Thursday, May 21, 2015

BMI Wins A Royalty Fight With Pandora

ASCAP-BMI-SESAC image
As you probably know, BMI and ASCAP have been fighting with Pandora for quite a while over the performance royalty rate that Pandora pays.

The streaming service was paying 1.75% of it's total revenue to the performance rights organizations (PROs), which all of the organizations deemed an unacceptably low rate.

ASCAP managed to renegotiate that rate up to 1.85% in December, but now BMI has won an improvement on that up to 2.5% in the latest court ruling. BMI actually asked for 3.825% initially, but was only granted the lower number.

This was an interesting development for a couple of reasons. Songwriters and publishers will get paid more, which is always a good thing. But the fact was that BMI was forced into this since many large publishers like Sony/ATV, Universal Music Publishing, and BMG Publishing pulled out of BMI and renegotiated their own deals with Pandora. They also settled at the 2.5% mark.

The 2.5% rate is about a 33% increase, so songwriters and publishers can rejoice in that fact, but it's only for non-interactive part of the streaming business. Unfortunately more money is being collected on the interactive part of the business from services like Spotify, but that money flows through the record labels first instead of a PRO or publisher before it gets to the songwriter. Until that changes, songwriters will continue to get the short end of the royalty stick.

Wednesday, May 20, 2015

The Death Of The 1 Hit Wonder

1 Hit Wonders image
For almost a hundred years Billboard has been producing music charts, and artists that have a single hit then drop into oblivion have always played a major part in them. These "1 hit wonders" either come and go (like Keith's "98.6" in 1967) or hit the oldies circuit (Nena with "99 Luft Ballons" in 1983), but every year the charts are littered with them.

Except that there are fewer and fewer 1 hit wonders every year.

An analysis of the last 50 years of Billboard's Hot 100 singles chart by Priconomics found that in recent years the number of artists with a hit has declined to an all-time low.

1 hit wonders decline image
Why? For one thing, songs now stay on the charts longer than at any time in history. Before 1985 it was uncommon for a song to stay on the charts for more than 50 weeks but now it happens regularly, like Sam Smith's "Stay With Me" at 54 weeks and counting. Now a Katy Perry song is likely to stay on the charts nearly 3 times longer than the average Beatles hit from the 60s.

Obviously, the music industry would rather there be more hits as it would be better for business and possibly build more careers. Radio, unfortunately, doesn't see it that way.

Radio needs listener attention to keep its ratings, so it's to their benefit to play songs that everyone knows for as long as it can.

That said, the music business is putting much more energy into promoting established artists than trying break someone new, which perpetuates the cycle.

Regardless, there are fewer new hits to listen to every month, and we're all the worse for it. Just image how boring oldies radio will be 20 years from now.

Tuesday, May 19, 2015

How Much Money Does A Hit Generate From Spotfy?

If you listen to many artists complain about Spotify, you'd think that they're making almost no money at all from the service. That's probably true for artists that don't get many plays per month (and when it comes to streaming, a million is not that many), but for others with a real hit on their hands it can be substantial.

Spotify has a nice page that explains how it pays royalties, and on it there's a chart that shows the payout of 5 different "hits." Of course, the definition of a hit is different for different types of acts. For instance, a hit for an indie band is gauged far differently than a hit a mainstream artist.
Chart from Spotify










As you can see, a global hit album actually returns quite a bit in monthly income at $425,000. In fact, even a huge single can pay out at least as much or more, with a good example being the Marc Ronson/Bruno Mars hit "Uptown Funk" doing twice that amount.

One of the good points of streaming is that unlike a sale where the customer buys the album or song just once, in this case the customer may stream it month after month, thereby generating continued income.

But the problem for the artist isn't how much is generated in royalties - it's how much actually trickles down after the record label takes their cut, and this has been the problem all along. 

If a hit has generated $400,000, the typical artist would probably only see $80,000 (on a 20% deal). Of course, if the artist still owes the label money from recording or advances, that figure could be considerably less than that.

