The Music Xray Blog
technology enhanced identification of high potential songs & talent

Sony Pulls All Music Off Soundcloud

Posted by Mike McCready | May 7th, 2015 | No responses – 

The globe’s second biggest music group, Sony, pulled its music off of SoundCloud yesterday after failing to reach an agreement. Gone are such hit artists as Adele, Kelly Clarkson, Hozier and Miguel.

Sony dispute with Soundcloud is over “a lack of monetization opportunities,” an anonymous music executive told Billboard, who were first to report the takedown. “[It’s] been a good place for exposure,” added an artist manager. “At the same time, artists and labels need to get paid for music. Until that can be worked out, we’re going to have situations that are incompatible with artist development.”

Ongoing Negotiations, $2 Million Paid

In addition to the NMPA, Soundcloud has also been able to strike a licensing deal with Warner Music Group; and talks with other rightsholders are ongoing.

“We are in ongoing conversations with major and independent labels and will continue to add partners to the program,” noting that the company has already paid out more than $2 million in advertising revenue to more than 100 partners since On SoundCloud’s establishment in late 2014″ Soundcloud said in a statement. “We’ve always put control in the hands of creators, and anyone who makes music and audio can decide when and how they want to share it with fans, allowing artists to essentially broadcast out to the world the availability of new content.”

Interview With Music Xray CEO Mike McCready On The Jimmy Lloyd Songwriter Showcase

Posted by Mike McCready | May 2nd, 2015 | 3 Responses

Jimmy Lloyd asks Mike McCready the tough questions.

Episode 31 – Segment 3 – Jimmy Lloyd interviews Mike McCready – The Jimmy Lloyd Songwriter Showcase from on Vimeo.


Grooveshark Finally Shuts Down, Apologizes to the Music Industry

Posted by Mike McCready | May 1st, 2015 | No responses – 

The online streaming website Grooveshark lost its battle with the music industry on Thursday, shutting down immediately as part of a settlement agreement.

The closure follows a six-year legal battle between music labels and Escape Media, Grooveshark’s parent company.

Escape Media, parent company to music streaming service Grooveshark, has agreed to settle with Universal Music Group, Sony Music Entertainment and Warner Music Group and cease all operations, effectively “wiping its computer servers of all the record companies’ music, and surrendering ownership of its website, mobile apps and intellectual property,” according to the Recording Industry Association of America (RIAA).

An RIAA statement issued on Thursday (April 30) goes on to say that under terms of the settlement, “Grooveshark founders Josh Greenberg and Sam Tarantino admit to creating and operating an infringing music service.”

“This is an important victory for artists and the entire music industry. For too long, Grooveshark built its business without properly compensating the artists, songwriters and everyone else who makes great music possible. This settlement ends a major source of infringing activity,” said a statement by the RIAA, the industry trade group that represents the major labels.

In court papers, plaintiffs called Grooveshark the “linear descendant” of file-sharing services Grokster, LimeWire and Napster, all of which were shut down over copyright infringement.

A message on its homepage reads: “Dear music fans. Today we are shutting down Grooveshark.

“We started out nearly ten years ago with the goal of helping fans share and discover music. But despite best of intentions, we made very serious mistakes.

“We failed to secure licenses from rights holders for the vast amount of music on the service.

“That was wrong. We apologize. Without reservation.”

It added, “If you love music and respect the artists, songwriters and everyone else who makes great music possible, use a licensed service that compensates artists and other rights holders.”


Amazon, Google and Pandora launch coalition to battle digital royalties hike

Posted by Mike McCready | April 30th, 2015 | No responses – 

Amazon, Google and Pandora have joined forces to launch a coalition to oppose efforts from musicians, publishers and record labels to raise digital royalty rates from online services.

The move comes during a review by the 114th Congress and the Copyright Office of US copyright law, while licensing agency BMI is headed to court with Pandora in a royalties’ dispute.

The MIC Coalition, that also includes AM and FM radio broadcasters, digital distributors and restaurants, say: “The next 24 months are pivotal for music, with big decisions coming from the Department of Justice, the Copyright Royalty Board and Congress that will have the potential to determine how and where music is played and what costs consumers and users will bear.”

Commenting on the Coalition’s formation, president of the National Music Publishers Association said: “Streaming giants like Pandora have long exploited these archaic regulations to use songwriters’ work while paying them almost nothing.

