To Do List 2012

Jan 12 2012

There’s never a busier day on the publishing calendar than the day after a holiday, and the first working day after New Years is the mother of them all.  Having had a nice two week break to sit and contemplate the future of music, the inadequacies of their present situation, the wealth of unexploited future classics sitting in their song catalogs, and the disturbing similarity between their circumstances this year and last, songwriters the world over wake up on the first day of the new working year with one single mission forefront in their minds:

CALL PUBLISHER!

I know this because I used to be a songwriter, and I did the same thing.  Every year.

Of course, it’s only natural to want to reassess, re-organize, and restructure in order to get a fresh start on the new year. It’s what we should be doing, whether we’re songwriters or publishers.  But often it’s too easy for songwriters to bring a list of complaints and goals to the conversation, without providing any ideas as to strategy. Likewise, too many publishers are prone to offer up a plan that’s amounts to more of the same—“keep writing, keep pitching and let’s hope we get that big break”. Both approaches leave a very good percentage chance that songwriter and publisher will be having the very same conversation next year.  And no one needs that.

So what does it take to move things ahead in 2012?  Of course, the detailed strategy will vary for every writer and publisher in every genre across every part of the world.  Nevertheless, there are a few resolutions we can almost all agree to make, that will pay off regardless of our professional level or musical market.

In lieu of a champagne toast, I offer you a no-cost kickstarter for the new year:

12 Resolutions for 2012!

1.  Get the paperwork right.

When I moved from being a songwriter to a music publisher, one of the great surprises was to see first-hand how much songwriter and publisher income vanishes every year due to paperwork errors, omissions and general sloppiness.  Settle your split disputes, check your song registrations around the world, read your royalty statements, make sure your PRO (BMI, ASCAP, SESAC, PRS, etc) has your correct address.  There’s no excuse for a paperwork error in publishing. Paperwork is pretty much what publishing is.

2.  Expand your territory.

When investment-backed companies like BMG Rights make billion dollar investments in the music-publishing sector, one of the key motivators is the anticipated expansion of the global music market.  And yet many songwriters and publishers, particularly in genres like country, hip-hop, r&b, and even rock rarely think about the world outside their own borders.  Beef up your sub-pub relationships, check out internet radio to familiarize yourself with markets outside of your own territory, use YouTube and other tools to find talent all over the world. There’s almost always more than one geographical market for any type of music.

3.  Don’t demo.

Songwriters are the only ones left still using the word.  Rough work tapes for reference are fine. But when you record, make masters. That way you can license them to film & television, commercials, video games and other venues.

4.  Live the single life.

Please…. no more unknown artists making their “album”.  At this point, superstars are struggling to sell albums.  We live in a singles market, so make singles—one memorable “hit” song will move your career further than a thousand interesting album tracks.  Unless you’re Radiohead or Adele, put your focus on making singles.

5.  Tighten your belt.

The tragic truth is, there’s a lot of money that’s gone out of music publishing over the past five years, and it’s not coming back. Plummeting mechanical income, some ugly days at the bargaining table for ASCAP and BMI, the complete bungling of the negotiations for the rates on “streaming” services, and wild, cutthroat competition in the sync world all add up to one thing: less. Less money for everyone, so get used to it. We’re all going to have to cut waste, reduce overhead, and eat fewer lunches at Bice.  Let’s start with the cutting waste and reducing overhead part.

6.  Loosen your grip.

Publishers like control—it’s our nature. But with more and more of the entertainment universe being covered by blanket licenses, rather than specific song by song licenses, we’re going to have to be willing to put our music out there, with less and less control over how it will be used. Whether it’s a homemade YouTube video made by a stranger or a mix on turntable.fm, songs are being used all the time—we’re just not being asked for permission. Those uses are what keep songs alive, even if it’s not yet something remotely profitable. But squeeze those songs too tight and you’ll kill ‘em.

7.  Don’t sweat the small stuff.

In a world in which the income for publishers and songwriters has been cut drastically, we cannot continue to waste time on meaningless matters. Does the split dispute get settled at 17.5 percent or 20 percent? Unless the record goes 4x platinum, it just doesn’t matter.  Someone changed a line in the lyrics without permission? Just hope a listener is paying enough attention to notice. What matters is what makes money. All else can be ignored.

8.  Put your head in the clouds.

For better or worse, the industry is embracing new cloud-based streaming services like Spotify, which means that iTunes will soon be going the way of Tower Records.  Given that this technology didn’t exactly sneak up on us, one might have hoped that the same mistakes made with mp3s might have been avoided this time around. Incredibly, the record companies managed to get this one right, while the publisher’s income seems to be lost somewhere in the grey, murky ether.  But publishers are going to have to figure out how to turn this technology into something profitable, or the only clouds we’ll be seeing will be those we pass as we plummet to our demise.  This is the battleground for the next five years.

9.  Don’t lose that syncing feeling.

Welcome to the only game in town. In the past ten years, the focus of publishing has shifted almost entirely, from records and radio, to film, television and advertising.  At this point, the transition is complete, and the sync world is the one that every songwriter and publisher has to be a part of. Depending on the style of music you work with, it might be video games, advertisements, source music libraries, branding campaigns, television spots or web-based advertising programs. But your business has to have some strategy for licensing your music in sync uses.

10.  Get the money in.

Easier said than done. It now seems that every record label uses songs without mechanical licenses in place, theater shows routinely drop songs into a revue without clearing the dramatic rights, advertisers sign sync licenses long after ads are on the air, and everyone pays late, if at all.  It takes a new kind of tenacity to get paid, and only those who are the most persistent, the most unrelenting, and the nastiest will get their money. You can’t just put your registrations in place and wait for the payment to show up.  Those who snooze will be abused.

11.  Move your business beyond music.

Despite a slightly better year in 2011, the writing is on the wall: the music business is in an almost permanent state of contraction.  It simply is no longer the singular cultural defining force that it was 30 years ago.  The good news is, the entertainment business as a whole is growing constantly, from new cable channels to internet tv to virtual worlds to a myriad of different venues for live entertainment.  The best news is, music remains a vital element in almost every entertainment form. Sometimes it’s okay to be the supporting actor. Music publishers who rely solely on the music business can’t survive. Better to be one small part of the larger industry of show business.

12.  Move your music beyond business.

Clearly 2011 was the year of Adele. Coming out of an environment knee-deep in Dr. Luke sound-alike records and generic auto-tuned voices over a Euro dance track, “21” was a breath of fresh air that above all else, sounded honest.  Public taste always swings like a pendulum and one can be sure that whatever is popular in 2011 will change to at least some degree in 2012.  But Adele’s triumph signals a move away from things that sound blatantly contrived. Songwriters are going to have to be more subtle, more daring, and dig a little deeper. Music that sounds more like a marketing strategy than a song may be on its way out.

 

Everything always looks good at the start. I’m sure that for all of us, 2012 will have its high points and low points, and enough inspiration and frustration to keep us all battling for the next 12 months. Still, now is a moment to make some plans beyond just calling your publisher, or assuring your songwriter that this could be his or her big year.  Here’s to making, not letting, things happen in 2012. Happy weaseling in  the new year!

 

 

 

 

Having vowed to keep the blog positive and focused on the new developments that could actually save the industry, I’ve decided to do what any cynical old music business weasel would do:

I’m calling on people younger and smarter than myself. (Doug Morris—wake up from your nap and take note.)

In what may be the best marriage yet of music and social networking, turntable.fm debuted this summer to rave reviews. One of those instant fans was my A&R colleague at Shapiro Bernstein, David Hoffman. Having educated our office on the endless possibilities of this new service, David recently sat down with my Berklee intern, Jorge Oliveres, to share the good news—two young guys looking at one exciting new facet in the future of music:

turntable.fm

Turtntable.fm is a virtual nightclub in which users are the DJs. The website is divided into “rooms” that play different styles of music. Users can chat with each other and bob their avatar’s head by clicking an “Awesome” button if they like the song that is being played or they can click the “Lame” button that, if pressed by enough people, skips it. DJs can choose the music they are going to play from a huge database or they can upload it themselves.

David Hoffman, Director of Creative Services at Shapiro Bernstein & Co., Inc., began using turntable.fm since soon after it was launched and he is extremely excited about its potential. I had a chance to talk to David about all the opportunities a service like turntable presents for both music publishers and songwriters.

David Hoffman

I heard you are very interested in turntable.fm.

I’m interested, almost slightly addicted to it. Probably a month ago now, a good friend of mine who is also in the music industry and one of the most knowledgeable music people I know, emailed me about turntable.fm. He said, “You have to check it out.” He’s also a DJ and I have, from time to time, guest DJed on his show–so we know each other’s music tastes pretty well. When he told me to check out turntable, I went on it immediately and was hooked. The next day I came to the office, stood up in front of everybody and was like, “You have to check out turntable.fm!”

I follow the digital music industry and the future of the music industry through blogs and reading up on the trades, and this, turntable.fm, [represents] the potential that I see for the new cloud services that are coming up. Hopefully, it’s something that will stay around for a while. Even if it doesn’t, it will show the potential of how great music discovery can be with the right website and the right digital tools.

What do you think of the legal implications of turntable.fm? I was reading that right now they claim they are protected under the Digital Millennium Copyright Act.

