The Unfamiliar Sound of Competition and Managing Your Rights BY: BRUCE WARILA / MTT

Up until now, music was in a unique competitive product category: there simply wasn’t much competition (for consumer attention) between well-made songs.

Songs are inexpensive, consumed in under four minutes, easily obtained, and songs are the only product in the world where billions of users…each own thousands of ‘competing’ alternatives.  In reality, uniformly-priced competitors are often stacked up and then consumed in succession, and in the age of the iPod, the stacks (the playlists) are growing instead of shrinking.

However the modern world conspires to ultimately deliver, in every product category, the greatest value at the lowest price, and songs are about to loose their long held exception.

There’s a clash coming between legacy songs (established hits) controlled by disconnected conglomerates versus new music solely controlled by artists that can instantly, with the click of a mouse, manage all of their rights.

Consider the (partial) concept control panel (below) for a set-it-and-forget-it, radio-like streaming music service…

For the purpose of this post, we are focused on price competition.  Assume that the popularity fader…simply works as expected.  I believe there’s enough work being done is this area to deploy this (popularity potential) feature now or in the near future.

Price Competition
The ‘stream / song price’ fader (shown above) controls price (consumer cost); it could just as easily control the flow of advertising insertions within a flight of music.

It’s only natural that the average music fan will want to listen to a combination of the lowest-priced music, popular music, music with popularity potential (within genres), and/or streams of music that are minimally interrupted by advertising intrusions.  

Let’s examine what the lowest priced, popular mix might contain: at the very lowest prices, the mix will contain the least amount music that’s controlled by entities that are unwilling or unable to waive fees and royalties; this includes music from established (signed) artists and almost all preexisting hits.  If users want (more) familiar music, they will have to either increase the price they are willing to pay per-stream / per-download, or expose themselves to more advertisements (by sliding the fader to the right).

We already know that users would rather not continuously listen to streams that are over populated with unfamiliar songs, so I suspect that most music fans will choose a place on the fader that includes a comfortable level of preexisting hits; obtained at an acceptable price.

Everybody and every entity in the world that plays or consumes music is price/cost sensitive.  People steal music because of price.  Music services are cost (label fees, streaming fees) sensitive.  Bars, restaurants and nightclubs are price (licensing fees) sensitive.  Even radio would love to reduce the costs connected to broadcasting music.

Coming soon to a streaming service near you…  If your songs have popularity potential (within a niche/genre), you will be able to compete for spins against established artists and preexisting hits, and you will be able to be filtered into streams…all based upon price.  Moreover, you will be able to withdraw your willingness to suspend your royalty rights and forgo payments with the click of a mouse.  If you believe exposure leads to the revenue, then price competition is going to be great for unknown artists and not so great for legacy artists.

Now that you have the information above, here are four things to consider:

1) I do NOT believe that using a Creative Commons license  is the best way to withdraw your rights from the marketplace.  Wait until you are able to control your rights upon, and suspend payments from, individual streaming services via the click of a mouse.

2) If you are unknown, uniform pricing is not your friend (it’s probably not your friend under any circumstance).  Any deal, contract or law that shortens your ability to set your own price or to temporarily suspend your royalty rights is not in your best interest.

3) Remain vigilant and don’t get misled into believing that certain laws need to be extended, amended or adopted to protect “your” best interests.  Chances are, the laws and regulations will be protecting the entrenched interests of those that 1) don’t want to compete on price, or 2) exist off the back of the income streams you want to suspend and restore via the click of a mouse.

4) In today’s world, the interests of publishers, labels, management, investors and artists are usually not in alignment.  The last thing you want is a contractual situation that prevents you from freely using your songs to drive the remainder of your business.  For this reason, I am an advocate of entering into 360 deals with ‘partners’ that can deliver value to, and participate in the upside of, every facet of your business.

I want to hear from music publishers, industry attorneys and songwriters on the option of temporarily suspending rights and payments to compete for exposure on streaming services.  Consumers are one (huge) thing, but venues (restaurants, bars, nightclubs, etc.) pay for blanket licenses; I don’t think venues are going to stop paying for blanket licenses in droves, as music fans will expect to hear a reasonable flow of familiar music.  Then again, I could be wrong?

In the US, royalties from traditional broadcast radio are only paid to songwriters. Can songwriters legally suspend their radio royalty rights in consideration for more exposure?  Artists, would you give full commission on the sale of your music (you get nothing until you click out of the program) to a popular radio station in exchange for ongoing exposure?

SOURCE:
The Unfamiliar Sound of Competition and Managing Your Rights 

 

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About Real*Industry*Talk

Professional Page: http://www.linkedin.com/in/jakly Experience: ASCAP Real Industry Talk Independent Music Company Get It Done Blog Artist Manager Education: Full Sail University, B.S., Music Business View all posts by Real*Industry*Talk

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