Don’t Hide Your Head In The Sand

By George Howard & Jeff Price
(Follow George on Twitter)
(Follow TuneCore on Twitter)

TuneCore artists have sold over 400 million songs over the past two years, generating over $300 million in artist and songwriter revenue.

Based on this, the idea that you can’t create a sustainable career on your own terms, without the backing of a label (major or otherwise) is empirically ludicrous.  No, not everyone will be able to do it, but the point is it is possible without a traditional label.  Anyone that says otherwise is wrong.

So, what’s the hold up?  What’s the excuse?

While one can’t teach talent or motivation (you either got it or you don’t), these are not the things that we’ve seen as lacking from most artists over the twenty years or so of observing/working with musicians.

Rather, the glaring omission that we see from most musicians is a profound gap in knowledge with respect to how the business that they engage in operates.  In other words, they don’t understand how they make money off their songs and recordings.

There are probably a lot of reasons for this.  Some have societal implications, fallacies like “Creative types can’t be good business people,” while others are more political in nature: labels and others enforcing stereotypes that artists are unable to manage their own affairs, and, thus, require these peoples’ services.

For some period of time (roughly from the 1950s to the mid-to-late 1990s) the label system (and its related satellite elements: PROs, managers, agents, etc…) was divided between those who have knowledge and those who don’t.

It was the labels (et al.) who had this knowledge, and the artists who did not.  The artists are not blameless here; I’ve heard from far too many that they don’t want to understand how the business (their business) works, but would rather “just create.”  In taking this position, they lay themselves supine, and abdicate all of their power.  How in the world do you know if you are getting ripped off or cheated if you don’t know the rules!

This has to end.  If it doesn’t, the world won’t change, the artist will still get screwed.  “They” will still get your money and “you” will continue to pursue your dream in some vague shadow world of bullshit where people smile at you while they steal money out of your pockets.

If you want this to stop, get the knowledge!  Once you have the knowledge, you can spot the bullshit and scream about it.  As an artist, your voice gets heard louder than most.  The only thing stopping change is you.

So here is the hit list, the list of information you really need to make a change and/or know if someone is lying, stealing, cheating or misrepresenting things to you.

Learn what a Performance Rights Organization (PRO) is.

WHY:
Every single time your song, be it your recording or a cover version, sells, streams, is played on TV in a bar or anywhere else publicly, you are supposed to get paid. In 2009, the PROs collected over $10 Billion dollars owed to artists that wrote songs.  Did you get your share?  If not, they gave it to Warner Bros., EMI, Universal and Sony.

Learn what the bundle exclusive rights is that an artist automatically receives when he or she creates an original work, and fixes it in a tangible medium.

WHY:
Because knowing that whenever you create an original work and fix it in a tangible medium (write it down/record it), you get six exclusive rights that you, and only you, can utilize.  With this knowledge, you will be well on your way to understanding how to monetize your passion for music.

Those six rights are:

  1. right to reproduce
  2. right to distribute
  3. right to publicly perform
  4. right to display
  5. right to create derivative works
  6. right to perform the copyrighted work publicly by means of a digital audio transmission.

Each one of these copyrights has the potential to make you a LOT OF MONEY.  Here, read this, it will explain what they are.

Learn what music publishing is.

WHY:
Because as the creator of a song you get six legal copyrights.  Then you need to license these rights and/or collect the money owed to you.  You will need to hire someone to do this for you.  How the heck will you know if they are doing their job if you don’t know what they are supposed to do!

Learn what a mechanical license is.

WHY:
Because this license is what you will employ in order to make sure you get paid whenever someone wants to reproduce and distribute your song on a record or a download; this is true whether you perform the song, or if it’s being covered by another artist.

Learn what a controlled composition clause is.

WHY:
Because this clause — inserted into recording contracts, where the artist who is signed to the label also writes the songs that are on the record — can drastically cut into your income from…mechanical license fees (see above).

Learn what an “assignment” clause in a contract is.

