tag:blogger.com,1999:blog-3474550675433017047Wed, 28 Aug 2024 19:38:55 +0000AudiamCopyrightJeff priceMoneyMusicSongwriterTuneCoremusic publishingArtistCorenoreply@blogger.com (ArtistCore)Blogger46125tag:blogger.com,1999:blog-3474550675433017047.post-8171575716090224443Mon, 06 Dec 2021 18:44:00 +00002021-12-06T10:44:55.130-08:00AudiamCopyrightJeff priceMoneyMusicmusic publishingSongwriterTuneCoreWhy Are Comedy Albums Being Taken Down From Spotify and other streaming services<p>Right before Thanksgiving, 2021 Spotify took down a large number of comedy albums. The question is why.</p> <p>The answer has to do with the fact that just because a comedian like Robin Williams says the words "Reality, what a concept" as opposed to sings them doesn't mean he does not have a copyright that needs to be licensed and a royalty paid when it streams.</p> <p>What happens if a streaming service like Spotify streams comedy albums without the needed licenses. The answer is not funny at all.</p> <br /><iframe title="Libsyn Player" style="border: none" src="//html5-player.libsyn.com/embed/episode/id/21395621/height/75/theme/standard-mini/thumbnail/yes/menu//direction/forward/tdest_id/268338/" height="75" width="100%" scrolling="no" allowfullscreen webkitallowfullscreen mozallowfullscreen oallowfullscreen msallowfullscreen></iframe><br /><p><a target="_blank" rel="noopener noreferrer" href=" here to download this episode!</a></p>2021/12/why-are-comedy-albums-being-taken-down.htmlnoreply@blogger.com (ArtistCore)0tag:blogger.com,1999:blog-3474550675433017047.post-2833257979442552454Mon, 04 Oct 2021 02:39:00 +00002021-10-03T19:39:20.208-07:00AudiamCopyrightJeff priceMoneyMusicmusic publishingSongwriterTuneCoreYou Know What’s Not Funny- One Trillion Streams and One Billion Dollars In Unpaid Royalties For Comedians<p>Comedians' works are streamed and broadcast across Spotify, YouTube, Pandora, SiriusXM, and more. However, unlike music where royalties are paid for two copyrights (composition and master recording), Comedians have only ever been paid royalties on the recording of their performance, not on the underlying literary work (equivalent of a composition). Jeff Price, founder of Word Collections and previous founder of Tunecore, Audiam, and more is setting out to fix that by helping comedians license and collect royalties owed to them for their unlicensed literary works.</p> <br /><iframe style="border: none" src="//html5-player.libsyn.com/embed/episode/id/20692592/height/75/theme/standard-mini/thumbnail/yes/menu//direction/forward/tdest_id/268338/" height="75" width="100%" scrolling="no" allowfullscreen webkitallowfullscreen mozallowfullscreen oallowfullscreen msallowfullscreen></iframe><br /><p><a target="_blank" rel="noopener noreferrer" href=" here to download this episode!</a></p>2021/10/you-know-whats-not-funny-one-trillion.htmlnoreply@blogger.com (ArtistCore)0tag:blogger.com,1999:blog-3474550675433017047.post-2582967247693688770Tue, 18 Feb 2020 14:17:00 +00002021-08-12T09:39:04.386-07:00THE DEFINITIVE GUIDE TO SPOTIFY ROYALTIES<div class="MsoNormal" style="color: black; font-style: normal; font-weight: normal; letter-spacing: normal; margin: 0in 0in 0.0001pt; text-decoration: none; text-indent: 0px; text-transform: none; white-space: normal; word-spacing: 0px;">
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<span style="font-family: "times" , "times new roman" , serif;">When I began to write this article, I thought it would be a quick one. Yes, I knew there was a lot of confusion and misinformation about Spotify royalties in the world, but I naively thought, no problem, I’ll just lay it all out in a quick couple of pages.<o:p></o:p></span></div>
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<span style="font-family: "times" , "times new roman" , serif;">I could not have been more wrong.<o:p></o:p></span></div>
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<span style="font-family: "times" , "times new roman" , serif;">The complexity of Spotify royalties is, frankly, insane. So insane that it took me over a month and 31 pages (before including diagrams) to explain it all. No artist, label, songwriter, distributor or musician should be required to have a depth of knowledge of this complexity to understand a very simple question: “How much do I earn when my music streams on Spotify?”</span><br />
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<span style="font-family: "times" , "times new roman" , serif;">There should be a simple, easy to understand answer. </span></div>
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<span style="color: black; font-family: "times" , "times new roman" , serif; font-style: normal; font-weight: normal; letter-spacing: normal; text-decoration: none; text-transform: none; white-space: normal; word-spacing: 0px;">
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<span style="color: black; font-family: "times" , "times new roman" , serif; font-style: normal; font-weight: normal; letter-spacing: normal; text-decoration: none; text-transform: none; white-space: normal; word-spacing: 0px;">And to be blunt, it’s not really Spotify’s fault, nor is it the music industry’s fault, or the fault of U.S. Copyright laws. But when you put all three of these things together, you get a weird franken-monster royalty schema that has resulted from a new music business model built on consumers paying to have <i>access</i> to music, rather than paying to <i>own</i> it.</span></div>
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<span style="color: black; font-family: "times" , "times new roman" , serif; font-style: normal; font-weight: normal; letter-spacing: normal; text-decoration: none; text-transform: none; white-space: normal; word-spacing: 0px;">
