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Epidemic Sound and Production Music Trends
Old 22nd November 2017
  #1
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Epidemic Sound and Production Music Trends

I found this article particularly enlightening. I especially like the part about Epidemic's transparency vs the PRO's. Classic. Read the whole article and let it soak in. There are a LOT of things Epidemic Sound is doing right.

Epidemic Sound gives its side of the Spotify ‘fake artists’ controversy
Old 22nd November 2017
  #2
None of it made sense to me. Clarify?
Old 22nd November 2017
  #3
Mrx
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I have a hard time with Epidemic Sound. From what people have told me they pay their composers peanuts upfront and there's no backend. How can that be good for composers. 50/50 on streaming is fine but unless I've misunderstood their terms then I think they're simply justifying themselves.
Old 22nd November 2017
  #4
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Interesting stuff Vita. I've already had an "outside the normal box" mindset for awhile now.
Old 23rd November 2017
  #5
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It seems that Epidemic Sound is a royalty-free type company, but according to their business model, they just pay upfront to the creator for each track. If you are affiliated with a PRO, you probably won't be able to work with them since they don't work with any PRO.
The Spotify idea is brilliant, I think. On the other hand, I always thought that Spotify was a scam business, so I won't be surprised if they employ companies such as Epidemic Sound to get some royalties back, or as a method to lower the share with publishers and authors.
Old 27th November 2017
  #6
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Epidemic kind of make it seem like they're being innovative by putting their music up on streaming services. Er, isn't that the norm these days? I have stuff with SATV on all the usual places (Spotify etc.), for example.

An interesting article but, let's face it, bearing in mind how Epidemic operate, it's more full of spin than...well, something that spins a lot.

Last edited by JJAM; 27th November 2017 at 10:36 PM..
Old 29th November 2017
  #7
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I've been told that Epidemic had a contract with Channel 5 here in the UK for a while but Channel 5 didn't renew it and went back to other libraries and no longer use Epidemic despite being much cheaper. I've heard it's because editors ran out of good music to use.
Old 29th November 2017
  #8
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Quote:
Originally Posted by Amber View Post
I've been told that Epidemic had a contract with Channel 5 here in the UK for a while but Channel 5 didn't renew it and went back to other libraries and no longer use Epidemic despite being much cheaper. I've heard it's because editors ran out of good music to use.
Must be why they seem to be aggressively looking for new composers. Big libraries can always service network clients better... but at some point these "smaller" companies grow up to control or own a serious amount of content. Should be interesting to see the Epidemic's of the world mature.
Old 29th November 2017
  #9
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Quote:
Originally Posted by Mrx View Post
I have a hard time with Epidemic Sound. From what people have told me they pay their composers peanuts upfront and there's no backend. How can that be good for composers. 50/50 on streaming is fine but unless I've misunderstood their terms then I think they're simply justifying themselves.
Don't know if it's true or not, but the owner said they pay between 1,500 and 2,000£ per song. That's pretty serious money and honestly is most likely the same or more than that composer would have made in any performance royalties. Just the way it is. We're a lot like the record industry in that regard- the one hit pays for the 30 other songs that returned squat.
Old 29th November 2017
  #10
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Quote:
Originally Posted by JJAM View Post
Epidemic kind of make it seem like they're being innovative by putting their music up on streaming services. Er, isn't that the norm these days? I have stuff with SATV on all the usual places (Spotify etc.), for example.

An interesting article but, let's face it, bearing in mind how Epidemic operate, it's more full of spin than...well, something that spins a lot.
I don't think being on Spotify is innovative, but I think being able to land your music in a bunch of playlists is unique. I know of no other library that has done it. And they apparently did it on their own? That's a force to be reckoned with. Even record labels have a hard time pulling it off. They are obviously very proactive about creating revenue streams. For me, that's what is intriguing- they are coming at it from different angles, finding ways to exploit their assets outside this make believe set of parameters that music libraries have set up for themselves. Even a company like audiomicro sees angles and says, why not? Like looking at their assets and recognizing the value of the session tracks... we should make some loops and samples out of these and sell them. A lot of these things seem obvious, but only the new guys that don't "know any better" are doing them.