“Sadly, it’s no surprise that they are joining other tech and streaming giants to fight the songwriters and artists who made them.”

The Department of Justice could be contemplating allowing US publishers to withdraw partial rights from blanket licenses with performing rights societies. Publishers would be allowed to make direct deals for digital licenses while still using the PROs for administering payments to its songwriters.


Mark Mulligan’s New Book Is A Must Read – Awakening: The Music Industry In the Digital Age

Posted by Mike McCready | April 28th, 2015 | No responses

daebogan.wordpress.comI’m happy to hear that Mark Mulligan has finally released his book, “Awakening: The Music Industry in the Digital Age,” about the rise of the digital music industry. He interviews dozens of prominent figures in the space and offers a point of view and analyses that we’ve come to love from this industry expert. “For anyone interested in the music industry and the lessons it provides for all media and technology businesses in the digital era, this is the only book you will ever need.” The book is available now on Amazon and iTunes and Google Play.



The Breakdown Of Monetization On YouTube

Posted by Mike McCready | April 27th, 2015 | 3 Responses – 

One of the questions most frequently asked by artists who are enrolled in the YouTube Monetization program is “how much money will I earn per view?” A closer look at the process for determining WHEN, HOW, and WHAT advertisements are displayed on any YouTube videos that feature your music provides those answers.

The first thing that should be clarified when answering this question is the fact that YouTube monetization is not based on views so much as it is based on earning ad revenue generated by your videos and user-generated content (UGC) that features your music.

So let’s morph the question slightly into “how much will I earn per advertisement on YouTube?”

There are a ton of factors that determine whether an ad will be shown on your videos and how much money you’ll earn from that ad impression, so let’s walk through the various steps and factors that affect your YouTube revenue.

Here’s a quick rundown of the four main ad types on YouTube:

* Skippable video ads

* Overlay ads

* Display ads

Well, there is a series of four checkpoints each video goes through every single time a viewer clicks to watch that video on YouTube. Those checkpoints are called:

* Enabled

* Allowed

* Requested

* Served

Here’s a breakdown of what those checkpoints consist of:

Checkpoint #1: Enabled

The first thing YouTube must determine is whether or not the viewer that clicked your video is in a “YouTube monetized market.” There are certain countries in which YouTube cannot serve ads (like North Korea, Cuba, Iran, etc.). So if the viewer happens to be located in one of those countries, an ad will not be served. You can see an up-to-date list of the countries included in YouTube monetized markets HERE.

Next, YouTube determines whether or not your content is appropriate for advertisements. If your content is deemed offensive or racy, YouTube may not feel that it’s safe to associate a brand’s advertisements with your video. If it contains depictions of alcohol, gambling, or similar sensitive content, your video may become age-gated so that YouTube knows to only serve ads that would appeal to adults. If this happens, you will receive a notification from YouTube (which you can appeal if you feel like the decision was incorrect).

If your viewer is in a monetized market and your video is ad-safe, the next thing YouTube checks is whether or not your video is claimed and enabled for monetization. If you’ve opted in for CD Baby’s YouTube Monetization program, your videos will meet that criteria.

Checkpoint #2: Allowed

Once your video has passed the “Enabled” stage, YouTube considers how often an ad should be shown. YouTube applies an algorithm they refer to as “dynamic ad loading” to help determine the frequency of delivery, with the goal of placing the right ad in front of the right viewer at the right time.

“Dynamic ad loading” takes several factors into consideration: how the viewer found the video, the time of day, how many ads that viewer typically watches without abandoning videos, and other features of the ad. YouTube does this in an attempt to prevent viewers from leaving your video before allowing an ad to complete.

After dynamic ad loading is applied, YouTube determines what kind of device the viewer is using to watch your video. All of YouTube’s ad formats can be displayed on computers when viewers are watching videos on, but certain ad formats cannot be shown on other devices and placements. For example, overlay ads cannot be shown on mobile devices, and display ads cannot be shown on embedded videos since YouTube does not own the real estate of the web page the video is embedded on.

Checkpoint #3: Requested

The next question YouTube must answer is whether or not there is an ad available to be shown on your video. At this point, your video is basically competing against all other similar ad-enabled videos on YouTube to see which one is the most valuable to the advertiser. Again, there are a number of factors that will influence this, but some of the major ones include the watch time, popularity, and engagement metrics (likes, comments, shares, etc) of your video.