WHY:
Because this clause allows for labels, managers, publishers, et al., to transfer ownership of the most important thing you created – a copyright – without your consent! Learn what they heck it is you are giving up before you give it up.

Learn what a royalty “point” is.

WHY:
Because that’s the language used in the industry to describe how you would get paid in return for transferring your rights.  Understand how it is actually being calculated. If it cannot be explained to you in a way you understand, walk the hell away from the deal.

Learn that there are two copyrights involved when a song is released on a CD or download.

WHY:
Because if you don’t know this, you don’t know the very basic underlying principle that drives money around every single piece of recorded music.  There are TWO copyrights for a recording: one for the person who wrote the song, and one for the entity that owns the recording of the song.

Learn how to clear a sample.

WHY:
Because if you don’t, and you use an uncleared sample, you could have your ass sued.  And if you find someone else using your music or song without getting the right from you, you can sue their ass.

Learn what a “synch” is.

WHY:
Because “synch” licenses can make you a LOT of money.  Understand what the heck you are licensing and WHY this license is needed.

Learn the difference between an interactive and non-interactive stream.

WHY:
Because the entire music industry is moving to streaming. This means people can listen to music without owning or downloading it.   The old industry paid you when the CD sold, the new industry pays you when the song is listened to.  You need to understand what the two different types of streams are in order to understand how much money is owed to you, where to get it and/or what rights must be granted to allow someone else to stream your song and recording of that song.

Learn the difference between copyright and a trademark.

WHY:
Because if you don’t you might be forced to change your band name after making 12 dozen t-shirts.

Learn what an intra-band agreement is (if you’re in a band).

WHY:
So you don’t kill each other or break up when you become successful

Learn what an LLC is.

WHY:
Because not doing so can set you (and your family) up for tremendous liability should something go wrong/you get sued, etc…

Learn what Harry Fox does.

WHY:
So you can stop laughing at their name and understand how they fit into this ridiculous world.

LEARN what SoundExchange does.

WHY:
So you can get money owed to you that’s just sitting there…really.  It’s just sitting there waiting for you to show up and get it. (go to Soundexchange.com and register.  It’s free. They pay you money).

It’s not just the artists who have to step up their games.  It’s completely ludicrous and absurd that the PROs are not more forthcoming and clear with respect to how they calculate payments.  We are rapidly approaching a time where streaming will represent more income to artists than will sales of downloads.  This means that public performance royalties will likely be the most material income that most artists have, and yet, how this income is calculated…income for the use of your exclusive song…is a dark science?  This has to end!

Similarly, the byzantine rate structure surrounding different uses (dominantly streaming) has to be made clearer and more visible by the copyright board.  It’s not fair for us to call out artists with respect to their lack of knowledge, when it’s virtually impossible to find out even the most basic rates that will be paid out to them when their music is used! Not to mention it’s time for congress and the copyright board to wake the hell up and start realizing the old music industry is dead and the new one needs different laws that protect artists, not just legacy labels and publishers.

Record labels, too (in whatever incarnation they continue to exist) can no longer write contracts in Latin or try to hide their deal terms in such dense and hard-to-understand language that one must hire someone else to translate it.  In an era where digital transactions essentially eliminate returns and packaging, we’re rapidly moving to a transaction that does not require clause after clause of language to account for things that are no longer relevant.   Do digital streams or downloads really need a packaging deduction?

Further, until they can line up a few people from the labels, and have them explain – in plain English – why there is a controlled composition clause in their agreements, get them the FUCK out of the agreements. While there may have been a time that there was some miniscule justification for these clauses, in an era of efficiencies due to technological innovation, they just don’t hold up any longer.

While they’re explaining things, please explain why movie theaters are exempt from paying public performance fees in the U.S., and why the U.S. (along with Syria and Iraq) continue to not pay public performance royalties to featured performers when their songs are broadcast on terrestrial radio.

