Chicago's Cloud Tax Could Affect Your Music

Most large cities claim to be in a money crunch these days and Chicago is no exception. In order to create a new income stream, the city has instituted a "cloud tax" that targets online databases and streaming entertainment services.

This means that you now may be taxed on your entertainment from Spotify, Apple Music, or Netflix at a rate of 9%. If you're currently paying $100 a year for a service, it will now cost you $109 if you live in Chicago.

But how can this happen, since none of those services are based in Chicago and for the most part are global entities? The cloud tax is actually comprised of two taxes - one covering "electronically delivered amusements" and the other covers remote computing databases and platforms that are aimed at those consuming the media, not providing or distributing it.

Some ISPs are already implementing collections of the tax, but that may also make them eventually leave the city limits to keep the bookkeeping costs down and their customers happier.

Many attorneys are gearing up for a fight as well, claiming that the tax violates both the Federal Communications Act and the Tax Freedom Act as it discriminates against services delivered on the Internet.

Of course, with people reluctant to pay for a subscription music service already, adding even a few dollars more could be a deal breaker.

Here's hoping that the cloud tax doesn't catch on beyond Chicago, since before you know it we'll all feel the pain as the local taxes pile up on our Internet use.

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Why Would Facebook Start A New Music Service?

Don't look now but Facebook has been in talks with the major labels and many believe that's because the company is seriously considering launching a music service to compete with Apple Music, Spotify, Pandora, etc.

One advantage for Facebook is that, unlike Spotify and Pandora, it wouldn't have to rely on the income from music to keep the lights on. Of course this is a strength of both Apple and Google.

That said, there's another more likely scenario at play.

Facebook has recently dedicated itself to making video a bigger part of the service, providing better engagement and ad rates than YouTube to start the ball rolling. While major brands have tried Facebook videos with some success, the platform is still having trouble getting smaller brands and page owners to post.

The most watched content on YouTube is music, so by just getting the official music videos of stars and superstars on the platform, Facebook believes it can make some giant strides in taking a chunk of viewership from YouTube, and hopefully prime the pump for more user generated content.

Reportedly a pilot program to post some music video trials will launch as soon as the licensing deals have been sewn up.

The ad revenue split is supposed to be identical to YouTube, with 45% going to the rights holder (in this case, the major labels) and 55% going to Facebook.

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7 Tips For Tweeting A Live Event

Adweek recently ran a great post about tips for Tweeting a live event. They were thinking more about a business conference than a gig, but many of the tips apply to a live show anyway. Here they are, but with a music spin.

1. Use the right hashtag(s). If you have a following that regularly attends your gigs, start your own hashtag that you can consistently use. Something like #(yourband)live could work. Also find out if the venue has a hashtag and include that as well.

2. Let your followers know. If there's going to be a flurry of activity in a short period of time, let your followers know beforehand. No one likes their feed dominated by one poster, but at least they can tune you out if they're not interested if they know its coming.

3. Be interesting. Try to give a unique perspective that only you can give. What's the venue like? Did you meet anyone interesting (give them a  shoutout)? Is there a meet and greet or something happening preshow or aftershow?

4. Retweet others. If there are others tweeting about the gig, retweet them as well.

5. Take pictures. Tweets are a lot more interesting when a picture is included and the engagement is increased as well.

6. Follow other tweeters. This includes the promoters, venue and other bands on the bill.

7. Use Vine and Periscope. Twitter is more than just text, so don't forget to share a video about meeting a fan, what's happening backstage, from the stage, etc.

Twitter is especially cool for communicating at events, and that's the perfect time to engage your fans. Follow these tips and you'll keep everyone happy.

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The BBC Will No Longer Play The Classic Rockers

In the wacky world of music copyrights, what's normal and useful in one country may not extend to another country that has a whole different set of copyright laws. The result can mean it's difficult for even classic superstar acts to get paid or played.

Such is the case with Neil Young, The Doors, Journey and Bonnie Raitt, who have all withdrawn from Britain's Mechanical Copyright Protection Society (MCPS) over the terms of its licensing agreement. As a result, the BBC has announced that it will no longer player their music, because there is no way to properly pay them.

The MCPS is like the UK's version of ASCAP or BMI in that it collects royalties for radio performances in that country.

The fact of the matter is that the BBC really doesn't play these artists all that much anyway, but it might disrupt a few newer artists who happen to use a sample from their records.

The BBC also took a long time to make this decision in that Young had bowed out from the association way back in 2002, The Doors in 2006, and Journey in 2013.

The lesson here is to make sure that you have your international licensing deals sorted out, especially in these days of streaming, because you might be missing out of royalties from airplay that you're not aware of, or not being played at all because you're not part of the system.

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Composer-Producer Rob Arbitier On My Latest Inner Circle Podcast

This week I'm please to have composer, producer and music technologist Rob Arbitier on my Inner Circle Podcast.

Rob is not only one of my compadres from the AudioNowcast, but he's been Stevie Wonder's technology guy for 30 years, as well as a composer/producer for commercials, movie trailers and albums.

Rob tells a great story about how he got started started with Stevie, then shares his vision about the future of audio hardware and software on the podcast.

In the intro I'll describe how a lawsuit from American Idol's record label 19 Recording against Sony looks to challenge the major label's equity interest in Spotify, and the importance of the studio headphone mix and some tips on getting a great one.

Remember that you can find the podcast at BobbyOInnerCircle.com, or either on iTunes or Stitcher.

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Everything You Need To Know About Hashtags

Here's a great infographic from SocialCaffeine.com about Twitter hashtags. I've posted a lot about them here in the past, and this graphic reinforces that info.

