Tag Archives: revenues

Copyright, Music, My Stories, Treating Fans Like Shit

Vinyl and CD’s

How misleading can the labels and the RIAA be?

You’ve seen the headlines about vinyl sales surpassing CD sales.

And how vinyl sales brought in $232.1 million and CDs brought in $129.9 million.

But the report also mentions that Physical Album Sales including vinyl is at 27.9 million units and that vinyl on its own has moved just 8.2 million units.

So the other 19.7 units are CD sales. I guess vinyl hasn’t surpassed CD’s in sales, but it has surpassed it in revenue, which the headlines fail to mention.

$232.1 million divided by 8.2 million units is $28 per vinyl record. Which sounds about right on average.

$129.9 million divided by 19.7 million units is $6.60 per CD, which also sounds right.

What’s your preference?

I don’t really have one anymore, except the price being right. I will not pay more than $20 for a vinyl record unless it’s included in a deluxe box set. Then again, I’m happy paying less than $20 for a Family Streaming account.

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Copyright, Music, My Stories, Piracy, Stupidity, Treating Fans Like Shit

Scott (Stealing) Ian

Piracy, Copyright Infringement, Plagiarism, Website Blocking, Trans Pacific Partnership (TPP) and on and on it goes.

Why would anyone create music?

The record labels via the RIAA have screamed black and blue that piracy is decimating the business. They fought tooth and nail against every digital service and start-up. Yet year after year, it was digital music that was making a fortune for them, because all digital monies are pure profit. There are no manufacturing costs (like vinyl and CD’s), there are no warehousing and distribution costs and there is no breakage.

Remember Napster. It showed the recording industry what the majority of customers want. Access to cherry pick the song they want and access to listen to whatever they want. 17 years later, you can say that what Napster started has almost become a reality. The only outlier is that people still want to download mp3’s for free.

Which brings me to Scott Ian!

Can someone please explain to him what stealing really means because he is making metal heads look stupid and uninformed?

Downloading a copy of an mp3 is not stealing because the mp3 is still up on the web for streaming, purchase or downloading. If anything, it is copyright infringement.

But the question that he fails to ask is why are fans of Anthrax downloading their music illegally?

Is it because;

  • They download music and have no intention to pay for anything, not even a concert ticket of the said artist?
  • They download music because they have no other way to get it?
  • They download music because they have no other way to get it and they will purchase the CD eventually and even a concert ticket
  • They download music because they don’t want to pay Apple to download it, but they want it on their phone, and have every intention to purchase a concert ticket when Anthrax hits their town?

I can go on and on with different types of viewpoints of fans.

The value of music was originally inflated, because we, the customers had to buy an album worth of songs for the three, maybe five good songs. The hard-core super fans will always purchase, however the rest will do what they want to do, when they want to do.

As a collector, I still pick up CD’s of bands when they are super cheap like $5, years after the album was released and after I’ve streamed the album to death. And they are still in the plastic wrapping which I am sure once I have joined the afterlife, my heirs will commit them to a second-hand store or just toss them. The value of music is different from person to person.

But how many artists can safely say they know who their hard-core fans are.

I bet you there are always fans who purchase deluxe bundles, every time the said artist releases an album.

Is that buyer information getting filtered back to the artist?

It’s these fans, Scott Ian should be caring about. Are they getting any bonus offer, a loyalty card, a discount to a concert or a simple personalised thank you that makes the fan feel special for supporting the artists with every release?

Imagine the fan getting a hand written letter sent to their address that thanks them for purchasing the last four super deluxe bundles of the said band, and here is a bonus mp3 album for you to download plus a special VIP pass for their upcoming concert.

Instead, the fans are made to feel like criminals, for streaming an album instead of buying,  for cherry picking a few songs instead of paying for all of them or for downloading the album illegally.

That’s not the way it’s done anymore.

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

All Things Music And Metal

The RIAA record label industry body a few weeks made an announcement about how are losing billions of dollars because of streaming and that Vinyl sales generate more revenue. The announcement then led to headlines across all of the news outlets.

The New York Post had the headline “Artists make more off vinyl sales than streaming services”.

Billboard had the headline “Vinyl Sales Made More Than YouTube, Spotify and Soundcloud Ads Combined”.

The Australian Financial Review had the headline “Some artists blame music streamers for shrinking the business”.

Fortune magazine had the headline “Record Industry Continues its War on Free Music”.

Mashable had the headline “Music streaming is getting bigger and bigger, but artist revenue isn’t keeping up”.

It’s safe to say that the RIAA got what they wanted with their report.

“This is why we, and so many of our music community brethren, feel that some technology giants have been enriching themselves at the expense of the people who actually create the music.”
Cary Sherman, Chairman & CEO of the RIAA.

“Last year, 17 million vinyl albums, a legacy format enjoying a bit of a resurgence, generated more revenues than billions and billions of on-demand free streams: $416 million compared to $385 million for on-demand free streams.”
Cary Sherman, Chairman & CEO of the RIAA.

