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Monthly Archives: June 2016

Big Tax Break Coming For Recording In New York

Music Tax BreakEverybody likes to save money and saving money on taxes is no exception. That’s why numerous states (like North Carolina and Louisiana) and countries (like Canada) have issued their own versions of a tax break to entertainment companies to lure production to their locations in recent years. Now New York is getting into the act, with a new proposal aimed specifically at music producers.

The Empire State Music Production Tax Credit would provide a 25% tax credit to production companies that create music projects in New York City, and 35% for music produced upstate. This would would cover a variety of production costs, including studio time, instrument and equipment rental fees, engineers, programmers, techs, mixing and mastering services, and even session musician fees. If the tax break is passed (and it looks like it will), the credit would be capped at $25 million per year.

It’s not clear whether this credit replaces or is in addition to the existing Empire State Music and Theatrical Production Tax Credit Program, which is designed to apply mostly to film and television production.

A similar tax break has been an effective way of luring large productions to a particular location in recent years. Louisiana especially has benefited, with many major films produced there in 2014 and 2015 because of the incentive (which has since expired and hasn’t been renewed).

Music is different in that the budgets are small in comparison, even with a major artist, and today most studio costs are absorbed by the producer or artist, if they own a studio. That said, a large tax break could only help the major studios in New York City, which are currently struggling with high real estate prices and a stagnant fee structure.

Basically, if you don’t live in New York already, or aren’t part of a music project with a relatively modest budget, this probably won’t apply to you. That said, it’s nice to know that at least someone in government in New York is looking out for the music community.

June 10, 2016

Get Ready For The Amazon Streaming Music Disruption

Amazon_Prime_Music_logoWith the battle over streaming music leadership raging on between Spotify, Apple Music and YouTube, there’s one major company that’s been lying silently in the weeds waiting for the right time to pounce on an industry increasingly ripe for the picking. Don’t look now, but it may be Amazon that may soon be the one causing the disruption in the music business, and not the other popular contenders.

Amazon’s already a major, but low-profile, mover and shaker in the industry, with reportedly somewhere between 75 million and 90 million yearly subscribers (the company doesn’t release such information, so this is just informed speculation) to its Prime service, and although most of that centers around 2 day merchandise shipping and video delivery, the different types of offerings coming from the Prime Music portion of its service have been growing by the month.

This slow roll-out is happening at a controlled pace, but you get the feeling that the company is learning what works best with each move while not intentionally making a lot of waves as it positions itself to enter the online streaming market full-force.

One recent example of this is when Amazon Music was added to T-Mobile’s Music Freedom data-free music streaming program, which is the first instance of Prime Music being available to off-the-platform users. The move didn’t cause a lot of headlines, but gives the company some experience in rolling out a service beyond its own closed ecosystem.

Step By Step

What might be more an indicator of the ultimate bigger picture is the fact that Amazon recently made it’s Prime Video service available as a stand-alone product for $9 a month. Just adding the ability to purchase the service on a monthly basis is a break from the traditional yearly membership required in the past. Another foreshadowing of the future perhaps?

Then Amazon Launched what amounted to a YouTube Rival with its Amazon Video Direct (AVD), which although it launched with only publishing heavyweights and no record labels, provides an interesting outline of how it will pay content partners, as well as how it will take down videos if copyright infringement occurs. AVD gives partners the option to upload their content to Amazon Prime Video (available to tens of millions of premium tier subscribers), make it available as an add-on subscription through its Streaming Partners Program, offer it as a one-time rental or a one-time purchase, or make it available to all Amazon customers, which is ad-supported like YouTube.

According to Variety, the Prime Video option pays video owners a 15 cents per-hour royalty fee in the US and 6 cents per-hour in other territories, but that appears to cap at $75,000 per year. On top of that, Amazon will also pay partners a 50% royalty of the retail price from one-off purchases and rentals. As with YouTube, Amazon will pay the partner 55% from any ad revenue received. Amazon will also distribute $1 million a month to the makers of the 100 most popular programs viewed by Prime members each month. Regardless of the percentages, providing a roadmap for how content contributors get paid sure looks like Amazon is setting up for something bigger down the road. [Read more on Forbes]

June 8, 2016

What If Google Had Bought Michael Jackson’s Half Of Sony/ATV?

Google Buys Sony/ATV?Word came out over the weekend that Google was a clandestine bidder for Michael Jackson’s half of Sony/ATV Music Publishing, and the news had the music business wiping its collective brow in relief. Had that purchase happened, we might be looking at a very different industry landscape today.

To recap, last March a buy-sell clause was triggered in the agreement between Sony/ATV and the estate of Michael Jackson that allowed either party to buy out the other, which ended in Sony paying around $750 million for the Estate’s 50% ownership in the company.

At the time it seemed inevitable that the negotiation would go that way, although it was rumored that the Jackson Estate actually had a deep pocket investor who could put up the needed cash to take the deal the other way.

What we didn’t know then was that Google was also a buyer in the mix, and you can bet that was a major factor in Sony pushing hard to get the deal done. In retrospect, it’s surprising that it only cost Sony $750 million, in that it’s conceivable that Google’s presence could have easily pushed that figure much higher.

