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The Future of Music – by Dave Kusek and Gerd Leonhard

The Future of Music book is available in various forms.

future of music

 

You can buy the book on Amazon.

 

You can purchase the audiobook from Audible.

 

You can listen to the book on iTunes as a podcast for free. Go to the iTunes store and search “Future of Music” podcasts and subscribe.

Here are a few of the reviews.

Publishers Weekly
Two innovators in music technology take a fascinating look at the impact of the digital revolution on the music business and predict “a future in which music will be like water: ubiquitous and free-flowing.” Kusek and Leonhard foresee the disappearance of CDs and record stores as we know them in the next decade; consumers will have access to more products than ever, though, through a vast range of digital radio channels, person-to-person Internet file sharing and a host of subscription services. The authors are especially good at describing how the way current record companies operate – as both owners and distributors of music, with artists making less than executives – will also drastically change: individual CD sales, for example, will be replaced by “a very potent ‘liquid’ pricing system that incorporates subscriptions, bundles of various media types, multi-access deals, and added-value services.” While the authors often shift from analysts into cheerleaders for the über-wired future they predict – “Let’s replace inefficient content-protection schemes with effective means of sharing-control and superdistribution!” – their clearly written and groundbreaking book is the first major statement of what may be “the new digital reality” of the music business in the future.

5.0 out of 5 stars THE FUTURE OF MUSIC IS NOW
Gian Fiero (Hollywood, California)

This book is so brilliant that it makes the vast majority of music industry books that are being published seem irrelevant. It discusses in detail, the reasons why the future of the music industry is headed into the digital/mobile entertainment era. It also provides statistical information that professionals, marketers, entrepreneurs, and educators can use constructively. Both Dave and Gerd (the books co-author), have their fingers firmly planted on current music industry activities and trends. They also possess and display a clairvoyant eye toward the future that offers beneficial insight and foresight to those who may not be aware of what this whole digital (i.e. independent) revolution is about, and most importantly, what it will entail to prosper in it. The book is easy to read, easy to understand and simply brilliant. If you buy just one industry book this year, this should be THE one. Buy it now!

5.0 out of 5 stars Indispensible
Stephen Hill “Producer, Hearts of Space” (San Rafael, CA USA)

A stunningly candid source of concentrated, up to date insight about the music business and its turbulent transition into the digital era. This book tells it straight and will make the dinosaurs of the music industry very unhappy.

Like Martin Luther’s ’95 Theses’ nailed to the door of Wittenberg Cathedral, Kusek and Leonard drive nail after nail into the sclerotic heart of the old-fashioned music business. Their rational vision of the future of music rests on the idea of unshackling music from the hardcopy product business in a yet-to-be-realized era of open content licensing, facilitating sharing and communication among users, and growing the business to its full potential.

It provides as clear a vision of the future of the music industry as you will find, from two writers with a rare combination: a solid grounding in the traditional practices of the music business, an up-to-the-minute knowledge of the new technologies that are changing it, and the ability to think through the consequences.

I’ve dreamed about a book like this, but thought it would be impossible in today’s hyperdynamic environment where every week seems to bring a breakthrough technology, device, or service. But by digging out the underlying trends and principles Kusek and Leonard get under the news and illuminate it. Along the way they provide a brilliantly concise history of the evolution of digital media.

I can’t think of any book more important for artists to get the full re-orientation they need to survive and prosper in the digital era. It’s no less critical for members of the music and broadcasting industries who need to consolidate their thinking into a coherent roadmap for the future. In a word: indispensible.

Other things to do from here:

We have a wide variety of blog posts and articles on the music business and the future of music. Please click on any of these links to read more.

How to Promote Your Music

How to License Your Music

How to get your Music on Spotify Playlists

How to book bigger and better Gigs.

Instagram for Musicians

Make Money from Music Licensing

A lot of musicians see music licensing as this big, super-intimidating goal.

Maybe you feel like you need to have a publisher before you can start. Or perhaps it seems like you need to have a catalog of at least 50 songs before you can even think about submitting anything to licensing opportunities. Or you may even think that you need to hit a certain level of popularity before your music will be “in demand” enough to get licensed.

Let me tell you right off the bat that those are all just excuses that hold you back.

You only need 3 things to start licensing your music successfully:

  1. The music
  2. A strategy
  3. Persistence

That’s it! In the music licensing industry, you’re going to get a whole lot further if you START.

