Kristin Thomson | Future of Music Coalition @Future of Music @Kristinthomson Slides Will Be Posted at Money.Futureofmusic.Org/Ama

HOW THE MONEY songwriters, artists, FLOWS BACK TO publishers & labels

How are musicians and songwriters compensated when their music is played on the radio, sold on digital platforms, webcast, or streamed on interactive services?

For radio and radio-like services, blanket licenses determine who gets paid, and how much.

songwriter C PROs ASCAP, BMI, SESAC publisher performance of composition broadcast radio terrestrial broadcast of any AM or FM station In the US, terrestrial broadcasters do not pay performers or sound recording copyright owners

performance of sound recording

songwriter C PROs ASCAP, BMI, SESAC* publisher performance of composition webcast UMPG and Sony ATV-EMI * At the end of 2012, Universal Music or digital performance C UMPG and Sony ATV-EMI* songwriters Publishing Group and Sony/ATV-EMI pulled their digital rights from ASCAP Pandora • Sirius XM • NPR streaming performance of composition any webcast stations and BMI, seeking to get a higher rate 50% record label by negotiating directly with webcasters. SR SoundExchange 45% performer(s)

5% AFM & SAG-AFTRA Fund background singers digital performance of sound recording and musicians

For digital stores and on-demand streams, Music and how the money flows depends on what entity negotiated the license.

For record labels that have a direct deal with services:

digital sale iTunes • Amazon How the Money Flows Google Play • eMusic 9.1¢ /track publisher songwriter mechanical reproduction of composition SR record label * Rate of payment from label to artist/band sale of sound recording 10-50% artist/band* depends on terms of contract, and whether digital sale is classified as a sale or a license.

0.5% Sound Recording musicians Special Payments Fund # # Labels contribute a small percent of sound recording sales income. If Kristin Thomson | Future of Music Coalition recording was made under the AFM’s recording agreement, payments are disbursed to musicians who were paid big labels songwriter scale wages during the recording session. C PROs ASCAP, BMI, SESAC publisher @future_of_music performance of composition UMPG and Sony ATV-EMI* UMPG and Sony ATV-EMI * At the end of 2012, Universal Music C songwriters Publishing Group and Sony/ATV-EMI performance of composition pulled their digital rights from ASCAP and BMI, seeking to get a higher rate on-demand by negotiating directly with services. @kristinthomson 10.5% publishers songwriter stream minus payment Spotify • Rdio • Rhapsody to PROs streaming mechanical royalty

SR record label * Rate of payment from label to 10-50% licensed use of sound recording artist/band* artist/band depends on terms of contract, and whether digital sale is classified as a sale or a license.

For record labels that are represented by a digital aggregator/distributor:

Wednesday, September 18, 13 digital sale iTunes • Amazon Google Play • eMusic 9.1¢ /track publisher songwriter mechanical reproduction of composition aggregator 85% record label SR IODA/The Orchard * Rate of payment from label to @50% sale of sound recording artist/band* artist/band depends on terms of contract, and whether digital sale is classified as a sale or a license.

indie labels songwriter C PROs ASCAP, BMI, SESAC on-demand performance of composition publisher mechanical licensing 10.5% publisher* songwriter * Services pay streaming mechanical agent or publisher* stream minus payment royalties to big publishers directly, Spotify • Rdio • Rhapsody to PROs streaming mechanical royalty or to a mechanical licensing agent like Harry Fox, Songtrust or Music Reports, which then pay their publisher SR aggregator 85% record label members/clients. Songwriters need to IODA/The Orchard be proactive in seeking out this revenue. licensed use of sound recording 50%+ artist/band

For artists who own their sound recording copyrights and use services like CD Baby or TuneCore:

digital sale iTunes • Amazon 9.1¢ Google Play • eMusic /track publisher songwriter aggregator 91- only relevant if performer recorded + released songs written by others SR 100% artist/band CD Baby or TuneCore sale of sound recording

self-released songwriter C PROs ASCAP, BMI, SESAC publisher performance of composition

on-demand mechanical licensing 10.5% publisher* songwriter * Services pay streaming mechanical agent or publisher* royalties to big publishers directly, stream minus payment to PROs or to a mechanical licensing agent Spotify • Rdio • Rhapsody streaming mechanical royalty like Harry Fox, Songtrust or Music Reports, which then pay their publisher members/clients. Because it is very aggregator 91- burdensome for self-published songwriters SR 100% artist/band CD Baby or TuneCore to collect these royalties, both CD Baby and TuneCore have set up services to licensed use of sound recording help self-published songwriter clients to collect them.

Information compiled by the nonprofit Future of Music Coalition, with gracious assistance from many experts and friends. Poster edition: September 2013 Artist Revenue Streams money.futureofmusic.org www.futureofmusic.org | money.futureofmusic.org © Future of Music Coalition 2013 Broadcast radio

Digital radio and webcasts

Digital downloads

On-demand streaming services

Wednesday, September 18, 13 Songwriters Broadcast radio Publishers Digital radio and webcasts Sound recording Digital downloads copyright owners Recording artists On-demand streaming services Background musicians and singers

Wednesday, September 18, 13 HOW THE MONEY songwriters, artists, FLOWS BACK TO publishers & labels

How are musicians and songwriters compensated when their music is played on the radio, sold on digital platforms, webcast, or streamed on interactive services?

