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WEDNESDAY 14 DECEMBER 2016 | CMUINSIGHTS.COM | ||||
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INSIGHTS BLOG: TEN MUSIC INDUSTRY QUESTIONS WE'RE OFTEN ASKED Through our programme of CMU Insights seminars, masterclasses and conference sessions  not to mention our in-house training courses  we train and educate hundreds and hundreds of music business professionals every year. We also help media, brands and start-ups looking to work with music navigate the industry, and through CMU:DIY offer tips and advice to aspiring artists and those at the very start of their music business careers. The CMU Insights seminar programme 'How The Music Business Works'  eight evening seminars over eight weeks  returns on 23 Jan, this time hosted by our friends at Lewis Silkin. Our popular music rights masterclass also returns on 6 Feb, and look out for information on upcoming conference sessions and the return of the monthly CMU:DIY x Urban Development night at the Red Bull Studios very soon. But before we jump into 2017, here are some of the questions we've been asked numerous times at CMU Insights and CMU:DIY sessions this year. 1. Aren't the music industry and the record industry the same thing? Other key elements of the wider music industry include the music publishing sector, that deals in the copyright in songs rather than recordings; the merchandise business, which creates products around the music industry's visual copyrights and trademarks; the emerging direct-to-fan business; and of course the live music industry. 2. Isn't the music industry now all about live? Though it is worth remembering that the live side of the business often has a high 'cost of sale', meaning higher revenues don't necessarily mean higher profits. From an artist perspective, it's important to consider how revenues are shared out. In that on the recordings side, the label often gets the majority of the money (because of its upfront investment) while with live the artist often gets the majority of the money. So an artist's recordings might make more money than their gigs, but the artist themselves makes lots more from the latter than the former. 3. Isn't the music rights industry all about sync? In terms of the record industry at large, globally it accounts for about 2% of revenues (according to the IFPI). True, that's recordings not publishing  sync will be a bigger slice of the music publishing pie  but overall sync is important, but not quite as important as you might think. 4. Are all those physical sales the result of the vinyl revival? True, CD sales continue to decline while vinyl is in growth, but the vast majority of that physical income comes from selling the shiny discs. Certain markets where CDs still dominate  especially Germany and Japan  skew the figures a little, though CD sales in the UK in recent years  while still in decline  have held up better than you'd probably have expected. 5. What's the difference between mechanical and performing rights? The reproduction and distribution controls are often grouped together and referred to as the 'mechanical rights'. The performance and communication controls are often grouped together and referred to as the 'performing rights' or  increasingly in the record industry  the 'neighbouring rights'. The distinction is most important in music publishing, because the mechanical and performing rights are often licensed separately and sometimes by different entities. So as a licensee it's important to work out which elements of the copyright you are exploiting. It might be both. 6. How does a collecting society know who to pay? Some licensees  eg radio  usually provide decent data of what songs and recordings they've actually used. But some  like that greasy spoon café in Inverness  don't. So sometimes the societies have to employ other methodologies  maybe market share, or market research or, with some societies, entirely mysterious equations  to work out how to distribute the money. 7. How do you know who owns a music copyright? On the recordings side, chances are whichever label released a record  which is information Amazon and the streaming services usually provide  owns or at least controls the sound recording copyright. Though not necessarily, as rights can be sold and different labels might control the same recordings in different territories. Meanwhile on the publishing side, where copyrights are routinely co-owned (because songs are often co-written), it's even harder to identify owners. The collecting societies usually have the best databases, though they often aren't publicly available. This, of course, has created lots of challenges in the digital domain and the need for better music rights data is a big talking point. 8. Which social media matter most for music? If you have a younger fanbase, chances are they are not active uses of either of those. Instagram will be more important for younger fans, closely followed by Snapchat. New artists also need to be on YouTube and SoundCloud, whatever the licensing issues may or may not be, because it's where people often go looking for artists or tracks they've just discovered (SoundCloud with industry and early adopters especially). 9. Do music magazines matter anymore? The music magazines are particularly influential when it comes to new artists, both within the industry and among early adopter fans, who are often the people adding new music to their playlists on Spotify and Apple Music, kickstarting that all important playlisting algorithm. 10. Why do artists still sign record deals? For more established artists, often it's the comfort of working with people you know and trust, and the marketing and distribution infrastructure and expertise that labels bring to the table. Though the artist-manager-label relationship is slowly evolving, and while artists look set to work with labels for the foreseeable future, the nature of the deals will likely change over time. | |||||
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