As the popularity and profitability of web video rise, rights owners and others are closely monitoring the integration of copyrighted music in online programming and advertising.  Don’t let your productions get caught in the crossfire; Affix offers solutions.

The promise of the Internet becoming a home’s video hub is close to being realized. 60% of people between the ages of 18 and 29 are either leaning towards or are seriously considering giving up paid television.  Video is slated to exceed 91% of global IP traffic by 2014.  With high connection speeds, seemingly unlimited bandwidth, and higher resolution computer screens than TVs, the Internet is at the helm of programming, and its quality gets better everyday. Sites like Hulu, Vevo, and Netflix bring the high-quality programming of paid television w are used to, and networks are now developing original online programming, in addition to nascent offerings of simultaneous online streams of their TV broadcast wares.

It’s not just major corporations who are raising the online programming video bar; small business and individuals are contributing content, as well.  Small businesses are harnessing the Web to get their messages out from Vblogs to video tutorials. In other instances, small business publishes the content while individuals create it.  The online video portal Funny or Die launched with five employees in 2007 with both original and user-generated content (“UGC”).  In a testament to the power and profitability of online video, their first video received over 70 million views, leading to venture funding from Sequoia Capital later that year and an HBO partnership in 2008.  (cite) UGC is the most pervasive new media trend; there are over 170 million blogs on the Internet, and as of May 2011, YouTube claims over 48 hours of video is uploaded to its site every 60 seconds, a 37% increase over the prior 6 months.

With increased quantity of online programming comes viewers, and with viewers comes advertising.  Revenue from online advertising spiked to a new high in the first quarter of 2011, a gain of 23% over 2010’s first quarter numbers and a trend that spotlights the shift of advertising dollars away from traditional media and toward the Internet.  Today’s technology allows advertisers today to better employ video and rich media online.  As a result, interactive marketing agencies have begun to grab a larger slice of corporate advertising budgets, and traditional agencies are striving to boost their digital marketing capabilities.  Small businesses are taking advantage of online video advertising, too, with over 25% now using video on their homepage.  Production companies have sprung up just to service the web video needs of small companies- from more formal corporate identity pieces to external/internal marketing pieces.

Music has always been a major component in good TV programming and advertising.  Online video is no different.  Engaging video requires quality music in its soundtrack. Today, viewers don’t give online video a pass on quality just because it is “online”; they now demand similar quality as broadcast.

Original online video content faces some unique challenges in its use of music.  Though additional resources are now being allocated to online content, production budgets are still typically a small fraction of their TV counterparts.  Record labels and music publishers licensing their music for the Web have yet to fully reconcile with the reality of the significantly lower music budgets and tight deadlines of online content producers. Licensing directly from independent artists can offer the quality that the content demands, as well as cost savings in terms licensing fees, but identifying and finding the owners and negotiating with all the rights holders can easily negate the savings. Additionally, smaller content producers may not have the resources, personnel or expertise to perform the nuanced rights clearances necessary to license commercial music for their online productions. Some producers have instead turned to one-stop stock music offerings for their affordability and ease of licensing, but with quality music an increasingly important component, these are not an attractive alternative for serious content.  Given the challenges, content producers as licensees and music owners as licensors often find that the time, effort and money necessary to properly license quality music for online productions can be prohibitive for both sides.

Music licensing has never been the most intuitive business, and the legalities of using music in online video can be particularly tricky, especially for those unfamiliar with the process. The complicated nature of the process can itself contribute to infringement.  Potential licensees may lack the knowledge to even know where to start. Other times, infringement occurs because of an incorrect belief that a license is not necessary (e.g. using only small samples of the music, using for non-commercial uses, etc).  And, of course, plenty of people knowingly infringe, willing to roll the dice of not paying under the assumption they simply won’t be caught (e.g. personal use, internal business use).

