This site is a blog for musicians and music industry people. It is a free educational resource and it is also the way I advertise my music consulting services. I am an entertainment professional with deep roots in the music industry. Throughout my music career I have been a major label A&R representative, a music supervisor, an artist manager, a reality show producer, a bass player and the head of a digital record label.
This past week was marked by music industry loss and innovative technology gains as indie labels reeled from destruction caused by the London riots, Universal Music Group sold defective products to valued customers, mixtape provider Datpiff provides an exciting marketing model for artists and ASCAP brings Netflix on board.
Datpiff Empowers the Mixtape, Helps with Artist Marketing
Free mixtape resource Datpiff came into the spotlight last month when Lil Wayne jumped on board after announcing he would be releasing a free mixtape through the site to reward his fans for patiently waiting for the release of his album Tha Carter IV on August 29. And even Forbes took notice of the site as an exciting business model in the rapidly-shifting music industry with an article published last week about how the site is developing as a happy marriage between artists, music lovers and even record labels.
Leesport, PA-based site Datpiff, which provides free mixtapes and mashups to music fans has been around since 2005, founded by now 27-year old music fan Marcus Frasier. The website attracts 9.8 million visits per month from 3.8 million people and has over a quarter of a million Facebook “likes” and almost 100,000 Twitter followers. It offers a user-based uploading environment (like YouTube). And Frasier has managed to keep pirated retail albums off the site by reviewing each submission himself before putting it up and more recently, by hiring an outside firm to keep quality control standards high.
As he told Forbes, when he first switched to the YouTube uploading model in 2008, “The queue to get on the site was sometimes two to three weeks. So we contracted with a company that did audio fingerprinting that could flag pirated material. That gave us the ability to grow.”
Many emerging online music providers have struggled to work with the music industry, in part because it has been very resistant to support giving away free or inexpensive music to fans. But Datpiff has become a great marketing tool for artists of all sizes, and Frasier has managed to create good relationships with even big recording artists like Jay Z and Kanye West (who also released a mixtape last month to advertise their new album) as well as both indie and major record labels. He says, about record companies, “They know the power of the mixtape. It’s in their best interest to keep the artists’ name going and to sample new styles and get feedback.” And because of the marketing powers Frasier’s site gives artists, he has been able to make money off more than just advertising and premium memberships. Many artists have upgraded their memberships to increase their exposure.
Because of his strong stance against piracy and his ability to prove that Datpiff provides solid marketing opportunities, Frasier has been able to build relationships with labels and artists and draw in a huge audience while other music providers struggle. And he has accomplished something unique in the music industry in that he’s been able to attract not only big artists like Lil Wayne and 50 Cent but also artists on smaller labels or with no labels. And there is an on-going conversation on his site facilitated by active comment boards and social media between Datpiff, artists and listeners, which strengthens the fan-artist bond. Datpiff provides an equal opportunity environment for artists of all sizes to build their fan bases.
Frasier is currently working to copy Datpiff’s model and spin out other entertainment sites through his larger company Idle Media. And he wants to make sure he continues to build future projects on his love for technology: “A lot of our best concepts come up just from us wanting to do something cool with technology. It’s still fun for us.”
Universal Music Group Inconveniences Classical Music Fans
Recently, paying customers on Universal Music Group (UMG)’s classical music site Passionato (a paid site geared towards audiophiles) noticed an odd noise on a variety of tracks. Users discovered the disruptive sound on the defective tracks was watermarking added by UMG after they asked Passionato representatives how to resolve issues with the site, which advertises that it provides “lossless” classical music recordings.
The exchange about this issue on the Hydrogenaudio message boards illustrates that Passionato representatives suggested everything from downloading pirated copies of files without watermarks (even though they had already paid for the watermarked versions), to remixing the files themselves. As Techdirt pointed out, watermarking tracks and then telling paying customers they have to go through the hassle of fixing the problem themselves alienates them and makes it unlikely they will continue to pay in the future.
ASCAP Licenses Netflix
On August 11, ASCAP revealed it would be entering into a licensing agreement with Netflix as the popular service shifts its focus from physical DVD rentals to streaming video. Netflix has become the most popular internet subscription service for film and television viewing, making up 61% of digital viewership in the U.S.
ASCAP decided to provide the license because subscription-based streaming services are emerging as a great source of revenue for ASCAP members whose music has been placed in films and on television. ASCAP also recently announced license agreements with Spotify and Turntable.fm and plans to tie up agreements with Hulu and Amazon in the coming months. ASCAP already has licenses with 18,000 different companies, including start-ups, huge internet companies and mobile networks.
