JPF Home Page Forums General Messages Brian Austin Whitney Blog Wednesday, May 30th, 2007

Hi Folks,

We had a nice evening last night at 318 Cafe in Excelsior, MN. We had 20 artists perform and the night was really high on talent throughout. I am staying with Mark and Amy Adams-Westin and they have the most comfortable guest room bed I've gotten to stay in outside of home and I actually slept 10 hours last night and feel amazingly great.

I have to start working on an article I am doing for Songwriters Market 2008. This will be my fourth article for them in the last 5 years. The topic this time around is Internet Music Resources. It's changed dramatically since my last article on that topic for 2004. If any of you have suggestions for things to include, let me know here and I will check it out while writing this. I have to have it done before the Sioux Falls show on Saturday.

Hope all of you are well. Looking forward to seeing many more of you on the road. I got to hang with Steve West last night. I'll get the group photo up later tonight.

Brian

Two ideas, the internet radio station flack and declining cd sales to the internet. Ben

The two new things that have shown up in the last year, but may not be revealant to your article is Myspace and Youtube.

iTunes is a pretty big one.

Jody

No Brian, I got to hang with you
I think everyone there had a great time and you're right, the quality of talent was very high. I was very impressed. Thanks for visiting and come back soon now, ya'hear.

I plan to include You Tube and MySpace. Keep in mind I have to angle the article to appeal to songwriters who often are not also peformers. So I need to find reasons and ways for them to use those resources even if they don't play music themselves, but I have some ideas. iTunes will get mentioned in the broader context of digital music sales, but most likely I will focus on CD Baby as the pathway to get on there rather than iTunes itself.

Any licensing sites worth mentioning? (I know some that are NOT worth mehtioning of course). Also what about hosting sites? Soundclick and Songramp were mentioned earlier. I know about the new NSAI involvement with SongRamp but I've viewed them as mostly irrelevant to date. Anything else out there that should be mentioned in that area?

As for Minneapolis, it's been a nice rainy stay.. I am going to pack up in a few minutes and head to Sioux Falls and likely get a hotel room for the night so I can really focus on the article and also the newsletter which is due as well.

See many of you out on the road!

Brian

You might mention "Bandzoogle" as an affordable way to create a professional website without breaking the bank or having to know anything about html code. Songwriters could definitely benefit from this site even if they are not in a band. One of the best things I've found online and use everyday. www.bandzoogle.com

> Any licensing sites worth mentioning?

I think this is a growing trend in the last two years and definitely worth mentioning. Many new licensing companies are tapping into a large pool of unsigned, unpublished and independent music to serve smaller markets that the big companies tend to overlook. The ability to simply open an account and upload music to be considered for licensing really is a new and unique thing.

A lot of these companies are making compromises such as offering non-exclusive licensing deals and revenue splits in order to attract musicians who would balk at exclusive deals that lock down their songs indefinitely.

It's definitely a "long tail" business. See: Pump Audio, Magnatune, etc.

But which ones are the best and worth mentioning in print? We haven't formed any warm/fuzzy relationships with any of them.

Brian

Pump Audio has earned me some money on TV royalties but they are really slow in paying me my share of the licensing fees.They claim I was overlooked by mistake and that I will get my money this quarter.I'm holding off from sending them any more music until they pay up.

Hmm.. that's good to know and doesn't make me want to name them in the article.

Brian

Sessionplayers.com might fit into your framework

(disclaimer: as Brian already knows, - I do some work for them)

Peace,
Christine

Good reminder Christine.. that's a topic (online demos) I should cover.

Thanks,

Brian

Brian,
Interesting topic and I'm sure it will be a constantly evolving one and rapidly changing as is the "nature" of things on the web.

Digital Downloads:
I agree that in the last 12 - 18 months there's been a huge trend to make digital downloading available at the "fingertips" of any musician. The trend started about December of 2005 and has accelerated since then. Several services jumped on the bandwagon (within weeks of each other) including Broadjam and SoundClick. I've been a member with HostBaby since Spring of 2006, and they've been mentioning about offering a PayPal interface for us (artists) to sell digital downloads right from our own Hostbaby site, so that may still be coming, hopefully soon.

