Recording

Getting Paid

THERE ARE MORE OUTLETS THAN EVER FOR INTELLECTUAL PROPERTY, BUT WHERE'S THE MONEY? 5/01/2009 8:00 AM Eastern

Illustration: Fredrix.com

So you're struggling to make a living doing something you're good at and enjoy, but it's like the Wild West out there, where most of the laws have yet to be written and it appears that nobody is in control. With the assumptions you made when you decided on a career in music as outdated as yesterday's papers, you need a new map to set you off in the right direction — to figure out where the money is. But that map doesn't exist.

The traditional music business model, which is based on the selling of physical product, may be irreparably broken, but at the same time music is everywhere: streams, downloads, ringtones, ringbacks, videogames, music games, video jukeboxes, video on demand, Webcasts, podcasts, widgets and more, as well as the traditional media of radio, TV, movies and — oh yeah — CDs.

In the sixth edition of their reference book, Music, Money and Success, attorneys (and brothers) Jeff and Todd Brabec devote 30 pages simply to laying out the various areas now in play in the constantly expanding digital realm. “In this new world,” they write, “you have a combination of the old rates, concepts and laws applying in some cases, with other areas being subject to the negotiation of completely new rates based upon new business models, laws, negotiations, court decisions and developing industry practices.”

Is your head spinning? Join the club. Not even the best and the brightest have figured it all out.

What haven't changed are the basic components: the song and the recording themselves. But how much revenue can they generate, and for whom? This is where it gets complicated. In new media, recordings — and the songs they contain — can be either downloaded or streamed, with separate licenses and royalty rates for each. Audio works fall under the category of mechanical rights, just as they do in the physical world, while streams, like radio or TV airplay, fall into the area of synchronization rights. Downloads and streams can be either audio-only or audio/visual. Mechanical only applies to audio works; once you put a visual behind a recording, it falls under the synchronization right. And when a copyrighted work is used as a ringtone, in a videogame or in some other nontraditional form, additional layers of complexity come into play.

“Everyone's wondering where the income is coming from and how do I survive?” says author Jeff Brabec. “You've gotta know how the business works to know where it's all coming from. You don't want to make a bad deal, that's for sure.”

“There doesn't seem to be an incredibly high expectation on the part of a lot of bands about the whole ‘get rich’ thing anymore,” says ASCAP's Tom DeSavia, a former A&R executive. “Now, it's, ‘How do I make a living salary? How do I survive?’”

“A musician wanting to ‘make it’ is going to have to completely change their conception of what it means to ‘make it’ in 2009 versus 1995,” artist Amanda Palmer asserted during a panel at SXSW. “Being a superstar is completely diluted nowadays…I'm spending a lot of time connecting with fans, and I don't feel as much of an artist as much as a promoter of Amanda Palmer. All of this instant connection has taken the place of making art. An idea that might have translated into a song before might now go into my blog instead.”

“Looking at young artists, the ones that have vision and drive, and for whom the major-label deal is not the Holy Grail, are going to succeed,” said Michael McDonald of Mick Management during the same panel. “If the definition of success is to make a living, and degrees of how comfortable a living, that needs to be the goal.”

Useful Information

According to BMI new media guru Richard Conlon, TV is now the primary revenue generator on the performance-rights side, having overtaken radio. And while new media presently represents less than two percent of the pie, it's growing rapidly and generating revenues at a multiple of that percentage. Almost all of the usage is from streaming via subscription services like Rhapsody, MusicNet and Napster; ad-supported major portals like MSN, Yahoo! and AOL; social sites like Facebook and MySpace; and mobile services including cell phone radio, ringback tones and audio/visual. Breaking down A/V, about one quarter of all streams are music-intensive. All of these areas are growing.

“At BMI, I think we're very well positioned for a usage-based economy and a service economy,” says Conlon. “We don't care about selling products or manufacturing discs. We care about monetizing use, and use is what's gonna happen, whether it's subscription or ad-supported or bundled services with ISPs.”

Hybrids Get Good Mileage

The days of putting all your eggs in one basket are over, according to New York-based manager Joe D'Ambrosio. “In these demanding times, the lines have blurred and people have to do other things,” he says. “Since I went on my own eight years ago to represent producers, engineers, mixers, composers, arrangers and writers, the lines between those roles are gone. We now get paid for the job.

“On my client Tony Visconti's high-profile projects, the money is there to hire his engineer. But with other artists he's working with, he's happy to engineer and mix himself. He also arranges, plays bass and sings background vocals, but he's not yet taken a writing credit. If he introduces a line, he doesn't think it's proper to take a full writing credit. On the other hand, Jay Newland, who built his reputation producing, engineering and mixing tracks on Norah Jones' first record, is being asked to sit in on writing sessions. He's not Kara DioGuardi, but he absolutely contributes a lot to songs and has been encouraged by record companies to sit in with writers and be a part of the process. But he came back to me, God bless him, and said, ‘I don't want to take a credit unless I can contribute.’”

The Performance Rights Act, a piece of legislation that would require radio stations to pay a fee for the music they play — which is the case in other countries — is now being debated on Capitol Hill. It would compensate labels and artists, musicians and backing vocalists, and also, if they obtain proper letters of direction, producers, mixers and engineers who are contract royalty participants.

