It seems the way money flows at a record label is largely a mystery to most artists who haven’t worked in the music industry for an extended period of time. It’s always interesting to lift the veil a bit on an unknown. Let’s take a look at one side of the economics of an indie record label, getting a new release to market. Below is a summary of the actual expenses an indie record label incurred for a new release:

Recording advance: $15,000
Tour support: $2,100
Mastering costs: $934.96
Marketing: $13,433.23
Advertising: $2,067.50
Publicity: $5,153.34
Manufacturing: $16,581.04
Artwork / photos: $200
Misc: $587.71

Total: $56,057.78

Here is an overview of each of the line item in a little more detail:

Recording Advance – The money for the recording advance is used to cover the cost of recording. Including studio rental, mixing, session musicians, sound engineer and producer.

Tour Support – Artists have traditionally sold more overall units when they tour so record labels will often times financially support a tour. Tour support money can help pay some of the expenses of touring such as gas, insurance, hotels, food and supplies.

Mastering – Mastering is a post production process that takes the final mix of the recording, edits minor flaws, adjusts volume and stereo widths, equalizes tracks, etc. It’s usually expected that the person who masters the recording will be different from the person who mixes it so there is typically a separate line item in the budget.

Marketing – The marketing line item is entirely for retail co-op marketing expenses. Co-op marketing dollars are expenses distributors incur from retailers for special product placement, in-store promotions, listening stations or advertising. The amount of co-op marketing dollars the distributor (and ultimately the label) are willing to spend on a new release has a direct correlation to the amount of product the retailer orders.

Advertising – Advertising expenses can include any print, radio and online advertising the record label incurs to promote a new release (outside of retail co-op dollars).

Publicity – It’s fairly common for a record label to hire an independent publicist for a 90 day period to help promote a new release to press, print and online media, bloggers and anyone else who can help influence music fans.

Manufacturing – The manufacturing costs for a CD with jewel case can vary but is still around $1.00 per unit for a distributor or label with measurable volume.

Artwork – The cost of custom creative and / or photos for the release.

Miscellaneous – Just like the name implies this is the catch “everything else” expense category related to a new release. For example, legal fees or video production expenses charged to a new release could end up here.

For this particular release to break even it must generate $70,072.23 in gross sales ($56,057.78 + the 25% fee of sales paid to the distributor ). The typical deductions a distributor takes on sales including return reserves and breakage (to name a few) further impact cash flow on sales back to the record label.

It’s important for artists to fully understand how the basic economics of an indie label work since they will not get paid any royalties from sales until the record label recoups all the expenses incurred in getting the record to market. This is true of both traditional record label agreements and even “50/50” licensing agreements. It is very common for artists to never receive royalties on sales from their record label since many new releases never fully recoup their expenses.

Being signed to a record label is no guarantee of sales success. Artists need to carefully weigh what a record label is going to spend on a new release to determine the level of sales that will be needed to achieve profitability before signing a recording contract. Even though the artist might sell a lower number of units on their own there is a very real chance they can actually earn more money without a record label being involved. 

Most indie record label owners are simply trying to get music they love heard by fans. They aren’t in it for the money. In addition to the above mentioned costs of getting a new release to market they have to cover multiple other expenses such as insurance, rent, payroll, travel and mechanical royalties . Making money as an indie label is no easy task. Needless to say, label owners give it a great deal of consideration before signing a new artist and committing to releasing their music.

It does take a lot of money and resources to get a new release to market. However, real transparency in accounting for these expenses is still largely lacking. Inevitably this leads to conflict between the record label and artist around recoupment of expenses and payment of royalties. Hopefully, as artists better understand the economics of record labels they will be able to make more informed decisions about when it makes sense to sign with a record label and when go it alone.

I’m a firm believer that the longer an artist can manage themselves the better off they will be in the long run. I wrote a blog post last year titled “Build It and The Music Biz Will Come ” I encourage artists to read before rushing out to find a music management “team” early in their career. Once an artist has done all the hard work required to build a dedicated fan base they may want to consider hiring management to help grow and manage their business. Below is an overview of some of the traditional management roles in the music business.

 

Manager

 

Traditionally, managers have spent much of their time getting their clients signed to a record label deal then working with their client’s record labels to coordinate publicity, radio promotions and retail marketing budgets and programs. Today, the desirable skills for a manager in the music industry have changed fairly significantly. Managers need to be specialist in direct to fan relationships, social media, online marketing, licensing and sponsorships. They should be generally knowledgeable in ways artists can be successful with and without a record label.

