The State of The Music Industry & the Delegitimization of Artists: Pt. 2

- a Six Part Series 

by Jeff Price


Part II: The Impact of DMCA Streams and Why They Should Be Considered

Read Past Chapters
Part I: Music Purchases and Net Revenue For Artists Are Up, Gross Revenue for Labels is Down

Upcoming chapters:
Part III: How a Skewed Perspective Delegitimizes Artists
Part IV: The Growth Phase is Over? Improved Label Margins.
Part V: When Good Laws Turn Bad
Part VI: The Hills are Alive…..


Part II: : The Impact of DMCA Streams and why they need to be considered

Keep in mind, up to this point, we are really just talking about paid downloads and/or physical CD sales.  Now let’s add in DMCA compliant streams (understand the Digital Millennium Copyright Act [DMCA]) that generate money for the copyright holder, the individual or group who owns the rights to the recording and the featured artist, or individual or band who recorded the track. This means every single song you listen to that is DMCA compliant via: satellite radio, your cable company, your smart phone and/or computer generates a new source of revenue for artists from a “traditional” use of music. 

How relevant is this revenue in this conversation?  Well, it may not be a talking point for most, but the RIAA sure does think it’s significant. 

In 2004, Digital Performance Royalties – defined by the RIAA as DMCA royalty payments – generated $6.4 million in new revenue for the labels and became a line item in the RIAA’s Year End Shipment Statistics (mind you, this is only the label share).  In 2005, it increased to $27.4 million in revenue.  In 2006, it increased to $31.5 million. In 2007, it increased to $47 million. In 2008, it increased to $81.8 million.  In 2009, it increased to $155.5 million.

(You can view the RIAA’s 1998 – 2008 Year End Shipment Statistics here and its 2009 Year End Shipment Statistics here)

Talk about a growth spurt! From 2004 to 2009 new revenue generated from DMCA compliant streams of music increased from $6.4 million to $155.5 million.

SoundExchange, the entity authorized by the U.S. government to collect and distribute these royalties, stated that between 2002 and 2008 they collected over half a billion dollars.

My point continues to be this, in today’s world, it is wrong to reduce success, validation and the legitimization of an artist to how many SoundScan tracked “albums” they sold (physical or digital).  This ignores all other indicators of fame, revenue, monetization and legitimization while potentially shutting off future opportunities for the artist.

 Part III of this series will discuss: How a Skewed Perspective Delegitimizes Artists

  • http://kelleemaize.com Kellee Maize

    Agreed … It’s all about getting yourself out there (which is easier now more than ever) and then figuring out a way to monetize your exposure. It’s simple business … and while 99% of artists are complaining, 1% are taking advanatage of it.
    For example, my videos on youtube only get around 50,000 – 100,000 views (for now) but I’m now able to get at least 20K in sponsorship for my video … which not only covers the cost of production but leaves a lot of room on the table to live and reinvest back into my music (production, artwork, other videos, marketing).

  • http://www.deltawavemusic.com Trino

    how does it work??? please explain, I’m new to this, and don’t know where I’m standing :S How can an artist get sponsorships for videos, etc.etc.?? please help!

  • http://www.josemascaro.com Jose M

    Best way to do it nowadays is just to promote it all yourself and with help from others, thanks to Tunecore Artist can now have a big name backing them up on their sales. people dont just wanna hear music if its not available to them. everyones thinks that u need to b sponsored to be someone. Just make a good name for yourself and get it out there. just be unique!

  • Vincent

    That’s not all. We want all of the internet groups to pay also. We need accountability for all of our sales on the internet. We will have to go to the Credit Card Companies to make sure the download sales of music, add up to the Credit Card Company registered purchases of the internets downloaded sales. Buck that against the internets sales report of music sales and find out where the money really went.
    Example: Your music sales report shows you as selling 100 copies of your latest song:
    Blaming Tidy bowl, but the Credit Card Company says you sold 1,000,000 copies for Blaming Tidy bowl. Better get a Lawyer ?
    Good luck Musicians, you have your work cut out for you…
    NOTE FROM JEFF:
    Another odd comment on the blog. I am tempted to take this posting down, but will give it the benefit of the doubt of being an honest thought as opposed to something with an ulterior motive.
    Your music sales report says you sold 100 copies of a song, but the credit card company says you sold 1,000,000 copies?
    Where exactly are you getting this credit card information from? The songs were bought at iTunes – an entity owned by Apple. Vincent, are you stating the you got Apple’s credit card processing company to send you Apple’s credit card processing statement?
    In addition, a publicly traded company like Apple/Amazon etc. have independent financial audits down to them by companies like KPMG. These companies are hired to come in to check financial records to assure that Apples sales reports match the credit card sales etc. Publicly traded companies (and others) get these third party independent audits done to assure that things are in order.
    If any company was doing what Vincent was suggesting, they would soon be out of business and shut down. Don’t think for a second that the major labels are not making certain the systems that track their sales are accurate – and these same systems are used for all artists sales
    Seriously, what a strange comment.