Like Pandora, and a few other services, they are operating under the DMC Act of 1998 that allows Internet radio to exist as long as it operates within the confines of the law. If you spend a lot of time on turntable.fm, you’ll notice that there are some interesting little rules that they don’t tell you are rules. For instance, if you go into a room, you can’t listen to music just by yourself. As with Pandora, if you want to hear the latest Beyonce single, it’s not necessarily going to play that first; it’s going to give you other music. That basically limits the listener to what is now Spotify. [On Spotify], you call up the song and listen to it, but Spotify is a service you have to pay for. Right now you can get it for free if you have an invite, but eventually you’ll have to pay. There are other rules too: you can’t play an artist more than a certain number of times in an hour.

Last week turntable signed agreements with both ASCAP and BMI. That’s really great news because I think a lot of these services didn’t originally sign with the PROs because they figured they didn’t have to. Turntable.fm signing with them is a big step in the right direction.

I think the only problem they’ll have moving forward, and it’s a big one, is the fact that you are able to upload your own music onto turntable.fm. That’s where the waters get a little bit muddy. If I create a mashup of a song and I don’t get permission from the publishers to create that mashup, that piece of music is technically one big copyright infringement. I’m able to upload that song and play it for people, and I believe once you upload a song to turntable.fm, it stays there. And those are the most popular rooms–the ones that play these mashups and remixes.

It’s going to come to a point where they’re going to have to do some licensing like Apple has done with the cloud services and Spotify has done. I hope they can really get it together. I also hope that the music industry realizes the strength of turntable.fm. I think they do.

What do you think is its potential? How could publishers take advantage of this?

Publishers can take advantage of it in a lot of different ways. Number one: for music discovery. It used to be, back in the day, music lovers would go to record stores. You’d go to a really good one (for me it was always some of the Ma and Pa cool shops or going to the Tower Records on West 4th Street). You’d go in and just thumb through the records. If I was into jazz that day I’d go to the Miles Davis section and say “Oh, wow, this is a CD I hadn’t seen before,” an interesting import CD or something, and I’d buy it. For music discovery [today], aside from word of mouth and what you read on blogs, the organic element of actually discovering something for yourself is kind of lost.

Turntable is the perfect place [to recover this] because you’re combining word of mouth (you’re learning from someone that you’re virtually meeting or someone that you know because they’re on turntable) and you’re listening to it. You’re talking about the music, you can link from it, and that, from an A&R perspective, is the closest thing to that original sense of discovery.

As publishing companies seek out talent, they can go into the cool room on turntable.fm, figure out who the DJs are going to be, and actually listen to it, learn about it and be on stuff before anybody else. I can’t tell you how many bands I’ve heard on turntable that I’d never heard before. When you are in a great room and the DJs are really going with the vibe, there could be a song that may not be your favorite song if you just heard it out of context. But when you hear it within the context of songs that are along the same vibe, [it] makes a big difference to someone who has a good ear for music and is out there to scout talent.

Not only publishers, but also record labels, managers, publicists, booking agents; everyone [can take advantage of this] to promote music. There was a band who was inviting people to a turntable.fm room for a listening party to debut their new CD. If one of our artists or songwriters has a new album or a new song, instead of sending out random emails or taking every music supervisor out to lunch and handing them a CD, I can invite them to a turntable.fm room. I’ll know if they’re there or not, see that they’re bopping their head, thinking it’s “Awesome” or not, and I can actually talk to them about it within the chat room. You’re basically creating a virtual listening party. I think that more and more bands are going to take advantage of it, and I think publishers will as well. There’s definitely the potential to have music supervision and A&R rooms.

I was also wondering about the potential it has on the other side, for emerging artists. Do you think it’s a good platform to promote new music?

I think it’s one of the best platforms. Whenever I speak on panels, people ask, “How do I get my music into the hands of the gatekeepers?” I say, “The best way to do it is to give it to someone who knows that person.” The analogy I like to use is [this]:

I’m in my apartment in NY and I hear a random Chinese food menu come underneath my door. It’s from the local Chinese place and I’ve never heard of them before. I take it and throw it out. But if Eric [Beall], my colleague, says to me, “Hey, this great new Chinese place opened down the block from me, you should check it out, ” I’ll probably go there the next day.

I take pride in listening to most stuff that comes to our office. But if I’m learning of music because I’m getting a random email, I’m thinking “OK– most of the stuff that comes randomly is not very good.” But if I’m learning of the music at turntable.fm from someone I know, or even someone I might only know virtually, it’s a different situation. If they’ve played a few good songs that I liked, and they say “Check this out,” I’m going to listen with open ears.

It seems like a really cool blend between social networking and music. I’m surprised something like this didn’t come out before.

I agree with you. It’s such a simple idea. Yet the potential is massive. Think about colleges. Since it came out in the summer, it hasn’t made its impact on college yet. Once the fall semester starts, you’re not only going to be at a party and listening to awesome music— you’re going to be playing the music. You’ll bring your laptop, we’ll get up on turntable.fm and start our own room. And while we’re partying, we’re also going to be DJing. If I were in college, I’d probably do that about 14 hours a day.

Right now [turntable has] limited capacity to 200 people [per room]. I think that will eventually expand. It’s going to become more like satellite radio. It will be an Internet radio station playing in the background, somewhat like Pandora because you’re choosing your overall theme, but more like satellite radio or traditional radio with great DJs. In fact, you might personally know the DJs.

What about when turntable has an application? What about when automobiles are wired with wifi? Once it’s on your phone and you’re able to DJ on your commute to work, you’re going to say, “This is really tremendous.” There are so many ideas I’ve been reading about, like an external “Awesome/Lame” button. You can be hosting a cocktail hour and secretly, in your pocket, hitting ”Awesome”.

Also, the link with Spotify is fantastic– turntable and Spotify go together like peanut butter and jelly. You’re discovering [music] and immediately clicking the Spotify link so that you can learn more about the band later. When you’re DJing, you can call up and research songs on Spotify—it’s a better interface than turntable for that.

Turntable.fm is the first thing in a really long time that’s made me very excited about music discovery. Instead of being an old curmudgeon saying, “Back in the day it was so much better,” this is the sort of thing that [has me] thinking, “Wow, this is amazing!”

David Hoffman is the Director of Creative Services at Shapiro, Bernstein & Co., Inc., one of America’s oldest independent publishing companies. At Shapiro Bernstein he is an A&R rep, TV/Film/Advertising placement person and song plugger amongst other things. The catalog ranges from classics including “In The Mood,” “On The Sunny Side of The Street” and “Ring Of Fire” to current hits by David Guetta, and current indie-darlings Savoir Adore. David is also a music supervisor who has worked on indie films like “Still Bill” a documentary on Bill Withers, and advertisements for Apple and Puma. Prior to becoming a full time publisher, David was a professional drummer with the popular instrumental jazz/funk/jamband ulu, touring upwards of 220 nights a year. Before hitting the road, David worked at BMI and Giant Step Inc.

David has been a featured speaker/panelist for CMJ, ASCAP Expo & ASCAP Night School, AIMP and others and DJ’s regularly on EastVillageRadio.Com.

Follow me on twitter @EricBeall

Looking Out For #1

May 08 2011

It’s remarkable how quick that warm and fuzzy feeling fades. Just last week the music weasels were gathered together at the ASCAP Awards, toasting EMI’s continued reign as Publisher of the Year. Well, okay… actually everyone was grumbling and sniping behind their back, and of course, chortling over their imminent sale. It’s a music awards dinner after all. You can only expect so much goodwill.

EMI Wins ASCAP's Publisher of the Year

Still, not too many foresaw that Publisher #1 would turn around a week later and publicly give the finger to ASCAP, and the songwriter and publisher community they represent. I suspect Marty Bandier at Sony ATV might get the front and center table next year, rather than Roger Faxon. Not that much of EMI will necessarily be around to see it.

Earlier this week, EMI Music Publishing made news by announcing that EMI would be taking back from ASCAP the responsibility for licensing digital rights in North America– EMI will now be able to “bundle” their rights together (mechanical, performance, and synchronization) and license them all directly, negotiating their own rates and terms, to digital services, rather than allowing ASCAP to negotiate and licensing the performing rights. In one sense, it’s a step closer to the “one-stop” licensing long-sought by digital services and many in the music community.

Roger Faxon

“The digital world demands a new way of licensing rights in musical compositions”, said EMI Music Publishing Chairman & CEO Roger Faxon. “We are reunifying the rights in many of the songs that we represent. By bringing these rights back together our aim is to reduce the burden of licensing, to create greater efficiency and importantly to reduce the barriers to the development of innovative new services.” Oh. And I thought it was just one more attempt to undercut the competition and cut out the middleman.

Of course, it might be some of that as well. While the ASCAP contract with publishers generally grants the PRO an exclusive right to represent the performance rights of the member’s catalog, even ASCAP CEO John LoFrumento acknowledges that “our members have always had the right under our Consent Decree to license their works directly”. Historically, most publishers have not chosen to do so– believing that the collective power of ASCAP (and BMI) allows them to negotiate more favorable licensing terms with radio, television, nightclubs and the rest of the music users than any one publisher could achieve on their own. Apparently, that’s no longer the case.