Depending on how your video stacks up against the other videos YouTube could place an ad on, they will then try to find an ad that is appropriate for your video. YouTube follows a “waterfall model” when they check for ads, which basically means there’s a hierarchy they follow that moves from the most valuable and lucrative ad formats to the least. Here again are the various YouTube ad formats, in order from MOST valuable to least: non-skippable ads, skippable ads, overlay ads, and display ads.

The other major factor to consider is the two ways in which YouTube ads are purchased by advertisers: 1) reserved ad buys, and 2) auction ad buys.

Reserved ads are either sold directly by a YouTube network or by Google’s ad sales teams, and are generally sold at a fixed rate for the right to advertise on premium, highly desirable video content.

If your video clearly addresses a targeted demographic that is desirable to brands, you’ll have more chances of attracting reserved ads.

Auction ads are paid for by companies and brands using Adwords to run their advertising campaigns. If your video is on a channel or in a category that one or more of those companies wants to target for advertising, whichever ad is willing to pay the most will be the one placed on your video.

Checkpoint #4: Served

At this stage, an ad is successfully displayed on your video. Congratulate yourself on monetizing your videos on YouTube.

How do YouTube ads generate revenue for musicians?

OK. So you’ve monetized your videos. But that doesn’t necessarily mean you’re earning money yet. The formulas used for determining how an advertiser is charged when their ad gets placed on a video that uses your music… they’re complex.

The simplest way to explain it is probably to say that just because an ad gets served doesn’t mean it’s necessarily generating ad revenue for YouTube. If it doesn’t generate ad revenue for YouTube, it’s not generating revenue for you either.

Similarly to the process used for determining IF and WHICH ads get placed on videos featuring your music, the process for determining ad revenue is based on many factors. For overlay ads, you might not earn money unless a viewer actually clicks the ad. For skippable video ads, you might not earn anything unless the viewer watches a certain amount of the ad before skipping. The best way to sum it up, though, is this: when YouTube earns advertising revenue on videos that use your music, you will earn a share of that money too.

How YouTube’s Content ID works

The last important piece of the YouTube monetization puzzle is Content ID. This is what allows CD Baby to help you collect advertising revenue on videos featuring your music that you didn’t upload yourself.

Basically, a sonic fingerprint is taken of any songs you’ve opted in for YouTube Monetization via CD Baby. YouTube then searches all the audio in its ever-expanding universe (which must consist of billions and billions of hours of video at this point) to see if any of it matches the sonic fingerprint of your music.

If so, the video featuring your music is flagged as containing “matched third party content.”

What this means is that a person or entity besides the channel owner is claiming rights to the video. If you see such a warning in your OWN YouTube Channel, that means Content ID is working. If those videos contain music you’ve opted in for monetization through CD Baby, then YouTube is correctly identifying CD Baby as your monetization administrator.

If someone ELSE uses your music in their videos, they will also see the “matched third party content” warning. Those videos are then “monetized” and go through the checkpoints we mentioned earlier to determine if an ad should be placed on them. If so, and if those ads generate revenue, you make money!


Grooveshark Universal Music Fines Could Top $736 Million, Judge Rules

Posted by Mike McCready | April 24th, 2015 | 1 Response – 

In the lawsuit of UMG v. Escape Media, Grooveshark’s parent company, the judge has set the range of statutory damages. On Monday, the jury will be instructed that the maximum statutory damage is $150,000 per infringed work rather than the usual $30,000 because the infringements were willful.

Minimum Due From Grooveshark & Founders: $3.7 Million

With 4907 tracks ruled infringing, the minimum total damages that can be awarded is $3,680,250 and the maximum is $736,050,000, according to the judge.

“Escape was directly liable for the infringing uploads of its employees, because the record included uncontroverted evidence that defendants instructed their employees to upload copyright protected music onto Grooveshark,” the judge wrote in his decision. “The court also found that defendants Tarantino and Greenberg-the co-founders of Grooveshark-were jointly and severally liable for Escape’s infringement, and were also liable for direct infringement based on their own infringing uploads.”



