In 2015, is there a future for the entrepreneurial artist manager? – 23/03/2015

Introduction

The battle between creativity and commerce is one that every artist will encounter when they start to attract interest from the public. The resulting commodification of that artists work then has to be dealt with professionally and securely. This is the role of the Artist Manager, to plan strategically in order to best exploit and generate interest in their client/s whilst keeping every single aspect of their careers closely monitored (Harrison, 2014, pp.31-61).

The variety of different business deals and problems encountered by managers has changed vastly over time in an ever shifting industry driven by technological change. Artists are now able to create music themselves without the need for label backing, on modest costs, using readily available yet highly sophisticated equipment. Social Media then allows artists to build a fan base for little or no cost and earn a sustainable wage through online distribution (Evans, 2014).

This situation has led to questions being asked of the value of the artist manager in today’s market, and if business savvy artists need someone behind the scenes pulling the strings. This essay hopes to find the way forward for artist managers in the 21st century in an attempt to find their relevance in today’s industry.

A brief history of Artist Management

Throughout the 20th century, artist managers have been centre stage with people like Malcolm McClaren, and Peter Grant grabbing almost as many headlines as the artists they represented. One of the key figures in this period was manager of The Rolling Stones, Andrew Loog Oldham, who details a shift in management style from the mid-sixties; “In the ’70s, a different kind of manager was required — a hard-nosed money collector. Acts had their own vision. In the ’60s, we provided them with that vision.” (Loog Oldham, 2014)

This could certainly be said of the heavy handed approach by Led Zeppelin’s manager Peter Grant. He became famous for his intimidation tactics towards bootleggers, and his fierce negotiations with promoters leading to a 90/10 split in Led Zeppelin’s favour on tours (Allen, 2014 pp. 31-46).

However, the situationism applied by Malcolm McClaren in the making of The Sex Pistols, that impacted on the whole UK punk scene, was closer in approach to that of the vision led managers of the 60s (Simpson, 2010). The “Svengali” managers of the 1960s were exemplified by London star-maker, Larry Parnes. Parnes took working class youths, dressed them up in flamboyant clothing and had them sing interpretations of American rock’n’roll music under exciting pseudonyms such as “Billy Fury” and “Vince Eager”. The “Svengali” approach to management can still be seen today with the successes of Simon Fuller, which could point toward this management style being a way forward in the contemporary market (stratobuddy, 2010).

The Decline of traditional Record Labels in the 21st century

The decline in revenue from recorded music sales has led to a shift in management priorities as managers feel that their influence extends far beyond their now industry standard 20% commission on the contractually stated areas of Recording, Publishing and Live income (Riches, 2012 pp. 24-28). As the industry moves forward, managers are looking at different ways to earn a living from artist’s successes, especially as manager’s work for the artists and could potentially be fired at any time so need to protect their own interests. One of these ways is to enter joint ventures with prospective artists and start businesses together, instead of just signing a traditional management contract. This would involve co-ownership of any available rights with the artist in question. This may work in some circumstances, but artists should be wary of any such deal, especially when major labels also look to take a share of all available income with 360 degree recording deals (Riches, 2012 pp. 15-17).

In the 21st century, the lines between the services offered by labels and managers will potentially become more blurred. The merger between Cooking Vinyl and Music Manager John Black to create Black Gold management is just one example of how labels and managers are forming partnerships. This particular deal will allow the management company to benefit from the A&R (artist & repertoire) and marketing departments of the label at an early stage but leaves the company free to partner artists with other labels/publishers should they see fit (Music Business Worldwide, 2015).

Simon Napier-Bell sees the role of the manager now as a developer and part A&R man. In an interview with music week, Napier-Bell argues that major labels are still the power players in the music industry holding most of the places in the top 20 in both the USA and UK. He also goes on to say that the way the internet has allowed artists to grow and develop without major label backing is a positive thing for the industry as in his opinion “Artistic development was always better in independent hands, rather than corporate, so it’s actually a big step forwards” (Napier-Bell, 2015). If this is to be the way forward, perhaps the re-evaluation of the management role is fair, as they are becoming more crucial in marketing an artist’s output at the earliest stages of their career. If this relationship is to become the norm however, it is of vital importance that the legal principles are correctly observed. Potential production and/or recording contracts offered by management companies must protect artist’s creative work. They cannot allow managers to “double-dip” by taking a percentage of revenue from a single source twice, once as a manager’s cut and then again as the label/publisher (Riches, 2012 pp. 15-17).