If you're a producer/engineer like Newland, you might want to think more seriously about, when it's appropriate, getting a piece of the songwriting action. “I wouldn't put it that way,” Jeff Brabec replies with a laugh. “You can if you want to. But so many producers are real contributors, also. Song ownership is a valuable source of long-term income, and one which is not touched by the record company.”

We're used to seeing the P-E-M credit; will we start to see a P-E-M-S credit?

Old-School Vs. New-School

As for the traditional record business, most observers feel it's only a matter of time before the whole thing crashes down; one person I spoke with predicts that a number of major labels will be gone by this fall. In the meantime, the labels' attempts to recast artist contracts as revenue-sharing deals, with the record companies taking a piece of the touring and merchandising, have been greeted with disdain by many artist managers.

“They want to share in that revenue, and they don't want to help you build that revenue — which is antithetical to sharing in that revenue,” says D'Ambrosio, referring to the labels' abandonment of traditional artist development. “At a managers' panel I attended at SXSW, all of them said, ‘We're no longer focused on CD sales; we're focused on merch and live shows. But our artists need to make new music to play at their shows for their audiences.’ And one manager said, ‘We're not burying the record labels, but we really don't need them as much as we did.’ I don't know if that's really true. They don't need the old model, but I think you still need a focused team to bring their expertise to a project. Even though it's diminishing, the major labels are still the only ones with the power to break records.”

That may be true, but the breaking of records has less and less to do with establishing and maintaining careers in the brave new world. While a handful of indie bands, including the White Stripes, Death Cab for Cutie and The Decemberists, have accepted offers from major labels to make the most of the career momentum they'd established on their own, others have turned down lucrative offers from majors in favor of sticking with indie labels, which generally split net revenues from sales of physical and digital product with their artists on a 50/50 basis after expenses. They include Arcade Fire, Spoon and M. Ward on Merge; Sufjan Stevens on Asthmatic Kitty; and The Shins and Iron & Wine on Sub Pop.

Son Volt, which recorded three albums for Warner Bros. in the '90s, recently made a 50/50 deal to release new album American Central Dust on indie label Rounder. “That's the way it seems to be going,” says bandleader Jay Farrar of the equal-split arrangement, “as opposed to the old model, where the record company was like a bank, throwing a huge loan at you. Ultimately, this way works better for everyone involved; it's more of a shared responsibility.”

Meanwhile, Prince, Radiohead and Nine Inch Nails have abandoned the major-label system to go it alone, retaining ownership of their master recordings, and the members of Metallica have intimated that they may follow suit.

Everything But the Kitchen Sync

The good news for the rest of us is that nontraditional means of kick-starting and conducting careers — and potentially making money — are plentiful these days.

Says Todd Brabec, who recently left ASCAP after 37 years to devote his time to teaching and speaking, “Just consider all the new uses that have come up, like greeting cards, interactive dolls and toys, even musical door chimes. There are a lot of licensable situations out there.”

Jeff Brabec picks up the thread: “Novels use lyrics from songs and pay for that use. These are all publishing and songwriting areas versus the record label area. That's why this article is important with respect to the song aspect because so many producers are songwriters.

“Videogames have obviously become a major source of income for writers, music publishers and record companies. The labels have a real asset in the master recordings. But the great thing about the publishing business is that we're not tied to one particular master. Mechanicals have gone down, but other areas are increasing. So the music publishing and songwriting aspects are still hanging in there, and in some areas are actually going up.”

Sound to Picture

Referring to the oft-stated contention that “TV is the new radio,” Tom DeSavia notes that Sara Bareilles and Ingrid Michaelson are among the previously unknown artists who have broken big from having their songs used in prime-time series. “Until the last few years, the biggest request we got from bands we were courting was, ‘Will you showcase me?’ That was our carrot on the stick. Now it's, ‘Will you do a show for music supervisors for me?’ or, “Will you showcase me at Sundance or Tribeca in front of filmmakers and music supervisors?' With the contraction of A&R at the labels, music supervisors like Alex Patsavas, Gary Calamar and Lynn Grossman have become the new cool A&R people. They're the audience bands want to get in front of, and that is a way to generate real income.”

“Nothing pleases me more than to see a new artist that I've discovered get some screen time,” Calamar says. “At the same time, the biggest priority is finding a piece of music that works for the scene and adds to the drama, humor, emotion, action in a significant way. I'm finding music all over the place. I keep my ears to the ground. I read a lot of music magazines, blogs, MySpace, iTunes. And KCRW, of course. [Calamar hosts The Open Road, airing Sundays from 9 p.m. to midnight on the NPR station, with archived shows streaming on KCRW.com.] I seem to be on everybody's — and their brother's — mailing list. Yesterday, I was walking down the street and a car stopped and the driver handed me a CD. I'm open to well-known or obscure artists. Obscure artists are, of course, generally easier to work with budget-wise, which is always a key factor.”

