The 5 Kinds Of Music Publishing Payments

Too many musicians underestimate or just plain don't understand how important music publishing is. It's always been the hidden-in-plain-sight cash cow of the music business, but also has been one of the least sexy. That said, publishing is literally the gift that keeps on giving, where you can get paid (and paid well) while you sleep. It's also the one part of the business that still continues to do well even though it's taken a hit like most other areas in music.

DIY Musician posted a short article on publishing recently that I'd like to paraphrase a bit regarding the 5 kinds of payments that music publishing can provide. If you're not hip to publishing, hopefully this will wet your appetite to learn more.

1. Mechanical Royalties: Every time your song is sold either on a vinyl record, CD or MP3, the songwriter is entitled to $.091 per copy. What that means is that if there's an album with 10 of your songs on it, you'll make $.91. This is why some writers made big money in the glory days of the business when albums where king. It's also why those same writers have far less income these days where it's a singles world, and will have even less when the world changes to streaming, although you do get a mechanical from some services like Spotify, although at a far lower rate.

2. Performance Royalties: Every time your song is played in public, you're owed a royalty payment. This includes airplay on the radio (terrestrial, satellite or Internet) and television, or in restaurants, clubs or even high school plays (although that's a lot harder to collect).

3. Synchronization License Royalties: Whenever your music is played along with moving pictures like television or movies, the creator of the movie or video has to pay the songwriter a fee. If fact, if you're the artist as well and they use your recording, they have to pay a fee on that as well. This is where most of the growth in the publishing business has come from recently, thanks to the proliferation of television channels.

4. Sample License Royalties: If someone samples a piece of one of your recorded songs, they owe you a royalty. Once again, this is a relatively new revenue source that's only happened in the last 20 years. There's been some big lawsuits regarding samples that have largely gone in favor of the songwriter.

5. Sheet Music Royalties: Any time your music is reproduced in a printed form, you're owed a royalty. This includes hard or soft copy sheet music, lead sheets, and anything else that represents your music or lyrics. When the music business was young over a hundred years ago, this was the major source of revenue for the entire industry.

As you can see, publishing pays in more ways than one. Having a piece of a big hit can pay off for the rest of your life, which is why those in the know are so protective of it. I still get paid for some songs I wrote that appeared on the 80s hit television show Bay Watch (although it's not much these days), which goes to show how powerful being a songwriter can really be.

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It Can Be Done, With An iPhone

We live in an age where there's so much technology available to us that there's no excess why you can't be creative anymore. Take making a video for example. Once upon a time not all that long ago, if you didn't have an expensive high-quality camera on your shoot, the quality wouldn't be sufficient enough to ever get on television.

Today an artist isn't all that concerned with getting their video on TV, but high quality for YouTube and other video networks is still a priority, as more and more consumers demand hi-def. Luckily, the video technology available today for mere hundreds of dollars far surpasses some of the multi-thousand dollar cameras of ten years ago. In fact, even the video quality that you get from the almost afterthought feature of a typical iPhone 5 is amazing.

Here's a video for Allied Irish Banks that was done completely on an iPhone. Granted, there's nothing fancy and no editing at all, but the point is that the video holds up well enough to meet television standards.

Considering that many videos with just lyrics or a picture of the album cover get millions of views, an iPhone video behind a song could work at least just as well, if not better.

Now there's no excuse. You can't blame it on the gear any more.

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9 Overlooked Video Optimization Tips

I've posted before on the some of the things you can do to optimize your videos (like YouTube Channel Ranking Tips and A Tip To Improve Your YouTube Ranking), but here are 9 additional tips for improving your video SEO after your meta tagging is complete. Most of these are overlooked, but fairly easy to accomplish.

1. Upload a transcript of the video. This is perfect for a music video in that it can contain the song lyrics. This closed-caption file is important because it's searchable content that helps with search indexing.

2. Create a custom thumbnail for each video. Don't rely on the choice given to you by YouTube. Create a custom thumbnail in an image editing program like Photoshop that adequately describes the video at a glance.

3. Upload in high-definition at 1920 x 1080 if possible. Unlike only a few years ago, hi-def is now the norm and preferable to most viewers.

4. Include a call to action. This can either be a link to a website or an annotation.

5. Make the video public. This seems like a no brainer, but the video won't be searchable unless this is selected.

6. Choose the right category for the video. This is a tough one sometimes since a video may fall into a number of categories at the same time. The best strategy is to stay with the most appropriate category (music), since that's where you're most likely to get the most views from.

7. Create a playlist. This is a relatively new feature of YouTube, but it helps viewership by keeping similar videos joined by topic or theme.

8. Embed the video on your website or blog. The best way to get the video out there is to have it appear in as many places as possible.

9. Include annotations. These are the pop-up links and text that provide the video with interactivity. Annotations take some extra time to program, but are worth it as it's been found that the engagement increases with videos that include them.

