MySpace Shares Some Equity Plans. Bands Beware…
Co-founder Chris DeWolfe shared some details of MySpace’s move into music in a Wired interview, but failed to reveal exactly how revenues will be shared with indie labels and offered only bad news for unaffiliated musicians.
When asked if MySpace’s equity sharing would extend to distributors like The Orchard and IODA, DeWolfe said, "We’re open to extending our equity deals to the right partners, but at a certain point, you can’t extend equity to everyone." Does that mean there will be a tiered system with only larger aggregators receiving equity? And is MySpace offering distributors equity like the majors or a just share of ad revenue?
Unaffiliated indies and acts are completely left out. "We don’t really have the mechanism right now to develop an affiliate program or a payout structure for millions and millions of bands," said DeWolfe. If MySpace doesn’t have a mechanism; its because they don’t want one. Thousands of affiliate and revenue sharing programs exist across the net.
Listening Post’s Eliot Van Buskirk suggests, "If you’re an indie artist on MySpace, it’s time to start shopping around for an aggregator…It’s the only way you’re going to re-level the playing field and get the same treatment MySpace accords the major labels." But will a share of equity offset the fees charged by the aggregator? And are they really getting a deal that equals the majors?
And by the way… Hey, MySpace! How much are you charging for downloads and exactly how much of that are you keeping?
Seriously, guys…there’s absolutely NO reason why an indie artist shouldn’t be using TuneCore as their aggregator. It costs (basically) NOTHING. And if they (or their manager) aren’t aware of how TuneCore differs from other aggregators, they probably shouldn’t be selling their music on MySpace anyway.
Nobody should give equity shares to distributors. IODA and The Orchard have contracts to distribute songs, but they don’t own the songs. If indie content owners want a piece of MySpace, if they really want to battle over what will amount to a few pennies and dimes for most of them, they shouldn’t use a few select distributors as a conduit.
I agree Glenn, but it appears that’s the way MySpace wants it.
I agree TalentFilter, Tunecore may be the answer
I’m probably just a bit slow here, but Tunecore can get your music onto iTunes, Amazon, etc. Do they also get your music onto MySpace Music, or somehow collect royalties from MySpace for the streaming of your songs? Wouldn’t they have to make a deal with MySpace on behalf of their users just like IODA or The Orchard do? Has this happened, and I’m just out of the loop?
I thought that Tunecore was simply a pipeline into digital retailers (not taking any of your rights, nor responsibility for maximizing your sales), and that IODA and The Orchard do more full-service (taking some of your rights, and, supposedly, promoting the music beyond just placing it at retail).
So the fit of one versus the other would depend on each situation,no?
Linda, the assumption is that Tunecore will be able to cut a deal with MySpace around the same time that others do. And how much extra other distributors do for smaller artists and labels is open to debate – and when they do it you almost always pay extra.
So yes, what is best for each band or label is open to debate.
When considering artists’ take, the MySpace equity deal is even more concerning than the blanket licenses being issued by majors. I represent a successful artist who is getting ready to sign a deal with a major and can see no way for equity income to flow through to this band (though we intend to find out details very soon).
With blanket licenses, at least there’s a specific use that generates specific income, however calculated. Getting artists paid for those licenses requires some finagling in the contract but is doable. However, how can any artist get an accounting with an equity deal? The major takes a share of stock in a company that does all sorts of things, with income coming from a variety of activities . . . how can an artist say, I’m entitled to $1,000 of the $10 million you earned on your MySpace shares? Or, more appropriately, how *easy* will it be for the major to say, You’re not entitled to anything.
Sadly, I can see how even activities that might otherwise generate readily identifiable income for artists (e.g., downloads and on-demand streams) will not end up in the artist’s royalty account because that income will come in the form of a dividend or increased stock price.