As far as spin, if a guy can come into an interview where he's being accused of something ugly and come out looking like a stud... well, he's doing something right.
Old 29th November 2017
  #11
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As far as I know you cannot be a PRO member if you want to compose for them..
Old 29th November 2017
  #12
Mrx
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Quote:
Originally Posted by VitaEtMusica View Post
Don't know if it's true or not, but the owner said they pay between 1,500 and 2,000£ per song. That's pretty serious money and honestly is most likely the same or more than that composer would have made in any performance royalties. Just the way it is. We're a lot like the record industry in that regard- the one hit pays for the 30 other songs that returned squat.
I came across these 2 articles. One says they pay an average of $500 per track. The other says between $100-$1000.

http://www.epidemicsound.com/wp-cont...emic_Sound.pdf

Epidemic Sound Takes In $5M To Grow Its Rights-Streamlined Production Music Library | TechCrunch

They say they have 25000 tracks in their library. Even with their $5 million venture capital injection that money won't stretch very far at $500 per track.

They also don't hire composers who are member of a PRO so they've certainly succeeded in creating a system outside the traditional box. Whether it will benefit composers and the industry long term we'll have to see.
Old 29th November 2017
  #13
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Quote:
Originally Posted by oscarproducer View Post
As far as I know you cannot be a PRO member if you want to compose for them..
Right. That makes for a serious uphill battle for good content. You're basically limiting yourself to a pool of amateurs and budding teenagers. Maybe that's all that people need these days? Someone who knows how to throw some loops together, maybe play a bit of piano and guitar. The music on their site is pretty hit and miss, but there's plenty of good stuff to make the whole thing interesting. That would be frustrating to a high end client, but I'm guessing there are a lot of youtubers that either wouldn't mind or don't know the difference. And there a A LOT of youtubers.

*Just listened to a few more genres. Their hip hop category is beyond dismal. Ouch. Same with Film/Orchestral. Sooooo bad. Anyway, at the moment it looks like most of their "top" tracks are written by a small handful of composers. Maybe these guys aren't doing as awesome as I thought!! Hahaha!

They have some nice acoustic and piano stuff, so I see why those are making playlists.
Old 29th November 2017
  #14
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Quote:
Originally Posted by Mrx View Post
I came across these 2 articles. One says they pay an average of $500 per track. The other says between $100-$1000.

http://www.epidemicsound.com/wp-cont...emic_Sound.pdf

Epidemic Sound Takes In $5M To Grow Its Rights-Streamlined Production Music Library | TechCrunch

They say they have 25000 tracks in their library. Even with their $5 million venture capital injection that money won't stretch very far at $500 per track.

They also don't hire composers who are member of a PRO so they've certainly succeeded in creating a system outside the traditional box. Whether it will benefit composers and the industry long term we'll have to see.
Well now, those numbers aren't awesome by any stretch. Maybe he meant to say, we are willing to pay up to 1500-2000 for an incredible, once in a lifetime, you should have never sold this piece of music song.
Old 29th November 2017
  #15
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Vita - why can't they just do buyouts from composers who are associated with a PRO? I don't see what's stopping PRO associated writers from doing a work for hire with them. Am I missing something?
Old 29th November 2017
  #16
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They can do buyouts with US composers I believe, but PRS needs to be able to administer everything and for some reason Epidemic won't work with UK composers. However, I do know a few people who did it, not sure how. I've heard figures from £100 a track to £1,500. I'd be interested in it myself to be honest. But it's have to be closer to £1,500 per track.

It really depends on how long it takes you to full write/produce a quality track. With more stuff going to streaming, I'm not putting as much importance on back end. Let's see how next years PRS statements are.

