By Jeff Price & Peter Wells
Adding a Distribution Point for TuneCore Artists
TuneCore delivers music to iTunes, AmazonMP3, Amazon-on-Demand, Rhapsody, MOG, eMusic, Napster, Spotify and others. It allows TuneCore Artists to pick and choose which stores or distribution points they would like their music to be distributed to. Here’s a look inside the process of adding a new distribution point.
Closing the Deal
Once we’ve found a potential partner, we get to work on the deal. The challenge here is to get the best possible deal for our artists. What percentage does the store keep? How does the store or distribution point make money and what are they going to pay TuneCore Artists? What is their business model, will they be in business a year from now, do they pay on time, are they legitimate, do people shop or listen to music there, can they guarantee a “live” time, how do we notify them to make changes to existing TuneCore Artist releases on their site or service etc?
Contracts get sent to our lawyers and our executive team, and we go over them with a fine-toothed comb. Of most importance is to assure that TuneCore Artists not only get their money, but the rates they get paid are the best possible. Our “redlines” (suggested changes) go back to the stores’ lawyers and executives, who accept or reject redlines and add their own, send it back, and so on. In some cases it can take months to hammer out the right deal.
Once we close the deal, it’s time to get to work. There are three main parts: Front End Changes, Delivering the Content, and Tooling the Accounting System.
Front End Changes
First, we have to prepare the changes to our “front end,” the part of our site that keeps TuneCore Artists informed and offers choice of stores and distribution points. We must build the changes to the website to accommodate both new TuneCore Artists and existing TuneCore Artists.
Each TuneCore Artist fits one of the three “cases” below. Each has a different experience at TuneCore.com. We must build for each of these situations:
-New artist to TuneCore
-Returning artist with a new release
-Returning artist adding the new store to an existing release
In all three cases, we must clearly and simply communicate everything about the new store while providing an “opt-in” button.
It sells music by:
It pays the artist by:
-Revenue share, either by advertising or subscription sharing
We also need to inform artists at the “point of choice” (when they click on the button to choose the store) of any extra or crucial information. Examples include: Does this store require world-wide rights? Do they pay quarterly or monthly? Are there are restrictions on how the music can be used? Then we update our pages and FAQs to reflect the new store, adding it to all the appropriate sections.
We train the TuneCore Artist Support staff so they can properly advise and support artists by email, Twitter and phone, from the day the new store goes live.
Delivering the Content
It takes one team of engineers to design around all those factors and another team to design a content delivery mechanism. Every store requires the music and the accompanying information, such as album title, artist name, and so on (called the “metadata”) and the artwork, in a unique way. It’s different for each store, but all share some common steps:
-The music file is converted for delivery: We take all kinds of music files (.mp3, .wav, and so on), and all of them have to be converted to that store’s requirements, and without any loss of quality. We do it by generating a virtual server: a computer like any desktop machine, except it exists only for a few moments, just long enough to do the work of conversion, and then it vanishes.
-The artwork is converted: We identify the artwork associated with the release and check that is it is the right size. If it isn’t, we change it to bring the artwork up to the proper size and ensure the files are clean.
-The music is married to the artwork and the metadata: The new file is joined to the adjusted artwork and to the information you typed in and made into a package.
-The package is delivered to the Amazon S3 cloud: This is a vast, amorphous computer environment in which you can both store information (even programs and virtual computers) and move it to other parts of the Internet connected to the cloud.
-The package is delivered to the store: Our engineers, working with the engineers of the new store, will have built a method of handing off the package to the store so it can be ingested, processed and placed on that store’s shelves properly.
-Other Stuff: Most stores or distribution points have something unique about them that we must custom build for. For example, with MySpace Music, an artist’s music must be joined to their MySpace ID. We built an auto-search function that allows us to scour MySpace for this ID so you don’t have to. In other cases, something like Ping gets launched, and we have to provide additional information or points of contact to get them live.
This is the first half of the build, next up there is the “handshake” between TuneCore and the store as well as quality control checks that have to pass, both automatic and manual. We send test files to the distribution points, coming up with as many variations as we can dream up to try to break the system. Once there are no errors, and the distribution point is live, our team processes reports daily, making sure all content made it to the stores correctly. We have to make sure when the music, art and release information shows as “delivered” that it truly is. For example, in some cases a release shows it was delivered to the store but it actually was not, this is called a “false positive,” and requires tracking down where the error happened. If it shows “not delivered” but actually was we call it a “false negative” and have to figure out why.
