The music industry has lost billions of dollars in revenue over the last decade. Nielsen says the industry can use generated at least a half billion in incremental revenue by allowing fans to better connect with artists.

Nielsen’s study was unveiled Tuesday at a SXSW panel titled “The Buyer and the Beats: The Music Fan and How to Reach Them.” A survey of 4,000 music consumers, which included PledgeMusic users and SXSW attendees, examined the degree to which different types of consumers want to connect with artists through exclusive music merchandise.

The bottom line: Nielsen found there could be potential incremental revenue of $450 million to $2.6 billion if artists, managers and labels offered a better set of products and experiences to fans.

“Fans want more,” said Barara Zack, Chief Analytics Officer at Nielsen Entertainment Measurement. “There is an unmet need there. There is a desire to engage at a different level than what they have.”

The idea behind this study is familiar to many people. A site like Kickstarter allows artists to raise money from fans for a project. Artists offer a variety of goods and experiences that segment customers by willingness to pay. Instead of getting $15 from an serious fan, an artist could get $300 for a CD, a T-shirt and a 30-minute conversation on Skype, for example.

This study’s conclusion isn’t limited to crowdfunding and superfans. Nielsen found that fans of varying degrees are willing to pay for content if given the opportunity. Over half (53%) of Aficionados (the most active music buyers) said they would be willing to pay to get exclusive content while a favorite band is recording a new album. Less active buyers were predictably less likely to show an interest in spending for exclusive content, but even the group Nielsen calls Ambivalent Consumers (22% of the population, spend on average $73 a year) said they would buy exclusive content if given the opportunity.

Nielsen estimates the industry’s incremental revenue potential from selling exclusive content is $564 million, as an individual buys content from only one band. That number jumps to $2.6 billion of incremental revenue if the individual buys exclusive content from all other favorite bands as well.

These findings bring up a number of questions. Will fans’ purchase actions match their stated purchase intent? Will fans be willing to support major label artists as well as independent artists? Or will major label artists need to use a model like PledgeMusic that highlights the fan-artist connection greater over the fundraising aspect of the platform?

Zack said most respondents who said they would pay extra for exclusive content had major label artists in mind when they answered the question. High-spending aficionados were more likely to have an independent artist in mind, but the overall split was about 80% major label artist to 20% independent artist, she said. That suggests that direct-to-fan revenue opportunities present an opportunity, if activated correctly, for labels to engage differently with fans for their signed artists.

One popular way to sell products and experiences is through crowdfunding sites like Kickstarter. Artists establish a fundraising goal and work toward that target. But what if dozens or hundreds of artists are simultaneously working toward their fundraising goals? Benji Rogers, CEO of PledgeMusic, a participant in the study, warned that “donor fatigue” could take hold if too many artists are constantly requesting money for their projects. “I think we have to change the conversation. Part of what we did different at PledgeMusic was we didn’t show the financial target. One of the reasons was is I don’t think it’s about the money. They want experience.” [Billboard.biz]

 

In what likely will be a trend for the next few years, Sony/ATV is the No. 1­­­­-­ ranked music publisher, based on its market share of the top 100 songs as compiled by Nielsen BDS.

For the fourth quarter, Sony/ATV, which includes administration for EMI Music Publishing, posted a share of 25.8%, which is up slightly from the 25.7% share that the combined entity tallied in the third quarter. On June 29, 2012, a Sony Corp. of America-led consortium completed the acquisition of EMI Music Publishing and assigned the company to Sony/ATV for administration.

In the fourth quarter, Sony/ATV, which also took the No. 1 ranking in the top 100 country songs with a 22.9% share, claimed a stake in 52 of the top 100 tracks, including Rihanna’s “Diamonds” (No. 2), fun.’s “Some Nights” (No. 3) and Ne-Yo’s “Let Me Love You (Until You Learn to Love Yourself)” (No. 5). In the prior quarter, the two combined song portfolios had a piece of 53 songs among the top 100.

For the second consecutive quarter, Kobalt Music Group ranked second, with 16.5% in the fourth quarter, which is down from the 17.5% it posted in the third quarter but up from the 15.6% it had in fourth-quarter 2011. For fourth-quarter 2012, Kobalt placed 25 tracks in the top 100 songs, down from 29 in the third quarter. Kobalt’s shares included Maroon 5’s No. 1 track, “One More Night”; “Diamonds”; and Ke$ha’s “Die Young” (No. 7).