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<span style="color: black; font-family: "times" , "times new roman" , serif; font-style: normal; font-weight: normal; letter-spacing: normal; text-decoration: none; text-transform: none; white-space: normal; word-spacing: 0px;">For each step described in the royalty calculation process, it took another step to explain the step preceding it, and the one preceding that one, and furthermore, the reasons why each step exists. Each step, in and of itself, makes sense, but together they are like peeling layer after layer of a never-ending onion.</span></div>
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So, over a month after starting to write the article, and over 35 pages later, this article explains how it all works in the <u>United States</u> for Spotify <span style="background-color: white; color: #111111;">and all other interactive streaming music services like it (Apple Music, Google Play, Amazon Prime, Pandora Interactive and more).</span><span style="color: #111111;"> Outside of the United States, many of the same mechanisms apply, but there are differences. This article is specific to the U.S.</span></div>
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<span style="color: #111111;">I did my best to break it all down into bite-sized chunks, and to provide examples and drawings to help it all make sense.</span></div>
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<span style="color: #111111;">And when you make it to the end (and I really encourage you to do so), not only will you have an understanding of how Spotify calculates royalties, and how much is earned for each stream, but also great insight into how the entire back-end financial machinery works, and how royalty calculations are made in the new streaming music industry.</span><span style="color: #111111;"> </span></div>
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<span style="color: #111111; text-align: start;">And that is a good thing.</span></div>
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<b><span style="font-family: "times" , "times new roman" , serif;"><span style="font-size: large;">THE TWO SEPARATE LICENSES AND THE TWO SEPARATE ROYALTIES GENERATED FOR EACH STREAM ON SPOTIFY</span></span></b></div>
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<span style="text-align: start;"><span style="font-family: "times" , "times new roman" , serif;">In order for Spotify, and other services like it, to stream a recording, they need two distinct and separate licenses. Each of those licenses result in two distinct and separate royalties. </span></span></div>
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<span style="font-family: "times" , "times new roman" , serif;">The first license earns royalties for the Sound Recording. These royalties are called “Sound Recording” royalties. <o:p></o:p></span></div>
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<span style="font-family: "times" , "times new roman" , serif;">The second license earns royalties for the “Composition/Song” or “song” (the lyric and melody). These royalties are called “music publishing” or “publisher” royalties.</span></div>
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<span style="font-family: "times" , "times new roman" , serif;">Each license has its own royalty rate and rules for to calculate the royalties earned. Payments for the royalties generated by the two separate licenses are funneled through two distinct and different pipelines to get to their rightful earners. </span></div>
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<span style="font-family: "times";">In addition, there are different types of Spotify services available to consumers. Each type has its own distinct and unique nuances that impact how to calculate royalties. For example, the Spotify “Premium” service costs $9.99 a month to listen to music, on demand and ad-free, on any device (i.e. computer, tablet, smart phone). By contrast, Spotify’s “free” service is supported by advertisements, and allows listeners to pay nothing to listen on demand to music on any device (i.e. computer, tablet, smart phone). And Spotify offers other types of services beyond just these two. Each one of these services differs slightly from the other in regard to the formulas and rules to calculate royalties.</span></div>
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<span style="font-family: "times" , "times new roman" , serif;">For simplicity’s sake, this article is going to use the Spotify Premium service in the U.S. as its example.</span></div>
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<span style="font-family: "times" , "times new roman" , serif;"><span style="text-align: start;">Now we will look at each of the two different types of royalties generated on Spotify when music streams. First, the Sound Recording royalty, and second, the Composition/Song royalty.</span><span style="text-align: start;"> </span></span></div>
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<b><span style="background-color: white; color: #111111; font-family: "times" , "times new roman" , serif;">THE RECORDING AND THE SOUND RECORDING LICENSE AND ROYALTY <o:p></o:p></span></b></div>
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<span style="background-color: white; color: #111111; font-family: "times" , "times new roman" , serif;">First the Sound Recording.<o:p></o:p></span></div>