We have to build for the entire life of the release. That means having a process in place for any changes to song titles, artwork and pricing, as well as an automated process ready if a third party comes along to challenge that a TuneCore Artist has rights to his or her music. And we have to have a process in place in case the store gets into its own problems and has to close or restructure.
When stores receive the releases, they aren’t obligated to put everything anyone sends them up, willy-nilly. They’re selective, and they have a right to exercise caution. All stores have their own controls in place, and it’s up to TuneCore to conform to those standards, as well as our own. If we send them a release that’s not up to snuff, it can cause considerable delays, or worse, make the store distrustful of the music sent to them. This causes slower live times. For instance, releases that go to digital stores require that every artist be listed on its own “metadata” line, even if they’re just featured on one track of an album. If we send a release to a digital distribution point with two or more artists crammed into one field, they’ll reject it, causing delays and making them worry our data isn’t “clean.”
Once we’ve built the “plumbing” for the new store, we make sure that before the release goes to the new distribution point, every release goes through a group of people that work at TuneCore who review the content. Here they check:
-Artist name – Is it already trademarked by another TuneCore Artist or band?
-Album name – Are there editorial comments or descriptions in the album name? If there are, the distribution points will reject them.
-Artwork – Does the release’s cover art have other companies’ trademarked images on them that would stop the distribution point from getting the music live?
-Song names – Are there URLs or email addresses in the song titles that would stop the distribution point from getting the music live?
-Copyright Infringement check – We check to see if someone is trying to infringe on the copyright of a song or recording from an existing TuneCore Artist.
This team: protects copyright holders, artists and musicians, and ensures that the stores can accept TuneCore Artist’s music in the right format to help get them live as quickly as possible. It also helps us make sure no one is trying to steal your music or songs. This makes the deliveries to the stores “clean,” causing TuneCore Artist’s music to be highly trusted, freeing it up for much faster processing.
Tooling the Accounting System
There’s front end and back end work to be done here. Much depends on the complexity of the store. Each of these factors impacts how we can accept their accounting statements and what other information we must communicate with TuneCore Artists. Does the distribution point offer insight into sales information before the accounting period? If they do, how frequently? Do they pay monthly or quarterly? How do they pay, by check (yes, some mail checks) or via direct deposit? What currency do they pay in? If they’re outside the U.S., are there sub-stores for individual countries, and does each store pay in the native currency (for example, Euros, Pounds, Yen, Canadian dollars and so on)? If not, who converts it all to U.S. dollars and at what rate and on what day? For example, the payment could be sent to us in Yen, and then our bank converts it to dollars OR they could do the conversion from Yen to Dollars themselves. Are there any witholdings from international trade agreements and tariffs and if so, how do we communicate this with TuneCore Artists (for example, Australia has a 5% tariff it imposes)? Does the store sell as streams or downloads or both and how then do we display this information within TuneCore? Does the money come from a fixed flat rate, or does it vary? If it varies, by what factor: a share of subscription revenue, a share of ad revenue? What formula does the store employ and how do we show this to TuneCore Artists?
The store’s method of how they send us their report plays a big part as well. Usually, they send us a massive spreadsheet or an XML document, sometimes an entire database, and we have to code our systems to parse it. On other occasions we download files from secure websites. On still other occasions, we get the accounting from the store, they then ask us to invoice them and then they mail a check.
Whatever the means, our systems must convert that data into one solid format that we use to report to TuneCore Artists both on the screen at TuneCore.com and as downloadable files that can be opened in any spreadsheet program. We need a mechanism in place to detect when the store changes their format (they do, and often forget to tell us). We also have to make sure to check what they report against the actual money they send, ensuring the numbers all add up.
Once we have a financial process in place, there is more work to do. Our finance department jumps in with their own tools and processes to double check that everything is correct. This includes matching the payments deposited against the data the store sends as they come from different departments. They then match everything we place into TuneCore Artist accounts against the data and the deposit as a second safety check. Even when all these numbers line up, there may be an “errored” file from the store. In those cases the finance team manually investigates to assure the money makes it where it should go. To top it all off, each year, we hire an outside company to come in and audit our books.
With this background, we thought you might find it interesting to a get a week to week “real time” update of the actual conversations and issues going on at TuneCore, around adding a new distribution point allowing TuneCore Artists to get paid if their music appears in on-line streaming videos.