You heard it here first– this topic was brought up several months ago in this blog-space, in “With Friends Like These”. That missive explored the policy of DMX, the custom music service, which encourages music owners to license to them directly, rather than through the PROs. Of course, the money at stake from Muzak-type uses with companies like DMX is dwarfed by the monetary potential of digital rights. A publisher licensing DMX directly is someone breaking off a piece of crust from the pie that is PRO performance income. Taking away digital rights is like someone sticking their grubby hand in and walking off with a fistful of PRO pie.

http://www.ericbeall.com/with-friends-like-these/

ASCAP quickly sought to put a good face on the whole matter, even sending out a letter to members several days after the announcement– most likely to quell a quiet panic spreading among other publishers. Emphasizing that EMI continued to use ASCAP to license and collect on uses at traditional media, like radio and television, LoFrumento explained:

“A changing licensing environment has led certain members to experiment with licensing defined categories of music directly. This only involves the performing rights for those online music users who are not currently licensed or do not have licenses in effect with ASCAP. The online dollars represented by this licensing alternative could amount to less than 1% of ASCAP’s total current revenue.”

John LoFrumento

A generous statement from the little guy who just got sand kicked in his face by the big bully. But it purposely evades the point. As the undeniable industry leader in the publishing world, EMI’s decision to go it alone has an impact much beyond the actual dollar value of what it will be taking out of ASCAP coffers. Most importantly, it undermines the entire “strength in numbers” principle that justifies the existence of the PROs. If ASCAP can no longer speak for EMI, which has a larger share of the most popular songs than any other publisher (hence their status as Publisher of the Year), how effective can the PRO be at negotiating licensing terms with the digital community.

It also potentially weakens ASCAP in relation to BMI– strangely, no announcement was made as to whether or not EMI would also be taking digital rights away from BMI. It would seem very odd if EMI did not take the same action at BMI and SESAC. If the goal is to bundle rights, then certainly you want to bundle all of the catalog, not just a portion. I suspect that if BMI manages to hold on to what ASCAP has lost, it will have been by making a massive, unmentioned cash advance to bolster EMI’s shaky financial picture. This highlights the other big problem of the moment at ASCAP, which is BMI’s willingness to dole out mega- advances to major writers and publishers– a game in which ASCAP is hard-pressed to compete.

Needless to say, it all comes down to money. Despite Faxon’s media-ready press statement, this action has very little to do with easing the licensing process or encouraging new services. In fact, the licensing process would seem to have just gotten a whole lot more confusing, given that almost no current contemporary hits are entirely controlled by EMI April Music. Instead, most could easily have seven or eight different writers and publishers, all represented by some combination of ASCAP, BMI or SESAC– except for EMI April Music, which will be off on its own. That should be very simple. This EMI move is really about:

1. Eliminating the middle man.
On the most straightforward level, this move is not much different from the whole DMX idea– one less organization taking a cut of the money. While ASCAP’s fees are relatively low, they add up, especially when your company is bankrupt and up for sale. While ASCAP and most of its supporters would not paint the organization as a “middleman”, but rather an advocate and a representative in the collective bargaining process, the portrait of the unnecessary, fee-grabbing, intermediary is one that the technology community has been painting for the PROs over the past ten years. According to many in the digital community, there would be more uses of music, they could pay higher rates, and we’d all be making more money without these outdated organizations. Hmm. And the auto workers would do better without the UAW. We’ll see soon enough, I expect.

2. Screwing your buddy.
Unity in the face of opposition has never been standard operating procedure in the music biz. From the vantage point of the giant companies that dominate the landscape of music publishing, the downside of the PROs is that they even the playing field. Small publishers benefit from the clout of huge catalogs like EMI, while those same huge catalogs pay most of the cost of maintaining the organization. Being free of ASCAP allows EMI to negotiate rates on its own. In fact, it may have been the dismal state of the current negotiations at the CRB (Copyright Royalty Board) that prompted this move by Faxon. EMI could feel it can negotiate more effectively alone. At the very least, it can use the new independence to undercut the competition when it’s advantageous to do so, and to over-charge where it sees an opportunity. And what about the small independent companies? Well, they can always sell their companies to EMI.

3. Being the first rat off the sinking ship.
The real reason that the EMI move has resonated so heavily in the pub world is that it’s the first undeniable evidence of the elephant who has been lurking in the room for several years. Virtually all of the licensing and collection organizations around the world are houses of cards that will have to withstand some very big approaching storms. Dwindling mechanical royalties and exploding paperwork demands have left HFA in a very precarious position. Performance income has remained stronger, but now that looks poised to take a significant dip as well. Couple that with the pressure to make imprudently aggressive advances to top new writers and you’ve got the recipe for disaster at the PROs. All it will take is for one or two more major companies to follow EMI’s lead before that sinking feeling begins. The big guys will swim for shore and the little companies will be left behind with less influence, lower income and rapidly escalating fees.

According to ASCAP, this step by EMI is no big deal. And indeed, it may not last very long, given that the management team of EMI can measure their future with a stopwatch. It’s perfectly likely that ASCAP will be holding its awards show next year without Roger Faxon, who may be floating around outside the Renaissance from a golden parachute. But the first shot of the battle has been fired, everyone’s seen it, and everyone will react to it. There’s no taking it back.

Despite all the accolades and warm words at last week’s Awards, the truth is that the creative community that ASCAP has represented for 100 years barely exists anymore. It’s just a ballroom full of independent contractors of A&R services, speculators, investors, and hedge fund managers all in it for a quick buck before the final buzzer sounds.

Can’t wait until the BMI Awards in May.

If The Shmoo Fits…

Mar 23 2011

In case you’re lying awake at night dreaming of being the next Rebecca Black (and really, who isn’t?), you might want to read a little further before you equate fame, which is cheap and getting cheaper, and fortune, which is ever more hard to come by. Just last week, the Copyright Royalty Board released the statutory royalty rates for Internet radio royalties, which are royalties paid by webcasters for the streaming of sound recordings. It’s not exactly the pot of gold at the end of the rainbow. At the same time, it’s actually a step forward from where we were several years ago.

To be fair, YouTube is not one of the services covered by these royalty rates (although YouTube’s rates are not much better). The published rates apply to “noninteractive streaming”, which refers to streams that do not allow the listener to specifically select each individual track– it covers everything from radio-like “broadcasts” to what are termed “pureplay’ webcasters like Pandora. And more importantly, these rates are for royalties paid through Sound Exchange to performers on the “sound recording”– that’s in addition to the royalties paid to music publishers and songwriters, through ASCAP, BMI and SESAC. If you are a performer who writes and publishes his or her own music, you should receive royalties from Sound Exchange (representing your earnings as a musician and/or owner of the sound recording) and from ASCAP, BMI or SESAC (who collect your money as the composer and publisher of the song).

Like most agreements that are the result of hundreds of negotiating hours between attorneys, the basis for the rates is almost entirely incomprehensible. There is a distinction between broadcasters (commercial radio stations for example) who are streaming their programming on the Internet and “pureplay” webcasters like Pandora, who do not have a broadcast component to their business. There are exceptions for small services that can’t afford the agreed upon rates as well as noncommercial services. NPR gets its own special deal. Then we get to do the negotiations all over again in 2015. Still, it’s worth at least getting a rough idea of what your music earns for you, as a performer, when it shows up on an Internet stream. To get the full story, check out:

http://www.broadcastlawblog.com/2011/03/articles/internet-radio/final-webcasting-royalty-rates-published-a-comparison-of-how-much-various-services-pay/

Here’s the basic breakdown for 2011:

Broadcasters Per Performance Royalties:
$.0017 per performance

Statutory Webcasting
$.0019 per performance

Pureplay Webcasting
.00102 per performance

I know…. it’s alot of zeroes before you even get to the decimal point. You read correctly: it’s significantly less than one cent per performance. Ouch.

But keep in mind that this number is multiplied by the number of people listening to the stream. Therefore, a “pureplay” service offering 10 songs an hour to 1000 listeners would be paying a royalty of $10.20 per hour– or about a dollar per song. That’s not so bad, especially if you’re talking about a lot more than 1000 listeners.

Indeed, before we start complaining about the rates, it’s worth noting that performers are still fighting (after only about 80 years) to receive any royalties at all for use of their music on commercial radio. While songwriters and publishers receive performance income from the use of the songs in a radio broadcast, record labels and artists receive nothing, except that all important “exposure”. Which leads me to my real point…

Why is it that songwriters, publishers, labels and performers always seem to find themselves begging and pleading for a small crumb from the pie when it comes to every new media invention throughout history?

It happened with radio. In fact, it’s still happening with radio. Since the 1930′s, writers and publishers have been battling for what amounts to a tiny percentage of the overall profits from commercial broadcasting, when virtually every radio format in existence (except news, talk and traffic) is entirely built on music! And performers still haven’t managed to get anything at all.

It happened again in the 1980′s with MTV. Here was a television network built entirely on music, that paid nothing for the music videos upon which the channel relied. Today, the videos are in short supply, but MTV continues to pay almost nothing in synchronization fees for the music that it uses throughout shows like “The Hills”, “Gossip Girls” and “Jersey Shore”.

Then it happened yet again with YouTube in the last decade. In a virtual replay of the MTV story, the creators of YouTube constructed an Internet broadcasting network fundamentally based on the illegal, unlicensed use of any and all music, then sold the enterprise off to Google for a billion dollars, never having paid a nickel to OK Go, Soulja Boy, or any of the other YouTube phenoms who brought the company most of its biggest stories. Since then, Google has adapted a more acceptable position in regards to royalties, and YouTube is licensed by the PROs. However, as any songwriter or artist will tell you, the money being generated for the creative community is more symbolic than substantive.

OK Go

When a problem keeps occurring over and over, it’s usually worth considering whether YOU might be doing something wrong. Sooner or later, the music community– labels, publishers, songwriters, artists, producers and musicians– is going to have to take off the headphones and step away from the control board, or duck out of the board meeting, or skip the after-party and take a few minutes to ponder:

Why do we keep getting screwed by the people building businesses around the music we create?