So start prepping the tracks you already have, start researching music libraries and other placement opportunities, and start actually submitting.

To help you get that initial momentum going, we’re going to go through each of those three things one by one. Use this as a checklist for yourself to start moving towards your licensing goals.

1. The Music – Preparing Your Music and Your Catalog for Licensing

When it comes to your musical approach to licensing, you have two options (note that these are not mutually exclusive).

Write a LOT of Music

The more music you have to sell, the more earning potential you have. Seems pretty obvious, right?

The big question is: how do you become a prolific composer?

My tip is simple: embrace imperfection and work under the assumption that quality will come through quantity.

What do I mean by this?

I mean that if you challenge yourself to write songs faster than ever before, you’ll come up with some crappy tunes and some great tunes.

One exercse that has worked wonders for me is working with an artificial deadline.

Here’s how it works. Set a 30 minute timer for yourself and write a new song with a beginning, a middle, and an end. It doesn’t have to be a long song or even a very good song. The only rule is that when the timer goes off, you stop what you’re doing and bounce the MP3.

The goal is not to finish the track in 30 minutes. The goal is to create SOMETHING, whatever that is, in 30 minutes.

This exercise ensures that you always have a lot of raw material to work with. By forcing yourself to just write you’ll stumble upon a lot more ideas. Some may not be that great, but some will be gems that you can come back to and refine.

THIS is how I manage to write dozens of songs in a year.

Write in a Niche

Another approach to building out a licensing catalog is to write in a particular niche.

There are many advantages to writing in a niche:

  • It’s easier to brand yourself and your music
  • You know the market better
  • You can position yourself as the go-to person for that genre of music

Now of course, the less crowded the niche is, the more this applies.

The thinking is that if you just jump on the latest trend, you’ll be part of the cattle herd. It will be your song in a sea of thousands. But if you focus in on a particular (less crowded) genre or sub-genre, you’ll be able to shine. 

I think this is a little easier to illustrate with an example:

Let’s say you love reggae and it’s something you’re really good at writing.

In the grand scheme of things, there really aren’t that many people specialized in reggae. And that means the music production libraries are not flooded with reggae music.

If someone types in “reggae” in a music library, you’ll be towards the top! If someone asks a small boutique library for reggae available exclusive, the staff will get in touch with you and ask if you can write something for them.

Of course, there are less licensing opportunities for reggae tracks than there are for EDM or happy quirky corporate tunes, BUT (and this is important) you’ll get a look-in almost every single time there IS a reggae opportunity.

2. Creating Your Music Licensing Strategy

Now that you have the music and know you can write quality new tunes whenever you want, it’s time to put together a strategy.

Musicians don’t always like this part. They think there’s something immoral about “selling out.”

But here’s the simple truth: music is your career, your job, and your business. If you don’t want to make money with your music, stop reading this and go get a job.

If you DO want to make money from music, you need to realize that you’re not the only one. Especially with music licensing, it’s bit of a competition.

Now I don’t want you to freak out. It’s a competition with the potential for a LOT of winners. The demand for great music is SO high today that there’s room for lots of musicians to be very successful.

Here’s a few general tips to help you stay focused, motivated, and ahead of the curve:

  • If you enjoy what you do, your music will be better for it and you’ll have more energy to stay persistent longer (that means DON’T write in a genre you hate just because you think there’s more financial opportunity. That’s how you burn out.)
  • If you strategize and focus on the activities that will yield the highest results (whether that’s exposure or financial gain), you’ll have more energy to stay persistent longer. This will take some time to figure out, but over time you’ll start to realize what your big winners are. Focus on  what works and cut everything else out.

Understand Your Strengths – SWOT Analysis

In order to strategize, you need to know yourself and your music.

Let’s start with a SWOT analysis! The acronym stands for Strengths, Weaknesses, Opportunities, and Threats.

The exercise is simple:

  1. Identify your strengths and weaknesses as a music composer and business person (because your music is your business).
  2. Identify opportunities for your music and what threatens to derail your progress in the licensing industry.

