Examples of New Business Models in * * Compensation figures and agreements included in this chart are based on and how labels, artists and are paid research, published FAQs and prior knowledge of services, but should © 2007-2009 Future of Music Coalition be verified with actual sources for accuracy.

Are they compensated, and how much?

SERVICE FORMAT DETAILS LABEL PERFORMER

YES. Artist sets price of their . CD Baby keeps $4 for each physical Consumers buy physical CDs that are N/A. Almost entirely unsigned artists, Songwriter and publisher are paid Online mailorder and digital CD sold. The rest goes to the artist. CD Baby then shipped to them in the mail, or can or artists running their own labels, so mechanical rate: label/artists' retail store. For digital sales, artist gets 91%. Paid buy digital via . entire payment goes directly to artist. responsibility. out every Monday. $100 million paid to date.

DIGITAL RETAIL YES. unsigned artist: gets anywhere YES. Of $9.99 sale, label or digital from 91% to 100% of the $7.00 paid Consumers buy individual tracks or Songwriter and publisher are paid distributor reportedly gets to label/aggregator. Indie label or iTunes Music Store Digital retail store. albums for set rates, usually 99¢/track or mechanical rate: label/artists' $6.50–$7.00. iTMS pays out on sales major label artist: more complicated $9.99/album. responsibility. monthly. because sales are based on percentages or "points" on contract.

YES. Though terms are not YES, Same as above. Unsigned Consumers buy individual tracks or disclosed, it's similar to iTunes Music artists get 91% - 100% of what's paid Songwriter and publisher are paid Digital retail store. All MP3 albums for set rates, usually 99 Music Store Store where, of $9.99 sale, label or to label/aggregator. Indie label or mechanical rate: label/artists' tracks. cents/track or $8.99/album, though some digital distributor reportedly gets major label artist gets whatever their responsibility. tracks are steeply discounted. $6.50-$7.00. contract stipulates.

Users purchase songs at a price that YES. Unsigned/unaffiliated artists Digital retail store with varies according to demand, starting at Songwriter and publisher are paid collect 70% of the money from each demand-based pricing. All 0¢ and ending at 98¢. Users also earn Unclear. mechanical rate: label/artists' song after it has made $5. Paid MP3 tracks. credits by recommending songs to their responsibility. directly to artist via Paypal. friends.

YES. For interactive streams: direct YES. For the subscription/ streaming For subscription streaming service, YES. For interactive streams, a few licensing fee negotiated with the services, Rhapsody and each Online subscription service consumers pay $12/month to have real- pennies per play. For noninteractive labels. Rates are not disclosed. For have licenses with Rhapsody or Napster (with other features including time access to enormous library of steams, featured performer also gets

SUBSCRIPTION noninteractive steams, label gets ASCAP/BMI/SESAC for downloads, to go, etc). albums and songs. (Paid downloads also 45% of SoundExchange digital 50% of SoundExchange digital songwriter/publisher performance available for subscribers). performance royalties. performance royalties. compensation.

Consumers pay $11.99/month for 24 YES, Same as above. Unsigned YES. eMusic pays a set percentage downloads, or $20.79/month for 50 artists get 91% - 100% of what's paid Songwriter and publisher are paid Online subscription download of subscriber revenue/month to label eMusic downloads. Since songs are , they to label/aggregator. Indie label or mechanical rate: label/artists' service. All MP3 tracks. or distributor, calculated on their can be played on any player, including major label artist gets whatever their responsibility. share of downloads. and iPhones. contract stipulates.

Consumers can download entire albums Label with physical and digital or songs (similar to iTunes), but can Songwriter and publisher are paid YES. , acting as the label, YES. Artist gets 50% of any sale/

ARTIST-TO-FAN Magnatune retail store, with variable choose their price between $5 and $18. mechanical rate: label/artists' keeps 50% of sales/licenses. license fees. pricing and online licensing. Can also order a physical CD via responsibility. mailorder. High bitrate options.

Pre-Radiohead version of an Consumers can buy Jane Siberry's songs YES. Assumption that Jane has YES. Jane is the songwriter, so she Sheeba.ca artist-run digital retail store in MP3 format for anywhere from "a gift ownership of these songs so she's retains all the income from these (Issa/Jane Siberry) with variable pricing. from Jane" up. probably getting 100% of net profits. sales.

© 2007-2009 Future of Music Coalition www.futureofmusic.org 10/4/09 ARTIST-TO-FAN

Are they compensated, and how much?

