Radiohead and In Rainbows – Pushing the boundaries in Publishing, too

January 6, 2008

There seems to have been a touch of serendipity at play in Radiohead’s decision to offer their latest album as a pay-as-you-want download. As the band’s managers told David Byrne in his recent Wired interview (Audio entitled “You have had years…) about 5 weeks before the band announced the imminent release of In Rainbows, Radiohead’s long-time publisher Warner-Chappell (“WC”), approached the band with what they described as an “experimental” idea.

WC’s proposal was a simple one (see article from Billboard, reproduced below).  In short, with Radiohead’s permission, WC would act as a global one-stop shop for the administration of the copyrights of In Rainbows.

Under the old publishing administration system, the artist and publisher would have to negotiate deals with collecting societies in each of the 27 EU territories separately, and the length of time between the purchase of a track until the time the artist is paid, could be a year or more.

The new deal allows WC and Radiohead to sidestep this enormously complex system, to the ultimate benefit of consumers (with music getting to market more quickly), artists (who are paid more quickly) and the music industry (by the reduction in bureaucracy) by allowing WC to be the collector and administrator of the rights for In Rainbows on a global basis.

Just to clarify, WC, although owned by Warner Music Group, is a separate company and one of the few profitable arms of a company who’s stock hit an all time low of $5.31/share today. WC handles the administration of the songwriting copyright for thousands of artists, including Radiohead.  EMI controls the sound recording copyright of all of Radiohead’s albums except In Rainbows. By not resigning with EMI, Radiohead maintained control of their sound recording copyrights for In Rainbows, but choose to allow WC to continue to administer the songwriting copyrights.

Although there are two separate copyrights (sound recording and songwriting) at work in every piece of recorded music, they are virtually useless when used independently of each other – digital downloads, using the music in a movie, making a CD, licensing the song to a video-game etc. all rely on the agreement of the sound recording owner (in this case, EMI for their seven prior albums, Radiohead themselves for In Rainbows) and the songwriting copyright owner (jointly Radiohead and Warner-Chappell Publishing for all albums).

The removal of EMI from this equation, and consequently the removal of many time- and-cash consuming “stakeholders”, may well have streamlined this whole process – on January 3rd, in a move that seemed to give credence to WC/Radiohead deal, the EU published it’s Creative Content Online In The Single Market paper.

It called for “the (music) industry to set aside piracy concerns through “innovative and collaborative solutions” and make more content available digitally” and “that there is ”an underlying need” to tackle “the lack of multi-territory copyright licences, (which) makes it difficult for online services to be deployed across Europe and to benefit from economies of scale”.”

It’s long been said that the new music industry would require bold moves and a re-thinking of old paradigms. Radiohead’s album release was certainly such a move: but it’s refreshing and exciting to see a company with “old industry” ties such as Warner Chappell lead the way in publishing, despite the obvious risks involved.

Even though success is far from guaranteed at this point, these moves may well be to the benefit of the next generation of great musicians, songwriters and industry entrepreneurs.

Warner-Chappell have agreed to answer any questions I might have about the deal they signed with Radiohead (thanks, Paul!). If you have anything you’d like to ask them about the deal, please post it as a comment and I’ll try and forward it along.

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BILLBOARD EXCLUSIVE: RADIOHEAD’S ONE-STOP SOLUTION (Dec. 15)

Radiohead’s “In Rainbows” has again chartered new territory—this time in terms of its digital licensing.

The British alternative rock act and its publisher Warner/Chappell Music have launched a unique “all rights” digital licensing service for the album’s release, aimed at streamlining the licensing process for works on the 10-track set, Billboard has learned.

The “one-stop shop” solution enables potential rights users worldwide to secure licenses from a single destination, effectively side-stepping the label and traditional collecting society networks.

Jane Dyball, Warner/Chappell senior VP of European legal and business affairs, hails the development as “groundbreaking,” noting that it allows the publisher to administer all digital rights for “In Rainbows,” including mechanical, performing, synchronization, lyrics, master recordings, image and likeness. The publisher will also license synch rights for publishing and master rights for TV and film synch uses.

“We can do it because we are not under a contract with a major record company,” says Radiohead manager Bryce Edge of Oxford, England-based Courtyard Management. “No major label, in my experience, would let a band sign a deal without the digital rights being attached.”

Like many aspects of Radiohead’s seventh studio set, the new digital licensing solution was “experimental,” says Dyball, but one that promises benefits to all parties. She stresses that the deal applies only to this album, and that it is still too early to gauge whether the system will provide a template for other acts to do the same.

“We’re able to do this because of the band’s unique circumstances, their history with Warner/Chappell and our combined willingness to try new approaches,” she says. “So it’s not something that can be immediately rolled out to others. But, as with any experiment, we will learn things along the way, which will be fed back into our business.”

The only constraints for third-party digital licensing, Edge says, is that download stores must sell works encoded in a bit rate of 256kps and higher, and that the content be offered digital rights management-free.

The convoluted process for licensing publishing rights in Europe alone typically requires a service to negotiate with one or two societies in each of the 27 European Union member states. Master rights are treated separately. The Radiohead deal is a step beyond Warner/Chappell‘s MIDEM announcement of plans to offer Pan-European licenses for its Anglo-American repertoire.

“To do that kind of experiment on a bigger scale, you had to have a buy-in from lots of different stakeholders and everyone would have to agree,” Dyball says. “On this, we had hardly any stakeholders, just Warner/Chappell and Radiohead, which really allowed us to try it.”