Here are a few questions that may help you analyze your strengths and weaknesses and identify threats and opportunities:

  1. What’s my production profile? Can I record a lot of music at little cost or am I limited in the number of tracks I can put out every year?
  2. Is my music catalogue very specific and niche or could I benefit from focusing on a sub-genre for a little while?
  3. Am I good under pressure? Do I like working with really tight deadlines?
  4. Will the last minute cancelation of a project frustrate me?
  5. Am I more productive working alone or with a team?
  6. Who in my network can help me? This is SO often underestimated (by yours truly as well!). Don’t be afraid to ask for help. I’m not suggesting you ask everyone for money all the time but reminding people you’re trying to make a living as a musician and you can help with this and that goes a long way! That’s also how you start getting referrals and more gigs coming in!
  7. Is this strategy going to bring enough money in (in the long term, you can’t expect immediate results)? For example, if you’re a beatmaker competing with $1 beats, you’re in trouble. You’ll burn out in no time.
    Think about how you could sell ONE beat for $20 and you can focus on getting 1 customer instead of 20, 5 customers instead of 100.

You need to be as honest as you possibly can when you answer these questions. There’s no point in the exercise if you’re not!

3. Persistence

Music licensing is a looooooong game and you’ll sometimes be spending months without anything major happening.

You still need to keep going when you’re in that hole.

That’s why you need to take the time to put together a strategy that makes sense for YOU. Then you can trust the process when you’re going through a period that’s not bringing you a lot of obvious results.

If you choose a path that’s not well aligned with your personality and strengths, it’s going to be extra tough to make it.

Follow a Path That Makes Sense for YOU

You don’t enjoy writing happy quirky corporate tunes? Don’t spend 6 months trying to close deals with Apple and Ikea.

You can’t stand classical music? Don’t set out to make orchestral trailer music because you’ve heard it’s lucrative.

I know it sounds obvious, but you couldn’t guess how many musicians nail them down to goals they HATE because they haven’t taken the time to really think about what they want and enjoy doing.

Set and Track Your Music Licensing Goals 

The only way to persevere is to set goals that you can reach. And here’s the key – set goals around things you actually control

So as an artist trying to get your music licensed, you shouldn’t be aiming to get 4 placements in the next 6 months.

It’s not that it’s impossible for you to get 4 placements in that timeframe. It’s that you can’t CONTROL if you do or not.

Here are a few examples of goals that could work:

  • Each year I will to record and release X number of tracks.
  • I want to have X tracks ready for licensing (complete with alternative versions, keywords and attention-grabbing description) by a certain date.
  • I plan to submit to X number of music libraries
  • By next month, I will have contacted X amount of film students / rappers / videographers / fill-in-the-blank (Note you’re not aiming for a number of projects to work on. You’re targeting a number of potential customers you can reach out to to get a project)
  • I’ll attend X amount of TV / film networking events you attend.

From personal experience, and I’m sure it’s the same with you, efforts bring results.

Every time I’ve thrown myself wholeheartedly at something, I’ve made progress.

Be Gentle With Yourself

Don’t set yourself up to fail.

By all means, stretch your comfort zone. You’ll grow and make progress.

But don’t aim too high too fast! That’s the easiest route to burnout!

If you don’t really like networking, don’t spend 1 grand on a large live event. Instead, start online in a small Facebook group.

If you’ve never scored music to video before, don’t try to convince a short-film director featured at Sundance to hire you, get in touch with film school students first.

I’m not saying you should not aim high. If you can and you know you’ll follow through, congratulations, you’re exceptional! Keep doing what you’re doing! 🙂

For the more neurotic reader out there: yes, of course, aim high BUT if after a few weeks you notice you keep putting off the same thing over and over again…. Dial it back a bit 🙂

By all means, if you have the energy and endurance, sprint out of the starting blocks!

Just know that there’s nothing wrong with slow and steady progress to finish the race.

Joyce Kettering (creativeandproductive.com) is a songwriter, composer, music licensing expert, and teacher of the Get Your Music Licensed! program. The music licensing methods she teaches has allowed her to quit her day job at a Fortune 500 company and be successful on licensing alone. 

 

music copyright

Your copyrights are your business! So it makes sense to take the time to understand how it all works. Unfortunately, “copyright” and “law” tend to have pretty scary connotations. Just hearing the words is often enough to make our heads hurt.

This article from Digital Music News pretty much lays out everything you need to know about your copyrights, publishing, royalties, and licenses in a way that’s easy to understand. Here’s the copyright segment of the article.

I know it’s not the most exciting topic out there, but understanding your rights (and more importantly how you can monetize them) will unlock a lot of income opportunities for you in music. After you finish this article, check out this free ebook to learn how to take those rights and score awesome licensing deals.

