, workgroup labs, and strategic planning; all culminating in the presentation of a fictitious music industry company at the end of the session.

 

To learn more or to enroll, contact the UCLA Summer Sessions program at http://summer.ucla.edu. The class ID is 434828200 (Music Industry 188 – Special Courses in Music Industry: Music Industry Entrepreneurship)

ETLA, The Research Institute Of The Finnish Economy, Publishes Report On State Of Digital Music Infrastructure – Calls For Transparency And Addresses “Black Box” Issues

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I had the honor of being interviewed by researcher and author, Derek Sellin, for his industry report “Digital Music Industry – Background Synthesis” for ETLA Working Papers No. 48, published by Elinkeinoelaman Tutkimuslaitos – The Research Institute of the Finnish Economy.

Black boxes materialize for many reasons, including but not limited to: the inability to identify rights holders despite payments made for the use of their compositions; the lengthy time required for filing domestic and ultimately international copyrights, often begun only when a recording is actually released; multiple claims for the same rights exceeding 100% of ownership, resulting in indefinite disputes; international collaborations with less than all creators asserting their rights; international legal inconsistencies regarding what type of performances result in payments (most visible in the fact that radio play does not generate royalties for recording artists in the United States); and the slow and often manual processes to report usage and clear payments under international reciprocal agreements. – Dae Bogan

You can download the report at https://www.etla.fi/en/publications/digital-music-industry-background-synthesis/.

About ETLA
The Research Institute of the Finnish Economy (Etla) is engaged in applied economic research with emphasis on topics that are important from the Finnish point of view. The main focus is on issues that relate to productivity and drivers of its growth, to the functioning of the labour market, as well as to challenges in maintaining a balanced macro economy including sound public finances. Etla monitors economic development, compiles forecasts as well as assesses economic policy and comments on it.

Etla is a private non-profit organisation. Its operations are backed by the supporting association, the members of which comprise the Confederation of Finnish Industries and the Confederation of Finnish Industry and Employers (TT) Fund. The funding from the background organisations covers more than a third of the institute’s budget and forms a solid base for its operations. Read more.

Southern California Music Industry Professionals & Artist Managers Connect present *GRAMMY Week 2017* Music Industry Meetup | Feb. 10th

I’m excited to announce SCMIP’s first event of 2017 in partnership with Artist Managers Connect: *GRAMMY Week 2017* Music Industry Meetup taking place Friday, February 10th from 7pm to 10pm at Bar Lubitsch in West Hollywood. Sponsored by TuneRegistry.
Come network and mingle with fellow music industry professionals.
RSVP to rsvp@daeboganmusic.com

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