Last edited by Amber; 30th November 2017 at 04:14 AM..
Old 29th November 2017
  #17
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Quote:
Originally Posted by drBill View Post
Vita - why can't they just do buyouts from composers who are associated with a PRO? I don't see what's stopping PRO associated writers from doing a work for hire with them. Am I missing something?
As Amber says, US composers could do it, but it applies only to things that would air in the US. A US composer signed with a US PRO can't go it solo in foreign countries. The US PRO's have agreements in place with international PRO's saying their writers can't have performances in their countries without it being accounted to a PRO.... Kinda confusing, but basically having music performed publicly without belonging to a PRO is illegal in some countries. Since Epidemic is global, they avoid the whole mess by just saying you can't belong to a PRO. And they can only hire US composers for the same reason. Make sense?
Old 29th November 2017
  #18
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Quote:
Originally Posted by VitaEtMusica View Post
As Amber says, US composers could do it, but it applies only to things that would air in the US. A US composer signed with a US PRO can't go it solo in foreign countries. The US PRO's have agreements in place with international PRO's saying their writers can't have performances in their countries without it being accounted to a PRO.... Kinda confusing, but basically having music performed publicly without belonging to a PRO is illegal in some countries. Since Epidemic is global, they avoid the whole mess by just saying you can't belong to a PRO. And they can only hire US composers for the same reason. Make sense?
Kind of but not really. If a writer turns in a piece under a pseudonym that's not associated with a PRO, I don't see what the problem is. Collect the check from Epidemic, and let them deal with the other issues?
Old 30th November 2017
  #19
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Originally Posted by drBill View Post
Kind of but not really. If a writer turns in a piece under a pseudonym that's not associated with a PRO, I don't see what the problem is. Collect the check from Epidemic, and let them deal with the other issues?
Yeah, you could do that. I guess it's a gray area where guys have to decide if they are going to play by the rules of the PRO or not. Pretty much akin to guys having their wives' name registered with a different PRO so they can always go where the grass is greener per song. It's apparently not a place Epidemic wants to go... at least not in public.
Old 30th November 2017
  #20
Quote:
Originally Posted by VitaEtMusica View Post
As Amber says, US composers could do it, but it applies only to things that would air in the US. A US composer signed with a US PRO can't go it solo in foreign countries. The US PRO's have agreements in place with international PRO's saying their writers can't have performances in their countries without it being accounted to a PRO.... Kinda confusing, but basically having music performed publicly without belonging to a PRO is illegal in some countries. Since Epidemic is global, they avoid the whole mess by just saying you can't belong to a PRO. And they can only hire US composers for the same reason. Make sense?
I honestly think it's because they take the writer and publisher royalties where applicable.

No company can stay in business if it isn't making money... So shelling out $1000 to $2000/track with no backend and no sync split means they are making way more than that on average per track to stay afloat. I have a feeling in countries where PRO registrations are required as well as here in the US where they are doing deals with production companies that end up paying royalties they are pulling a JP and just putting themselves as writers and publisher. Just a hunch/suspicion... but what else are they going to do... they have to list the stuff on the cue sheets.

I personally know composers who have made over $100k in royalties from one track. I see composers who get neighboring rights payments of $20k to $40k with royalty payments for the same track at around $40k frequently... I know one composer who's neighboring rights alone was $80k over a 3 year period!!! To have given up the potential to earn that kind of money for a $1500 guarantee just seems naive to me. Not to mention then you never know what is doing well and what isn't. You just get your check and your done and you never hear about the track again...

Sure it's always a gamble to place your music with any catalog, royalty bearing or not... but to then have no hope whatsoever of cashing in on that risk seems absurd to me. Your tracks could be making $10's of thousands of dollars in royalties and neighboring rights worldwide and you would never know... Epidemic is the one collecting it and keeping it all.
Old 30th November 2017
  #21
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Not many libraries are sharing related rights- I actually don't know of any, but I haven't and don't work with libraries that don't own the master. If Epidemic is paying a respectable upfront, I suppose it's fair to assume they own the master... which isn't any different from most music libraries. Yeah?

And the dude said they are paying composers a share of the streaming revenue. And if you go to their site all songs are listed with composer name right upfront... which more than I can say for most music libraries.