I've adapted these points especially for musicians from a great article on ClickZ, which has a lot of additional info on video SEO.

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The Flarian Music Player Reinvents Physical Product

Even though CD sales are down more and more every year, consumers are still buying albums (see yesterday's post). There's still a place for CDs as a product during live events like gigs since music consumers want a physical memory of the event, but they're starting to feel more and more dated as time goes by. That's why a new format for the album could be a boon to music sales, and that's why the Flarian Music Player is so interesting.

The Flarian Player is about the size of a credit card and can hold about 1 Gig of data. Since it's a true audio player complete with an audio jack, you can listen to the audio directly via a set of headphones or earbuds, or plug it into a computer with a USB adapter (which will also charge the unit). The company also sells a USB-only version of the card that has been previously released, but this takes it to the next level.

One of the things that the Flarian Music Player claims to be is a great business card for musicians, since it can contain audio examples of your work, and I see a future for this device at least in that market even if it doesn't break out to the larger consumer marketplace. That said, physical music products will always be around, so it makes sense to move to something that technologically newer and has a lot more wow factor than the old tech that is the CD.

The Flarian Music Player is currently at the beginning of an Indiegogo crowdfunding campaign, and you can find out more details about the unit there. In the meantime, check out the video below. I wish it had just the basic info instead of the attempt at comedy (the principles probably read somewhere that most successful crowdfunding videos are humorous), but you'll get the idea.


Flarian Music Player Crowdfunding video from Hammad Naseem on Vimeo.

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US Individual Track Sales Down, But Why?

After a gangbuster growth rate for ten years, US individual music track sales are down 2% for the year through April 14th according to Nielsen SoundScan. While this may be a surprising stat, what's even more surprising is that digital album sales are actually up 9% for the year.

While digital track download sales had gone negative for a time in 2010, they actually ended the year in the positive. While this might happen again in 2013, it also might be an indication that the streaming music revolution is beginning to take hold, as more and more consumers discover the beauty of access or ownership. That might explain track sales, it doesn't adequately describe why album sales have increased though.

The two major theories on the subject are that more and more people are using Apple's Complete My Album feature to fill in their missing album tracks. The second theory is that both Amazon and Google Play are gaining market share from iTunes, mostly because of deep discounting, especially on albums. If I had to make a choice, I'd say the reason lies more in the fact that albums have been discounted rather than people trying to fill in those lost tracks that they never listen to anyway.

We'll have to see if either of these sales stats are temporary or long-term, but the only thing that will be a surprise is if album sales continue at their current pace. If they do, the bigger marketing question will remain, why?

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Surprise: iTunes Leads In Video Too

When it comes to a viewing audience, there's no service bigger than YouTube, but when it comes to video sales, it appears to be an iTunes kind of world. That's from the latest info online research company NPD Group, which released a new report on the subject last week.

As more content owners struggle to monetize their catalogs, iTunes is increasingly leading the way. According to the study of the 2012 video business, iTunes had:

• 67% of TV show online sales
• 65% of online movie sales
• 45% of video rentals

As you can see from the chart on the left, iTunes dominates even Amazon in this regard. When it comes to rentals though, the race is a bit closer with Amazon accounting for 18%, Vudu for 15%, and XBox video at 14%.

None of this should be a surprise, although it seems to be. First of all, iTunes was the first mover in the download sales area and enjoys dominance in music, but when you factor in the proliferation of iOS devices like iPhones and iPads (which are excellent for watching video), you have an ecosystem that supports the distribution arm. Just as Apple planned it.

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Why The Grooveshark Ruling Should Scare YouTube

Grooveshark is the music streaming service that everyone uses at least sometimes, but gets no respect, especially from the music industry. In fact, Grooveshark has been laden with lawsuits from the major labels over the last few years over users uploading copyrighted songs illegally, a fact that has weighed the company down significantly.

Despite having a healthy 30 million users a month, the service has been struggling with cashflow thanks to the legal hassles that the suits entailed. Things just got worse for the company when a 5 judge panel of the New York Supreme Court overturned a previous ruling and concluded that any song created before 1972 that was uploaded to the service should have the same "safe harbor" protections offered by the Digital Millennium Copyright Act as a song written after 1972.

What that means is that not only must Grooveshark remove any copyrighted song from that period if given notice of infringement by the controller of the copyright, but that it can also be charged as a party to the infringement as well. This, of course, opens the company up to all sorts of potential lawsuits that can bring an already struggling company to its knees.

While Grooveshark is clearly the focus of this suit and controversy, it also brings the same type of scrutiny to YouTube and all other video sites however, a fact that should be making them extremely nervous about now.

Now the saving grace for YouTube in all this is that so far this is a lawsuit based in New York, where Grooveshark does business, and each state has their own interpretations of the same law, but a precedent has been set.

