2008 was the first full year for KnowTheMusicBiz.com. We are extremely grateful to all the music business professionals and artists who shared their experience, advice and insight with our community.  Below is a summary of the most read articles on the site during 2008 by section.

Biz Blog – Business View

1. The $52.45 Music Marketing Plan
2. The What Every Musician Should Know About Digital Distribution series by Peter Wells of TuneCore
3. So You Wanna Be a Rock and Roll Star – Then Listen Now to What I Say by Rob Miller of Bloodshot Records
4. So What is a Song? By Terry McBride of Nettwerk Music Group
5. The Necessity of Touring for Independent Musicians by Martin Atkins of Invisible Records

Biz Blog – Artist View

1. What Would John Doe Do? – Drummer Dilemma
2. What Would John Doe Do? – An Unscrupulous Producer
3. The Myths and Truths of Playing the SXSW and CMJ Festivals by David Slade and Collins Kilgore of American Princes.
4. If you Love Something Set it Free by Matthew Ryan
5. Why Don’t You Just Try Making Music? By Steve Wynn

DIY Tips

1. Five Mistakes You Are Probably Making With Your MySpace Page by Andrew Dubber of New Music Strategies
2. Top 6 Facebook Applications for Musicians by Ariel Hyatt of CyberPR
3. Using Facebook to Promote Your Music by Kavit Haria of Inner Rhythm
4. How To Call Attention To Your Music by Derek Sivers, Founder of CD Baby
5. Top 10 Indie Music Marketing Tools by Bruce Houghton of Hypebot

Biz Wiki

1. Licensing and Royalties
2. Recording Contracts
3. Music Publishing
4. Management
5. Record Labels

We are looking forward to sharing more information on the business of independent music with you in 2009!  If there is a specific topic related to the music business you would like to learn more about please let us know.

Like almost everything else in the music business, it seems the ways artists earn royalties and actually get paid is confusing and a bit of a mystery. Below is an overview of how the typical royalty streams for musicians are earned, collected and paid in the music business.

Before we get into the specifics of royalties it’s important to understand the difference between a songwriter and a recording artist since royalties for each are often times different.

A Songwriter is typically the person (or people) who write a song’s lyrics and melody. A catchy guitar rift doesn’t entitle the guitar player to any songwriter royalties unless that person is also credited with contributing lyrics or melody to the song. Ultimately, the people who receive songwriter royalties are the ones that are listed as a songwriter when the song is registered with the US Copyright Office . The majority of royalties in the music business are paid to songwriters. It’s much more viable for a songwriter to build a long-term career in music than it is for a drummer or guitar player who doesn’t write lyrics or melodies.

The Recording  Artist  is the entity collectively considered “The Band”. This usually includes all members of the band. For example, all the members a band like The Arcade Fire would be considered the “recording artist” for royalty calculations purposes. Recording artist can also mean a solo artist.  Even though an artist like Pete Yorn is backed by session musicians in the studio during a recording session, the session players are not usually entitled to recording artist royalties. In this example, Pete Yorn would be considered the “recording artist” for royalty calculations.

Now, let’s take a look at the different types of music business royalties.

Royalties from Sales - Royalties from sales are royalties paid by the record company to the recording artist based on sales from their music. These royalties are typically based on a percentage of sales, 10% for example. The calculations used for determining royalties from sales can be quite complex and are a negotiated as part of the artist’s overall recording contract with the record company. Payments of royalties from sales to the recording artists do not start until the record company has recouped all the expenses they incurred for making, promoting and marketing the record. Recoupable expenses can include the costs of recording, producing, mastering, manufacturing, promoting and marketing the record, tour support, video production and any other related expenses the label includes as part of the recording contract.

It is quite common for a recording artist to never receive royalties from sales (unless, of course, their record is a huge hit) due to the way royalties from sales are structured and the high costs for the record label of getting a new record to market.

Mechanical Royalties - Mechanical Royalties are paid to the songwriter by the record company for the right to reproduce songs for public distribution. Mechanical royalties are paid on a per song basis for physical sales (CD’s, Albums) and permanent digital downloads (iTunes). Mechanical royalties are determined by multiplying the mechanical rate by the number of tracks on each record or CD that is sold. As of January 1, 2006 the statutory rate is 9.10 cents for a composition five minutes or less in length. For example, a record with 12 tracks on it that sells 50,000 copies would generate $54,600.00 in mechanical royalties (12 tracks X $.0910 X 50,000 sold copies) that the record company would have pay to the songwriter. In the US mechanical royalties are collected and distributed by The Harry Fox Agency .