 

Managers should handle all the artist’s personnel issues with the band and crew members and work with the rest of their management team including the attorney, booking agent, business manager and tour manager as needed.

Managers are typically paid 15% to 20% of the artist’s gross earnings. That means they get paid their percentage on all the artist’s earnings including, royalties, publishing, touring, merchandise, or sponsorships before the artist gets paid. Some managers have multi-year contracts (that can be quite complicated) with the artists they represent and some just work on a handshake.

Attorney

Given the uniqueness and complexities of recording contracts, management agreements, publishing deals, sponsorship or licensing agreements and the various other music business related agreements attorneys can play a critical role in protecting the interests of the artists they represent. The most important thing to look for in an attorney is experience in the music business. Just because someone has a law degree (even from a top school) does not qualify them to adequately represent artists in the music business.

A good attorney with experience in the music business can keep you from making contractual mistakes they have seen that have happen to other artists. Attorneys usually charge by the hour or by retainer (a set monthly fee) and in the music business it’s fairly common for them to charge well established artists a percentage of gross earnings, 5% is typical. 

Business Manager

A business manager is the person or firm that collects monies owned to the artist from royalties, publishing, touring and merchandise sales, pays the bills, band and crew, invests the profits and files the tax returns. They handle the artist’s general accounting related needs, royalty collection & auditing and tour budgeting & reporting. Many good business managers are either CPA’s or employ CPA’s on their staff due to the complexities of the music business accounting and the challenges of dealing with multiple state and international tax jurisdictions that come into play when an artist is on tour. They also handle all financial aspects of the artist’s personal life including insurance, loans, mortgages, investments and estate planning.

 

Business managers typically charge 5% of the artists gross earnings in the music business but some an hourly rate or flat monthly fee. 

 

Booking Agent

Booking Agents play an important role in the success of the artists they represent by planning and booking their tours with promoters and venues. They will make sure you are playing in venues that are known for your genre of music or booked as an opening act for bigger band. Booking agents negotiate the fee structure (guarantee,  % of the door, meals, etc.), determine ticket prices and ticket availability in the market. Thoughtful route planning is critical to the financial success of a tour and a good booking agent should make sure you are not playing in Atlanta one night, Chicago the following night and Jacksonville the next.  Route planning can be a challenge for even a seasoned booking agent due to the large number of competing tours and the limited availability of quality venues in highly desirable markets.

Booking agents typically collect a 50% deposit on the show guarantee from the promoter once the show is booked. They usually charge 10% of the money the band gets paid for the show for their services. For example if the booking agent negotiates a $2000 guarantee for a show, they would collect a $1000 deposit, keep $200 (10% of $2000) then send the band $800. The band or their manager / road manager would collect the balance ($1000 in this example) from the promoter or venue after the show. 

Tour Manager

The Tour Manager handles all the details of life on the road for the artist during a tour. They will arrange transportation, hotels and meals for each stop, make sure the equipment is accounted for and maintained plus manage the crew. The tour manager makes sure the venue has the stage, sound and lighting set up as requested and that the band is paid per the terms arranged with the booking agent. They manage and safeguard the cash collected while on the road. The Tour Manager will work with the tour publicist to make sure the artist shows up on time for scheduled interviews, appearances and promotions in each market. It’s the tour manager who puts out all the inevitable fires that come up at each stop during the tour.

The tour manager is also responsible for maintaining the tour plan and budget set up by the manager, business manager and booking agent. They are typically paid a salary, per diem or a set amount per tour.

Have you ever found a band (or several) you were convinced would become a success or even be destined to become one of the most popular band on the planet if only other music fans knew they existed? Isn’t it always completely baffling when a band you love doesn’t catch on despite their outstanding talent, songwriting and live shows?

This happened to me many times during my tenure at Yep Roc Records while working with such a great artist roster. In 2004 we had a new release from a band called The Comas I was convinced would be one of the best selling indie rock releases of the year. The Comas are a very talented band and Conductor , based on singer Andy’s Herrod’s breakup with Dawson’s Creek star Michelle Williams , was a great release. Additionally, director Brent Bonacorso created an amazing full length video based on the album that was included as a DVD in the CD’s packaging.