We’re also hosting a free licensing webinar covering a surefire way to license your music. You’ll learn how to get your music on music libraries and how to make connections directly with music supervisors. Click here to register for free and choose the date and time that works best for you.

Copyright

As a musician you are a creator.  Whether you’re a composer, lyricist or performing artist, you create works.  These works automatically become copyrighted once they are documented; for example through recording or writing.

Copyright is a form of intellectual property.  The creator becomes the copyright owner.  If there are multiple creators, this right is automatically split equally.  Writers are free to deviate from this equal share through mutual agreement.

The duration of this copyright is generally until 70 years after the death of the last surviving author. It differs in some countries.

Copyright ownership rights give control over who can reproduce, distribute, perform publicly, display and create derivatives of a work. These ownership rights can be fully transferred and assigned to others.  Others can also be granted licenses to use your music, typically in exchange for a payment. These payments are called royalties.

There are two types of musical copyright;

Musical Composition Copyright:

A musical composition is a piece of music, in part or in whole.  The authors are typically the composer (writer of music) and the lyricist (writer of text, in case of lyrics). These authors are the owners of the musical composition copyright.  Typically in equal share, as both the composer and lyricist of a track get assigned 50% of the composition’s copyright, unless they agreed on a different split. This can be done when one party contributed more than the other.

The creators have the exclusive right to determine who can produce copies of their song, for example to create records.  This right can be granted to others by giving out a mechanical license, which is done in exchange for a monetary payment (mechanical royalties).

Whenever a record label or performing artist wants to record a song that they do not own, they have to get a mechanical license from the people that do. Always.

All decisions regarding the composition can only be made when agreed upon by all copyright owners.  As mentioned before, the ownership and control of copyright can be transferred to others.  Generally, songwriters get a specialized third party, namely a publisher, to control and manage their songs.  In exchange, they get a cut of the royalty streams which they help generate with the repertoire.

Writer-publisher splits tend to range between 50%-50% and 70%-30%, depending on the clout of the artist and sometimes even on the relevant country’s regulations.

Sound Recording Copyright:

A sound recording is the actual final recording of a song, a fixation of sound.  It often goes by the name of ‘master’ from the old ‘master tape’ expression.  The authors are the performing artist and record producer, who in essence are therefore the owners.  Producers typically get a small share of the master rights (up to 12.5%). However, recordings are typically made in assignment of record labels, whom have negotiated deals with both the artist and producer in which they transfer ownership of their copyright to the label in exchange for royalty payments.

Also, it’s increasingly more common and easy for performing artists to record independently.  In these cases, the master ownership belongs to just them, or them together with the producer.

Royalty payments to performing artists are called artist royalties.  Royalty payments to producers are called producer royalties.

Now that you know about the two different types of musical copyright, it is important that you grasp the difference between the ‘writers’ of a track and the owners of the actual ‘master recording’.  The composition, made by the writers, is typically represented by a publisher.  The sound recording, made by the performing artist and producer, is typically represented by a label.

To learn more about publishers, royalty calculations, and licenses, check out the full article over on Digital Music News.

Here is an excerpt from a great piece from Wyndham Wallace of The Quietus on how the music industry is killing music and blaming the fans. This rather dark opinion is spot on in so many ways and raises some very difficult questions about the future of the music business that most people do not want to talk about.

“All the time the industry talks of money: money it’s lost, money it’s owed. It rarely talks about the effects upon artists, and even less about how music itself might suffer. But no one cares about the suits and their bank accounts except shareholders and bankers. People care about their own money, and the industry not only wanted too much of it but also failed to take care of those who had earned it for them: the musicians. And it’s the latter that people care about. Because People Still Want Good Music.”

“In March this year, for instance, the RIAA – the Recording Industry Association of America – and a group of thirteen record labels went to court in New York in pursuit of a case filed against Limewire in 2006 for copyright infringement. The money owed to them – the labels involved included Sony, Warner Brothers and BMG Music – could be, they argued, as much as $75 trillion. With the world’s GDP in 2011 expected to be around $65 trillion – $10 trillion less – this absurd figure was, quite rightly, laughed out of court by the judge. The RIAA finally announced in mid May that an out of court settlement for the considerably lower sum of $105 million had been agreed with Limewire’s founder.”