Earlier this year an agreement was reached for limited download and interactive streaming services to pay a mechanical royalty of 10.5 percent of their revenue, less any amounts owed for performance royalties. It is currently unclear how the calculation for paying songwriters from these revenues will be calculated.

Mechanical royalty payments are typically not reliant on the record label recouping their expenses from recording, producing or marketing the record like royalties from sales.

Public Performance Royalties – Public performance royalties are paid to songwriters for use of their songs by radio stations, restaurants, bars, TV / cable networks, retailers, online services or any other establishment that plays / streams licensed music heard by the general public. These royalties are collected and distributed in the US by the major performing rights organizations, ASCAP , BMI or SESAC . Public performance royalties are calculated using several variables and not on a per play basis. Songwriters should register their works online with one of the performing rights organizations in order to receive royalties for their work. However, it’s common for songwriters to not receive any public performance royalties until their song is publicly performed heavily.

Digital Performance Royalties – Digital Performance Royalties are paid to recording artists and copyright holders (usually the record label if there is one involved) when their sound recordings are performed on digital cable and satellite television, music, internet and satellite radio providers. SoundExchange collects and distributes digital performance royalties on a pay per play basis. Recording artists and copyright holders should register their work online with SoundExchange to receive royalties for their work.

Synchronization Royalties – Synchronization Royalties must be paid for a song to be used or “synchronized” with a movie, TV show, commercial or video. Synchronization royalties are usually paid in two parts. First, the copyright holder (usually the record label if there is one involved) is paid a fee for use of the song. Second, since the song will be publicly performed as part of a movie, TV show, commercial or video a public performance royalty must be paid to the songwriter through their performance royalty organization of record. Fees for synchronization range widely and are usually negotiated with the producer of the movie or TV show.

Print Music Royalties - Print Music royalties are paid to songwriters based on sales of printed sheet music. Royalties are typically 10% of the retail price of the sheet music.

Please keep in mind that royalty calculations can be very complex and for the sake of brevity this is only a broad brush overview of how royalties are generally structured without getting into the nuances of copyrights or music publishing . For more information on royalties be sure to check out our wiki section on the topic .

Martin Atkins has a 30 year career in the music business that includes touring with the bands Public Image Limited, Killing Joke, Ministry, Nine Inch Nails and Pigface, owning an independent record label celebrating its 20thanniversary with over 350 releases, and is an instructor at Columbia College Chicago teaching The Business of Touring, Applied Marketing, and Indie Label Management. He is also the author of the book Tour:Smart.

With all the advances in technology, does anyone have to leave their basement or their bedroom anymore?  We can play interactive games with people all over the world, have Peapod or Amazon deliver our food, our diapers, or our intellectual nourishment in the form of books (if we’re “old school”) or via Kindle if we’re not.  We can have phone sex, cyber sex, and stimulate the senses downloading movies sitting in an aroma therapy massage chair separated from the life of a space station astronaut by only the absence an aluminum pouch of freeze-dried strawberries.  We can plug in Rock Band 2 and tour the world without the mysteries of two day old crusty vomit in only our left ear (suggestions on a postcard please!), gig lag, jet lag, five days of not showering, ten days of not eating anything healthy, losing money, or fear.  We can do all of this without the problems, smells, or tastes of reality getting in the way. 

You don’t need to form a band to have drums, violin, sitar, gamelan gong, the church of St. Martin’s in the Fields all male choir, mellotron, guitar, bass, or harpsichord on your album.  And whilst the sound, the tonal quality, the broad range of the digital spectrum, and the timbre might be better than the lame recording of violin or drums you can manage to do at home (more about that later), the thing that is missing from the recordings is the bass player needling you about the lyrics and the push and pull of a joint mindset that gets you thinking outside of your little box and gets brain cells working.  When you don’t disturb the neighbors recording drums it robs you of the knock on the door one year later when your neighbor says, “You’re getting a lot better.  Here’s a bacon sandwich.  Let me know when your band is playing somewhere, I feel like I know the songs already.” 

