Music Industry Survival Manual: 13 Different Ways To Make Money From Your Songs

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Building revenue streams for artists and bands

Join Tony George from Austrade’s Australian Music Office as he provides this comprehensive overview of how an artist or a band goes about developing revenue and income streams.

The Dual Purpose of Copyright Law

In this segment from http://www.artistshousemusic.org – Mark Davis lectures at a music educators conference at Loyola University New Orleans, entertainment attorney and educator Mark Davis discusses the two (frequently opposed) purposes of copyright law: to protect free transmission of information while giving its creators some control over how that information is distributed and sold.

Music Licensing Deals in Today’s World: Making Money as a Songwriter

Video game royalties, music in apps, movie and television song negotiations, interactive dolls and toys, e cards, performing right organization radio payments, live performance royalties, non-interactive and interactive streaming, downloads and physical product sales, music in ads, Broadway shows, lyrics on clothes, musical toothbrushes – these are but some of the areas where songwriters and composers make money in today’s world of music. Todd Brabec, former ASCAP Executive Vice President and author of” Music Money and Success: the Insider’s Guide to Making Money in the Music Business” will discuss how traditional licensing deals work as well as how new media licenses in the online world are structured and negotiated. He will also talk about how much money can be made in the initial negotiation as well as the back-end royalties that can continue for many decades from song uses throughout the world.

How Publishing Royalties Work In The Music Licensing Business

Aaron Davison from explains how publishing royalties work in the context of the music licensing business.

Jeffrey Brabec On Types of Publishing Deals

In this clip Jeffrey Brabec, Vice President of Business Affairs for the Chrysalis Music Group, talks about two types of publishing deals. The first is the writer deal. A writer agrees to deliver a certain number of songs. The second is the hip-hop and rock deal. Brabec points out that hip-hop and rock deals are structured the same. However, hip-hop and rock deals do have a significant distinction. Rock and roll has very little sampling, while hip-hop has a lot. Brabec explains that samples must be cleared prior to the payment of an advance. Also, hip-hop deals are more expensive.

Music Business – Creative Distribution – Moving CD’s And Making Money

ASCAP Reports Increased Revenues in 2011

ASCAP Reports Increased Revenues in 2011

Delivers Licensing Innovations, Operational Efficiencies and
Enhanced Services to Members

CEO John LoFrumento Announces Dynamic New Leadership Structure
EVP Randy Grimmett Leads Expanded Membership Department
Vincent Candilora Promoted to EVP, Licensing
Roger Greenaway Named EVP, International

New York, NY, March 8, 2012: ASCAP, the global leader in performance rights
royalty collections and advocacy on behalf of songwriters, composers and copyright
owners, today announced strong revenues of $985 million for calendar year 2011,
the second highest revenues in the organization’s history, and an increase of 5.4%
over 2010. Collections from foreign countries totaled $347 million, an increase of
approximately $50 million over 2010.

ASCAP President and Chairman Paul Williams commented: “The demand for ASCAP’s
repertory across all genres of music is enormous and growing by leaps and bounds,
both domestically and abroad. A major driver of our revenue growth in 2011 was
the popularity of our members’ music abroad, leading to the highest ever foreign
collections bolstered by an advantageous foreign exchange rate. As songwriters and
composers, we depend on the efficiencies of ASCAP to manage our performing rights
in a rapidly changing global economy. ASCAP’s advocacy throughout the world is an
important factor in ensuring fair treatment and compensation for songwriters and
composers of every kind of music.”

Representing more than 425,000 music creators from every genre, the member-
owned organization distributed over $824 million to its songwriters, composers
and music publishers. ASCAP is the only performing rights organization (PRO) to
distribute royalties exceeding $800 million annually, which it has done for the past
four years, delivering a total of $3.3 billion to its members. ASCAP remains among
the most-efficient performing rights organizations with an operating expense ratio
among the lowest in the world — 11.9%, down 2 percentage points from last year.

According to ASCAP CEO John LoFrumento, “ASCAP has been able to deliver
strong financial results for our members through licensing innovations, operational
efficiencies and growth in foreign revenues. We will continue to meet the challenges
of this economy and evolving music marketplace through innovation and by offering
the best model for licensing the most in-demand repertory of music in the world. In
this unsettled time, our goal is to ensure a stable future for our members.”

Toward that end, several multi-year license negotiations were concluded with major
licensees in 2011, including XM/Sirius Radio, HBO, Viacom and the radio industry,
providing security and certainty for ASCAP members for the next five years. The
radio settlement includes a return to a revenue-based fee structure as radio is
broadening its revenue base through new distribution platforms, such as online,
wireless, multicast and HD stations.