As you can see, there's a lot of money being generated in music streaming, it's just not actually making it to the artist. In other words, same as it ever was.

Monday, May 18, 2015

Artists Use Uber To Release New Music

Britney Spears Uber promotion image
It seems that the car service Uber is becoming more than a taxi. It's also a way to deliver and even break new music to fans.

Britney Spears released her new single "Pretty Girls" on May 3rd using Uber as the "vehicle" to get the word out. She jumped on Twitter and Facebook during the day telling fans that they could be the first to hear the song in in Los Angeles and wanted to take a brief joy ride to have a listen.

At midnight Uber customized SUVs were available free for up to 30 minutes to those that registered, who could then hear the song before anyone else.

Fans were told to open up the Uber app on their phone between 3 and 9PM, then enter the promo code PRETTYGIRLS in the promotions section to unlock the Britney vehicle option. Winners were on a first come, first serviced basis and were also then eligible to win a prize of 2 tickets to a Britney concert.

Whether you like Ms. Spears and her music or not, you have to admit that this promotion is pretty good out-of-the-box thinking. It combines a nice combination of new and old technology to do what promotion departments have been doing for a very long time - breaking a song.

That being said, the song wasn't exactly a smash, reaching only #29 on the Billboard Hot 100 chart, proving that even a good promotion can't make a hit if the song isn't killer to begin with.

Friday, May 15, 2015

An Indie Streaming Success Story

Rumblefish logo image
NPR recently posted an article about how the tiny royalties coming from music streaming can add up and chose one artist as a great example. Josh Colum and his band Secrets In Stereo signed up with Rumblefish, a company that finds licensing opportunities for artists.

Initially there wasn't a lot of money, only a few bucks per statement (we've all seen that one), but soon Josh began to see around $10,000 per quarter. Astonished, he explored what happened.

It seems that a song called "Happy" from the band's first album was chosen by a wedding photographer who was looking for music to accompany a wedding video he made, and he chose the song from a site called Animoto after listening to hundreds of songs.

After he gave the couple their video, they posted it on YouTube, where others saw it and also used it for their own wedding videos. Today the song has passed over 250 million views, which ads up to some substantial cash for the artist and songwriter.

Rumblefish takes care of collecting the money from Animoto and tracking the views on YouTube and online video services.

Both Josh Colum and Secrets In Stereo are pretty under the radar in the music business, but they've managed to carve out a living thanks to putting their songs in the right places, a little luck, and a little virality.

Here's the song, in case you're interested.



Thursday, May 14, 2015

Does Your Taste In Music Freeze At Age 33?

Taste Freeze at Age 33 image
Everyone reading this loves music, but for the most part, our musical tastes are different. That's all well and good, but a new study has found that by the time we reach age 33, whatever our tastes in music are, they're pretty much set in stone.

The study was based on data derived from Spotify users in the US, as well as artist popularity data from The Echo Nest.

The study found that most music lovers begin to discover music less as they reach about age 25, and pretty much stop at age 33, when they return to listening to music that was popular when they were coming of age. The author's call this "taste freeze." The problem is that this music has usually been phased out of popularity by that time.

The study also found a number of other interesting points:
  • people with children listen to less currently popular music, so their taste can freeze at an earlier age
  • men and women listen the same when in their teens, but men listen to less mainstream music than women after that point.
Certainly this study isn't true of all people, as musicians continue to stay up to date with current music longer, but it's true that the vast majority of people hit taste freeze at some point in their life.

Has it happened to you yet?

Wednesday, May 13, 2015

Learning From The "Uptown Funk" Royalty Split

Uptown Funk image
"Uptown Funk" is one of the biggest selling songs in a long time, proving that people really do like the funk. How big? Just check these figures out.
  • 627 million YouTube views
  • 5.5 million units in the US alone
  • 95,000 album sales
What's interesting is that the songwriting credits were originally split between artist and producer Mark Ronson, the featured Bruno Mars, Phillip Martin Lawrence and Jeffrey Bhasker.