Copyright infringement of music on the Web is, however, becoming easier to discover, track and trace.  The viral nature of web video means that human identification is more likely as more people see the infringing use, and today’s automated monitoring technology is highly effective and likely to get even better.  Declining overall revenues in the music industry have placed an increased importance on the development of tools to monitor and monetize performances of music across all platforms.  The music identification business is estimated to grow to $500M in 2012, and digital fingerprinting and watermarking companies, backed by heavy weights such as Phillips Electronics (Civolution), BMI (Landmark Digital) and ASCAP (Mediaguide), are being contracted by copyright owners to find and identify unlicensed uses in Internet broadcasts.  YouTube uses its own audio identification technology called “ContentID” to help identify songs on behalf of copyright owners. When ContentID finds an upload video has elements of copyright content in it, YouTube performs one of three actions dictated in advance by the copyright owner: block it, leave it up or monetize it.  If blocking has been selected, it is automatic, difficult to contest and certainly more than a simple inconvenience for video producers.  However, copyright owners can also file a separate copyright claim with YouTube that adds a “strike” to the video creator’s account.  Three infringement strikes will terminate a user’s account, and users “with terminated accounts are prohibited from creating new accounts or accessing the site’s community features.”

The law provides for much stiffer penalties for infringement should copyright owners wish to pursue them.  Infringement can lead to the threat of, or an actual, lawsuit against all parties involved.  Such parties can include everyone from the brand or video owner to the advertising or marketing agency to the production house that created the video and more.  In Grant Crowell’s excellent ReelSEO.com episode on using music in online video, IP attorney Daliah Saper paints a fairly bleak picture for those found guilty of infringement.  Properly registered copyright owners have the right to pursue not only lost profits and other regular damages, but also statutory damages.  Statutory damages can range from a minimum of $750 per infringement up to $150,000 per infringement depending on the judge’s discretion.  Winning litigants may even collect attorney’s fees.

Even more alarming are newly proposed criminal penalties for infringement.  Senate Bill 978 seeks to make illegal streaming of copyrighted works a felony.  The bill seeks to add “illegal public performance by electronic means” to the current No Electronic Theft Act felony offenses of unauthorized copying and distribution, even when infringers do not necessarily profit financially from the infringement.  Regardless of whether or not it becomes law, the bill emphasizes the seriousness by which copyright owners and their advocates are now approaching online infringement.  The bottom line is that the Internet, once the Wild Wild West of intellectual property enforcement, is becoming more tamed with real civil and criminal consequences for those who don’t pay attention.

Legally and affordably licensing quality music for online video use does not have to be hard.  Affix Music offers solutions designed to make licensing music for the Web easier and more profitable for everyone involved.  As specialists in the field, we understand new media, its music needs and its concerns.  We offer premium, independent commercial music at affordable, published rates for the most common types of web usages and can create custom licenses for clients with more complex rights requirements.  Our licensing platform allows a fast moving media marketplace  to license quickly with confidence 24 hours a day.  Price any of our music online at www.affixmusic.com or contact us at (404) 460-8562 x100 or licensing@affixmusic.com.

* Special thanks to Samantha Parvin for co-authoring this post.

Affix co-founder Simon Horrocks interviews Grammy-winning songwriter/producer Anthony Dent.  One of P-Diddy’s “Hitmen,” Dent’s credits include songs for Destiny’s Child, Jay-Z, Mya, and 112, and his company State of Mind Muzic now provides the same chart-topping caliber of music to Affix and our clients.  Check out what Dent has to say about making records and the position of Urban in the music industry landscape:

http://www.youtube.com/watch?v=9vic4JiWesA

London may not be the first city that comes to mind when one thinks about Urban Music.  But in the early days of the twenty-first century, the British capital served as a breeding ground for what would eventually become known as “dubstep” – an electronic Urban sub-genre built around “tightly coiled productions with overwhelming bass lines and reverberant drum patterns, clipped samples, and occasional vocals” (“Explore Music: Dubstep.”  Allmusic.  Rovi Corporation.  Retrieved 5 April 2011).  The term “dubstep” itself comes from the combination of 2 step and grime, two major influences on early dubstep artists.  BBC Radio 1 DJ’s John Peel and Mary Anne Hobbs are often credited with helping the genre grow from underground roots to a more accessible and critically recognized genre.  In 2011, the mainstream got a taste of the sound when Britney Spears added a dubstep section to her hit “Hold It Against Me.”