In 2011, Netflix, Hulu and Spotify were among the major digital services that signed
ASCAP blanket license agreements. For digital services with billions of performances,
an ASCAP blanket license provides unparalleled flexibility and efficiency. The blanket
license proves a valuable and simple solution to legally perform the ASCAP repertory
of over 8.5 million copyrighted works while respecting the right of songwriters and
composers to be paid fairly. ASCAP has already licensed thousands of new and
established new media services, ranging from start-ups to the biggest players on the
Internet and mobile networks.

ASCAP members continued as the dominant creative forces in music throughout
2011, taking home major honors and awards, and writing the world’s most
performed and best-loved songs, scores and compositions. Oscars went to Trent
Reznor and Randy Newman; Golden Globes to Randy Newman and Diane Warren;
the Pulitzer Prize to Zhou Long; Jay Z, Jeff Beck, Arcade Fire, Josh Kear, Paul Worley
and Esperanza Spaulding won big at the Grammys; Trey Parker and Matt Stone’s
Book of Mormon captured multiple Tonys; Katy Perry became the first woman
to score five #1 singles from the same album; and ASCAP members claimed the
top nine spots on Billboard’s list of the top Hot 100 songwriters of the decade –
Timbaland, Dr. Luke, Pharrell Williams, Max Martin, Rob Thomas, Alicia Keys, Akon,
Scott Storch and Stargate’s Mikkel Eriksen and Tor Hermansen.

ASCAP continued to offer members the best career development, education and
professional recognition through our highly successful and innovative programs,
from the annual ASCAP “I Create Music” EXPO to the Sundance/ASCAP Music Café
to TV and film composing workshops to multi-genre songwriting workshops and
songwriting camps, bringing together emerging and hit writers, to our annual award
shows.

Also in 2011, ASCAP introduced several enhancements to its online Member Access
interface, providing members with the most advanced online tools in performing
rights for managing their catalogs, royalty statements and more.

New Leadership Structure

ASCAP created a new organizational structure in 2011 which consolidated several
operational areas and expanded the Membership, Licensing and International
departments into synergistic units positioned to deliver enhanced services to
members, operational efficiencies and licensing innovations. Three ASCAP
executives were tapped to the lead the new departments:

EVP, Membership Randy Grimmett was promoted to take on added leadership of
a multi-functional membership department which consolidates member services,
creative services, business affairs, estates and claims, and marketing and
communications into a fully integrated department that is serving the evolving career
needs of members and providing the strongest advocacy for their work.

Vincent Candilora, formerly SVP, was promoted to Executive Vice President,
Licensing, taking leadership of all licensing-related areas including broadcast, cable,
online, wireless and general licensing as well as infringements.

Roger Greenaway, formerly SVP, International, and based in London, is now

named EVP, with all international operations reporting to him, including relationships
with foreign societies, collection of foreign revenues and distributions.

Commenting on the executive promotions, LoFrumento said: “As the only member-
owned performing rights organization, we are committed to providing members
with the best payments, advocacy, services, tools, information and education to
help them succeed now and in the future. Randy Grimmett has proven himself
as a forward-thinking leader who understands how our members are impacted by
business trends and what we need to do to protect their livelihoods. As a strategist
and negotiator, Vincent Candilora’s experience has been an important part of
ASCAP’s ongoing licensing success and he has spearheaded several innovations
in how licensees interface with ASCAP, resulting in reduced costs. Roger
Greenaway’s expertise and deep understanding of the international market have
ensured ASCAP’s global leadership to the benefit of our members, as evidenced by
our 2011 collections.”

[Note: Financial results reported in this press release are un-audited. Independently
audited results will be available in May 2012.]

About ASCAP
Established in 1914, ASCAP is the first and leading U.S. Performing Rights
Organization (PRO) representing the world’s largest repertory totaling over 8.5
million copyrighted musical works of every style and genre from more than 425,000
songwriter, composer and music publisher members. ASCAP has representation
arrangements with similar foreign organizations so that the ASCAP repertory is
represented in nearly every country around the world where copyright law
exists. ASCAP protects the rights of its members and foreign affiliates by licensing
the public performances of their copyrighted works and distributing royalties based
upon surveyed performances. ASCAP is the only American PRO owned and governed
by its writer and publisher members. http://www.ascap.com

Press Contacts:
Bobbi Marcus
Bobbi Marcus PR & Events, Inc.
310-889-9200
bobbi.marcus@bobbimarcuspr.com

Lauren Iossa
Sr. Vice President, Communications & Media
ASCAP
212-621-6226
liossa@ascap.com

SOURCE:
ASCAP Reports Increased Revenues in 2011

Want To Make $50,000 a Year In Music? Start With One Dollar a Day. BY: CHRIS SETH JACKSON

Photo by Glen Edelson

A big part of my blog, How To Run A Band, is to figure out how to actually make money with music. However, I’ve been talking about giving music away for free, buying fancy tablets, and paying for web hosting. If you look at my “financials” page, you’ll notice a downward trend in money for my guinea pig band Shiplosion.