Some of that, more than a scientific disassembly of the recording, is the essence of what being in a band is about.  Of course, you don’t have to do this, but some people do.  It’s all the journeys, adventures, and interactions with people, machines, and inner-strength that create the band, massively affect the music, and give it an appealing reality.  People in the physical world are more likely to support bands over a longer term, through ups and down.  This isn’t scientifically based, it’s just conjecture that the nature of the internet is driven by A.D.D. skipping which makes a blimp of success quite possible but makes Andy Warhol’s 15 minutes seem like a Rolling Stones’ epic career eternity.  People decide to support bands for so many reasons.  It’s a relationship that will have its ups and downs, difficult periods of experimentation, but enough moments of fulfillment and release to keep the relationship alive and to keep the push and the pull pushing and pulling. 

Remember the fat kid in Greece who was dancing to some disco hit on Youtube?  He was really, really famous around the world for a minute and a half.  There is a backlash to this new direction.  Ever heard of Norman Greenbaum? 

So how do you use all this to help your band?  I pulled some of my favorite parts from Tour:Smart to share with you below – Shoot the dolphin, baby!

The web is the ultimate cool tool enabling instant and direct communication between artist and audience without the filters of label, radio station, or record store. But... the easier the communication, the shorter the shelf life. It’s easy to be the flavor of the day or the minute, but much harder to be the flavor of the year. For that, you need to use the web as one of many tools at your disposal. In addition to staying on top of and enhancing traffic to your own web site using key words, cost-per-click advertising, banner exchanges, MySpace, YouTube, Facebook, blogs, and message boards, etc., there are many other things that you can do to maximize your presence on the web in an innovative way to solidify your transient base. Make no mistake, the web alone is very powerful, but it is in conjunction with physical world strategies that it is the most potent.

It’s all about content, content, content. Type, blog, video yourself blogging, blog yourself filming, write about the experience of filming yourself while you blog, make a sculpture celebrating the event, and then film it’s destruction on the first anniversary of its creation and write about how that makes you feel. You have to move between the web world and the real world. Gracefully, effortlessly, you have to shoot the (pretend, inflatable) dolphin! With the ocean as the web, the air representing the physical world, and the dolphin as the delivery method, the object of the game is to shoot as many information darts into the dolphin before he disappears below the surface. The more darts, the more people with high-powered rifles you can add to your team. So the next time he surfaces, you can pepper his shiny body with hundreds more message darts, until the dolphin is an unrecognizable message porcupine and the ocean runs red with your marketing genius… OK? 

A quick update on what I’m involved in right now.  I’m finishing up Band:Smart– the more band-centric sequel to Tour:Smart.  You can go to my SuicideGirls column where I’m conducting "market research" for my new book, Band:Smart.  Fill out the survey HERE . I want to know: What is the ONE THING you wish you could tell a band, a singer, a radio station, etc.? We'll pick some of our favorite responses to include in Band:Smart and we'll send you a free Tour:Smart e-Book if your survey is chosen.  I’m teaching more at Columbia College Chicago.  I’m beta testing a wonderful piece of equipment from PreSonus right now that puts professional recording and a better sound at your live show within reach.  I’m producing great music from China and finishing up the sixth studio album from Pigface which, because I’m a contrary, difficult F***head, is going to be made available on 8 track cartridge .

I’m on the road in 2009 for Tour:Smart .  I’ll be at NAMM in Anaheim January 15 – 18, Florida in February, SXSW in March, and everywhere in between.  Leave a comment if you want me to come to your neck of the woods!

Peace, Love, Respect

Martin Atkins

Randy Chertkow and Jason Feehan are authors of The Indie Band Survival Guide: The Complete Manual For The Do-It-Yourself Musician published by St. Martin's Press/Macmillan in the US and Canada and founders of the open and free musician resource ,IndieBandSurvivalGuide.com. They are also lead members of the horn-powered Chicago indie-pop band Beatnik Turtle . Their latest project is the The DIY Music Manual: How to Record, Promote and Distribute Your Music without a Record Deal  from eBury/Random House in the UK, Europe, and Australia/New Zealand to be released in February 2009.

Of all of the tasks that independent musicians need to take on for themselves, publicity seems to be one of the hardest to tackle. Trying to get other people to talk about their music usually doesn't come naturally to musicians. But the goal is simpler than you may think: publicity is just like creating a snowman. You start it out small, and build it up. Each mention you get helps you get more coverage, and bigger publications. We'll tell you how to grab that first bit of snow, and start rolling.

First, you need to structure your campaigns based on how the media works. This might change how you plan major events for your band so that they are media-friendly, and improve your chances of getting coverage. In the last decade, the media went from a handful of outlets (television channels, radio stations, and publications) to nearly infinite outlets thanks to the Web (blogs, podcasts, email, Twitter). Unfortunately, books about publicity from the pre-net era don't take the new media into account; and, on the flipside, some bands focus entirely on new media because it's easier. Good publicity campaigns combine both, using appropriate techniques for each one.

