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

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