[Music1234]

Michael, Just curious to learn your opinion. How does one “adapt” to music licensing models where the offer will soon be “Unlimited downloads for .49 cents a month.”

I guarantee you some “investor group” out there is already plotting “Man if we can just get 1,000,000 customers giving us $6 bucks a year (6 million in annual revenue) for our UNLIMITED DOWNLOAD music catalog, we’ll be able to make a $2,000,000 profit by 2021.”

The game has shifted to just grabbing market share by any means. The undercutting will continue until it hits fractions of cents being paid for a single download. I’ve heard (from people who manage the catalogs and digital inventory on music licensing subscription sites) that the revenue earned averages about .05 to .25 cents being paid to the original creator per download.

The only bright spot I see is PRO’s still set rates of pay for broadcast performance royalties, and those rates will remain fair. I do not see a bright future for direct licensing on stock music sites because the price of a music file just seems to go lower and lower by the minute.

[Music1234]

@Kevinjohnston1

Think about the offering to a customer: Customer pays $200 a year, and can download EVERYTHING in the catalog, use the music royalty free, and even in broadcast, and IN PERPETUITY. Well at least some sites allow broadcast usage in this model.

Now compare that to the “normal” direct license model: Pay typically a $15 to $100 license fee and be able to use the ONE TRACK, for a video project.

If you were a customer, which plan would you chose?

If you were a music producer, which model would you rather be compensated in and where do you think you can earn the most?

More facts: It is an absolute fact that some of the top selling music producers on stock music sites can and have earned $20,000 a month from 2013 through 2018 under the normal “one sync license sold at a time” business model. I saw the data with my very own eyes. So did everyone else.

I talk to and email back and forth with a lot of colleagues in the music licensing business and from what I am hearing no one is coming close to those numbers in a subscription model.

Additionally, the only way to really know for sure what this type of model is all about and what can be earned I too have taken a baby step with that model and I have put about 10 tracks in there. Here are the earnings for those tracks last period. I have no information as to who downloaded the tracks? what the end usage is? nor do I I know how many times the tracks were downloaded. The model is 100% non transparent and allows all companies offering this kind of service to be overtly corrupt. There is 0 accountability.
1 $15.38
2 $0.69
3 $1.38
4 $6.54
5 $4.83
6 $3.83
7 $3.96
8 $7.15
9 $1.36
10 $1.66

Now in the “normal” sync fee business model I typically see a sea of $25 to $100 sync fees on my monthly statements.

So I can conclude that these models are devaluing production music and it’s earning potential by 70% to 90%.

I can understand selling annual subscriptions (that allow unlimited downloads) for $1000 to $2000 a year, But $200 a year is absolute insanity. But hey, many composers are on board. Music producers are willingly supporting this massive devaluation of music assets. Venture capitalist money is behind these business models and let me tell you I know some of these hedge fund investor type guys and they are in this for one reason and one reason only: to exploit musicians, and profit from it as quickly as possible. They have one goal only, obtain as many credit cards as possible, grab the $200 annual fee and let each customer download away as much as they want. They could care less about the destructive devaluation they are engaging in. They just want more subscribers signing on as fast as possible.

Here are some more things I have heard through the grapevine. The company in Israel has 40,000 subscribers paying $200 a year which is $8,000,000 in annual subscription revenue. Sounds amazing right….However, if you divide that by perhaps 400 artists to pay, and also include the fact that you have the company staff and their investors to pay, as well as a juicy monthly advertising budget to bring awareness to the marketplace, the earnings potential shrinks very very quickly. My educated guess is that even the most talented writers (some of whom I know and have told me what they actually are earning) may make around $3000 a month. This is small potatoes compared to $20,000 a month and it represents 85% reduction in monthly earnings, Hence it’s a pricing model that devalues production music by 85%.

Time to write to your Senators to regulate this industry. We’re entering another NAPSTER moment. The value of production music is under serious attack.

[Music1234]

The other question here is what exactly makes investors “greedy?”

PM me and I can explain…..I do not know how to PM someone on this site.

[Music1234]

Dropping prices on tracks that have not sold previously has resulted in sales for us.

I sold a few that never sold before too Art, but the strategy did not increase the volume of units sold, so from my perspective price dumping results in lower monthly earnings.

Just who is defining “quality”?

I’d have to say that the buying public define it, but also site curators who also are musicians (we hope at least) define it by curating the music and having taste and intuition based on experience of “what works”.

Just who are these ignorant venture capitalist “investors” you are talking about? How many libraries do they control? Data? What is your solution?