After the song became a hit, many more were added to the list however, most recently Nicholas Williams and producer Devon Gallaspy, the creators of "All Gold Everything". Why? Because there was a sample from the song in "Uptown Funk"  (I don't hear the similarity myself). This was good enough to gain 15% of the huge hit, which amounted to about $400,000 until now.

But there's more. Two months ago the representatives of The Gap Band put in a claim on YouTube that "Funk" was close to their "Oops Upside Your Head" (this one you can hear the similarity in the bass line) and each of the four writers there were give 3.4% of the song as a result.

The moral of the story here is that since the "Blurred Lines" court case, everyone is being a lot more cautious about songwriting credit.

This will probably become a standard form of doing business from now on unfortunately, and will only change if the "Blurred Lines" decision is reversed on appeal. Welcome to the new world of songwriting.

Tuesday, May 12, 2015

Choosing The Best Content To Share With Fans

Content consumption image
Whether you're creating or choosing content to share with your fans, it pays to know just what your fans like and how they consume it. BuzzStream and Frac.tl recently surveyed people from 3 generations to determine their content preferences. This is what they found.

First the similarities.
  • All three generations had the same favorite and least favorite types of content.
Most favorite:
   1. Blog articles
   2. Images
   3. Comments
   4. ebooks

Least Favorite:
   1. White papers
   2. Webinars
   3. Slidshares
  • Content length was also unanimous. Articles of 300 words in length were the most preferred, although Gen Xr's also like longer articles of 500 or more words.
  • Genres of content were also unanimous with entertainment being the most popular, although technology was a close second for Millennials and world news for Baby Boomers.
  • When it came to preferred social platforms for sharing, Facebook was far ahead of all others for the 3 generations as well, with YouTube a distant second
  • For visual types of content, there was a bit of a difference between age groups with Boomers and Millennials both preferring videos slightly over pictures.
  • The big divergence came from the amount of time spent online. While everyone thinks that the younger you are, the more time you spend online, the study found the opposite, with 25% of Boomers spending at least 20+ hours per week online compared to 22% for the other generations.
  • That said, one huge divergent is when each generation consumes their content, with both Millennials and Gen Xrs peaking in the late evening between 8PM and midnight and Boomers in the late morning between 9AM and noon.
Once again this all comes down to knowing your audience and fan base so you can tailor the right content to them at the right time in order to increase your engagement.

Monday, May 11, 2015

Spotify Looking To Add Video Streaming

Spotify Video image
Reports are that Spotify has been reaching out to top YouTube content creators and traditional media companies in an attempt to accrue content for a new streaming video feature. Although no specific date for the launch has been officially announced, many believe it will come by the end of the month.

The feature is said to be free and will take advantage of the existing advertising infrastructure that the company has set up for its streaming music service.

Spotify recently raised another round of investment said to be around $350 million on the basis of a total valuation of $8 billion. Speculation is that the introduction of video played a large part in raising the cash.

While it's difficult to make money with streaming music, video streaming (even if it's free) is another story, as more and more brands expand their advertising in that area. Of course, YouTube hasn't done too badly with that model either.

Another reason why Spotify might be going that route is from pressure brought by other streaming music services like TIDAL and Google Play, which also offer video. That said, Rdio also tried a video feature but abandoned it after 6 months.

Spotify also sees the upcoming competition from both Apple's new music service and from Google's Music Key, and views adding video as the best way weather the storm of their launches. That's also why we'll probably see a Spotify video launch sooner rather than later.

Whether the streaming service's new video feature will actually gain traction is another story.

Friday, May 8, 2015

Grooveshark Won't Stay Closed

Grooveshark back again image
It didn't take long, but Grooveshark is back online just days after receiving orders to cease operations as a result of a lawsuit filed against it by the major record labels. The service can now be found at Grooveshark.io instead of ".com."

Apparently an employee of the company caught wind that the service might shut down before it happened and decided to back up the entire contents of the site and move it to a different offshore server.