OK,  we’re ranting.  And we have to guess that at least half of the readers don’t understand what we’re ranting about.  That’s the point.  These things, controlled composition, public performances from movie theaters, featured performers getting paid from AM/FM radio, etc… generate hundreds of millions of dollars.  People buy mansions off this money, send their kids to college from this, or just become incredibly wealthy, and most artists have not a clue what we’re talking about.  You can’t complain if you don’t know what you are complaining about.  And you can’t change things if you don’t have the knowledge about how it’s supposed to work.  “Sorry son, you’re not supposed to make any money when your music sells, that’s just the way it works” should no longer be acceptable.

Look, we’re at an inflection point.  The “old” business doesn’t work.  Really.  It doesn’t.  Remember what we said about going from downloads to streams?  This means that labels who were accustomed to making $11 each time a CD sold for $17.98 had to become accustomed to netting out at something like $7/album or $0.70/single.  And now they have to adjust again as they will soon be looking at $.000003 per stream. THEIR SYSTEM WILL NOT WORK.  So, we have an opportunity here to begin again, and put our heads together, and start a new system up (RIP R.E.M.).

This time we can do it in a manner where all parties involved are clear on the relationships (risks and benefits).  TRANSPARENCY in information and in money is the answer. This transparency and clarity will eliminate the ethical problems that have plagued this business we love since it began.  No more bitching about getting screwed, now you know what to expect.  In so doing, we level the playing field.  At that point, we don’t have the moral hazard of artists taking undue risks because they think the label will bail them out, and its reciprocal action of labels taking advantage of artists because they don’t trust the artists.

As Edith Wharton said of Baltimore, “there’s no there there” when it comes to the record business any more.  However, as with nature, business abhors a vacuum.  It’s up to us as to how we elect to fill the hole.  We vote for filling it with knowledgeable, empowered artists who are able to sustain their artistic careers on their own terms. You’ve got willing partners in entities like TuneCore, we just need you to know your rights and then use us as your megaphone to force the change.  All of you are a hell of a lot bigger than “them.”


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 an Associate Professor of Music Business/Management at Berklee.  He is most easily found on Twitter at: twitter.com/gah650

TuneCore Artists Featured In Digital Stores – September 2011

Steve Moakler – iTunes U.S. Singer/Songwriter Page 9/6

Kal Lavelle – iTunes U.S. Single Of The Week iTunes UK 9/13

Ten Out of Tenn – iTunes U.S. Singer/Songwriter Page 9/13

Wisdom, Transcendent Man – iTunes U.S. Documentary Page 9/20

Ben Rector – iTunes U.S. Singer/Songwriter Page 9/20

Celebrating Hispanic Heritage Month (featuring Francisca Valenzuela & Intocable) – iTunes Latino Page 9/20

9th Wonder – iTunes U.S. Music Homepage 9/27

The Boxer Rebellion – iTunes U.S. Alternative Page 9/27

Victor Wooten – iTunes Australia Jazz Page 9/27

For the full roundup of TuneCore Artists featured in September, check out our slideshow below…

(To view larger images, click on them and head to our Flickr page.)

Gadgets We Like: Groovebug, The iPad Music Magazine + Search Engine

Groovebug takes music discovery to a new level.  This iPad app brings together a media magazine with a music discovery engine, at no cost to the music fan.

This app works well for anyone who likes to stay on top of the latest news and music from their favorite artists.  Groovebug takes care of the legwork of the exploration.  It scans your music library to identify your favorite artists, and then gathers artwork, bios, videos, downloads, news from music blogs, and recommended artists.  What results is a magazine to swipe through, with page after page of music, information, and suggestions of similar artists, all in one place.

If you’re someone who puts on a song, and then opens 4 or 5 tabs on your computer to read up on the artist, find his or her videos, or check out more music to download, this app will make your life a little more organized. It does the work for you, so you’re left to scroll through the info on your favorite artists and maybe even find a few new bands to check out.