Indie Catalog Destroyed by London Fire
The Sony DADC distributing warehouse caught fire as a result of the on-going riots in London last Tuesday at 4 a.m. The building contained the entire stock of 150 labels distributed by PIAS UK and PIAS Ireland, including Rubyworks, Model Citizen, 4AD, Warp, Rough Trade, Sub Pop, Secretly Canadian, Jagjaguwar, Drag City, Soul Jazz and Domino. According to Billboard, 3.2 million CDs and vinyl units were destroyed.
As labels and stores awaiting their stock panic, reports from PIAS continue to indicate that the warehouse has moved to a new location and is once again up and running. Sony DADC states is has found a new temporary distribution partner and will be ready to pack and ship orders within the next week. Representatives from Sony admit that their biggest challenge is going to be recreating a catalogue with as much depth as the one that was lost: “Re-manufacturing and getting stock in [outlets] next week of the top several lines is do-able, but we had over 8,000 lines at Sony DADC. [As for] whether they will all ever be re-manufactured, there’s obvious issues there and I think some of them will lose out in that process.”
A campaign to help artists and labels affected by the blaze called LabelLove has been set up to help with rebuilding efforts and is quickly garnering the support of music fans worldwide. Music fans are being encouraged to buy albums from one of the many labels affected by the fire: digital downloads of an album or physical albums from their local record stores.
Marc Hutner is a musician and producer and currently the Director of Membership at ASCAP (The American Society of Composers, Authors and Publishers). I normally summarize people’s biography in the first paragraph when doing interviews but Marc’s biography is a lesson in and of itself.
Marc, thanks for taking the time. I know you started out as a musician but how did you become Director of Membership at ASCAP?
MH:
I’m originally from L.A., and I am and was a musician who got signed (Marc was the singer and guitar player for a band called Sugartooth) to Capital/EMI Publishing in 1991. We went from Capital to Geffen in a classic A&R shuffle. We put out two studio records on Geffen and then I just continued doing music and producing. The Dust Brothers took me under their wing and taught me how to do sampling and computer recording back when it was still the wild frontier. Then I produced a band called Bicycle Thief, which was the singer from Thelonious Monster’s new band. That went on the road, and I went with them as a touring guitar player as well. Then I was in another band called Pleasure Club from New Orleans. That was a bit of a punk/gothic thing. We put out two studio records and one live record.
Was that through a label system or on your own?
MH:
We put them out on our own and then got picked up by an indie label out of Atlanta. We ended up selling more on our own than we did through a label. As a musician I’ve been on major labels, indie labels and released music completely independent. I’ve toured the world many times over for many years and have played in front of tens of thousands of people, and also had to cancel shows because nobody showed up. I feel like I’m in a good position to advise songwriters at ASCAP because I’ve been around a bit.
How did the job at ASCAP come up?
MH:
It actually came up because in the late 90s, Geffen was going through all kinds of awfulness, and my band had basically disbanded, and I was a little bit lost as all my other friends that weren’t musicians had gone and pursued an education and now were working. I was in my later 20s and without a formal education. So, I was trying to figure out a way to earn a living and stay in music. I knew an ASCAP rep in L.A. We met, and the stars aligned, and I got hired two weeks after that on a temporary basis, and then temporary turned permanent. I worked for about five years there in L.A., and then I quit to go back out on tour for a few years. Then I decided to move to New York, and the job opened up again, and I moved right in. I’m coming up on five years working there in New York. I’ve been on and off at ASCAP for about a decade.
Do you have anything active playing-wise these days?
MH:
I actually don’t play anymore. My stuff still gets licensed in film, TV and video games occasionally but I don’t pursue it at all and rarely pick up the guitar at this point.
Tell me in your own words what your job is as director of membership?
MH:
I sign up writers and publishers to ASCAP, and try to help them in anyway I can. Sometimes it’s in the form of advice, other times it’s helping them refine their songwriting skills through workshops, or helping them meet managers, labels, publishers, etc. The idea is to help ensure that they have the ability to earn a living through creating music.