How does a musician make money? Honestly, I don’t know for certain. But, I think I have a couple of ideas. However, these ideas are based more on the individual musician, and not the band as a whole. Why? The individual can make more money and have more control over their finances than an entire band.

Start Earning One Dollar A Day

Photo by rychlepozicky.com

Every day, grab an acoustic guitar and head down to the street corner. Start playing songs and singing with the case open to take tips. Don’t stop until you have at least one dollar.

There you go. $365 for the year.

Are you a drummer? Grab some drums and set up shop on that street corner. I’ve seen kids playing with buckets busking for money. There’s no reason a drummer with a minimal drum kit can’t do the same. (Even though we all know drummers are “special”…)

“$365 a year? That sucks!”, you say.

Yep, that does suck. But that’s $365 more a year than you were previously earning. Being in a band over a 6 year period, I’ve lost way more than $365. Busking every day will earn you more than my band that was playing multiple cities in multiple states 3 days a week for 6 years.

But earning a dollar a day is not the end goal. Once you can successfully earn one dollar a day, how much effort will it take to get to $2 a day? Maybe busk at one additional location? Do some cover tunes? Play for 30 more minutes?

“But I feel like a hippy dumbass. Isn’t this for homeless drug users and not the awesome caliber of musician that I am?”, you ask. (Okay, I asked but pretended it was you.)

If you don’t feel comfortable doing something, don’t do it. However, there’s money on the table that you are ignoring. If you are on tour, busking could be the deciding factor for being able to afford dinner or gas money. Or, more importantly, beer money.

Busking also gives you the coldest, most disinterested crowd on Earth. What better way to learn how to be positive and entertaining regardless of the situation? And if you think you are too great of a musician to resort to busking, I’d say it’s about time you learned some humility. If you’re not completely self-sufficient as a musician, there is plenty of humility yet to be had.

Sweeten The Deal

Photo by Clyde RobinsonYou are now comfortably earning a couple of dollars a day. Now it’s time to turn it up a notch. Create an acoustic CD to sell with your busking.

Don’t go crazy on this. In fact, I’d argue you record, mix, and master it yourself. As cheaply as possible. Your busking isn’t your main musical career, but an additional revenue source. Use CDBaby to print out a limited run of CDs.

With the addition of CD sales, you are now making $5 to $10 a day. You also have an extra CD to add to the merch booth of your main band.

See the pattern?

Start small and constantly add value and content. Don’t overlook small price points. 25 cents from a few thousand people adds up. There is no purchase too small.

Do it every day. Daily. Every day is an opportunity. It’s yours to have or not.

YouTube Busking

Photo by codenamecueballPhysically busking in one area is limited to only that one city and the people only walking by at that particular time. YouTube is global and timeless. Record yourself playing your music daily and throw it out to the world on YouTube. Hell, record yourself while you’re busking on the street.

At the end of your YouTube busking, add a call to action. Give a link to your website and ask for 25 cents. On your site, provide people a way to donate a small amount of money to you. PayPal has options for micro transactions. Use it! The good ol’ long tail theory could net you a bit of cash over the life of this YouTube post.

On top of the daily busking, this additional outlet “could” provide additional revenue. It’s not guaranteed it will, though, so be prepared. However, make your videos interesting enough, you can gain a large following. At that point, you can become a “YouTube Partner” and earn money through ads.

Breaking Down The Numbers

So, doing the above, you’re going to be earning about $5 to $10 a day. You’re going to bitch and whine that that’s impossible to live off of. What you’re not realizing is that I just taught you how to make around $1825 to $3650 extra a year on your music.

It’s not glamorous. It’s not sexy. But it’s money in your pocket.

But, I know you are not satisfied. You want to quit your job. I’m with you on this. I wish I could quit mine. I’m not there yet. However, we need to know the numbers that we need to achieve to quit our day jobs. For me, I’d like $50,000 a year. I’ll use this number to calculate what it would take to be a financially independent musician.

