Wednesday, September 26, 2012

Anti-360 deals must have a downside – right?

The four areas below remain critical points when evaluating the effectiveness of anti-360 deals:

1. Lifestyle Branding
Companies who generate anti-360 opportunities typically have certain customers.  For example – Red Bull energy drink is highly embraced in the extreme sports community.  Snowboarding, skateboarding, BMX riders and adrenaline enthusiasts typically involved in this community gravitate towards certain genres of music. With this known – does your band fit the community typically accessed by the company? If the answer is NO, don’t force the relationship because it won’t benefit the band or the company.

2. Unique Outlets
Non-traditional deals typically translate into a lack of traditional distribution and radio exposure. This isn’t a bad thing, however it is an area that must be evaluated when seeking the correct anti-360 fit. For example – Hard Rock Records, one of the newest anti-360 players in the game, lacks ambition with traditional physical/digital distribution.It’s likely you’ll never see their artists in major chain stores, purchase albums in iTunes or hear them on the radio.  However, Hard Rock Records artists and their products will be highly visible throughout Hard Rock CafĂ©’s 173 locations scattered throughout 53 countries.  Additionally, their artists will be consistently showcased at Hard Rock Casino stages around the globe and pumping through speakers at any Hard Rock location.

3. Ownership
A majority of anti-360 companies have little interested in controlling intellectual property. Their particular interest lies with marketing, promotion and visual components. If offered a partnership deal, it’s important to analyse what is still owned by the band – copyrights, trademarks, a majority stake in royalties, publishing, etc. Secondly, if the company retains some portion of ownership (that’s okay) it’s becomes important to review the duration of time.  For example, labels typically own product “in perpetuity” (i.e. – forever), as anti-360 deals may own product for a specific amount of time.

4. Use
Anti-360 companies have the luxury of already penetrating an established market (cf. point 1 – Lifestyle Branding).  As this may appear appealing on one hand, it could also prove detrimental on the other.  For example – many anti-360 deals may require a gratis license towards “Company-related use.”  What’s company-related use, and how deep does this go? Fictiously, assume Mountain Dew signs Band X to an anti-360 deal and the band gives them a gratis use license for music produced while under the agreement.  Mountain Dew may use a particular track for commercials, sporting events, theme songs, product bundles, etc. Additionally, Mountain Dew may have a sister company that produces sports related documentaries, which now has access to the songs. If Band X retains publishing rights in the anti-360 agreement addressed above, they should generate hefty income from the situations identified.  However, due to the gratis license, they’ve now lost a large portion of publishing income due to “Company related use.”

Watch out for these contract killers. {VIDEO}

Every music contract is laced with detrimental pitfalls which can be difficult to spot for the untrained eye. However two legal concepts are guaranteed to be included in all contracts, and when understood properly, you can hold the key to the trap.  Learn what nobody else wants you know -the industry’s dirty little secret.