Because ASCAP is a member-owned, not-for profit, we can operate very differently than most other music industry companies. If one of the writers I work with became the most successful writer of all time, I wouldn’t get a percentage, a raise or a bonus. That’s just not how it works. So what that means is, there isn’t a sense of territorialism with our writers, so we utilize all of our co-workers’ knowledge and connections when we need to – We have an L.A. office, a Nashville office, a UK office and an office in Puerto Rico. You get the advantage of a company that has a network all over the place. It’s a unique situation.
ASCAP is a not-for-profit company, right? Tell me about how the money flow works. An artist signs up for ASCAP and then they go out and their music gets played on the radio or on film and TV and…
MH:
A songwriter or publisher joins ASCAP, and because it’s a non-exclusive agreement, they need to register their songs with ASCAP… it’s the registrations that enables us to go out to the marketplace and represent the song, the artist or the publisher and collect the monies. Otherwise, if they don’t register it, we have to assume they don’t want us to because they have the right give away their music for free. So they register their songs, and then our purpose is to monitor the public performances and pay them performance royalties. This includes radio, TV, Internet, sporting events, etc – any time you go into a public area and you hear music, whether it’s in an elevator, in a shopping mall or in Central Park, a license fee has been paid to ASCAP for the right to play that music. We survey those performances and pay the writers and publishers for them.
Correct me if I’m wrong, but there are still people whose jobs it is at ASCAP to wander in and out of different public or retail places and make sure that licenses are in place or that music is not being played or it’s royalty free. Is that right?
MH:
Yeah. It’s our licensing department. It’s a serious undertaking if you can imagine. You walk into any restaurant in Manhattan, and you’re most likely going to see a little ASCAP sticker in the window saying they’ve paid their licensing fees and can have a live band, a cover band, the radio on, CDs playing. etc. The job of the licensing department is to make sure that happens. If you’re not paying a license fee, you can’t legally play ASCAP music
In films and TV, we receive cue sheets. A cue sheet is a sheet that lists all the music contained within the film or movie in chronological order. It tells us the song title, who wrote it, who published it, how long each piece of music was and how it was used. Was it background, vocals, off-camera, a theme to a show? That’s how we know what’s aired and how to pay it. All the different factors from who aired it, how it’s used, to the duration of the use factor into the amount of money that it generates.
Ball park, how many artists are registered with ASCAP?
MH:
We are approaching 400,000 at this point.
Really? I actually expected more.
MH:
Yeah. It seems like it would be. But it’s actually grown exponentially in the past few years.
As someone in membership you probably have thousands of artists who know you by name and want your attention, what’s the best way to get the attention of somebody at the membership department? Is it best to meet you in person at an event or cold call or get a referral? What works?
MH:
It can all work. You can make contact with anybody at ASCAP by putting a phone call in or showing up and asking to speak with somebody. If you’re an ASCAP member, you’re entitled to all that membership entails, which certainly includes being able to speak with an ASCAP representative. But you can attend one of our events and you’re sure to see one of us there, easily accessible
And announcements of those ASCAP events are through the newsletter or on the website, right?
MH:
Yes, exactly- but we are also at a lot of shows that aren’t our showcases, seeing bands and trying to stay current.
Here’s the tough question – ASCAP, BMI, SESAC … why ASCAP in your opinion?
MH:
When you join ASCAP, you’re a member. The terms of our contracts are one-year… very artist friendly. At BMI, you’re not a member, you’re an affiliate. You don’t have the same rights that you have at ASCAP. Their contract terms are two years as a writer and five years as a publisher. Therefore, if you want to resign from BMI, and say, join ASCAP, you are able to resign every two years, but you can’t take your songs with until the two-year writer contract and five-year publisher contract coincide, which is every ten years! Imagine that! At SESAC, their terms are three years.
From either your position at ASCAP or your years of being on the road, do you have any advice you could give that you wish someone had told you when you were just starting out – lessons you had to learn or seen learned the hard way?
MH:
I see the same mistakes over and over again. Generally, don’t get a manager until you actually need a manager. From my perspective, you don’t really need a manager until just before you have a label. That way the manager can still commission the deal, which you want, because the last thing you want is a manager who works for no pay. Because trust me, that won’t continue as a positive arrangement for very long. I always see people get managers way too early, and they’re usually really terrible managers or newbie managers who can easily turn people off or even burn bridges. I would also say, just do the very basic research on publishing and songwriting and performing rights. The way the industry is now, it’s moved to a world where the ASCAPs of the world are one of the few ways you’re going to be able to earn a living anymore. So knowing what that means is important. I highly recommend the book Making Music Make Money: An Insider’s Guide to Becoming Your Own Music Publisher by Eric Beall.
