Average Artist Income 1 Bajillion Dollars – Cure Cancer, Bring Peace To The Middle East And End World Hunger

By Jeff Price

In the words of President Obama,  ” … if we just make stuff up and pretend that facts are not facts, we are not going to be able to solve our problems if we get distracted by side shows and carnival barkers…”

This “average income” conversation is the strangest I think I have come across in quite some time.  We are sitting in the middle of a transformation of a sector and the conversation is about a silly useless statistic around dividing Lady Gaga’s income into other people’s bottom line?

Sorry to disappoint anyone, but the truth is just not that exciting, but here it is: some artists make a lot of money from the sale of their music, others make a moderate amount and many more make very little. This is just as it has always been (and will continue to be).  I’m not certain what the point is around this average income statistic – it would be the same as stating the average amount of money for a band on a major label is Lady Gaga + Eminem + Jay-Z’s income added into all the other bands and then divided. Huh?

(On a side note, artists signed to major labels typically did not make their money off the sale of their music but via other income streams.  Artists today can make revenue off of all income streams)

May we all agree that there will be fewer superstars than non-superstars and move on to the real story?  Despite the traditional music industry releasing less music now than at any point over the past 15 years there is actually more music being distributed, bought, sold, streamed, shared, discovered and generating revenue for more artists/songwriters than at any point in history.  Is it not more important or interesting that the gatekeepers are gone and that there are hundreds of thousands of artists who, for the first time, have: access to distribution, the opportunity to be discovered and are actually making at least some money off their art?

In addition, the revenue these artists are generating–no matter how little or much–is coming in from a variety of sources, some new and some old.

No, not everyone is a mega-superstar–to suggest as much is ridiculous (the major labels have a historical 98% failure rate). Yes, there are mega-superstars, but now also a larger strata of musicians and labels who are able to generate revenue, fame and notoriety through their craft and businesses.

Some of these artists will be signed to record labels, others will do it themselves, and some will have other types of deals.

Let’s not get distracted from the true changes and issues at hand by the side shows and carnival barkers who make up silly little numbers to be sensational in an attempt to drive web traffic .

(By the way, if you add up the ad dollars from the Huffington Post, TechCrunch and  all of AOL and Google’s blogs, and divide, you will end up with the average amount of ad dollar money a blog will generate.)

Getting A Gold Record By Selling Nothing

By Jeff Price

Some time ago, we had a TuneCore Artist sell thousands of copies of his single every week.  The song and sales caught the attention of a major label, the two met and a marketing/distribution deal was struck directly between them. The single went on to break into the commercial radio charts and sold over a million copies within a year.

Recently, the label reached out to TuneCore asking for sales info on the single prior to the artist working with the label – they are trying to get an RIAA platinum sales award for the single.

There is something very wrong with this picture

Before the digital world, Gold Records (500,000 units), Platinum Records (1,000,000 units) and, for a short time, Diamond Records (10,000,000 units) were based on the number of physical units shipped, not sold. If the label/distributor could ship a certain number of copies of a release into the market, it was eligible to buy a sales award “certified” by the RIAA, a trade organization created to represent the interest of its label members. However, everything that was shipped to record stores could be returned back to the distributor for a refund.  A label could literally ship out a million CDS, sell a lot less than they shipped but still be eligible to buy a plaque. This was sort of a “who watches the watchman” situation, but it made sense as distribution was consolidated and controlled by the RIAA members.

As absurd as this may sound, this system actually worked pretty well.  Most labels did not want to spend huge amounts of money manufacturing inventory that they knew they would not sell just so they could ship it.  Nor did they want to pay additional money to force inventory onto shelves of record stores so they could get the opportunity to spend even more money to buy a RIAA certified shipment plaque to hang on the wall (although it did happen).  And finally, the majority of music being released and distributed was going through the RIAA member’s pipelines.

All that changed with the shift to digital music sales.  First, as noted at the start of this article, the RIAA no longer has a handle on what is being distributed as the majority of releases in the music stores are being placed there by entities outside of the four major music distribution companies.  With the loss of control comes the loss of knowledge and information. Next, consumers are now predominantly buying individual songs across an artist’s catalog as opposed to albums.  The concept of a gold record is sort of out the window, in its place is the gold artist.  In addition, the concept of what counts towards being eligible to get one of these awards is in doubt. Does a sale or download count if it sells for $0.05?  How about $0.10 or $0.25 or another price point?  How about a twelve song album priced at $2.99?  Does a stream count?  If not, why not?  What if the stream generated more revenue than the download?  What qualifies the consumption of music as “eligible” to be counted? Which brings us to the ridiculous situation of asking a non-qualified trade organization to verify something it is no longer qualified to verify. To be blunt, who cares if the RIAA does or does not believe you have sold a certain number of copies.  The truth is the truth whether they say it is or not.