At Affix Music, we recognize that Urban goes far beyond Rap, Hip-Hop, and Pop and we’re proud to feature great dubstep music in our catalog.  So we’ve put together a dubstep-centric and license-ready playlist for your listening pleasure.  Click here to give it a listen…you just might find some new favorites.

Recommended listening:

1) Mayehm - Tristate

2) The Beat Geeks - Ready To Move

The annual Grammy Awards mark highlights and milestones in the careers of many artists.  For those that grew up dreaming about a life of music stardom, it gets no better than hoisting a golden gramophone trophy.  A nomination in and of itself is recognition of outstanding achievement in the recording arts.  Yet, while Grammy night can mean so much to individual artists or groups, this years’ awards show was a banner night for an entire genre: Urban.  Urban artists shined not only as nominees and winners, but also as performers, commandeering the stage at L.A.’s Staples Center.  We’re proud to be a part of the most relevant genre in music today and we couldn’t help ourselves from breaking down the massive success of Urban at this year’s Grammys.

Nominations

No genre was as well represented when it came to nominees.  Among the artists who received multiple nods, Eminem lead the pack with ten, followed by Bruno Mars with seven, Jay-Z and Lady Gaga with six, John Legend and B.o.B with five, and Drake, Rihanna, Cee Lo Green, Katy Perry, and Alex Da Kid with four each.

Four out of the five nominees for Record of the Year were Urban (“Nothin’ on You” – B.o.B feat. Bruno Mars, “Love The Way You Lie” – Eminem feat. Rihanna, F*** You – Cee Lo Green, “Empire State of Mind” – Jay-Z & Alicia Keys); as were three of the five nominees for Album of the Year (Recovery – Eminem, The Fame Monster – Lady Gaga, Teenage Dream – Katy Perry).

Winners

Lady Gaga grabbed three Grammys including Best Female Pop Vocal Performance for “Bad Romance” and Best Pop Vocal Album for The Fame Monster.  It was a good night for rappers with Jay-Z collecting three awards and Eminem bringing home the Best Rap Album nod his, Recovery.  The future looks bright as well as Esperanza Spalding beat out fellow Urban nom’s Justin Bieber and Drake for the Best New Artist Award.  Young upstart Bruno Mars won the Best Male Pop Vocal Performance for his catchy “Just The Way You Are.”

Performances

The broadcast opened with a tribute to soul queen, Aretha Franklin in which Christina Aguilera, Jennifer Hudson, Yolanda Adams, Martina McBride, and Florence Welch traded licks across some of Franklins most well-known and loved hits.  Aside from Welch who looked and sounded out of her depth alongside the other women, the ladies nailed it, bringing down raining applause from the audience.  Oh, and hats of to Aguilera for getting back on the horse after her Super Bowl Anthem disaster – she was back with a vengeance.

Lady Gaga was next as she emerged from a translucent egg to take the stage for what was perhaps the most anticipated performance of the evening.  The frantic rendition of her new single, “Born This Way” was executed in typical Gaga fashion – complete with dancers and a Baroque organ break down.

After a few seconds of shticky dialogue with his mentor, Usher, and an acoustic chorus of the mega-hit “Baby,” Justin Bieber launched into the theme of his new rockumentary “Never Say Never” and made some room for a cameo by fellow kid star Jaden Smith.   There was no hair whipping but there were a few proud grownups in Will and Jada Pinkett Smith as well as Usher who returned to the stage to perform his hit “O.M.G.” with Bieber chiming in at the tail end.

Blending the fashion senses of Elton John and George Clinton, Cee Lo Green sat at the piano and was backed by a band of Fraggle-Muppets for a rendition of the 2010 internet smash, “F*** You.”  Despite a forgettable appearance by Gwyneth Paltrow (I mean really, she plays a singer in one film and now has to sing on every awards show?) and flubbing the second line of the first verse Green delivered a light hearted and free spirited performance that fit both the set and the overall tone of the song.