Google has some mighty deep pockets that can hold their own in just about any legal fight, but you know that this is not a fight that they need or want. Copyright holders might see this as another source of income however, one that they might feel has rightfully eluded them for many years, and move along a new round of legal action based upon the ruling quickly.

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What's Learned In 30 Years Of The Music Biz

As everyone knows, the music business has changed substantially in the last few years. One of the things that's evolved has been the fact that the artist is able to do so much without the help of a record label and still have a chance for at least some modicum of success. That could never happen way back when, where if you weren't embraced by the "music business," you were essentially left out in the cold with no hope for ever getting ahead.

Wayne Coyne of The Flaming Lips has seen it all over the band's 30 year run, and in this video he explains not only how things have changed, but how the band was always against the grain business-wise, as they operated more DIY before it was even popular or possible. The lesson here is that sometimes trading money for artistic freedom can be worth it.

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The Music Subscription Music Service You Don't Know About

Subscription music services have been getting more and more press as the music business and their customers gradually adopt the concept, but we normally only hear about the higher profile services like Spotify and Pandora. It's true that they have the most subscribers at the moment, but did you know there's one service that's quietly crossed the million mark that very few have heard about?

Muve Music, which is a service of wireless carrier Cricket Wireless, has quietly surpassed 1.1 million subscribes less than 2 years after it was launched. It's basically an unlimited music service that's tied to a pay-as-you-go mobile phone service. It offers no apps for personal computers or tablets, and is only offered on Android phones.

What's particularly interesting is the demographic that Muve Music caters to. Most of its users don't own a computer or have a credit card. That means they'd never be a user of one of the other services anyway.

It just goes to show that there's always a sub-market to be served, even though it may not get much attention. That's pretty much the way music works these days. Even superstar artists have their own niche that they cater to, and any artist can have a career within a narrow category.

That's the key to being an artist in Music 3.0. Find your niche and play to it. It doesn't matter if you play something esoteric like Swahili polka or Manchurian jazz, there's a market out there for what you do. The trick is to find it. Luckily that's easer than ever thanks to social media. Stay tuned for more on how it's done.

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

12 Social Media Tactics For Artists

Here's an excerpt from The Music 3.0 Guide To Social Media ebook that looks at the basic concepts for artists to use social media more efficiently.

"Heidi Cohen at ClickZ post a great article regarding the 13 tactics to make social media work harder. I've adapted her post for Music 3.0, since her points are excellent, but I've found that only 12 of them apply. They are:

1. Understand how and why your fans use social media. This is the best way to make sure that you're interacting with the majority of your fans in the first place.

2. Develop content that meets your fans needs and interests. This shouldn't be too hard. They like you already and will probably want anything you give them. Don't be afraid to offer rough mixes, rehearsal and studio out-takes, and behind-the-scenes videos.

3. Use a variety of forms of content and understand the role that each plays in social media. Blog posts, video, forums posts, Twitter and Facebook posts are all important. Many fans prefer one over another, so it's best not to ignore any of them.

4. Encourage your fans to share content. The key to a healthy fan base (or Tribe" as "Seth Godin calls it) is not only their interaction with you (the artist), but also with each other.

5. Support and promote consumer-generated content. Mash-ups of songs and videos can be as important as your own releases.

6. Integrate product information into your content/story. Don't sell or hype your fans, inform them. They'll do the promotion for you.

7. Use content in social media to help build organic search optimization. Always think of SEO (search engine optimization) when developing content. Using the proper keyword phrases in your copy and metadata (even for videos) is crucial for being found, and therefore getting the word out.

8. Listen to, interact with, and recognize your fans. Communication can't be just one way. When they reach out, you must reach back.

9. Provide immediacy and nimbly react to events as they unfold. Social media is immediate by nature, so your fan base expects a more-or-less immediate response.

10. Participate in social media with a human voice. For social media to work well for an artist, the artist herself must participate. Certain communication can work through a surrogate, but fans can see right through a post that's supposed to be you but isn't.

11. Encourage band members and crew to participate in social media. The perspective of everyone involved with an artist is valuable to the fan, that's why it's important that everyone in the artist's circle should participate at least a little.

12. Track relevant conversations, responses, fan relationships, and sales across social media forums. The real key to effective and efficient social media management is measurement.

All these points are worth considering in order to ensure strong social media management."

To read additional excerpts from my books, go to bobbyowsinski.com.

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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.

Just Who Is Winning The Streaming War?

There's no doubt that streaming is catching on slowly but surely, as more and more people discover that having immediate access to a large library is better than owning a small one. That being said, Spotify seems to get most of the publicity. You may be surprised to learn that the service is actually far behind the leader though.

