A to Z of Making It, Copyright, Music, My Stories, Stupidity, Unsung Heroes

Victory Records Saga

It’s been almost three weeks since Spotify pulled Victory Records catalogue of songs in a dispute over $23,000 in royalty payments to Another Victory, the Publishing Arm of Victory Records.

The Victory Records founder has stated in an email that somehow “found its way to the press” that if Victory’s catalogue of songs is not placed back on Spotify soon, with their histories and stream counts as they were, he would be forced to lay off staff and drop artists.

You see, it’s no longer about sales, but streams.

Did you see how Metallica, once anti-digital are on iTunes and Spotify? Did you see how Pink Floyd and Led Zeppelin also caved? It’s just a matter of time before the Beatles are there as well as the imitators of Beatles music are raking in due to holdout.

All the action is in streaming and that is where the artists need to be. The music business has undergone a revolution where a “hit song” is something people listen to forever and ever, not something which they buy once.

Forget about how the media trumpets Adele’s “25” as a music industry (it should be recording industry instead of music industry) saviour.

Adele’s figures of 1.1 million first week sales for her new single are impressive and news worthy. There is a limited supply of Adele music and she has a universal “mainstream” appeal (by the way all of the Eighties Hard Rock bands had this mainstream appeal with the backing of a cultural juggernaut in MTV). This in turn makes demand for her music very high.

As appealing as the first week numbers are, they are just numbers. A lot of the times the real hits are “slow burners”.

To use books as an example, Dan Brown’s “Angels and Demons” his second book, sold only 98 copies in its first week. It wasn’t until his fourth book “The DaVinci Code” which sold hundreds of millions that “Angels and Demons” got a second wind to the tune of about 40 million copies.

Five Finger Death Punch’s debut album only moved a couple of hundred copies when it came out. Within a few years it was certified “Gold” and it is still selling, almost 8 years later.

Def Leppard’s “Hysteria” was out for 12 months before it got a second wind on the backs of “Love Bites” and “Pour Some Sugar On Me”.

However, the tides of change set forth by the customer show that streaming is the way forward. Labels like Victory Records collect between 25 and 50 percent of their digital income from streaming services.

This whole saga highlights so many wrongs with the music business;

  • Lack of transparency
  • Bad data collection
  • The length of copyright terms means that heirs of the artists (kids, grandkids, step kids, business partners, lawyers, accountants, etc.) are “songwriters” of the song and they should be paid.
  • Who actually should be paid?
  • Missing money (about 25%) to songwriters due to all of the above not being met.
  • Artists selling away their copyrights to the labels for an instant pay-day (advance) and then the record label keeps all monies earned as “recoup costs” (charged expenses like recording costs, marketing budgets, advances) that the artist needs to pay back.
  • Who is the rights holder? The artist or the record label and/or publisher? Because it is the rights holder who is receiving the 70%. If a writer or artist isn’t seeing the money, the answer to their question can probably be found within their label or publisher contract.

But when artists are in control of their own copyrights with a lot fewer people in between, guess what happens. They actually make money if their music is listened too.

One song can earn a decent amount to the songwriter if there are fewer hands in the cookie jar. In the link, the take away line is that 10,929,203 streams on Spotify has resulted in royalty payments of $56,329.35 to the rights holder, which in this case is the artist and songwriter. If one song has been streamed that many times, by default, other songs from the artist will be streamed and the article talks about another song earning $37,000 from 11 million streams.

The consumers have made their choice that streaming has a future.

It’s time for artists to wake up and be smart about their choices when it comes to signing away their most valuable asset, their “COPYRIGHT”.

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A to Z of Making It, Music, My Stories, Stupidity

The War Between Streaming and Black Box Revenue – Will The Record Labels Kill The Streaming Star?

The public has voted. It prefers streaming. The war is over. Case Closed. Maybe not.

Spotify pays millions to copyright holders. Now unless the artist is a DIY artist who controls their own copyright, most of the copyright holders are the major labels. So if the major labels are getting the millions each year for the blanket license to access their catalogues, where is that money going.

There is a term doing the round, called “Black Box Revenue.” This is the name given to income that the record labels collect that cannot be directly tracked to the recordings of a specific artist.

To put it all into context, streaming services pay the labels and upfront fee to access their catalogues. In addition, they then pay the labels royalties for each stream.

In time, this streaming system will be challenged by artists, much the same way the mp3 sales system was challenged by Eminem and other artists like Whitesnake, Rob Zombie and the band White Zombie.

In all of these cases, the artists said that their record label violated their contracts by counting a digital download as a sale instead of a licensing. Most artists get a royalty of 10 percent for the sale of a CD, minus a lot of deductions, while licenses pay a royalty of 50 percent and in most cases are not subject to any deductions.

When the same thing happens to the labels streaming revenue, the long-term viability of streaming services will be less than certain.

The main part of streaming that the critics and the record labels fail to understand is that it is a tool that is in place now, to PROVIDE REVENUE STREAMS later.

Of course the record labels and the executives in charge are all about the NOW, and a lot of their label rosters are designed for the NOW, so they don’t have time to allow things to grow. Spotify is growing in users, however the company still hasn’t made a profit after so many years in operation. The streaming system employed by the record labels that I mentioned above doesn’t allow it to make a profit.

Spotify wants to reduce piracy to ZERO. At the moment the critics of Spotify like Thom Yorke are complaining that it simply doesn’t pay enough. The truth is, creators have always been ripped off. However, if a song is great and it gets some traction, expect it to pay well.

Daft Punk passed 100 million downloads. The $700,000 that comes with that in streaming payments is enough for a band to live off, however artists see very little of the dollars paid to the record labels for the right to stream their content.

However with YouTube dominating in music, why do people need Spotify? Actually, Thom Yorke has no issues with YouTube, an unofficial streaming platform which is interesting. So I am thinking that Thom Yorke’s issue is with the record labels stake in Spotify.

Personally, I am quite content to listen to three songs on Spotify and get an ad break. I have no interest in paying for a package even if Spotify caps the limit of free songs I can listen to in a month. I will just move to YouTube when that happens, or to my iTunes library or to my physical collection of LP’s and CD’s.

What about the songwriters who write the songs? How do they get paid in the streaming age. It’s simple. They get paid, the same way everyone else gets paid that provides a service. Songwriters need to stop being greedy. What they need to do is hand in the song, get paid the agreed monies and off they go, writing more songs for artists. If a songwriter gets paid $1000 for each song they hand in, then they know they need to write 50 songs in order to earn $50,000. If one of the songs gets traction and gets 100 million streams, the songwriters should be using that as a piece of promotion and up their song writing fee. It’s simple business practices.

It is a revolution that we are experiencing.

Musicians can still make a living. Is it harder now compared to the past? My answer is NO. Musicians always had to work hard to get somewhere, that part hasn’t changed and it will never change.

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