Second, it helps to stagger your events so that the media gets a steady stream of news from you. This is not just a numbers game, it's a way to build name recognition. Even press releases that don't get you coverage can help you get a future story. You should think long-term since it can take a year of press releases to finally get some coverage.

Perhaps the most misunderstood concept of traditional US media is the lead time. Any feature stories need to be sent at least three months in advance to give them the chance to cover it. For example, if you plan a CD release show, you need to get your CDs replicated months before the show in order to give the media time to review it. 

The traditional media usually requires you to create a formal press release and do some research to figure out where to send it. Although some bands use a physical press kit, publicists we've interviewed tell us that most journalists now prefer email. The only exception is if you need to send a CD. Once you have a press release, you should use press wires to blast your release to journalists browsing for stories. This doesn't always get coverage, however some of them are free so it's worth your time (we maintain a free list of press wires for you at http://indiebandsurvivalguide.com/category/view/PR_Wires ).

The new media is comparatively simpler: they don't want formalities and they crave immediacy. So that CD release show? All it takes is an informal email a week or so before the event. Research (again, http://indiebandsurvivalguide.com/) and personal relationships help here, too, so you know who to target. We suggest reading their recent posts or subscribing to their podcasts. That way when you write them you can mention a recent article or episode in your messages. You might be surprised at how much paying attention to them helps them pay attention to you.

To get started on your publicity campaign, go after smaller press outlets within the traditional and new media with journalists you already know. This is one reason why some musicians use publicists. Publicists don't just sell their skills, they rent you their relationships. If you don't know any yourself, you can develop these relationships on your own. The easiest way is with bloggers or podcasters that you already follow, as they always like to hear from their audience. For traditional journalists, read the journalist's prior articles and learn their personal interests. The traditional route takes time, so we recommend polite persistence -- never give up after sending just one email.

When you get coverage, send a thank you. You're building relationships. With new media coverage, don't forget the currency of the internet: link love. Link back to any site that covers you from your own blog or website. They will be more likely to cover you in the future because they get exposure to your audience -- something that costs you nothing to share.

And then, use the coverage that you get in future press releases and emails, aiming higher. Just like building a snowman.

John Doe is the founder of the seminal Los Angeles punk group X, a solo artist and actor. John answers questions from our community members in the WWJDD? blog. Photo by Autumn de Wilde.

Hi John,
My question is in regards to management. When would you say is the
right time to seek out management? As a solo pop singer/songwriter,
seeking out a manager or talent agent seems like a great way to get my
music into the hands of those in the industry which I could not do on my own.
On the other hand, many people suggest that you should manage
yourself as long as possible. What do you think? What are some
qualities I should look for in a management team? Any suggestions?

Best,
Derek Adams
www.myspace.com/derekjadams

Hey Derek,
   I'm not sure what the advantage of managing oneself is accept to save the 10 to 20% in commission that they might charge.  BUT if there are other reasons; write back & I'll address them.  X, The Knitters & myself have had management almost the entire time I've worked in entertainment.  But that never allows you to be unaware of yr business or removed from the other people (record company, booking agent, lawyer, publisher etc.) that you work with.
  Anyone you work with should be someone enough like you that you're proud to have them speak for you & represent you because that's exactly what they're going to do.  You want someone who's organized, honest, knowledgeable & being good company at dinner doesn't hurt.  As powerful or connected as they may be, you don't want some asshole making demands you wouldn't approve of or do yourself if that was yr job.  And in a way it is your job: to make sure you know what's going on & weigh in on most all of the decisions, especially the important ones.  The last quality to look for is someone who's priorities are the same.  Try to match the degree of fame & fortune & reasons & methods to achieve them with you own.  Working with friends is OK especially at the beginning but that doesn't mean that they can slide on any of the qualities that I talked about above.
   Like all relationships it's a great when you find the right person & keep working together to maintain that. I can also say that I've had the good fortune to stay in touch w/ & love almost all the managers that I've worked with. Trust your intuition, I know it's not easy.
 
hope this is some help and as always, thanks for writing.
yrs,
JD
  

If you have questions for John Doe about music, the music business or life feel free to email them to wwjdd@knowthemusicbiz.com.

For more information on John Doe check out theejohndoe.com or YepRoc.com .