Online Song Lyrics & Royalties

The exclusive rights granted to songwriters under U.S. Copyright Law and assigned rights under publishing agreements is a vital source of protection and income for copyright owners in the music industry. Copyright owners receive royalties when song lyrics are used, and it is generally understood that copyright owners are compensated when songs are used on television, in movies, and are otherwise performed.

So what about websites that compile the lyrics to songs?

Lyric aggregation sites are once again under scrutiny for copyright infringement allegations for posting song lyrics without paying royalties to songwriters. According to LyricFInd, lyric searches on Google reach an estimate of 5 million per day, which stacks up to serious cash for songwriters whose lyrics are found on non-paying websites.

Music publishers are reaching out to lyric aggregation sites to have sites obtain licenses or face take down notices for infringing activities. Not only will licenses help songwriters get paid for their works, but they can also help regulate the quality of lyrics posted to sites. Many lyric aggregation sites rely on user submitted lyrics, which often contain incorrect lyrics and can devalue the songwriters’ creation.

Some music industry professionals and lyric sites question the fight against unlicensed online song lyrics, finding the payout to songwriters is inconsequential compared to the time and money battling unlicensed use. According to a study by Peter DiCola of the Northwestern University School of Law, only roughly 6% of an artists’ revenue stream comes from songwriting royalties. Although this percentage is small in comparison to other revenue streams, it is not representative of the non-performing and non-touring songwriters.

Whether or not licenses from online song lyric sites will provide songwriters with a big payout, the battle over song lyric aggregation sites will perceivably continue.

YouTube Licensing Offer Opt-In Gives Indie Publishers an Advance

Between November 17, 2011 and January 16, 2012, independent music publishers and non-U.S. mechanical collection societies that have reciprocal agreements with Harry Fox Agency who choose to opt-in to a direct license agreement with YouTube is eligible for a share of an up-to $4 Million advance, based on the participant’s relative market share.

The YouTube Licensing Offer is a result of a 2007 class action law suit brought by the National Music Publishers Association (NMPA), and several music publishers, against YouTube/Google.  In the suit, the plaintiffs alleged that YouTube used the publisher’ copyrighted works without authorization, thereby infringing the publishers’ copyrights.  The District Court granted summary judgment in favor of YouTube.  Plaintiffs appealed the judgment, and the suit is currently pending.

NMPA and music publisher who enter into the YouTube License Agreement with YouTube will have dismissed their appeal and will release YouTube from all past, and accrued, copyright infringement claims.  Since the agreement is not a class-wide settlement, publishers wishing to participate in the agreement must opt-in.  Moreover, publishers wishing to receive a portion of the advance must opt-in by the January 2012 opt-in period; but publishers are free to opt-in thereafter.

Crowdsourcing: The Modern Approach to Musical Collaborations

The music industry is facing some fascinating changes.  Just within this first full week of October, RCA announced that it is shutting down Arista, Jive and J Records; not to mention that the Supreme Court refused to review the appellate decision in ASCAP v. United States – effectively upholding the New York appellate court’s determination that Internet downloads of musical recordings are not public performances, therefore disallowing artists from collecting a public performance royalty whenever someone downloads their music.

As most of the business folks in the music industry grow more and more concerned about the state of the industry, and weary of future endeavors, artists are continually developing new means of driving down the cost of music production.  With the inter-connectivity of social media, many artists are turning towards the concept of crowdsourcing in order to create music.

Crowdsourcing allows large groups of individuals to inexpensively undertake the tasks that are usually reserved to a small group of specified people.  In the music world, this allows groups of amateur and seasoned musicians to collaborate on a song, without the need of having highly trained musicians, producers, lyricists and composers.

With the abundance of free software, Creative Commons licenses and the copyleft movement, and opensource software – software codes that allow the public to collaborate by changing and improving the codes – musicians are finding it easier and cheaper to seek help from fellow musicians who may have otherwise been unobtainable without the digital connection.

Sites like Indaba Music, the most popular crowdsourcing site for musicians, brings together over 500,000 musicians from over 170 countries, bridging amateur artists with Grammy Award winners.  Through crowdsourcing, artists can upload and download tracks, mix, edit and provide feedback to other users.

Additionally, crowdsourcing provides musicians with access to other resources that are traditionally unavailable without a record deal or adequate financing.  Musicians can seek the help of professionals and novices on everything from marketing, to distribution, to crash courses on surviving in the industry.

As crowdfunding allows musicians the opportunity to fund their projects without relying on advances from record label, crowdsourcing further eliminates the need of record labels and distributors.  With the continued evolution of technology and social media, the traditional concept of the music industry can face serious restructuring in our digital future.

