As Music 2.0 Gains Traction, How Do Artists Get Paid?
A plethora of new and re-tooled sites are offering free ad supported music via streaming and download. Spiral Frog, Qtrax, imeem, We7, iLike, YouTube and others each offer their own platforms to listen to almost any song or video on
demand and sometimes to even download it.
Each service has made their own unique deals with labels and publishers for compensation. Some pay a fee per play or download. Others share a portion of ad revenue received; and rumors have a new MySpace music service trying to compensate labels with stock options.
But how much of that money will find its way to the artist and how many of these new deals conform with existing label and publishing contracts or the statutory rate legally due songwriters? I don’t know of a single artist contract that mentions stock options or ad revenue as acceptable compensation.
Artist managers are just beginning to question where their share is of large settlements with the original Napster and others. Thus far, however, payments from ad supported services
have not drawn much attention perhaps because they are too small or because the deals too arcane to understand.
The web services are not to blame for pushing the envelope and attempting to offer consumer choice. But just as they always have (eMusic payments are a
recent example) record labels large and small are bending the rules in search of revenue and hoping that artists don’t have the means or motivation to argue with them.
NeoMusicStore offers payment directly on paypal account in real-time, and this is something that will be pushed in the coming version 3
The opportunity lays in the first music online platform that can successfully pass the ad dollar to the indy artists since the majors will simply cry UNRECOUPED and call it a day since they can’t afford to forward any of the revenue down to the artists due to the dwindling of CD sales and the slow down of download sales. I would like to thank this site for bringing this very important issue to the surface because the online content aggregators will make money and the label owners will make money and the only ones starving(outside of the few remaining superstars) are the ones creating the music to begin with. The artist community seriously needs to move collectively on this asap
Hi Bruce,
I think the question you’ve raised here is appropriate as the industry shifts to embrace new revenue models. At We7 we’ve been proud to pay our artists royalty cheques from day one. Last month we moved to automatically paying unsigned artists via Paypal.
Our new deal with Sony BMG means we’re looking forward to developing and strengthening our revenue model with progressive majors too.
I’m looking forward to seeing lots more artists profiting from ad-supported music.
Gareth Reakes – CTO – http://www.We7.com
Great comments everyone.
Gareth can you share what you pay indie artists and others?
Hey Bruce,
As you would expect we keep the financial details between ourselves and our rights owners for multiple reasons but we are very proud of our record to date especially since we treat brand new artists with the same respect as established ones. New artists get paid automatically into their Paypal account each month.
Gareth