Perched on a swing high above the crowd, Katy Perry delivered a sweet version of “Not Like The Movies” before returning to the ground and inviting the crowd to sing along to her feel good anthem “Teenage Dream.”  Even Nicole Kidman was mouthing the words.

In her first performance of the evening, Rihanna set the stage for Eminem who delivered a fiery verse of their song “Love the Way You Lie.”  Rihanna was good but Em’s emotion was palpable and he stole the show on this one.  As Skyler Grey sang “I need a doctor,” Dr. Dre emerged to add a verse to what may have been the best performance of the night.  Rihanna returned to the stage one more time for “What’s My Name,” with Drake.

Urban was all over this year’s Grammy Awards and there’s no indication that next year will be any different.  So keep your eyes and ears on our Affix Music Providers, you may be seeing them accepting some hardware next February!

Affix partner, Simon Horrocks, chats with Mojo House Music Supervisor, Marc D’Amour about the role of music in movie trailers.  Marc has worked on trailers for films like 300, Harry Potter, and Precious.

http://www.youtube.com/watch?v=W5857q_2JhY

The sky is falling.  At least that’s what recent music industry reports would lead one to believe.  The first four weeks of 2011 saw the three lowest selling number one albums ever (Taylor Swift’s Speak Now – 52,000 copies, Cake’s Showroom of Compassion – 44,000 copies, and Amos Lee’s Mission Bell – 40,000 copies).  Pair those stats with the latest layoff spree at Universal Music Group and it’s easy to see why many feel like the horizon is looking rather bleak.  But amidst all of the ruble and dismay, there is one statistic to get excited about.

Artists and publishers are making more money than ever by licensing their music.  According to grabstats.com licensing revenue has climbed $100,000,000 every year since 2006 and is expected to continue to gain at the same rate in 2011.  Of course, these reports should be taken with the necessary amount of caution.  Will higher licensing revenues help artists sell as many albums as they used to?  No.  Will they rebuild the crumbling major label system?  Probably not.  But, licensing opportunities becoming more accessible and more lucrative will certainly come as a welcome reprieve for artists who have seen their former cash cow (album sales) slaughtered at the hands of Generation Y-Pay-For-Music-When-I-Can-Download-It-For-Free.

While singles and albums seem destined for file sharing purgatory, the commercial nature of advertising and promotion will ensure that licensing remains a viable moneymaker for songwriters, publishers, and artists.  After all, it seems rather disingenuous to try and convince people to buy your product when you’re stealing someone else’s.  More than ever we are seeing artists and their songs representing some of the world’s most iconic brands.  And while image-conscious artists used to be hesitant to align themselves with brands for fear of being labeled as too commercial, they are now doing so with gusto.  Ironically, the same fans that download their music for free are often the ones accusing their favorite artist of “selling out.”  Hip-hop star, Talib Kweli, along with Big Boi, Lupe Fiasco, and B.o.B, recently and unapologetically licensed his music for the latest Pepsi campaign.

“There’s a generation growing up that doesn’t understand that music is paid, but just because you get it for free doesn’t mean that someone’s not paying for it,” he says. “Someone’s still got to pay for it. So you’ve got to figure, ‘Well, how is this person going to pay for it?’ You’ve got to maybe loosen your idea of what selling out is, when you’re not participating in supporting the culture.”

We at Affix could not agree with Kweli more and we are proud to support the culture of Urban Music by helping artists realize the potential of licensing their music.  We are excited to take part in shaping the new music business landscape and we are determined to focus on the positive opportunities it provides.

Have you watched MTV recently?  VH1?  The networks that used to be tastemakers in the music industry have become no more than pop culture pipelines (oh, hi Snooki).  Spend an evening viewing the programming on either station and while you may see artists (Bret Michaels, Flava Flav) chances are you’ll see very little, if any, music.  These days it seems like the only time Music Television even mentions the word “music” is during one of it’s celebrity pageants, sorry…awards shows.  But before we start getting all nostalgic about shows like Yo! MTV Raps and The Grind, let’s try and look at the change through the lens of the modern music business.