Now think for a second what the ramifications of Google owning part of Sony/ATV would be today. First of all, it would be part owner of the largest music publishing company in the world – one that manages 4 million copyrights of some of music’s biggest publishing moneymakers, like The Beatles, Taylor Swift, Michael Jackson, Ed Sheeran, James Brown, Elvis Presley, Oasis and Eminem.

What do you think would happen when it came time to negotiate the next licensing agreement with YouTube (which Google owns) and Google Play? It stands to reason that Google/Sony would give itself a sweetheart deal in such a situation, right? Imagine how the rest of the industry would have reacted to that one. [Read more on Forbes]

Mastering Engineer Ian Shepherd On My Latest Inner Circle Podcast

Ian ShepherdIan ShepherdIf you take notice I have a lot of mastering engineer’s on my Inner Circle Podcast, and that’s because they’re pretty overlooked, usually keep a low profile, and what they do is generally misunderstood. That said, as you’ve probably heard by now if you listen to the show a lot, they all have great stories and musical depth. This week is no exception as mastering engineer Ian Shepherd joins me for a chat.
 
Ian has been a champion for keeping dynamic range in music, and is the founder of Dynamic Range Day. He’ll explain the pros and cons of keeping some dynamics in your music and how backing off on the loudness can actually be better for the audio quality these days.
In the intro I’ll look at the fact that most videos on Facebook are being watched with the audio turned off, as well as Facebook offering it’s Spatial Workstation virtual reality plugin suite for free.
Remember that you can find the podcast at BobbyOInnerCircle.com, or either on iTunesStitcher, and now Mixcloud and Google Play.
Enjoy the show!
June 6, 2016

7 Social Media Marketing Secrets No One Tells You

social media marketingsocial media marketingSocial media marketing is the lifeblood of artists and bands everywhere since, except for live performances, that’s where your audience is. The problem is that it’s easy to fall for a number of misconceptions about what it can do for you, but that soon becomes very apparent after you’ve spent some time actually doing the work involved. If that’s where you’re at, you know that it can be a big job, and you may feel a bit overwhelmed as a result. Here are 7 social media marketing secrets that you probably won’t see anywhere else that hopefully will put your mind at ease when those doubts creep in.

1. Social media has a cost. It’s easy to think that it’s free, and there are thousands of articles online that will tell you that,  but the fact is that you’re paying for it with your time. In order to do this well, you need a strategy to carry it out, and that doesn’t just fall out of the trees – it takes some real effort to create. Plus, if you really want to supercharge your marketing, you’ll find that actually paying to promote it gets much better results, which requires yet another level of strategy and effort.

2. There’s more than one way to do it. If you want some help with your social media marketing, there’s plenty of it online, both for free and paid. That said, be aware that there’s no single one way that works for everyone. In fact, you’ll find that what actually works for you is a blend of different strategies that have worked elsewhere in the past. This is especially true when it comes to the music business, which usually isn’t addressed by the many online marketing gurus out there (this is one of them).

3. Your success depends upon the number of followers you have. When it comes to social marketing, volume is everything. It’s pretty difficult to launch a successful crowdfunding campaign, for instance, unless you already have a pretty decent following to market to. Same goes for Facebook, Twitter, Snapchat, Instagram, YouTube, email lists and just about any other platform of your choosing. Success comes from having followers, and building that list takes time.

4. Social platforms aren’t as effective as your personal platforms. One of the problems with relying on a social platform is that you’re restricted by the terms and conditions of that platform, as well as its layout, format and features. These are things that you can’t change, but can be changed at any time by the platform. Plus, social followings can be deceiving. Facebook, for example, doesn’t even allow you to reach more than 3% of your followers unless you pay for it! The online presence that you can control is your website, which is still the best contact point for people to discover the real meat and potatoes about you and your music. Next is your email list and newsletter, which is still #1 when it comes to fan communication, even though the concept feels dated to many.

5. The social world is constantly changing. Don’t get too comfortable with anything that you’re doing because guaranteed it’s going to change by next year. What’s working great on one platform today is going to be outdated really soon as both the platform and its audience evolves. Maybe your audience loved Facebook 6 months ago, but today it’s on to Instagram, and in 18 months from now, who knows? You have to constantly stay up on the latest as much as you can and adapt your marketing as needed to keep up.

6. You can’t be everywhere. It would be nice to be on Facebook, Twitter, Snapchat, Instagram, YouTube, Blab, Periscope, Ning, and any of the other top 50 social platforms, but the fact of the matter is that you need time to do what you do best, which is make music. It’s too easy to get burned out with the full time job that can be social marketing. And the fact that you have to constantly adapt to the various platform changes means that when it comes down to it, you’re better off to select a few where most of your fans hang out, and concentrate on those. Then at least you’ll have a fighting chance of keeping up without burning out in the process.

7. You won’t always get it right. You’ll get really good at one or two platforms, and just float along on any others that use for marketing. Don’t kick yourself – release the regrets, that’s just the way it is. Unless you can employ a team with specialists for each platform, you’re going to lag behind on some of them. Don’t beat yourself up – it’s happens to everyone.