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<span style="background-color: white; color: #111111; font-family: "times" , "times new roman" , serif;">To help understand what a "Sound Recording" is, let's use the Whitney Houston recording of the Composition/Song "I Will Always Love You"</span><br />
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<span style="background-color: white; color: #111111; font-family: "times" , "times new roman" , serif;">Whitney Houston was hired by the record label Sony Records to record the Composition/Song "I Will Always Love You." Spotify must get a license from Sony Records in order to stream this Sound Recording. The license specifies the amount of royalties that will be generated each time there is a qualifying stream of this Sound Recording on Spotify. <o:p></o:p></span></div>
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<span style="background-color: white; color: #111111; font-family: "times" , "times new roman" , serif;">This royalty is called the “Sound Recording” royalty.</span></div>
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<span style="background-color: white; color: #111111; font-family: "times" , "times new roman" , serif;">The same concept holds true for an artist who uses a DIY distribution services like DistroKid, CD Baby, TuneCore, etc. For Spotify to stream the recording of a DIY artist who uses one of these distributors, it still must get a license to stream the Sound Recording. But in </span><i style="background-color: white; color: #111111; font-family: times, "times new roman", serif;">this</i><span style="background-color: white; color: #111111; font-family: "times" , "times new roman" , serif;"> case, the artist controls their own Sound Recordings and acts as their own “record label”. Because of this, a second layer of licensing is necessary to authorize Spotify to play the Sound Recording. First, the artist grants the right to stream their Sound Recording on Spotify </span><i style="background-color: white; color: #111111; font-family: times, "times new roman", serif;">to their distributor</i><span style="background-color: white; color: #111111; font-family: "times" , "times new roman" , serif;">. Next, the distributor licenses the right to stream the artist’s/record label’s Sound Recording </span><i style="background-color: white; color: #111111; font-family: times, "times new roman", serif;">to Spotify</i><span style="background-color: white; color: #111111; font-family: "times" , "times new roman" , serif;">. And again, just like with Sony Records, the license the DIY distributor has with Spotify specifies the amount of royalties to be generated each time a qualifying stream of the Sound Recording occurs on Spotify.</span></div>
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<span style="background-color: white; color: #111111; font-family: "times" , "times new roman" , serif;">In some cases, record labels (that are not the artist) can use distributors to get their recordings into Spotify. When this happens, the record label grants the right to the distributor to let their Sound Recording stream on Spotify. The distributor then licenses the right to stream the record label’s Sound Recordings to Spotify. And again, the license between the distributor and Spotify states the amount of royalties to be generated each time there is a qualifying stream of the Sound Recording on Spotify. </span></div>
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<span style="background-color: white; color: #111111; font-family: "times" , "times new roman" , serif;">So how do the royalties make their way down from Spotify to the artist? </span><br />
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<span style="background-color: white; color: #111111; font-family: "times" , "times new roman" , serif;">When royalties are generated from a stream, Spotify pays the money to the entity it signed the contract with for the right to stream the Sound Recording. That entity may take a percentage of the Spotify money, as outlined in its distribution contract with the record label, called a “distribution fee.” Some DIY distributors like DistroKid take none of the Spotify Sound Recording royalties and pass all of them on to the artists. Others, like CD Baby take a percentage of the Spotify money before they pay the artist. If the artist is signed to a record label, and that record label uses a distributor to get the Sound Recordings into Spotify, then Spotify pays the distributor. The distributor takes a cut of the Spotify money and then pays the record label. The record label then pays the artist under the legal terms that exist between the record label and the recording artist. </span></div>
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<span style="background-color: white; color: #111111; font-family: "times" , "times new roman" , serif;">Depending on how the Sound Recordings were licensed to Spotify, the royalties earned for the Sound Recording are to be paid directly to either: (1) the record label (like Sony Records); (2) the entity that works for the DIY artist to distribute their recording into Spotify (like DistroKid, CD Baby, TuneCore etc); or (3) to the distributor that works for the record label which takes a cut of the money and then passes the rest back to the record label. </span></div>
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<b><span style="background-color: white; color: #111111; font-family: "times" , "times new roman" , serif;">THE COMPOSITION/SONG LICENSE/ROYALTY <o:p></o:p></span></b></div>
