Examples of New Business Models in Music *

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Examples of New Business Models in Music * * Compensation figures and agreements included in this chart are based on and how labels, artists and songwriters are paid research, published FAQs and prior knowledge of services, but should © 2007-2012 Future of Music Coalition be verified with actual sources for accuracy.

Are they compensated, and how much? SERVICE FORMAT DETAILS LABEL PERFORMER SONGWRITER

YES. Artist sets price of their album. CD Baby keeps $4 for each physical Online mailorder and digital Consumers can buy physical CDs that are CD sold. The rest goes to the artist. For retail store. CD Baby also acts N/A. Almost entirely unsigned artists, or Songwriter and publisher are paid then shipped to them in the mail, or can buy digital sales, artist gets 75% of income CD Baby as an aggregator, delivering artists running their own labels, so mechanical rate: label/artists' digital albums or singles via CD Baby from sales on CD Baby, and 91% of net digital music to iTunes, Amazon, entire payment goes directly to artist. responsibility. website. revenue from iTunes/Amazon/ Spotify, etc. streaming services. Paid out every Monday.

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

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

YES, Same as above. Unsigned artists get 91% - 100% of what's paid to label/aggregator. Indie label or major Consumers buy individual tracks or albums YES. Though terms are not disclosed, label artist gets whatever their contract Songwriter and publisher are paid Digital retail store with cloud for set rates, usually 99 cents/track or it's similar to iTunes Music Store where, Google Play stipulates. Artists can also go direct to mechanical rate: label/artists' storage. $8.99/album, though some tracks are of $9.99 sale, label or digital distributor Google Play and get 70% of profit, after responsibility. steeply discounted. Free song of day. reportedly gets $6.50-$7.00. $25 setup fee. Provides good integration with YouTube for track sales.

For subscription streaming service, YES. For interactive streams: direct YES. For interactive streams, fractions YES. For the subscription/ streaming consumers pay $5 to $10/month to have licensing fee negotiated with the labels. On demand subscription service of a penny per play. For noninteractive services, each have licenses with Rhapsody, Spotify, MOG, real-time access to enormous library of Rates are not disclosed. For (with other features including streams, featured performer also gets ASCAP/BMI/SESAC for

SUBSCRIPTION Rdio, Zune, Slacker albums and songs. Some offer free, ad- noninteractive steams, label gets 50% downloads, to go, etc). 45% of SoundExchange digital songwriter/publisher performance suppored tiers. (Paid downloads also of SoundExchange digital performance performance royalties. compensation. available for subscribers). royalties.

Consumers pay from $11.99/month for 24 YES, Same as above. Unsigned artists YES. eMusic pays a set percentage of downloads, up to $31.99/month for 73 get 91% - 100% of what's paid to Songwriter and publisher are paid Online subscription download subscriber revenue/month to label or eMusic downloads. Since songs are MP3s, they label/aggregator. Indie label or major mechanical rate: label/artists' service. All MP3 tracks. distributor, calculated on their share of can be played on any player, including label artist gets whatever their contract responsibility. downloads. iPods and iPhones. stipulates.

YES. Artist gets 85% of sales under

ARTIST-TO-FAN USUALLY N/A BUT.... Almost entirely $5000, and 90% of sales $5000+. Provides fast, dependable streaming and unsigned artists, or artists running their Bandcamp, as the intermediary, gets Adds physical and digital music downloads of an artists' entire catalog, Artist own labels, but some indie labels have 15% of each transaction, but that drops Songwriter and publisher are paid sales and merch sales option to sets prices (which can include free), can Bandcamp storefronts here as well. Assume that to 10% if your sales exceed $5000. For mechanical rate: label/artists' existing band website or blog, or choose high bitrates. Bandcamp provides label gets 85% under $5000 and 90% artists signed to labels using responsibility. serves as web host for artist. the web interface for a very powerful, artist- of sales over $5000, same deal as Bandcamp, assumption is that label controlled storefront. unsigned artists. receives sales revenue and passes along royalties to its bands.

SERVICE FORMAT DETAILS LABEL PERFORMER SONGWRITER

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

ARTIST-TO-FAN On website, fans could 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 Nine Inch Nails experiment album, Ghosts I-IV, that offers a record; C) $10 for 2 CD set; D) $75 for N/A. No record label involved. ($750,000), and that, in the first week, they retain all the income from these range of pricing and features. deluxe CD set or E) $300 for signed edition. there were 781,917 transactions that sales. Also released simultaneously on Amazon, earned $1.6 million. and seeded to P2P networks.

Consumers can download as many albums Website with physical and digital or songs as they want for $15/month. Songwriter and publisher are paid retail store, with $15/month YES. Magnatune, acting as a "label", YES. Artist gets 50% of any sale and/or Magnatune Members can also access simple, one-click mechanical rate: label/artists' subscription fee and online keeps 50% of sales/licenses. license fees. style licensing for music uses in films, TV, responsibility. licensing. videos, etc. High bitrate options.