The album finally receives a physical release through ATO Records Group (United States), Hostess Entertainment (Japan) and XL Recordings (rest of world) in late December/early January (see story, page 18).

“We are intending to share the revenue that we receive through the one-stop shop from the master exploitation with XL and ATO,” Edge says. “It’s just we are collecting it.”

All licenses as part of the new Warner/Chappell arrangement are subject to band approval.

“We will certainly be starting to talk with licensees now, in conjunction with the band and management,” Dyball says. “But it’s too early to talk about deals.”

Edge confirms that Radiohead’s camp is in talks with iTunes about carrying “In Rainbows.” The band’s previous albums are not available through Apple’s music store.

Warner/Chappell says the licensing service will operate at standard industry rates.

“We’re working with the band,” Dyball adds, “and they are working with their non-digital partners. The idea is that we’re all pushing in the same direction.”

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Kristen Hirsch & Cash Music – “I wonder if we might be able to do this together”

December 23, 2007

Just a quick post about a “new” business model that’s actually been knocking around for a while. What’s most significant is an artist of Kristen’s stature acknowledging the reality of free music and most importantly taking steps to address that reality.

Kristen Hirsch (of former Warner act Throwing Muses and now successful solo artist), along with a number of other artists, has started cashmusic.org. The basic premise of Kirsten’s offering is basically something Techdirt’s Mike Masnick had suggested all the way back in 2003.

At it’s heart, it’s a subscription model, but with a twist – Subscriptions range from:

Dime-a-Day Level: $10 per quarter

In addition to the music and media files, you will also receive:

  • a CASH Music Kristin Hersh window sticker
  • a limited-edition quarterly poster
  • all members in good standing will also receive Kristin’s new CD, when it’s complete ahead of the release date

all the way up to:

Executive Producer Level Support: $5000

In addition to all the above, Executive Producers receive:

  • in lieu of a Featured Sponsor credit, they shall receive an Executive Producer credit on Kristin’s next CD.

I love Kristen’s philosophy and it’s another wrinkle that might serve artists at Kristen’s level and below well.


The Rise & Fall of Snocap – What Did We Learn?

December 18, 2007

I watched with interest the recent layoffs by digital music widget provider Snocap and their subsequent decision to look for a buyer for the company. For anyone who’s unaware, Snocap is a company founded by former Napster head Shawn Fanning and provides music sales platforms for signed and unsigned artists.

The sales platforms, like most widgets, are HTML based stores that can be added to any webpage, blog or (theoretically) email. Although it may sound like old news now, Snocap was one of the first companies offering music widgets to artists, and their summer 2006 deal with MySpace seemed to have them destined for great things. I thought so – I nearly accepted a position at Snocap last December. So what went wrong?

Listen to and know your customers

What’s become clear to me since last year is the growing ubiquity of music is causing a devaluation of the initial purchase of music products, which usually means recorded music. Most people are viewing their initial encounter with a band (indeed, even with a new album) as one that they should hear for free. The job of a good digital music service is to monetize this interest at a later date.

This is especially true among MySpace’s core audience of 12-19 year olds, then and now, but Snocap stores normally priced music at $0.99/track (although artists could price as low as $0.45/track). The killer was that payment was made via PayPal or credit card, a method of payment that few teenagers have access to.

Although not acknowledged at the time, possibly because of the then unique “viral” element, the stores also put Snocap in direct competition with iTunes, and the past decade is strewn with the charred business plans of companies who tread in that direction.

Worse still was the lack of a ringing endorsement from the point-of-first-contact for Snocap: Independent artists. More than one artist raised concerns with me about the service last year. The main point at issue was turning what was essentially a networking platform into a sales pitch – the feeling was that, after months of work to build relationships and fan trust via MySpace, the move would have a negative impact…of course, these same artists understood what MySpace is and is not, which leads me to…

Understand the platform

Given the volume of visitors to MySpace in mid-2006, it made sense to attempt to monetize those visitors, especially if it would provide a way for independent artists to make income.

But MySpace never was or will be a sales platform – it is the default destination to hear a band and make an initial connection but it is far from an Amazon-esque trusted vendor. MySpace is like a market with a billion sellers and no buyers. Taking a stab at changing how MySpace is used was admirable, but illustrates the immense difficulty, some would say futility, of changing users behaviour on a certain platform.

I think Facebook (with Pages & Beacon ) is trying something similar, but their success is far from assured for the same reasons.

Customer service matters

As revealed by Derek Sivers about CD Baby’s ill-fated relationship with Snocap, there was a more fundamental problem plaguing Snocap’s offering – The widget, customer service and overall service weren’t very good.

The widget couldn’t be skinned so it stuck out like a sore thumb on most pages, technical support was spotty at best and unresponsive at worst and the most obvious of features (allowing an artist to sell whole albums rather than track by track, for example) took forever to implement. Album bundling was only made widely available in July 2007, nearly a year after the MySpace deal.

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Snocap’s endeavors were worthy, if only for what you can learn from the mistakes. But so many seasoned marketing and digital media folks poured their hearts into the project that it’s clear the volatile digital music space is one to be approached with caution, especially on the scale Snocap were aiming for; namely a whitelabel, viral storefront service for unsigned, indie and major label acts.

In the end, that might be the key lesson here – there is not just one solution to making money from digital music, but many, and each new music business requires it’s own unique solution.