For radio and radio-like services, Music and How the Money blanket licenses determine who gets paid, and how much. songwriter C PROs ASCAP, BMI, SESAC publisher performance of composition Flows infographic broadcast radio terrestrial broadcast of any AM or FM station In the US, terrestrial broadcasters do not pay performers or futureofmusic.org/moneyﬂow sound recording copyright owners performance of sound recording

5% AFM & SAG-AFTRA Fund background singers digital performance of sound recording and musicians Printed poster version available For digital stores and on-demand streams, how the money flows depends on what entity negotiated the license.

For record labels that have a direct deal with services:

digital sale iTunes • Amazon Google Play • eMusic 9.1¢ /track publisher songwriter mechanical reproduction of composition SR record label * Rate of payment from label to artist/band sale of sound recording 10-50% artist/band* depends on terms of contract, and whether digital sale is classified as a sale or a license.

0.5% Sound Recording musicians Special Payments Fund # # Labels contribute a small percent of sound recording sales income. If recording was made under the AFM’s recording agreement, payments are disbursed to musicians who were paid Wednesday, September 18, 13 big labels songwriter scale wages during the recording session. C PROs ASCAP, BMI, SESAC publisher performance of composition

UMPG and Sony ATV-EMI* UMPG and Sony ATV-EMI * At the end of 2012, Universal Music C songwriters Publishing Group and Sony/ATV-EMI performance of composition pulled their digital rights from ASCAP and BMI, seeking to get a higher rate on-demand by negotiating directly with services. 10.5% publishers songwriter stream minus payment Spotify • Rdio • Rhapsody to PROs streaming mechanical royalty

For record labels that are represented by a digital aggregator/distributor:

digital sale iTunes • Amazon Google Play • eMusic 9.1¢ /track publisher songwriter mechanical reproduction of composition aggregator 85% record label SR IODA/The Orchard * Rate of payment from label to @50% sale of sound recording artist/band* artist/band depends on terms of contract, and whether digital sale is classified as a sale or a license.

For artists who own their sound recording copyrights and use services like CD Baby or TuneCore:

self-released songwriter C PROs ASCAP, BMI, SESAC publisher performance of composition

notes and lyrics make up a Songwriters musical composition Publishers

Sound recording sound recording copyright owner is a recorded performance Recording artist of a musical composition Background musicians and singers

Wednesday, September 18, 13 In most cases, composition royalties are separate and distinct from sound recording royalties.

Wednesday, September 18, 13 Even if you are both the songwriter and the recording artist, you need to think about these roles separately.

Wednesday, September 18, 13 Over-the-air version of an Broadcast radio AM or FM station that plays music.

Blanket licenses determine who gets paid, and how much.

performance of sound recording

Wednesday, September 18, 13 Pandora, Sirius XM, any webcast stations Digital radio or streams of terrestrial stations.

Blanket licenses determine who gets paid, and how much.

songwriter C PROs ASCAP, BMI, SESAC* publisher performance of composition webcast UMPG and Sony ATV-EMI or digital performance C UMPG and Sony ATV-EMI* songwriters Pandora • Sirius XM • NPR streaming performance of composition any webcast stations 50% record label

SR SoundExchange 45% performer(s)

AFM & SAG-AFTRA Fund background singers digital performance of sound recording 5% and musicians

* At the end of 2012, Universal Music Publishing Group and Sony/ATV-EMI pulled their digital rights from ASCAP and BMI, seeking to get a higher rate by negotiating directly with webcasters.

Wednesday, September 18, 13 Pandora, Sirius XM, any webcast stations Digital radio or streams of terrestrial stations.

Blanket licenses determine who gets paid, and how much.

songwriter C PROs ASCAP, BMI, SESAC* publisher performance of composition webcast Today’s UMPG and Sony ATV-EMI or digital performance C UMPG and Sony ATV-EMI* songwriters court ruling changes this Pandora • Sirius XM • NPR streaming performance of composition any webcast stations 50% record label

SR SoundExchange 45% performer(s)

AFM & SAG-AFTRA Fund background singers digital performance of sound recording 5% and musicians

* At the end of 2012, Universal Music Publishing Group and Sony/ATV-EMI pulled their digital rights from ASCAP and BMI, seeking to get a higher rate by negotiating directly with webcasters.

Wednesday, September 18, 13 Pandora, Sirius XM, any webcast stations Digital radio or streams of terrestrial stations.

Blanket licenses determine who gets paid, and how much.

songwriter C PROs ASCAP, BMI, SESAC* publisher webcast performance of composition or digital performance Pandora • Sirius XM • NPR streaming 50% record label any webcast stations SR SoundExchange 45% performer(s)

AFM & SAG-AFTRA Fund background singers digital performance of sound recording 5% and musicians

Wednesday, September 18, 13 Digital downloads iTunes, Amazon, Google Play