Sony Develops Real-Time Streaming Royalty Reports

In what may be a real breakthrough for artists, Sony Music has developed an app that shows exactly what their daily streaming royalty earnings are. The app also includes information about how these earnings impact their label advances as well.

Other features include other key information in real time, such as streaming volume across all platforms, airplay data, profiles by age, gender and location of listeners, and a heat map of areas of the world where the artist is currently popular. It also offers insight to the artist's popularity on social networks as well, including Facebook, Twitter and Instagram.

The app is only available to Sony artists in Sweden (where the app was developed) at the moment, but is expected to be rolled out to Sony artists globally later in the year.

This is a first for a major label, since it makes earnings a lot more transparent than in the past. Artist royalty statements have always been viewed with some suspicion as labels have traditionally used a variety of accounting tricks to limit the royalties owed, but the new Sony app gives at least some hope that this position may change in the future.

Although the Sony real-time app is a revolution for a major label, it's not the first of its kind. Kobalt has offered these features to artists and songwriters for some time.

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Spotify Royalties Overtake iTunes In Europe

Many high profile artists are railing against the royalty payments provided by Spotify, but it's paying out more and more money every day. In fact, the streaming service has now overtaken iTunes as far as royalty revenue in Europe, according to Kobalt, a company that helps collect music royalties on behalf of artists.

Kobalt has a number of big artists in its stable, including Maroon 5, Lenny Kravit, Dave Grohl, Max Martin, Bob Dylan and many more. The company reports that revenue from Spotify streams were 13% higher than from iTunes last quarter, but it only collects for its artist in Europe.

What's interesting is how fast this has flipped. It was only a year ago that Kobalt found iTunes earnings were 32% higher than Spotify.

People can deny that streaming isn't gaining traction or isn't paying, but the facts say that's definitely not true.

The problem is that many artists aren't seeing these new revenues mostly because of the deals they've struck with their record labels. Labels have always been good at siphoning off money from artist royalties, and even though we're now in the digital age, it seems just as difficult as ever to track.

That said, streaming is coming on strong, and soon it will mean more money for all involved. How much more remains to be seen.

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50 Cent The Latest To Exploit The Music Industry’s Newest Business Model

It was announced recently that rapper 50 Cent is leaving his previous record label Shady/Interscope for a new home with Caroline, the label services division of Universal Music Group. The artist and his G-Unit imprint joins a number other artists like Macklemore & Ryan Lewis, Korn, Peter Gabriel, and Prince who chose to leave the comfort of a traditional major label (Shady/Interscope is a subsidiary of the giant Universal Music Group) record deal behind in favor of going independent, but with a new twist. Now the label’s once exclusive services are for hire instead of available only as a byproduct of a traditional recording agreement.

What we may be witnessing is the dawn of a new age in the music business as all the major labels have set up separate divisions to be able to offer their services and expertise on an a la carte basis. Need physical distribution, radio promotion, digital strategy or product development? If you’ve got the money or the audience, you can hire their expertise for these services plus a lot more. Where once upon a time, an artist signed exclusively with a record label for a number of albums, the new label services deals can be for a single album at a time, with none of the traditional multi-record contractual strings attached.

Although some were faster into the space than others, all the majors are now represented. Sony Music has its Red Associated Labels unit, Warner Music Group has Alternative Distribution Alliance (ADA), while Universal Music owns Caroline. In addition, there’s also BMG, which began the trend in 2008 when it sold its traditional record business to Sony to concentrate on artist rights management, as well as the independent Kobalt Label Services and in the UK, Cooking Vinyl.

The reasons why an artist might want to consider such an arrangement are many. First of all, there’s the issue of artistic control. In a traditional record deal, the artist and the record label are in a partnership, with the label as the senior partner. The stories about clashes on creative direction between the artist and label execs are legendary, but all this is alleviated when the artist is independent and hires the label services on a “as needed” basis. The artist is now the boss when it comes to product creation, but the responsibility for making it or breaking it are on his shoulders alone. Read more on Forbes.