What is questionable about all of this is exactly how much of the settlement of $105 million will flow to the musicians, songwriters and producers whose work was the subject of the infringement to begin with. In previous settlements including Napster ($270 million), Bolt ($30 million), Kazaa ($130 million) and MP3.com ($100 million) it is unclear how much, if any, of the money received by the labels ever reached the pockets of the artists. I have yet to see an accounting of this and many managers I have spoken with have simply laughed when I asked the question if they ever received any payment from these settlements. I suppose that proceeds from litigation may be considered recoupable costs.

“But if the industry wants to talk money, let’s talk money, albeit the ways that developing musicians are encouraged to make up the loss of sales income in order to ply their trade. Someone’s got to bring this up, because it’s not a pretty picture. Consider, first, direct-to-fan marketing and social networking, said to involve fans so that they’re more inclined to attend shows, invest in ‘product’, and help market it. In practise this is a time-consuming affair that reaps rewards for only the few. Even the simple act of posting updates on Facebook, tweeting and whatever else is hip this week requires time, effort and imagination, and while any sales margins subsequently provoked might initially seem higher, the ratio of exertion to remuneration remains low for most. It’s also an illusion that such sales cut out the middlemen, thereby increasing income, except at the very lowest rung of the ladder: the moment that sales start to pick up, middlemen start to encroach upon the artist’s territory, if in new disguises. People are needed to provide the structure through which such activities can function, and few will work for free – and nor should they – even though musicians are now expected to.”

“Still, if an act can find time to do these things, or has the necessary capital to allow others to take care of them on their behalf, then they can hit the road. Touring’s where the money is, the mantra goes, and that’s the best way to sell merchandise too. But this is a similarly hollow promise. For starters, the sheer volume of artists now touring has saturated the market. Ticket prices have gone through the roof for established acts, while those starting out are competing for shows, splitting audiences spoilt for choice, driving down fees paid by promoters nervous about attendance figures. There’s also a finite amount of money that can be spent by most music fans, so if they’re coughing up huge wads of cash for stadium acts then that’s less money available to spend on developing artists. And for every extra show that a reputable artist takes on in order to make up his losses, that’s one show less that a new name might have won.”

“Touring is also expensive. That’s why record labels offered new artists financial backing, albeit in the form of a glorified loan known as ‘tour support’. Transport needs to be paid for, as do fuel, accommodation, food, equipment, tour managers and sound engineers. These costs can mount up very fast, and if each night you’re being paid a small guarantee, or in fact only a cut of the door, then losses incurred can be vast, rarely compensated for by merchandising sales. Again, financial backing of some sort is vital, but these days labels are struggling to provide it. In the past, income from record sales could be offset against these debts, but with that increasingly impossible, new artists will soon find it very hard to tour. Everyone’s a loser, baby.”

From Beck’s ‘Loser’

Forces of evil in a bozo nightmare
Banned all the music with a phony gas chamber
‘Cause one’s got a weasel and the other’s got a flag
One’s got on the pole shove the other in a bag
With the rerun shows and the cocaine nose job
The daytime crap of a folksinger slob
He hung himself with a guitar string

Soy un perdidor
I’m a loser baby, so why don’t you kill me?
(Know what I’m sayin?)

“Whether the industry likes it or not, music is now like water: it streams into homes, it pours forth in cafés, it trickles past in the street as it leaks from shops and restaurants. Unlike water, music isn’t a basic human right, but the public is now accustomed to its almost universal presence and accessibility. Yet the public is asked to pay for every track consumed, while the use of water tends to be charged at a fixed rate rather than drop by drop: exactly how much is consumed is less important than the fact that customers contribute to its provision. Telling people that profit margins are at stake doesn’t speak to the average music fan, but explaining how the quality of the music they enjoy is going to deteriorate, just as water would become muddy and undrinkable if no one invested in it, might encourage them to participate in the funding of its future. So since downloading music is now as easy as turning on a tap, charging for it in a similar fashion seems like a realistic, wide-reaching solution. And just as some people choose to invest in high-end water products, insisting on fancy packaging, better quality product and an enhanced experience, so some will continue to purchase a more enduring musical package. Others will settle for mp3s just as they settle for tap water. Calculating how rights holders should be accurately paid for such use of music is obviously complicated but far from impossible, and current accounting methods – which anyone who has been involved with record labels can tell you aren’t exactly failsafe – are clearly failing to bring in the cash.”

