– 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

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