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The New World Of Label Services

It all started with Macklemore and Ryan Lewis. Instead of signing a typical record deal with a major label, they opted instead to pay Warner Bros promo department to work "Thrift Shop" to radio, taking advantage of one of the attractive strengths that major labels still have to an indie artist. Thanks to Warner's muscle in this area, the song went on to be a world-wide hit, turning the team from modest success story to superstars.

Previously, in order to receive all the marketing and distribution clout of a label you had to sign a recording agreement with them that entitled you a split of the net revenue of between 12 and 15%. Today with an artist able to do so much of the work himself, it's no longer necessary or desirable to sign such a deal. There still are some services that only a major label does well (like CD distribution and radio promotion) that are desirable, and now all the majors have developed their own "label services" divisions to make those services available to indie artists.

For instance, Sony Music provides label services through its Red Associated Labels, Warner Music Group through its ADA unit and Universal Music has it's Caroline division (which handles Peter Gabriel and Korn). Plus BMG transitioned totally to label services when it sold its record label to Sony in 2008 and now handles Back Street Boys, Bryan Ferry and Anastacia, among others. Plus there's Kobalt (Pet Shop Boys and Prince) and in the UK, Cooking Vinyl (Madness and Amanda Palmer), as large indies getting into the arena.

While a brand new artist might not be able to afford these services, any artist with a small measure of success probably can, and should. Label services are a fast rising revenue generator for the industry, and truly a symbol of the new music business. It's a win-win situation for the artist and the label. The artist stays independent and gains the clout of the label, and the label gets added revenue without having to bankroll a new artist.

If you ever wanted to see the face of Music 3.0, this is it.

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Prince's New Record Deal

We tend to think of record labels not changing much even in the face of the major paradigm shift that is Music 3.0, but while that may hold true for the major labels, there are a few that are forward thinking. Take Kobalt Music, for instance, which is an independent publishing company that launched their version of a label last year with the idea of giving control back to the artist, allowing them to not only maintain ownership of their work, but when and how it's made available as well.

The latest to sign a deal with Kobalt is superstar Prince, who joins the likes of Dave Grohl, Paul McCartney, Dave Stewart and Eddie Veder (among others) who've decided that this is the way to go in the future. Of course Prince is all about control, even changing his name to that unpronounceable symbol in order to get out from under the clutches of his deal with Warner Bros.

One of the things that he gets in the new Kobalt deal is access to their new software that closely monitors the streaming world, thereby increasing the royalties. Every artist and songwriter is concerned about streaming and what it will do to their career, so any way to get a foot up is attractive, which is why Kobalt seems to be making the splash that it is at the moment.

It's still to be determined just how successful their software tools actually will be, but there's a lot of music heavyweights that are convinced that Kobalt has something they need. You'll hear more about them in the future.

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McCartney Takes His Talents To Kobalt

Talk about timing; EMI Music Publishing is just being taken over by Sony/ATV and one of their biggest clients bolts. It seems that Sir Paul McCartney didn't like the looks of what was going down with EMI/Sony and decided to take his talents elsewhere.

But he didn't go to another so-called "major" publisher. No, Paul took his MPL Communications to the upstart Kobalt Music Group, who is quickly becoming one of the major players in the publishing world. Why? Because Kobalt has built it's business on technology, which they claim gets the songwriter paid as much as 25% more and up to two years faster than the more traditional publishing companies. In fact, Kobalt has enticed the likes of Pear Jam, Trent Reznor and Dr. Luke into it's fold, and its share of Top 100 hits has already grown to 15%, which is just under what long time market leader EMI has.

While MPL's move might be symbolically ominous, it doesn't hit the bottom line of EMI as much as you might think, with estimates at less than 10%. The deal with Kobalt does not include North America, Britain and Ireland, which MPL administers itself. But MPL is a heavier hitter than just the McCartney catalog as it includes songs by Roy Orbison, Carl Perkins and Broadway shows like The Music Man.

This just goes to show that even old traditional businesses can be improved with technology, and when that happens, it doesn't take long for artists to take notice and jump on board.

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Help support this blog. Any purchases made through our Amazon links help support this website with no cost to you.

You should follow me on Twitter for daily news and updates on production and the music business.

Check out my Big Picture blog for discussion on common music, engineering and production tips and tricks.