Bobby Owsinski

Author Archives: Bobby Owsinski

U.S. One Of 4 Countries That Doesn’t Pay Artists For Radio Airplay

Car RadioRadio is still a big part of an artist’s success, but did you know that an artist doesn’t get paid for radio airplay in the United States? Songwriters get paid from money collected from broadcasters by ASCAP, BMI or SESAC, but there’s no mechanism in place for an artist to get paid for the same airplay.

As an example, the Righteous Brothers “You’ve Lost That Lovin’ Feeling” is the most played song on the radio ever, with more than 15 million plays since its release in 1964, yet the group never received a dime from all that radio play. The writers (Barry Mann, Cynthia Weil and Phil Spector) got rich, however.

Unbelievably, the U.S. is one of only 4 countries in the world that doesn’t pay artists for radio airplay. More unbelievably, the other 3 are North Korea, Iran and China, none of which are exactly known for their artistic freedom or copyright protections.

So what’s the problem in the U.S.? Lobbyists, to put it simply. The National Association of Broadcasters is very powerful and contributes to many political campaigns, so they’ve always managed to quash any legislation that gets introduced to Congress.

The NAB has always threatened that radio and television stations would go bankrupt and be forced to go off the air if legislation was passed mandating them to pay artists for playing their songs, all while the industry was raking in billions of dollars of profits.

Sadly, this situation won’t change soon, mostly because radio is in a true downswing (especially AM) with advertisers moving their money away from radio to social media instead (streaming platforms do pay artists for airplay, by the way).

Radio still helps break a song as millions of people continue to listen at work and in their cars, but it’s mostly from the top 1% artists or those backed by the major labels. It’s irrelevant to young artists and bands since airplay is out of reach.

While the rates seem low, music streaming is an artists friend, since at least you get paid something. Because unless you’re the writer, you’re not going to see any money from radio airplay. And at least online is a place for a young artist to build an audience, since local radio (once the champion of local music scenes everywhere) barely exists anymore, and many colleges have shed their terrestrial radio stations.

For a deeper look into the subject, check out this article on Medium from CD Baby’s CEO Tracy Maddux.

How Gen Z Is Using Social Media

Gen Z is coming of age and they have a whole different take on communication than the generations before. Gen Z is generally defined with birth years ranging from the mid or late 1990s through the early 2010s or starting from the early 2000s.

Gen Z and social media imageA study by the college marketing insights agency Fluent examined the online active of Gen Zers and found a number of interesting points.

  • Facebook is still the top network for many users. 51% use the platform for keeping in touch with high school friends and family, while 39% used it for keeping in touch with college friends. Gen Zers like the fact that the platform keeps on top of new technical trends like messaging and video.
  • Snapchat and Instagram were used to keep in touch with closer friends, particularly at college. 34 and 35% used Snapchat and Instagram several times a day.
  • They spend their time online looking for content rather than social interaction.
  • 24% sample new apps every month.
  • YouTube is a major destination with 80% of respondents.
  • That said, Facebook has become a major video destination as well for 79% of respondents.
  • 32% watched at least 1 hour of video a day, 30% watched 2 hours a day, and 21% watched 3 hours a day.
  • They cannot live without the following brands in order of popularity: Apple, Samsung, Google, Netflix, YouTube.

Notice that Twitter isn’t a part of the social mix. This goes to show that pictures and video are a big part of the Gen Z lifestyle, so if you’re fan base is in this demographic, this is something to strongly consider in future marketing campaigns.

March 28, 2016

YouTube Says It Pays Plenty Of Royalties

youtube not paying muchMany fingers are being pointed at YouTube for not contributing much to label and artist bank accounts despite the enormous number of streams it generates.

For instance, YouTube claims that it had 50% of the 317 billion streams last year, yet paid only a fraction of what the paid tier from Spotify paid.

How much? We don’t have the exact breakouts, but a combination of YouTube, Soundcloud, and all the ad-supported tiers from all streaming services accounted for $385 million in the U.S. in 2015.

Premium tiers of Spotify, Apple Music, Google Play and others amounted to $1.22 billion last year.

While everyone is disgruntled with YouTube for paying such low rates, its response as been that it’s paid out over $3 billion dollars to the music industry, which is deceiving in that it’s over the services lifetime, not last year.

The fact of the matter is that YouTube is still the go-to service by most people to listen to music, yet it pays the least to artists, songwriters, labels and publishers.

Yet the company has the music industry over a barrel as it holds all the leverage. Whether an artist wants their music there or not, chances are some fan is going to upload it, so it’s always going to be available, and the price is still right at free.

Unfortunately, don’t expect this dynamic to change soon.

The Official RIAA 2015 Statistics Are Out

CDs sold in 2015The RIAA has released its statistics for 2015 and, as always, there are some surprises. The things to remember about the RIAA is that it works for the record labels (especially the majors), so some stats you have to take with a grain of salt. Here are some of the more noteworthy data points.

  • There was a very slight increase in the recorded music part of the business, with revenues of just over $7 billion, for an increase of 0.09%
  • Streaming accounted for more revenue than any other income stream for the first time, accounting for 34.4% of income, while download sales made up 34%, physical sales were 28.8%, and synch were 2.9% of total revenue.
  • Paid subscription revenue increased 52.3% to $1.22 billion, compared to $800.1 million in 2014, while ad-supported streaming revenue increased 30.6 percent to $385.1 million. All very good news!
  • Revenue from CDs, vinyl and DVDs of albums and singles fell another 10.1 percent to $1.9 billion (although that was less than predicted). CDs fell to $1.521 billion from $1.83 billion the year before based on 123 million CDs that were sold last year, which was down from around 143 million in 2014.
  • Vinyl sales continued to soar, generating $423 million from 16.9 million album sales and roughly 500,000 singles, an increase of 31.8 percent.

