by : Business, October 2014

Lessons for DIY Musicians: II

Lessons for DIY Musicians: II

Editor’s Note: This is the second of two installments dealing with DIY issues. We printed the first in August 2014. There, Fuller covered music production, distribution, and promotion. Here, he tackles performance related topics and music licensing.   

Performance,  a specialized form of promoting, has long required independent musicians to hustle for gigs.  The web, as with other areas, has made this, too, easier for musicians.  They no longer package and deliver recordings to venue promoters, they just email a link to a website where their music can be streamed.  Sonicbids has pioneered using the web to connect performers with event planners and live venues.1  The internet, moreover, has created new performance spaces altogether.  Ustream, Justin.tv, Big Live, and JustJamIt allow musicians to live-stream traditional shows or web-only performances.2 Additionally, musicians can now perform through avatars in virtual environments like Second Life.3  These trends are likely to strengthen with time as virtual reality becomes less and less distinguishable from first life.4

Lesson 4 – Divide Yourself & Conquer.  Whereas other forms of promotion are an up front investment with uncertain returns, playing live is a relatively stable way for DIY musicians to earn income.5  DIY musicians should try to play out as much as possible.  However, physical venues will require booked acts to honor “radius exclusivity”; meaning, DIY musicians that commit to playing a club are often not allowed under their booking contract to perform within a given geographic radius of the club for a set length of time.6  In the internet and digital age, however, geography is no longer our master.7  Hence, DIY musicians should explore performance opportunities in cyberspace, open to the possibility of adopting different stage personas, or alter egos, to meet diverse audience demands in virtual worlds.

Licensing

Musicians in the U.S. earn four main kinds of music licensing revenue: royalties from terrestrial radio, compulsory fees from cover songs, sync license fees (from licensing music to synchronize with audiovisual works), and royalties for digital streams of sound recordings.8  Royalties from terrestrial radio have been harder to come by since the Telecommunications Act of 1996 deregulated radio, resulting in the consolidation of ownership in the radio market and a subsequent decrease in playlist diversity.9  Nonetheless, performance rights organizations (PROs), which monitor the airtime of all songs in their registry, now harness the power of IT to improve the accuracy of their monitoring and, hence, their songwriter services.10

The information revolution has improved songwriters’ chances of being covered insofar as it increases their ability to share their songs with potential cover artists.  Songwriters’ sync license opportunities, however, have increased dramatically in the digital age, as the volume of entertainment content has ballooned―from cable TV, to web-based shows, to video games.11 Music libraries have popped up in the digital marketplace to connect songwriters with content buyers.12  While these warehouses of digital tracks have been criticized for diluting both the quality of the licensing market and how lucrative it is,13 they meet a demand for quick deals on short notice, created by the incessant turnover of new media.

Lastly, the digital age has ushered in a new, statutorily-created form of licensing revenue―digital sound recording streams.14  Sound-Exchange is the PRO that collects royalties from satellite radio (e.g. SIRIUS XM), internet radio (e.g. Pandora), cable TV music channels, and other digital platforms on behalf of sound recording owners.  In 2013, SoundExchange allocated a record $590 million in royalties, a 28% increase from 2012 (the former record year).15

Lesson 5 – Register Your Songs with PROs and Do Business with Music Libraries That Offer Non-Exclusive Licensing Opportunities.  The lesson here is straightforward.  DIY musicians must register with ASCAP (The American Society of Composers, Authors, and Publishers) or BMI (Broadcast Music, Inc.) in order to collect broadcast royalties.16  Moreover, after signing up with a digital aggregator, per Lesson 2 (see MBJ, Aug. 2014), a musician’s music will be available to stream on many digital platforms.  Meaning, musicians should also register their songs with SoundExchange.  As for doing business with music libraries that offer non-exclusive licensing opportunities, the logic is: what’s the harm in it?  At worst, the musician earns nothing. At best, the musician earns revenue, without sacrificing the potential to earn more revenue.  The concern about “selling out” is passé.17  Musicians should pursue every reasonable licensing opportunity available, unless it precludes other licensing opportunities or truly diminishes their creative control over their works.  Of course, if DIY-ers are concerned about being credited for music obtained through non-exclusive licenses, or have any other legitimate concerns, they should diligently research the business practices of any music library they are thinking of transacting with.18

* * *

Prior to rise of the internet and digital technologies, barriers to enter the music market were daunting.  In fact, these barriers still exist in the traditional music industry.19  However, the web and web-based technologies present exciting opportunities for DIY musicians.  Low production costs make it easier for songwriters and performers to maintain creative control of their works.  New communication platforms allow them to reach potential fans and business partners.  Digital music marketplaces make room for even the most obscure recording artists.

