CSUN Digital Music Class - BFM Digital

Pie Charts

Pie Charts

42 Ways to Make Money

SONGWRITER & COMPOSER REVENUE1. Publisher advance2. Mechanical Royalties3. Commissions4. Public Performance (PRO) Royalties5. Composing Original Works for Broadcast6. Synch Licenses7. Sheet Music Sales8. Ringtones Revenue9. ASCAPlus Awards Program10. Publisher Settlement

PERFORMER & RECORDING ARTIST REVENUE11. Salary as Member of Orchestra or Ensemble12. Shows/Performance Fees13. Record Label Advance14. Record Label Support15. Retail Sales16. Digital Sales17. Sales at Shows18. Interactive Service Payments19. Digital Performance Royalties20. AARC Royalties

Source: Future of Music Coalition

Digital Sales

42 Ways to Make Money

PERFORMER & RECORDING ARTIST REVENUE(continued)21. Neighboring Rights Royalties22. AFM/Secondary Markets Fund23. AFM/Sound Recording Special Payments24. AFTRA Contingent Scale25. Label SettlementsSession Musician Revenue26. Session Musician/Sideman Fees for Studio Work27. Session Musician/Sideman Fees for Live Work28. AFM/AFTRA Payments

TEACHING & PRODUCING29. Music Teacher30. Producer31. Honoraria or Speakers Fees

Source: Future of Music Coalition

BRAND RELATED REVENUE32. Merchandise Sales33. Fan Club34. YouTube Partner Program35. Ad Revenue36. Persona Licensing37. Product Endorsements38. Acting Fees

42 Ways to Make Money

FAN, CORPORATE, & FOUNDATION FUNDING 39. Fan Funding40. Sponsorship41. Grants

OTHER42. Arts Administrator

Source: Future of Music Coalition

Digital Music is Social

PEOPLE WANT TO SHARE THEIR MUSIC

WHO ARE YOU?

FREAK THIEF

• ARTISTS• COMPOSERS• PRODUCERS• MUSICIANS

• LABELS• PUBLISHERS• MANAGERS• AGENTS

Before/After

1991 2013

• Yahoo• Netscape• MP3• Napster• Blog• File Sharing• Spice Girls

• Facebook• Youtube• Tweet• iTunes• Netflix• Justin Bieber

2001

WORDS WE DIDN’T KNOW

Now…

????

Word Of The Decade

DISINTERMEDIATION

• LABELS• PUBLISHERS• MANAGERS• AGENTS

• ARTISTS• COMPOSERS• PRODUCERS• MUSICIANS

WHO ARE YOU?

THIEFFREAK

Digital Music Work Flow

Distribution Process

Direct Marketing(optional)

Label/ArtistActivities

Digital Stores

HUNDREDS MORE!

What is the value of music?

Situational Pricing:Same Product…Different

Prices

= $5.00

= $0.35

= $1.50

20 oz bottle

SO WHAT IS THE VALUE OF THIS

BOTTLE OF COKE?

What is the value of music?

= $0.99

= $0.30

= $.001

Warning!: Shameless self-promotion coming up!

SO WHAT IS THE VALUE OF THIS

SONG?

Revenue Streams

STREAMS– Previews– Full Length– Free– Ad-Supported– Subscription– Cloud– Radio

Digital Revenue Streams

DOWNLOADS– Permanent– Tethered– Variable Price– Premium– Upgrade– Dual– Ringtone

Digital Revenue Streams

DOWNLOADSType Price RangePermanent $0.50 - $1.50/tkTethered $0.001 - $0.01/tkVariable Price $0.10 - $0.45/tkPremium $1.25 - $2.50/tkUpgrade $0.25 - $0.50/tkDual $0.79 - $2.50/tkRingtone $0.00 - $3.50/tk

Digital Revenue Streams

STREAMSPrice Range:

$0.00000 - $0.010000

Spotify (per stream): Ad: ~$0.0010 - $0.0050Subscription: ~$0.0075Premium: ~$0.010

Youtube (per view): $0.0001 - $0.01Pandora (per stream): $0.0011

Ownership vs Access

THE CLOUD STORAGE

Which is more important to you: • Access to 30 million tracks or Owning 3000?• Streaming or downloading? • Privacy or Sharing?

Subscription Vs. Cloud

Subscription Services:• Pandora• Spotify• Slacker• Deezer• Rhapsody• Muve• WiMP• SiriusXM• Google• Youtube• Beats

Cloud Services• iTunes• Amazon• Google

Pandora vs. Spotify

Pandora• ~1 million tracks• Play is limited by

DCMA rules (can’t play exactly what you want)

• Can’t make playlists• Not very social• No apps• US Only

Spotify• 30 million tracks• Play whatever you

want• Easily integrated with

your social media• Open Platform (lots of

apps)• Offline Version (with

Premium membership)• 23 countries

Which has more listeners??

Listeners vs. Subscribers

Source: http://www.digitalmusicnews.com/permalink/2013/05/26/state

24 mil “listeners

72.7 mil “listeners

Why?

iTunes Radio

iTunes Radio

• 20 million unique listeners in the first month!

• That’s almost 1/3 as many users as Pandora!

Why?

Which Would You Want?

Creatives

Corporate/Jobs

Consumers

$0.99 (really $0.70)

$0.001/stream

X

X

X

$0.99 (really $0.70)

$0.001/stream

X

X

X

X

What Is Your Career Path?

Creatives

Corporate/Jobs

Consumers

ROYALTIES SALARY

How Do You Get There?

OLD PARADIGMLABELS DICTATED TO CONSUMERS

“It’s really hard to design products by focus groups. A lot of times, people don’t know what they want until you show it to them.” (Steve Jobs)

How Do You Get There?

NEW PARADIGMCONSUMERS STEER THE SHIP

“Follow the money” (Mark Felt aka Deep Throat)

NIN Story

CwF + RtB = $

Connect With Fans (CwF) + Reason To Buy (RtB) = The Business Model ($$$$)

(Source: Michael Masnick, Editor TechDirt)

“Before anyone can pay a royalty, someone has to pay attention.”- Ron Sobel

Recommended Toolkit

Recommended Toolkit:MS Excel (2007 or newer) [1,048,576 rows vs. 65,356)

Dummies Guide to MS Excel Good Music Business Book

“Music Publishing – The Complete Guide” (Steve Winogradsky)“All You Need To Know About The Music Business” (Donald Passman)

File Transfer Program or ServiceYoutube/Facebook/Twitter Channel NameLarge Email InboxBillboard.biz (and print version)Music Blogs (e.g., Digital Music News, Hypebot, etc.)Paypal AccountConstant Contact or other Newsletter Program

A CLOSER LOOK

About Me http://about.me/stevencorn

Linked In https://www.linkedin.com/in/stevencorn

CMS http://www.cornmusicservices.com/

BFM Digital http://bfmdigital.com/

Steve's Blog http://bigfishmedia.typepad.com/thedigitallowdown/

Steve's Slideshare http://www.slideshare.net/scorn100

Twitter @digimusic4real

BFM Jazz http://www.bfmjazz.com

© 2014 Steven Corn – All Rights Reserved