Here are three quick explanations of why the music business seem to continually find ourselves desperately, hopelessly passing the bucket around the media industry, hoping someone drops in some spare change:

1. We are incapable of acting in concert.

We can make concerts all right. But labels, publishers, artists and musicians can never manage to act “in concert”– that is to say, as a unified front capable of fighting for the rights of everyone in the industry. Publishers distrust labels. Labels take advantage of the artists. Artists desperately undercut one another, hoping to grab an opportunity to set themselves apart from the pack. Now we even have the problem of publishers and songwriters going around ASCAP,BMI, and HFA to license directly, effectively damaging their own representatives in the collective bargaining process, all in order to save a few percentage points worth of fees. Not surprisingly, everyone in the media, from advertisers, to networks, to film studios and Muzak programmers, have realized that there is always someone willing to license their music for next to nothing, or at least less than their buddy is charging. We are, by and large, an industry of weasels, and it’s not helping our cause.

2. We forever believe in the myth of “exposure”.

I remember when I first started playing the guitar, back in grade school. Soon I had formed a band, and even at that young age, I quickly realized: everyone always has a party, a dance, a wedding or a bar mitzvah that they want you to play for free– “because it will be great exposure”. Of course, it’s not entirely untrue. Clearly, OK Go got plenty of benefit from their “free” YouTube video, as has Rebecca Black. But as a business model, the idea of giving away the product to another company who then keeps all the money that your product generates has not panned out very well for us.

In perhaps the greatest irony of all, the music industry actually winds up paying out huge amounts of money to radio (and back in the day, to MTV) in order to get those media outlets to use their music for free. It’s not just that we’re giving it away for nothing. We’re actually begging, pleading, and paying out the nose just to be able to give it away. Meanwhile, someone else is building their Clear Channel, or MTV or YouTube, largely from people tuning in to hear our product. And the more people that tune in, the more someone else earns, while we get nothing. But don’t worry. It’s great exposure.

3. We continue to focus solely on creating music, rather than selling it or marketing it.
Why was it Apple, rather than Sony for instance, who created the iPod, and iTunes? Why didn’t the major record labels, having already learned about the power of music videos from all the “exposure” they got from MTV, come up with YouTube? Why couldn’t a music publisher have invented Pandora? Instead of battling endlessly with the corporations who control these ventures, none of which have any inherent investment in music, the industry could actually control and profit from the medium it uses to promote and disseminate its product to the public. Instead of passing the bucket around after the set, the musicians could actually own the club.

It never happens. The history of the music business is the story of one fatal flaw, and that is the inability to think beyond the music itself, to how the public wants to receive that music. We’re creators and owners of content. But we’re never interested in thinking about how that content could be used.

Doug Morris

A few years ago, Doug Morris, then the head of Universal Music, gave a widely publicized interview with Wired magazine– where he bemoaned the effects of the digital revolution, and complained that everyone was treating the record industry like “The Shmoo”:

“There was a cartoon character years ago called the Shmoo. It was in Li’l Abner. The Shmoo was a nice animal, a nice fella, but if you were hungry, you cut off a piece of him and put onions on it, and if you wanted to play football you just made him like a football. You could do anything to him. That’s what was happening to the music business. Everyone was treating the music business like it was a Shmoo.”

Acknowledging that his lack of knowledge in regards to technology made it difficult even to hire the necessary experts, Morris insisted that his job should solely be finding and developing new artists.

“There’s no one in the record company that’s a technologist. That’s a misconception writers make all the time, that the record industry missed this. They didn’t. They just didn’t know what to do. It’s like if you were suddenly asked to operate on your dog to remove his kidney. What would you do?”

Given an attitude like that, it does seem a little surprising that Morris would be the choice of Sony (didn’t they use to be a technology company? ) to revitalize their music division in the year 2011. But of course, that’s exactly the problem. We’re so used to being the Shmoo, we couldn’t possibly think of doing anything else. It might be wise for musicians and performers to keep their calculators handy. Because we’re going to have to continue to live off royalty rates like $.00102 per play for some time to come.

Never Can Say Goodbye

Mar 09 2011

A night in the life of a Music Business Weasel:

After many broken promises and lame excuses, I finally make it to the showcase performance of a friend of mine. Miraculously, I arrive early, and the band is just starting to set up. Not wanting to do the usual “stand by the bar with arms folded” A&R routine, I try to be supportive by taking a seat up front– at the far end of the stage, right in the front row. I’m a little surprised by the fact that I don’t see any familiar faces in the audience. After all, the artist and I have been friends for a decade or more. We usually have quite a few acquaintances in common. But it seems she’s attracting a new audience these days. Also seems that she has an entirely new band, with all new instrumentation. No wonder she was so eager for me to catch the show.

A few minutes before the show, the club has filled up– still no sign of anyone I recognize. It’s only when the band finally takes the stage that I realize:

This is not my friend.

I check my blackberry… and realize I’ve shown up in the right place, but on the wrong night. My friend is not playing tonight. She’s playing next week. This is problem #1.

But it’s really problem #2 that is the most serious and urgent matter. I’m stuck. By sitting in front of the stage, on the side furthest from the door, I have absolutely no way out of this club. My only choice is to stand up in the middle of the set, in front of the whole audience, and walk out, tripping over people all the way across the room. This is an option I do indeed contemplate, as the band is bad. Very bad.

Nevertheless, I persevere Only an hour later am I freed from this hell to make my escape. Having wasted an evening, I return home and spend the next few hours contemplating immediate retirement.

Here’s the point: in the music business, you always need an escape route. Finding your way into situations is a great thing– but sometimes it’s just as essential to find a way out of them.

When negotiating publishing deals, it always surprises me how much time songwriters and attorneys will put into bartering over things like bonus payments (which almost inevitably never actually come into play) and how little attention they pay to what happens at the end of the deal, when the company either runs out of option periods, or elects not to pick up the contract for another year. This is a crucial period, and a smooth exit strategy is essential in order for a songwriter to be able to retake control of his or her catalog, or to move on to a new deal with another company. If you’ve reached the end of the line with your current publisher, or if you’re in the midst of entering into a new relationship, here are four things to ask:

1. How long can we go on like this?

In the world of publishing contracts, one “contract period” does not necessarily equal a year. A publishing deal with two option periods does not necessarily end at the end of the second option period. In this land of legalese, things are not always what they seem.

Some contracts are actually built on periods that will last a calendar year. But most agreements today are built on a “contract period” that will last a minimum of one year, but could stretch into multiple years depending on whether or not a certain number of songs have been delivered, a certain number of exploitations have been obtained, or a certain level of recoupment has been reached (that is, the earning back of whatever was paid as an advance to the writer).

I have seen instances where songwriters have spent five or six years in the first “contract period” of their deal, trying to hit a Minimum Delivery Requirement or Minimum Release Requirement that was completely beyond their reach. This can literally be a career-ending situation, as writers are forced to live year after year off that first period advance, with no hope of receiving another payment until they obtain a certain amount of placements.

2. Whaddya want from me?

So let’s talk about that Minimum Delivery and Minimum Release requirement. These two clauses are at the heart of most “break-up” problems between writer & publisher. A Minimum Delivery Requirement is usually not a big threat– it’s a fairly standard clause that requires a songwriter to hand in certain amount of new songs (usually 8-12) per “contract period”. But be sure to do the math! If you co-write a song with one other songwriter, and split the ownership down the middle, then you control only 50% of a song, and only that number is credited toward your Minimum Commitment. So if you always write with two other writers, and split things evenly, you will have to write 30 songs in order to hit a 10 song delivery requirement. It gets worse…

The Minimum Release Requirement is by far the more dangerous of these two clauses. While the Delivery Requirement only applies to turning in “acceptable” songs to the publisher, the Release Requirement is based on having a certain number of songs (anywhere from 3 to 7, or even 10) on “commercially released albums”. This is often made even more onerous by restrictions that stipulate that a “commercial release” must be on a major label, must be released in the US, and can not include soundtrack albums or compilations. I’ve even seen requirements that say that no more than two songs on any one album can count toward the Minimum Release Requirement.

The problem here is that songwriters generally have almost no control over release schedules or circumstances. Songs get dropped off of albums at the last minute; album releases are delayed; albums are released in Europe months before they’re released in America; songs are held off of one album and saved for a subsequent release. Personally, I hate the Minimum Release Requirement. It’s simply too dangerous for writers, precisely because it leaves them with almost no escape hatch. Nevertheless, such clauses are very common, especially on deals with relatively large up-front advances. Despite what an attorney (who is often basing his or her fee on the size of the advance) might tell you, if you can take less money upfront in exchange for no Minimum Release Requirement– do it.

3. When do I get my life back?

Reversions differ widely from contract to contract, with a “life of copyright” deal (once the standard in music publishing, but far less common now) being at the far end of one side of the spectrum, and the Kobalt-style “administration” model, with all of the writer’s catalog reverting at the writer’s request within a matter of months being at the other side. A more standard agreement might provide for the publisher to retain for 15-20 years any songs “exploited” during the term of the contract, while “unexploited” songs will revert back immediately upon termination, or within three years, provided all advances have been recouped.

It’s very important that writers are aware of the reversion terms in their contracts, as there is often a window of time in which the writer must reclaim the song, or else allow the publisher to keep it for life of copyright, or at least the 15-20 year period. To miss such an opportunity to reclaim a song, especially one earning money, can be a very expensive mistake.

