When music is played on a non-interactive digital service like Pandora, Sirius XM, or cable radio, payment for the sound recording copyright is collected and distributed by SoundExchange, a non-profit performance rights organization. As we detail in our handy “Music and How the Money Flows” chart, this revenue is divided up in a standard formula: 45% goes to the featured artist, 50% goes to the sound recording copyright owner (usually a label), and 5% goes into a union-administered fund to compensate backing musicians and session players. We’re fond of this system because it treats all artists equally, ensuring direct payment that can’t be held against recoupable debt to a label, with equitable splits.
But what happens if you’re a self-released artist who doesn’t work with a label, but owns the copyrights to your sound recordings? You are entitled to collect both the artist share and the label share yourself. Unfortunately, many artists don’t know this, and end up missing out on money they ought to be collecting, because they’ve only registered for the artist share. Other artists haven’t registered with SoundExchange at all.
CD Baby, a popular distribution service with a large userbase of mostly self-released artists, recently announced a change to their terms of service that allows them to collect the label share from SoundExchange for their roster of distributed artists. This move was met with some minor controversy, as indeed, artists are entitled to collect that money themselves directly from SoundExchange, without the administrative cut that CD Baby charges. We decided to go directly to the source: CD Baby CEOTracy Maddux answered our questions this week via email.
...and how musicians, labels and songwriters are compensated
Sunday, August 19, 2012
How are musicians paid when their fans buy downloads on iTunes? How are songwriters paid when their music is played on Pandora? Since our founding, Future of Music Coalition has provided musicians, managers and labels with the in-the-trenches details about how performers, songwriters and labels are each compensated when their music is either streamed or downloaded on an array of music services. read more
It was a great weekend for listening to FMC folks talk about our favorite subject: the intersection of music and policy.
On Saturday, FMC Policy Director Michael Bracy chatted with Windy City music scribes Greg Kot and Jim DeRogatis on "Sound Opinions" — a weekly talk show from Chicago Public Radio and American Public Media. read more
FMC pal Charles McEnerney of Well-Rounded Radio (a very cool podcast site that conducts interviews and connects listeners to what’s happening outside of mainstream music) recently spoke with Jeff Price, founder/CEO of TuneCore — a service that allows musicians to distribute their music to all the online retailers and on-demand streaming sites such as iTunes, Amazon MP3, eMusic, Rhapsody, Lala and Napster.
For those of you who don’t know, Sivers founded CD Baby in after quitting his job at Warner Music to become a full time musician. Instead of trying to score a record deal and conventional distribution, Sivers began selling his CD on his personal website. Soon he was helping his musician friends do the same, and CD Baby was born. Since those humble beginnings, the site has grown to include more than 267,000 acts, sold more than five million CDs to online customers and has paid more than $98 million directly to artists.
With so many cool and interesting panelists on board for our upcoming DC Policy Day on February 11, it’s hard to choose which guest to be more excited about. read more
The New York Times Magazine had an interesting piece over the weekend on how musicians are building new distribution networks and fan bases via the Internet.
The piece kicks off by profiling Jonathan Coulton, a former computer programmer and unsigned Brooklyn indie artist who is making a “reasonable middle class living” by selling CDs and music downloads via his web site, iTunes, and CD Baby. Coulton built a fan base by recording a song a week for all of 2006 and then posting them on his blog. They ranged from odes to Tom Cruise (“Tom Cruise Crazy”) to pieces about the dead-end life of a programmer (“Code Monkey”). read more
After having a near-death experience a few weeks ago, webcasters got another dose of good news. Sens. Sam Brownback, R-Kan., and Ron Wyden, D-Ore., introduced a bill that would vacate a recent ruling by the Copyright Royalty Board. The ruling would have increased royalty rates for webcasters by 300 to 1200 percent (according to Savenetradio.org).
This comes after a pair of representatives introduced a similar bill in the House a few weeks back.
Webcasters had complained the new rates would sink many of their operations. The new rates were slated to go into effect on May 15 , but the CRB decided to push the deadline back to July 15 after an outcry from webcasters. read more
A lot of ink is spilled on the declining fortunes of music industry. It seems like every other day a new report shows album sales are down for this period or in that country. In the wake of all the doom and gloom, the always informative Digital Music News posted an interesting report showing the sky isn’t exactly falling everywhere.
The researcher eMarketer is projecting revenues in the North American music industry sector will grow at a rate of 2.8 percent annually between now and 2o11. Revenues will climb from $23.1 billion to $26.5 billion largely on the strength of live concerts and publishing. eMarketer also predicts mobile and digital assets will offset decreases in physical sales. read more
How CD Baby helps indie musicians with digital distribution
Wednesday, October 8, 2003
CD Baby embraces the co-op model, where artists can share common resources, and takes it to a new level. They offer independent musicians a whole range of tools to help
them with their musical livings – from promoting and selling CDs
online, to their customizable Host Baby website hosting service, to networking
opportunities, down to helping bands get barcodes for their records. The
results are inspiring. Currently over 47,000 artists sell their CDs through
the store, and $4.7 MILLION has been paid out to artists since the store’s
launch in 1998. read more