Established artists do now have the ability to bypass the major labels/publishers structures completely, and retain the rights in their compositions and recordings by utilising label services groups such as Kobalt, who have financial backing from tech companies the size of Google [Ingham, 2015]. Jazz Summers proves the importance of the alternatives Kobalt offers as he was able to reduce the percentage taken by a record label on one of his artists live income from 20% to 12.5% through the threat of using Kobalt over a traditional label deal [Summers, 2014]. The transparency offered by Kobalt through the use of data that can track royalty payments over 700,000 revenue streams is a tantalising prospect for the 21st century manager and one that could put him centre stage in his artists career, accounting to them like no record label has previously been able to (Collins, 2015). 

The importance of Brand Creation

In the modern music industry, Patrick Wikstrom proposes the idea that the importance of how people interact with the online world lies in the context and not the content of its services. He states that Spotify’s success is down to “the service’s features and structure are superior to those of its competitors” (Wikstrom, 2013 pp. 177) While this may be the case in the online world, the same arguably cannot be said for one of the music industry’s most entrepreneurial projects of recent years. Tyll Hertsen (2011, quoted by Martin, 2011) declared “Beats” headphones by Dr. Dre as “among the worst you can buy” yet the company’s sale to Apple in 2014 was worth a reported $3 billion (Moore, 2014). This is a perfect example of how a fresh idea by an artist that is branded correctly can make waves in the modern music industry. The product identified a gap in the market for fashionable and high quality headphones to be worn as a statement that people latched onto (Martin, 2011). This same model can be seen when looking at Simon Fuller’s success with The Spice Girls and S Club 7 who was quoted in a 2003 guardian article stating “I reflect what’s out there, and if there’s a demand for something I recognise it.” (Fuller, 2003) Fuller’s success went on and spread into the realm of television with the huge brands of Pop Idol and American Idol and all of these point towards the importance of brand power in today’s industry.

Josh Brandon from Insanity Management believes that when it comes to his artists “the music is secondary, it’s the lifestyle or brand that the artist represents is what people buy into” (Brandon, 2015). Perhaps this is one of the key areas for development and could lead to the widespread adoption of artist-specific subscription services. The mass amount of content and slick “context” of an on-line streaming service like Spotify allows consumers to listen to an incredible amount of music at the touch of a button. The potential for this type of service has been identified by Bandcamp, a platform that allows artists to sell their music direct to fans with no middle man. Their next step of development is to provide acts with a self-managed subscription service, where the artists themselves dictate the price-point and availability of content direct to their fans (Williamson, 2014).

One successful brand that has already capitalised on such a service would be Jack White’s subscription service run through his record label, Third Man Records. Platinum membership to the service entitles the consumer to a quarterly package of vinyl records and bonus items, as well as an exclusive on-line members area where video interviews are held with Jack White and other exclusive content can be downloaded (Third Man Records, 2015). This approach, along with marketing stunts such as recording the world’s fastest vinyl record, liquid filled vinyl records and the release of the 2014 album “Lazaretto” on the gimmick filled “Ultra LP” format resulted in Lazaretto being the fastest selling vinyl LP since records began (Caulfield, 2014)

By taking the wisdom of Simon Fuller and identifying what brand value an artist has and developing that, music managers could still retain their worth in the industry today. This would allow artists to concentrate on their musical output, whilst the managers seek to identify ways for fans to buy into artists as lifestyle choices, not just by purchasing their latest record.

21st Century Technological advancements and opportunities

Technology has always been a force that has dictated change in the music industry and led to new ways of generating revenue. One incredibly innovative way that established artists can generate revenue through streaming is through the placement of retroactive advertisements in the YouTube videos. This new technology means that brands can now place ads in music videos that weren’t there in the first place and is a way that they can ensure their message is seen that will benefit the brand visibility and the artist financially (Newman, 2014). 

The app world is another area of potential development in the 21st century for innovative ways of thinking that could open up a whole new world of possibilities for artists and managers. Bjork’s Biophillia application provided an immersive experience that allowed listeners to actively participate in a visual and aural world they could interact with, rather than just listening passively (Beaumont-Thomas 2014). Although this may not be the right approach for more mainstream pop acts, an application that focused on a specific artist rather than album could be developed for this audience. Managers could look into partnering with tech companies to create artist specific apps that are purchased and subscribed to. In return, exclusive premium content would be unlocked and back catalogue works readily available to stream/download, as well as press, video interviews and regularly updated social media channels.