The Anti 360 Deal

BY 

The 360 Deal isn’t a new concept.  Also referred to as multiple right deals, collateral entertainment activity agreements or collective agreements – these beasts have been taking advantage of musicians for decades but recently became adopted as “the norm” in artist label relations.   What’s fascinating about the unique music ecosystem of today is that one label’s stupidity equates to opportunity for someone else.  Now more than ever, opportunity lurks around every corner for emerging groups.  In today’s market if you don’t want to sign a 360, DON’T, because many emerging prospects exist who have created an “anti-360 Deal” formula.
To understand the anti-360 landscape you must first understand the totality of what a 360 deal entails.  The concept/conversation is simple –
Because we (the label) feel so strong about you (the group) we are willing to invest in your career.  In order to do that, we must assist with several aspects of your career to assure success.  This is a massive financial risk therefore we want to enter into a partnership with you.  In order for us to properly invest in the group we will issue a multiple rights deal.  These are standard. Due to the fact we will become so deeply involved assisting your career, we must receive a percentage of career based income.”  You see where this pitch  is going.
Career based income includes a percentage of fan club revenue, merch, publishing, tour revenue, endorsements, or if it so applies – acting fees, book deals, movie contracts, appearance dollars and so forth.  The worst part about the 360 situation is rarely does a label allow for an artist to deduct expenses prior to distributing the label’s cut.  For example, Artist X may gross $25,000 from a self-booked tour but accumulate $5,000 in gas expenses, $2,000 in hotel accommodations, $1,000 insurance cost, $3,000 in rental fees, $2,000 food expenses and $2,000 paid out to the booking agent, just to name a few.  Essentially Artist X actual nets $10,000 (not $25,000), but the label will take their Multi Rights cut from the $25,000.  Did the label do anything to deserve this?  Do I need to answer that question? The somewhat skewed logic on behalf of the label is they absolutely deserve a percentage.  Because the label invested in sound recordings and marketing to drive sales of the sound recordings, Artist X only acquired popularity due to the labels involvement.  Additionally, because music sales only represent a small percentage of Artist X’s total worth, the label feels a sense of entitlement to the derivative works spawned from the music.  Like magic, the 360 deal spreads. Is this the aspiration – sign with a label but fall victim to the 360 system?  Doubtful.  Step aside and let the anti-360 take over.
Majors labels have a civil war on their hands if they aspire to remain meaningful and profitable.  The battle isn’t with piracy, streaming or file sharing, it’s with the new players of today.  The Jimmy Iovine, Gary Gersh, Antonio Reed, and the Harve Pierre’s of the world must now go toe to toe with the Geoff Cottrill’s, Meredith Chinn’s, Cartoon Network’s Adult Swim television program, clothing brand Levis, restaurant bar HardRock or Mountain Dew.  These people and organization have silently, and affectively, changed the landscape of the music industry all in various ways; but the list continues to grow.  Bluntly speaking, I like the business model and chances of the later because they care more about their business.  Odd statement?  No.  The aforementioned examples care more about enhancing an image, a product or a lifestyle brand more so than selling 1 million records.  The profits generated via music sales either become a second level afterthought or totally irrelevant.  Certain brands are willing to take artists with them on this ride, using artist for marketing benefit or niche penetration but allowing the artist to profit as much as possible.  For example, would a label tell an artist – “we’ll pay for the production of your album but we want you to retain control over all the copyrights, trademarks, images and album sales.  Additionally, we’ll give you distribution for free and give you guaranteed performance/tours every year at your regular tour rate.  On top of that, we’ll pay for the tour, hotels, meals, etc.” Would this happen at the label level? No. Labels want everything (360), lifestyle labels want to provide artists everything (anit-360) and make them happy, which results in a strengthening of the brand.  Not clear? What makes better marketing sense, spending hundreds of thousands on a billboard ad or having thousands of happy customers engaging in positive conversation about your product? Where you see this happen as at the level of hybrid record labels (ie. – more concerned about enhancing artists, because the artists will enhance their brand).  The situation identified above is real (I read the contract), and I can assure that from a contractual standpoint, these anti-360 labels prove to be fantastic, no tricks, no gimmicks, just straight forward language.  If you add into the mix, many of these anti-360 deals offer visibility and opportunities (for free) which major labels could only generate after $10 million of investments – anti-360 labels are changing the industry landscape right in front of our eyes.  How can major labels, which rely heavily upon a business model structured around “taking” compete with a label whose business formula is rooted in “giving.”  They can’t, and I don’t see this changing.

