BMI Wins A Royalty Fight With Pandora

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.

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The Death Of The 1 Hit Wonder

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.

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.

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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.

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.

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Artists Use Uber To Release New Music

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.

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