Because of the changing nature of the industry, what is required for an artist’s success is highly based on social media metrics and online “buzz” in order to entice people to get involved with their creative output (Peckham, 2015). It is through applications like Soundcloud and Bandcamp that music can be shared immediately and for free which is becoming key in establishing an artist’s career early on. Music managers need to look further than just the music-focused apps already available though and encourage their artists to adopt and experiment with other platforms. Video streaming service “Meerkat” could provide a key insight for fans into an artist’s life on the road for example. Partnerships could be struck with this service to stream live shows or live chat/interview sessions could be held with competition winners. The services selling point is the here and now and immediate interaction, as the video is not saved after it is streamed, once it’s over, it’s over (Peckham, 2015). It is through the creative use of new platforms like these to showcase artist’s talents, and the insight provided by management teams that will see acts thrive going forward.

The Live music industry and its importance today

The potential revenue from the live music industry is one of the most immediate ways an emerging artist can make their career sustainable through performance fees, live performance publishing income and intuitive merchandise ideas (Allen, pp. 85-98). It is for this reason that the management team of an artist must identify this quickly and capitalise on it appropriately, whilst being careful not to over expose their act. This means they have to act in the best interest of their client and not of themselves, known as their “Fiduciary Duty”. The stresses of earning a living as an artist can be seen when looking at the Martin-Smith VS Williams case when Robbie Williams decided to leave Take That. Martin-Smith sued Robbie Williams for unpaid commission and Williams argued that he did not have to pay because Martin-smith had failed in his Fiduciary duty to him personally. Williams stated that Martin-Smith advised the rest of the band to sack him, but the rest of Take That and Martin-Smith said Williams left of his own accord. The court found that, Martin-Smith had advised Take That’s members individually to the best of his abilities, the interests of the group as a whole were protected and he therefore did not sack Robbie Williams. Martin-Smith was therefore not in breach of his Fiduciary duties and was paid the unpaid commission from Williams (Harrison, 2014, pp.31-61). Disputes like these still arise today and constant media exposure and touring commitments have led to One Direction star Zayn Malik to be signed off with stress from the bands activity. It would be interesting to see if he takes action against Modest Management (Modest Management, 2015), because he feels they failed in their Fiduciary duty to him (Guardian Music 2015).

One example of an entrepreneurial yet controversial approach to the live music industry can be seen when looking at the secondary ticketing market. The demand for entrance to a live show by a highly successful pop/rock act, who’s audience quantity outnumbers the tickets available, opens up a new potential revenue stream on the free market. Some people are able and prepared to pay a significantly higher price than face value to guarantee entry to a live show and this is what the secondary market provides. Promoters have been able to allocate tickets to secondary resellers and take a cut on the profits. Channel 4’s dispatches documentary stated that 1865 tickets allocated for SJM promotions for a Coldplay show sold for £229,230.51 which is around £123 per ticket and almost double the £65 face value and earned 90% of that mark-up (JustMe STKK 2012). Although this is a way to maximise revenue on live shows in a market where the price is dictated by demand, it is seen as unethical and has been met with calls for transparency by managers. Jon Webster, chief executive of the Music Managers Forum, told the BBC: “It reflects badly, at the end of the day, on the artists – probably more so than anyone.” (BBC, 2012).

This has led to legislation put through in the UK to require the face value, seat number and any applicable restrictions to be stated when put on sale though anonymity of the seller has been upheld (Hanley, 2015). The legislation will still allow promoters and artists to reap the benefit of the secondary market if they choose to do so, but the possibility of bad press could result in managers failing their fiduciary duty to their clients by damaging careers in an attempt to maximise revenue.

For artists that already have a following, the secondary market can be avoided through direct to fan sales platforms like Music Glue (Music Glue, 2015). Through a service like this, the artist and manager can set their own price point for their shows and sell direct to their most passionate fans without booking agencies or promoters getting in the way and taking percentages from the earnings. This empowers artists and managers to have their own live schedule and tour when and where they want through using data collection services and is exemplified by acts the size of Mumford & Sons using these new platforms (Reynolds 2012, pp. 312).

Another successful artist in the live area is Skrillex and Jazz Summers puts him forward as an artist that the industry could learn from; “[he] makes these tracks, puts them out, doesn’t worry about whether they’re on a label or not on a label. Then he does 300 gigs a year for £50,000 a night or whatever it is.” (Summers, 2014) Although this is clearly part exaggeration, it gives an example of a key industry figure identifying a trend that is leading to recorded music becoming a marketing tool for artists to earn money through the live sector. This sentiment is echoed by Adele’s Manager, Jonathan Dickins, as far back as 2008 when he said; “when you’re looking at people who are willing to pay more to see an artist live than they are to buy a CD or download an album then that tells you a lot” (Dickins, 2008).