Anyway, obviously there are downsides to what Epidemic is doing, but I guess I'm saying that they are also doing some cool stuff and plowing into areas that traditional libraries haven't thus far. For all we know, they may be opening wide an avenue for a proliferation of streaming performances of library music... as art/artists, not "just" as library music.
Old 30th November 2017
  #22
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Quote:
Originally Posted by oscarproducer View Post
As far as I know you cannot be a PRO member if you want to compose for them..
How does that work? can't you submit tracks that you did'nt register with your PRO?
Old 30th November 2017
  #23
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Originally Posted by boinkeee2000 View Post
How does that work? can't you submit tracks that you did'nt register with your PRO?
Not if you are with PRS, as far as I know.
Old 30th November 2017
  #24
Quote:
Originally Posted by VitaEtMusica View Post
Not many libraries are sharing related rights- I actually don't know of any, but I haven't and don't work with libraries that don't own the master. If Epidemic is paying a respectable upfront, I suppose it's fair to assume they own the master... which isn't any different from most music libraries. Yeah?

And the dude said they are paying composers a share of the streaming revenue. And if you go to their site all songs are listed with composer name right upfront... which more than I can say for most music libraries.

Anyway, obviously there are downsides to what Epidemic is doing, but I guess I'm saying that they are also doing some cool stuff and plowing into areas that traditional libraries haven't thus far. For all we know, they may be opening wide an avenue for a proliferation of streaming performances of library music... as art/artists, not "just" as library music.
I don't really see that... the libraries I work for have been up on Spotify for a few years, they are up on iTunes, Apple Music, etc...DashGo does this for a lot of libraries already.

The problem that Epidemic ran into but won't admit in the article is that they flat out sold the tracks to Spotify and Spotify put new band/artist names on the tracks so that Spotify could offset the payments they are having to make to all labels who have songs prominently placed in the playlists, and funnel some of the money they were paying out back into their own bottom line. I know because my friends at the labels were [email protected]#$ing PISSED at Spotify and were talking about all the labels that have part ownership in the company taking legal action against Daniel Ek and to get him kicked out as CEO!!! It was a HUGE controversy within the record label world.

Spotify pays master rights holders about $4000 for every 1 million streams. That is how Universal Music Group (The record labels, not the publishing side) is making around $3 to $6mil a day from Spotify. But Spotify has yet to be profitable... they are spending all they money they are making to the master rights holders... so to offset that and keep some of the money for themselves, they bought a bunch of tracks from Epidemic and rebranded them as artists with the revenue from those artists being pushed back into Spotify to help keep them afloat.

Epidemic was putting tracks up there for a while and was not doing the 50/50 split at first... But after the scandal and a huge backlash from writers they started doing a 50/50 split on all Spotify revenue... But to be honest, there really isn't a ton of revenue on spotify for library music unless one particular track gets used in something big. The only way to actually make a lot of money on spotify is to get your tracks in one of the top playlists... and to actually get your tracks into the top 5 or 10 spots in the top playlists. occasionally the playlist programmers will pick unknown artists they like and put them in there no different than a radio station programmer will try to break a new song. But just like radio, the playlist programmers are looking for tracks from artists that the listener base can latch on to and follow... you can't really follow library music all that much they way you would follow an artist.

That was the really big controversy... Artists with fake names, who's revenue pay outs looped back around to spotify were all over the top 20~30 spots in each of the top 50 playlists on spotify. The most coveted spots are the top 5 spots in any of the top playlists, because they get played the most. If you have a track in the top 5, you will make millions of dollars. And the labels and others started realizing that there were they completely unknown and lackluster artists interspersed in the playlist, with at least 2 or 3 of the top 5 spots going to these unknown artists. When certain people in the labels and within music publications started to continually notice this, they all started investigating on their own... eventually some of the label people who have ownership stakes in spotify found out that the payments for those fictitious band names (and they were fictitious, nothing even pointed back to Epidemic Music. They were just completely made up band names) were directed back to Spotify. That is where the scandal was/is. And the composers for those Epidemic tracks were NOT getting paid anything, nor was Epidemic (although I wouldn't be surprised if Hoglund worked out a backroom deal with Ek to give some of the money back to Epidemic).