Sunday, September 23, 2012

Be Your Own Publishing Company


Once many people have seen what a publishing company does for them, and how much they have to give up to have a publishing company working for them they may start to search out different options. This especially happens when bands have several copyrights for their songs and are uncomfortable with assigning them to the big companies. One of the options many bands will take at this point is to start up their own publishing company. In doing this, they will be assigning the copyrights to themselves essentially and will never loss any control or ownership of those songs.
It's actually a lot easier to set your own publishing company up than most people think. In fact it will be very similar to getting your band a business license. Your first step will be to contact one of the big performing rights societies, BMI, ASCAP or SESCAC. You want to ask for a “Publisher's Application.” You will also want to request “Writer's Applications” if anyone in your group isn't affiliated with at least one of these societies. Once you have this form, you will have to come up with a name for your publishing company. There will be space for many different names, just in case some of the names you would like are already taken. Other than the name you will also have to start filling in background information on the owner of the new company. Normally the entire band will be the owner(s), so you will need to put each person on the application. You'll also have to add what type of business license the band has. Next will be the tax ID number, but you will have to put “applied for” since the business is new and doesn't have one. Now you can simply send the form in with any fees that you are required to pay. You should get confirmation when your new publishing company is accepted.
You must realize that your publishing company that you've just started is a separate company from your band. That said, you now will need to apply for a new tax ID number and business license. This will be done the same way you did it when your band obtained them. After you've received your ID number, send that in to the society that you originally applied to. Your last step is setting up your publishing company is to open a checking account under the company name. This needs to be done because any checks coming from the performing rights societies will be in the company name and not your personal or band name.
Starting up your own publishing company is a great way to keep more of the money that you will be making, but you must be realistic about your need for one. There are times when a publishing company isn't necessary at all. So, take a step back and look at your band. Where is most of your money coming from? If it is all from live performances and product sales, you don't need to spend extra money on a publishing company. This is because a publishing company is most useful and profitable when your songs are being played on the radio or when you have a record deal, and if you aren't or don't, it wouldn't make sense to start a publishing company now since none of your profits are coming from other people using your song. Holding off until your band makes that step will be the most profitable way to run your business.

Running your own Publishing Company


You may be like some bands and actually be interested in starting up your own publishing company to handle all of the copyrights and money that your band will be receiving. This could allow you to make more money from your music, and also allow you to maintain complete ownership of your songs. Starting your own publishing company isn't too complicated, running one is a different story.
Let's start with the basics. A publishing company is basically a company that is hired, by the songwriter or song owner to collect money on their behalf whenever their song is played or bought. They have a few other responsibilities, but essentially, that's what a publishing company does. That being said, they need to have some kind of control or ownership of the song in order to collect the fees for you. Also, part of the money that you will be receiving for these sales will be kept by the publishing company as a fee for their services.
Because most of the income that a band actually makes isn't collected by the publishing company, but by the performance rights societies things become a little easier for you to act as your own publishing company. What you as the publishing company would have to do is to submit the paperwork for each song that the band writes and plays. This would not only have to be done for each song, but for each band member. Also, since there are three different societies that your band members could be a part of, you will have to submit the paperwork for each song to each of the societies that your members are affiliated with. Included in this paper work will be the percentage that each member is suppose to receive. Once the performing rights societies start collecting the money from the different songs and performances, they will pass it on to the publishing company who then distributes the money out to the band members. When you create your own publishing company, then the money will go through one fewer pair of hands and more money will make it into yours.
Another way that the band will make money and thus involves the publishing company is through royalties. This is essentially the sale of their song, whether on CD or electronically. The band will always receive a portion of that money. This is also an area where the publishing company is required to collect that money and distribute it to the band. Like the performing rights societies, however, there is the Harry Fox Agency. This agency will actually ask your publishing company (or you, if you are your own publishing company) to fill out forms detailing the song and the copyrights. Once this is done, Harry Fox will actually collect all of the money from those sales for you. They will then be brought to you as your publishing company to be given to the band. Again, this makes one more area of work for you, but also more money in your pocket.
Harry Fox does other things as well. One of these would be the option of a synchronization license. They will actually negotiate a fee for you when television commercials want to use your song or movie producers want to add it to their soundtrack. You will be charged a small fee by the Harry Fox Agency, but it will still avoid having to deal with an outside publishing company.
You will have to recognize that you are probably going to have to have some help from another company of some kind at some point however. This is mostly because your music won't stay local, especially if you start to deal with the internet and online sales. Once your music goes world-wide it will become difficult for you to keep tabs on it. That said, it is possible that you will have to take on a sub-publishing company to assist you with these types of issues.
As stated at the beginning of this article, there are other things that a publishing company does for you and your band, but these are the largest perks. With that in mind, starting your own publishing company really could make a lot of sense for you and your band. However, if your band makes very little, or no money outside of live performances in your area, there may not be a need for a publishing company at all. If that is the case you should not go through the hassle, nor the money to start one on your own. Simply retain the knowledge, grow your band and take on that responsibility as the need arises.