Conclusion

Recorded music is now readily available for free and some industry figures like Jim Griffin, founder of Choruss music believes that “Sound recording’s economy is now a tip jar.” (Griffin, 2009) Griffin’s failed company believed a way forward could be to bundle in the cost of accessing recorded music at ISP (Internet Service Provider) level but the scheme stalled as it could not get licenses for enough content. (Rosenblatt, 2011) The ‘free’ access to music this would have facilitated, along with the significant stature of legal streaming services like Spotify and YouTube, further ads to the belief that the way forward for artists and managers is shifting. It is no longer through selling significant amounts of recorded music, but through finding innovative ways to license it through alternative media platforms that are not specifically music based, like Facebook and even on-line messaging services like Snapchat (Peckham, 2015)

The role of the contemporary music manager is to work with their artists, identify their target audience, and partner up with the relevant brands, tech companies and marketing teams at the time that is right for them. “The music is secondary, it’s the lifestyle or brand that the artist represents is what people buy into” (Brandon, 2015). If music managers can understand this and create worlds that fans want to engage with all year round, not just in the lead up to another album release, then artists can truly flourish. Technology that allows direct to fan engagement could open up a world of possibilities that would allow fans to be immersed in an artist’s activities like never before. The managers that service their acts fan base innovatively, and deliver content that has enriching cross format appeal, have the potential to provide an immersive and interactive experience that would benefit the entire music industry.

Reference List:

Allen, P. (2014) Artist management for the music business. 2nd edn. Amsterdam: Taylor & Francis.

BBC (2012) Viagogo defends sale of promoter’s tickets. Available at:http://www.bbc.co.uk/news/entertainment-arts-17151727 (Accessed: 23/03/15).

Beaumont-Thomas, B (2014) Bjork’s Biophillia becomes first app in New York’s museum of modern art. Available at: http://www.theguardian.com/music/2014/jun/12/bjork-biophilia-first-app-museum-of-modern-art-new-york (Accessed: 22/03/2015).

Brandon J. (2015) ‘UEL Guest Lecturer.’ Interview with Josh Brandon. Interview by Dave Wibberly for UEL, March, 2015, unpublished

Caulfield, K. (2014) Jack White’s Lazarreto Debut’s at No. 1, sets vinyl sales record. Available at: http://www.billboard.com/articles/news/6121606/jack-white-lazaretto-debuts-billboard-200-sets-vinyl-sales-record(Accessed: 23/03/2015).

Collins, K (2015) Google Ventures bets on music publisher Kobalt in $60 million round. Available at: http://www.wired.co.uk/news/archive/2015-02/27/google-ventures-invests-in-kobalt (Accessed: 23/03/2015).

Dickins, J. (2008) ‘Untitled’. Interview with Jonathon Dickins. Interview by Kimbel Bouwman for Hitquarters.com, 14th July published

Evans, R. (2014) 7 things a Record Deal Teaches you about the Music Industry. Available at:http://www.cracked.com/personal-experiences-1288-7-things-record-deal-teaches-you-about-music-industry.html (Accessed: 22/03/2015).

Fuller, S. (2003) ‘I’m one of the best in the world.’ Interview with Simon Fuller. Interview by Caroline Sullivan for The Guardian, June, 2003, Available at:http://www.theguardian.com/culture/2003/jun/13/artsfeatures(Accessed: 23/03/2015).

Griffin, J. (2009) ‘Keynote at Digital Music Forum East.’ Interview with Jim Griffin. Interview by Bruce Houghton for Hypebot.com, 14th March published Available At:http://www.hypebot.com/hypebot/2009/03/transcript-jim-griffin-of-choruss-keynote-at-digital-music-forum-east.html (Accessed: 23/03/15)

Guardian Music (2015) Zayne Malik ‘signed off’ One Direction world tour to recover from stress. Available at: http://www.theguardian.com/music/2015/mar/19/one-direction-zayn-malik-signed-off-world-tour-stress (Accessed: 23/03/15).

Hanley, J (2015) Revised secondary ticketing laws passed by MPs. Available at:http://www.musicweek.com/news/read/revised-secondary-ticketing-regulations-passed-by-mps/061113 (Accessed: 22/03/2015).

Harrison, A. (2014) Music: the Business: Fully Revised and Updated, Including the Latest Changes to Copyright Law. United Kingdom: Virgin Books.

Ingham, T. (2015) Google Ventures pumps funds into Kobalt, leads $60 million investment round. Available at: http://www.musicbusinessworldwide.com/google-ventures-pumps-investment-into-kobalt/(Accessed: 22/03/2015).

