Friday August 22 2008 |
All about Music Income
Streams, Part I |
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Article by Special Guest,
George Howard
When TuneCore first began,
we called George: few
people understand the
music business as deeply.
George Howard is a
professor of management at
Loyola University, New
Orleans. He is the former
president of Rykodisc, and
founder of Slow River
Records. He is the senior
editor for Artists House
Music, and a board member
and advisor for a number
of companies including
Wolfgang's Vault and
Daytrotter. He has written
two books on the music
business for Berklee
Media. Check out his
personal blog at
www.9giantsteps.com.
All about Income Streams,
Part I
--By George Howard
One thing that’s very
important to get a handle
is the multiple royalty
(income) streams available
to artists. As an artist
in today’s landscape you
must think in terms of
varied sources of revenue.
What many artists don’t
understand is that there
is a HUGE difference in
potential income streams
for the person who writes
the song versus the person
who performs the song.
This article will explain
these differences and
illustrate the first two
multiple streams of
income. Future articles
will explain further
streams.
Concept of the song as a
separate entity from the
performance of the song To
begin to understand how
this works, you must
separate out the
performance (or recorded
version) of the song from
the actual song itself.
Think of it this way,
Frank Sinatra never wrote
any of his songs. He
performed songs written by
lots of different people
on his albums, on his TV
appearances, via radio
broadcast, and in venues,
but he didn’t write any
of the songs. Why is this
important? It’s
important because, every
time Sinatra released a
record, the person (or
people) who wrote the
songs got paid. It’s
important because, every
time Sinatra sang on TV,
the person (or people) who
wrote the songs got paid.
It’s important because
every time one of
Sinatra’s records was
played on the radio, the
person (or people) who
wrote the songs got paid.
It’s important because
when Sinatra was one of
the top-grossing touring
acts in the world, the
person (or people) who
wrote the songs the he
performed on stage got
paid.
Now in some of the
examples above, of course,
Sinatra also got paid. But
what’s crucial to begin
understanding is that
Sinatra got paid for
something completely
different than the
writer(s) of the songs
did. Sinatra got paid for
performing the song, not
writing it. For performing
the song, Sinatra received
a royalty from the label
called an “artist” or
“record” royalty (both
terms are used, they mean
the same thing). This
“artist” royalty is
based on a percentage of
the list price of the
album, while the writer of
the song(s) received what
is called a
“mechanical” royalty
based on the number of
songs the writer has on
the album.
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