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«How to Make a Living from Music Second Edition By David Stopps Creative industries – No. 4 How to Make a Living from Music How to Make a Living ...»

-- [ Page 1 ] --

How to Make

a Living

from Music

Second Edition

By David Stopps

Creative industries – No. 4

How to Make a Living from Music

How to Make a Living from Music

TABLE OF CONTENTS

PREFACE 7

INTRODUCTION 9

DEFINITIONS 16

CHAPTER 1 19

WHERE THE MONEY COMES FROM 19

1.i Authors 19

1.ii Performers 19 CHAPTER 2 22 BUILDING A TEAM 22

2.i Authors 22

2.ii Performers 24 CHAPTER 3 26

COPYRIGHT AND RELATED RIGHTS 26

3.i Rights for Authors 30

3.ii Rights for Performers 31

3.iii Rights for Phonogram Producers 32

3.iv Licensing and Assignment 32

3.v Exclusive Rights and Rights of Remuneration 33

3.vi Making Available 34

3.vii Limitations and Exceptions and the Three-step Test 35

3.viii Fair Use and Fair Dealing 36

3.ix Moral Rights 37

3.x National Treatment, Term of Protection and the Public Domain 38

3.xi Copyright Registration 40

3.xii Trademarks 40

3.xiii Two Copyright Laws that support Authors and Performers 41

3.xiv Creative Commons 42

3.xv Copyright Infringement and How to Stop It 43

3.xvi Carrot, Stick and Education 44

3.xvii Creative Heritage Project 48 How to Make a Living from Music CHAPTER 4 49

COLLECTIVE MANAGEMENT AND COLLECTION MANAGEMENT

ORGANIZATIONS (CMOs) 49

4.i Why is Collective Management Necessary and what is its History? 49

4.ii The Importance of Correct Registration of Works, Performances and Recordings

–  –  –

PREFACE The World Intellectual Property Organization (WIPO) is pleased to present this second edition of the Creative Industries book How to Make a Living from Music.

The book is designed for musicians and music professionals who wish to hone their knowledge of the music business. It offers practical information to help authors and performers appreciate the importance of proper management of their intellectual property rights, in addition to providing instructive advice on how to build a successful career in music by generating income from musical talent.

The book provides useful definitions of grassroots concepts and identifies the basic income streams for authors and performers. Special attention is given to copyright and related rights, and their particular application in the music context.

The book underscores the importance of artist development and management, and provides guidelines on establishing fair arrangements for benefit sharing resulting from songwriting and performances.

How to Make a Living from Music is written, first and foremost, as a practical tool for creators in the world of music who are still in the process of establishing themselves in the market. Hence it offers a style that is designed to reach out to a broad audience. Secondly, the publication explores the interface between the creative process and all the necessary management arrangements which need to be in place from the moment of creating the music material until the moment it reaches the audience, thus providing valuable insights on synergies between creative and entrepreneurial approaches. Thirdly, it looks into the importance of using the enabling infrastructure such as collective management organizations, registration systems and available compensation schemes. The value of the presented material is reinforced by the detailed annexes which can guide music professionals through the practical complexities of the music business.

How to Make a Living from Music This book is intended as a tool for musical authors and performers both in developed and developing countries. Many international examples have been included, making it a useful instrument for creators worldwide. The content is not meant to be used as a substitute for professional advice on specific legal issues.

How to Make a Living from Music was commissioned by WIPO and written by David Stopps,1 a seasoned music manager with vast international experience.

The author is not an academic or a lawyer. Rather, he is a working music business artist manager, event promoter and entrepreneur with over 40 years’ experience in dealing with copyright and music monetization issues at the music industry’s coalface. This book is therefore written from the point of view of a practitioner and tends to take a pragmatic, practical approach, rather than a theoretical or academic one. The views expressed in the book are those of the author and do not necessarily reflect those of the Organization.

How to Make a Living from Music

INTRODUCTION

This is a very exciting time for music artists. A music artist is always a performer (someone who sings and/or plays a musical instrument) and is often also a music author (a composer, songwriter, lyricist or arranger). Never before in the history of the world music business have there been so many opportunities for authors and performers to get their music heard and sold on a global level.

So much has happened since the first edition of this book. We have seen the emergence of Twitter as a major marketing tool for music, and continued expansion and innovation from Google, Apple, Facebook and Amazon (often collectively referred to as GAFA). We have also seen Myspace falling into decline after it was purchased by News Corp and then seemingly revived in 2013 under the stewardship of Justin Timberlake. Cloud computing and storage are emerging as the next major phase in the development of digital music services, as we move from a copy economy (CDs and downloads) to an access economy (streaming). Artists are discovering that ‘data is the new oil’ as they constantly find ways to grow a database of fans which will be key to their success in the new digital ecosystem, an ecosystem increasingly being driven by artists and artist managers. More and more music is becoming social, with sharing and recommendations being at the heart of music discovery and digital music marketing. Whereas in previous times fans were regarded as consumers, they are now a vital and active part of every business model.





Google’s YouTube has become the world’s biggest music discovery website, which has increasingly resulted in music moving from audio-only to an audio-visual format.