JustMe STKK (2012) Viagogo – the Great ticket Scandal Available at:https://www.youtube.com/watch?v=G0PQIVQVVSI (Accessed: 23/03/15).

Loog Oldham, A. (2014) ‘Andrew Loog Oldham dishes on rock’s biggest movers and shakers’. Interview with Andrew Loog Oldham. Interview by Ken Sharp for Goldmine Magazine, September 2014, Available at: http://www.goldminemag.com/article/andrew-loog-oldham-dishes-musics-biggest-movers-shakers?4qL0410 (Accessed: 22/03/2015).

Martin, A. J. (2011) Beats Headphones with swagger (and lots of bass). Available at:http://www.nytimes.com/2011/11/20/business/beats-headphones-expand-dr-dres-business-world.html?ref=technologyhttp:/&_r=1 (Accessed: 23/03/2015).

Modest Management (2015) Available at: http://www.modestmanagement.com/one-direction(Accessed: 23/03/2015).

Moore, H. (2014) Apple buys Dr. Dre’s Beats for $3bn as company returns to music industry. Available at: http://www.theguardian.com/technology/2014/may/28/apple-buys-beats-dr-dre-music-streaming (Accessed: 22/03/2015).

Music Business Worldwide (2015) Cooking Vinyl Back New UK Artist Management Venture. Available at: http://www.musicbusinessworldwide.com/cooking-vinyl-backs-new-uk-artist-management-venture/ (Accessed: 23/03/15).

Music Glue (2015) Artist Services. Available at: http://www.musicglue.com/services/artist-services/#profiles (Accessed: 23/03/15).

Napier-Bell, S. (2014) ‘The Big Interview Simon Napier-Bell’. Interview with Simon Napier-Bell. Interview by Tom Pakinkis for Musicweek, September 2014, Available at:http://www.simonnapierbell.com/mweekFB.htm (Accessed: 23/03/2015).

Newman, J. (2014) Old Videos, New Ads: Advertising shocking next frontier. Available at:http://www.rollingstone.com/music/features/old-videos-new-ads-advertisings-shocking-next-frontier-20141104 (Accessed: 22/03/2015).

Peckham, E (2015) Envisioning Snapchat’s impact on music. Available at:https://medium.com/@epeckham/envisioning-snapchat-for-music-3a9e9069b41f (Accessed: 23/03/2015).

Peckham, E (2015) The New ‘Meerkat’ App is a win for music. Available at:https://medium.com/cuepoint/the-new-meerkat-app-is-a-win-for-music-a7452a1de2fc (Accessed: 22/03/2015).

Peckham, E (2015) Why Artist’s Managers are taking centre stage. Available at:https://medium.com/cuepoint/why-artist-managers-are-taking-center-stage-4c54f93b1e44 (Accessed: 23/03/2015).

Reynolds, A. (2012) The tour book: how to get your music on the road. 2nd edn. Boston, MA: Delmar Cengage Learning.

Riches, N (2012) The Music Management Bible: 2012. London: Music Sales

Rosenblatt, B (2011) The future of music, from blanket licenses to registries. Available at:http://copyrightandtechnology.com/2011/10/10/the-future-of-music-from-blanket-licensing-to-registries/ (Accessed: 22/03/2015).

Simpson, D. (2010) Malcolm McClaren Obituary. Available at:http://www.theguardian.com/music/2010/apr/09/malcolm-mclaren-obituary (Accessed: 23/03/2015).

stratobuddy (2010) Panorama 1959 inc Billy Fury EDITED.wmv. Available at:https://www.youtube.com/watch?v=G0PQIVQVVSI (Accessed: 23/03/15).

Summers, J. (2014) ‘All That Jazz’. Interview with Jazz Summers. Interview by Tim Ingham for Music Week, 31st January published, Page numbers 15-17.

Third Man Records (2015) Third Man Records Vault Platinum Subscription – Renews Automatically Every 3 Months. Available at: http://thirdmanstore.com/vault/vault-subscriptions/tmr-vault-platinum-subscription(Accessed: 13/04/15).

Wikstrom, P. (2013) The Music Industry: Music in the Cloud. United Kingdom: Polity Press.

Williamson, C (2014) Bandcamp to offer artists individual subscriptions. Available at:http://www.musicweek.com/news/read/bandcamp-to-offer-artists-individual-subscriptions/060101 (Accessed: 22/03/2015).