Learn more about ASCAP
Neeta Ragoowansi is the Director of Artist-Label Relations for SoundExchange. She is also an attorney, a keyboard player and the singer for an eight piece group called the Oxymorons. Her experience as a musician, as the Assistant General Counsel for the Kennedy Center and The National Symphony Orchestra and as an advocate in the music industry were what landed her in her current position. She explains her job educating and helping to find the thousands of artists and labels that are owed SoundExchange royalties
Tell me how SoundExchange differs from the other Performance Rights Organizations (PROs) like ASCAP, BMI and SESAC.
NR:
We are a performance rights organization, but we represent the performers and recording artists- that is, we protect the performers who go into the studio and put down the sounds- instruments or voice – onto a track. ASCAP, BMI and SESAC collect for songwriters and composer of the underlying musical work – the notes and lyrics on paper. So if you’re a songwriter or composer, sign-up with one of those. If you’re a recording artist, and put your talent down in a sound recording, sign up with SoundExchange. You can be a member of one of the three songwriter PROs AND SoundExchange – and you probably should be. It’s in no way a conflict. PROs help to collect and distribute the royalties that accrue when others publicly perform your copyrighted work. When you talk about music, you have two copyrights involved: the songwriter’s right to the music and lyrics on the page, and the musician or artist’s right to the sounds on a track – they may be the same person, but there are still two different rights. SoundExchange is the PRO that administrates the rights that come under the public performance of the sound recording. 50% of the royalty on each track goes to the performers or artists on the sound recording – 45% to the main recording artist and 5% to the session musicians and back up singers on that track, through RARoyalties.org. The other 50% of the royalties on each track goes to the owner of the master recording, which might be a record label or an independent musician.
Does SoundExchange cover all different kinds of mediums, or are there specific types of mediums that you cover?
NR:
SoundExchange collects royalties when sound recordings are used on satellite radio (like SIRIUS-XM) , Internet radio (like Pandora), on cable TV music channels, and certain other streaming services. SoundExchange DOES NOT collect for digital downloads (like iTunes or “podcasting”) or “on-demand” and “interactive” services like YouTube or MySpace, where a user can select and immediately play the song she wants to hear. SoundExchange also does not collect for the streaming of any audiovisual work, including music videos. We also don’t collect for sound recordings used on radio, because radio doesn’t pay artists for using their work – yet.
SoundExchange is hoping that will change, and we’ve teamed up with lots of organizations and artist advocates to support a bill in Congress called the Performance Rights Act (PRA). If it passes, PRA would mean that for the first time, corporate radio would have to start paying a royalty to artists and labels for the use of their sound recordings. Radio makes almost fifteen billion dollars a year in ad revenue from music stations alone, and they don’t share any of it with the artists who create the music. They do pay composers and publishers via ASCAP, BMI and SESAC; but because of a loophole in copyright law, the creators and copyright owners of the sound recordings are not getting paid. In the rest of the world, almost every single country pays their artists this way – the US’s only company on this is China, Rwanda, North Korea, Iran. That’s not good company to be in which it comes to protecting rights. Using an artist’s work to make money and not paying them a royalty is just wrong. We’re trying to get that loophole changed, so artists and rights owners can be paid fairly.
There was no SoundExchange until ten years ago?
NR:
SoundExchange began in 2000, and became an independent nonprofit in 2003. Legislation passed in 1995 (The Digital Performance Right in Sound Recordings Act of 1995) and in 1998 (The Digital Millennium Copyright Act) finally recognized the rights of artists and copyright holders to be compensated when others use their work, and the laws set up a stream of royalties for the recording artist and sound recording copyright owner. After some negotiations to decide what those royalties would look like, SoundExchange started collecting, and made its first distribution in 2001. We distributed $4 million that year. In 2009 we distributed $147 million.
There’s a ton of money that’s unclaimed by artists. Can you estimate how much outstanding money is owed?