When a publishing contract has run it’s course, it’s imperative for songwriters or their attorney to furnish to the publisher a Schedule clarifying all of the songs submitted in order to meet the terms of the agreement, listing any exploitations of the songs, and identifying the dates upon which the various songs will be reverting back to the writers. Which leads me to the final point…

4. Take a letter, Maria….

Reversions are only helpful to the extent that you can get written notice from the publisher that the songs have reverted back to you, and that the publisher will relinquish their rights in registrations at ASCAP, HFA, or BMI. This is the key concern that actually triggered this blog.

Particularly in these days, when small publishers are disappearing faster than Arab dictators, when mid-level and even large companies are being swallowed whole by new hedge-fund back acquisition firms, and many of the biggest players appear to be in the game only long enough to acquire some assets and immediately sell them to someone else, songwriters need some protection.

I recommend a clause in the contract requiring that upon the completion of the final contract period, the Publisher will provide Writer with a letter and a schedule of all songs handed in during the term of the agreement. The letter should state the date upon which the agreement ended, acknowledge the dates upon which the various songs on the schedule will revert back to the writer, and relinquish any claim to the songs that revert immediately. Publisher should also be required, within a designated window of time, to provide all necessary Quit Claims or other documents in order to facilitate changes in registrations, and to cause the Publisher’s foreign affiliates to do the same.

Imagine you are a songwriter signed to a publisher which is swallowed up in a giant corporate merger, or goes out of business entirely. Two months later, your contract period is up, and no one calls to exercise the option for the next period. Technically-speaking, you are out of your deal. You can pursue new opportunities and perhaps reclaim at least some of the songs from your catalog.

But how can you do that if no one at your former publisher will pick up the phone at the office? Or if there is no one at the office who knows anything about you or your deal? No one at ASCAP or BMI can change a registration without a letter from the company currently claiming control of the rights. You can’t make a new publishing deal, because most publishers will also want notification from a former publisher that your previous contract truly is over, and that there will not be any claims that one of the new songs was written during the previous term. You need to be sure that the failure by Publisher to provide a letter or notice of the completion of the deal is considered a “breach” of contract.

No one likes to talk about endings at the beginning. But in days where many people who are with you at the start of the game will have been ousted, purchased, fired or arrested before you reach the finale, you have to know what happens when the music stops. Relationships ain’t what they used to be– even in music publishing.

When I worked at Sony ATV several years ago, the Sr. Vice-President of the Nashville office, Woody Bomar, was legendary for his ability to skip out of cocktail parties undetected. He would show up, make his rounds, greet everyone warmly and make sure that everyone who needed to see him was aware that he was in the house. Then like a flash, he would duck into a back room, a stairwell, a kitchen or a hallway and suddenly he was gone. When latecomers inquired about him, everyone would say “Oh yea– Woody’s definitely here. I just saw him. I think he’s over in the corner there…” By that time, Woody was already on to the next event. He knew every back door or fire exit in Nashville. That’s a pro for you.

Don’t go in, until you know how you’re getting out. Every deal deserves a happy ending.

Sometimes tough times breed a certain sense of solidarity among those suffering together, creating a sense of unity and a determination to stick together for the good of all. The English in World War II come to mind. Sadly, one seems to have to go back in history a bit for such tales of shared sacrifice in the name of a common interest.

On other occasions, economic or physical hardship can lead to a desperate willingness to do anything and everything, including dining on the bones of your buddies, if that’s what it takes to survive. Try throwing a tiny scrap of meat to a group of hungry lions, then watch the carnage ensue. Or just turn your eyes to the 21st century music industry, and watch the weasels beg, borrow or steal from each other, in a desperate grab for a piece of their quickly-shrinking pie. Not pretty.

Of course, it’s not surprising, either. As much of the formal structure of the music business evaporates (including such small structural details as “creator makes music; listener purchases music”), the large players begin to fall apart, and the whole playing field becomes increasingly populated by individual entrepreneurs trying to fight their way through the crowd, it’s only natural that an “every man (or woman) for himself” mentality takes over. We’re all just trying to make a living after all. Nevertheless, there is a real danger for the creative community, when we begin to undermine any effort to act collectively in advancing our own economic interests.

Needless to say, the people who use music, whether in advertising, on records, in television shows or in bars and restaurants, have noticed the growing levels of economic desperation among those who write songs and publish them. They’ve also noted that there is more than enough music to go around. Consequently, we’re beginning to see efforts by those who request music licenses to circumvent the collective organizations that have represented American songwriters for decades. Why license songs through Harry Fox, ASCAP, BMI or SESAC when you can go directly to the songwriters and publishers? Those using music as part of their business can negotiate directly with the music creators, eliminating the middleman and all the bloated overheads of those admittedly bureaucratic organizations. In some cases, they may actually increase the amount of money going directly to the copyright owners.

This issue came to mind recently when I heard about the licensing policies of DMX, a music programming service that has emerged as one of the chief designers and suppliers of music to a variety of different venues, including retailers, bars and restaurants, hotels, and airlines.

www.dmx.com

Traditionally, companies like DMX function in much the same way as commercial broadcasters, obtaining blanket licenses from ASCAP, BMI and SESAC which allow them to use any and all the music represented by those organizations in return for an annual fee, which is negotiated by each of the performance rights organizations. Those fees are collected by the PROs, and divided among their members (the songwriters and publishers) based on which songs are being used most often. Clearly, it’s not a perfect or even remotely precise system, which partly explains why DMX is so eager to offer publishers an alternative.

Rather than licensing through the PRO’s, DMX encourages publishers to issue direct licenses to DMX, in which DMX will have access to all of the songs in the publisher’s catalog (or in an individual songwriter’s catalog) and will pay the songwriters and publishers directly, rather than through a performance right organization. At first glance, it seems a pretty good deal. What writer or publisher wouldn’t want their music played in public venues? Why wouldn’t the payments for those uses be higher if ASCAP or BMI weren’t taking their fee off the top?

All true. By most accounts, DMX pays more money with greater accuracy for these music uses than the PROs. The truth is that BMI and ASCAP have never managed to pay more than a tiny dribble of money for this particular type of public performance. In fact, DMX also has “blanket licenses” with the PROs, in order to allow the company to use music that the individual publishers or songwriters might not be willing to license directly. Presently, writers and publishers have a choice: to license and collect directly through DMX, or to simply collect through the traditional blanket licensing system of the PROs.

So why would any publisher elect to receive less money, less efficiently? It all comes down to a sad, but simple reality:

No one lives at the top of the charts all of the time. Unless of course they’re Dr. Luke or Stargate, and even they have to cool down eventually. By requiring radio stations, television stations, and yes, companies like DMX, to take out “blanket licenses”, the PROs have been able to use their strongest songs and members as the basis for negotiating licensing rates that benefit all of their members. In order to have access to the biggest classic songs and contemporary hits, companies like DMX have to pay a fee that can then be shared with the songwriter who had only one big song, or the small publisher who has some golden oldies, but not much else. The power of a few hit-makers is leveraged to benefit the whole music community. Given the realities of the music business (in any era), most of us will find ourselves at both ends of the spectrum, from stars to starving, at different times in our careers.

Call me a cynical old music business weasel (you won’t be the first one to do it), but my instinct is that companies like DMX, or those insisting on receiving direct mechanical licenses rather than going through Harry Fox are not acting out of a general beneficence toward songwriters and music publishers. They are seeing an opportunity to undermine the organizations that license, collect, audit, lobby politicians and pursue legal action on behalf of songwriters and publishers, large and small. Even if they have to offer to pay a bit more money in the short-term, if these music users can eliminate the pillars of the creative community, then all the rules of the game can be changed at will. Each songwriter and individual publisher will be left to fend for themselves, based on the value and desirability of their particular catalog at any particular time.

We all like to see our music used, and we all benefit by those who help place the music in public venues. But think twice about issuing direct licenses to companies like this. These people are not your friends.

Sadly, there are two sides to this story, and the flip side is not so pretty either. If we’re going to be cynical about the motives of those outside of the creative community, we have to bring a little of the same skepticism about the motives of some of those working on our behalf. There are some ugly secrets at ASCAP and BMI that need to be exposed—more on that next week. If one is looking for heroes, the music biz in decline is not the place to find them.

Still, a little perspective is in order. Songwriters in the 21st century are far better off than those in the 19th. American songwriters are far better off than those in countries without strong PROs. The principle of collective bargaining power is a large reason why. Just because times get tough, we might want to think twice about killing off our old friends on behalf of some new ones.

By this time, most of you are probably trying to figure out how a 14 pound turkey is supposed to fit into that tiny little browning bag, or you’re stuck in an airport somewhere trying to reunite with a family that will be driving you crazy within about twenty minutes, if you ever do manage to arrive. If so, then the point of Thanksgiving may already be starting to grow a little hazy.

Having spent the last several Thanksgivings in Italy, on a single-minded mission to educate the unknowing locals about the pleasures of this peculiarly American holiday, I know that it can be difficult to explain what this event is all about, especially in times like the present. As one Italian friend asked, “Thanksgiving, yes… I see. But for what? “

With blessings few and far between in the music industry these days, one could be forgiven for focusing solely on football and food on Thursday. Still, particularly in the hard times, one should always be mindful that even the worst of times have their mitigating factors that allow us to survive and fight another day. Well, at least most of us will survive, unless we’re Guy Hands and EMI.