$50,000 divided by 365 days = $137 a day.

That’s it. Earn $137 a day, and you can quit your day job. You are a fraction of the way there using the above techniques, but you will definitely need more money per day to accomplish this task. This figure shows why you can’t entirely rely on your band by itself to generate the income you need.

Your Band Won’t Make The Dough

This point I know you will rail against. “My band will make it! We will become famous.” That’s your ego talking and not your brain. Your band will most likely, by itself, not produce the money you need to get by.

WhiteI was following one of the members of GWAR on Twitter. I was surprised to find that he is a bartender after the GWAR tours end. GWAR packs an awesome crowd at venues and has been doing so for 25 years. Still…bartender. One of his tweets was “I always wanted to be rich and famous. I have one of the two.”

Here’s the breakdown. Let’s say your band plays every weekend, twice a week. That’s 104 shows a year. For you, personally, to make $50,000 a year, you’d need to make $481 a show. Now add your band mates that also want to make $50,000 a year. Total, the band would need to make $1924 a show. Yikes!

Even if you played every day of the year, your band would need to profit $548 per show for everyone to get paid. For every additional person in your band, that is another multiplier to the base salary and profit considerations. That 8 piece Ska band doesn’t sound so thrilling now, does it?

The point is, relying solely on your band to make you a financially independent musician is not feasible. The band is just one more revenue source for you. You need multiple, musical revenue sources to get where you need to be.

You Are Your Own Income Stream

On nights your band isn’t playing, you could hit up open mic nights. Bring your CDs along. Perform and sell. Give lessons for your instrument. I think the going rate for a half hour lesson is about $30. Giving a lesson a day at this price will get you over $10,000 a year. Add the busking, and you are approaching $14,000 a year.

Exclusive Merchandise

Instead of all this daily working, what if you had some merchandise to sell that could do the trick? Easy. Get 365 avid fans. For them, make 365 items that cost $137. These items should be limited edition and never, ever hit the market again. There’s your $50,000.

Fan Base

Or, in the above example, just get 365 fans that are willing to pay $137 on you over the course of a year. Expand that to the popular 1000 True Fans model, and you would need to have each fan pay $50 a year. Do you have $50 worth of content, merchandise, or shows for the year?

This is why growing your e-mail list and treating e-mail like money is so important. Giving away a free CD for an e-mail can net you a positive income flow over a few year period. That network of fans can give you what you need to be successful. If you can grow that e-mail list to 50,000 people, all you would need is $1 a year from each person to quit that day job.

Exhaust All Possibilities

Busking. YouTubing. Lessons. What else can you do? Guitar tabs for 99 cents. Adsense for your free songs. PayPal donations.

What else? Do you have ideas on what can generate money on a daily basis? I think my ideas above could get an artist up to $10,000 a year. What would push it to $50,000?

SOURCE:
Want To Make $50,000 a Year In Music? Start With One Dollar a Day.

Tour Merchandise Deals: Eight Important Clauses By Heather McDonald

It may not surprise you to know that tour merchandise (like concert t-shirts and stickers) are a significant source of income for many musicians, but what may shock you if you’re from an indie background is how complex tour merchandise deals can become. Instead of having a friend sell your t-shirts at the merch table in the back of club, major tours involve large music merchandising companies that license your band’s name and likeness and produce and sell your stuff, paying you a royalty. Merch deals can be like record label deals, but there are some important differences. Here’s a look a the major points in tour merchandise deals.

1. Tour Merchandise Royalties

Of course, the royalty you’ll be paid by the tour merchandise for selling goods featuring your name, face, album names, logos, artwork and so on is one of the most important points of any merch deal. There are two ways tour merch royalties can be calculated: percentage and splits.

With percentage deals, the musician simply gets a pre-determined percentage of gross sales of their goods. Gross sales usually mean sales minus any taxes and credit card fees paid by the merch manufacturers. In the US, musicians tend to get royalties in the 30% to 35% range, though it can vary, as do foreign royalties (which are usually a bit less than the US rate). If you receive a percentage for your royalties, you can sometimes work a provision into the contract that your royalty rate increase as you reach certain sales thresholds.

Profit splits are usually based on NET sales – so the merch company deducts all of their expenses from the sales income and then splits what is left with the musician at a pre-determined rate – often 85/15 (in the musician’s favor), though again, these rates can vary. Profits splits are common in foreign royalty deals as well as deals for stadium shows and festivals. Additionally, concert bills/programs are nearly always sold on a split, even if the rest of your merch is sold under a percentage deal.