While this post is more about the big picture outlook of social media marketing more than the nuts and bolts, it’s designed to put your mind at ease when you discover that you’re falling behind. Just take a step back and take a deep breath. If you’re doing at least some social marketing every day, you’re doing fine. If you don’t feel at least a little overwhelmed, then it’s time to worry.

The Music Industry’s Big Data Problem

Big DataOne of the hopes that digital music brought was for a faster and more accurate way for everyone in the food chain to get paid. That sounds good on paper, but unfortunately hasn’t quite panned out the way anyone in the industry expected. While it’s true that it’s easy to count online sales and downloads in the digital realm as well as streams and views, digital accounting lags far behind the expectations of artist, label or publisher alike. But now, music’s big data problem is beginning to be changed thanks to the efforts of companies like Kobalt Music and DistroKid, a trend that hopefully will be adopted by the rest of the industry at some point.

One of the major problems in the current world of music big data has been that although the streaming services could provide accurate info to labels and publishers, it came in a format that was incompatible with their accounting systems. That meant that all those reams of data (more than ever, thanks to the services ability to granularly collect everything)  was delivered in stacks of hard copy, which then had to be manually input into the label or publisher’s system. And of course, the problem was that the person doing the inputting was often an intern or a low-on-the-totem pole employee who was not equipped to deal with some of the more complex decisions that would come up in the course of inputing, which lead to inaccurate statements for artists and songwriters. And let’s not forget the inevitable human error that goes along with manual data entry that didn’t help matters.

This is a problem that continues to plague the majority of the industry every quarter, and in some cases, every month. In fact, many publishers secretly complain that the cost of the manual labor involved exceeds their revenue in many cases. Still, it’s their fiduciary duty to carry on despite these difficulties.

Now to be fair, accounting software systems are expensive, usually custom designed, and take a very long time to both implement and overcome their inevitable growing pains. While changing to something that’s more digitally compatible is in everyone’s best interest, it’s still a painful process, both financially and morale-wise. It’s not a remodel, it’s almost a full tear-down and rebuild.

However there is a light at the end of the tunnel. A few years ago Kobalt Music, lead by Swedish entrepreneur Willard Ahdritz, launched the Kobalt Portal, the first online dashboard that Kobalt artists and songwriters could use to discover their earnings in a timely fashion. In fact, the portal has now been turbocharged so it can even report in real-time, an innovation that has attracted over 8,000 artists and songwriters to the service, including such heavyweights as Paul McCartney, Prince, Gwen Stefani, Bob Dylan, Tiesto and Kelly Clarkson, among many others. [Read more on Forbes…]

Electronic Dance Music Still Has Room For Growth Despite Predictions

Andy_Moor_DJ_2010Andy_Moor_DJ_2010It wasn’t that long ago when it looked like electronic dance music, or EDM, might be the savior of the music business, thanks to an impressive growth rate of 54% over the course of just three years. With overall CD and download sales slowing down, and streaming paid subscribers not increasing as fast as the industry expected, EDM looked like it was the record label’s shining star when it came to fertile new sales ground. The problem is, in the last year, the upswing has slowed to just 3.5%, but that doesn’t mean there still isn’t room for growth in the genre.

According to the IMS Business Report 2016, total EDM sales went from $4.5 billion in 2012/13 to $6.9 billion in 2014/15. In the past year, that growth slowed by quite a bit, increasing by just $200 million, which has a many in the music industry thinking doom and gloom again.

That outlook may be a bit premature, however, because even though the U.S. market seems to have matured, other high-potential markets are only now in the early stages of development. Cuba, South America, Vietnam, the Philippines, and China have all seen huge electronic dance music festivals and clubs launched this year alone. In fact, nine clubs out of 20 new entries into the DJ Mag Top 100 Clubs are in Asia, with four in China, and three in Jakarta. Even a club from the UAE was listed.

One of the reasons for all the optimism comes from the fact that out of all genres of music (and there are a lot), electronic dance music is one of the most transportable. Since it’s mostly instrumental (even if there’s a vocal, the lyrics often don’t play a big part in song), there’s no language barrier between countries as a result. This means that even when the genre has topped out in the major developed countries, growth can still continue in smaller and upstart markets, sort of like what happened with American jazz music of the 1950s and 60s.

While it might seem like most of the revenue growth is coming from live events, that’s not entirely true. Song streams and downloads play a significant part of the genre’s revenue makeup.

For instance, streams increased 33% in the U.S. last year to 15 billion, although that figure is somewhat tempered by the fact that album and digital track sales and genre market share fell. In the UK, however, streaming growth grew at a faster rate than any other genre in 2015, and EDM remained in the top three formats in terms of sales there. In France, a third of the radio stations dedicated more than 10% of their output to Dance tracks in Q1 2015, showing the format is alive and well there too. In fact, Europe in general loves the genre, since figures indicate that at least 1 in 7 people have recently attended an EDM event. [Read more on Forbes]

(Photo: Andymoore1980 via WikiPedia)