In the spirit of gratitude for past acts of kindness and hope for the future, here are five things for which we songwriters and publishers can thank our lucky stars. Feel free to make your own list, or offer up suggestions—we need all the help we can get.

This year, let’s be thankful for:

1. Our Friends
No one survives in this business on his or her own. Not only do we have our own personal networks of contacts, cronies, and colleagues, we are fortunate enough to have dozens of organizations both large and small that support the efforts of songwriters and music publishers. Some go out and get our money for us. Some offer career advice. Some recognize outstanding achievement. Some fight for our rights at a government and industry level. Here’s to the whole lot of helpers: ASCAP, BMI, SESAC, NARAS, NARIP, RIAA, Songwriters Hall of Fame, Songwriters Guild, NMPA, AIMP, etc. If you don’t know what those acronyms stand for, it’s time you do some research. You may be missing out on a valuable ally.

2. Little Girls and Old People.
Never thought I’d see this happen, but the truth is that music is no longer a crucial element of youth culture. That spot has been handed over to a whole collection of pastimes from social networking to electronic games. The people keeping us in business these days are adults and their 10-13 year old daughters. Don’t believe me? Go ask Justin Bieber, Taylor Swift, Michael Buble, Susan Boyle, and every top touring act of 2010, almost all of whom are old enough to be Justin Bieber’s grandparent.

3. Hipsters, trend-chasers and buzz-mongers.
There’s certainly enough of these people out there. If you haven’t seen ‘em, just go and spend a few days at SXSW, or MusExpo, or check out any edition of Music Week. No matter how many times these characters chase the new trend that never quite catches on, or fork up massive advances to buzz bands that never make it out of Williamsburg, or fill up endless amounts of blog-space waxing on about an act so obscure that it will never be more than a flea on the industry long-tail, they’ll always have a home in a business endlessly devoted to the next big thing.

For small independent publishers looking for opportunities, that’s a great thing. Because while the hype-sters and the cooler than thou types are drawing everyone’s attention in one direction, a smart, savvy, and yes, conservative publisher can take his or her pick from dozens of proven, steady income-earners to go in business with. They might be songwriters whose catalogs survive on oldies stations, or heritage acts that sell year after year to their core audience, or jazz, classical and world music acts that barely register on the industry radar screen. They’re not too cool or sexy, and they won’t get you any mentions in the A&R Worldwide newsletter. But they will make you money, and they’re being all but ignored by the A&R staffs of most major music companies. For that, I say thank you.

4. Sub-publishing, if not sub-publishers.
Those of you who follow this blog know that several recent postings have dealt with the opportunities and challenges related to sub-publishing. Like most blessings, this one can also be a bit of a curse. For those looking to spread their business to other foreign territories, the subject of sub-publishing is primarily focused on finding partners in other territories where your music might be effective. That’s an opportunity that often winds up being more of a source for frustration than real income.

The problem is that most sub-publishers are simply not very good. Most companies are simply offering lip-service to foreign publishers—promising to promote their music in the local territory, but rarely doing anything but the most basic collection functions, and sometimes not even that. If you’re counting on your sub-publishers to create a global presence for you, you’re likely to be disappointed.

In fact, the bigger opportunity in regards to sub-publishing is often to become a sub-publisher for other companies. By offering to represent viable catalogs in your local territory, you create a whole new set of business relationships, build your roster without having to make a major financial investment yourself, diversify your song catalog, and improve your cashflow—and that’s not even mentioning the 15-20% that you can often take as your percentage. For a small publisher, picking up other catalogs to sub-publish in your local territory is one of the easiest and most cost-effective business strategies you can hope to find.

5. The suits
And finally, a good word for the lawyers. That’s unusual. However, the truth is that the biggest growth area in the music publishing business for the next 10 years will likely be lawsuits—particularly the large-scale, class action kind. Having already seen distributions from YouTube and Napster cases, and in anticipation of receiving payouts from the late payment fund set up by NMPA as part of the recent negotiations over digital payments from record labels, music publishers are anticipating a windfall. Sooner or later, dozens of major internet media and music businesses will be forced to settle up for music that they’ve been using without a license for the last 5-10 years. It won’t be easy or quick, and it won’t happen without a fight. But given that the copyright laws are clearly on our side, we are likely to eventually walk away with some money, with a little help from our trade organizations, and of course, the lawyers.

I know—it’s not the most uplifting list. Anytime you’re actually thankful for lawyers, lawsuits, trade groups, Justin Bieber and heritage rock acts, you know that it’s been a tough year. Nevertheless, we’re still fortunate to be in a business where we are able to spend our days working with music and songwriters. There are a lot worse ways to make a living.

Most of all, I’m thankful for the indomitable spirit of the Music Business Weasel that lives in all of us. Sure, it’s a business that is often short-sighted, ridiculously speculative, and maybe a little bit sleazy. At the same time, it’s a business of survivors. The people I work with each day are clever, full of ambition, endlessly determined, and always sure that tomorrow will bring the big hit that makes it all worthwhile. That’s the kind of weaseling I most admire, and it’s what assures us that there will always be a music business, in some shape or form, for us to profit from and complain about in the future.

Have a great holiday and thank YOU for your support of the blog over the past 12 months. See you in December!

The New Big

May 16 2010

A good friend of mine, one of the best “songpluggers” left in the music industry, has his own company through which he consults for a number of publishing companies and songwriters, pitching songs throughout the world. His company slogan, emblazoned on every email is:

Small is the new big.

He’s right– in more ways than one. Clearly, small companies with low overheads and fluid business plans are better suited to manage the challenges of the “new” music industry than the massive conglomerates that have been the dominating forces over the past several decades. In fact, even many large, well-established companies have realized that small profit ventures like low-percentage administration deals, music library businesses, gratis sync licenses that yield only performance income, and no-advance sub-publishing arrangements have replaced the big-money pay-offs on co-publishing, life of copyright deals and six-figure sync fees. Small money is not only the new big money. It seems to be the only money there is.

But “small is the new big” in another sense as well–perhaps it would be more accurate to say, “small is tomorrow’s big”, and it always has been. The music industry is full of niche markets, many of which are deemed too small or specialized to interest the major record labels, or their colleagues at the major publishers. These little pockets of activity probably don’t show up on the Billboard charts. The music may not even be sold through conventional music outlets (whatever those are anymore). The markets are too obscure to interest the big industry players, not nearly sexy or cutting-edge enough to bring up at an A&R meeting, and too limited in their earnings to attract the attention of the investment community or the financial guys at the major music corporations. And yet, if you look at some of these markets twenty years later, you’ll usually find that at some point, a smart, wily, unconventional entrepreneur came in and quietly made a killing, while all the rest of the industry slept. Out of nowhere, the small business person becomes the new big one.

Happened to read an article today about one such example– a very dramatic one at that. Check out an article called “The Influencer”, by Connie Bruck, in the New Yorker magazine.

http://www.newyorker.com/reporting/2010/05/10/100510fa_fact_bruck

New Yorker articles being what they are, this is a long and fascinating story of entertainment mogul and political powerbroker Haim Saban, full of complex political and ethical implications. But for music business weasels like myself, the primary point of interest was this one:

Saban made his initial fortune as a music publisher. He’s now estimated to be worth more than $3 billion dollars. Do I have your attention now?

In 1986, Saban sold his first music publishing catalog to Warner Communications for about $6 million dollars, which he then used to expand his empire, buying additional catalogs, and then expanding his media holdings to eventually include Fox’s Family Channel and now, Univision. Still, I feel fairly confident that most in the music business would hardly recognize his name, except for having seen it on the outside of office buildings or theaters in LA. For all his years in the music industry, Saban doesn’t seem to have any big hits or legendary acts to his credit. He probably didn’t often hang around the schmooze circuit of awards shows and music conferences. I can’t see him checking out bands at Stubbs at SXSW.

So how did he manage to make a fortune in the music business, anyway? The answer:

Cartoons.

Not exactly the mainstream of the industry. Indeed, it was even less so when Saban got into it, in the late 1970′s. At the time, Saban was managing a young French singer from Israel named Noam Kaniel. The manager brought Kaniel to Paris, taught him French, secured a recording contract and had a minor hit with the artist when he sang the theme to “Goldarak”, a Japanese cartoon series broadcast in France. You can’t get much further from the mainstream music business than that. Yet for Saban, it became the opportunity of a lifetime.

The exposure to the cartoon business allowed Saban to see that a huge amount of music publishing income could be generated by TV cartoons, which are licensed to television stations around the world and played countless times. If you’re wondering what the word “perennial” means, think about Bugs Bunny or the Road Runner, and how many times you’ve seen certain classic episodes– and how many times your kids have seen, or will see them as well. Now, imagine what those generate in performance income from ASCAP, BMI, SESAC, and the other societies around the world.

Quickly, Saban seized the moment and began signing writers to create music as “works for hire”, which he then provided to the cartoon production companies for free– Saban registered the works and took the publisher share (and often the writer share as well). In less than ten years, he was selling the company for seven figures. Small got big and was getting bigger.

It’s a remarkable story, but not an entirely unique one. There are similar tales throughout the music and entertainment industry of people who found a spot in the shadows where they could quietly mint money, while others grabbed the headlines. Actually, the story of Saban reminded me of Clive Calder, the founder of Jive Records and Zomba Music, who I had the good fortune to work for in the late 90′s, before he sold his company for more than 3 billion dollars. Like Saban, Calder found his initial opportunity in niche markets like heavy metal and hip-hop, snapping up the publishing on early hip-hop artists and producers when the general consensus was that hip-hop was unlikely to yield any enduring copyrights. Rap was too small a business to matter much, and even many of the other entrepreneurs that were pivotal in the expansion of the genre failed to see the value of the publishing rights, and focused only on starting record labels.