Pay attention to the bottom right hand corner - the Where To Find Popular Hashtag section. It has some great suggestions about where to find find the right hashtags for your content (remember that what you post doesn't always have to use #musicians, #music, #studio, etc.).

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Is Smooth Jazz Dead?

For a while there in 1990s and early 2000s "smooth jazz" was front and center in radio stations in every major city across the country. Many former rock stations switch to the smooth jazz format in an effort to boost ratings, and for a while it worked.

That trend has drastically changed however, and we might have seen the last of the format for a while, at least on radio.

Stations that featured smooth jazz have seen their ratings plummet recently, causing most to bolt to another format to attract more advertisers.

But why? One theory is that smooth jazz stations struggled to attract younger listeners, which is the most desirable demographic for advertisers. Still, there seemed to be plenty of listeners in the almost-as-desirable 25-54 age demo.

Which means that the demise of the radio format may in fact be due to bad data supplied by Nielsen, who's the dominant ratings provider for both radio and television. The idea is that people were still listening, but they weren't being counted due to being in the wrong demographic.

I'm not a proponent or listener of the smooth jazz format, but the lesson here is that if it happens to one format, it can happen to others as well. Having listeners doesn't equal having the right kind of listeners for many advertisers, and by extension the station groups that own the radio stations. No wonder radio content is worst than ever. Thank you very much Madison Avenue.

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How Much Is A Music Stream Actually Worth?

There's a lot of confusion in the marketplace about how much a music stream is worth. To say that it's a complicated issue is an understatement.

• It depends upon all of the following factors:

• What type of service (interactive like Spotify, or non-interactive like Pandora)

• Which tier (free or paid subscription)

• Which territory it's played in (they all pay different royalty rates)

• Your marketshare (on Spotify you get paid more if you get played more)

As you can see, it's impossible to say exactly what each stream is really worth, and the best we can do is get an average. Billboard has done just that with a great infographic that gives you an approximate worth of a stream coming from Spotify and Pandora.

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Is Sony's Stake In Spotify Legal?

One of the things that most people don't know about Spotify is that it's partially owned by the three major labels. That was a required part of the licensing deal that Spotify had to acquiesce to  in order for the streaming music service to launch in the United States.

The major labels are obviously hoping for a windfall profit should Spotify ever be purchased by a larger entity (its valuation is north of $10 billion), and the worst part is that most of it would go to the company's bottom lines instead of to the artists that helped make it happen.

But one of the major labels, Sony Music, might be up against a legal foe that could change everything in its equity position with Spotify.

19 Recordings, the record label tied to the American Idol television show), has filed suit against Sony demanding fair-market royalty rates from the label regarding its position with Spotify.

Basically Sony received a block of advertising on Spotify's free tier that it could sell on the side, with the label pocketing the money. 19 Recordings, who's artists include Kelly Clarkson and Carrie Underwood, claims it wasn't receiving its rightful cut of that money.

While this might shock some in the business (especially artists), it's just some of the same shenanigans that record labels have been playing almost forever. Whether it's morally right or wrong, labels do their best to make the most money possible and will do whatever it takes to feed the bottom line. The artists are usually left with less than they deserve, but have little power to change things (unless of course you're name is Taylor Swift).

Should 19 Recordings win this lawsuit, however, it will start a chain reaction that could end up forcing the major labels out of the streaming business, and maybe even pay at least a slightly higher royalty to its artists for digital distribution. At least, that's the dream.

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Big Changes In Music Sales This Year So Far

Nielsen's mid-year music sales report is out and a lot has changed in a mere 6 months. Here are some of the highlights.

• On-demand streaming from services like Spotify is up 92.4% over last year! Over 135 billion songs have been streamed so far this year. Yes, this streaming thing is definitely catching on. 

• Vinyl sales continue to rise at an ever greater rate, up 38% over last year. Vinyl albums now comprise almost 9% of all album sales.

• Digital track download sales are down 10.4% from last year. The bloom is off the rose.

• Digital album sales are virtually flat though, which is good news considering that last year they were down 10%.

• If you add in the new ways of looking at albums in the digital domain (track equivalent albums = 10 and stream equivalent albums = 1500), total album sales are actually up 14% over last year at this time.

• CD sales are down 10%, which is decreasing at a much slower rate that anticipated and slower than we've seen in previous years.

• Physical album sales are down at traditional big-box retail, but up 0.6% at indie music stores, and up a giant 18% at non-traditional vendors like online, at the venue, and direct-to-consumer.

What do these numbers prove? Music is still not only alive and well, but demand and consumption is growing. What we don't see in the Nielsen report is the revenue numbers, and that's where the actual tale is told. We have to wait for the end of the year for that.

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A Look At Music Tech Salaries

Once it leaves the creative stage, music is more and more dependent upon the tech community than ever before. Today's distribution, communication, interaction, marketing and promotion all depend on tech.

That's why it's a good idea to have an idea of what it costs in terms of salary for tech execs. Many musicians, artists and bands want to build their own app or music service but have no idea of the costs involved. Of course, labor is just one of the pieces of the puzzle and it can be a big one.

Of special interest is the lowest rung on the ladder, which is community or social media manager, with an average salary of $40k to $70k. This is a job that every artist needs these days, and this figure can help place a value on that job. Thanks to Billboard for the infographic.

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A Look At The Crowded Streaming Marketplace

Apple Music launch this week moves it into an already crowded streaming marketplace. This Edison Research survey (the chart was put together by Statista) shows that Pandora has a commanding lead in the US over all other streaming services.

It's important to remember that Pandora isn't available in most of the rest of the world, so Spotify basically has matched its user numbers if you look at it globally.

Apple Music hopes to be at the top of the food chain within a year though, and actually has a shot at it despite the tepid launch thanks to its hardware user base and the 850 million credit cards currently on file.

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