 

This is the RIAA being as dishonest as you can get.

They are basically comparing gross retail vinyl sales against the net streaming revenue amount earned. In truth the net vinyl revenue is a lot lower than the gross $416 million quoted. And the $385 streaming revenue was $0 before 2011 due to copyright infringement/piracy.

As an article at Fortune.com states;

“Sherman is saying that because ad-supported services—or in fact, any alternative music-distribution method—don’t pay as much as some other music services, they must be flawed and/or stealing from musicians and record labels. In other words, the music industry’s largest negotiating body assumes that any new distribution method or infrastructure for delivering music to consumers must by default generate as much revenue as the industry used to get from records or CDs. And if it doesn’t, that means there is a structural error in the business that the RIAA needs to fix.”

And streaming companies like Spotify have a battle being profitable.

Remember that the streaming services pay the record labels a licence fee to have the music the record labels hold copyrights too on the service. These monies are never passed onto the artist. Hell, Spotify doesn’t even have long-term license contracts with Universal and Warner Music. These labels are cashing in on licensing deals on a month to month basis.

Then based on listens, the streaming services pay 70% of their streaming revenue to the record labels and publishers and based on the contracts the artists and songwriters have with their labels/publisher, these monies are paid back to the creators in cents. Meanwhile, the record labels are rolling in billions of dollars from streaming.

Maybe that’s why Spotify needed to get a billion dollars from investors.

The money will be needed for further expansions, acquisitions of tech companies and other investments. In my opinion, for Spotify to survive long-term they need to get into the record label business themselves sort of like how Netflix is creating its own content and using that content to sell their service. That is why HBO went from licensing movies from the studios (which wasn’t profitable) to creating their own content. And now look at the company.

There is no way around it for Spotify. They are under increasing pressure to remove their free tier and the latest research from the RIAA (mentioned above) is being used as evidence to build a case against ad-supported free music.

And poor old Google is always the punching bag when it comes to the RIAA.

If Google isn’t taking flak for not censoring the internet based on what the RIAA or the MPAA see as wrong, then their YouTube service is attacked for not paying enough.

So what we have is a coalition of artists and music groups asking for the lawmakers to write new laws to support their business models. Just think of it as another Lars Ulrich/RIAA vs Napster battle. And how did that turn out.

As the article at Techtimes states every law is open to abuse and while the DMCA was never intended for censorship, it is being used exactly as that:

“Over the past few years, however, the DMCA has been a cause of controversy. On one end, holders of rights to content are saying that the law does not do enough to protect content creators, while on the other end, there are warnings of abuse and censorship if the law is further tightened.”

And speaking of Lars Ulrich, in case you have lived under a rock, “Master of Puppets” from Metallica has been added to the National Recording Registry in the US as a cultural, artistic or historical significant recording.

Basically anyone can nominate a recording to be considered via sending an email to recregistry@loc.gov.

Once the nomination is sent, the lobbying starts.

Don’t get me wrong, “Master of Puppets” is a great album (although I do prefer “Ride The Lightning”), but is it really a defining cultural, artistic or historical significant recording. Although Metallica is seen as leaders of the thrash metal movement, the truth of the matter is that the movement is much bigger than one band.

I would even say that the “Metal Massacre” compilation that featured Metallica (spelt incorrectly as Mettallica mind you) is more culturally significant than “Master of Puppets”. But hey, Brian Slagel, founder of Metal Blade Records, is nowhere near as important as the biggest band. Because all history is written by the winners, the ones that have the most money.

And for Metallica albums, you cannot escape the “Black” album.

That one album killed off glam rock/metal, introduced a new heaviness to the mainstream that opened the door for bands like Korn, NIN, Disturbed, Godsmack and many others to exploit in the Nineties to great success.

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

What Can Lorde and Spotify Teach The Metal World? Plus The Ones That Control The Talent Will Win In The Long Run

Record labels were dependent upon record sales and when the profit margins from recorded sales shifted from high margin returns to low margin returns, they screamed piracy. To them the only way they could remain in business was to have laws passed that protected their gatekeeper based business models.

However technology and innovation is always moving forward, so while the record labels are lobbying hard for new laws, at the same time they were being pulled into the future, kicking and screaming all the way.

Spotify to me is just a legal version of Napster, that has arrived in most markets. However before Spotify was even allowed to operate in certain markets, they needed to make licensing deals with the relevant record labels and publishing groups.

Spotify came into the market with the idea that they need to compete with free. And compete they did. The service even started to break artists to the masses, something that the record labels are clueless to do in current times.

Look at Lorde.
Her song “Royals” was added to Spotify on March 19th. It did nothing.

On April 2nd the song was added to the popular Hipster International Playlist by Napster founder Sean Parker. Isn’t it amazing what a little help can do and this was achieved without any dollars going into marketing. This was purely a stakeholder of Spotify, liking a song and sharing that song with the masses.