The concern I have is the perpetuation of a myth that discredits those achieving “success” by claiming they are not eligible for a coveted award.  Let’s face it, having a gold record hanging on your wall is freakin’ cool – they look great.  But what exactly do they now represent?

And herein lies the challenge: having an entity issue these awards should mean there is either a non-partial governmental agency issuing them (not going to happen) or there is a consolidation of power and information into an institution (like the RIAA) giving them the knowledge, information and control to be qualified to issue these sorts of awards – and that’s just a bad idea.

With more music being distributed globally by non-RIAA members, hard empirical data showing what has sold or streamed (as opposed to shipped), the shift from buying/downloading albums to buying/downloading singles and the forthcoming “cloud” services, we really need a new definition of what counts, who gets to say it counts and what the awards represent.  If not, we will have a great looking bunch of eye candy on the wall that may as well just be fool’s gold.

Leveling The Playing Field: Unearthing The Hidden Traps Of The Traditional Music Business

By George Howard
(follow George on Twitter)

Introduction

In Thomas Friedman’s book The Lexus and the Olive Tree, he relates an anecdote about how prior to the fall of the Soviet Union the state-run newspapers would frequently run pictures that ostensibly showed American citizens standing in long bread lines.  They did this as a way of demonstrating that it wasn’t only communist states that had food shortages.  These images, for some period of time, assuaged the masses, as they perceived their status to be at least no worse than those of the hated Americans.  The problem with this approach was that the photos that Tass and Pravda used were not in fact people waiting in line for their rations, but rather your typical group of New Yorkers queuing up for a hot, fresh bagel on a Sunday morning.

It is said that the Internet shines a bright light on mediocrity.  The Internet also tends to make keeping things secret very hard.  This is not to say that even in a post-Wikileaks era of “transparency” that there isn’t confusion and disinformation.  Having trolled through some of the “expert” sites on the music business, for example, I feel that often they do more harm than good (they also often have a mercenary aspect them that tends to overshadow actual unbiased information).

All that said, now more than ever, artists can find out the information needed to make better choices, and the industry knows this. And the industry is frightened.  There’s a bit of an emperor has no clothes element going on; recently, a major label executive apparently justified 360 deals by stating that if artists want access to the talented executives at this company, they would have to part with the vast majority of their rights (i.e. make a 360 deal) in order to gain this access.  It’s worth nothing that this is a label that has consistently lost money and market share.

“Well, they do it, because they can”: Some Examples of Music Business Landmines

I’ve had the misfortune of having to explain some of these vagaries of the record business with the less-than-satisfying “answer” of, “Well, they do it, because they can.”  I’m hoping that the tenses begin to shift, and I can soon say, “Well, yeah, they used to do that, because they could. Glad they can’t anymore.”

The Controlled Composition Clause

One of the more frustrating “because they can” record label practices revolves around the controlled composition clause.  In a nutshell, as any reader of the TuneCore blog knows, any writer of a song is due a mechanical royalty when her song is reproduced by a label (either physically or digitally).

The royalty rate that the label is supposed to pay the writer of the song is set by statute, and currently rests at $.091 (i.e. just about a dime) per song.  Well, the vast majority of writers never receive this statutory rate from the label that mechanically reproduces their work.

The reason for this is that the writer — who almost always is also the performer signed to the label — as part of his or her record contract, signed a sort of waiver that gave the label the right to pay less than the rate established by statute; typically, 25% less.  So rather than getting $.091 the writer gets $.068 per song.  Why? Because they can.

It gets worse.

Suppose your label releases your record that has fifteen songs on it that you wrote.  As part of most controlled composition clauses, under the above hypothetical, you will only get paid a mechanical royalty on ten of those songs (occasionally, you can negotiate it up to eleven) – at the reduced rate, of course.

How do the labels get away with not paying you on the other four of five songs? Because they can.

The reality is that controlled composition clauses have become such an ingrained part of recording contracts that when most artists and their representatives are confronted with them, they begrudgingly accept them as “boilerplate.”  The real reality, of course, is that most artists don’t know what a mechanical royalty is, let alone a controlled composition, and must defer to their representatives.[1]

As artists begin to understand what rights they have when they generate copyrights (and, please, please do download the TuneCore PDF booklet on this topic ) more artists can ask the questions regarding the validity (or lack thereof) of things like the controlled composition clause.  Believe me, just because something is “boilerplate” doesn’t make it not horseshit, and doesn’t mean it has to be accepted.

Lack of Public Performance Rights for the Performer

Another “because they can” element of the music business relates to public performances.  As readers know, one of the exclusive rights that a copyright holder to a song has is the right to publicly perform that song.  Radio play is a public performance, and, thus, when a radio station desires to play a copyrighted song, they must have a deal in place with the copyright holder.