SERVICE FORMAT DETAILS LABEL PERFORMER SONGWRITER

Short term digital release Consumers could pay "nothing", although YES. Though real figures are not YES. Radiohead are also the run by the there was a $1 "handling charge", plus available, it's assumed that Radiohead experiment N/A. No involved. songwriters, so they retain all the that offered variable pricing Radiohead collected everyone's contact Radiohead kept the vast majority of income from these sales.

ARTIST-TO-FAN option. info. the income from these sales

On website, fans can choose from: A) getting first nine songs for free; B) paying YES. Trent Reznor reported to media Digital release of 36-track $5 for a high bitrate download of whole that all the box sets sold out YES. NIN are also the songwriters, so album, Ghosts I-IV, that offers Nine Inch Nails experiment record; C) $10 for 2 CD set; D) $75 for N/A. No record label involved. ($750,000), and that, in the first they retain all the income from these a range of pricing and deluxe CD set or E) $300 for signed week, there were 781,917 sales. features. edition. Also released simultaneously on transactions that earned $1.6 million. Amazon, and seeded to P2P networks.

Consumers/music fans can not only buy digital/physical CDs of Artistshare artists, they fund the projects in exchange for the privilege of accessing Songwriter and publisher are paid Label that builds patron YES. Artistshare, as the label, keeps YES. Artist gets a large percentage of ArtistShare "the creative process" -- attending mechanical rate: label/artists' communities around its artists. a small percentage. revenue from sales. recording sessions/rehearsals, working responsibility. PATRONAGE drafts of music in progress, credit on the CD. Money collected underwrites artists' costs.

Fans had option of contributing anything from $10 to $10,000. For $10, fan get a YES. Raised over $89,000 to record. Jill is also the songwriter so she Jill raised $89,000 from her free digital download when released. For Assumption that she will keep the Jill Sobule N/A. No record label involved. retains all the income from these fans to record a recent record. $1,000, fan had a theme song written vast majority of income from sales sales about them. For $5,000, Jill pledged to when it is released in April 2009. come and play a house for donor.

Musician sets up a goal -- say, raising enough money to record an album or buy YES. If the project goals are met, the Website that facilitates project a van -- and offers his/her funding patrons artist receives the money that funding by helping artists build different incentives to contribute. $5 may N/A. No record label involved. Kickstarter collected for them. If they N/A in this case. pages, create incentives, track get you a free CD, and $5000 may get do not meet their goals, the funders fundraising progress you executive producer credit. Money is are given their money back. not given to artist unless project goal is met. requires artist to assign SORT OF. An artist who "wins" gets Sellaband -- as "label" -- gets copyrights in all songs for 5 years; Music fans can by a $10 "part" in a band. access to $50,000 for recording/CD Online service that sells exclusive 5 year license for mechanical compensation due to Sellaband Each band must sell 5,000 parts to gain manufacturing, but doesn't get the "parts" in a band's future work exploitation of recording, as well as publisher, but unclear who pays, or if access to $50,000 recording budget. cash directly. Also gets 50% split on ad revenue and transaction fees. "non-controlled" compositions are ad revenues and CD sales. permitted.

LICENSING YES. If licensee gets a synch license, YES. If label is the entity that submits B2B service. Music directors can use YES. If artist submits the music and ASCAP/BMI/ SESAC royalties the music, it gets 50% of any fees on Rumblefish/Pump Audio Online licensing service Pump Audio or Rumblefish as a source directly, he/she gets 50% of any fees would be sent directly to songwriter a license deal, then passes on for affordable music for ads/TV/movies. on a license deal. and publisher if song was performed percentage to artist. as part of TV show/movie.

© 2007-2009 Future of Music Coalition www.futureofmusic.org 10/4/09 Are they compensated, and how much?

SERVICE FORMAT DETAILS LABEL PERFORMER SONGWRITER

Two models: Ad-supported model for free, YES. 45% of SoundExchange digital YES. Pandora has licenses with or ad-free version for $36/yr. Search for YES. 50% of SoundExchange digital Webcast stations formed performance royalties paid directly to ASCAP/BMI/SESAC for bands you like and services will also play performance royalties. Pandora also Pandora around music featured performer. Pandora also songwriter/publisher performance music that's similar, thus increasing links to Amazon and iTunes for digital recommendation engines links to Amazon and iTunes for digital compensation. Pandora also links to consumer's musical knowledge. Hugely sales. sales. Amazon and iTunes for digital sales. popular iPhone app.