“The problem is, it’s not really the industry that is being cheated. It’s the artists and their fans. People get what they pay for, but – whatever the industry claims – most fans know that. They just don’t want to hear the businessmen fiddle while the musicians are being burnt. Revenues are unlikely ever again to reach the levels of the business’ formerly lucrative glory days, but in its stubborn refusal to recognise that both the playing field and the rules themselves have been irreversibly redefined without their permission, the industry is holding out for something that is no longer viable. Lower income is better than no income, and the industry has surely watched the money dwindling for long enough. Musicians, meanwhile, are being asked to make more and more compromises as they’re forced to put money ahead of their art on a previously unprecedented scale.”

Read the whole ugly story here at The Quietus.

The comments alone tell the sad story of the state of affairs in the music industry today.

I ran into Jim Griffin this weekend and as usual, he got me thinking about music and it’s future. We talked a little bit about Chorus, the new controversial Warner Music backed company trying to create a music utility service for colleges. I’ll tell you the guy is like a bolt of lightning and his fever can leave you doubting what you know yet somehow I always come away with something new to think about and ponder. I listened to him speak briefly and then found a transcription of a similar speech he gave at Midem last year which I wanted to share with you. The complete speech is here: Jim Griffin Speech and a brief excerpt is below. Enjoy!

“It sort of struck me once, I was reading Marshall McLuhan, and I recommend Marshall McLuhan to everyone here who has not already read some of McLuhan’s work. McLuhan is a terribly influential person in media in the 1960’s, so much so that if you’ve seen the movie Annie Hall you may recall that he appears in that movie with Woody Allen in a line outside of a movie theater, and he’s very well known for having said that the medium is the message. I always wondered what that meant. And now that we live in a time of MP3, I think all of us can acknowledge that McLuhan had it right, that in some ways it’s more about what format something comes in these days than it is even the music itself.

But McLuhan said something else that escaped my notice until say five years ago. He indeed said that you will never understand the media of your time. He said that the media of your time is like the air that you breath. You’re unconscious of it. It’s like the water in which a fish swims. He said that you would only understand your media through the rearview mirror of history. And so it is that it led me back to the library to look through microfiches and so forth from the 1920’s and around that time period, because it was around that time period that electricity started to spread around the world. Before electricity spread around the world, for the most part, it could be said that an artist was in complete control of their art. Especially in the sense that, you know, they controlled it with their feet because if they weren’t in the room you couldn’t see them or hear them. Then in rapid succession over several decades we have the spread of electricity around the world, and loudspeaker systems evolve that make the crowd bigger than you can count. And then very very quickly radio broadcast, and now sounds are traveling many thousands of miles beyond their source. Then television is proven out in 1928. And so now your sound and your image can travel thousands of miles. Now, look, I get how we feel special living in this time that we do of the net. We think, wow, we are beset with change unlike we have ever seen. But I would say that that is absolutely untrue. The 1920’s, the spread of electricity, this was a far more savage time to be an artist. This was a far more difficult time.

Our changes, that we are seeing, are merely a gradation of change by comparison to what happened when electricity spread around the world. And so we have something to rely upon that they did not. We have something to look to, which is: what was their experience; how did they handle this dramatic change. I think that without question the way we handled this dramatic change was with collective licensing. In other words, loudspeaker systems, hotels, restaurants, wherever there are performances of music that are so powerful, we have a collecting society that would like to monetize this, and can and does, monetize the anarchy of music moving through say loudspeakers. And equally true of radio, and television broadcast, and cable, and satellite, and as recently as this past decade, we now monetize webcasting over the net in America in just this same way. And so I don’t think it is a great stretch, or that you have to think too far into the future to realize that it would truly be an anomaly if collective licensing did not extend itself further. It does not require a crystal ball to figure this out.

I think it is just about looking back into history and realizing that the way we have dealt with the loss of control, the loss of actual control, has been with the introduction of actuarial economics. And I know actuarial is a big word, you know, but it’s really simple. It’s just a pool of money and a fair way of splitting it up: a pool of money, a fair way of splitting it up. And that is how we have dealt with the loss of control in the past and I suggest to you it is likely that that will be the way we deal with loss of control now and into the future.”

Great coverage from Rolling Stone.