Even The Graveyards Dead 7″ Single Recording – January 2015

Before heading out on the February 2015 tour,  I booked The Caezars in to record a new single to be released on 7” vinyl and digital download in time for the tour in February. This is so physical 7” single would be available to pre-order on The Caezars Bandcamp page and the digital audio track would be made available to listen to on the bands Soundcloud page. Soundcloud is where music is posted before it appears on Spotify or iTunes or anywhere else (Horn, 2014) because, as its CEO Erik Wahlforss (2014) told Gizmodo; “Soundcloud is where music culture happens on the web”.  The digital audio files would also be made available on iTunes and Spotify upon the release date via the aggregator service Zimbalam (2015), as iTunes and Spotify do not work directly with artists to receive works. This releasing strategy will help rectify the errors made on the last tour whilst still servicing fans in a way that is simple, efficient and appropriate. Vinyl sales grew by 54.7% in 2014 and although the format only accounts for 2% of global revenues, it has an appeal that matches the bands current demographic (IFPI 2015).

IMG_2291

The single was recorded live, all analogue, straight to tape in one day, with the session engineered by cult Rockabilly guitarist Darrel Higham. The record was also mixed and mastered by Darrel then the label design was designed by myself with collaborative input from the rest of the band to ensure it looked as authentic as possible. I monitored the whole process of the release, going through Neil Scott at Sounds That Swing and Damon’s pressing plant that they use. I set up the templates myself and ensured everything was ready for the pressing process that was funded by Clive Duffin at Ambassador records. The tracks were titles “Even The Graveyard’s Dead” on the A-Side and “Oh! Odette” on the B-Side and you can listen to them both below:

How the developments of new technology have changed the way Music Publishers generate income over the past 50 years

Introduction

Music Publishing is the area of the music world that controls the copyright contained within musical works. Publishing companies exist to collect the royalties generated by the use of the copyright contained within songs and act on behalf of songwriters to exploit these copyrights in order to generate revenue. [Avalon, 2009, pg 41]. For this to take place a deal is signed between the songwriter and the publisher to give control of the copyright contained in the works to the publisher and gives them permission to administer them. The income from the exploitation is then split in accordance to the deal (e.g. 60%/40% or 70%/30%) and depending on the deal, an advance may be paid to the songwriter that is then recouped by their future earnings [Passman, 2011, pg 230].

The three main areas of publishing income are split into royalty brackets; performance (live performance and broadcast) and mechanical income (reproduction of recordings and works) being primary sources and synchronization (sound recording placed with moving image) being a secondary source [Wikström, 2009, pg 57]. The way each of these revenue streams has earned money for publishers has changed over time thanks to developments in technology. The relationship between these technological advancements and how they have affected the income generated will be the main subject of this piece. 

History of Music Publishing

The music publishing industry as we know it today started with the production and sale of sheet music on Tin Pan Alley, which is where the term “Publishing” was, coined [Harrison 2011, pg 110]. The publishing offices on Tin Pan Alley (Denmark Street in the UK, West 28th Street, NY in USA) employed songwriters to write songs that were pitched to the popular singers of the time to be performed. This was the only way for the works to be heard, as there were few national radio platforms in the early 20th century and those that existed, did not cater for popular music. It was also regular practice for performers to not write their own songs and therefore relied on published songwriters to give them material. Unfortunately, this resulted in unpublished songwriters finding it very hard to exploit their music without the backing of a publisher [Passman, 2011, pg 232].

Because of the lack of recorded music at that time, people had to buy and perform sheet music in order to enjoy music in the home. This is the first time the commoditization of music yielded significant profit, with “School Days” performed by Gus Edwards selling over 3 million copies of sheet music in 1907 [Wikström 2009, pg 62] showing just how vast the secondary income market could be.                                                                                                                                                                        Performance Royalties

In terms of publishing, performance royalties are a primary source of income and not only limited to when a composition is performed live in by an artist, it is whenever that particular work is broadcast publicly, whether that be on the radio, in a place of work, the internet, a shop or on television [Wikström, 2009, pg 57]. The money generated by broadcast/performance is then collected by collection societies, the main UK collection society being the Performing Rights Society (PRS), and then distributed back to its members. In short, each publisher assigns the performing right contained within all of the songs in their catalogue over to the PRS to be licensed on their behalf [Nichols, 2013]. Once this deal is completed, the PRS then go to every user and ensure that they have the correct license in order to broadcast the music publicly. The users pay a license fee to the PRS that covers their particular song usage and the funds generated (minus the PRS’s operating costs) are paid to the publisher and then, in turn, the songwriter [Passman 2011, pg 251]. It is also possible (and encouraged) for unpublished songwriters to join the PRS so that their royalties are collected and distributed to them, as some songwriters choose to publisher their own work and get paid directly, or have not yet signed with a publisher [PRS, 2013].  