Calamar points to his use of Sia's “Breathe Me” to play over the climactic moments of the Six Feet Under final episode as “the most dramatic case of turning someone's career around” in his own experience. “Sia's label was about to drop her and had decided not to release her album in America. I knew her from her work in Zero 7 and had been playing the track on my KCRW radio show.”

As for the remuneration: “There is a fee that is paid to the record label and the publisher to license the song,” Calamar points out. “Depending on their deal, some of that money will hopefully trickle down to the artist. Of course, the exposure will help bring out more people to their live performances, which is probably the most significant area where artists are getting paid these days.”

“At ASCAP,” DeSavia points out, “we can actually say how much money you'll make if you have a song used in a series, if it's the theme song, if the show gets syndicated. That performance income is making up for the lack of mechanical royalties. ASCAP used to be seen as the bank and an afterthought; it's amazing to see how important we've become to the limited industry. It used to be an ancillary source of income; now, it's the primary source, except for touring, if you're lucky. It's a totally different world.”

DeSavia notes that composer Michael Giacchino jumped from videogames to scoring TV series like Alias and Lost, as well as movies like The Incredibles. Similarly, Shawn Clement's CV includes TV series Buffy the Vampire Slayer, several videogames and the upcoming feature-film Quantum Quest. “I'm a big fan of getting yourself out there, whether Facebook or Twitter or directories,” Clement said in the March issue of Mix. “There is film, TV, videogames, Webisodes, cell phone content — endless opportunities for the working musician who is open to a lot of new things. Now there may not be a lot of money at first, but there wasn't money at the start of music videos or videogames. You have to have an ear out for the next big thing and the money will come.”

Another viable medium for income and mega-exposure is the TV commercial. It's safe to say that the use of Coldplay's “Viva La Vida” in an Apple iPod campaign was as significant a driver of exposure and subsequent sales on the album of the same name as any other individual factor. In recent months, the little-known indie band Chairlift got a huge boost from having their song “Bruises” used in an iPod Nano campaign, which resulted in a deal with Columbia Records.

“In the old days, no self-respecting band wanted to have a song used in a commercial,” says DeSavia. “But then Led Zeppelin started shilling for Cadillac and it all became okay. And then, when U2 did the iPod commercial with ‘Vertigo,’ everyone saw what it could do for records. Here was a heritage band that all of a sudden had a big hit single. More recently, Wilco had multiple songs used in a VW campaign. And just think, back in the early '90s, that was the most un-Pearl Jam thing you could do.”

New Model Army

Reacting to the radically changed landscape, a new breed of proactive individuals has arisen, tossing out the conventional wisdom as outmoded and drawing up their own career blueprints — in the process giving a whole new meaning to the term “independent.” Singer/songwriter AM, a Hotel Café regular, self-produces and self-releases his music — “and off one album he's had 63 placements,” DeSavia marvels. “He has no interest in getting a record deal; he's focused exclusively on recording himself and getting placements.” Greg Laswell, who produces and engineers his own records for indie label Vanguard, is another in a growing field of proactive artists who derive their income primarily from licensing their material, and that primary form of exposure enables them to sell tickets and records. Both are making a decent living doing what they love.

Grace Potter & The Nocturnals, a Vermont-based group that got traction on the jam-band circuit, are on their third album for Disney's Hollywood Records. For them, the traditional model is working. Their label, which has exhibited remarkable patience during an era that prioritizes immediate results, has put the band together with producer T Bone Burnett, a situation that wouldn't have happened if Potter and her crew were still on their own. But they don't rely on subsidies from Hollywood to cover their overhead. They do it by “touring our faces off,” says Potter.

“That's not the only solution, but it's what we know,” she explains. “Sometimes you just can't get over what you were born to do. No matter what happens, we can always go back to ground zero and pack ourselves into the van we pooled our money to buy in 2003, as long as we can scrape together $40 for gas and get ourselves dinner. And hopefully by the end of the week we'll be able to pay the rent. We're not selling a lot of records — I hope someday we can be that band. But we're lucky to be on a label that can sweat it out with us. You can't wait for the tide to turn; you have to turn it yourself.”

“There's every reason to be optimistic,” says Richard Conlon. “People are going to use music. Maybe consumers won't be buying CDs, or buying downloads for that matter. But whatever happens, music is going to be used. It's not like the music is gonna turn off everywhere. Writers will write, artists will record, consumers will listen and enjoy. If you keep those fundamentals in your head, you'll realize the sky isn't falling by any sort of metric.”


Bud Scoppa is Mix magazine's L.A. editor.

Resources for Producers and Engineers

The Recording Academy Producers & Engineers Wing advocates for equitable compensation on behalf of recording professionals. In our back-page Q&A this month, Maureen Droney, senior director of the P&E Wing, discusses her organization's current projects, including research into new streams of revenue, development of compensation models, development of a recording metadata collection tool to facilitate proper crediting and payment, and support for the Performance Rights Act.

Droney also wrote a feature on the use of metadata and file management, key components in tracking and recovering payments owed to producers and engineers; read it at mixonline.com/studios/business/digital-track-sheet. For general information about the P&E wing, visit www.producersandengineers.com; for answers to specific questions, e-mail p&ewing@grammy.com.