With the recent announcement of EMI working with iTunes and also Amazon to offer DRM-Free song downloads, that's another thing that will propel the music industry deeper into the digital era.

Self Promotion Sites:
There are many ways for artists to get virtually free promotion around the net, now more than ever. Two hot trends that popped up in the last year are PureVolume (250,000+ artists) and Last.fm which was just bought for $280 Million by CBS, is totally DRM-Free / MP3 oriented, and FREE for artists and indie labels to use. Recently IODA (Independent Online Digital Alliance) signed a deal with Last.fm to get all their indie labels into their system which has over 15 million registered listeners worldwide in over 100+ countries, so that's another big step forward for the indie community.

Online Licensing:
Besides ticket sales and digital downloads, music licensing will probably create the biggest sales revenue gains (opportunities) for indie artists, labels and publishers, today and in the years to come. Below is a handy reference list of online services in order of current (March, 2007) traffic ranking popularity:

soundclick.com (Provides basic, simple online licensing and recently added a song/genre/artist searchable database)
cdbaby.com (Works with PumpAudio.com, see below)
royaltyfreemusic.com (Online independent stock music site)
audiosparx.com (Online licensing, currently has 928 indie publishers & labels)
magnatune.com (Online licensing, currently features 248 indie artists)
indie911.com (Provides licensing services to 100's of indie artists)
shockwave-sound.com (European based private label licensor)
freeplaymusic.com (U.S. based stock music site)
soundrangers.com
productiontrax.com (Stock & custom track licensing)
audiolicense.com
pumpaudio.com (Online licnesing, works directly with artists or through CD Baby)
beatpick.com (UK based "clone" of Magnatune business & licensing model)
iamusic.com (Instant Access Music - US based early online licensing adaptor)
songcatalog.com (JPF endorsed ad licensing service)
ricall.com (UK based licensing service catering to major and now also indie labels.)
licensemusic.com (Pioneer online licensing service originally founded by Gerd Leonhard, author of "Future Of Music")
rumblefish.com (U.S. based private label licensing service featuring over 400+ indie artists and small size publishers)
davenportmusic.com
dayfornight.com
nonstopmusic.com
tvmusic.com

In general most of these services offer a 50% share of licensing revenues with the content providers. So services like AudioSparx, Magnatune and PumpAudio (and the rest) all offer about the same sales split (pay out) but under slightly various terms. For example, Magnatune pays out every 6 months, AudioSparx pays out every 3 months and perhaps some pay out monthly or whenever the pay out reaches a certain threshold, such as $20.00, etc.

New Licensing Service Emerging:
Then there's a new company just starting, YouLicense.com, which will charge only 9% of licensing sales, but artists will pay anywhere from $3 to $10 per month depending on how many songs they want to upload to the YouLicense server. This will be competitive with SongCatalog which charges about $20 per month (for the first year) and takes a 25% commission cut on licensing sales. I think in the 2nd year they charge less, like about $10.00 per month for the most basic account which is limited to 10 songs.

From Personal Experience:
Personally I've seen a lot of growth and increased sales in the last 6 months through Audiosparx, and I get paid regularly every 3 months, so no complaints about that. Their customer support is very responsive and earlier this year they started a "Stock Music Site" to supplement and expand their Licensing offerings and make them more competitive with places like royaltyfreemusic.com.

AudioSparx now offers "batch" (bulk) track uploading and settings and recently allowed me to link out to my own website where customers can watch one of my videos; so they're doing some cool things for independent artists, publishers and labels.

In Conclusion:
It appears that music LICENSING will play one of the biggest rolls in helping music publishers, artists, producers and labels attain growth and sustainable sales revenues. More than ever there's so many ways that music can be integrated and be "part of" people's personal, social and business lives that more & more kinds of music licenses (usage types) need to be created to cover all the new applications.