Download Groovebug from the iTunes App Store

Learn More

PaperDoll On Developing A Fan Base In China

Manhattan-based band, PaperDoll,  is about to go on a major tour in China, and it’s not their first.  In fact, this is the band’s 3rd major tour in China. Fronted by Teresa Lee on vocals, with Patrick Moloney (guitar), Steve Paelet (bass), and Will Haywood Smith (drums), PaperDoll uses different marketing tools for effective fan outreach no matter the continent. Read on to learn how this energetic and dedicated band has worked hard to acquire such a following many miles away.

Without using the words “rock,” “pop,” or “alternative,” describe your sound.
Kick Ass

So how did this New York based band get such a big following in China?
Last year we were invited to play the Shanghai World Expo. The World Expo was a big deal in China–half a million visitors a day on average so it was a huge chance for exposure. We were playing at an outdoor festival type set-up.  During our first show at the Expo, I noticed half way through the set, the crowd doubled. By the end of the set, the crowd quadrupled. The next day it happened again. Eventually the crowds turned from a few hundred to a few thousand, and they had to move us to a larger stage. I’d love to say “Chinese crowds just love us!”… but here is why the crowds responded so well and grew so large:

– We work very hard at our live show.
– I sang a few lines of our song “Anything At All” in Mandarin and told people it was up (in Mandarin) on youku (chinese youtube). On that note, all our Chinese sites were updated with new music and information.
– The audience weibo-ed (Chinese twitter) during our set, attracting more and more people…we could literally see people on their phones weibo-ing, more people would show up, then they’d be on their phones, then more people would show up.
– We always made sure we had a helper in the crowd getting emails and passing out stickers, buttons, and postcards while we were playing. The idea was (and still is) that everyone in the crowd goes home with something that says “PaperDoll” on it.
– Finally, the crowds saw me (the singer) as “home-grown.”  I’m Chinese American and that counts for a lot in a country that’s very proud of their culture.

During the first tour in August 2010 we ended up booking more and more shows while were there–sometimes doing 2 or 3 shows a day at the Expo and booking extra club dates at night. As soon as we got back to New York we were contacted about returning for more Expo shows in October and decided to go back and tour some other cities. It’s just the 4 of us in the band, so we just hustled as best we knew how.  We ended up booking shows in Hangzhou, Suzhou, Beijing, and Tianjin as well as Shanghai, and we appeared on Shanghai TV with write ups in People’s Daily (China’s largest newspaper) and Time Out Shanghai among others. Through hustling our butts off, we grew our fan base and got a distribution deal for “Ballad Nerd Pop” with Loft Records in collaboration with General Lee Records (our own label). Now we’re going back a third time to promote the release and tour some new cities.

What differences do you find touring China vs. touring the U.S.?
I would say that Chinese crowds are less inhibited than the crowds in the U.S. or Ireland (we toured there in 2009). If they like you, they will show you by dancing and shouting almost immediately. American audiences dance, but it might take like 3 songs to get them started. Ireland…4 or 5 songs.

Other differences:

– Bathrooms in China are…complicated.
– It’s easier in China to eat healthy foods on the road, even at KFC! I once got a vegetable soup at a KFC in Beijing. I saw them hand-chopping fresh spinach and carrots for it.
– In China the boys in the band are “exotic.” In smaller towns, people stop them on the street to take photos of them. Especially Steve (bass player) because he has a full beard.

All in all though, it’s not that different from the U.S., but we definitely have to adjust our sleeping patterns a bit since the promotional interviews are on China time.

Do you prepare differently promotion-wise for tours in China?
We promote on social networking sites, but for China its douban, weibo, sina, etc. We post videos up on youku. Getting everything translated correctly … “correctly” being the operative word, is sometimes a challenge. You can’t just google translate directly. Besides promo material (postcards, posters, emails, stickers, etc…), this time, we have a commercial airing in Shanghai so that was a new translation element we had to deal with.

We have a bigger following in China than in the U.S., so the scale of things, I suppose, is larger.

How do you continue to engage with your fan base in Asia when in the U.S.?
I post at least once a week to weibo and we always try to give some free music away on douban every once in a while. Some Chinese fans are also on facebook which is banned in China, but people find ways around it. I always give them special attention because they’ve worked extra hard to get access to us.