While up-and-coming bands may find most of their licensing offers in the $2,500 range, established bands can make much more: from $30,000 at the high end for TV shows to $100,000 for movies and $250,000 for commercials. To introduce last year’s Sky Blue Sky, Wilco licensed six of the album’s songs to Volkswagen for ads. And the veteran duo They Might Be Giants, who have been releasing recordings on their own for the last six years, made a deal with Dunkin’ Donuts for around $1 million to create original music for over two dozen spots, according to industry sources.

Perhaps no band has been more aggressive — or creative — with its licensing than OK Go. When the group treadmilled its way to YouTube stardom in 2006 with the no-budget video for “Here It Goes Again,” it was having the kind of careermaking hit that bands dream about, just as the commercial record industry was tanking. So OK Go manager Jamie Kitman sought licensing opportunities for the group — making deals for its music to be used in everything from TV commercials and video games to corporate seminars and cable TV “bumpers” (the music that’s used to come in or out of a program). Kitman estimates that when all the uses are tallied, OK Go will have granted more than 200 licenses and made old-fashioned hit-record money. “The accepted wisdom now is that no one is selling records,” Kitman says. “So how do you keep the wheels on the bus? There’s a person in my office who spends half her time fielding licensing queries.”

Ian Montone, whose Monotone Management handles the White Stripes, Vampire Weekend, the Shins, M.I.A. and the Raconteurs, says his bands no longer make most of their money on CD sales. “A lot of artists are looking toward touring and merchandising sales at shows, because that market is still vibrant if you grow it methodically,” he says. The Shins have licensed songs for use in commercials for McDonald’s and Zune. Still, Montone says the Shins turn down 90 percent of the licensing deals they’re offered. So why McDonald’s? “Why not?” says Montone. “They have kids and want to own houses.”

By comparison, the White Stripes have focused on touring and coming up with creative merch: The band sells limited-edition CD singles on the road, as well as unique posters created for each show. “We do that because it’s something special for the fans, but it’s also a way to make money,” Montone says. “I think you’re going to see artists doing more direct-to-consumer sales.” The Stripes have already been able to reapportion the record-company pie to their advantage: The band owns its masters and strikes distribution deals with the major record companies on an album-by-album basis.

Those kinds of partnering relationships are also being sought by the major record companies, who are offering artists better money if they sign deals that include more than just recording rights. Generally referred to as “360 deals” because they seek to cover every facet of an artist’s career, including publishing, touring, merchandising and licensing, the new deals are a way for record companies to hedge their bets in a declining record market and to recast themselves as music — rather than just recording — companies.

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One of the savviest labels is Fueled by Ramen, which boasts Fall Out Boy, Panic at the Disco, Paramore and Cute Is What We Aim For. “A lot of people hear about 360 deals and think it’s a land grab, but when you own the content, there are so many interesting things you can do,” says John Janick, who started the label in 1996 while going to college in Gainesville, Florida.

Unlike conventional labels, Fueled by Ramen, which has a partnership with Atlantic Records, does everything in-house: from building Websites that sell merchandise and recordings to producing the T-shirts it sells at chains like Hot Topic. In fact, Fueled by Ramen uses T-shirts to introduce fans to new music — both Panic at the Disco and Paramore placed tags on shirts with PIN codes that enabled buyers to download advance singles at home. “We’re creating a culture for each artist,” Janick says. “Obviously everyone is still looking for new ways to monetize recordings, but our company is growing into many other areas, and that’s great.”

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The state of the music business is obviously in transition, but new models are beginning to work at various levels that shine a very positive light on the future of the music industry. For example, some of the predictions made in the Future of Music Book and in other places are beginning to come to pass, such as the abandonment of DRM, music subscription and licensing services, ad supported music and the ascent of the Indie artist and Indie label. Take a look at these examples:

You can now purchase MP3 files for download without DRM from all four major labels on Amazon.com, emusic and a growing list of music destinations. The predictions that an unprotected format would kill sales have simply not been true. These businesses are exploding.

Early proponents of the subscription models Napster and Rhapsody have survived and are growing.

There is active discussion of a flat-fee structure for music at major labels where once we were laughed out of the offices.

Indie Labels now account for upwards of 30% of total music sales, up from the low 20’s just a few years ago. This is a profound shift in the powerbase that favors the independent artist and innovator.

Social music sites such as LastFM, Pandora, iLike and many more are making the fans into tastemakers with the ability to promote and share great new music at the touch of a button.

This is all very good news for musicians, writers and artists who want control of their destiny and their careers.