I don’t know these people personally, but from the discussions I have had with some very experienced players in the business both writers, library owners, and employees of some stock music licensing platforms, they all talked about answering to “investors.” When you google search “stock music”, “Production Music” , “Royalty Free Music”…most of those companies showing up on page 1 are backed by hedge funds, venture capitalists, etc. I get the impression that these people tossing millions of dollars at these companies really do not understand music publishing. The policies and business models they have been enacting these past 2 years really seem to be putting all stakeholders involved on a slippery slope. As far as solution goes: well we actually were in a good place when a price floor was put in at $20, but now the policy has changed and we’re seeing a trend of much lower prices. Lower prices result in less revenue. I have verified that because I figured “hey let’s give it a shot”. Well it does not work. AM I crazy? Do lower prices work for anyone? Were customers even complaining about how expensive production music was when the floor was at $20?

Art, I am not initiating a “bitch fest” just trying to create some lively discussion about where we’re headed into the future because it looks pretty dicey to me. It’s also self inflicted. Too many rights are being granted to larger companies for too little money. When a policy is set that a customer can get a track for $5 and the projects’ end usage is national broadcast TV rights in perpetuity, something is wrong. Someone has their eye off the ball. When the data of how a customer intends on using a track is not gathered and shared with the stakeholders (writers and publishers), especially for national and worldwide broadcast tv rights, something is wrong with that policy.

The end user, whether they pay $15 or $100, is just looking for something to get the job done. In the end, it’s just product.

This is exactly my point and it is exactly why everyone should charge a respectable price. Ok so we all know a student film maker needs music as does the casual youtuber. Why not have drop down menus that start the buying process with the question: How do you intend on using this music? When big ad agencies and big brands can get a track for the same price as a student film maker doing a “no budget” film, that’s a problem that needs to be solved. These “investors” setting policy need to step up and solve this problem soon. Using tunesat to spy on and investigate the usage of our intellectual property is getting to be ridiculous. There has to be a better way.

[Music1234]

July through August is one of the slowest times of the year for libraries. Offering deals to motivate sales during slow times is a common marketing strategy

Michael, you are missing my point. My point is that when our customers need a track, they go on a search to find the right track for their project and the price of the track is the last thing they are worried about.

I still believe what I say is true because I have heard so many editors make the statement too. Video editors using our music will buy what they need period. Whether the price is $15 or $199…if they hear and temp in what they need and want, they will buy it. These “sales” are desperate and pointless. Price dumping is pointless and will only result in less monthly revenue for both composers and music licensing platform operators.

If sales are down, it’s because big companies are spending less on media production at this time. Dropping the price of music tracks is not going to motivate companies to increase purchase orders for media production.

Price Dumping and “50% off sales” serves no purpose whatsoever in our business.

In regards to saturation and over supply, that always has been the case and always will be case. Cues that never sell essentially just fall into the garbage bin and are obliterated into ether dust. They essentially are not even inventory any more because they are burried into non-existence within search engines. Frankly, in 2019, why are stock music licensing platforms even holding these irrelevant and dated cues on their servers? Just blast them into non existence and eliminate the inventory that is, for all intents and purposes, “dead content”.

You “win” with quality music and quality service, not with price. You “win” by understanding publishing and how PRO’s pay. You win by gathering the data from clients as to how they intend to use the track? Web only? TV Spot? radio Spot? TV show? Vlog? Podcast? Film? These ignorant venture capitalist “investors” do not understand any of this.

We all want to make money with our music, but if our only goal is making money — and we have no love for what we do — what’s the point?

You folks are implying that there is little money to be made? Then why are venture capitalist investors jumping in this game? They jump in because they see an opportunity to exploit. They succeed at that but they also do it in a manner that from my perspective is just so stupid and foolish and is…well…just a bad business plan. They leave ridiculous amounts of money on the table from overt ignorance and a total lack of knowledge of how music publishing really works.

Selling music is not like selling apparel.

[Music1234]

That’s common sense beatslinger. A Madison avenue ad agency, or a Disney certainly has truck loads of cash to license a piece of music. These kinds of companies also have staff (music supervisors) that understand PRO’s and how publishing works. Venture capitalists do not have a clue about this stuff. They just see a “platform” that they can “scale”. Units sold and Market share seem to be all they are chasing.

It’s time for the pendulum to swing back to a more strict “rights managed” approach especially when all these frivolous law suits are popping up daily. This business of “making it simple, easy, and less complicated” to license music is increasingly a failure. Buy once, use in perpetuity, no strings attached…is a total failure.

