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The Rock-itt : June 2011
Last article I described the process of how a band can get their song published but what if you were moderately successful and felt you wanted to sell music and set up a digital store like you could have with a corner store in the eighties. W ith these days of ease of internet access, cloud servers, cheap digital streaming tools and everyone having some level of technical savvy you would reckon it would not be that complex. The problem is that it is not very easy to get the three licenses necessary to sell or stream music on- line, the reality is it’s not only one of the most confusing things to get a handle on but it is also the bottleneck stopping the music industry from reaching its full potential. Before music went to digital, people used to buy music by walking into a traditional store, what they now call a bricks and mortar store. The business model for a traditional store like your local Sandy's at Dee Why was: give us your stuff, we’ll put it on our shelves, we’ll pay for it when it sells or send it back for a refund if it doesn’t . The complexities that existed for Sandy’s Records and other traditional stores stemmed from the infrastructure needed to: have shelves, decide what things to place on them, have a shipping department to receive new albums and return unsold albums, have a finance/billing department to pay people and keep track of: what sold, what was returned, and how much money was owed, hire people to place the stuff on the shelves and ring up sales at the cash register. As simple as it may sound, this is a hard to scale, clunky system that limits what is available to buy based on needing tangible “things” like stores, trucks, CD manufacturing plants, inventory control, and so on. The model limited consumer choice and denied well over 99% of artists on the planet the ability to have their music sit on a shelf in a store where people go to buy music. The new digital music “stores” and services like iTunes, Amazon, Spotify, etc bypass all of these problems. Everything can be in “stock” on their servers with unlimited inventory that replicates on demand as soon as it is bought or streamed. There is no shipping department and no need to guesstimate how many copies of a CD to bring in. Sales are one way and there are no returns. As music can only be found if searched for, the inventory causes no “clutter” stopping other music from selling. In addition, unlike the physical world, it is known exactly how many units sold as opposed to only knowing how many were shipped. Despite these innovations, the industry is still bottlenecked, only this time it stems not from the inefficiencies and costs found in the physical world but from the clash of technology, the value of a song and copyright law. In the old school physical model, record labels pre-cleared all licenses and made all the copyright royalty payments; Sandy Records’ job was to simply pay distributors for each CD sold, not pay copyright owners. In the new digital music world, on-line stores need to negotiate multiple licenses and directly administer payments to copyright holders. With this need, stores traded hiring people to work in sales and shipping to hiring teams of lawyers, financial administrators, software engineers and database administrators. Despite the, hundreds of millions, if not billions of dollars, being invested into this new model, one cannot circumvent the basic notion of the value of the copyright to a song and the recording of that song. To get your head around the issues, some background is needed on copyright. Here are the quick basics: There are two copyrights to every recorded song–a©anda(p)Asanexample, Paul Kelly wrote the song “To Her Door'”. Triple J hires Clare Bowditch to sing Paul’s song “To Her Door'. ” When they are done, there is a recording of Paul’s song that Triple J hired Clare to sing. The actual recording of Clare singing Paul’s song is controlled by Triple J – this is the (p) it stands for “Phonogram.” The song itself is owned by Paul, this is the © – it stands for “Copyright.” If you are both the songwriter and the performer, it’s important to imagine yourself split in two; one of you controls the © (the “you” that wrote the song) and the other “you” controls the (p) (the “you” that owns the recording of the song). As the owner of these copyrights there are a whole bunch of laws in place that allow you to make money. These laws also set the rules that others must follow in order to distribute, stream and sell your song(s) or recordings of your song(s). These are the six legal copyrights that state that your song has monetary value and these rights drive the entire music industry. Be back with us in July as Mike takes you further into the complex industry of publishing, selling, recording and performing, and all the aspects of the inside of the music industry. Mike’s Music Gumbo Mike’s meandering mind of music mumbo jumbo reviews of the nation’s live music mayhem and events. By Mike Williamson