I read that your music is part of a NIKE campaign now in greater China. How did that come to be?
Like with the Expo, someone working on the NIKE campaign just really liked our music and asked if they could use it. Then we hustled and made it happen. It was the same thing with the Dayquil commercial that aired in the U.S. last year. We’re totally independent so we rely heavily on word of mouth and the support of our fans. We’re not opposed to signing with a label or manager, we just haven’t found the right fit. But in the mean time, we’re not waiting around for someone else to make things happen for us. We like keeping busy.

Is your fan outreach different depending on what country they’re in?
The strategy is the same, but the tools are different (weibo as opposed to twitter etc). You just want to connect with people and to be accessible. Doing that in Chinese is sometimes a challenge, but my Chinese is getting a little better and my Chinese-speaking friends and family help a lot.

Aside from your upcoming tour, what projects do you have on the horizon?
This winter, we’re back in the studio with Michael Moloney who produced our last three singles. We’ll also be playing a few college shows. Early 2012, you’ll hear our music in a few indie films. Then it’s back to China for the festival season next Spring–hopefully promoting a new album with songs in Mandarin.

Learn More About PaperDoll
Become A Fan On Facebook
Follow PaperDoll On Twitter

Download their new single “The Moon Represents My Heart” From iTunes

How To Get Your Song On Commercial Radio

By George Howard
(Follow George on Twitter)

Why is it that even with all of the changes that have occurred of late in the music business — changes that have altered the face of nearly everything — commercial radio today is still not that different than it was ten, twenty, or even fifty years ago?

As Jeff Price rightly points out in his article “The Hidden Money In Radio,” commercial radio is the last stronghold of the majors.  They lost control of perpetual copyrights when artists could fund their own recordings via the advent of ProTools.  They lost control of distribution once Apple and TuneCore got in the game.  And, arguably, they lost control of publicity once artists began using social media to connect directly with their constituent group.

So…why not radio?  Why has radio remained in tact when all the other elements in the industry have changed?

To answer that question, it’s first important to understand how a song gets played on “Big Time” radio.  By “Big Time” radio, I’m referring to formats like Adult Contemporary (AC), Hot Adult Contemporary (Hot AC), Contemporary Hits Radio (CHR), Active Rock, Pop, and Urban.  There are other formats — college, Adult Album Alternative (AAA) — but, because their impact is smaller (read: less money can be made from them), they operate more in line with the way one would think radio operates: program directors try to pick music that the listeners of their stations will like, and if the listeners respond (calling in to request the song; calling in to ask what the song was, etc.), the song gets played more and more.  If there’s little or no response, the song doesn’t get played for very long.

“Big Time” radio doesn’t typically operate that way.  For an artist to even be considered by a Program Director at one of these stations, a tremendous amount of other activity must be going on.  For instance, the artist may have had tremendous (and I do mean tremendous) success at one of those lower formats (AAA or College); or the artist might have had their music used in a TV commercial or film; or (and this is rare) the artist could be blowing up (selling out live shows, etc.) in a local market, and one of these Big Time stations “tests” their music during one of their “specialty” shows (i.e. shows that feature local music, which are typically aired on weekends or late at night — when few people are listening), and it goes so well, that other stations pick up on it.

All of the above seems (and is) fair and reasonable.  Unfortunately, this type of organic, merit-based radio play usually does not end with an artist’s song actually being programmed and played.  Instead, there is another, less reasonable way artists find their music being played on Big Time radio.

This other way involves most everything you’ve ever thought it involves – primarily money (lots of it) and the old boys club of relationships.  A major label (and that’s an important distinction) signs an artist, spends a bunch of money to make a record, and then must get that artist’s music on the radio in order to have any chance of success.

