No matter how many books, forums, or online sites that disseminate information readily to be accessed, artists today just don't seem to care about treating their music as a business first. Many are stuck in one sided contracts at the indie and major level, because they simply did not take the time to learn what they possibly could before inking that infamous deal that would bring them riches and fortune. Although I will only touch on a few areas, they are key in what any artist needs to know and understand completely.
First, publishing is not part of record sales, it is completely separate! Neither is it similar to publishing a book. Music publishing is just what it is (performance royalties from radio, television, video, movies, commercials, sheet music, etc.) which is entirely separate from record royalties! Publishing is collected from one of the several performance rights agencies (ASCAP, SESAC, BMI,etc.) and then distributed to those owners and contributors of the song itself.
PERFORMANCE RIGHTS AGENCIES WORLDWIDE - http://www.royalty-free.tv/rftv/performance_rights.htm
NMPA (National Music Publishers Association)
http://www.nmpa.org/legal/music101.asp
Second artists need to learn the business, PERIOD!
Most don't know what the 5 exclusive rights of protection in the copyright law are, what music publishing is (and that by law you don't have to give up more than 50% of it), that the distributor owes you money upfront not to be considered an advance or recoupable for mechanical royalties (royalties collected from the immediate and actual physical manufacturing of your copyrighted works at 9.1 cents X the number manufactured), etc. The Harry Fox is the largest agency for collection of mechanical royalties: http://www.harryfox.com
Numerous others as independent artists don't know that release scheduling is important because you are now competing with the majors. They don't understand that leveraging your business is highly important, and that you must register your music with BDS to track radio airplay or with Soundscan to track record sales, or join NARAS to be nominated for a Grammy, to make sure that you get in contact with a radio consultant because no matter how many dj's, music directors or program directors tell you they are in control of their station's "play list', they are not telling the truth, because the majority of stations now belong to a broadcasting company network and must go through a corporate board that gets it's suggestions from a radio consultant (wonder why all stations sound the same now?).
United States Broadcasting Companies: http://www.rbr.com/broadcasting-companies.html
BDS & Sound Scan: http://www.nielsen.com/content/corporate/global/en.html
The internet is a viable tool, and should be utilized to leverage your business so that you will be able to fully benefit from it.
The majority of artists find themselves in what is called a "non-recoupable" status in the industry today. What this means is that the artist is responsible for whatever costs are incurred by the distributor and record label. So let's say an advance of 1 million dollars is given to the artist, then 2-3 million dollars is put of for marketing, promotions, advertising, and tour support (mini tours and in-store appearances to help support the pending release of an album and build the artist's buzz), then another 1-2 million is put into the creation of the videos, branding materials, etc., the distributor and record label would first need to recoup all costs from whatever they spent, and only then would the artist be able to earn any money from the sale of their music. The artists would need to sell a ton of albums and digital downloads in order to recoup what was spent, but the sad thing is that most don't or ever will, because the same process goes through for each consecutive album that they are contracted for.
One more tragic scenario is that a lot of artists don't even own the masters to their music, or even the publishing, or have such a small interest in it because they didn't take the time to find out what it is. Michael Jackson through several business deals and acquisitions (ATV, Pye Records, Baby Mae Music, Acuff-Rose, Dial Records, Four Star Records, Challenge Records, Famous Music, etc), owns a large majority of the publishing or a large stake in it of some of the biggest artists today, which includes a list of who's who in the music industry: The Beatles, Lady Gaga, Willie Nelson, Charlie Pride, The Back Street Boys, Eminem, Rick Ross, Justin Timberlake, Gretchen Wilson, Hank Williams, Roy Orbison, Elvis Presley, The Everly Brothers, Jay-Z, Lil Kim, Flo Rida, India Arie, Hillary Duff, Gorillaz, Jessica Simpson, Jennifer Lopez, Patsy Cline, Beyonce, Black Eyed Peas, Tim McGraw, Jonas Brothers, etc. etc. Besides his genius as a performer, composer and writer, this displays Jackson's desire to be the best in business by asking what was needed to know for him to succeed through Paul McCartney, Berry Gordy and others in his circle. All artists should strive to be the busineman that Jackson certainly was. http://www.sonyatv.com/
No person or entity, other than the copyright owner, can use or employ the music for gain without obtaining a license from the composer/songwriter.
Inherently, as copyright, it confers on its owner, a distinctive 'bundle' of five exclusive rights:
(a) to make copies of the songs through print or recordings
(b) to distribute them to the public for profit
(c) to the 'public performance right'; live or through a recording
(d) to create a derivative work to include elements of the original music; and
(e) to 'display' it (not very relevant in context).
Where the score and the lyric of a composition are contributions of different persons, each of them is an equal owner of such rights.
These exclusivities have led to the evolution of distinct commercial terminology used in the music industry.
They take four forms:
(1) royalties from 'print rights'
(2) mechanical royalties from the recording of composed music on CDs and tape
(3) performance royalties from the performance of the compositions/songs on stage or television through artists and bands, and
(4) synch (for synchronization) royalties from using or adapting the musical score
in the movies, television advertisements, etc. and with the advent of the internet, an additional set of royalties has come into play: the digital rights from simulcasting, webcasting, streaming, downloading, and online "on-demand service.