Songwriting and performing music are still super competitive occupations, fraught with daunting uncertainty; but today looks like a better day than ever before to make a dent in the music universe (at the risk of being too cloy in cloning a famous digital age mantra).  The DIY musician should view their venture as an entrepreneurial one, because it will involve a lot of experimentation and risk.  But with no need to relinquish creative control over songs, recordings, or branding, at least their destiny is self-guided.20  “The new does not have to be scary and it’s a lot less risky than it ever was.”21  The five lessons described in this series, three of which were printed in August 2014, serve as a reasonable starting point for the DIY musician who is thinking strategically about how to optimize their chance of survival in the jungle of the digital music age (lessons I-III were printed in Aug. 2014)

Nick Fuller is a graduate of Northwestern University School of Law and a musician that has worked in the performing, licensing, and booking end of the business.


1. See SonicBids, sonicbids.com (musicians sign up for the service and fill out electronic press kits, that include all the information an event organizer needs to assess whether to book the act or not).
2. Antony Bruno, “Online video sites embrace live concert streams,” Reuters (Jun. 11, 2010), reuters.com/article/2010/06/12/industry-us-internet-idUSTRE65B0D520100612.
3. See Zac Cataldo, “Make Money  & Fans in Second Life,” PerformerMag.com (Apr. 4, 2013), performermag.com/2013/04/04/make-money-fans-in-second-life; John D. Sutter, “Artists visit virtual Second Life for real-world cash,” CNN.com (Apr. 7, 2009), cnn.com/2009/TECH/04/07/second.life.singer.
4. See “Face Tech Demos: Next Generation Graphics Show Off Unsettlingly Real Faces” Huffington Post UK (Mar. 28, 2013), huffingtonpost.co.uk/2013/03/28/face-tech-demos-next-generation-graphics_n_2971292.
5. In a recent survey of musician revenue streams, 58% of respondents said they play live to earn money.  Meanwhile, 28% of total revenue of the group surveyed was attributed to live shows, yet live shows were just 1 of 42 identified revenue streams identified by the survey. This means performing live is a significant driver of music-related income for those musicians who choose to perform. Kristin Thompson, “Mythbusting: Data Driven Answers to Four Common Assumptions About How Musicians Make Money,” Future of Music Coalition (Dec. 7, 2012), money.futureofmusic.org/mythbusting/3.
6. See, e.g. Jacob Ganz, “A Nerdier Guide To 2012 Summer Music Festivals Than You Require,” NPR The Record (Jun. 2, 2012), npr.org/blogs/therecord/2012/05/29/153913924/a-nerdier-guide-to-2012-summer-music-festivals-than-you-require (describing common radius clauses included in contracts musicians sign to play at music festivals).
7. Andersen, supra note 18 (claiming we are in many ways past the “tyranny of physical space).
8. Terrestrial royalty fees are bargained for by PROs, compulsory fees for cover songs are guaranteed by 17 USC § 115(a)(1), sync fees are bargained for under 17 USC § 106(2), and royalties for digital streams of sound recordings are guaranteed by 17 USC § 106(6).
9. See Peter DiCola, “False Premises, False Promises: A Quantitative History of Ownership Consolidation in the Radio Industry,” Future of Music Coalition (Dec. 13, 2006), futureofmusic.org/article/research/false-premises-false-promises.
10. See e.g. “The ASCAP Advantage,” ASCAP.com, ascap.com/about/ascapadvantage.aspx, claiming ASCAP, has developed technological innovations, like digital fingerprinting, which enhance performance identification.
11. See Leo Mirani, “America is watching more TV than ever before―just not on TV,” Yahoo! Finance (Apr. 2, 2013), finance.yahoo.com/news/america-watching-more-tv-ever-131518615; Kiyoshi Takenaka, “Growth ahead for more diversified game industry,” Reuters UK (Jul. 18, 2008), uk.reuters.com/article/2008/07/18/ businesspro-videogames-growth-dc-idUKN1736434220080718But see, David Weiss, “Peter Fish: A Top Composer’s Transition to Content Producer,” Sonicscoop, Apr. 29, 2012, sonicscoop.com/tag/ sync-licensing, an interview with a traditional TV soundtrack composer who is feeling squeezed by the influx of songwriters into his market.
12. See, inter alia, Audiosocket, audiosocket.com; Taxi, taxi.com; Music Dealers, musicdealers.com.
13. See Weiss, supra note 116.
14. See 17 USC §§ 112 & 114, additions to Title 17 resulting from the 1995 Digital Millenium Copyright Act.
15. “Music Industry Leader SoundExchange Celebrates Year of Milestones with 2013 Distributions Reaching $590 Million” (press release) (Feb. 4, 2014), soundexchange.com/pr/music-industry-leader-soundexchange-celebrates-year-of-milestones-with-2013-total-distributions-reaching-590-million.
16. Or SESAC, however, songwriters must be invited to join SESAC.
17. See Josh Sanburn, “Advertising Killed the Radio Star: How Pop Music and TV Ads Became Inseparable,” Time Business & Money (Feb. 3, 2012), business.time.com/2012/02/03/advertising-killed-the-radio-star-how-pop-music-and-tv-ads-became-inseparable.
18. See David Philips, “Red Bull DIDN’T Steal My Music: More Important Lessons for Indie Artists,” MusicThinkTank.com (Apr. 25, 2013) (discussing how songs can be part of blanket license deals between music libraries and creative directors, which don’t include any requirement on the part of creative directors to accredit songwriters or performers).
19. See e.g. “Contact,” BMG.com, bmg.com/category/contact, which states “Please Note: BMG Rights Management does not accept unsolicited materials. We only accept materials recommended to us by established music industry professionals such as agents, managers, lawyers and artists;” and “FAQ,” WMG.com, wmg.com/faq#box3, which states “Demos should only be submitted to Warner Music Group’s record labels (e.g., Atlantic, Elektra, Warner Bros.) for consideration, not directly to Warner Music Group. However, please note that Warner Music Group’s record labels do not accept unsolicited materials. This means that your demo must be recommended to our labels by an established industry professional (manager, agent, lawyer, journalists, one of our artists, etc.). Industry professionals that understand the creative goals of our record labels are best suited to make these recommendations. We strongly suggest you seek out the assistance of one of these individuals.” 20. “[C]reative control is number one for Ryan and I. It’s a no brainer.”  Macklemore quoted, Hardwick, supra note 33, at 00:16:45.
21. Benji Rogers, CEO, Pledge Music, quoted in “30 Pieces of Advice from Music Industry Entrepreneurs,” VentureHarbour.com, ventureharbour.com/30-pieces-of-advice.
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Comments