I thought once we executed the publicity plan, music fans of the world would have a new favorite band and Conductor would be sitting at the top of the indie charts.

The label committed fully to this release with new media, publicity, radio promotions, and retail marketing to build awareness; plus, provided a tour support budget to get the band on the road. The band and release were embraced by the media, a few of the successes included:

• An 8 (out of 10) rating from indie tastemaker Pitchfork Media

• Named to Rolling Stone Magazine’s “Top 10 Bands You Haven’t Heard of"

• Magnet Magazine’s # 3 record of the year

• Multiple songs added into the rotation at KEXP plus a featured interview and in studio performance

• Yahoo Music “One to Watch” selection that included an in studio performance and interview plus a full day feature on theYahoo.com homepage

Conductor sold just over 5000 total units despite strong media coverage and all the other things the band and release had going for them. At 5000 units the record was unprofitable for both the label and the band. The Comas moved to Vagrant Records for their next release in hopes of finding greater success. Unfortunately their 2007 release Spells sold even fewer units than Conductor.

How could a great band with a great release and full backing from their label and distributor not be more successful? Unfortuately, for some reason many bands simply don’t catch on with music fans or become a commercial success.

I have come to the realization over the years that there is some type of unseen “X” factor at work for bands that become successful. Some bands hit, some bands don’t and it’s not always clear why. Ask any experienced musician or industry professional and they will most likely tell you the same thing. I’ve taken to calling this “X” factor magic pixie dust since it’s not easily defined and quite elusive. Magic pixie dust isn’t available from a different publicist or found at the newest online music website to be sure.

How do you go about finding this magic pixie dust? No one knows for sure, but I’m of the opinion that it has to find you. The only way to put yourself in a position to be found is to work hard at your craft, play as many live shows as possible, build up your fan base and simply persevere through all the challenges you face every day as an artist pursuing your passion. You never know when a little magic pixie dust might come your way.

The DIY Tips section of KnowTheMusicBiz.com is a collection of useful information and best practices for independent artists aggregated from some of the best music business focused websites and blogs. Any community member can post DIY Tips to the site.

Below is a summary of the most read DIY Tips posts on the site during 2009.

1. Twitter Tips for the Music Industry by Heather McDonald
2. Recording Your Indie Album: a Pre-Production Checklist
3. Musicians, Day Jobs, and Answering the question: "What Do You Do?"
4. Write a Killer Setlist
5. How to Record an Acoustic Guitar
6. How do Non-Musicians Hear Your Music?
7. A Musicians Guide to Promoting On iTunes by Ariel Hyatt
8. The Self-Released Album 101: The Basics by Cameron Mizell
9. Alternative Domain Name Tips For Music Websites, Bands and Labels by Adrian Fusiarski
10. The Art of the Email Contact by Loren Weisman
11. Musician Business Cards by David Hahn
12. How to Write a Band Bio by Heather McDonald
13. Last.fm Guilt by Association by Brian Hazard
14. 7 Truths and Tips On How To Get Gigs And Fill Up Your Touring Schedule by Daniel Kohn
15. Exploring The Digital Music Distribution Jungle by Adrian Fusiarski
16. What I Learned Working at Venues by Cameron Mizell
17. Recording a Demo CD
18. Success at The Merch Table, The First 10 Ideas by Charlie Dahan
19. What You Need to Know about The Music Industry by Heather McDonald
20. Why You Should Start a Blog Today by David Hahn

2009 was the second full year of operations for KnowTheMusicBiz.com. We are extremely grateful to all the music business professionals and artists who shared their experience, advice and insight with our readers.  Below is a summary of the most read blog posts on the site during 2009.