Song Publishing - Music publishers


For band or singer writing their own songs, publishing is where a lot of the money is in the music industry. The publishing money will go only to the person with the copyright for that song, so it may or may not go to the person actually singing the song. The best way to check this is, on most CDs, the name of the writer of the songs will appear below the title. Again, this name may or may not be someone connected directly to the band performing the song. Often times song writers will work for bands to help them with lyrics and music to play, but here again, the writer of the song is the owner of it and gets the copyrights to it, and thus the publishing money. One things to recognize is that copyrights are not the same as sound recordings. Someone can record a song and sell it to another band or company and then that particular company owns that recording, but they would not own the song. The original writer will always maintain the copyright for that particular song. The reason for this is, the publishing money is connected to the copyright, so the owner will be the only one making money off of the song itself.
Being the owner of a song has its perks for sure. Essentially, no one can play your song without you receiving money for it. When another company or band wants to play your song, they come pay to you, this grants them a license to play your song. The money that you've just made from your song is the publishing. The more popular your song, the more people will want to sing it, and the more people that want to sing it, the more money you will make. Basically there are four different areas of how to make income: print, synchronization, mechanical, and performance. There are a couple more, but use of them is pretty infrequent.
The synchronization and print licenses tend to bring in less money than the other two venues, but they can still be additional income for the owner of the song. Also these licenses must be attained before any printing or distribution takes place. Essentially a printing license means the owner will obtain publishing fees any time his/her song is written anywhere and published. This would include a piano score or lyric pages. Most of the time you won't get more than a few cents for each copy printed, but again, it's still some money coming in. Synchronization licenses are a little different since they are connected to some visual image. Some easy examples of this would be any video, soundtrack, or commercial. Even television show theme songs or background music are considered synchronization. The money you can get for a synchronization license varies greatly. Generally your record company will require a free music video granted to them to promote your song, but a popular artist can ask well into the six-figures for one of their songs to be put on a big movie soundtrack. The fees connected with each license vary so much and are connected not only to the popularity of your song and band, but also to the popularity of the movie, commercial or video it will be used in. The length of the commercial or video will also change this figure, as will how much of the song will be used. Because of all this complication and range of fees, most bands and songwriters will hire a publisher to help them. These publishers will know more about the industry standards and normal rates and fees that could be applied, and thus take care of collecting and charging for each use of the song.
Another right that the copyright holder can take advantage of is the mechanical right. Coming from the term used when wax records were made mechanically, this term basically means the owner has the right to reproduce their song. This right means that any time your song is reproduced onto a record, a CD or any other form, you get publishing money for it. The going rate for this mechanical fee is pre-established by the US copyright office. This makes charging clients a little easier and offers less negotiation. Nice thing about the rate that they put in place is that it's on a per-song, per-album-sold basis. This means that even if you are only getting six cents per song, and you wrote five songs on the album that is being published that you will get thirty cents per album sold. Let's assume that you sold to a relatively popular band and they sell one million albums, you just made $300,000 on five songs. Mechanical rights are where a lot of the publishing money is hiding.
One of your biggest rights when you own a song is the right to prohibit performances. The performances must be public, but essentially no one is allowed to play your song without paying for it. Generally societies like BMI, SESAC and ASCAP will keep track of your song and money for you. Publishing companies will also depend on these places to keep tabs on their clients money. The reason is, it is simply too difficult for one person to track where and when your song will be played live, or on the radio. Once one of the big societies collects your money for you, they will make sure that you get it. This fee is also a decent way to make money, especially if you end up getting on a few top song lists.
The fee for these publishing companies to keep tabs on your copyrighted song often surprise people when they first bring them on board and sign, or assign, their copyright to them. A normal fee for most publishers is half. That means that anytime your song is played, recorded, printed or synchronized you will only receive half of the earnings, while the other half goes into the pocket of the publishing company that you hired. While this fee may seem pretty steep, you must also consider what the company is doing for the songwriter. In a sense they take over all obligations and hassles of having a copyright, even though the original writer still actually holds the copyright. When they assign it to their company in basically gives that company the ability to enforce the laws and fees for that person. This means that the company will be watching the country to ensure that if someone plays or records your song, you get paid for it. They will also be making sure that there are no copyright infringements anywhere, and when there are, they will be the ones taking on whoever it is infringing on your rights. In short, they hold all of the responsibility of having a copyrighted song, while you can sit back and possibly write another song, rather than worrying about missing someone using your song. Having a company take care of this for you is really one of the only ways, or at least the best way, to ensure that all of the money that should be paid to you, is being paid to you. Having this company will also make it easier for people interested in playing or using your song to get a hold of you to negotiate a fee.

