HOW ARTISTS ARE USING SOCIAL NETWORKING SITES TO PROMOTE THEIR MUSIC ACROSS THE WORLD – AND MAKING MONEY FROM IT.
This blog is Part 3 of our look at Social Media sites and their ability to promote and market artists across the world.
In this new world of online music promotion and streaming, its important that artists and labels understand the ways in which they can utilise the latest online technologies and trends to not only get their music ‘out there’ like never before, but also earn money over the latest e-revenue streams available.
WHY?
Before going into how artists and labels get paid online, its important to understand why they get paid. Under Australian copyright law, an mp3 or any format of recorded music contains 2 distinct copyrights – the publishing rights in the composition that was recorded as well as the performance rights in the actual sound recording.
Copyright law says that anyone who, among other things, distributes, communicates and/or reproduces recorded music must compensate both the composers of the music and the owners of the recording. These rules still operate in an online world, so this means artists and labels are entitled to 2 sources in one music stream:
1. payments to the composers/performers (known as Mechanical Royalties) and
2. payments to the owners of recordings (known as Performance Royalties)
If you have signed any recording or publishing contracts your rights to these incomes will change.
Its important to note that these obligations under Australian law are mirrored to a great extent across the globe.
Enough theory, show me the money!!
HOW?
Last.fm
One of the latest methods in which artists and labels can promote their music and get paid for it is provided by the website lastfm. For more information on the value of distributing your music over lastfm, please read our previous blog titled The iBand Part 2.
Performance Royalty Program
One important incentive that lastfm provides to artists is its Royalty program. Under the program, artists will get paid a small percentage of the revenue lastfm receives from the streaming of a track as compensation under its Performance Royalty obligations.
Other Sites
As most other streaming sites do not have specific Performance Royalty payment schemes, bodies such as APRA and its equivalents across the world seek out and collect Performance Royalties from such sites. It is therefore important that artists and labels register with APRA and update their information with them to ensure that money collected from online usages of their music is adequately compensated through APRA’s services.
Mechanical Royalty Payments
As lastfm operates from both the UK and the US, it is required to follow their laws in respect of copyright, especially in respect of mandatory royalty payments. The UK and US copyright law provides that sites like lastfm pay mechanical royalties to composers – both the US and UK have collecting societies to collect and distribute such monies through to its member artists.
APRA has agreements with other collecting societies around the world so, when Streaming sites pay mechanical royalties to international societies, any amounts related to Australian APRA members are on-paid to APRA for distribution to those members.
If you are unsigned, a label or someway else own the copyright in recordings that are likely to be streamed extensively over the internet, we recommend that you become a member of the PPCA or the Phonographic Performance Company of Australia. The PPCA actively seeks licence fees from Australian online streaming companies and distributes income received to its members. The PPCA too has links with international equivalents to aid in generating you income from around the globe.
As there are so many interest groups involved in online business models for the music industry, it is no surprise that the royalty rates payable to copyright owners are currently in a state of flux both locally and across the globe. We recommend artists contact both APRA and the PPCA to keep abreast of the latest developments and to find more information on the latest rates payable in respect of online streaming.