Universal Music Publishing Group continues to be on the rise, this time moving up in the rankings to No. 3, with a 15.9% share, versus the 12.6% it had in the third quarter when it ranked fourth. In fact, that third-quarter tally marked an improvement from the second quarter, when UMPG had an 11.3% share. But it’s down from the 16.3% it had in fourth-quarter 2011, when it was ranked No. 2 behind EMI.

For fourth-quarter 2012, UMPG had a piece of 39 songs among the top 100, up from the 35 it had in the third quarter. Its top songs included “One More Night,” Bruno Mars’ “Locked Out of Heaven” (No. 4) and “Let Me Love You.”

Even though it gained in market share, Warner/Chappell Music fell to No. 4 from No. 3 in the third quarter when it had 13.1%. For fourth-quarter 2012, Warner/Chappell posted 14.2% and placed 32 tracks in the top 100, down from 37. But that’s better than the No. 5 ranking it had in fourth-quarter 2011, when it had 10.4%. W/C’s top songs included “Some Nights,” “Locked Out of Heaven” and Alex Clare’s “Too Close” (No. 6).

BMG Chrysalis ranked fifth, the same as in the third quarter, with its market share falling slightly to 5.3% from 5.5%. BMG had a share in 18 of the top 100 songs, including “Locked Out of Heaven,” Chris Brown’s “Don’t Wake Me Up” (No. 11) and Ellie Goulding’s “Lights” (No. 18). In fourth-quarter 2011, BMG had a 7% share and ranked No. 6.

For the fourth consecutive quarter, Downtown Music Publishing appears in the rankings, this time at No. 6 with 3.9%, up from the 2.7% it had in the third quarter. In finishing sixth, Downtown placed eight songs in the top 100, one more than the prior quarter. Its songs included “Don’t Wake Me Up” and Phillip Phillips’ “Home” (No. 12).
Also on a four-consecutive-quarter streak is Words & Music Copyright Administration, which ranked No. 7 with a 2.2% share based on the five tracks it placed in the quarter’s top songs, which included Carrie Underwood’s “Blown Away” (No. 36).

Big Loud Bucks posted a 1.7% share, good enough to return the publisher to the rankings for the first time since second-quarter 2009. In placing eighth, Big Loud Songs had six tracks among the top 100, including Florida Georgia Line’s “Cruise” (No. 24) and “Blown Away.”

Razor & Tie’s piece of “Home” places the publisher at No. 9 with a 0.93% share — a drop from the 1% it had the last time it was in the top 10 in fourth-quarter 2011.
Rounding out the rankings, Jerk Awake Music’s share in Demi Lovato’s “Give Your Heart a Break” (No. 43) kept the company in the top 10 for a second consecutive quarter, with 0.89%.

Martin Karl “Max Martin” Sandberg was the top songwriter for the quarter with a share in six songs among the top 100, including “One More Night,” Taylor Swift’s “We Are Never Ever Getting Back Together” (No. 8) and Katy Perry’s “Wide Awake” (No. 20). [Billboard.biz]

German media group Bertelsmann has reportedly purchased BMG Rights Management outright. Originally the owners of 49% of the company, Bertelsmann bought the remainder of the company at roughly $390 million. It is believed that an agreement was reached very quickly once negotiations started. That said, the agreement is subject to regulatory approval. No word yet on how this could impact BMG artists such as Bruno Mars, Johnny Cash, and Will.i.am. [AlLindstrom]

If you write music and/or lyrics, and then record your songs (at your own expense), you are now a fully fledged copyright owner. Well done. In fact, you own three separate copyrights in every song: there is one in the music, one in the lyrics and one in the sound recording (by default – ie unless a contract says otherwise – the musical and lyrical rights belong to the creator, the sound recording rights to whoever paid for the recording to take place).

We all know copyrights make money, but how? Well, if you are the owner of a copyright, then there are certain things that only you – as the copyright owner – are automatically allowed to do in relation to your song and/or recording. These ‘things’ are called the “acts restricted by the copyright” in law, and in the UK they are listed in Section 16 of our Copyright, Designs & Patents Act.

Which says the copyright owner has the: – exclusive right to copy the work. – exclusive right to issue, rent or lend to public. – exclusive right to perform, show, play or ‘communicate the work’ in public. – exclusive right make an adaptation of it.

