COM 107 4/2/15 The Music Business, iTunes

and the Importance of Intellectual Property and

Copyright

Music Industry Oligopoly

The Big 3:
Universal 39.5%
Warner 19.1%
Sony 29.3%

Source: The Nielsen Company

Making Music
A&R Artist & Repertoire Agents the
Talent Scouts
Recording sessions:
Producer oversees process
Artist performs the music
Session Engineer oversees technical
aspects
Audio Technicians work under engineer

Problem: Decline in Sales

Sales down more than 50% since 1999
41% of CDs bought by people under 29

iTunes
Becomes leading music retailer
38.2%
Songs range from .69 to $1.49

Where The Money Goes

RollingStone.com

Courtesy of

Where The Money Goes

RollingStone.com

Courtesy of

Where The Money Goes

RollingStone.com

Courtesy of

Copyright
Legal registration of ownership of an
expression
Copyright owner has exclusive rights
to their work
Financial incentive to create art

Copyright Expiration
When copyright expires, work enters the
Public Domain
Original copyright expiration: 14 years
(plus 14 year extension)
Mid 20th Century 56 years
1976: Life of author + 50 years/75 years
for corporations (i.e. blockbusters from
Hollywood Studios)

Public Domain
the state of belonging or being
available to the public as a whole,
and therefore not subject to
copyright.
Works whose intellectual property
rights have expired

Copyright Expiration
1998: Sonny Bono Copyright Term
Extension Act/Mickey Mouse
Protection Act: Life of author + 70
years/95 years for corporations

Copyright and the Music

Industry
Digital Millennium Copyright Act
(DCMA): illegal to create or distribute
technology used to circumvent
copyright

Licensing Agencies
ASCAP American Society of
Composers, Author and Publishers
(1914)
BMI Broadcast Music, Inc. (1939)
Monitors public performances,
collects license fees, distributes them
to members as royalties

ASCAP: Who Do They Collect From?

Networks
TV Stations
Radio
Websites
ASCAP's Customers

ASCAP Payment System

ASCAP

Courtesy of

Piracy
Selling unauthorized recordings of a
copyrighted work

Napster
Founded 1999
Peer-to-peer MP3 file sharing services
Shut down after lawsuits
Piracy? Yes or no?

Music in the Digital Era

Streaming Services Spotify,
Pandora, Soundcloud
Can be:
Free, with ads (and limited ability to skip
songs)
Subscription

Music in the Digital Era

Major issue with Streaming Services:
Payments for rights to stream music,
and how much goes to artists

Music in the Digital Era

Taylor Swift Controversy

How royalties (rights payments) get
to Swift
Step 1: Radio stations, marching
bands, TV stations, streaming
services -> BMI (Licensing Agency)

Taylor Swift Controversy

How royalties (rights payments) get
to Swift
Step 2: BMI (Licensing Agency) ->
Sony/ATV Music Publishing
(Conglomerate)

Taylor Swift Controversy

How royalties (rights payments) get
to Swift
Step 3: Sony/ATV Music Publishing
(Conglomerate) -> Big Machine
Records (Record Label)

Taylor Swift Controversy

How royalties (rights payments) get
to Swift
Step 4: Big Machine Records (Record Label) ->
Taylor Swift

Taylor Swift Controversy

Spotify vs. Swift Spotify says theyll
pay 6 million this year, Big Machine
says they only paid $500,000 last
year

Taylor Swift Controversy

Now I know how
Joe Jonas, Taylor
Lautner, John
Mayer, etc. all feel!

Goodby
e,
Spotify!

Taylor Swift: Where Her Money Comes

From
Touring: Red - $30 million
Merchandise: $1 Million
Endorsements: $10 Million (Diet
Coke)

Sources: WSJ, C/net, Billboard, Buzzfeed

Taylor Swift: Where Her Money Comes

From
Licensing (BMI):
9.1 per song
1989: $1.17
Plus, radio, TV, streaming

Sources: WSJ, C/net, Billboard, Buzzfeed

Taylor Swift: Where Her Money Comes

From

Digital and Physical Sales (iTunes)

20% of sale price
$1.29 single = 26
$12.99 album = $2.60

Sources: WSJ, C/net, Billboard, Buzzfeed

Taylor Swift: Where Her Money Comes

From

Per stream: 0.6

Sources: WSJ, C/net, Billboard, Buzzfeed