Apple’s Streaming Service: Everything We Know So Far

Posted by Mike McCready | April 21st, 2015 | No responses – 

Nearly a year after announcing its purchase of Beats — both its successful premium headphones division and its nascent-at-the-time, now-hibernating streaming service — for $3 billion, Apple is inching closer and closer to unveiling its much-anticipated revamp of that streaming service. Apple hasn’t revealed many details, not even a name for the new service, but when it does emerge, Beats will face stuff competition from market leader Spotify along with other streaming upstarts including Jay Z’s revamped Tidal and YouTube’s Music Key, still in beta.

By the time Apple finalized its acquisition of Beats late last summer, the company’s founders, Dr. Dre and Jimmy Iovine, had already joined Apple in executive roles. Apple CEO Tim Cook quickly praised the duo’s vision for the service on Charlie Rose, saying that the pair “recognized… human curation was important.” Since the Champagne corks popped, however, there have been more than a few distractions for Apple, including departing execs — such as Beats svp Bobby Gaza — and a lawsuit with someone claiming to be a co-founder of the company. By November, there were reports the rebranded Beats would debut in March of this year. Obviously, that didn’t happen.

All signs now indicate that Apple will debut the service at the Worldwide Developers Conference (WWDC), scheduled for June 8-12 in San Francisco, to coincide with the launch of its iOS 8.4 upgrade. According to reports, the streaming service will be baked into 8.4’s Music app, meaning users who update their phones will automatically have access to it should they choose to join. As Apple’s developer release notes reveal, the new version of the Music app includes an all-new design that encourages more personalization of playlists, a revamped “global” search and a streamlined iTunes Radio.

Despite Apple’s early attempts to offer a a treaming subscription at a lower price ($7.99) than every other for-pay service, though that pan was reportedly scuttled during negotiations with labels. Bloomberg suggests the company is now considering a two-tier pricing approach of $9.99/month for individuals and $14.99 for families. The company is expected to skip a ‘freemium’ offering, derided by label heads like Universal Music Group CEO Lucian Grainge in recent months. (As the recent IFPI report laid out, paid subscriptions contribute far more per listener than advertising supported streams. While free, advertising-supported listening accounted for double the global revenue of subscription streaming, that revenue was generated by far less than half the number of listeners. Spotify claims 15 million paid subscribers and 45 million free listeners — meaning it took three times the number of free listeners to only double the revenue. The result is that labels are far less willing to give Apple the kind of slice of the global pie that they did during their negotiations around the time of the iTunes Store’s launch in 2004.)

As for who is behind the redesigned app’s look, following last year’s acquisition Nine Inch Nails frontman Trent Reznor moved from his position as Chief Creative Officer at Beats Music to a similar role at Apple. According to a New York Times report, Reznor and a team of other Apple/Beats employees — including Iovine — are working on the app, which is expected to resemble Beats Music in features (curated playlists) but with a decidedly Apple-like aesthetic and sheen. An Android app for the Apple-ized Beats is expected to launch at a later date.

Apple Reportedly Buys Analytics Company Semetric Ahead of Beats Music Relaunch

Apple also made a bold statement in February by hiring former Radio 1 DJ Zane Lowe, who is said to be giving the lackluster iTunes Radio some much-needed attention in order to position it better against streaming radio leader Pandora.

Once launched, part of Apple’s initial strategy for attracting subscribers — other than being automatically installed on hundreds of millions of phones — will be offering exclusives from major artists. The company has reportedly approached Taylor Swift and others with offers, while Jay Z responded to rumors that Iovine had been trying lure some of Tidal’s bigger names with more money. “I think that’s just his competitive nature,” Jay told Billboard recently, “and I don’t know if he’s looking at the bigger picture: That it’s not about me and it’s not about him; it’s about the future of the music business.”

The newest headache for Apple comes courtesy of the European Commission, which is reportedly taking a look at Apple’s dealings with a number of record labels ahead the Beats launch. Several labels and digital music companies have been contacted by the European Commission and sent questionnaires requesting information about agreements that are in place. The inquiry does not necessarily mean the commission will launch a formal antitrust investigation. (It took the Commission five years of research before bringing a case against Google, for example.) Representatives from the E.U. refused a request for comment on whether the reported investigation would delay the new streaming service’s launch on the continent.