YES. 45% of SoundExchange digital

RADIO/WEBCASTING/DIGITAL PERFORMANCES performance royalties paid directly to YES. 50% of SoundExchange digital featured performer. Indie/unsigned YES. Last.fm has licenses with performance royalties. Indie labels Free for users. Create custom radio artists that are not SoundExchange ASCAP/BMI/SESAC for that are not SoundExchange stations and from any of the members can be paid directly by songwriter/publisher performance UK based radio and members can be paid directly by audio tracks in Last.fm's music library, last.fm's Artist Revenue Program. compensation. To permit song music community site that last.fm's Artist Revenue Program. Last.fm and are able to listen to some individual NOTE: If your indie label is signed up downloads (which are free), you must also offers on demand Also links to Amazon, iTunes and tracks on demand or download tracks if to last.fm's' ARP Program, own the copyright in both the streaming. for digital sales. Downloads the rights holder has previously performer's royalties will go to the recording and composition. Also links require label authorized it. label, which undercuts your ability to to Amazon, iTunes and Digital7 for permission but do not provide receive your statutory share. Also digital sales. compensation. links to Amazon, iTunes and 7Digital for digital sales. YES. Four major labels signed direct SORT OF. Major label artists should equity-sharing deals with MySpace be getting shares of the major label's In the abstract they should have PRO Social networking site that Music prior to launch. However, indie equity revenue and share of the ad licenses for the performances and MySpace Music allows users to stream songs, Free for users. Ad supported model. labels were not offered the same revenue. For indie and unsigned would also need the publishers' and make and share playlists. favorable equity terms. Ad revenue is artists, no mechanism for payment permission depending on the rates shared with the label. Also links to yet. Also links to Amazon's MP3 store the PROs set. Amazon's MP3 store for digital sales. for digital sales.

YES. Radio stations have licenses YES. 45% of SoundExchange digital YES. 50% of SoundExchange digital with ASCAP/BMI/SESAC for terrestrial radio station with Seattle-based radio station with performance royalties paid directly to KEXP (for example) performance royalties for webcast songwriter/publisher performance webcast streaming webcast. Free access. featured performer for webcast (not (not for terrestrial broadcast). compensation for terrestrial broadcast for terrestrial broadcast). and webcasts.

YES. Both also have licenses with Consumer pays for equipment plus YES. 45% of SoundExchange digital YES. 50% of SoundExchange digital ASCAP/BMI/SESAC for Sirius XM Satellite Radio satellite radio stations monthly subscription fees, about performance royalties paid directly to performance royalties. songwriter/publisher performance $13/month. featured performer. compensation

YES. Also have licenses with YES. 45% of SoundExchange digital Part of consumer's monthly cable YES. 50% of SoundExchange digital ASCAP/BMI/SESAC for MusicChoice music on cable TV stations performance royalties paid directly to package bill performance royalties. songwriter/publisher performance featured performer. compensation

NOT USUALLY. Per artist contract. NOT USUALLY. Technically, Interactive performance, reproduction podcasters would need both NOT USUALLY. ASCAP/BMI/SESAC Consumers can either subscribe to and distribution rights could be online audio files reproduction and distribution do offer a podcast license, but many podcasts or listen to audio files online implicated, but currently mostly for licenses. Currently mostly free for podcasters use pre-cleared music. promotion, so these rights are promotion. waived. NOT USUALLY. Currently for NOT USUALLY. Currently for promotion only, though many blogs promotion only, though many blogs Blogs that provide full-track Music fans can listen to and/or download make it clear that songs are available For promotion only. Publisher has a MP3 blogs make it clear that songs are available links to MP3s of songs. full-length MP3s from blogs. short term only and that right to request takedown short term only and that label/artist label/publisher has right to request has right to request takedown takedown

© 2007-2009 Future of Music Coalition www.futureofmusic.org 10/4/09 Twitter users search for a UNCLEAR, BUT PROBABLY NOT. UNCLEAR, BUT PROBABLY NOT. UNCLEAR, BUT PROBABLY NOT. song or artist using these Reproduction and distribution Reproduction and distribution Music on Twitter feeds Reproduction and distribution licenses services, then can forward link Free for the moment licenses are required, but not licenses are required, but not (Blip.fm, Twisten.com) are required, but not obtained, so no to the song to their Twitter obtained, so no compensation for obtained, so no compensation for compensation for songwriters followers labels. artists

NO. Reproduction and distribution NO. Reproduction and distribution NO. Reproduction and distribution Consumers search for and download licenses are required, but not licenses are required, but not licenses are required, but not Unlicensed P2P networks items without paying for the music. obtained, so no compensation for obtained, so no compensation for obtained, so no compensation for labels. artists songwriters

Consumers would pay a monthly fee, say $5, on their cable or DSL bill for access to ISP music access proposals TBD TBD TBD unlimited music content. Money collected would be distributed to artists/labels

© 2007-2009 Future of Music Coalition www.futureofmusic.org 10/4/09