1. Email 101 for Artists, Labels, and Venues by Jed Carlson

2. 10 Online Music Marketing Priorities by David Rose

3. Fan List Basics for Musicians by Noah Dinkin

4. What Would John Doe Do? - Music Biz Success Metrics

5. An Overview of Music Business Management by David Rose

6. I Really Dont Want To Get a Regular Job by Jason Isbell

7. SXSW Networking Tips by Martin Atkins

8. Why Bands Should Avoid the Myth of the Rockstar by Nick Fitzsimons

9. Music Business Royalties in the Digital Age by Don Passman

10. The New Website for Indie Artist X by David Rose

11. Do the MySpace Math by Loren Weisman

12. An Overview of Creative Commons Licensing for Music by John P. Strohm

13. Why and How To Get Your Band Touring by Todd Hansen

14. Music as Dumpster Pizza by Rob Miller

15. What I know now I wish I knew when I was getting started in the music business by Chuck Prophet

16. Tips for Getting Your Music Played on KEXP by Kevin Cole

17. Multiple Streams of Musician Income by Cameron Mizell

18. Making Merch So That It Doesnt Break The Bank And Helps To Break The Band by Steve Gerstman

19. The Indie Artist X Project - Artist Website by David Rose

20. To a Mother Concerned About File-Sharing by David Rose

Thank you for stopping by KnowTheMusicBiz.com. Here's to wishing everyone a successful, prosperous and peaceful 2010!

 

The goal of the Indie Artist X Project is to develop a basic, actionable music marketing plan designed around simple strategy, prioritization of tactics, easy to use tools, and a reasonable budget that can be implemented by any artist who has the inclination to follow it. About.com Music Careers, Artists House Music, Hypebot, KnowTheMusicBiz.com, MusicianWages.com and Revolution Number 3 have banded together to create this community based music marketing plan.  We will be working with one anonymous artist to design and implement this music marketing plan then track and report the actual results over a four month period.

 

Today marks the wrap up date for the 4 month long Indie Artist X Project. I posted a blog at Hypebot today with an overall IAXP wrap up and summary.

The majority of the inquiries and questions I received during the Indie Artist X Project where about the identity of the anonymous artist who was participating in the project and how that artist was selected. Now that the project has officially wrapped up I can finally announce that the artist who participated in the project is Austin Collins from the band Austin Collins and The Rainbirds.

Background

I first stumbled upon Austin and his band by accident at the 2008 South by Southwest Festival. While I was at SXSW I attended a show case event to see a friend of mine’s band play and Austin’s band just happened to come on stage next. I was immediately impressed with the set Austin and the Rainbirds performed. After the show I briefly met the band and picked up a copy of their latest CD, Roses are Black.

Once I got home from SXSW I began listening to all the CD’s I’d brought home with me and after a few listens I decided Roses are Black was a damn fine record. After many, many more listens I decided Roses are Black was my favorite record of 2008.

At the end of the year I was one of the people who blogged about my “Five Favorite Things”  in About.com’s 2008 Music Wrap Up feature. Soon afterwards Austin contacted me to say thank you for mentioning Roses are Black was my favorite release of 2008. ‘I kept Austin’s contact information but we didn’t communicate past his initial email.

SXSW 2009

Two weeks before I was to depart for South by Southwest this past spring I found out my housing plans had fallen through. Anyone who has been to SXSW can tell you there are no hotel rooms available anywhere near Austin, TX two weeks prior to the event.

In an attempt to try and salvage my trip I pulled a list of everyone in my contacts that lived in Austin, TX and sent out an email asking if anyone knew a place where I might be able to crash during SXSW. Almost immediately Austin replied back to my email saying I could stay at his house. Problem solved!

When I arrived in town Austin and I agreed to meet up at the Guitar Town party after the day’s panels had concluded.  I learned several interesting things hanging out with Austin that first night. He has great taste in music, a wide circle of friends, strong interpersonal skills and a degree in Finance from the University of Texas. When I introduced Austin to Rob Miller from Bloodshot Records I was impressed with how easily Austin fell into my conversation with Rob (and didn’t immediately fall all over himself pitching his band).

The Deal

Austin was very interested in getting my take on music marketing and the music business in general and had a lot of good questions. We found it difficult to talk at the evening parties and showcases so we arranged to talk over breakfast on my last day in town. At breakfast we covered a wide range of music business related topics, online marketing, distribution, licensing, etc. while Austin made furious notes of everything we discussed.

I really liked Austin’s music and found him to be very motivated and driven so I made him a deal that morning. I told Austin I would help him pull together a music marketing / music business plan without compensation but I would only put as much effort into building his music career as he was. I have tried to help a few musicians with their business / marketing efforts in the past but always grew frustrated at their lack of follow through and execution.

We setup a Google Docs page to help us get Austin’s marketing efforts organized and to assign key tasks and due dates. I quickly found out that Austin always follows though. I can’t think of a single time that I even casually suggested an idea to Austin he didn’t have it done before our next weekly phone call.