Korean artist PSY’s ‘Gangnam Style’ video received over one billion views on YouTube in 2012, making it the most viewed video in YouTube history. The audio version of the track was successful, but not as successful as the video, which shows that fans want the full multimedia experience. Meanwhile Lady Gaga has How to Make a Living from Music created her own social network, ‘Little Monsters’, created by Backplane, which uses Facebook as a feeder. More and more artists and managers are taking the DIY (Do It Yourself) route, but that cannot function in a vacuum. Fans expect artists to nurture their digital presence by constantly updating their website and their social media artist pages, and by providing regular and interesting tweets and Facebook posts.

Real-time analytics are proving invaluable, as they can reveal exactly what type of fans an artist has and, more importantly, where they live, which greatly assists successful tour planning. In the digital services landscape we are increasingly seeing ‘freemium’ offerings such as SoundCloud, Dropbox and Reverbnation, which provide the basic version free to download and use, whereas more advanced features or increased capacity have to be paid for. We are seeing traditional financial advances from third-party phonogram producers (record companies) becoming more scarce, and financial crowd-sourcing directly from fans providing an alternative source of finance for artist projects. Where recording agreements are on offer, phonogram producers are increasingly demanding a 360 degree contract wherein they will receive income from live work, merchandising, branding and sometimes publishing in addition to recording income. When it comes to recording, recording hardware is becoming ever more sophisticated and less and less expensive.

Telecoms are also getting involved with music content and are developing their own music stores and services in some countries. New innovative digital services are constantly being launched, but innovation in the coming years will be driven by the competition between Apple’s iOS system and Google’s Android in the mobile ecosystem. Anyone doubting the true value of music should consider that Apple became the world’s largest corporation in 2011, with music being one of the main drivers of that achievement. When Steve Jobs launched iTunes and the iTunes music store, he was not focused on selling music but rather on using music to sell iPods and computers. iTunes enabled Apple to take a massive market share in the portable digital music player market and by association the personal computer market. Apple later expanded the same music storage ability from the iPod to the iPhone and the iPad.

As the Internet is geographically neutral, where an artist is based has become far less important. In previous times, it was often advisable for an author or performer to move to one of the world’s major music business centers, such as Los Angeles, Paris, Hamburg, London, New York or Nashville. With the advent of the Internet, that How to Make a Living from Music is far less important. If an artist can create and record great music, all that is needed is a table, a chair, a computer and a broadband connection and he/she is in business on a global level. Provided an artist can create a good website and have an active presence on the key social networking sites, all the world’s markets are at their fingertips, no matter where they live.

Philosopher and composer Friedrich Nietzsche famously said ‘Without music life would be a mistake’. How right he was. The whole world is mad on music. Even in the very poorest countries, singing, dancing and making music are an important part of daily life. In the developed world, interest in music is increasing all the time mainly due to the ease of access that the Internet and the digital ecosystem are providing. Music is deeply embedded in the culture of every country. In the past, the only music that could easily be purchased was that stocked by record stores. Due to the limitations of the size of any particular record store, the stock carried represented only a small fraction of the music that had been recorded worldwide.

The Internet has changed all that. The diversity of music now available means that anyone with an Internet connection has access to a record shop measuring ten kilometers by ten kilometers, and it’s always expanding.

Age is also becoming a significant factor. In the developed world, older people are regarded as digital immigrants whereas younger people are digital natives.

Developed countries are seeing a significant reduction in youth crime as computers, smartphones, social networking and video games take away the youth boredom factor.

This book is designed to identify and explain the basic income streams that exist in the worldwide music industry for musical authors and performers (and also for phonogram producers, publishers and anyone involved in the music industry). It is intended primarily to reveal to authors and performers the most effective way to generate income from their talent and endeavors, and the best way to achieve fair arrangements for the exploitation of their songwriting and performances without being ripped off. It also explains the importance of good management and provides guidelines on finding a manager and reaching a fair agreement regarding the conditions of an artist/management contract. A comprehensive example of a longform artist management agreement can be found in Annex C on page 223. Artists How to Make a Living from Music and managers have found this to be particularly useful. It also fulfils the function of pulling together all that is contained within this book in a practical way. Basic guidelines on starting a record label, publishing agreements, recording agreements, band agreements, music in film, TV, advertising and video games, collective management, live work, building a fan base and the basics of digital marketing are all to be found here. There are also recommendations for further reading or online information if the reader wishes to learn more about a particular topic.

In all of the above areas we are seeing spectacular changes as music fans’ preferences move from desktop and portable computers to mobile smartphones and tablets. We are seeing a revolution in advertising. Instead of blanket advertising such as a TV or newspaper ad where 95% of those viewing have absolutely no interest in the product, it is now possible, by using Facebook Ads and Google Ads, to target only those consumers who are likely to have an interest in a particular type of music.

The statement ‘There is no innovation without disruption’ manifests itself almost every week as new and exciting digital services are launched.

The live music industry is also seeing sweeping changes, with companies such as Intellitix revolutionizing the music festival experience. By issuing ticket holders with a wristband containing an intelligent microchip and transmitter, it is possible to reduce the time ticket-holders stand in line. It is also possible to load the chip with cash or credit so that food, drink and merchandise can be purchased without cash transactions, which has been found to boost sales. In addition, it allows festival organizers to know where every ticket holder is, manage festival staff and integrate with social networks. However, even this is being leap-frogged by new finger vein recognition technology which scans a person’s finger and creates a unique biometric identifier. Vein recognition technology is already being used to replace credit cards and could even replace passports in the future. In smaller venues fans now expect direct contact with the artist, so rather than relaxing in the dressing room after a show, artists are expected to come out and not only do a meet-and-greet with fans but also actually sell and sign merchandise.



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