Clearinghouse agencies like ASCAP and BMI handle these negotiations, collections, and payments on behalf of their affiliated writers.

However, there is, of course, a copyright in the recording of the song too (i.e. the version of the song as reproduced on a record/mp3).  The copyright holder of this element has the same rights as the copyright holder of the song itself — including the exclusive right to publicly perform the song.

By all logic, therefore, radio stations (and others) should have to go through the same process with the copyright holder of the master as they do with the copyright holder of the song; i.e. negotiate a rate and pay them in order to publicly perform their copyrighted work.

And yet, nothing of the sort is required.

The US is in fact the only industrialized country in the world, where the copyright holder of the master does not receive a public performance royalty when their songs are publicly performed on terrestrial broadcast.

While we might not have lost a lot of sleep over this when it was largely the record labels who were losing out on this public performance revenue, in an era when many artists are acting as their own label, and at a time when every penny is needed to sustain oneself in this industry, it is truly unconscionable that broadcasters continue to not pay a public performance royalty to master holders.

You might ask, how they get away with this.  I suppose I don’t need to tell you the answer: because they can.

There is a movement afoot to end this craziness, and, if you’re so inclined you can add your support. Here is additional information: Music First Coalition

Conclusion

There are certainly other elements of the music business that continue to exist for no other reason than “because they can.”  Some are happily fading and anachronistic (packaging deductions), while others seem to be becoming further entrenched (the aforementioned 360 deals).

What gives me hope is that, increasingly, artists are their own labels.  As such, not only do they no longer have to suffer the indignities foisted upon them by labels, but, more importantly, they are in control of their own destiny.  No longer must they play by the somewhat arbitrary and capricious “rules” that no one remembers when or why they were codified in the first place, and instead can begin making deals in a strategic manner; deals in which there exists a parity of expectation and value alignment.

As these types of deals increase, we will finally see something of a renaissance in the music business; it will, of course, no longer be the music business at that point, but rather a business with music at its center.

Until this happens, and so long as artists are assigning their rights to another party, it’s imperative — and, happily, more realistic than ever — to become educated about the above (and other) landmines out there laying in wait for artists to step on.  There really are no longer any excuses for not doing so.


[1] As a note, I’ve just scratched the surface of the controlled composition clause; it’s a multi-headed hydra, and you simply must educate yourself on it in its entirety. See additional information about the controlled composition clause at Artists House.

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George Howard is the former president of Rykodisc. He currently advises numerous entertainment and non-entertainment firms and individuals. Additionally, he is the Executive Editor of Artists House Music and is a Professor and Executive in Residence in the college of Business Administration at Loyola, New Orleans. He is most easily found on Twitter at: twitter.com/gah650

Le Butcherettes On Their Creative Approach To Songwriting And The Meaning Behind Their New Album

Le Butcherettes know how to put on a live show. The “garage-punk trio” (which originally began in 2008 as a duo), fronted by Teri Gender Bender, has come from Mexico to Los Angeles, bringing with them an almost theatrical energy and obvious passion for their music. Read on to learn about the band’s unique songwriting process and how their new album Sin Sin Sin represents both musical and spiritual growth. Continue reading

Gadgets We Like: Concert Vault App From Wolfgang’s Vault

Did you also happen to miss The Monkees performing live at the Sun Theater on August 31st, 2001? Or maybe Rod Stewart and The Faces at The Anaheim Arena or October 17th, 1973? Well, thanks to a free app by Wolfgang’s Vault, we can listen to all of the live performances we missed. The Concert Vault App for the iPhone, iPod Touch, and iPad provides access to live concert recordings when you sign up for free.

Concert Vault came to be after Wolfgang’s Vault got their hands on master recordings from the archives of Bill Graham Presents in 2003, which contained live concert recordings from shows between 1965 and 1999.  Wolfgang’s Vault’s collection grew as they acquired archives of the King Biscuit Flower Hour in 2006. Soon they added to that country music, indie rock, folk, and jazz catalogs, and the list keeps growing.

The app version of Concert Vault gives you access to these vintage concert recordings dating back to the 60s without requiring that you be at your computer.  In order to find concerts you can search by artist, browse categories, check out the latest additions and most popular concerts, or tune into Wolfgang’s Vault’s radio stations.  As you’re listening you can create playlists and rate concerts, thereby building a collection of favorites.  You can also access music sessions, articles, and artwork from the Daytrotter app.

I think I better go listen to The Who live at the Filmore East in ‘68, since I missed that one because I hadn’t been born yet…

Learn more about the app from Wolfgang’s Vault

Head to the iTunes app store to download it!