The IAXP is Born

I initially thought I could pull together a fairly comprehensive outline for a music marketing plan easily enough but found it to be a pretty huge task. I started reaching out to other folks I know and respect to get their input on ideas for Austin’s marketing plan.

While talking to Cameron Mizell from MusicianWages.com one day we stumbled upon the idea of blogging about the creation of Austin’s marketing plan and the results it generated.  We discussed the need for Austin’s name to be withheld so it wouldn't provide him with free publicity during the project and in turn skew any results he might see.

After phone calls to some smart, forward thinking, indie focused music business blogging peers the Indie Artist X Project was born. Hopefully a few musicians will find the music marketing plan we created useful in developing their own plan and furthering their own music career.

What’s Next for Mr. Indie Artist X?

As the IAXP was preparing to kick off Austin won the 2009 AirPlay Direct “All Things Americana” artist contest. Austin is using the $35,000 contest prize package to self release his third studio record, due out in February 2010.

Moving forward you can follow Austin’s progress on his website, Facebook and / or Twitter.

The goal of the Indie Artist X Project is to develop a basic, actionable music marketing plan designed around simple strategy, prioritization of tactics, easy to use tools, and a reasonable budget that can be implemented by any artist who has the inclination to follow it. About.com Music Careers, Artists House Music, Hypebot, KnowTheMusicBiz.com, MusicianWages.com and Revolution Number 3 have banded together to create this community based music marketing plan.  We will be working with one anonymous artist to design and implement this music marketing plan then track and report the actual results over a four month period. To keep up with the latest news on the IAXP follow the project on Twitter and Facebook.

 

 

Below are the Indie Artist X Project statistics for the month of September:

 

September Stats:

 

Band Metrics Score:            241 / Silver

Website Unique Visitors:    979

Website Total Visitors:       1187

Website Sales – CD’s:        $0.00

Website Sales – MP3’s:      $14.99

Website Sales – Merch:      $0.00

Fan List:                                774

Live Show Attendance:       215

Live Show Net Sales:          $850.00

Live Show CD Sales:          $240.00

Live Show Merch Sales:     $320.00

Distribution Sales:              $1,340.61

Licensing Royalties:           $0.00

BMI Royalties:                    $305.56

Soundexchange Royalties:  $0.00

MySpace Royalties:             $0.00

 

Some notes about September’s IXAP reporting:

·         Indie Artist X spent much of September in the recording studio so they weren’t able to play many live shows. The new songs sound great but the lack of live shows this month definitely impacted the growth of the fan list, live show revenue and direct-to-fan sales of CD’s and merchandise.

 

·         BMI pays! Indie Artist X received a PRO Royalty check in September from BMI for $305.56. Finding an unexpected check in the mailbox is always a nice surprise.

 

·         Despite regular IAX plays and streams on Pandora, Last.fm, MySpace, iLike and Imeem there are still no royalties reported or paid from Soundexchange.

 

·         The indie label that released IAX’s last two records only pays / reports periodically. In September IAX received a check for $1,340.61 for year to date royalties. Distribution is handled through InGrooves.

 

·         Band Metrics measures activity across several web properties where IAX maintains a presence including iLike, Last.fm, MySpace, Twitter and YouTube. Band Metrics also measures terrestrial radio play but hasn’t picked up any spins to date for IAX. The Band Metrics score for September moved to 241 from 233 in August.

 

·          Direct CD and Merch sales for August were $0.00. The website ecommerce store is not yet set up for CD and merchandise sales since IAX is still waiting on the artwork files from the indie label that released the last two records.

The goal of the Indie Artist X Project is to develop a basic, actionable music marketing plan designed around simple strategy, prioritization of tactics, easy to use tools, and a reasonable budget that can be implemented by any artist who has the inclination to follow it. About.com Music Careers, Artists House Music, Hypebot, KnowTheMusicBiz.com, MusicianWages.com and Revolution Number 3 have banded together to create this community based music marketing plan.  We will be working with one anonymous artist to design and implement this music marketing plan then track and report the actual results over a four month period. To keep up with the latest news on the IAXP follow the project on Twitter and Facebook.