What this means is that only you, by default, can make copies of your work, perform your work in public, or adapt your song or recording. And if anyone else wants to do any of those things, they need your permission. When you grant permission, you provide a licence allowing someone else to copy, perform or adapt (usually subject to terms and limitations).

With regards to ‘copies’, with the sound recording, that’s straight forward isn’t it? Only you can legally make copies of your record. With songs, it’s the same, only you can make copies of your song, whether that means a photocopy of the sheet music, or a copy of a recording of the track.

Regarding public performance, the word ‘public’ is interpreted widely here. Basically anything outside your home or car constitutes public. Shops, offices, cafes and bars that play music – whether live music or recorded music over a PA – need permission of whoever owns the copyrights in the songs and recordings being played.

Regards adaptations, this means remasterings and remixes of recordings, and reworks of songs (a new arrangement of the musical score, an alteration of the lyrics).

Obviously, until someone wants to copy, perform or adapt your work, your copyrights are worthless. But the minute there is an appetite to copy, perform or adapt, then your copyrights can be monetised – because usually you would grant permission to the copier, performer or adaptor in return for money.

But how much money? Well, that depends. The basic principle is that you can ask for whatever you like – or, assuming you want to do a deal, more realistically what you think you can get. However, remember collective licensing.

Collective Licensing In certain scenarios, for various reasons, the music industry at large has decided to licence its entire catalogue as one, charging a standard per-play or revenue share fee. Where this applies, collecting societies like PRS For Music and PPL negotiate so called blanket licence deals, collect the money from licencees, and distribute that back to rights owners, in theory based on how much their work was used.

Collective licensing generally applies where companies use music a lot (eg radio, TV, clubs, labels releasing records, the live sector), and where it would be impractical for every rights owner to negotiate terms with ever licensee for every track used. Where it applies, smaller rights owners (including self-releasing artists) would be foolish not to opt in to the collective licensing system, ie join their local collecting societies.

Once inside, this means you will receive standard royalty rates based on how much your music is used. You can’t negotiate a million pound deal on your own, then again, in the areas covered by collective licensing, you probably never would have been able to do so anyway, and this way someone else takes care of the actual negotiations and licensing shenanigans for you.

Fair Dealing It’s also worth noting that there are a number of exemptions in copyright law, where the exclusive rights of the copyright owner do not apply. This means a user can use your work without your permission (sometimes a royalty is still due, but the right of veto is removed). The exemptions vary from country to country (and are often called ‘fair use’, rather than the English term ‘fair dealing), but most often apply for those involved in education, cultural criticism, news reporting, satire and archiving. The fair dealing exemptions in the UK are currently under review and may be extended.

 

 

Ralph McDaniels

Ralph McDaniels, creator and host of the iconic music video program “Video Music Box,” spoke at length about the history of the program as well as some special events lined up to help celebrate the show’s 30th anniversary while a guest on the weekly online radio talk show The NY Hip Hop Report.

McDaniels admitted that there was some early resistance to the idea, but his persistance led to the birth of a platform that helped launch the careers of countless rap artists. He also noted that despite the early regional success of the show, there were still some who didnt believe that mainstream TV was ready for a Hip Hop music video show.

“Yeah, we approached them [MTV] in 1986,” he said. “And they said, ‘Mainstream TV’s not ready for Hip Hop.’ I said, ‘Did you ever go to the Fresh Fest? You play Run-DMC! All kids are wearing Run-DMC gear and listening to the music.’” While MTV would go on launch “YO! MTV Raps” the next year, McDaniels held no ill will towards the company, seeing the show as an opportunity for Hip Hop to reach a broader audience.

“People were like, ‘Yo, what do you think? Is that your competition?’ I said, ‘No, now the music can go further.’ If I or The Vid Kid did a video, it automatically got played across the country. That made our work get seen by people in other areas we didn’t reach.”

McDaniels mentioned several events planned to help celebrate the anniversary of “Video Music Box,” most notably that the 2013 Brooklyn Hip-Hop Festival will be dedicated to the legacy of the show’s 30-year history. [AlLindstrom]

@pensadosplace Celebrate our 100th episode at the Avid booth at NAMM 2013!