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<span style="background-color: white; color: #111111; font-family: "times" , "times new roman" , serif;">In addition to the Sound Recording, there is also a <u>second</u> separate license Spotify must get to allow the Sound Recording to stream. This second license is for the “Composition/Song.” The Composition/Song is the lyric and/or melody of the song. The Composition/Song license has a <u>second</u> separate royalty generated for each qualifying Sound Recording stream on Spotify.<o:p></o:p></span></div>
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<span style="background-color: white; color: #111111; font-family: "times" , "times new roman" , serif;">Now that we’ve covered the two separate licenses that Spotify needs to stream music, we can move on to the formulas Spotify uses to calculate the royalties generated for each of the two licenses. </span></div>
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<b><span style="background-color: white; color: #111111; font-family: "times" , "times new roman" , serif; font-size: 14pt;">HOW THE TWO ROYALTIES ARE CALCULATED BY SPOTIFY: SOUND RECORDINGS AND COMPOSITIONS/SONGS <o:p></o:p></span></b></div>
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<b><span style="background-color: white; color: #111111; font-family: "times" , "times new roman" , serif;">ROYALTIES FOR THE SOUND RECORDING: <o:p></o:p></span></b></div>
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<span style="background-color: white; color: #111111; font-family: "times" , "times new roman" , serif;">For the Sound Recording royalty, Spotify creates a “big pot” of money. The record label, distributor or DIY artist/record label earns an amount of money from the “big pot” of money for each licensed eligible stream of their Sound Recordings. The amount paid for each stream changes every month as it’s typically based on a number of factors including how much revenue was made by Spotify in one month, how many monthly subscribers Spotify has and how many streams occurred in that same month.<o:p></o:p></span></div>
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<span style="background-color: white; color: #111111; font-family: "times" , "times new roman" , serif;">Let's start with how the "big pot" of money is determined.</span><br />
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<b><span style="background-color: white; color: #111111; font-family: "times" , "times new roman" , serif;">STEP 1: Determining The “Big Pot” Of Money<o:p></o:p></span></b></div>
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<span style="background-color: white; color: #111111; font-family: "times" , "times new roman" , serif;">According to the licensing agreements, the “big pot” of money is typically the greater of</span></div>
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<li style="text-align: justify;"><span style="background-color: white; color: #111111; font-family: "times" , "times new roman" , serif; text-indent: -0.25in;">A percentage of Spotify’s monthly Revenue</span></li>
<li style="text-align: justify;"><span style="background-color: white; color: #111111; font-family: "times" , "times new roman" , serif; text-indent: -0.25in;">The number of subscribers Spotify has multiplied by a flat dollar amount called the “Subscriber Minimum”.</span></li>
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<span style="background-color: white; color: #111111; font-family: "times" , "times new roman" , serif;">As an example, if in November 2019, Spotify’s monthly Gross Revenue was $100, and per the licensing agreement 50% of it was eligible to go into the “big pot”, then $50% of $100 is $50.<o:p></o:p></span></div>
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<span style="background-color: white; color: #111111; font-family: "times" , "times new roman" , serif;">At the same time, if Spotify had 10 subscribers, and Spotify had to pay $4.00 per subscriber, then 10 * $4.00 = $40.00 would be eligible to go into the big pot.</span></div>
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<span style="background-color: white; color: #111111; font-family: "times" , "times new roman" , serif;">Spotify compares the $50 to the $40, picks the one that is higher, (in this case the $50) and that is how much goes into the “big pot” for Sound Recording royalties.</span></div>
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<span style="background-color: white; color: #111111; font-family: "times" , "times new roman" , serif;">One reason why the minimum amount per subscriber is in the agreement is so the entity licensing the Sound Recording to Spotify has a minimum amount that will go into the "big pot" even if at some point in the future Spotify lowers its prices for a subscription. </span><br />
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<span style="background-color: white; color: #111111; font-family: "times" , "times new roman" , serif;">For example, Spotify can decide it’s going to drop its per month subscription price from $10 a month to $5 a month. If it does this, and there is no minimum per subscriber amount as to how much goes into the “big pot,” it’s probable the amount going into the “big pot” goes down. <o:p></o:p></span></div>
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<span style="background-color: white; color: #111111; font-family: "times" , "times new roman" , serif;">As an example, if in November 2019, Spotify’s monthly Gross Revenue was $50, and per the licensing agreement, 50% of it was eligible to go into the “big pot”, then $50% of $50 is $25.<o:p></o:p></span></div>
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