 

Below are the Indie Artist X Project statistics for the month of August:

 

August Stats:

 

Band Metrics Score:          233 / Silver

Website Unique Visitors:    990

Website Total Visitors:       1189

Website Sales – CD’s:        $0.00

Website Sales – MP3’s:      $29.97

Website Sales – Merch:      $0.00

Fan List:                                760

Live Show Attendance:       785

Live Show Net Sales:          $2,590.00

Live Show CD Sales:          $315.00

Live Show Merch Sales:     $530.00

Distribution Sales:               Waiting on Report

Licensing Royalties:             $0.00

BMI Royalties:                      $0.00

Soundexchange Royalties:  $0.00

MySpace Royalties:             $0.00

 

Some notes about August’s IXAP reporting

·         Band Metrics measures activity across several web properties where IAX maintains a presence including iLike, Last.fm, MySpace, Twitter and YouTube. Band Metrics also measures terrestrial radio play but hasn’t picked up any spins to date for IAX. The Band Metrics score for August moved to 233 from 183 in July.

 

·          Direct CD and Merch sales for August were $0.00. The website ecommerce store is not yet set up for CD and merchandise sales since IAX is still waiting on the artwork files from the indie label that released the last two records.

 

·         Distribution for the indie label that released IAX’s last two records is handled through InGrooves. The label has agreed to allow Indie Artist X to work directly with the distributor moving forward but that transition has not yet taken place so we don’t yet have direct reporting access to distribution sales.

 

·         Despite regular IAX plays and streams on Pandora, Last.fm, MySpace, iLike and Imeem there are still no royalties reported or paid from Soundexchange or BMI.

 

 

The goal of the Indie Artist X Project is to develop a basic, actionable music marketing plan designed around simple strategy, prioritization of tactics, easy to use tools, and a reasonable budget that can be implemented by any artist who has the inclination to follow it. About.com Music Careers, Artists House Music, Hypebot, KnowTheMusicBiz.com, MusicianWages.com and Revolution Number 3 have banded together to create this community based music marketing plan.  We will be working with one anonymous artist to design and implement this music marketing plan then track and report the actual results over a four month period. To keep up with the latest news on the IAXP follow the project on Twitter and Facebook.

Below are the Indie Artist X Project statistics for the month of July. Since July is the first month of the project we plan to use these numbers as our baseline. Now the goal is to see if we can implement marketing strategy and tactics that will move all these metrics in a positive direction through the remainder of the project and beyond.

July Stats:

Band Metrics Score:            183 / Bronze

Website Unique Visitors:    355* (10 days only)

Website Total Visitors:        628* (10 days only)

Website Sales – CD’s:        Waiting on Report

Website Sales – MP3’s:      Waiting on Report

Website Sales – Merch:      Waiting on Report

Fan List:                              739

Live Show Attendance:      1120

Live Show Net Sales:          $1650.00

Live Show CD Sales:          $510.00

Live Show Merch Sales:     $460.00

Distribution Sales:               Waiting on Report

Licensing Royalties:             $0.00

BMI Royalties:                      $0.00

Soundexchange Royalties:  $0.00

MySpace Royalties:             $0.00

 

Some notes about July’s IXAP reporting:

• Band Metrics is a relatively new service so it’s not yet entirely clear how to interpret the score of 183. It’s assumed that if the IAXP marketing efforts are successful that the Band Metrics score will increase accordingly.

 

• Indie Artist X launched a new website on July 21^st so we only had 10 days of website traffic data to report during July. The indie label that released IAX’s two previous records hosted and managed the original website and didn’t provide site traffic details to the artist.

 

• The Artist’s indie label also handled direct e-commerce transactions and fulfillment from the artist website and only provided semi-annual reporting so we don’t have any data to report for website sales during July. The label is winding up their operations and has agreed to let IAX handle direct website sales and fulfillment moving forward. Since IAX is now using the Audiolife for ecommerce sales and fulfillment on their website we will have monthly sales figures to report in the upcoming months.

 

• Distribution for the indie label is handled through InGrooves. Again, since the label only provides semi-annual reporting we don’t have distribution sales for report for July. The label has agreed to allow Indie Artist X to work directly with the distributor moving forward so we expect to have more frequent and better distribution sales reporting available in the months ahead.

 

Where are the streaming and online radio royalties?