In order of appearances:

  • Anthony Gordon, Mark Lowentrout, Joe Barrera,
  • Chris Kantrowitz, Tricky Stewart, Chris Lord-Alge,
  • John Nettlesby, Jaycen Joshua, Bill Gibson, John Cerullo,
  • Will Thompson, Cliff Maag

The urge to believe there is a magic formula for success, and that it can be deduced from studying past hits, is powerful. Strategic Communications Group CEO Mark Hausman believes he has distilled The 3 Hallmarks of Exceptional Content. Columnist Marcel Williams is convinced he knows The Essential Features of a Hit Record. Their two cents on the subject may be worth a nickel, but as Yogi Berra observed, “a nickel ain’t worth a dime anymore.”

These checklists, while almost intuitively obvious and rightly containing features correlated with past successes, fail immediately as predictors of the future by being neithernecessary nor sufficient. Their authors cannot prove that all the characteristics are necessary for success; i.e. eliminating any one of them will guarantee failure. (Mr Williams even admits as much.) Nor can they prove that their list is sufficient for success; i.e. a work possessing all these characteristics may still be a failure for lacking other elements.

The lists highlight statistical regularities—good for documenting the past, lousy for predicting the future. In The Financial Regulators’ Dilemma economist Edwin G. Dolan illustrates how statistical regularities do not always reflect causal relationships using the so-called Nickels Paradox:

Suppose the Federal Reserve observes a strong past correlation between the number of nickels issued by the U.S. mint and the rate of inflation. Does that mean restricting the issue of nickels would be a sufficient instrument to control inflation? Of course not—not if pennies, dimes, bank balances, and money in all other forms were issued in the same quantities as before. All that would happen is that the previously observed correlation of nickels with inflation would disappear.

How does the Nickels Paradox apply here? Suppose all music producers take Mr. Williams advice to heart, and 100% of future tracks can be characterized by: catchiness, timeliness, a strong vocal, and accomplished performance. There would still be only 100 releases on The Billboard Hot 100 in a given week, and the vagaries of public taste would still decide who gets there. Or, taking Mr. Hausman at his word, suppose all future web content has: a unique perspective, great “get” and/or brilliantly constructed prose. All that would happen is these would cease being differentiating features in attracting readership.

Don’t stop critiquing your past work, learning from others, applying rigor and discipline, or nurturing creativity in your quest for greatness. Just don’t mistake performance metrics forpredictive ones. And use that advice for what it’s worth.

[About the authorConsumer Electronics and Software industry veteran Tom Dennehy publishes the online journal Surface to Airtriangulating among ideas and events at the intersection of the physical music past and the weightless digital future. Follow him on Twitter @InAurem_a2d.] [MusicThinkTank]

How Universal Publishing Production Music Works

00:33 – About Corinna C. Poeszus

01:42 – Comparing the music industry of present and the past

02:09 – How major labels started making money after the recording crisis hit

04:00 – Why making music “free”

04:25 – What UPPM does exactly

05:46 – How a production company works with your existing composition

07:06 – How an artist can get a deal with UPPM

10:30 – SPECIAL: Conversation inside Corinna’s office in Universal Berlin

Props to Hypebot & AlLindstrom

Want your music to be used in films or games? Have a CD that came out five years ago, but never sold well, and don’t know what you can do with it now? Well, you have something to learn from major labels.

The new issue of Stand Above The Noise features an interview with Corinna C. Poeszus, General Manager of Universal Publishing Production Music (Germany).

We conducted the chat on the roof of the Universal building in Berlin, a place journalists don’t have access to usually, as well as inside Corinna’s office, where she was kind enough to show us some of UPPM’s most successful projects.

So what is Universal Publishing Production Music and how can this knowledge be useful to you? Watch the video above for the answers:

Grammy Award-winning production duo Danja and Engineer Marcella Araica aka “Ms. Lago” discuss how they met at Timbaland’s studio and collaborated on hits including Timbaland’s “The Way I Are” feat. Keri Hilson and Britney Spears’ “Gimme More.” They also talk about founding N.A.R.S. Records, how it’s different from other labels and upcoming projects with Luke James, Kevin Cossom, Caligula and, Wyld.


Wallace Collins, an entertainment attorney based in New York, gives a wide-ranging interview on numerous topics of interest to anyone interested in a career in music or music law. He shares his advice on how to become a music lawyer and what a typical day looks like in his office, and begins an extended discussion of the legal side of music as it affects players — why it’s hard to get out of a “bad” contract, when an artist should seek legal advice, what a “work for hire” is and how that term affects musicians signed to a label, how the Controlled Composition Clause can cost you lots of earnings potential, how copyright works, what compulsory licenses are, and much, much more.