I can say with absolute certainty, because at this last PMC I talked to a few libraries that were putting stuff up on spotify... the revenue is REALLY small. But then I talk to a friend at a label and he tells me they release a new single and it is placed in the 1st spot in one of the top playlists and they are making $2mil a day from all the streams of that one song!!!

Anyway... Epidemic isn't really doing anything new. The fact that they are completely royalty free but will still do deals with royalty bearing networks is very suspect to me... because we can't see what they are asking to have listed on the cue sheets for those shows and those promo spots. Who are they listing as the composer and publisher?

And then they are completely royalty free, but after this whole Spotify debacle they all of a sudden become royalty bearing, giving 50% of Spotify streaming royalties to the composers?!?! I don't know... that just seems very suspect and shady to me.
Old 30th November 2017
  #25
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Quote:
Originally Posted by Etch-A-Sketch View Post
The fact that they are completely royalty free but will still do deals with royalty bearing networks is very suspect to me... because we can't see what they are asking to have listed on the cue sheets for those shows and those promo spots. Who are they listing as the composer and publisher?

And then they are completely royalty free, but after this whole Spotify debacle they all of a sudden become royalty bearing, giving 50% of Spotify streaming royalties to the composers?!?! I don't know... that just seems very suspect and shady to me.
Maybe some of their US composers could figure it out. Stick those songs in Tunesat, then when they get some hits, look up the cue sheets, see if they used the same song title.
Old 30th November 2017
  #26
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Originally Posted by Cruciform View Post
Maybe some of their US composers could figure it out. Stick those songs in Tunesat, then when they get some hits, look up the cue sheets, see if they used the same song title.
But there is no way you can. The only way a composer can see cue sheets is on their ASCAP or BMI portal, and even then you can only see shows that you are listed on the cue sheets directly. I have tons of cue sheets listed in my ASCAP portal. But it's on an episode per episode basis. I only get to see the cue sheets that list me directly as composer. Since Epidemic doesn't want composers affiliated with ASCAP or BMI and therefore does not collect any information about PROs from the composers... the composers of the tracks have no way of seeing any cue sheet information about the shows in their PRO portal.

After you get the tunesat detection, you'd have to have a friend who also has music in the same episode and is registered with ASCAP who can see the cue sheet in his PRO portal, he would then look up that episode and find your use and see how it's listed.
Old 1st December 2017
  #27
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Quote:
Originally Posted by Etch-A-Sketch View Post
But there is no way you can.
OK, fair enough. Here in Australia, using publisher access I can see all cue sheets for all shows, as long as they've been filed.
Old 1st December 2017
  #28
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Quote:
Originally Posted by Etch-A-Sketch View Post
Spotify pays master rights holders about $4000 for every 1 million streams. That is how Universal Music Group (The record labels, not the publishing side) is making around $3 to $6mil a day from Spotify.
That is an interesting figure and caught my attention. Far better to own the Master than the copyright/publishing for streaming via Spotify. Could pan out for a composer that scores an indie hit but keeps all rights - particularly the master.

Thought provoking thread. I've read about some indies that are quite happy with Spotify - Chad Larson comes to mind. (#1 on classical charts.) If you land in those top spots you are off to the races.

Following,
Sam
Old 1st December 2017
  #29
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Quote:
Originally Posted by Etch-A-Sketch View Post
I don't really see that... the libraries I work for have been up on Spotify for a few years, they are up on iTunes, Apple Music, etc...DashGo does this for a lot of libraries already.

The problem that Epidemic ran into but won't admit in the article is that they flat out sold the tracks to Spotify and Spotify put new band/artist names on the tracks so that Spotify could offset the payments they are having to make to all labels who have songs prominently placed in the playlists, and funnel some of the money they were paying out back into their own bottom line. I know because my friends at the labels were [email protected]#$ing PISSED at Spotify and were talking about all the labels that have part ownership in the company taking legal action against Daniel Ek and to get him kicked out as CEO!!! It was a HUGE controversy within the record label world.