Many indie artists have long complained about not receiving PRO royalties for terrestrial radio airplay. The census taking methodology the Performance Royalty Organizations (ASCAP, BMI and SEASAC in the US) have traditionally used to track terrestrial radio airplay falls well short of capturing actual plays for individual songs.  In defense of the PRO’s, trying to track actual terrestrial radio airplay for every individual song from every single radio station is no easy task since up until the last few years terrestrial radio stations traditionally used manual, hand written logs to track what songs were played. Given that compiling aggregate terrestrial radio airplay data from hand written logs is all but impossible the census methodology did seem somewhat reasonable, even if it was bound to exclude plays and ultimately royalties for many indie artists.

I am a big fan of the opportunity Internet radio provides for indie artists. However, after reviewing the Indie Artist X statistics from July it’s hard to comprehend why there are simply no royalties from BMI or Soundexchange at all. A quick check of IAX’s profile on Last.fm shows the artist is approaching 4000 plays. I personally hear Indie Artist X’s music daily on my Pandora station. Despite clearly receiving Internet radio airplay, being registered with BMI and Soundexchange and having their most recent record posted on multiple Internet radio stations for the last two years, Indie Artist X has never been paid any royalties for Internet radio airplay or on-demand streaming. Yes, IAX did write the songs and owns the copyright to all their music.

So where are the Internet radio and streaming royalties for Indie Artist X?

Is the problem that Last.fm, Pandora, Imeem, etc. are simply not reporting all their plays to BMI and Soundexchange? Are BMI and Soundexchange collecting royalties from the Internet radio stations but not paying royalties to Indie Artist X? Are the royalty organizations applying the same dated and flawed terrestrial radio census methodology to calculate Internet radio royalties even though the play data for each song is captured electronically and stored in databases by the providers?

These are all troubling questions. Admittedly, I don’t know where the breakdown in this process is occurring.  I’m no copyright attorney or topic expert but I’m operating under the assumption that the copyright law and court rulings that have set current royalty rates are supposed to apply to all artists receiving Internet radio airplay, not just those in the Billboard Top 200.

All of the above mentioned organizations and companies owe their very existence to the songwriters and musicians that create music.  It’s time they figure out how to calculate and pay royalties on a per play basis for all artists. Even a few thousands Internet radio plays deserve compensation.

Despite the very public debate and the tremendous amounts of time and money spent lobbying Congress and the Copyright Royalty Board over Internet radio royalties it appears the Internet radio providers and royalty collection organizations have left Indie Artist X out of the equation.

You might have heard by now that Martin Atkins and partners started a school:  Revolution Number Three (www.revolutionnumberthree.com). Martin Atkins is a regular guest blogger here at KnowTheMusicBiz.com and has a 30 year career in the music business that includes touring with the band s Public Image Limited, Killing Joke, Ministry, Nine Inch Nails and Pigface, owning an independent record label celebrating its 20th anniversary with over 350 releases. He is also the author of the book Tour:Smart.

Our friends Martin and Revolution Number Three provide five week immersion programs where students learn IN the music business, not ABOUT the music business.  It’s hands-on, down and dirty learning in the fast paced, continually evolving, head spinning, cross pollinated, entrepreneurial, groovy as all hell HUB that they are.

Check out this video to get a better idea of what R3’s programs are all about:

On August 21 – August 23 r3 is hosting the Weekend Revolution which is the five week program on speed! In just two and half days they are going to cram your head with as much information as possible to revolutionize the way you think about the business of your art.  The revolution weekend is limited to 30 attendees – guaranteeing hands-on learning and one-on-one time with Martin Atkins and other speakers.

Before you lose your ass, your mind, your relationship, your car, the reason you started in the music biz in the first place, and thousands and thousands of dollars, you can invest $299 on a unique two day immersion seminar with people who have been there, done that, are still doing it, and are teaching it!

In two days you will:
• screen print your own merchandise and promo material
• design simple graphics (logos, t-shirts, and postcards)
• write a bio other people will want to read
• engage your online community in tangible ways
• use audio and visual tools to market yourself and your stuff
• hack xboxes and traditional business models
• launch an actionable plan that you can do yourself!

 Also, Indie Artist X will be participating in the Revolution Weekend! Participants in the program will have the opportunity to hang with the anonymous artist behind our group music marketing project / experiment. 

Click here to register or to learn more about Martin’s upcoming Revolution Weekend. KnowTheMusicBiz.com readers can enter the discount code “martinrocks” and get $50.00 off the cost of attending.