Note that if you opt to have any merch that requires an the merch company to bring in an outside designer (like a jacket specially designed by a well known name in fashion), your royalty rate will be lower on these items than the rest of the merch. Why? Because the merch company has to bear the cost of the outside designer, and the lower royalty rate is their way of recouping the costs.

2. Tour Merchandise Advances

Yes, like a record deal, you DO get an advance on a tour merchandising deal. Before you get excited, you should know that the terms are much worse than record deal advances. Why? Because tour merch advances are usually recoupable by the merch company – meaning you could be on the hook to pay back the advance.

There are a number of circumstances that can put you in the unfortunate position of repaying your merch advance, but most of them are tied to you not touring within the time frame specified in your contract or not playing to audiences of the sizes expected when your deal was signed (we’ll get to performance minimums later, which is closely tied to this). If you decide you want out of the contract, you will have to pay back your advance with interest.

Advances vary in sized depending on your bargaining power, the length of your tour and the size of the venues/size of your fanbase.

Most tour merch advances are paid over the course of your tour, to help you meet your costs and to stop payment if you are failing to meet the terms set out in your contract. You’ll get a lump at the start and the end with one or two payments in the middle.

Your contract should state the amount of your advance and the terms of the advance clearly.

3. Terms

The term of your deal is the length of your deal. For tour merch, you are usually tied down for one album cycle or until your advance has been repaid – whichever is LONGER. Technically speaking, that means if you repay your advance but never release another album, you’re under contract with a tour merch company forever. A good lawyer can help you negotiate exit strategies from the contract, but make sure you are very clear about where the finish line is, or you’ll be stuck with a merch deal for a very long time to come.

4. Hall Fees

Once you get off the bar circuit, you’ll find that many venues charge a percentage of profits for letting you sell your merch in their place – these are called hall fees. Agents negotiate hall fees with the venue when they book your tour, but tour merchandising companies usually put a cap on the hall fees they are willing to pay (often around 30% or so). If your agent negotiates a hall fee that is more than the cap your merch company set, they take the difference out of your royalties.

5. Performance Minimums

Basically, the performance minimum is the number of people that must attend each show to make you compliant with your tour merch deal. Where does the tour merch company get off telling you how many people need to be at your shows? Because the number of people through the door determines how much merch they can sell – more people, more merch sales. Tour merch deals usually measure this in how much they expect to sell “per head” – what is the average spend at the merch stand of each person through the door?

Merch companies don’t count every attendee at a show as counting towards your performance minimum. For instance, no one on your guest list counts. They also count people differently at different venues. Stadium shows are counted most harshly. Even though more people go to stadium shows, they tend to spend less, since they may attract casual fans who aren’t interested in buying anything. Some merch companies try not to count stadium shows towards your deal AT ALL, though a better compromise can usually be reached during the negotiation stage. Remember that falling before your performance minimum can trigger repayment of your advance, so be sure the numbers are realistic before you sign a deal.

6. Artwork Approval

Your deal should specify if (and how and when) you will get to approve the merch thecompany/designer is producing for your shows. Even up and coming artists with little touring track record can get full creative control in merch deals.

7. Exclusivity

You can’t have a deal with two tour manufacturers at the same time, of course. Where exclusivity gets tricky is when you have a separate deal for retail merch and/or your label is planning some kind of merchandise promotion at your show. It is common for merch deals to exclude you from selling any merch within 48 hours of the show within two miles of your venue. You need to make sure that this clause leaves retail stores out of the equation, since you can’t control where a record store selling merch is located in relation to the venue.

Record label promotions, such as a concert shirt giveaway by the local radio station set up by the label, should also be allowed in your contract. However, the tour merch company can – and will – limit the amount of merch you or your label can give away for free before a show.

8. Selling Leftovers

What happens if you don’t sell everything the tour company produces during your tour? The merch company will try to sell it off. You have the right to limit where they can sell the merch and for how much. Your contract should provide you an opportunity to buy the leftover goods at cost plus a small markup (though be sure the contract doesn’t say you HAVE to buy it).

If you don’t want it, the merch company usually reserves the right to try to sell your good (often to a retail store) for up to six months after your tour ends. However, they can’t sell your goods at a cut price. They also can’t purposely manufacture more than you reasonably could have expected to sell on tour just so they have some leftover after the shows end, nor can they make new goods after the shows end. Further, their sell off of your merch should be on a non-exclusive basis, as long as the other terms of your deal have been met, so you are free to make new merch deals.

SOURCE:
Tour Merchandise Deals: Eight Important Clauses