When you’re faced with a “must do” scenario, you do what you must.  In this case, the labels first try to find some early supporters: program directors willing to “test” the song — give it limited play, and see if there’s a response from the stations’ listeners.  If there is, great. If there isn’t…well, great.  In either case, if the label decides they have to get the song on the radio, whether the “test” went well or not, they’re going to do what they have to do.  And for what it’s worth, getting a “test” spin is no easy task in and of itself.  Favors are given to those who have greased palms for years to provide the three and a half minutes of airtime at 2:30AM on a Thursday night to test a song.

Getting a song “added” to a station’s playlist to get a certain number of plays per week involves a rather byzantine process that brings in various parties, called independent promoters (“indies”).  These “indies” are first paid by the label.  It’s important to note that the money the indies receive isn’t necessarily compensation paid directly to them for getting Program Directors to get a song played.  Rather, they work more like an intermediary to pass the label’s money to the radio station. These indies, with the money paid to them from the labels, pay the radio station money for various listener give-aways, bumper stickers and so on. To top it off,  these very same indies are often also paid a second time by the stations themselves as a consultant to advise the stations on what songs they should play.

Top indie promoters make a lot of money.

Confused?

You’re meant to be.

Smell fishy?

That’s because it is.

It’s all obfuscation.  It’s all a way for the labels to avoid being seen as engaging in direct payment to a radio station in exchange for the radio station playing the label’s song. In other words: Payola.

Payola emerged pretty much alongside radio.  However, it wasn’t until the 1950s that anybody paid it much mind. At this point, payola was criminalized, and it’s been illegal to induce a station to play a song in exchange for money, without disclosing that money has changed hands, ever since.

The methods change; the labels always trying to stay one-step ahead of the government, and obfuscate just enough to keep the system churning along as it always has.

The reason the majors are willing to take these risks, and bear these costs — and the costs associated with breaking a record on Big Time radio can easily reach the seven figures — is because when a record breaks — even today — the returns are massive.  One could argue, in fact, that due to the ineffectiveness of other means of promotion, Payola has become even more frenzied and high-stakes.

You may ask, at this point, “well, fine, I get it…the majors pay a bunch of money, and they get their records played, but why couldn’t some non-major (indie label or investor) do the same — pay a bunch of money and get a hit record?”  The answer ties us back to Jeff’s article, and explains why Big Time radio is still the purview of the majors.  Assuming you had a million bucks or so, you very well could hire yourself some of these indies to “work” your record to Big Time radio, and, believe me, they’d take your money.  Your record even might get a few spins (though likely only during times when prisoners, insomniacs, and long-haul truckers are listening), but those spins would peter out pretty fast.  The indies would come back and say something along the lines of, “We’ve got our toe in the door with station KCUF, and if you can just give it a bit more juice, they’ll move it from overnights to drive-time.”  And you may give them that juice, and it may get a few spins during drive-time.  And then you’ll be told that you need to “juice” some other stations.  You can juice until your money runs out, but the chances of the record ever really breaking is almost zero.

Here’s why: You’ve come to these indies, and they’ve gone to the labels, and they’ve taken your money, and they know that you’re probably not coming back any time soon. On the other hand, the majors are coming every week with money and new artists.  Who would you prioritize if you were in the indie/radio station’s shoes?

So, the majors have a lock on this.  Every once in a blue moon a song will be so powerful that it can’t not be played, and it doesn’t matter if it’s on a major or not.  But this is so rare as to be almost non-existent.  The reality is the songs you hear on Big Time radio all got their the same way, and if you look at the label who released these songs, 99% of the time, they’ll be on a major.

It’s not all doom and gloom however.  Any time a system exists that is as corrupt as what I’ve outlined, it eventually falls under its own weight.  Customers who have been fed a steady diet of music that is not being played because it impacts the market, but rather because it was the highest bidder, eventually lose interest and look for alternatives.  Up until recently, there weren’t alternatives, but now with internet radio, satellite radio, subscription services, and your own playlists on your iPod/iPhone, the alternatives abound.

Our challenge and opportunity is to not allow these alternatives to follow the same path that traditional radio went down.

_________________________________________________________________________________

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 an Associate Professor of Music Business/Management at Berklee.  He is most easily found on Twitter at: twitter.com/gah650