You can not treat a student film maker or mom and pop youtube channel the same way you treat medium/ large size ad agencies, TV networks, and post houses in major markets. You also need people in the customer service centers who understand the nuances of: end usage, broadcast territory a track is used in, PRO’s, and how cue sheets and advertising claims really work.

It’s sad, but none of these licensing platforms and their venture capitalist investors (still in 2019) seem to truly understand how the sync license business really works.The only strategy they can come up with is price dumping to grab more market share. Price dumping never works. If your price is lower, well guess what?….your revenue and monthly earnings are lower. It’s that simple.

[Music1234]

Hey Youngrich, who am I to not believe you? Congrats on a winning strategy. I wish I knew your short cuts because for me, I have been grinding away at this for 2 1/2 decades and I have only earned through good old fashion hard work.

I actually believe anything is possible. Let’s all tone down the pessimism and doubt and let this discussion continue because in this business anything is possible and clearly all of us have seen stranger things happen where suddenly a lot of money comes falling down out of no where (Don’t we all love those moments!)

By “distribution costs” – I am talking about the time involved in either:
A. Self Uploading music tracks to stock sites (direct license models) or
B. Submitting music to publishers who then distribute to multiple overseas publishers and register all titles at PRO’s.

It takes me and others a lot of time to do those tasks and yes I too at times employ people to handle that admin work for me and no I am not using free interns to do those tasks. You personally may work 1 hour a day on your model, but still just managing the inflow of music from 70 writers takes time so clearly you have an employee who is working for you. Or perhaps you do not?

I have one final question: if you don’t own a library, do you just distribute the music of 70 writers to another Library/ Publisher?

[Music1234]

Hey everyone, before we pull out the pessimism weapons and trash Youngrichyrich’s claims…let me say that his model does seem reasonable to me from a financial perspective only. If any of us find 70 writers and we are getting 100% pub share of the 15 tracks a year these writers are writing for this publisher, the earnings curve looks about right. BUT, where I am skeptical is the one hour per day effort going into this. Sorry, but just finding and evaluating 20, let alone 70 writers and then fielding submissions from them, publishing them for sale, registering them at PRO’s, writing keywords and descriptions for all releases, requires A LOT more time than 1 hour a day.

If however, the entire process is automated and everyone auto uploads and you do not curate and review the music at all, maybe this kind of model does work for 1 hour per day.

Anyway, @ young and rich and beautiful, if you are a publisher you are off topic. The discussion is about what 1 composer/ writer/ music producer can make from their own efforts writing music and submitting them to libraries, publishers, and do it yourself stock sites.

Finally, certainly you have overhead running such an operation? So while your sales may be 250K this year from the 70 writers/ 1000 track catalog, I am sure you had to spend a good chunk of that $ running a web site and engaging in other marketing and distribution costs. This type of “part time side hustle” where you are only working 1 hour a day seems to not really add up.

For the record, I typically spend 15 hours a week just writing, mixing, and mastering 1 or 2 tracks, but then I spend another 15 hours a week doing admin work: Studying Tunesat detections, filing claims at PRO’s, organizing metadata on spreadsheets, registering new titles at PRO’s, typing e-mails, reading industry news here and other publications, implementing uploads to the sites I sell on or distribute through.

1 hour a day does not get you very far when you are first starting out.

In fact any composer reading this who is just getting started, you better be ready to work non stop for many years writing at least 700 to 1000 tracks to get over 6 figures in earnings and you better write super creative, emotive, catchy, beautiful, powerful, etc. tracks that the market will want and have some decent shelf life.

[Music1234]

@ Youngrichyrich, So you have a stable of writers writing for you and you are taking writer share on each composition/ title? or are you taking publishers share? Are the earnings as “writer? or publisher? or both?

Are the earnings back end only from PRO? or do they include “direct” sync licensing? Blanket fees sold? Advance payments? Streaming from Apple and Spotify, etc….ADREV earnings on youtube? HFA?

To add some flavor to the discussion – In My first 4 years, Back end PRO royalties always exceeded direct licensing earnings, but that then started to shift and eventually direct licensing caught up to PRO earnings and lately they are about the same. Other important yet smaller sources have been Spotify Streaming, HFA royalties.

When you have the asset earnings from several angles, it makes it a lot easier. Typically that situation can only be created if you maintain full control of your catalog. If all writers would just never sign cues over exclusively ever again, we’d all be in a better position to earn more because you then have the ability to put your music where you want to put it creating multiple revenue streams from the exact same asset.