NR:
There are millions of dollars owed to thousands of recording artists who’ve not yet registered with SoundExchange. Because SoundExchange and the performance right are relatively young, a lot of artists don’t know they’re owed this money, or they just haven’t signed the forms. Remember, unlike ASCAP, BMI, and SESAC, who collect only for their members, SoundExchange collects royalties for everyone who’s getting played, whether they’ve ever heard of us or not. Then we have to try to track down those artists and rights holders and get them to register so we know where to send the check. We regularly partner with industry associations, services and companies like ReverbNation, CD Baby, iLike, Sonicbids, The Blues Foundation, The Folk Alliance, The Vocal Group Hall of Fame and lots of others, to help get the word out about this right and these royalties. We match their member lists against the lists of artists we have money for, and then have them send an e-mail or a letter to that unclaimed recording artist and/or indie record label. In 2009 alone, we notified more than 15,000 artists, owed more than $9 million in all. If you think there’s even a chance you might be owed money, register at SoundExchange.com. It’s always 100% free.
So, a lot of your job right now is just an awareness campaign.
NR:
Yes, it’s a huge awareness and marketing campaign and it’s mostly about educating – outreach and education. Through conference panel, doing things exactly like this interview, talking one-on-one to artists at festivals, and making sure we get the word out every way we can. Maybe finally getting paid for their work just sounds too good to be true – sometimes artists think we’re an email scam. We find that even when artists have received emails from trusted sources (like their manager, their booking service, whatever) saying, “Hey, SoundExchange has money for you,” they don’t always believe it or do anything about it. But then they go to CMJ as a showcasing artist, for example, and get an email from CMJ saying we have money for them, and see our trade booth and see a poster with their name on it, that they finally remember the name SoundExchange and realize that this really means money for them. Sometimes it takes 3 and 4 and 5 contacts before people recognize that SoundExchange is legit, and sometimes a few more before they fill out the forms. People are just naturally skeptical, and this sounds like ‘free money,’ so it must be too good to be true. But it’s not ‘free money’ – it’s better – it’s money they’ve already earned. All an artist has to do is register with SoundExchange, and they can get paid when they get played.
At what point would you sign up for SoundExchange as an artist?
NR:
When you go into the studio to record and you come out with a recording that you release. As soon as you start sending out your recordings, you should sign up with SoundExchange. But I tell artists, anyone that’s even planning to do a recording, should go ahead and register. It usually only takes 10 to 20 minutes, and it’s free. We just need to know you exist, where you are and where we would properly send a check. In terms of recording artists, anyone that is a member of a band or featured artist in general should register with SoundExchange. There are certain housekeeping things that a musician needs to do and registering with SoundExchange is definitely one of them!
Is there any pre-requisite to sign up?
NR: There is no prerequisite other than that you are a performer on a commercially released sound recording and/or you’re the owner of the sound recording copyright (sessions musicians and back up singers on sound recordings are entitled to a royalty as well and they should go to www.raroyalties.org to claim theirs). The copyright in the sound recording is automatic, as soon as the original creative work (like the sounds made on your instrument) is fixed to a tangible medium (a CD, a digital track, MP3). You don’t have to go to the Copyright Office and register in order to claim royalties from SoundExchange.
Music Consultant: Where does this money come from?
NR:
At SoundExchange we administer the public performance royalty that derives from the non-interactive, digital transmissions of commercially released sound recordings. So when a streaming service like the ones we talked about before use a track, it generates a small royalty. At the end of the month, those services that use your track total up all the royalties they owe, and give that money to SoundExchange. They are also required to provide us with reports of use (playlists in a sense) so we know what they’ve played, and how to divide up that lump payment. This is very different from what’s happened historically with other performance rights organizations, where they tend to pay out based on sample data – a few weeks a year to represent all of what they play. SoundExchange strives to get what’s called census data – that is, the exact tracks they are playing, every time they play them. That’s the fairest way to pay, and so far, 95% of the royalties SoundExchange distributes have this track-level census data. How much each service pays for a track is determined by the kind of service they are, and how many listeners hear the track, under rules set by the Copyright Royalty Board at the Library of Congress. For the most part, artists get paid more the more people hear their tracks. So if you can get played on more stations, to more people, or even on SIRIUS-XM, or cable TV music channels (not the video channels, but the high-numbered radio-like channels), you’ll get paid more.
Do you have any general advice for artists?
NR:
Know all the places you can generate income from, know about all the special payment funds available to you out there, know your licensing rights/copyrights and educate yourself. Knowing licensing is the number one thing that artists can do for themselves. If you’re going to make a living, you have to know the income you can generate from various sources. Once you send a creation out into the world, it generates different streams of revenue – but it’s your responsibility to make sure they lead back to you. So, keep creating, know your licensing, go collect on that licensing and push your stuff out there in areas where you’re going to see income, such as the digital streaming of your music and recordings. And register with SoundExchange, so you can get paid when you get played!
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