Crowd Funding: a New Industry Collaborative

Crowd funding is a term used to describe a collective of people coming to together to combine their finances and resources to fund projects initiated by others. With websites like Kickstarter becoming widely popular, not to mention fan sites and artists/filmmaker web pages, fans are now able to invest in the creative future of their beloved artists on a more personal level.  Instead of supporting creative content after its creation, fans can directly encourage artists to pursue their talents by providing the resources necessary for the artist to practice his or her craft.

Traditionally, artists receive an advance by record labels, using those proceeds to fund their musical endeavors and paying other necessary expenses throughout the recording process.  Since the record labels invest in the artists’ craft, the artists provide the music that labels sell to consumers.  Often times the record labels make the definitive decision as to which songs get released.  Artists would then create the music that would sell and meet the conditions of the record labels in order to fulfill the terms of their recording agreements, and to try to make enough money through royalties to pay off their advances, break even and make a profit.

With crowd funding, fans are giving artists the ability to make music without relaying on record labels.  In turn, artists are able to indulge in creative avenues that are not always available or allowable under the discretion of record labels.  In the end, the artists are happy to make the music that they really wanted to make, and fans are happy to receive the music they wanted to hear, right?

For many, this scenario is true.  However, crowd funding creates unique issues that are new to the music industry.  As with every aspect of music 2.0, crowd funding has created a set of challenges that artists must consider.

Crowd funding raises a question of intellectual property interests on several levels.  A big question arises when an artist promotes the idea in which he or she seeks to create in order to generate funding.  For example, a solo jazz singer may describe the theme of the proposed album, complete with the ideas she or he has for individual songs.  Although this information is often helpful in allowing prospective investors to determine whether they should pool their resources to help the aspiring musician, the musician’s idea may look enticing to another aspiring artist who is able to produce the end product quicker.  Since copyright protection is not extended to ideas, artists must think carefully as to what information they provide to potential crowd funders.

Crowd funding also raises the issue of who owns an interest in the end product.  Most crowd funding websites make a profit by taking a portion of the money raised, without wanting more from the persons seeking funding.  However, artists should check the “Terms of Use” and other site rules, regulations and information to see whether they are granting any intellectual property rights to the site hosting the crowd funding drive.

Artists must also be clear with potential investors as to what they will get out of donating resources.  Many projects offer “thank yous” in liner notes, deluxe copies of the album, advance copies, etc.  Without paying attention to what the artists offers to the potential investors, artists could inadvertently seclude fans, give away intellectual property rights or fail to present an appealing project to people who would otherwise fund the project.

The level of interactivity between the artist and investor can also harbor stronger fan relationships.  Most people who donate resources through crowd funding projects do so because they believe in the artist.   The investor is more than a passive listener and wants to feel as if he or she is a part of the creative process.  If the artist seeks resources other than those of financial sorts, the artist and the investor need to make clear what exactly they seek out of the arrangement, and should retain advice as to the legal implications that may arise.

Regardless of what type of investment the artist receives, artists are given the opportunity to forge a closer relationship with their investing fans.  Artists can provide the investing fans with regular updates of the recording process, give a “behind the scenes” look into the creative process; artists can make the fans feel special by giving them early previews or early access to the finished product; etc., etc., etc.

Crowd funding is a great resource, but, as with everything new, it also forces artists and fans to consider new challenges.  It has the potential to develop stronger fan bases, to allow for better music production, to harbor greater creativity, and to further redefine the music industry.

The Future of Radio is Between (or instead of) the Songs

I came across an amazing webcast that touches on the current state of the radio industry.  Mark Ramsey, of Mark Ramsey Media – a media research and strategy company, chats with Craig Bruce, of the Australian  media and entertainment company, Southern Cross Austero,  about the current state of American radio.  This short, but engaging, discussion provides some great insights on the transitions that radio stations will need to undertake in order to retain listenership by transforming themselves into greater-content-producing media companies.

Check it out:  The Future of Radio is Between (or instead of) the Songs.

Breaking an Artist in the Digital Age Pt. 2: Avoiding Premature Hype and Pigeonholes

The goal of many musicians is establishing mega-stardom, becoming a household name, or at least spreading their music to a large enough fan base in order to create a sustainable and long-lasting music career.  As mentioned in Breaking an Artist in the Digital Age Pt. 1: Odds, Facts and Figures, mega-stardom is an extraordinarily difficult feat.  However, creating a sustainable living off of one’s music is reasonably obtainable for many artists, especially those who are smart and flexible when it comes to utilizing their talents.

