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

Piracy, Lost Sales and Profits

I am sure that everyone has come across the “Minecraft” game in some form or way. My exposure to this game was when my kids asked me last year if they are allowed to download the free version of the game, which I agreed. After playing it for months and unable to save their progress, they kept on asking me to download the full version, which cost $6.99AU.

I said NO.

They kept on playing the game and as they did new features kept on getting added to the game that made it better. However they still couldn’t save their progress and they kept on asking me to allow them to download the full version.

Eventually after a stellar week of good behaviour I couldn’t say NO to them and they got the full version at the beginning of the year.

For the uninitiated, Minecraft is one of the biggest games in the world right now. It debuted on Mac and Windows PC in May 2009. By February, 2014, it had sold 15 million copies of the PC version. Also in the same month, Mojang (the makers of Minecraft) had sold more than 21 million copies of Minecraft: Pocket Edition on Android and iOS; more than 12 million copies of the Xbox 360 Edition; and more than 1.5 million copies of the PlayStation 3 Edition — making for a sum very close to the 50 million mark. They have over 100 million registered users.

Just imagine if a streaming service had those numbers. However, the argument would still be the same. Artists are not getting paid. We all know why this is so. Talk to your record label.

And they did all of this with piracy being rampant on the game. However, Minecraft’s developer Notch (Markus Persson) has been on record in saying that worrying about piracy was a waste of time, and it was much more important to focus on giving people a reason to buy.

“Piracy is not theft. If you steal a car, the original is lost. If you copy a game, there are simply more of them in the world. If you just make your game and keep adding to it, the people who copyright infringed would buy it the next week.”

Persson adds features to the game based on conversations he has on Twitter with random people and he fixes bugs based on the Minecraft community voting on the priorities. He is engaging with the users and a majority of those users are people who said that they copied the game initially, but then bought a copy for both themselves and a friend. Or they are people who didn’t ever buy a copy, but had friends who learned about it through them who then went on to buy copies.

There is a clear indicator here for any artist.

Make sure that everyone has access to your music.

I remember a time when I went to Utopia Records and I purchased four CD’s. They were “Subhuman Race” from Skid Row, “It’s Five O’Clock Somewhere” from Slash’s Snakepit, “Balance” from Van Halen and “Waiting For The Punchline” from Extreme. I hand over my cash and a sale goes onto their chart record.

The fact that “Subhuman Race” and “Waiting For The Punchline” gathered dust on the shelves, while I played the hell out of “Balance” and “It’s Five O’Clock Somewhere” didn’t even come into the equation. All of those bands got a “SALE” or a “COUNT” from me. The fact that two albums connected with me more than the other didn’t even come into the equation. Probably the reason why SLASH is still such a force to be reckoned with in the music business, while Skid Row and Extreme, not so much.

That is why a lot of the Eighties bands couldn’t understand or get a handle on their decline in popularity. Everything under the sun got blamed, however the real reason was ignored.

WHAT DOES A SALE OF A PIECE OF PLASTIC/VINYL REALLY MEAN?

Everyone saw a sale as a fan number, a unit to add up, however the fact that the real fans listened to the music non stop and due to playing it to death they had to re-purchase the album.

In my music collection, anyone will see that for bands like Motley Crue, Dokken, Megadeth, Van Halen, Ozzy Osbourne, Metallica, Twisted Sister, Bon Jovi, Whitesnake, Stryper, Ratt and many more, that I would have an LP, plus a CD, plus for a select few, remastered releases and remastered releases with bonus tracks. That means that I have re-purchased the bands whole catalogue over 4 times. And I am sure I am not alone in that.

In other words, a sale of an album never reflected what we (the fans of music) did with the albums after we purchased them. The second-hand music market thrived for a reason as music consumers got rid of those albums that gathered dust. However, was this stat shown.

But what about all the tons of money, lawsuits, lobbying, education campaigns, advertising, threats, news reports and the like from the recording industry, all telling people who unauthorized downloading was unquestionably morally wrong and that each download is a lost sale.

The developers of Minecraft (who struck even bigger when they got acquired by Microsoft in 2014) showed that you can compete with free and that you can get people to commit if you focus on the art. Making money was always a byproduct and in the end they made a bunch of it.

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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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