Spotify pays master rights holders about $4000 for every 1 million streams. That is how Universal Music Group (The record labels, not the publishing side) is making around $3 to $6mil a day from Spotify. But Spotify has yet to be profitable... they are spending all they money they are making to the master rights holders... so to offset that and keep some of the money for themselves, they bought a bunch of tracks from Epidemic and rebranded them as artists with the revenue from those artists being pushed back into Spotify to help keep them afloat.

Epidemic was putting tracks up there for a while and was not doing the 50/50 split at first... But after the scandal and a huge backlash from writers they started doing a 50/50 split on all Spotify revenue... But to be honest, there really isn't a ton of revenue on spotify for library music unless one particular track gets used in something big. The only way to actually make a lot of money on spotify is to get your tracks in one of the top playlists... and to actually get your tracks into the top 5 or 10 spots in the top playlists. occasionally the playlist programmers will pick unknown artists they like and put them in there no different than a radio station programmer will try to break a new song. But just like radio, the playlist programmers are looking for tracks from artists that the listener base can latch on to and follow... you can't really follow library music all that much they way you would follow an artist.

That was the really big controversy... Artists with fake names, who's revenue pay outs looped back around to spotify were all over the top 20~30 spots in each of the top 50 playlists on spotify. The most coveted spots are the top 5 spots in any of the top playlists, because they get played the most. If you have a track in the top 5, you will make millions of dollars. And the labels and others started realizing that there were they completely unknown and lackluster artists interspersed in the playlist, with at least 2 or 3 of the top 5 spots going to these unknown artists. When certain people in the labels and within music publications started to continually notice this, they all started investigating on their own... eventually some of the label people who have ownership stakes in spotify found out that the payments for those fictitious band names (and they were fictitious, nothing even pointed back to Epidemic Music. They were just completely made up band names) were directed back to Spotify. That is where the scandal was/is. And the composers for those Epidemic tracks were NOT getting paid anything, nor was Epidemic (although I wouldn't be surprised if Hoglund worked out a backroom deal with Ek to give some of the money back to Epidemic).

I can say with absolute certainty, because at this last PMC I talked to a few libraries that were putting stuff up on spotify... the revenue is REALLY small. But then I talk to a friend at a label and he tells me they release a new single and it is placed in the 1st spot in one of the top playlists and they are making $2mil a day from all the streams of that one song!!!

Anyway... Epidemic isn't really doing anything new. The fact that they are completely royalty free but will still do deals with royalty bearing networks is very suspect to me... because we can't see what they are asking to have listed on the cue sheets for those shows and those promo spots. Who are they listing as the composer and publisher?

And then they are completely royalty free, but after this whole Spotify debacle they all of a sudden become royalty bearing, giving 50% of Spotify streaming royalties to the composers?!?! I don't know... that just seems very suspect and shady to me.
1- UMG, as a whole, made $1.56B last year with streaming, which was a pretty huge jump from the prior year. Quarterlies don't show the same growth this year. That is about $4.27M a day from streaming, which is astonishing, but ok. If all of that, or even 75% of that comes from Spotify, UMG is in a very, very precarious place. And if they are relying on one song to account for 50% of that revenue, then they are also in a very precarious place. Your label friend is throwing out some numbers that are not something I would brag about. Putting all your eggs in a basket you own a very small stake in is not smart. I don't think the portrayal of UMG's reliance on Spotify is quite accurate, but maybe it is! Which means Spotify has UMG's nuts in a vice.

2- There's an elitist attitude among record labels to which I don't subscribe. "Fake" artists? You mean like calling Jay Wayne Jenkins "Young Jeezy?" Or Farrokh Bulsara "Freddy Mercury?" So, if music doesn't come from one of their record labels it's fake, right? Not made by reeeaaal artists. Ok.

3- UMG, Warner, EMI and Sony are minority stake holders in Spotify. They can cry all they want, but they don't run the show. But it's their music driving the revenue? Ok, go start your own streaming service. Good luck, Tidal. Welcome back, Taylor! Spotify's pending IPO valuation should be interesting. Basically no one that's looked at the company's books is confident it can turn a profit with the amount they're paying content owners. But say they suddenly had an influx of $20B and paying subscribers had grown to 80 million by then. Well, good luck with your license renegotiation, UMG et al. Spotify Records, anyone?