All of this came to mind when I met this week with Chrisie Santoni, a talented songwriter, performer and publisher. In our discussion about her band and the success she’s had in creating a self-sustaining business around her music, she happened to mention that there was another element to her company which focused on children’s music. As it turns out, she has constructed an exciting new business, Dancing Bears Music, built around her work as a performer and music educator for children– playing shows and selling CDs. Still, I could tell that she was a little hesitant to mention it, knowing that music for children was something that rarely registered on the radar of most music business weasels.

http://www.dancingbearsmusic.com

That’s their loss. The fact that most of the major labels have entirely abandoned the children’s market is incredible, especially since it’s one of the few genres that can still move physical product. People who balk at paying a dollar to download a song for themselves will happily buy a fifteen dollar CD for their kids (especially if it keeps the kids quiet in the car!). Why label A&R’s and music publishers would rather wager money on a buzz band from Brooklyn, instead of a children’s project that could be sold to all the people wheeling strollers around Park Slope is utterly beyond me. But I know that it spells opportunity.

It’s not the only such opportunity out there. Niche markets like world music, foreign language releases, theater music, modern classical, jam bands, soca, dancehall and many others all have the potential to generate big money, and yet fall outside the purview of most major label and publishing A&R people, who are segregated into pop, rock, country, urban, and (maybe) Latin departments.

Of course, there are no guarantees. Many small niche markets never grow much, and others quickly become over-saturated to the point where no one can make any money. Niche markets probably won’t get you a profile in Billboard, or generate a major label bidding war. At worst, a niche market provides a small but steady income with a minimum of risk. At best, it could be tomorrow’s hot new thing, and you’ll be there before anyone else. So never be embarrassed or hesitant to focus your company in areas that the mainstream industry dismisses as marginal. There’s a lot of money to be made on the margins. For small publishers who want to get big– this is where you start.

A quick note in closing:

I want to be sure to let all of you who follow this blog know about my new business: Ask The Music Business Weasel! This is an hourly consulting service aimed at songwriters, artists, and publishers looking for information, feedback, or advice on confronting challenges in their business. The consultation can happen in person, over the phone, through skype, or whatever suits you– but it’s a chance to chat and try to brainstorm about opportunities and strategies for your music career. If you’re interested check out my brand new website:

www.ericbeall.com

If you go to the section marked: consulting, you’ll find more information about the service. Just drop me an email at ericbeall@ericbeall.com, and I’ll be in touch to set something up.

After an upbeat pep talk to begin the year, it seems appropriate now to acknowledge what we all know:

Things do not always go as planned.

Have you noticed that? If you’ve tried any of the previously given tips on how to get your music out there, I’m pretty sure you’ve definitely noticed that as good as the ideas look on paper, they don’t always play out as well in real life. The truth is that the work of putting your music out into the industry is every bit as difficult as the creative work of writing songs and making records. And that’s pretty hard.

Unfortunately, most of us bring a lot more tenacity and determination to making the music than we do to selling it. It’s always interesting to watch musicians, who have spent countless lonely, isolated hours honing and refining their ability to play a musical instrument or to sing, then devote all of twenty minutes to researching potential contacts. Producers who will miss deadlines or blow out their budget to fix tiny flaws in a recording (which are probably noticeable only to them), will balk at spending money to attend a conference, or will choose to send out mass emails to A&R contacts, rather than personalized ones, in order to save a few minutes worth of work. Songwriters will work and rework one simple line in a hundred variations, but give up in despair when their first phone call attempt to an A&R person goes unreturned.

Be forewarned: no matter how strategically you approach it, getting your music out there will always be challenging. You will run into closed doors everywhere you turn. Everyone does. But somehow, each year, a handful of people do break through. We know then that it can be done. It’s simply a case of trying every possible avenue until you find the one that works. So, to conclude a series of blogs on “How To Get Your Music Heard”, here’s three ideas of how to trouble-shoot when your sales approach isn’t working. Most importantly, don’t panic and don’t get discouraged. This problem is no harder than learning to play an instrument, finding the perfect title, or figuring out why your Protools isn’t working. When your first approach fails…

1. Check your connections.

The most common response you’ll hear when trying to get someone in the industry to listen to your music is this:

Our company does not allow us to accept unsolicited material at this time.

Welcome to the dead zone, from which most songwriters and publishers never return. Indeed, that’s part of the reason for such a policy. By its nature it will eliminate at least 50% of the people trying to call the company. Most will just give up.

Don’t give up. At the same time, don’t get mad– as irritating as it obviously is. The person who is telling you this is telling you the truth. Almost every major music company has an official policy, drafted by the corporate lawyers, that no A&R person is ALLOWED to accept material that is “unsolicited”, which is to say, from someone the A&R person doesn’t know. This is to protect companies from the very real threat of lawsuits, launched by amateur songwriters who are sure that their song was stolen by a superstar act. An A&R person who violates the policy and suddenly finds himself or herself at the center of a lawsuit could very likely lose their job.

The best way around this obstacle is to get out of the category of “someone the A&R person doesn’t know”. You need a connection. If you can drop the name of a lawyer, your ASCAP, BMI, or SESAC writer rep, another songwriter or producer who the A&R person has worked with, a friend in a different department of the company, or an established manager, booking agent, or radio programmer who is recommending you, you are now no longer “unsolicited”. This is the cover that the A&R person needs to be in compliance with company policy. It’s also the test you need to pass in order to make the person on the other end of the phone believe that it’s worth his or her time to speak with you.

If you’re getting the “unsolicited” line, then it’s time to go back and figure out who on your team (lawyer, manager, writer rep, songwriting buddies, studio engineer or owner, gear salesman, friends, etc.) might know the person you’re calling and be willing to refer you. If no one on your team can help, see if they know a friend of a friend of the person you’re calling. If you’re still unconnected, then you need to expand your team. Figure out who might be able to get to the music weasel you’re after, and go after that new person, starting the whole process over again.

I didn’t say it was easy.

2. Check your levels.

The second most common issue, after the “no unsolicited material” roadblock, is “nothing”. That is, total silence. Unreturned phone calls. Unanswered emails. The big freeze-out. You’re trying to get your music out there, and it seems there’s no “there” there.

Again, don’t get mad. Remember– just because you want someone to hear your music does not lay an obligation on the other person to take your call or listen to what you send. The person on the other end of the phone is being given priorities and duties by his or her boss, and they probably don’t include speaking with you. This is especially true as you move up the corporate ladder, and start trying to reach out to the higher-ranking executives on the A&R staff.

Most major record labels do have people that are searching for the next “developing” star– the hot, unknown songwriter or the undiscovered artist. But they are junior A&R people– not Sr. Vice-Presidents. The more elevated executives are supposed to be devoting their time to the superstars that are already signed and paying the bills. The same is true in major publishing companies and management firms. If you don’t yet have a track record or the calling card of a current “hit”, you will probably not have much luck reaching the Big Weasel. But that’s not who you need anyway, nor is that the person that needs you. You want to speak to the hungry, ambitious, excited, 22 year old kid that works for the Big Weasel and who wants more than anything to discover the talent that no one else knows about yet. This is how the kid will eventually become the Big Weasel. It is also how you will eventually get a returned phone call.

If you’re hitting a wall, it may be that you’re aiming too high. Adjust your aim one or two levels down the corporate pecking order, and you might find an open door.

3. Check your sound.

I know it will come as a shock, but some people may simply not like what you do. They have that right. In fact, if what you do is reasonably stylized, quirky, or clever, you can be sure that most people in the industry will not quite get it. Sony dropped Alicia Keys. Jive dropped Kid Rock. Lady Gaga is already on her second record deal. The fact that some people don’t like what you do might mean that there’s a problem with your music– you’ll have to determine how to address that. But it also might mean that you simply don’t have the right match between your sound and the person listening. There’s no accounting for taste–and you don’t have to. All you have to do is find the person whose taste is suited to your music.

As a veteran of the music industry, one of the few advantages that I enjoy is that I have begun to understand the likes and dislikes of the people to whom I’m pitching music. This means that a huge part of my job is simply knowing how to match a particular song, a new artist, or a producer with the people in the industry who will “get it”, whatever that “it” is. If I hear a great Swedish style pop song, I know to send it to Jive Records or Syco, and not to Island/Def Jam. If I’ve discovered a new female singer/songwriter or a Triple A band, it’s going to fit better for Chop Shop than Activision. Much of song-pitching is not how you send it out, but who you send it to. If you’re not getting results, it may simply be that you haven’t matched your sound with the correct listener.

4. Check your options.

Every office has multiple entrances. There is always an alternate way into any project. Persistence is vital, but persistently beating on a closed door will not make it open. The good kind of persistence is the kind that knocks on a door once, twice, maybe a third time… and then circles around the back, and goes in the side entrance. If an A&R person refuses your “unsolicited material”, try the artist manager. Many managers are one or two person companies, and thus have far fewer corporate “policies” that have to be respected. If the manager won’t respond, try the producer. If that proves to be a dead end, just keep searching– try the artist directly on MySpace or Facebook, or a friend of the artist, or the recording engineer, or the fashion stylist. Whatever crazy idea you have, I promise you, someone has tried something stranger. Not quitting doesn’t mean picking one person and torturing them until they listen to your song. It means searching for every possible person to torture. Just joking. But it does mean that you never stop looking for another way to approach the project that you’re targeting.

