Sunday, October 12, 2014

Music Business/Law Tips - Touring Profits

Touring profits for new artists are razor thin as most of the money goes right back out for travel, crew and commissions. It’s estimated that a new act only pockets between 15-30% of the profit from a show (after expenses and commissions), and this is before taxes. For example, a new band playing decent size rooms opening for a bigger act will generally gross about $10,000 a night if you combine the show fee plus merchandise sales. If such a band plays 5 nights a week they are grossing $50,000 a week (on average). Out of that, the band must deduct production costs ($10,000/week average), transportation costs ($10,000/week average), and crew costs ($10,000/week on average). That is a net profit of $20,000. The band must then deduct commissions of up to 40% to pay its manager, booking agent, lawyer and accountant, leaving the band with on average $8,000-$10,000 to split between the 4-5 members. Clearly, for a new artist, touring is all about setting themselves up for making more money in the future once they become a headliner where the fees increase (but so do the production and travel costs). On the other hand, touring is essential to develop a fan base that will stick with the act for many years to come/reap future benefits. Ben McLane Esq Benmclane.com

Thursday, October 2, 2014

Music Business/Law Tips - "Royalties for Oldies"

A recent California court case ruled that Sirius XM Radio (digital radio) must pay broadcast royalties for pre-1972 records it plays. The case was filed by The Turtles who sang on several big hits in the 1960s (i.e., Happy Together). Current Copyright law says that terrestrial (i.e., AM/FM band) radio stations don’t have to pay broadcast royalties to performers (only to songwriters via BMI, ASCAP or SESAC). Moreover, there was no copyright in sound recordings (only songs) prior to 1972. However, in 1995 the Digital Millenium Copyright Act carved out an exception whereby digital services like Sirius XM Radio must now also pay a performance royalty to performers and master rights owners when records are played on their stations. This royalty is collected by SoundExchange. The key issue was that Sirius XM was only paying out on records made from 1972 onward on the basis that no copyright existed prior to 1972 so there was no legal right to pay - artists like The Turtles felt they were getting screwed. The ruling is a major precedent and may result in terrestrial radio stations eventually being forced to pay broadcast royalties to performers as well. Of course Sirius XM will probably appeal, so keep posted to see if the decision stands. Ben McLane Esq Benmclane.com

Wednesday, September 17, 2014

Music Business/Law Tip - "Wristbands = Mo' $$$"

Festivals such as Lollapalooza and Bonnaroo are now having concertgoers wear RFID bracelets whereby an attendee has the option to connect the wristband to his/her bank or credit accounts to pay for what they buy at a concert (food, drinks or merchandise) by tapping the band against a chip reader. Statistics indicate that concertgoers spend about 20% more on on-site purchases when its cashless. This is clearly a trend you'll see more of at venues since the promoters make more money and there does not seem to be a backlash from attendees. Ben McLane Esq benmclane.com

Monday, September 1, 2014

Music Business/Law Tips - "Public Domain"

A song that is in the public domain means that it is no longer protected by copyright laws. This is usually because the song is very old and the term of copyright expired (generally if the song was created before 1922). A song that is in the public domain can be used, released or sampled without having to pay royalties or get permissions. However, when a song goes into public domain varies case by case, so make sure that the song is really in the public domain before you treat it as such. There are some helpful online databases that list public domain works you can Google to find them. Ben McLane Esq benmclane.com

Tuesday, August 19, 2014

Music Business/Law Tips - "House Concerts"

For a touring band that maybe is new or needs to fill in some gap dates, house concerts are a great way to stay busy, make new fans and generate income. Normally house concerts are promoted by a fan/host and will happen at a private home or backyard. Due to sound restrictions such shows tend to be unplugged/acoustic oriented. Make sure to get a few simple things in writing with the host, such as: (1) the band gets to keep all the merchandise and other donation monies fans pay at the show, (2) the host is liable for any damage to property or person on the premises, and (3) the host will provide food and drinks to the band. Ben McLane Esq Benmclane.com

Sunday, August 3, 2014

Music Business/Law Tips - "Business Plan"

If an artist is independent and is seeking money to record and promote an album project, they will need to create some sort of “business plan” to entice an investor to back the project. There is not one way to go about it, but any proper business plan should include the following basic sections: -Bio on the Artist -The amount of funding being sought -How the investment will be used (i.e., recording, touring, staffing, promotion) -A market analysis of the artist’s genre/niche (i.e., rock, pop, country) -How the artist plans to earn income from his/her career (i.e., sell records, tickets, merchandise) -Financial projections on the return on investment (be realistic and note cannot guarantee success) Ben McLane Esq Benmclane.com

Wednesday, July 23, 2014

Music Business/Law Tips - Copyright Reversion (35 Year Rule)

The 1976 Copyright Act added a provision that allows an artist (or songwriter) to reclaim ownership of masters (or songs) created from 1978 or thereafter once the 35 year term on those copyrights expire. Although it’s a bit more complex and the Act should be read to fully adhere, basically in order to trigger the reversion process, the artist/songwriter must file a termination notice with the label or publisher (and the Copyright Office) no earlier than 10 years and no later than 2 years before the 35 years of date of creation. A failure to miss this deadline waives the right to reclaim. The labels and music publishers who survive off their catalog of old hits cannot afford to lose the golden goose so they are fighting back under the theory that the original agreements with the artists/writers contained “work for hire” language that essentially made the label/publisher the author forever (i.e., the artist/writer waived the right to later claim ownership). A few lawsuits are starting to trickle through the system but there is no clear precedent yet (and they will probably will be resolved case by case if not settled out of court). Some artist/writers are using the threat to cut new deals. Note that Artists (or songwriters) who created masters (or songs) prior to 1978 can also reclaim their copyrights, yet under different and more lengthy timelines (but that is beyond the scope of this piece). Ben McLane Esq Benmclane.com