Tag Archives: Music Industry

SoundExchange Paid Artists Record Amount of Royalties Last Year

soundexchangeRoyalty payments from SoundExchange set a record in 2012, and exceeded the previous year by 58%. Payments to artists for performance made by Internet radio, satellite radio and cable radio services hit $462 million. Payments for performances made by subscription services are not included in these figures.

“SoundExchange’s increasing annual royalty payments are a positive indication of where the industry is heading. As digital radio continues to grow, so should the amount that performing artists and rights owners receive for the use of their content,” said SoundExchange President Michael Huppe. “Our distribution represents another record-breaking year for SoundExchange, but more importantly, it means more money in the pockets of the creators of music. We’re optimistic about the industry’s future, and look forward to maximizing digital performance royalties for the people we serve and finding new ways to propel the music industry forward.”

To be accurate it’s important to understand that not all of this money ends up in the hands of  “creators of music.” According to Billboard, first, SoundExchange takes 5.3% off the top for administrative fees. After that, the “net” figure gets divided up as follows: record labels, or owners of the sound recording, get 50%. Performance artists get 45% and session musicians and backup singers get 5%.

Earlier this year it was estimated that Pandora was responsible for 37% of that record breaking number collected by SoundExchange. While SoundExchange doesn’t specifically report the figure they pay for performance royalties, they do report a “content acquisition fee”, which topped $182 million through their Q3 of 2012.

 

 

Nielsen: Song, Album Sales Are Up

Music sales are up this year, bucking a several year annual decline. Led by strong digital downloads of albums and songs, music sales in the US are up 1.6% through May 8th. That’s according to Nielsen. Physical album sales continue to drop, but the rise in online sales is compensating for the first time. Digital album and track purchases went up 16.8 percent and 9.6 percent respectively.

A contributing factor in this would be the release of the Beatles catalog online which drove catalog album sales to a 5.4% increase. CD sales were down, but only 8% compared to double digit declines for several previous years. And strangely enough, Vinyl album sales were way up – 37% year over year, after growing 14% last year.

So what does all of this mean? Well, the future’s not as bad as it seems. Perhaps precipitous drops in revenue are a thing of the past for the record companies.

Piracy’s Impact On Digital Music Sales

Drawn by Steve Hawtin based on widely quoted d...

Image via Wikipedia

Digital music sales grew globally by 6 percent last year to $4.6Billion. That number accounts for 29% of record company revenues around the globe. According to a new report by IFPI, consumer choice for accessing music via digital channels continued to grow in 2010. It’s recently released Digital Music Study makes a very clear case that digital music piracy has stifled and eroded the music industry.

Case studies included in the presentation cite examples such as in France, where government regulation, awareness campaigns, and even subsidized legal downloads have made headway in lowering the amount of piracy and stemmed the loss of revenues, and in Spain where a once flourishing and highly creative music scene has gone the other way, with nearly half the residents using illegal download sites to obtain music and fewer and fewer new artists are emerging.

The study calls for government action in the form of ISP regulation, consumer awareness campaigns and content protection. It’s an interesting read – certainly worthwhile for anyone hoping to do business in the online music marketplace. You can access the summary and download the study here.

How To Connect With Your Audience

I read a great article about branding on Chris Brogan’s blog the other day which emphasized that branding is not just about how you market your brand, product or service, but also about how you distribute it. Very successful product/brands have established successful channels of distribution for those products/brands.

Twitter, Facebook, MySpace, social media sites in general are channels of distribution for your messages. Ways that you, your brand or product can connect directly with your audience. Get it?

amanda palmerHere’s a real life great example. Amanda Palmer is a musician. Singer, songwriter, pianist, formerly of a band called The Dresden Dolls and more recently a solo performer. Amanda Palmer is also a masterful promoter of her personal brand. Which is the part I want to tell you about.

Amanda Palmer has over 38000 followers on Twitter. According to a post she wrote recently here, she loves Twitter and tweets whenever she can because it allows her to connect directly with her fans. (She gets it.) So she wrote a post called “How an Indie Musician can make $19000 in 10 Hours using Twitter” in which she describes how she was “hanging out on Twitter” on a friday night with her network of followers, mainly cracking jokes and complaining about losers who have nothing better to do than hang out on Twitter on a friday night. This turned into the number one topic on Twitter, which meant the popularity of the group increased even more.

So Amanda and her friend/web guy put together a quick website and started selling tshirts, then had a webcast auction for which she performed live and sold other stuff signed by her. After that, she offered a Twitter Donation-Only Gig and got donations for that. As she puts it in her post,“TOTAL MADE THIS MONTH USING TWITTER = $19,000 TOTAL MADE FROM 30,000 RECORD SALES = ABSOLUTELY NOTHING.”

The post is worth reading (expletives alert) – she’s quite a character. The point is, Amanda Palmer is a masterful marketer of her brand. Her distribution channels allow her to connect with her audience and sell her product – which is her music and her personality.

Standard distribution channels for the music industry are dying. Both the radio industry and record companies are struggling to find new business models. Solutions are found in stories like Amanda Palmer’s. Put the focus on your distribution channels. Give your listeners lots of access to your brand. Love your audience and connect with them often.

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