Since the launch of the iMac in 1998 through to the recent launch of the Watch — prompting many to ask what exactly it was for, like the iPad before it — Apple has launched or perfected to the point of domination pretty much every market its touched. That said, its failures have largely been software-related — Apple Maps, the social music network Ping, the launch of iCloud. The company’s bottomless checkbook and obvious investment in its upcoming streaming service seems to point to a success, even if achieved by sheer muscle.


Spotify Is Now Worth More Than the Entire US Recording Industry…

Posted by Mike McCready | April 20th, 2015 | No responses

digitalmusicnews.comSources: Spotify valuation ($8.4 billion) calculated by Wall Street Journal, based on an upcoming, $400 million+ capital round led by Goldman Sachs.. US-based recording valuation for 2014 ($6.72 billion) published this month by recording trade group RIAA.



Revenge Of The Record Labels: How The Majors Renewed Their Grip On Music

Posted by Mike McCready | April 17th, 2015 | No responses – 

Last October SoundCloud–a free music-streaming service with a massive 175 million monthly users–appeared to be running out of cash. News broke that the Berlin-based company had lost $29.2 million in 2013, and when a rumored $2 billion buyout bid by Twitter fell through, it looked like music’s hottest startup might be in danger of going bust.

Then something strange happened: Warner Music Group became the first major record label to strike a licensing deal with SoundCloud, instantly legalizing scores of songs posted to the service. More surprisingly, Warner acquired up to 5% of the company, adding to funding that’s passed $120 million; the company is now valued at over $1.2 billion.

Yet despite the credibility they bestowed on each other, Warner and SoundCloud have largely eschewed talking about the partnership–neither side would comment to FORBES–and have zealously guarded the terms. Why? A source with knowledge of the agreement says the record company acquired its SoundCloud stake at a discount of about 50% from what other investors paid. And such details illustrate a quiet revolution in digitization of the music industry that all sides seem to prefer go unnoticed .

Left for dead by most investors and pundits, the surviving Big Three labels–Warner, Universal and Sony–have quietly muscled out stakes of the hottest digital entertainment startups, including 10% to 20%, collectively, of the established streaming services, such as Spotify and Rdio. Terms are similarly stark for younger startups: The labels take stakes for free or on the cheap, and then often give themselves the right to buy larger chunks at deep discounts to market later on. It’s not just streaming: The labels have gobbled up pieces of startups ranging from choose-your-own-adventure music video purveyor Interlude to song-recognition giant Shazam–valued at $1 billion in its latest round–which counts Carlos Slim, the second-richest man in the world, among its investors.

And what have the labels been giving the startups, aside from legitimacy, to secure these sweetheart deals? All-encompassing access to the artists and their songs–a neat little trick. Sure, the artists derive some minimal amount of royalties from these new channels, but they aren’t getting any of the ownership.

“That’s the story of the music business,” says John Oates, one-half of Rock and Roll Hall of Fame duo Hall & Oates, who went independent almost 20 years ago amid frustration over their financial arrangements with labels. “It goes back to the earliest days–take it back to, ‘Give him a bottle of wine and take all his publishing for the rest of his life.’ 

The artists are starting to fight back–and not just by opting out of the system. Earlier this year Jay Z purchased Swedish high-resolution-streaming services WiMP and Tidal for $56 million, merging them into a single service to compete directly with Spotify. At the official launch 16 of music’s biggest acts were introduced as the new “owners” of Tidal, including Beyoncé, Calvin Harris, Kanye West, Alicia Keys, Jason Aldean and Daft Punk. Each was reportedly offered a 3% stake.

Representatives from all three major labels–as well as Beats, Spotify and Rdio–declined or did not respond to requests for a comment on whether or not the majors demanded free or cheap equity in streaming companies as part of the price of doing business. But in industry circles, the practice is an open secret.

FORBES estimates that the three labels have amassed positions in digital music startups valued at almost $3 billion–or around 20% of the $15 billion or so the labels are collectively worth. The percentage will shoot even higher if and when Spotify goes public. And some bets have already paid off: Universal Music Group took an early position in Beats by Dr. Dre and owned 13% when Apple bought the company for $3 billion last year, resulting in a $404 million score. Artists + leverage = digital windfall. That’s the kind of math, applied across all their revenue models, that the labels hope puts them back atop the musical food chain.


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