Week 1 – New contract signed, Prep work
A deal was recently signed allowing TuneCore Artists to be paid if their music appears in a video that is streamed on that site. Any video on that site that is identified as having a TuneCore Artist’s music in it will generate money for the TuneCore Artist from the advertising.
After signing, our product development team re-reads the deal, this time taking notes on the step-by-step details needed to launch this new distribution outlet. They take note of any unique nuances that might exist as compared to other distribution points and stores we work with. This is written up in a document that is distributed to the heads of our technology team, finance team and artist support team. We then set up a time to meet to discuss and go over the details, ask questions and make sure we’re all on the same page.
In the meantime, a Manager of Artist Support reaches out to the new distribution site to go over all of the FAQ questions, including those not covered in the agreement.
Finally, we get a sample accounting statement from them to see what new things we will have to build (if any) to automatically ingest their statements into the TuneCore accounting system.
Week 2 – The first group meeting.
I was first up in the meeting, explaining to everyone about the deal and why it was important:
– I think the future of the industry is streaming.
– In 2010 there were over 300 billion videos streamed that had music in them.
– Each time a video streams it generates three income streams (one for the ‘label,’ one for the ‘publisher’ and one for the ‘songwriter’).
– Streaming video sites allow music to be discovered.
– Fans can create videos with artist’s music in them and the artist gets paid.
– Artists can upload their own videos with their music in them and they get paid
A few people asked questions and I answered. The product team then pointed out some nuances that made this deal different than others. First, unlike in iTunes, Amazon, and other stores, music is not for sale. Instead, it generates money for TuneCore Artists when a free, ad supported video is streamed. We need to make certain we find a way to clearly communicate this to our artists.
Next, TuneCore needs the song to be over 30 seconds or it is not eligible for this program. This means that we will need to build new code that identifies songs 30 seconds and under, make certain we are not delivering them AND we have to find a way to tell our artists about this.
Further, if after six months the video is not found within the distribution partner’s site, TuneCore will have to either auto-identify and then redistribute these songs OR notify the TuneCore Artist that no matches were found and leave the decision up to the artist.
In regards to accounting, how do we want to display the information and where? For example, should it just work the way it does now for a store like iTunes?
The product team pointed out that there is a separate API that we can tie in that will allow us to get information about the views of the video. For example, it may provide the city/state/country of the person watching it. Therefore, is there an automated system we can build to get this data? If so, what will it look like and what can we build within TuneCore to display it back to the TuneCore Artist as this is not regular old sales accounting data?
Finally, for TuneCore Artists to have their songs delivered and be eligible to earn money, we must get information from TuneCore Artists that they do not usually need to provide as we need to assure all rights holders are getting paid. If we do not get this information then the songs will not be eligible for the service.
The three key pieces of information we need are:
– The person or entity that controls the right to the recording of the song. (that one we already get)
– The name of the music publishing company for the song.
– The name of the songwriter.
We all then started asking questions about the publishing and songwriter info. Questions that came up:
– What if someone does not understand what this is, how can we communicate clearly what is being asked for?
– What about cover songs, what if someone claims he or she wrote and published the song “Smells Like Teen Spirit” and what sort of legal issues will this create?
– What if multiple people wrote the song but we only have information on one of them?
– What happens to the money that is owed for the streams and digital public performances? Does that get collected by others and given back to TuneCore Artists? What role can we play to help this happen?
– How do we take a track down?
On the more practical logistics front: Where do we ask for this information while the person is on TuneCore.com? All this information is not needed to get live on stores like iTunes and Amazon, and we want to make sure we don’t stop someone from going live on the stores they want due to confusion; where do we put the request for the information?
We wrote down all the questions.
Then came some brainstorm ideas:
Can we make a section of TuneCore where our artists can pre-clear the use of their songs for anyone to use in an on-line video? (A: No, as there is no way to restrict this.)
Can we automatically make a music video for a TuneCore Artist that shows their cover art as the song plays and send that as well? (A: Cool idea! We’d love to be able to do it. What sort of technology do we need to build and how much time would it add to getting the store live?)
Then we wrapped up, with the next step to meet again in a few days with answers to as many of the questions as possible. With this completed, we should then be able to get a detailed line listing of all the work that needs to get done and nail down a date when this distribution point goes live for TuneCore Artists.
An update will be posted next week…