  • EM

    We need direct spreadsheets from digital retailers that can be confirmed are true in a court of law- with physical copies one can track this kind of thing easier. With digital it’s impossible. No one ever brings this up.
    -EM

  • fakeye kolawole aka d j skarf o g

    OK I got 3 albums on the .wav format tunecore asked for. I also got their album art. Good. Now I got the money but the online payment makes me trip. Should I leave my debit card info. on the internet ‘cos that a’int safe! How do I pay for distribution?

  • http://www.reverbnation.com/pinkituscaderro Pinki Tuscaderro

    I agree with -EM, tracking standards need to be implemented to ensure accountability in web royalties management, but this is a minor detail compared to the artist opportunities that have evolved over the last decade.
    Gone are the days of looking for a record label to sign with, playing for bar tabs and shamelessly schmoozing with talentless industry insider elitists just to get a little exposure on the local radio station and maybe a gig. It is time to say so long to industry fascism and hello to creative possibility.
    Before the internet and digital audio recording, my musical endeavors were slim pickings, requiring too much work and not enough play. Today, I write, record, produce, promote, and distribute (with tunecore’s help) my music on my own record label and all without ever having to leave the house. It is a new era for music, technology and the independent artist.

  • http://www.pauldalymusic.com Paul Daly

    I’m still learning to promote on youtube & net , thanks for the input !

  • http://www.tunecore.com Peter Wells

    Hey Fakeye, don’t sweat it, we don’t hold on to your card for payments or anything like that. When money comes in and you want it, just click the Withdraw button and it’ll ask you if you want it sent to your U.S. bank account, to your PayPal account or a paper check. Whatever you put down won’t be stored, so it’ll ask again the following month.
    It’s all 100% safe and secure!
    –Peter
    peter@tunecore.com

  • Tony D

    Okay, I’m confused! We are supposed to PAY artist for playing their music on Internet Radio. Isn’t the radio industries largest purpose to promote music. Wasn’t there a day you would be happy if a radio station played your track. You would beg them to play your track. I mean seriously, I run a weekly world wide internet radio show and if any artist actually asked to be paid for playing his/her track, the track would be removed from the servers and never played again. And to the artist?? well there goes all that free promotional play of your track. Seriously, if artist are to be paid when their track is being played on internet radio, why is Tunecore sending me emails asking me to PAY them some ridiculous price to get my track played on internet radio. Is this not the most oxymoronic thing ever?

  • Vincent

    Jeff,
    What are you upset about. It’s not you that has to prove that your an honest business, it us that must prove that. It’s simple. You do have to go out of Business if you worry about that. That’s what it’s all about. Keeping you honest with proof of sales from a non-bias source.(the credit card companies). We don’t need you to tell us that. Your the one that has to pay, off-course if the musician proves that. Don’t take it personel but we the musicians are not stupid…..It is not a Crime to not trust any of you…
    Of the Musician, By The Musician, and For the Musician.

  • http://www.janeanebernstein.com Janeane Bernstein

    Hello!
    I am a host of a radio show here in Orange County, CA called OC Talk Radio and I just read about Tune Core in today’s LA Times and I would like to schedule a radio interview with Jeff to talk about Tune Core. My audience and subject matter deals alot in music and Tune Core would be a great topic to cover on a show in November.
    Please let me know how to make this happen. I can be reached at janeane@janeanebernstein.com and 949-929-9449.
    Thank you, Janeane
    DJ/Host of MRTH Show

  • http://www.youtube.com/anjelicasbaby Anjelicas Baby

    Well Enron comes to mind and the banking collapses when noting the clockwork, perfect notion of public companies or accountants being in some way above any kind of dilliberat or incompitant mistakes. I’m not suggesting that Apple or anyone else is fiddling the books so to speak.
    However, history tells us quite clearly that institutions set up to protect the public in this case musicians are littered with corpses of people who did not get a fair deal. One has to be a bit naive not to recognise this in my view. External orditing is not some new notion to meet the needs of the internet age. We are all aware that before the internet musicians still got their just dues held back from them. Creative accounting and all that LOL.

  • http://youtube.com/user/FunkyStixVideos Enock

    First of all no artist should be paying an internet site to play their music and yes artists are supposed to get paid for their music getting plays because the music is getting used. Now if an internet site that plays music don’t want to pay the artists then don’t play music because when a radio station or any other company or individual wants to broadcast and play music you need to be licensed through BMI or ASCAP to play the music and let the artist choose to be paid or not but absolutely not charged for it. Get a music business education before starting up a business so that the business that’s created don’t cause a conflict of interest in the music industry.

  • http://cdbaby.com/cd/alantmackey http://cdbaby.com/cd/alantmackey

    I told myself, self I said..I’m not going to pay to play my stuff.
    Guess what , no plays.
    Maybe it really is bad music.
    I’ve lost perspective.
    It’s waiting for voice tracts in all languages. What do you think?
    http://cdbaby.com/cd/alantmackey

  • http://mymusiccircle.com/ music industry

    i am very well interested in music industry, i want to be professional in this field, thanks for the blog

  • http://www.creditcardrays.com Nancy

    This is very niche and excellent content love to see more post like this..keep posting. Thanks for information ..bravo…