Musician sets up a goal -- say, raising enough money to record an album or buy a YES. If the project goals are met, the Creative incubator that van -- and offers different incentives to artist receives 95% money that facilitates project funding by funders to contribute. $5 may get you a free Kickstarter collected for them. Kickstarter helping artists build project N/A. No record label involved. N/A in this case. CD, and $5000 may get you executive Kickstarter keeps 5%. If they do not pages, create incentives, track producer credit. Projects must meet target meet their goals, the funders are given fundraising progress. within 30 to 60 day time frame. Money is their money back. not given to artist unless project goal is met.

Musician sets up a goal -- say, raising Music-focused incubator that YES. If the project goals are met, the ADVANCE PROJECT FUNDING enough money to record an album or buy a facilitates project funding by artist receives the 85% of the money van -- and offers his/her funding patrons helping artists build project that Pledge collected for them. Pledge Pledge Music different incentives to contribute. There is N/A. No record label involved. N/A in this case. pages, create incentives, track keeps 15%. If they do not meet their no time limit on project length (must be less fundraising progress, pre-sell goals, the funders are given their than 364 days). Money is not given to artist albums and offer exclusives. money back. unless project goal is met.

YES. Two funding options. (1) fixed Creative incubator that Musician sets up a goal -- say, raising project goal that must be met in order facilitates project funding by enough money to record an album or buy a to be funded, in which artist gets 96% Indiegogo helping artists build project van -- and offers his/her funding patrons N/A. No record label involved. of pledged money or (2) flexible goal in N/A in this case. pages, create incentives, track different incentives to contribute. Musician which artist gets 91% of what's fundraising progress. chooses the funding strategy. collected, even if they don't reach their target.

Musician sets up a financial goal and YES. If the project goals are met, the Online service that sells "parts" incentives for fans. Music fans can by a $10 artist receives the 85% of the money Sellaband N/A. No record label involved. N/A in this case. in a band's future work "part" in a band, or numerous bands, to that Sellaband collected for them. support upcoming projects. Sellaband keeps 15%.

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 a YES. Artist gets a large percentage of ArtistShare "the creative process" -- attending recording mechanical rate: label/artists' communities around its artists. small percentage. revenue from sales. sessions/rehearsals, working responsibility. drafts of music in progress, credit on the CD. Money collected underwrites artists' costs.

SERVICE FORMAT DETAILS LABEL PERFORMER SONGWRITER

Fans had option of contributing anything from $10 to $10,000. For $10, fan get a free YES. Raised over $89,000 to record. Artist-powered outreach: Jill Jill raised $89,000 from her fans digital download when released. For Jill is also the songwriter so she retains N/A. No record label involved. Assumption that she has kept the vast Sobule as example to record a recent record. $1,000, fan had a theme song written about all the income from song licenses/sales. majority of income from sales. them. For $5,000, Jill pledged to come and play a house concert for donor.

LICENSING YES. If licensee gets a synch license, B2B service. Creative directors or music YES. If label is the entity that submits YES. If artist is self-released, he/she and ASCAP/BMI/ SESAC royalties Rumblefish/Pump supervisors can use these services as a the music, it gets 50% of any fees on a Online music licensing service gets 35% to 50% of any fees on a would be sent directly to songwriter and Audio/Getty Music source for affordable music for license deal, then passes on license deal. publisher if song was performed as part ads/TV/movies, or on YouTube. percentage to artist. of TV show/movie.

YES. If the label is participating in YES/POSSIBLY. If artist is self- YouTube's licensing program, label released and has a significant YouTube

ONLINE VIDEO/WEBCAST PERFORMANCES shares in percent of advertising presence, they may be able to UNSETTLED. YouTube and various revenue. YouTube can also link to track participate in YouTube's Partner PROs and Harry Fox Agency have been YouTube Online videos Posted videos. or album purchases on iTunes, Amazon Program. Artists signed to an indie or in litigation over public performance and and Google Play. Labels can also earn major label may see ad-based revenue mechanical licensing. money on user-generated content received by the label passed through to through the AudioSwap service. them as per their deal.

Performer sets date, time and ticket price, N/A. This is a relationship with a YES. 60% of gross ticket sales. Also YES. StageIt has relationships with Fans buy tickets to the webcast show and performer (unless performer owes label StageIt Live performances via webcast provides links to stores like iTunes for ASCAP/BMI/SESAC and pays watch show online.Fans can also tip and a percentage of their live performance digital download sales. performance royalties. interact with performer in real time. money based on a 360 deal).

Performer sets date, or just starts to NO. At this point, it's not possible to sell UNCLEAR. Google + Hangouts Live performance/broadcast via Google+ Hangouts On Air broadcast immediately. File saves in real NO. This is a free service. tickets or charge admission to your requires performers to only play/perform webcast time to YouTube. webcast. music that they have exclusive rights to.

