Welcome to the weekly article looking at the current music industry, its challenges and overall why and how SHOUT4's RevShare model works so well for the independent music industry. Written by SHOUT4 Chairman, Ric Yerbury.
To be clear, I was in the Blur camp when the industry constructed a wonderful campaign based on a supposed enmity between Albarn and the Gallagher brothers. Which was weird considering I loved both those bands in equal measure.
Anyway, I could have titled this article: “Starting From the Wrong Place”. Essentially two sides of the same discourse. I have always thought that many arguments and outbursts of anger come from starting from the wrong place. This presupposes that arguments can be based on reasonable terms, whereas we all know that this is not always the case.
So to the case in point, the plight of the new artist in the music industry. It can be argued that for many of us it is a case of looking back in anger about what amounts to poor decisions and poor service. My previous article which touched on Raye’s recent split from her record label did reflect a little on the inappropriateness of the long term record deal. For me it is a far simpler diagnosis, the world has changed and failure to recognise this has resulted in many within the industry starting from the wrong place. What actually does an artist need? Is this the same as an artist 50 years ago? Possibly, but unlikely. Elements remain the same but in terms of commercial engagement, definitely not.
The artist can potentially generate revenue from a myriad of sources directly and indirectly related to the music they create. The artist is a business as well as a creative force. Much of their output is consumed digitally with the potential to have a direct relationship with the consumer. Given all of this, how do we answer these questions?
- Why are we starting the relationship with the artist with the movement of the copyrights related to the content they put out?
- Why are we starting with a silo approach to the copyrights and the revenues generated?
- Why do we insist on long term commitments in terms of future products created beyond simply a share of future revenues?
To be honest these questions are puzzling beyond the desire of the commercial enterprises that currently rule the roost in maintaining the status quo.
Well here’s a surprise, you can still make a decent return even if you start from a better place!
In terms of why labels and publishers seek assignment of copyright, they feel this establishes asset value and to an extent it does. However so does recurring revenues which, by the way, you can sell on similar multiples.
The recording rights are probably easier to administrate and so that remains one of the reasons why they are often kept separate. The specialism required for administering the rights of the composer has traditionally been very complex with a myriad of global collection societies. However all that means is that specialised services are required for differing areas of the artist’s business. Very similar to businesses in many sectors and they don’t suddenly hive off part of their ownership to manage that process. So why should the music industry behave any differently?
Let’s make a shopping list for the aspiring new artist or new manager:
- Recording- studio/producer/engineer/mastering
- Distribution – digital/physical
- Marketing – PR/digital/advertising
- Professional – accounting/legal
All of the above can be provided under a service agreements and rewarded either directly by cash, a % of sales or through the RevShare deals offered by SHOUT4. At no stage do rights need to be assigned.
As a side note, I am curious as to the ‘race to the bottom’ of distribution business models now seemingly being offered for free by platforms seeking to gain subscribers to their own services. This seems to say that the value of the distributor has diminished perhaps? But let’s return to that in another article soon. As I say, I am curious!
So let’s not look back in anger but let’s start from the right place by not assigning rights and go from there in my next article. This gives me the chance to shoehorn in lyrics from one of my favourite tracks from Public Service Broadcasting.
“We’re off to a good start, play it cool,
Ok flight controllers, I’m going round the horn,
Go go go go go go go go go go go go go go go go.”
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Ric has a background in music as an artist, manager, label owner and promoter. He has combined this with a career away from music as CEO within SMEs and PLCs. As the architect of SHOUT4's Revshare model he is a strong advocate for artists retaining rights and providing legal and financial solutions to the DIY market which reflect the way the world is now and not the past.