  1. mxmaker says:

    I disagree with your take on non-exclusive sync licensing deals. Yes there are many music libraries now that will represent artists’ tracks, but those deals are often not very good in favor of the artists, and whether they have to give up ownership or not (even if temporarily), they almost always have to give up control of their music. In most cases, especially non-exclusive libraries, once it’s in a library, the library can do whatever they want with the track and price it however they want.

    Furthermore, with non-exclusive libraries, many take some or all the publishing and therefore re-name tracks and it can create situations where the same tracks are pitched to a project from different libraries under different names, and music supervisors HATE that. It can also cause legal issues if a track is licensed by one library that is also available at another and I’ve seen law-suits about who should have issued the license, with the artist getting stuck in the middle having to spend more money on legal representation to protect him/herself than the license was worth.

    Finally, with more and more digital fingerprinting technology to recognize how ASCAP/BMI/SESAC pay performance royalties, you get a problem where they recognize audio as being multiple tracks that are all the same piece of music registered under different names from different libraries and it’s not always clear who should get paid the royalties. So I’m very weary of placing tracks in libraries that do non-exclusive representation.

    There are few good libraries and catalogs that offer FAIR deals that don’t force the artist to give up actual control of their content and they all require exclusive representation, which is smart. Those are the ones worth considering. There are far too many that are simply not worth it.

  2. thank you for sharing your knowledge and insights in the music industry

  3. Nick Fuller says:

    Mxmaker, you raise great, worthwhile points, and I regret not getting deeper into this discussion in the article. The issue of digital fingerprinting is a big one, and it seems there is not yet a consensus between record labels, PROs, and the music-tech community about how best to accomplish a 1 tag per 1 recording system. This is hugely important, and should be achievable given the tech behind companies like Shazam and SoundHound.

    As to your main critique of the non-exclusive licensing arena – I agree with your skepticism and warnings. I tried to imply the importance of such evaluations with the line that musicians should, “diligently research the business practices of any music library they are thinking of transacting with.” But I see how this leaves much clarification and guidance to be desired. I regret not specifically mentioning that any contract with a music licensing company should be term-limited as well. The agreement should not outlast 2 years (an arbitrary length of time that seems reasonable to me; readers, judge for yourselves). As for licensing firms taking writer’s share royalties, I hadn’t heard of that problem, admittedly because I did not dive deep enough into this topic. I know there are some licensing companies that do not dig into that revenue source, and I would encourage business only with those. And I urge readers to use your comment as supplementary guidance on this topic.

    Lastly, I wrote this with a specific type of musician in mind – the type that writes, records, and releases their own original music. For this type of “DIY-er” just starting out with limited connections – despite your comment – I still feel it is an advantage to sign up with a single trustworthy music library using a non-exclusive (term-limited) deal. Why? They have more connections than you. It takes time to learn how to shop your songs around. While you’re climbing that learning curve I don’t see the trouble with letting someone else shop ’em for you. Again, this really depends on how trustworthy they are. I would balk at a company that automatically accepts all sent-in material. But others are more scrupulous and discriminating. If you can get in with one of those, let them work for you. The advantage of it being non-exclusive, is it leaves you an out for if you have the luck of landing a licensing spot on your own. That’s how I think of it.

    Who fits my criteria of a licensing company I’d be willing to deal with? Audiosocket out of Seattle – a company I worked for part-time for a couple years.

    Again, though, readers – read Mxmaker’s comment as a valuable supplement to this article.

  4. Dave McClanahan says:

    Thanks for a great article and great comments. Being specific with recommendations really helps people like myself new to this aspect of creating music.
    Mxmaker, do you have a recommendation for an “exclusive” license company?

  5. Dave McClanahan says:

    Also, any thoughts on aggregators? Thoughts on catapult?

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