I hope the little series we’ve done on “Getting Your Music Out” has been helpful. I know in the opening paragraph of this blog, I compared the challenge of selling your music to making it– and in many ways the two things are quite similar. But in a few important ways, they’re as different as night and day. You know that rush you feel when you play a great guitar solo, or come up with the perfect hook line for a song? You’ll probably never get that feeling when you’re pitching music. It just doesn’t have that kind of reward. Instead, you get rejection followed by rejection followed by a slight glimmer of hope.

But here’s the thing: if you don’t do it, nothing happens. No stranger is going to find a song hiding on your hard drive and decide to put it on the radio. You’re going to have to make that happen. That’s the point of my book, “Making Music Make Money”. The only thing that can move your career ahead is if someone else hears your music and wants to buy it, sell it, perform it, or help you to do one of those three things. That won’t happen if the song never leaves your home studio.
If you haven’t made your New Year’s Resolution yet, here’s one: resolve to spend one hour pitching songs for every five hours writing or recording them. Get your music out there, and let’s see what happens…

Happy New Year everyone!

I know I said that this blog would carry on our current theme, which is how to get your music out there to people– and it will. But I’m going to save my trouble-shooting blog, what to do when you run into obstacles in pitching your music, for just a minute. After all, has anyone really been making pitch calls over the last two weeks? If you have, you’ve been leaving a lot of voice mails, because it’s dead out there. All of the music business weasels have departed for ski vacations or the Caribbean (nothing like a weasel in a swimsuit) and left LA and NYC to the tourists. So instead, I thought I’d offer up a quick set of ideas to kick off the New Year, and to put me thoroughly in sync with the rest of the blogosphere, offering Top Ten lists ad infinitum. Here’s mine:

TEN THINGS THAT YOU CAN DO IN 2010 TO MAKE YOUR MUSIC MAKE MONEY!!

1. Identify your market.

This year, try narrowing your vision and focusing on the one specific market that best fits what you do. No more dabbling in one style, then another, then another. Most of the reason that songwriters struggle to create that two minute “elevator pitch” that we discussed last week is that they quite literally don’t know what they’re doing– they have never forced themselves to focus on one specific thing sufficiently to be able to articulate precisely what it is that they do.

2. Know your market.

In 2010, the music business is a business of specialists– A&R people, managers, publicists, engineers, producers, and yes, even songwriters, are segmented by genre, and expected to be experts in that particular area of music. That means being familiar with all of the artists old and new in that market, knowing the key business players, the labels, the current production styles. Sound like a lot of information to digest? That’s why you “identified” your market. It’s not plausible to be an expert in three or four genres at once.

3. Strategize.

Once you know your market, and you know all about the artists, labels, managers and producers in it, then you’re in a position to start looking for the openings. Where are the opportunities? Don’t focus on the superstars if you don’t have any track record– those are out of reach. Look for the up and coming artists, or the new trends, or the hot new label, or the young entrepreneurs. That’s where you’ll find your opportunities. Once you see where the openings in the market are, you need to look at every possible way in which you can take advantage of it.

4. Know who you are.

You can’t start meeting people until you know how to introduce yourself. That doesn’t mean just saying your name and handing out business cards. You need to be able to explain in three or four sentences who you are and what you’re doing. You can talk about what you’re doing now (“I’m promoting a new single that just came out…”), what you did in the past (“I had a song on Kelly Clarkson’s last album…”), who you work with (“I co-write with Brett James in Nashville”), or who you are (“I’m a producer from Norway” or “I’m a recording engineer for a jingle house, but I’m also a songwriter”), but you need to have two or three sentences to present a picture that’s clear, interesting and memorable. Whatever it is, memorize it. Ideally, it should be a conversation-starter– that way it won’t be the only two sentences you get.

5. Know what you want.

This is such a big one that it needs to be divided into a big picture and a small one. In the big picture sense, you need to know what your goals are for your music and what would constitute success. Do you want to get rich? Do you just want to be able to have a full-time career in music? Do you just want to support your hobby and have one song on a record somewhere? Everything is acceptable, and there’s a strategy to get you to each goal. But it won’t be the same one. You can’t read a map until you know where you’re going. If you want to take on the big picture question, and you shouldn’t waste a moment on any other plan of action until you do, take the “Music Business Weasel’s Pop Quiz” in my book, “Making Music Make Money”.

http://www.amazon.com/Making-Music-Make-Money-Publisher/dp/0876390076

On the small picture side, you need to think about what you want from the person to whom you’re presenting your music. Are you looking for a record deal? Do you want them to record your song with an artist to whom they’re connected? Do you want them to sign you to a publishing contract? Are you looking for an introduction to someone they know? If what you want doesn’t match up to what the person on the other end can feasibly deliver (a BMI rep can’t offer you a publishing contract; a NY-based A&R rep can’t get your song to a country artist) then you’re wasting everyone’s time. Figure out what each person can do for you BEFORE you reach out.

6. Take the conference call.

No industry in the world has more conferences and networking events than the music business. That just means that there is no excuse for not knowing anyone, or not understanding the business. Every conference has a full array of industry executives in attendance, many of whom are on panels where they share the knowledge of the business and take questions from the audience. Beyond that, there are ASCAP, BMI and SESAC educational events, programs sponsored by songwriter groups like the Songwriters Hall of Fame and NSAI, or events hosted by industry trade organizations like the Recording Academy, NARIP, and the NMPA. Depending on your genre, your goals, and your financial and geographical situation, you can check out: MIDEM, CMJ, South By Southwest, Winter Music Conference, Billboard & Hollywood Reporter Film and TV Music Conference, Biillboard’s Music & Money, Amsterdam Dance Event, or ASCAP’s “I Create Music” Expo. That should fill your calendar for the year. If you can’t afford to register, consider contacting the conference and volunteering to work at the registration desk or within the conference itself. Sometimes you can trade some labor time for a free pass…

7. Ask one good question.

If you do attend a conference, here’s a tip for meeting that key industry player that you want to know:

Find a panel on which he or she is speaking. Then, when the Q&A portion of the panel arrives, step up to the mic and ask one good question. A good question does not directly involve you (“why didn’t you listen to the package I sent you?”), and is not too basic (“how can I get music to you?”). A good question reflects a knowledge of the business and the panelist, is relevant to all of the industry people in the room, and could be the topic of discussion among other panelists (“What do you think of the new rate decision from the Copyright Board?”, “How is your business using the social networking sites to target an audience?”, “Do you see your show widening its use of music, or the genres it uses, or narrowing it?”).

Having done hundreds of such panels, I guarantee you that if you ask one good question, you will be the only one who does. I also guarantee that if you approach the panelist at the close of the discussion, you will be remembered, and probably walk away with a business card and an invitation to be in touch.

8. Educate yourself.

At the music publishing company where I work, someone called our office this week, and began the conversation with “I don’t really understand what you do there…” Believe it or not, this happens EVERY DAY! For whatever reason, music seems to attract a large number of people who are almost entirely ignorant of the business of which they supposedly wish to be a part. Is it any surprise that most of these people are either ignored or taken advantage of?

If you’re serious about pursuing music publishing and/or songwriting as a business, it only stands to reason that you need to have the same knowledge as every other professional in the industry. Invest 12 weeks in “Music Publishing 101″ at berkleemusic.com, and learn exactly what a music publisher does, how to do it, and how to set up your own music publishing business. You’ll come out not only with a thorough knowledge of the business, but also with a full strategy for how to make your music make money.

9. Write hits.

The truth is, most songwriters’ primary obstacle to success is not a lack of knowledge, contacts, or strategy. Most of the time, the real problem is that songwriters are simply not selling what the industry needs. Most songwriters are trying to write good songs. Some are even writing great songs. But what is needed by every A&R person, manager, artist, is something else entirely. These people need “hit” songs.

If you don’t understand the difference, then check out my book, “The Billboard Guide To Writing and Producing Songs That Sell”. In an age where the album cut has become entirely irrelevant, there is no formula for success that doesn’t involve writing “hits”.

http://www.amazon.com/Billboard-Guide-Writing-Producing-Songs/dp/0823099547

10. Do the work.

I read an incredible article last year in the New Yorker by author Malcolm Gladwell, called “How David Beat Goliath”.

http://www.gladwell.com/2009/2009_05_11_a_david.html

Perhaps the most profound point made in the article was this, and I paraphrase:
most people don’t succeed simply because they are not willing to do the work required.

Having had the opportunity to work with superstar writers from Steve Diamond to Billy Mann to Andy Goldmark to Stargate to David Guetta, the one thing that all of them share is a “work ethic” that simply dwarfs most of their competition. This is not to diminish their individual talent, which is significant and unique. It is to say that there is no way you will be able to compete with these A-level writers on the basis of talent alone. Even if you have the same gifts as a songwriter, their drive, ambition, and willingness to go anywhere and do whatever it takes will put them on top. If you are going to compete, you have to do what is needed to win.

I know that most of the songwriters reading these suggestions will ignore them entirely, and search instead for a shortcut to success that involves less effort. A few will resolve to try three or four of the ten, and at the end of the year, will have excuses for why they only accomplished one or two. But be aware: the successful songwriters and music publishers will do all of these every year.

You can’t “try” to do something. Either you’re doing it, or you’re not.

Best wishes for a great 2010! Thanks for your support of the blog. See you at the top of the charts…