For example, in the last 12 months I was able to sell 20 licenses (including 2 direct licensing deals) that covered at least 8 different kinds of unique uses. This is a mind boggling trend which most indie artists wouldn't have dreamed of even just a few years ago; but this is where everything is heading now!

I hope this gives you a bit of "ammo" to work with for your upcoming music industry article.

Best regards,
Michael

Well, there's as much negative as positive with those sites you listed. Including:

1. They've driven the prices and value of music WAY WAY WAY down. When there's droves of people wanting to give it away, the hope of making some money from your music dims and dims.

2. With all these sites looking to really make money from stuff being hosted on their site rather than simply from licensing, they seem to welcome any level of crap into their library. As they swell and get clogged up with crap, the value of their site becomes pretty limited. The whole point of being a great licensing site is having an outstanding collection of music, with pre-cleared usage rights available, for a price that meets the needed budget. If you have to sort through loads of crap to get to something useful, the site is worthless. If the site itself directs a music supervisors towards a specific collection of songs over the others, then they are screwing the folks who paid to be on the site and get a shot. Bad situation all around.

3. Though I certainly like the idea of "non-exclusive" there may be a problem with it. If 10 different sites are all available to a music supervisor and he uses them and the same song is on there because there's no exclusivity, that puts the supervisor into a bad place. Does he just find the cheapest version of it? Does he support the company he likes most? And what does he do when one of the companies says "hey.. you heard that song on our site.. we should get the fees." Don't think that will happen? Think again. It IS happening and there are supervisors who will already refuse to work with non-exclusive sites. That's a problem because I wouldn't suggest anyone sign with an exclusive site unless they have a quick "out" for you and a good track record of placements. Too many cooks are spoiling this soup.

4. With all these folks in the game, the people who are actual experts in this field are being hurt and that means that the quality of the entire process is damaged. If everyone is selling t-shirts for next to nothing, and the quality is bad across most, and the people with the good quality ones go out of business.. who wins? Nobody.

5. With all these folks in the game, it's harder for people to vet out the scam artists and the honest folks. It's also a haven for incompetant idiots. We've already found some really unprofessional companies who clearly should not be in business. But with all this rush to sign up for all the services, people are forgetting to make careful decisions. You may find your music being used somewhere you didn't want, you may find your music being used for way below fair market value, you may find your music is being used and you never get paid at all. Some of these places close down and disappear before you can even go after them.

Food for thought.

Brian

Brian,
All good points for sure... seems like the whole online thing with licensing is becoming like a two-edged sword. On the one hand, it gives artists and publishers more opportunities via "equal access" to the internet, and as you say, via non-exclusive dealings. While on the other hand it gets harder for serious music supervisors to source the best possible music at the fairest price. The "sword" cuts both ways.

If the music they want or prefer isn't already available on an exclusive basis, they might have to offer a higher price to get such exclusivity, which could average from 5 to 10 x higher, but might give the Licensee anywhere from 3 to 10 years of exclusivity, if that's what they really need. I'm sure publishers would be willing to negotiate such licenses, maybe not for the whole album or catalog, but for one unique song on a case-by-case basis.

As far as online licensing services, there's really only three ways for companies to make money from offering such service:

1. Charge a flat fee based only on actual licensing sales, for example 50% or 30%, etc. Most services are now sharing their sales 50/50 with their co-publishers, which are the indie artists, labels and small publisher content providers.

2. Charge a flat fee based on storage, bandwidth, programming (software) and the general promotion of the licensing site. In this scenario, nothing is charged on actual sales, but it's mostly a specialty hosting oriented service. This can be totally legitimate if done right. For example, I thought that is what SongCatalog started out with, but recently they added a percentage, like 25%, or at least that's what they quoted me by phone, so that may vary from from publisher to publisher. The Flat-Fee system might work well for small or mid-size indie publishers that simply need the technology and hosting but will still do their own promotion, or at least they should be as pro-active as possible, as if they had built their own online music licensing site from "scratch", but not every indie artist or label has the expertise and capital to build such elaborate ecommerce site that will be competitive and "up to speed" with today's high tech expectations.