Technological innovation has played a huge role in the way that performance royalties have been generated over time. Tin Pan Alley had songwriters creating works for singers to perform live in public, but this evolved with the invention of recording technology and development of radio equipment. These advances meant the songs could be broadcast as recordings and earn significant royalties without the need of a performer [Wibberly 2013]

The earning potential of recorded songs being broadcast developed further as technology opened up further avenues of secondary income. Songs started to become used in motion pictures and broadcast to cinema audiences where performance royalties are earned, although US cinemas are exempt from this. Works also started to be used in television advertising campaigns where broadcast royalties are due after every airing. As the number of television channels has increased, so has the possibility of earning public performance royalties [Passman, 2011, pg 253]

However, the largest shift in performance royalties has come in the digital age with income being generated through plays on YouTube, digital download services such as iTunes and streaming services such as Spotify. As of 2012, the royalties generated through online usage have eclipsed radio broadcast and live performance. This is an indication of the radical change the music industry has been through over time [PRS, 2013]. 

 Mechanical Royalites

Another form of copyright exploitation in the music industry is the reproduction and manufacturing of songs contained within sound recordings. Whether these are vinyl records, cassettes, CDs or even digital download files, a license needs to be applied for in order to reproduce the works in this way [Krasilovsky, Shemel, 2007 pg 161]. This license is called a mechanical license and in the UK is obtained through the Mechanical Copyright Protection Society (MCPS), which is paid on every physical release manufactured. The license fee on every physical copy produced is 8.5% of the published dealer price (PPD) but is a slightly different amount for online reproduction. These are the primary sources of mechanical publishing income. Mechanical license fees are also payable when copyrighted music features on computer games and DVDs that are being mass-produced and sold [Harrison, 2011 pg 121].

Initially, it was only vinyl records being sold that generated mechanical royalties and over time this has developed into many other forms of media using music also having to pay for it usage. Given the wealth of different formats carrying licensed songs in today’s market, it would be assumed that mechanical royalties would generate a significant portion of the music industries revenue. Unfortunately, because of the digital revolution, the amount of money generated through the mechanical reproduction of music has been in decline due to an overall decrease in the amount of physical releases sold [Rogers, 2013, pg 32].

This has not always been the case though, before the digital age, one of the music industry’s primary royalty generators was mechanical revenue. This is highlighted with the invention of the CD, as record companies were able to reissue their artists back catalogues. Avid fans would purchase their favourite acts recordings, repackaged on the new medium, which resulted in mechanical royalties coming in from records that were not only popular at the time, but also from those who had long since disappeared from the public eye [Wibberly, 2013].     

This could be seen as one of the music industry’s greatest ever marketing achievements, maximizing mechanical income. The public were promised that CDs had a cleaner sound of much higher quality, as well as being more portable and more hard wearing, enticing music enthusiasts to take up the new format [Harrison, 2011, pg 183]. However, the digital age has actually seen some music buyers revert back to purchasing vinyl; the format the industry proposed was out of date. Although still small in number, the resurgence of the vinyl format could indicate the extent of the music industry’s cunning, seeking to squeeze maximum amount of profit from the consumer [Dredge, 2013].

Synchronisation Royalties

Synchronisation in a publishing sense is the act of placing a recorded musical work to moving image and in order to do this, a synchronization license must be obtained. From films and TV programs to advertisements and computer games, wherever a musical work is used, it would have been paid for. These deals are often very lucrative for the songwriter with fees of £100,000 being relatively commonplace [Harrison, 2011, pg 123]. If a song is to be used in any film or motion picture then the producer of the film must go directly to the publisher to use the song in question, then to the record label to use the sound recording in question. This process also applies to get permission to use a work in a television advertisement or video game. The same also applies if a song is to be used on a television program in the USA. However, in the UK, the process is slightly different for television programs. The main channels such as SKY, BBC and ITV pay a “blanket license” to the PRS, which is a negotiated set fee, enabling them to use any song controlled by the PRS and any sound recording registered with the Phonographic Performance Limited (PPL) in their show [Passman, 2011, pg 261].  

The potential for royalties from secondary revenue sources can be explained when looking the soundtrack of the 1973 motion picture, American Graffiti. Music from the 1950’s and 1960’s was synced to the moving images in the film to recreate the feel of early 1960s America [Guardian, 2013]. Music from Buddy holly, Johnny Burnette and Bill Hailey [Amazon, 2013] among others, was included, which saw interest in those acts rekindled long after their recording careers had diminished or completely ceased. This meant that inclusion on the films official soundtrack provided mechanical income from the copies of the album manufactured, performance royalties were generated from the films cinema showings and synchronisation royalties were also paid for the songs inclusion in the film itself. Record labels also had the idea to stimulate primary income by re-releasing material from the featured artists back catalogue and so benefited from the profit of those sales, which in turn lead to the songwriters (or their estates) benefiting from mechanical copyright attached to production of the re-released work.