According to a new study published by the NPD Group called "Music Acquisition Monitor," streaming music usage in 13 to 35 year olds looks like this:

Pandora (free) - 39%
iHeart Radio - 11%
Spotify (free) - 9%
Grooveshark - 3%
Slacker - 2%
Pandora One - 2%
TuneIn - 2%
LastFM - 2%
XBox Music - 2%

Streaming music accounted for 23% of the demographic group's total listening. Interestingly, for those older than 36, this figure decreases to 13%, as most of their listening still belongs to AM/FM radio.

It's interesting that Pandora gets so little press (unless it's about royalty payments) yet has such a large lead in marketshare. It also should be interesting to see if these numbers hold up after Apple's iRadio is introduced later in the year. Next year's study might prove to be something very different.

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

Interested in the Music 3.0 archives? Buy The Music 3.0 Guide To Social Media. The best of over 800 posts.

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.

An Interview With Derek Sivers

Derek Sivers’s life has certainly been interesting so far, from working as a musician/ringleader of a circus to a stint at the publishing giant Warner/Chappell to being on the road as a touring musician to creating and running CD Baby, one of the most widely used music-distribution services today. After selling CD Baby in 2008, Sivers now spends his time thinking of new ways to help musicians. In this excerpt from my Music 3.0 book, you’ll see his insights are as thoughtful as they are cutting edge.

"What trends do you see today that you think will influence the distribution and consumption of music as we go forward?

Now that there’s absolutely no barrier to entry for every person on earth to release every noise they make, there is a huge flattening of selection. Instead of 100 people making $1 million each, the future music biz may be 1 million people making $100 each.

How do you think the audience has changed?

They’ve changed because they can’t be spoon-fed anymore, and they can’t really be sold or persuaded as much as before. Because they have endless selection, they only receive and act on recommendations from trusted sources, usually friends.

Radio used to be one of the things they trusted. But now it’s transformed into something that music lovers can’t even tolerate, so real music fans don’t expect FM radio to turn them on to new music like it once did. Therefore, for new artists, radio is moot.

What’s the best way to break an act today?

First of all, an artist has to have the right attitude, which maybe is no different than it ever was. What’s new is that the artist now must also have the ability to learn, adapt, and communicate.

You’ve got to touch lots of people. You’ve got to resonate emotionally with them, then communicate sincerely. A lot. Fans really do like using their favorite artist as a bonding, cementing group maker. It’s part of your job as an artist to encourage your fans to talk to each other and make a “tribe” (to use Seth Godin’s word) around you. And after breaking, you have to solve problems and improve your skills weekly to keep your career developing.

That being said, to be a great musician you have to learn how to focus. You have to look at yourself yourself objectively to notice what needs improvement, and have the dedication to improve that even when you think you can’t.

But to be a successful professional musician, you have to learn how to look at yourself through others’ eyes. You have to understand why the venue owner is really booking artists, why this person really signed your mailing list, and why people really go out to a bar at midnight on a Thursday night. It’s an amazing learning experience, and as you’ve noticed, I’m endlessly fascinated by these things.

Do you have any promotion tips?

Hundreds. Please see http://sivers.org/pdf, where I took a few months to write them all down and share them all for free.

As for tools, I’d try to find ones that aren’t already saturated with music: maybe an artistic use of Twitter or Improv Everywhere. But whatever I used, I’d really make sure that I was always in a real three-way conversation with my fans. It’s three-way in that I’d encourage them to talk with me and with each other and make my success their success, just like Obama did in his election campaign.

What are your feelings toward the major record labels today? 

It’s easy to look at them as buffoons (like we do politicians), but most of them are surprisingly smart. This last ten years has been humbling for them. It’s shaken out the people that were only in it for the money, so most of the people at labels today are in it for the right reasons and are more entrepreneurial.

If you look at the current biggest sellers, they’re almost all on major labels, so it’s just bad logic to say that the labels are doing everything wrong. They still may do many things wrong, but not everything. Their different expectations change their costs, so they have to get incredibly lean and efficient so they can actually profit off something that sells only 10,000 copies. Most indies can profit off of 10,000 sales, but majors simply can’t right now.

Do you think an independent artist needs an agent or a manager today?

Most musicians feel if they just had a good manager, agent, or promoter they’d be all set, but most managers, agents, and promoters will tell you that most artists aren’t ready yet.

I think it’s the artists’ responsibility to develop themselves to the point where they’ve proved their persistence and ability to make music and to put on a show that people love. Once they’ve got more bookings than they can handle, it’s a good time to hand that job to an agent.

As for a manager, I think that should be like a business-minded band member whose sole job is to handle the business and marketing. It doesn’t have to be a professional manager. But yes, someone of that mind-set should definitely be included always. Don’t go too long without one!"

 Visit Derek Sivers' website at sivers.org for lots of ideas and inspiration.

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

Interested in the Music 3.0 archives? Buy The Music 3.0 Guide To Social Media. The best of over 800 posts.

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.