3. Charge a combination of a flat fee (to cover hosting, storage and bandwidth) along with a small (reasonable) sales commission. Evidently this is what YouLicense will do, and SongCatalog is already doing. Also, in the photography business, Shutterpoint is doing the same thing. They charge photo owners (sellers) a monthly fee to cover storage and bandwidth plus a 15% commission on any photo licensing sales. This approach probably makes most sellers (artwork owners) feel like they are in a partnership with the service provider as it gives the company a "steak" in the success of their sellers. Come to think of it, even eBay offers enhanced services for their serious (pro level) sellers, (plus a small sales commission) so this is probably NOT a bad business model if there are useful services included to be of real benefit to both parties and especially to the sellers.

Note: The 4th way is for indie artists and labels to go direct to market with no service, broker or middleman. This can be done through their existing customer (contact) base as well as through a well designed website, which I've seen some artists and publishers do already. Through my own contacts I've also manged to do a couple of direct licensing deals, so I know it works.

I think competition and the "free market" will eventually sort out these other issues (you mentioned) about filtering out the bad and making it easier to find the good stuff and also being able to custom negogiate pricing and terms, like getting "x" years of exclusivity, etc. These are common problems that all music licensing services will need to address (and deal with) as the market keeps expanding into one huge world-wide accessible system. What musician, publisher or label wouldn't want to exploit their music on a global scale at the lowest possible price for the highest possible profit?

Obviously it will all come down to a combination of good filtering, supply, demand and a certain amount of negotiated pricing. With YouLicense, they will allow buyers (Licensees) to make offers directly to the sellers (Licensors) based on their proposed usage. The sellers can either accept or make counter offers until an agreement is reached.

The bottom line is that both the buyers and sellers need to be happy with the final deals that they accept. In any case, it won't cost buyers anything to shop, as it doesn't now for eBay shoppers to get quotes or make offers. And currently SongCatalog buyers are charged various fees for enhanced licensing services, so "free" shopping may be a welcome change for many kinds of licensing buyers.

JPF Music Licensing Service?
Tell you what Brian, I'd like to hear what YOUR solution is for today's online music licensing opportunities. Perhaps you have a special "formula" that no one is doing or thought of. For example, you have handy access to thousands of top-flight award winning artists (songs & recordings) that could probably do extremely well in the right online geared licensing format. I emphasis "online" because it will probably be the most efficient and cost effective way to connect globally with all kinds of potential customers. You could offer a great service to put JPF "award winning" artists together with all kinds of commerical industry licensing uses.

You would need to get a plan and budget (in writing) and then implement your idea and try it. This is exactly what John Buckman is doing with his Magnatune concept and Quinn Coleman is doing with his AudioSparx idea. These guys are independent thinkers, investors, programmers and in the case of Quinn, he's also a classically trained pianist turned composer/producer.

The founder of YouLicense.com (Maor Ezer) and his partners also have some background in music publishing and label promotion, so its easy to understand why they also have an interest in today's online music licensing trend.

Seems like everyone's getting on the bandwagon, even SonicBids is now starting to compete against Taxi by offering ways for artists to "submit" to new music licensing opportunities. This is certainly a hot trend these days, so I'm waiting to hear more about your program and how it will be different and better than what everyone else will be doing. Bring it on Brian!

Michael

My program?

Brian

Well, I'm sure you "could" put something together if you had the right opportunity and timing.

I know... it would take some serious effort along with access to lots of great music, some organization and a plan to pull it off.

Since you are so well connected I thought you might be thinking about starting a music licensing service sooner or later. And yes, it does take some money, but mostly good ideas, sweat equity and some key connections to get started.

Just trying to provide a bit of encouragement.
Michael