Publishing companies still didn’t realize just how productive the area of secondary income could be until Levi Jeans re-launched their brand with an innovative television advert featuring Marvin Gaye’s, “Heard it Through the Grapevine” which together married moving image and music to create a cool, authentic and original feel for their brand. Advertising agencies realized that music could be a way to help branding and sell products. This was an opportunity that could yield large amounts of money for publishers with both synchronization and performance royalties generated. Not to mention the mechanical royalties generated by the rejuvenated sales of a long since forgotten record. Virgin Publishing were the first act on this and set up a dedicated synchronization department to fully exploit this revenue stream which is now a cornerstone of every publishing company today [Marcel Visser, 2013]. 

Today, the synchronisation departments of publishing companies also have to change the way they generate revenue in the digital age. For example the act of synchronisation in a computer game should generate both synch and mechanical royalties. This is not the case and instead, a flat fee is paid to the publisher of the work in question in return for the songs use. [Passman, 2011, pg 262]. 

Another interesting sync case to look at in the digital age is Bjork’s release of a digital and interactive “App” in conjunction with an album. This is an innovative idea as music is synced to moving image in an interactive way, in a product will be copied every time the app is downloaded and therefore, generate both synchronization and mechanical royalites for publishers [Kiss, Needham 2013].  

Unfortunately for publishers, it seems that the increase in technology available could lead to difficulties when completing synchronisation deals in the future. Leading music supervisor PJ Bloom suggested that the potential exposure and revenue sales generated through a synchronisation deal are so important, that rights owners should be willing to pay for the right sync deal [Musicweek2013].

Conclusion

Labels and publishers paying for advertising space would indicate a complete shift from the current synchronisation paradigm, as advertisers would no longer be paying for the use of songs. Music Publishers would instead, pay for a works inclusion on an advert, in order to benefit from the exposure that would generate income through other revenue streams. Coupling this with how the digital age has seen mechanical royalties continue to decline, the publishing market looks to become even more challenging [Rogers, 2013, pg 32].

However, the copyright in a song will always be exploited, which means royalties will be generated, even if the money generated becomes spread thin over a number of different revenue streams. If the days of big mechanical royalties are over and synchronisation fees continue to decline, the future could be in song placement. Higher quantities of music in more places all together generating sufficient income could be the future of the publishing world in the 21st century [Musicweek, 2013].

Reference List:

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The Guardian. (2013) American Graffiti. Available at: http://www.theguardian.com/film/movie/36298/american-graffiti

(Accessed: 24th October 2013).

The Guardian. (2013) Daft Punk and David Bowie Have Helped UK Vinyl Sales Double in 2013. Available at: http://www.theguardian.com/music/2013/oct/17/uk-vinyl-sales-daft-punk-david-bowie

(Accessed: 24th October 2013).

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Moses, A. (2009) Confessions of a record producer. 4th Edition. Milwaukee: Backbeat Books.

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Passman, D. (2011) All You Need To Know About The Music Business. 7th Edition. London: Penguin Group.

PRS. (2013) YouTube Deal – Help Centre. Available at: http://www.prsformusic.com/creators/helpcentre/Pages/YouTubeDealHelp.aspx#5

(Accessed: 24th October 2013).

PRS. (2013) PRS For Music 2012 Financial Results Briefing Paper. Available at:

http://www.prsformusic.com/aboutus/press/latestpressreleases/Documents/04%20April%202013%20-%20Financial%20results%20briefing%20paper.pdf

(Accessed: 24th October 2013).

PRS. (2013) Press Releases. Available at: http://www.prsformusic.com/creators/helpcentre/Pages/YouTubeDealHelp.aspx#5

(Accessed: 24th October 2013).

Rogers, Jim 2013, The Death and Life of the Music Industry in the Digital Age, e-book, accessed 24th October 2013, <http://uel.eblib.com/patron/FullRecord.aspx?p=1172529&gt;.

Marcel Visser (2007) Levi Commercial – Laundrette. Available at: http://www.youtube.com/watch?v=wT4DR_ae_4o

(Accessed: October 24th 2013).

Wikström, P. (2009) The Music Industry. Cambridge: Polity Press.