Determining the number of artists who create a living off of their music is often difficult, and most statistics on this point are misleading and under-inclusive.  As such, aspiring musicians should not rely solely on music sales statistics in planning their route to achieving longevity in the music industry.  Being a professional musician is just one aspect of the music industry, and is very much a business within itself.  With that in consideration, it is useful for artists to develop a business plan with regards to his or her music that takes into consideration the various ways to promote one’s music and the numerous avenues available to generate a profit beyond music sales.

A Successful Music Career is More than Just Music Sales

Music sales provides only a portion of revenues within the music industry, and often does not include the music sales of artists who are “under the radar” or unaware of the process in which music sales are calculated.  Music sales (and music video products) tracking is calculated by Nielsen Soundscan, which provides figures for music charts such as Billboard music charts.  Sales figures are also calculated by the Recording Industry Association of America, which provides the data used to determine RIAA certifications (gold, platinum, multi-platinum, and diamond).

Nielsen Soundscan calculates the actual sales of items, but only calculates products that carry a unique UPC or ISRC and that are registered with Soundscan.  In order for the sales to be reported to Soundscan, the retailer must have a point a sale inventory system, and comply with other requirements for sending sales data to Soundscan.  Sales data is collected from more than 14,000 retailers in the United States, Canada and the United Kingdom, including large retail chains, independent retailers, online stores, digital media services and venues.

RIAA certifications, on the other hand, collects sales data from record labels and artists who request (and pay) to have sales figures calculated.  RIAA audits are considered more inclusive because it calculates sales data by looking at net shipments after returns.  This data differs from Soundscan as Soundscan only looks at sales without taking returns into consideration, and RIAA audits looks at outlets that are not used in Soundscan calculations.

Although Soundscan and RIAA audits are comprehensive and used to estimate the sales, and ultimately the profitability, of an artist, relying solely on those figures fails to take into account the countless artists who are not included in these calculations.  With grassroots means of distributing music, digital distribution and ancillary music markets, many artists are generating a lucrative and fulfilling music career outside of the traditional and publicized music industry business model.

Artists continually discover unique methods to grasp the interests of fans, record labels and music execs.  Whether an artist gets noticed by going viral, selling copious amounts albums and digital downloads, or selling out live performances, making a stable living off of one’s music requires musicians to overcome many pitfalls.  In the digital age, two of the biggest pitfalls that end the careers of many artists are (1) artists getting too much hype too soon, and (2) not being versatile as an entertainer.

  • Premature Hype: “It takes a lifetime to write the first album”

The history of the one-hit-wonder dates back long before the Internet became the most used means of accessing music.  However, the Internet the infinite access to music has allowed more artists to gain worldwide listenership more quickly than ever before in music history.  Consequently, the multitude of available music has also created an increasingly shrinking musical attention span, requiring artists to act quickly in generating new music.  For the artists who manage to receive hype off of one hit song, video or record, most are unable to produce a subsequent hit album quick enough to retain the attention of their fans.  Even more unique to the digital age, many artists who create a hit song are unable to deliver a full length album in enough time.

Creating a catch-22, aspiring artists must release songs and albums strategically to prepare to deliver the same level of entertainment as established musicians – being a world-class performer the moment they break.  In the past, artists were were given a chance to develop as artists.  Many notable, multiplatinum selling artists from the past were able to spend many years growing as an artist; beginning their careers with slow-moving albums, performing disappointing live performances, creating a unique persona, and generating a substantial fan base after several albums.  Today, artists aren’t given such leniency.  Regardless of a musician’s talent, an artist must perform as a polished entertainer the moment they break to the masses and produce enough music to remain relevant.

  • Being Pigeonholed

Another troubling pitfall that many musicians fall into is not being versatile in the ways in which they can exploit their talents.  Digital music services alone provide musicians with a multitude of outlets to distribute music through streaming and downloading services.  According to the International Federation of the Phonographic Industry’s 2010 Digital Music Report there are over 400 services licensed worldwide by music companies with ISPs that engage in music services, a number that will continually increase as technology expands.

Having one’s songs distributed one way or another to listeners is not the only way that a musician can create a living off of his or her music, which is often overlooked by artists.  The music industry provides musicians with many opportunities to use their skills in various ways.  Many bands and solo acts have developed a successful music career writing songs for other musicians, playing back up instrumentals, licensing music for various uses, becoming producers, etc.   Other artists have also found unique ways to transform their experiences as musicians into well-founded careers on the business side of the music industry, becoming A&R reps, agents, managers, etc.

Making it in the music biz has become the dream for many musicians, many of whom begin their career unaware of how the industry works and how the business is evolving.  If an artist wants to break into the industry, the artist step quickly into the limelight, deliver amazing albums and performances, and do whatever it takes to remain relevant.  Artist unable to do so, or unwilling to take on the pressures of being a superstar, can establish alternative careers within the music industry so long as the artists is versatile and can creatively develop ancillary career paths.