Maybe the networks just adapted in a way that major labels didn’t.  We live in a digital world; one of instant gratification and custom programming.  We don’t listen to the radio, we listen to commercial-free personalized playlists on our iPods.  Kids don’t buy albums, they cherry pick the singles they like from iTunes.  There’s a trend here: where does the modern consumer go for their music?  To the internet.  If you’re 17 years old, why would you wait in front of the TV screen just hoping that the VJ (remember those?) plays that new kick ass video from your favorite artist when you could find it on YouTube and watch it to your heart’s content?  Yes, when the internet changed the music business, it changed all of it.

But while the digital revolution spelled doom for the retail side of the record business, it could well be the savior of the video world.  Think for a moment about the videos MTV was showing right before the reality shows invaded.  They were nip and tuck cookie-cutter bites of what the suits thought the kids would buy.  Shows like TRL went so far as to air just clips of most of the videos on their countdown.  The video shows were turning into radio – get to the chorus and get out…and make it quick.  What had once been a relevant art form (think MJ’s “Thriller” or TLC’s “Waterfalls”) was quickly becoming nothing more than sexed up commercial fodder – a microwaved marketing tool controlled not by the artist, but by the salesmen.  Oh, and what’s more…they weren’t paying for it.  Artists and labels were so desperate for their share of the airtime that they were forced to grant the network gratis licenses for the airing of their work.  The law of supply and demand meant that MTV was able to muscle its way around like a bully on a playground.

Now fast forward to the present: the ever-polarizing Kanye West releases a 34-minute odyssey of a video, “Runaway,” that debuts simultaneously on VH1.com, BET.com, MTV.com, MTV, MTV2, and BET.  West is certainly a lighting rod of a pop-culture icon so it’s not surprising that the networks aired the premiere on their flagship stations.  But since the October 23 special, fans must turn to the websites or YouTube to see it.  When there’s little to no room in the programming schedule for videos, you can bet that at 34-minute video won’t find a place on air.  Again though, the fact that the video has found it’s home online is hardly surprising.  In fact, one could argue that this video was created for, and even made possible by, the internet.  Even if MTV were still in the business of airing music videos, it’s highly unlikely that they would allow one artist to absorb over half an hour’s worth of programming on a regular basis.  And with a new album on the way, Kanye would have had his hand forced.  He would have had to play the game and release a nice three-minute video just like everyone else.  His artistic vision that takes life in ”Runaway” would have been throttled.   Fortunately, there is no program director for the internet.  Since no one dictates what content ends up online, West was able to create and release the video that he wanted.  Regardless of your opinion of Kanye West, that has to be a good thing.

Ironically, the death of the true music video network has led to more creative options and control for the artist.  And the best part?  Fans are responding.  In just over a week, the official version of “Runaway” has over 3.5 million views on YouTube alone.  Lady Gaga recently eclipsed 1 billion views on YouTube.  Artists from around the world are creating and uploading videos that don’t require million dollar budgets and the subsequent indentured servitude to the record label and the networks. There’s even money in it for the artist now – well, for some of them.  YouTube grants the major labels a share of their advertising revenue whenever an ad appears on the same page as one of their artist’s videos.  The video is back in business.  And so is the creative opportunity that it used to provide.  Like West’s avian love interest in “Runaway,” the music video has risen from the ashes of big media.

Digital Music News published an article this week detailing the top 8 reasons why rappers are great businessmen.  We think they hit the nail on the head…almost.  It’s not just rappers; it’s Urban artists across the spectrum.  Between their collaborative zeal (read: brand alliance) and their unrivaled ability to prolifically produce records (consistently engage the consumer), Urban artists are showing no signs of relinquishing their roles as the leaders of the new music movement.  Nor are they content to rest on their laurels.

