Business Matters: Are Market-Based Solution the Future of Music? Ask GreenLight Music, EMI Music Publishing
Business Matters: Are Market-Based Solution the Future of Music? Ask GreenLight Music, EMI Music Publishing

Market Solutions May Be Answer to Copyright Questions
Copyright law isn't broke, but it needs private enterprises to find solutions. Take last week's news that Clear Channel had struck a comprehensive royalties agreement with Big Machine Label Group that will for the first time pay a record label for terrestrial radio broadcasts. Rights owners want a law passed. A few private actors found a solution.

Exclusive: Clear Channel, Big Machine Strike Deal to Pay Sound-Recording Performance Royalties To Label, Artists

Here's another example: music licensing service GreenLight Music and EMI Music Publishing have an exclusive deal with New York University's Tisch School of the Arts to provide student filmmakers with affordable licensing costs for thousands of songs in EMI's catalog. The deal will make an EMI song available for $250 to $600 depending on how the music was used in the film, Corbis CEO Gary Shenk told Variety. That's about a 75% drop in price from normal licensing costs for student filmmakers. Media rights company Corbis founded GreenLight Music in March of this year.

Corbis Simplifies Music Licensing With GreenLight Launch

Some people long for government intervention to fix big issues, but businesses tend to favor finding solutions themselves (often after a little saber-rattling by the government to encourage parties to negotiate). "Well listen, I'm as big a fan as the next guy of elected officials, but I think it's always a little scary when you look for legislative or regulatory solutions to what should be marketplace solutions," Clear Channel CEO and chairman John Hogan said at last week's Country Music Summit in Nashville.

The truth is the market is good at finding solutions. People should be very encouraged that small businesses like GreenLight Music have been created to fix problems in the market. Licensing music has been too cumbersome a process for a market filled with growing digital opportunities. "It's our responsibility to find new and innovative ways to help EMI's artists achieve the success they always dreamed of and, as part of that, we are committed to finding ways to simplify the sync licensing process to provide easy-to-use solutions for creative professionals," said Brian Monaco, executive vice president for sales and strategic marketing at EMI Music Publishing, in a statement when GreenLight launched.

Market-based solutions will usher in new uses for music licensing, will help build new business models and will assure rights owners are paid for the performance of their materials. If you want inexpensive personal use licenses for your YouTube videos, don't expect Congress to find a solution. If you desire legal file sharing that pays all rights holders, expect a solution to come from private enterprise (just as one attempt, Choruss, came from private actors working together). ( Variety)

Amazon Offers Mp3 Incentive For Slower Shipping
Labels and artists should benefit from Amazon's desire for customers to accept slower shipping. As the Digital Audio Insider blog notes, Amazon Prime members, who as members receive two-day free shipping, now get $1 to spend on MP3 downloads if they accept "no-rush" shipping that will take 5 to 7 days. A dollar in an MP3 store will cost Amazon 70 cents in content costs. The difference between two-day and five- to seven-day shipping could easily be greater than 70 cents. ( Digital Audio Insider)

Albums Don't Sell As Much As Five Years Ago, But Radio Promo Still Helps
I found myself looking at the current album chart, seeing how long some of the most popular albums have been on the chart, and wondering if radio promotion is still worth the expense. After all, talk to any two people in the music industry and you're likely to hear once that radio is dead. But when I compared the numbers to the June 10 album chart from the same week in 2007, I saw labels were still getting a lot out of radio-driven albums.

Seven albums have been on the current album chart over 80 weeks (a cutoff I picked arbitrarily): Mumford and Sons' Sigh No More, Katy Perry's Teenage Dream, Zac Brown Band's You Get What You Give, Maroon 5's Hands All Over, Bruno Mars' Doo-Wops and Hooligans, the Band Perry's self-titled album and Jason Aldean's My Kinda Party. Those albums have averaged sales of 1.82 million. Throw in Adele's 21, which has been on the album chart for 68 weeks and has sold 9.34 million, and the average unit sales rises to 2.76 million.

Adele's '21' Hits 24th Week at No. 1 on Billboard 200 Albums Chart

Five years ago, there were also seven albums that had been on the chart for 80 or more weeks: Jason Aldean's self-titled album, Brad Paisley's Time Well Wasted, Brooks & Dunn's Hillbilly Deluxe, Pussycat Dolls' PCD, Nickelback's All the Right Reasons, Carrie Underwood's Some Hearts and Kenny Chesney's The Road & the Radio.

But there's a big difference in the sales of those two groups of seven albums. In 2007, the albums with 80 or weeks on the chart sold an average of 2.98 million units -- almost 1.2 million units more than the 2012 group.

Lower album sales can be offset -- at least partially -- by growth in track sales. Popular albums, especially ones like these driven by radio play, often sell over 10 million individual tracks. The 80-plus week albums on the current album chart have sold an average of 9.45 million individual tracks. That's an almost fourfold increase from the 2.4 million-unit average by the seven albums from the June 10, 2007 album chart. In terms of track-equivalent albums (TEA), there has been a 14.5% decline to 2.77 million units from 3.23 million units.

Here's a rough translation of the above numbers: if you keep an album on the chart for more than 80 weeks, you're going to get 15% fewer sales out of it than you would have five years earlier. If that sounds awful, it shouldn't.

It would be hard to suggest radio promotion is no longer a worthwhile activity from that mild decline. Radio also drives YouTube views, Spotify streams, ticket sales and sponsorship opportunities. Everything is interconnected.

Touring and press can keep an album on the chart -- for some genres. Bon Iver's self-titled album has been out 46 weeks and has sold 453,000 units. Underground buzz can do the job, too. Scary Monsters and Nice Sprites by E.D.M. artist Skrillex has been on the chart 58 weeks and has sold 381,000 units.

But for the most part, radio is what keeps an album on the chart and selling. LMFAO's Sorry for Party Rocking and Pitbull's Planet Pit have each been out 51 weeks. Both albums have benefitted greatly from their singles' success at radio.

And then there's country. The album chart leaves no doubt why country music is synonymous with country radio. After 39 weeks, Lady Antebellum's Own the Night has sold 1.65 million units and two No. 1 country songs out of four singles. Luke Bryan's Tailgates & Tanlines sold 25,000 units after 44 weeks, three singles and a No. 1 hit. Eric Church's Chief sold 16,000 units in its 46th week of release and currently has a No. 1 country song, "Springsteen." Justin Moore's Outlaws Like Us has been out 51 weeks. Eli Young Band sits at No. 137 after 43 weeks and a No. 1 country song with "Crazy Girl."