As a result, he was able to reproduce the user interface, playlists and song catalog identically to the previous service.

In the short term this might not be that important, in but grand scheme of things it goes to show how difficult it is to shut down a pirate service.

Since Apple and the major record labels are trying to shut down the free tiers of the current streaming services, this serves as a warning. Piracy is going to rise again if those free tiers are eliminated, and it will more difficult than ever to close things down as pirates get more and more clever.

Grooveshark had about 20 million active users, which is about a third of Spotify. The difference is that the company never purchased a license to use the songs, or paid any royalties to artists and songwriters.

Considering how easy it is to get free music right now from legal streaming services, it does show that many people just don't want to trade their email address for the privilege of getting something free. It's a dilemma that we currently have live with in the business, but some form of this will probably always be with us.

Thursday, May 7, 2015

The Reality Of Using Google Plus For Promotion

Google Plus key image
There have been conflicting reports as to whether its worth the time to bother with Google+ when it comes to promoting your project. On one hand, the network has 2.2 billion profiles, of which Google says 500,000 are active per month.

That still pales in comparison to Facebook, with its 1.2 billion active users, but it's still ahead of Twitter, which has about 300 million.

But the Google+ user numbers are deceptive since you automatically are signed up to it if you have a gmail or YouTube account. Many people choose to ignore G+ entirely and just use the Google service they need at the moment, so many of those accounts lay dormant.

So is G+ worth spending the time on or not?

Stone Temple Consulting wanted to find out, so they randomly selected over 500,000 G+ profiles and analyzed how active they were. What they found was that only about 10% were active users in some sense of the word, with 90.1% containing actually no content at all.

Extrapolated out across the 2.2 billion user profiles, that means there were only 212 million active users. But after further looking at those "active" users, it was determined that only 50 million of those users had posted more than 5 times. An analysis of those users found that only about half of those posted in the last 30 days and only 8 million had posted over 50 times.

For such a reportedly huge network, Google+ doesn't have a commensurate amount of activity. Some of the activity that it does have is artificial in that YouTube upload notifications and comments and profile picture changes are automatically posted, but real live active users are far fewer than believed.

That said, if you know that's where your fans are, then that's where you should be as well. Google+ still has one of the best communication apps anywhere in Hangouts, which alone is worth spending time on the platform.

Wednesday, May 6, 2015

I Hope Apple Kills Free Streaming, But Not For The Reason You Think

Apple Uh Oh image
There have been multiple reports over the last few days that the Department of Justice is looking into the accusation that Apple is pressuring the major record labels to end their license agreements with music distribution services offering free tiers. The European Union has a similar investigation underway, so there must be some fire under all that smoke.

This comes before the speculated introduction of Apple’s new streaming service, which is widely anticipated for the Apple Developers Conference next month. Eliminating the free tier of the competition, especially Spotify, presumably puts Apple in a stronger position to regain its dominance in music distribution, a status that has slipped in recent years.

While Apple may be pushing hard for this to happen behind the scenes, chances are it’s a long shot and here’s why.

1. Just the fact that the DOJ is looking into the allegation will stop this thing in its tracks. The major labels have never been bastions of fair and balanced dealings and the last thing that the big players in the industry want is the Feds snooping around. While they may or may not be complicit on this issue, who knows what else may be uncovered during an investigation? That means that you’ll soon get directives from high ranking music execs for their business affairs departments to drop this issue like a hot potato. 

2. Does Apple really believe that eliminating the free tier will actually increase its subscriber numbers? First of all, to assume that the next incarnation of iTunes Beats (or whatever it will be called) will have all Spotify users immediately want to suspend their subscriptions and switch to iTunes is delusional at best.

That’s assuming a lot considering that the company has a pretty poor track record of late with its music software. While the early editions of iTunes led the way in user friendliness, lately the app feels old and bloated, with features that are more like attachments rather than integrations. Likewise, iTunes Radio wasn’t exactly the runaway hit that everyone expected. Read more on Forbes.

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