[Music1234]

I didn’t start working with libraries that paid well upfront ($500 or more per track) until about four years into writing full time, and those deals were work for hire, as in, I got the writer’s share of the performance royalties, but no licensing. So in the long run, I started to move away from most of those deals as they felt a bit like fool’s gold.

Could not agree more. I would absolutely never ever hand over my tracks for a lousy $500. Controlling your entire catalog to sell however you want, and wherever you want is the easier road to 6 figures. My earnings trajectory was strikingly similar to Marks. I think a newbie writer can get there but they have to be willing to dedicate 5 to 10 years and write 1000 really good tracks! You have to put in the time.

Thanks for sharing your journey Mark. We’re all still on this journey and I do not look forward to the day when earnings start to drop year of over year. I can deal with stagnation, but I’ll get concerned if I ever see earnings drop year over year. That has not happened yet but one gets a sense that it may happen soon with the disturbing trends we all see. Further devaluation by composers accepting horrible deals out of ignorance and paranoia, too many networks paying blankets, but no PRO – GAC, HGTV, SCRIPPS, ESPN, Big 10 Network, etc. This practice is officially annoying and is just overt theft. I am getting thousands of detections on these networks and never am I paid royalties, but I will protest this soon and just ask these libraries for money. They serve up my music and others, pocket blanket fees ($300 to $1000 an episode, or juicy annual access to the entire catalog for a 1 year blanket license fee), then don’t share any money with the writers. This is bogus and unethical.

What’s even more bizarre is how cue sheets get filed, but the PRO’s don’t pay off them anyway. Something does not add up. Then we all earn .01 cents for streaming on HULU Amazon VOD, and NETFLIX. .00000037 cents a stream…….SAD!

[Music1234]

I pulled the calculator out. I singled out my best royalty line item royalty payment from the internet audiovisual section of my BMI statement to analyze it. BMI seems to be listing stream counts on statements which is pretty interesting.

The reality of streaming royalties is pretty bleak:

I had a :27 second cue on 1 episode of The Voice stream 1,691,000 times. The pay was $10 for those streams. This is 0.000000591 cents per stream on HULU.
The exact same cue paid $70 for the broadcast performance on NBC.

Amazon VOD – an NFL cue that paid $370 for 1 live tv performance on Fox for :25 secs of air time paid $8.35 for 2,113,904 streams

0.00000395 cents per stream

But check this out. I have been reading and also calculating streams on Spotify and what spotify pays…often .0004 cents per stream (on average). If HULU or AMAZON were paying similar rates 1,691,000 streams x .0004 cents would actually = $676!

Future of streaming is not bright. Time for AMAZON, the most profitable company in the world, to pay the F up!

[Music1234]

The biggest problem in my opinion is aggressive price dumping by writers. It’s writers undercutting writers with ridiculously low prices. When you see highly skilled music producers who are the top selling artists on certain sights dumping their prices down to $5…well….that’s just pretty pathetic, and problematic. Again revisit “artists themselves destroy our business” thread. Composers are their own worst enemies.

[Music1234]

Regarding Rocketium and music usage. I asked them how much a music license costs if you use their service to make a video and below was their response:

The music is free to be used. However, if you’d need to monetize your videos, you’d need to use your own tracks.

So, where is the $2 fee coming from?

[Music1234]

If Rocketium is an S Stripe paying subscriber and they charge their video creator clients $2 for a music drop, why would they pass a portion of that $2 music drop fee on? This is why subscription is such a dangerous and slippery slope. It allows companies and individuals to obtain and store a massive supply of music via unlimited downloads to use in perpetuity, and then re-use it, re-package it, and seemingly resell it in creative ways that do not put more money in a music producers pocket. We’re on a road to destructive burning hell if music producers continue to serve up their music in these terrible deals.

Unlimited commercial free streaming (Spotify and Apple, etc) for the personal listening market makes sense, but unlimited DOWNLOADING of the actual non-watermarked wave files will create all kinds of chaos eventually.

[Music1234]

Post a link to the mp3 clips you found in tunesat and someone here can help you determine if it was an advertising spot or a Promo for a show. I have a track running in very heavy rotation in Spain now as a promo.I contacted my USA publisher and copied the tunesat detections data and sent in an mp3 clip. The publisher reached out to the sub publisher in Spain and I should get some royalties eventually I was told. You should hope that this is an actual tv spot. 1800 detections of a TV spot should result in meaningful royalties so it should be worth you spending a few hours building your case and claiming what’s yours.

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