What’s that word again? Sharing.

On April 8th “Royals” appeared on the Spotify Viral Chart. What does this mean? It means that people have started to share it.

In relation to metal, I have posted previously how Dream Theater is doing it all wrong with their album release, putting money into marketing and believing that the old school scorched earth policy would bring results. It doesn’t. Sharing is what brings results. Fans sharing your music. Hey didn’t Napster do just this. Didn’t Napster allow fans to share music.

On June 10th “Royals” started to appear on radio. Remember when radio was cutting edge and used to be hip. This is proof that radio is a format that is dead and buried. This is proof that radio is always late to the party. This is proof that radio is clueless. This is proof that radio only plays what the record labels pay them to play.

So if you are an artist and your idea is to get your song onto radio, forget it. It is pointless. It does nothing for your career today.

Go on Dream Theater’s Facebook page and they are telling fans to contact their radio stations, so that “The Enemy Within” can be added to the playlist.

To use a quote from Flying High;
“Surely you can’t be serious.”
“I am and don’t call me Shirley.”

On July 9th “Royals” debuted on the Billboard Hot 100 – three months after debuting on the Spotify Viral Chart.
See how important sales are. By July 9th, Lorde was already a super mega star. It didn’t matter if she finally made enough physical sales to enter the Billboard Hot 100. She was already a success.

This is another lesson that the metal and rock world fail to learn. They still focus on the sales in the first week and the chart position. This is so old school and not a great measuring tool of reach or success, especially for new acts starting out.

But the metal world is still clueless. This is what we get from the bands, their PR companies and the various news outlets that report on metal and rock. Here are a few examples.

Loudwire: Dream Theater’s new DVD ‘Live At Luna Park’ recently entered at No 1 on the Soundscan music DVD chart.

Loudwire: Volume 2 of Five Finger Death Punch’s ‘Wrong Side Of Heaven; lands at No. 2 on Billboard 200.

Blabbermouth: “Wretched and Divine: The Story of the Wild Ones” sold 42,000 copies in the United States in its first week of release to debut at position No. 7 on The Billboard 200 chart.

See what I mean. They are still reporting on the old system. What those websites are saying is that the first week of sales is a measure of success, which I totally disagree with. If that was the case, then the first Five Finger Death Punch album was a dud, after first week sales.

August 6 – Lorde plays her first US gig in NYC.

Slow and steady wins the race. You play where there is demand. Humanity wins out in the end. Those that can play, perform live and write their own songs will win. It’s a return to the song writer. Expect a back lash against the over processed songs written by a committee.

Forget about acts that focus on big screens and pyro technics. The people are looking for human performances. It is an escape from our increasingly digital world.

“Royals” is the most shared track in the US by a new artist this year. This is what matters. The track is SHARED. It means the fans are spreading the word, getting more people to invest time and money into you.

Spotify has finally released some information as to how they pay and it sure makes an interesting read. I have posted previously about the greed of the record labels and how that greed will ultimately kill the streaming star.

So let’s get down to the nitty-gritty. Spotify pays 70% of their revenues to rights holders. The rights holders in 90% of the cases are the record labels and publishers. The same people who lobbied hard to extend copyright terms and are lobbying hard again for longer copyright terms.

So in 2013 so far, Spotify has paid out $500 million dollars to rights holders in royalties. That’s right $500 million. When Spotify pays royalties to a rights holder they provide all the information needed to attribute royalties to each of their artists. Check out the post, it sure makes interesting reading.

http://www.spotifyartists.com/spotify-explained/

So it got me thinking about business models. It looks like to me that the new record label business model of today is to ensure that they have the talent. The one with the most talent wins.

The Record Labels are the only ones putting money out there and the rule of thumb is that if you want to dominate in the music business in the future, you have got to spend. So if record labels are spending, the talent ends up on a label.

That talent brings to the record label the following;

Any songs that BAND A writes will end up with the record label for the life of the artist plus 70 years after their death (the U.K has 90 years). So if the artist is say 30 years of age when they write HIT A, then the copyright of that song will be owned by the record label for 120 years (assuming the artist lives to 80 years of age). Talk about securing their future. Now multiply BAND A or ARTIST A by all the millions of artists who are getting into deals where they sign away their copyrights.

SECURE the most talent and be a winner in the long run.

Has anyone noticed the large push from Frontiers Records in signing up talent past and present? Has anyone noticed how they are getting the Eighties legends to re-record their classics by creating modern forgeries and in the process handing over the copyrights to Frontiers? Has anyone noticed how they are getting all of these artists together for special one-off projects like Michael Sweet from Stryper and George Lynch?

Since managers and other entities are afraid to spend on artist, the ones that do so will win. If a label is not spending money, then they are not in the game. If they are not in the game, then they do not control any talent.

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