Two models: Ad-supported model for free, YES. Sound recording copyright owner YES. Pandora has licenses with or ad-free version for $36/yr. Search for YES. 45% of SoundExchange digital

RADIO/WEBCASTING/DIGITAL PERFORMANCES receives 50% of SoundExchange digital ASCAP/BMI/SESAC for Webcast stations formed around bands you like and services will also play performance royalties paid directly to Pandora performance royalties. Pandora also songwriter/publisher performance music recommendation engines music that's similar, thus increasing featured performer. Pandora also links links to Amazon and iTunes for digital compensation. Pandora also links to consumer's musical knowledge. Hugely to Amazon and iTunes for digital sales. sales. Amazon and iTunes for digital sales. popular iPhone app.

Combines music-streaming, chat rooms, YES. Turntable.fm has licenses with YES. Sound recording copyright owner YES. 45% of SoundExchange digital and voting by simulating a virtual ASCAP/BMI/SESAC for Turntable.fm Realtime webcast/DJ station receives 50% of SoundExchange digital performance royalties paid directly to environment filled with audience members songwriter/publisher performance performance royalties. featured performer. and DJs represented by player avatars. compensation.

YES. 45% of SoundExchange digital performance royalties paid directly to YES. 50% of SoundExchange digital featured performer. Indie/unsigned YES. Last.fm has licenses with performance royalties. Indie labels that Free for users. Create custom radio artists that are not SoundExchange ASCAP/BMI/SESAC for are not SoundExchange members can stations and playlists from any of the audio members can be paid directly by songwriter/publisher performance UK based internet radio and be paid directly by last.fm's Artist tracks in Last.fm's music library, and are last.fm's Artist Royalty Program. NOTE: compensation. To permit song Last.fm music community site that also Royalty Program. Also links to Amazon, able to listen to some individual tracks on If your indie label is signed up to downloads (which are free), you must offers on demand streaming. iTunes and 7Digital for digital sales. demand or download tracks if the rights last.fm's' ARP Program, performer's own the copyright in both the recording Downloads require label holder has previously authorized it. royalties will go to the label, which and composition. Also links to Amazon, permission but do not provide undercuts your ability to receive your iTunes and Digital7 for digital sales. compensation. statutory share. Also links to Amazon, iTunes and 7Digital for digital sales.

SERVICE FORMAT DETAILS LABEL PERFORMER SONGWRITER RADIO/WEBCASTING/DIGITAL PERFORMANCES YES. Radio stations have licenses with YES. 45% of SoundExchange digital YES. 50% of SoundExchange digital ASCAP/BMI/SESAC for Terrestrial radio with Terrestrial radio station with Seattle-based radio station with streaming performance royalties paid directly to performance royalties for webcast (not songwriter/publisher performance webcast: KEXP for example webcast webcast. Free access. featured performer for webcast (not for for terrestrial broadcast). compensation for terrestrial broadcast terrestrial broadcast). and webcasts.

YES. Sirius XM has licenses with YES. 45% of SoundExchange digital Consumer pays for equipment plus monthly YES. 50% of SoundExchange digital ASCAP/BMI/SESAC for Sirius XM Satellite Radio Satellite radio channels performance royalties paid directly to subscription fees, about $15/month. performance royalties. songwriter/publisher performance featured performer. compensation

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

NOT USUALLY. Per artist contract. NOT USUALLY. Technically, Interactive performance, reproduction NOT USUALLY. ASCAP/BMI/SESAC Consumers can either subscribe to podcasters would need both Podcasts Online audio files and distribution rights could be do offer a podcast license, but many podcasts or listen to audio files online reproduction and distribution licenses. implicated, but currently mostly for podcasters use pre-cleared music. Currently mostly free for promotion. promotion, so these rights are waived.

YES BUT NOT DIRECTLY. Labels that YES BUT NOT DIRECTLY. Artists who post content to SoundCloud may be post content to SoundCloud may be Visitors can search for, listen to, share and using it for promotional purposes, and using it for promotional purposes, and Online audio capturing and embed audio tracks. Includes unsigned Soundcloud then linking to stores or their own site then linking to stores or their own site sharing service. aritsts/composers, and some indie label for track purchases.There are also a for track purchases.There are also a musicians. couple of third party apps that can couple of third party apps that can facilitate one-click purchasing. facilitate one-click purchasing.

NOT USUALLY. Currently for NOT USUALLY. Currently for promotion only, though many blogs promotion only, though many blogs Blogs that provide full-track links Music fans can listen to and/or download For promotion only. Publisher or record MP3 blogs make it clear that songs are available make it clear that songs are available to MP3s of songs. full-length MP3s from blogs. label has a right to request takedown short term only and that label/publisher short term only and that label/artist has has right to request takedown right to request takedown

Twitter users search for a song UNCLEAR, BUT PROBABLY NOT. UNCLEAR, BUT PROBABLY NOT. UNCLEAR, BUT PROBABLY NOT. or artist using these services, Reproduction and distribution licenses Reproduction and distribution licenses Reproduction and distribution licenses Music on Twitter feeds Free for the moment then can forward link to the song are required, but not obtained, so no are required, but not obtained, so no are required, but not obtained, so no to their Twitter followers compensation for labels. compensation for artists compensation for songwriters

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