Here’s the catch – the RIAA’s numbers reflect retail sales, which means that the above numbers don’t reflect how much the labels actually received for their music, although wholesale prices are from 65 to 70%.

Branding For Musicians Quick Overview

Branding For MusiciansLast summer I was a thought-leader at David Cutler’s wonderful SAVVY Musician program at the University of South Carolina, which is basically a mini-MBA program for musicians. The program not only teaches you have to think like an entrepreneur, but produce results as well.

Here’s a brief branding outline that I gave while there, which explains some of the very basic steps that any musician, engineer, producer, or music exec can do to develop your brand.

March 23, 2016

Twitter Can’t Get Young Users

Twitter not for Gen ZIf you’re an artist or in a band then you’re probably on social media to reach your existing fans and to expand your fanbase. There’s a problem though, in that it’s getting a lot harder to do that, especially with the biggest social platforms available.

This is especially evident with Twitter, which still has 320 million monthly users, but most of those seem to be business, sports and celebrity users or journalists. Gen Z and younger millennials are staying away like the plague.

It seems that, unlike Facebook (which they reluctantly use), younger users really don’t have a good reason to use Twitter when other alternatives like Snapchat, Instagram and Kik fulfill their needs in a better way.

Twitter is hard to define and even harder to describe why you need it, but any social network is in trouble if the user doesn’t have any friends on it, as is currently the case with Twitter and the Gen Z and millennial crowd.

Brands are beginning to recognize this as well and spending less on the platform, understanding that it probably won’t be growing much in the future, and that you’re buying current users, not future ones.

That’s why it’s important that you know exactly where your fans are before you invest your time in a social platform. You only have a limited amount of energy and as a result, can’t be everywhere, so go where you can get the most bang for your buck in terms of time invested. If you know that your fans are on Twitter, spend your social capital there, but if more are on Instagram (for instance), that’s where you have to be.

Also, be aware of the ebb and flow of social media platforms, because they change every year both in terms of users and features. What works this year might not work next, and vice versa.

EDM Is Slowing Down

EDM is slowing downWe’ve all seen clubs and restaurants that were white hot for a while and suddenly petered out after the sheen had worn off. That’s what’s happening with EDM at the moment as the scene is slowly winding down on a number of fronts.

Although some big festivals like Ultra Music can still command large crowds, they’re not the instant sellouts that they once were. In fact, many formerly successful festivals like TomorrowWorld have been cancelled this year.

Why is this happening? There are a number of reasons why the scene is said to have peaked (some say back in 2013).

  • For one thing, EDM is a victim of its own success, with entrance, VIP and bottle prices now beyond what the normal fan can handle.
  • There are fewer South American high-rollers to prop the clubs up as unfavorable exchange rates and country economics have kept them at home.
  • Soaring DJ fees (as high as $400,000 per night) have also made it impossible for many clubs to continue.
  • The “show” that most DJ’s put are is basically the same, and is pretty much limited by the genre and environment. People that used to love EDM are now looking for something new.
  • Many are also tired of the house music genre that’s at the heart of EDM.

Both Las Vegas and South Beach, the respective ground zero for the genre, have seen mass club closings in the last year, and SFX Entertainment, who bet heavily on investing in EDM, has declared bankruptcy.

It looks like we’re ready for a new trend. Do you see it on the horizon?

Former Taylor Swift Manager Rick Barker On My Latest Inner Circle Podcast

Rick Barker and Taylor SwiftThis week’s guest on my Inner Circle Podcast is Rick Barker, who helped launch the career of Taylor Swift as her first manager. In the interview, Rick provides an overview of how Taylor became such a huge star, and gives us some insights into how the music business has changed since she hit the scene.

Rick is now is the social media mentor on American Idol, and offers a great Social Media For Music video full of tips and tricks on how to use Facebook, Twitter and YouTube to help you promote your music. Rick is cutting edge in this regard, and taught me a few things I didn’t know myself.

In the intro I’ll take a look at how the record labels are now changing their marketing strategy away from the short product release window to a “continuous loop,” and how the fifth Beatle Sir George Martin changed the finances of the music business.

Remember that you can find the podcast at BobbyOInnerCircle.com, or either on iTunes, Stitcher and now on Mixcloud and Google Play.

March 21, 2016

Labels Adapt To Music Without Sales

Record Label PromotionMajor record labels are are finally coming to grips with the fact that we’re going to be living in a streaming world where any sales are a bonus. That means their strategy is now changing from one of selling product to one of engagement, according to a great article on The Drum.

The article states that there’s now a rethink of how product should be marketed.

Instead of the short “release windows” of the past, labels are coming to realize that the more consumers are listening to an artist’s streams, the more money everyone is making. As a result, the marketing cycles are becoming much longer, creating a “continuous loop” that’s geared to keep people coming back to listen.

This movement is being spearheaded by Sony Music UK, but other labels are slowly adapting the strategy.

Sony began to look at other industries like traditional publishing and hotels to see how both are courting and keeping their customers, then incorporating that strategy to help increase engagement.

This can only be good for artists, who have long suffered from inadequate promotion when a song or album wasn’t an immediate hit.

In the past, there was still a chance that a record could catch fire if a radio station (no matter how obscure) would add the song to its playlist, but in these days of station groups, consultants, and less local radio, that’s more difficult than ever. Plus, radio is less and less relevant when there’s no product to sell, so any new ideas in music marketing is great news for every artist and label in our new Music 4.0 age.