Almost every record company will require that you hand over your publishing problems to a publishing company, and normally they have one that they work with exclusively. As an artist, you may try to avoid this, but if you do, you will be required to keep track of your own song across the country, and possibly the world. That being said, never sign with a company that doesn't have a good reputation. This is the biggest factor that you will want to look at when considering a publishing company. It would be easy for them to take advantage of you with all of the power that they have, so be sure that you are signing with a reputable one. Your last option if you can't handle the high fees is to start your own company. A small publishing company to handle just your songs should be easier to handle, but you will need help from several different people, and you may end up paying them just as much as you would another company in the end.

Music Copyright law & information


Does a band have to send their material to the Copyright Office in Washington D.C. in order to keep other people from stealing their ideas ? The answer is no. When you write down your lyrics or record your own music, even on a USB key, you own a copyright and no one can steal it. As soon as the material is "fixed in a tangible medium of expression" it is copyrighted and protected. By sending your tape to the Copyright Office, you are registering your copyright. So, if you hum a song in your head-no copyright; but, the minute you write it down or record-copyright. Once you put your ideas into tangible form, you have all the copyright you need to prevent someone from stealing your material.
What you do need to be concerned about is to being able to prove when you created the musical work. If someone does steal your material, you have to prove that you thought it up first. The most popular way to date your work is what is known as the poor man's copyright. This involves sending a copy of your tape or lyrics through the mail (certified return receipt requested) to yourself. When you receive the package in the mail, do not open it; save it in its unopened condition. What this does is put a date on the recording which would be the day you mailed it. If you had to go to court, you could give the unopened tape to the judge and prove when you created the work. This procedure, however, does not afford any legal protection. I never recommend this route to bands.
As soon as you have a copyright, you can use the copyright notice which is written "©". You do not have to register with the Copyright Office in order to use this symbol. Whenever you write your songs down or record them, always include your name or the band's name and the copyright notice. This puts the world on notice that you are claiming a copyright in the material. Since March, 1989, it has no longer been necessary to place the © sign before a copyright notice. Under prior law, if you did not place the magical © sign on your work, you lost protection. Even though it is no longer required, there are reasons why you would still want to use the © sign. First, there are other countries where the © sign is still required. You would not want to loose your protection in these countries. More importantly, it helps prospective users locate the copyright owner in order to secure the appropriate licenses.