If more artists would first learn the business than having the burning desire to be famous first, then a lot of "one sided" contracts would not exist in the music industry. They would then have more leveraging power through them already securing the rights to their music by completely protecting it, and the rights to their "brand" by trademarking their name and image before stepping to a major label. No major distributor (EMI, WEA, SONY, UNIVERSAL) or any of the record labels they distribute (Tommy Boy, Bad Boy, Def Jam, Cash Money, Maverick, Road Runner, etc.) holds a gun to these artists heads and make them sign on the dotted line without understanding what they are signing. Then most get their family members, friends and "homies" to represent them as personal managers, and they too have no clue as to what the artist may be signing and agreeing to.
Third, the entire infrastructure of the business is broken due to the MAPS agreement made between what was then 6 major distributors to level the median price of the compact disc, but the FCC caught them in price gouging and forced them to abandon it, but by then it was too late. The internet and various technologies P2P, etc., had already infiltrated the market place, and the rising cost of music forced the hands of these new technologies and consumers began to pirate, trade and exchange files over the net, while at the same time the majors railed against the digital revolution instead of embracing it. They too had the same opportunity to get on the learning curve and be ahead of these file sharing sites but instead chose to sit back and let it blossom into what it has become today. They definitely would have not stopped all piracy, but they could have curtailed it tremendously by being more fair and competitive with the pricing of their products. This has directly affected the traditional radio industry, the physical retail market, and several sub industries formerly supported by the success of the music business as a whole.
Fourth, the RIAA is not to blame here. It is acting as a union should, to protect it's members, just like the Teamsters, the Screen Actors Guild, The UAW, etc., that stand as a direct representative for it's members rights. Bottom line, you can't go into Sears and get a free appliance, you can't walk into McDonalds and get a free meal, you can't go to your dentist and get a free cleaning, or to your doctor and get free surgery, you can't go into a car dealership and drive out with a free car, so why should you be entitled to receive free music unless it is part of a promotion? Just as you would hurt the employees and the executives at the aforementioned companies and industries, so you do the same to these artists, executives and their individual families because they are depending on the sale of music to take care of their responsibilities.
Even the RIAA admits that the decrease in record sales can't be attributed wholly to P2P sites: http://www.zeropaid.com/news/91984/riaa-admits-p2p-not-solely-to-blame-for-decreased-music-sales/ We are in one of the worst economic times in the history of this country over the past several years, but don't think for one second that P2P sites have not put a dent in the business, because they have.
Fifth, the big problem that the industry faces today is the sudden exodus of brand-name artists away from the traditional recording companies. The digital revolution has opened up more avenues for artists today, that already have a brand name. In the case of both Prince and Radiohead, they have made inroads on how to survive and prosper without depending on the wings of a major distributor. Their business models that were launched by them, have been a guide for all artists to follow or at least gain some insight on how to conquer the marketplace without the "eyes" of a major hovering over all facets of your music business career. Record companies have always depended on the revenue and cash flow generated from platinum-selling artists to finance new talent. If that revenue stream disappears, how can they compete with the new digital technologies that are already here and on the horizon?
You do not get into a for profit industry just to be a provider of "free services", you get into a for profit industry because it is what you chose to do with your life, as these individual artists chose to be in the business of music, and you want to make a good living at it. Bills do not pay themselves, and no matter how creative an artist may claim to be, trust that they want to earn a living at what they are doing.
Sixth, sorry but most of these digital distribution sites are collecting royalties and charging upload fees to a large majority of artists that actually never even break even in what may have cost them 'out of pocket' to launch their music business. The CEO's and founders of these online entities have gone on to become multi millionaires while most artists still struggle to make a living with their music. For instance, the artists distributed to iTunes by these online merchants, make more per download than ANY major label artist ever will and are happy for it. However its a volume game and 100 downloads will not pay the bill no matter how high the royalties are. So you still need to be known and loved by a substantial amount of people before the fact that your song is “For sale on iTunes” is going to make a difference to your Wallet. Also, the advantage of releasing in a digital platform like iTunes is the lack of prints and advertising costs, not to mention distribution. Distributors are immediately reimbursed for their costs before skimming the remaining gross for overhead and profit. Self-pressed CDs would all still have the same expenses, one way or another, however the disadvantage is the same, because as previously stated you still need to account for some form of advertising and promotion, and just doing it on Face Book, My Space, You Tube, etc.. just isn't going to cut it, especially when you are still competing against the juggernaut of the major distributors. Not saying that it isn't possible to earn a living, but it won't be a field of roses either.
The revenue per fan is clearly higher, the more direct the relationship is with the fan. The argument for an artist right now is about reaching new fans, more fans, online fans, other bands' fans that have a similar brand or music. Yet, too often the chase is on for transient fans, those that tend to be band wagon jumpers and more than likely account for the majority of P2P sharing and piracy. Instead the focus should be on building long term relationships with those who have shown interest in the music – loyal fans, not transient ones.
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