Many of today’s Urban artists are taking their business prowess beyond the music industry.  Where Rock artists have traditionally shied away from corporate partnerships for fear of being labeled “sell outs,” Urban artists have cashed in. Artists like John Legend, Jay Z, and Beyonce have parlayed commercial opportunity into positions as inter-media celebrities, expanding both their influence and their commercial viability.  As HOVA himself once said, “I’m not a businessman.  I’m a business, man.”  He recently held court with business gurus Warren Buffett and Steve Forbes.  Needless-to-say, Jiggaman and his contemporaries now have the undivided attention of corporate America.  Indeed, some of the world’s biggest brands are clamoring to align themselves with Urban superstars – Nike’s newest “Boom” campaign features rapper Rick Ross and while crooner Legend has teamed up with Lexus and Target, pop diva Beyonce and her music have appeared in commercials for American Express, L’Oreal, and Comcast.

It is important to acknowledge however, that the initial force that broke down the floodgates to business opportunity for these artists was their early music.  In fact, the authenticity of Urban music is the very thing that makes it work in a commercial setting, and perhaps why Urban artists have been able to cross into the business world with more indemnity than rock bands.  Urban is a cultural movement – one that is centered on hustle and where commercial success is not dutifully shrugged off, but wholeheartedly pursued.  Right now across America, up-and-coming Urban artists are creating new music that possesses both this authentic identity and commercial viability; the next chart-topper as well as the next wireless service provider commercial.

With the reach of Urban music expanding exponentially, one can be certain that the genre will continue to produce pop culture icons.  And with that will come opportunity – for the artists, to turn music stardom into broader business success; and for companies smart enough to align themselves with such artists, to reach millions of potential consumers.

It’s no secret that the evolution of the digital sphere over the past ten years is one of the most significant trends in the history of the music industry. It’s hard to remember a bigger game-changer and no genre is playing the new game better than Urban. Every song on today’s iTunes Top 10 Singles chart falls under the Urban umbrella (ella, ella). But at nearly 7.5 years old, iTunes is creeping toward middle age in digital years. While it remains the most relevant of music retailers, even this last bastion of music sales is beginning to plateau in terms of annual revenue (Reuters, Digital Music Sales Flat This Year). Digital music sales are simply not making up for the massive loss of physical sales. So what’s next? And, more importantly, who’s going to capitalize on it first?

These days we find artists looking beyond the song for ways to cash in on their brands, but in the face of all of this change, one thing remains the same – Urban is winning. And sitting atop the new dogg pile is none other than Snoop himself. Only this time it’s not with chart-topping singles or a celebreality television series. It’s with Branded Virtual Goods (BVGs).

Virtual worlds like Zwinky, Second Life, WeeWorld, and Gaia Online filling up faster than Kim Kardashian’s True Religions. Strategy Anayltics predicts a virtual world population boom of nearly 250% over the next five years – a rate that makes China’s (6.9%) look like the little engine that could. But what’s really impressive is how the creators of these avatar-inhabited realms have managed to monetize the trend. Users can buy, earn, and spend virtual currency in the form of ZBucks, Linden dollars, points, and Gaia Cash – and spend it they will. The recession may have caused retail numbers to dwindle in the “real world” but virtual malls are teaming with Sims ready to spend on everything from branded T-shirts for their avatars to digital doggies. In August the social gaming and virtual goods platforms Viximo and Virtual Greats predicted that BVGs will generate $150 million in 2013 and reach an annual revenue of $318 million by 2015 (http://bit.ly/bvgsprd). Snoop Dogg himself has sold over $200,000 worth of BVGs to date and he’s pushing for more.

“My virtual items are off tha chain jacc! It’s a world and a movement that I have been down with since day 1,” he says.

Urban has always been about hustle. It’s a way of life. And after years grinding for mainstream radio spins, Billboard chart position, and suburban shopping mall supremacy the genre finally seems to have a strangle hold on the market. Now as opportunities to engage consumers in the virtual universe develop, Urban is in the drivers seat. But one thing is certain: the hustle will continue. It’s a way of (virtual) life.