4- It's not ok for Spotify to fill playlist slots with artist songs that will pay them back in streaming revenue. But it IS ok for labels (who also own part of the company) to fill playlist slots with artist songs that will pay them back in streaming revenue. Furthermore, it's ok for labels to use pay for play services like DigMark to make sure they are at the top of the playlists. Ok. And as far as any record label pointing at Epidemic and scoffing at the fact that they don't pay their artists... That's just plain funny.

Tread carefully, record labels. It's as if their short term memories are blocking out what happened when Netflix and Amazon became cash rich and decided to kick the studios' collective arses with original content. Once a company becomes dominant in the way Spotify is becoming dominant, that company can do whatever the hell it wants. Spotify has already started to sign artists to its own label. UMG and the others can wipe that smug look off their faces, they too are about to get their asses kicked. And for pure karma reasons, and the fact that they call library composers "fake" artists , I think they deserve it.

As far as DashGo and libraries with music everywhere, yeah, we already talked about that above. But, again, Epidemic was the only company that figured out how to make serious money from it. As far as Epidemic artists getting the shaft? They knew what kind of snake that was before they picked it up.
Old 1st December 2017
  #30
Quote:
Originally Posted by Sam Watson View Post
That is an interesting figure and caught my attention. Far better to own the Master than the copyright/publishing for streaming via Spotify. Could pan out for a composer that scores an indie hit but keeps all rights - particularly the master.

Thought provoking thread. I've read about some indies that are quite happy with Spotify - Chad Larson comes to mind. (#1 on classical charts.) If you land in those top spots you are off to the races.

Following,
Sam
The whole reason it happened this way is because Spotify was started by a "dot com" a-hole that knew nothing about the music business. He figured he needed to get the rights to the music so he could stream it on the service... so he went to the labels and started negotiating with them... he never even knew he needed to secure performance rights, not just master use rights... that is why to this day, spotify argues with the courts and the PROs that spotify should be looked at as replacing the purchasing experience and that composers and publishers should be paid their mechanical royalties directly from the labels out of the money the labels make...

That is where the PRO royalty rate for spotify streaming comes from and why it is so insanely low compared to the master use rate...

Spotify, because it screwed up and basically promised all the money to the labels AND then sold a portion of the company to the labels, has no more money to give... so they started to look at the $0.095 per song per album sold mechanical royalty rate... and they said... since we are trying to replace the purchasing experience... the mechanical royalty paid to the composer and publisher should be based off the $0.095 statutory mechanical license rate. So then what they have to do is come up with an estimate of how many times a person would normally listen to a song on an album after they purchased that album... hundreds of times? thousands of times? Well, you need to then take that purchase price mechanical royalty of $0.095/song rate and divide it by the average number of plays the song would typically get after purchase...

$0.095 / 1000 plays = $0.000095 per play.
$0.095 / 600 plays = $0.000158 per play.

(notice these look right around the ballpark for the average PRO royalty per stream?)

and so on... you can tell what the streaming service estimates the average number of plays a consumer would have of a purchased piece of music by taking their per stream royalty rate and multiplying it by $0.095. And because there is no pre-defined number as to the standard number of plays per song purchased set forth by congress... companies can basically make up whatever royalty rate they want for PRO payments...

This is why Dina LaPolt and SONA are suing the federal government to get the laws changed so that a separate commission determines the mechanical royalty rate based on the type of use it is... so then the streaming services can't set their own rates, a separate commission made up of music publishers would.

Anyway... Dina has already started making progress with this... and has already gotten a bill through the house and needs to now get it through the senate.

When this goes through, all of these rates for streaming services are going to change dramatically and composers/writers and publishers will start making decent money from streaming, and record labels will most likely lose a chunk of the money they are getting now.

So while the $4000 per million seems good now and seems to favor master recording copyright holders... it is going to change in the not so distance future hopefully.
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