allegedly with Bo and Ryan | Episode 5
Today on the podcast, Bo and Ryan discuss TikTok, Spotify and other ways musicians can make money…allegedly.
Allegedly… with Bo and Ryan Podcast E5| Transcript
Bo: [00:00:00] Are you ready for this? There is an American artist who has sold more than Michael Jackson, then the Eagles and even Elvis Presley.
Ryan: [00:00:11] Okay.
Bo: [00:00:11] Are you ready for this?
Ryan: [00:00:12] I’m ready.
Ryan: [00:00:14] Welcome to allegedly with Bo and Ryan, the only entertainment and law podcast that brings you the truth, the whole truth, and nothing but the truth. Allegedly.
Bo: [00:00:24] I’m Bo Bowen.
Ryan: [00:00:25] And I’m Ryan Schmidt.
Bo: [00:00:26] You’re listening to Allegedly with Bo and Ryan. We’re coming to you from our law offices in beautiful historic Savannah, Georgia, where we’ll be chatting about pop culture, hot legal topics in the news, and doing our best to change the way people think about the law and lawyers. But first, a little about us. Ryan’s mustache has its own Instagram page. It has over 10 million followers, among them the entire US Olympic water polo team.
Ryan: [00:00:56] And Bo doesn’t have or need a computer. He has the entire Internet committed to memory and is fluent in binary code. Together, we are Savannah’s consummate renegade and legal titans.
Bo: [00:01:08] And the only corporate and entertainment lawyers in the free world who have never lost a single case, allegedly. Well, welcome to episode five, Ryan. We’ve now have enough episodes to count on one full hand.
Ryan: [00:01:24] Or for every member of the Backstreet Boys.
Bo: [00:01:27] That’s fair enough. And speaking of the Backstreet Boys, as our resident musician here at the firm, I know you’ve got to be excited to dive into today’s topic.
Ryan: [00:01:38] Oh, absolutely. I don’t know if I’ve been more excited for a show as I am about this one. I mean, today we’re going to talk about the state of the music industry and how musicians can protect themselves from getting ripped off. You know, as you know, the landscape of the music industry is rapidly changing. And I mean, Bo, you were just telling me the other day about a study you read about the current state.
Bo: [00:02:00] Yeah, that’s right. I thought it was kind of interesting. It was a study from a music research and analytics platform called VIBRATE, but and it suggested that TikTok has made some changes that that they said is going to, quote, reshape the music industry. So this is what I remember from the article. And I would suggest anybody go check it out and read it if you’re interested. But basically in the past, the top 1% of artists that they analyzed ruled 99% of the engagement numbers on social media and other music channels. So given that you got 1% responsible for 99% of the blaze, well, that’s pretty hard for new artists to kind of break in.
Ryan: [00:02:45] Yeah, absolutely.
Bo: [00:02:46] So, I mean, Tick Tock has made a commitment to try to do something about that. They tried to come up with an algorithm that they think is going to level the playing field a little bit. So one change they’re going to do is that no two users will ever see the exact same For You curated page. So that’s going to allow really kind of hyper focused and curated content from artists you may not have ever heard of, but it’ll be based on your actual preference and not necessarily just, you know, an artist that’s received the most views or likes is kind of how it happened in the past. Well, you know, reading that article, it kind of the general consensus among insiders in the industry that that’s the type of thing that’s going to lead to the next Justin Bieber or Taylor Swift. You know, they’re going to emerge just seemingly overnight and out of nowhere, because now they are being exposed to a much wider audience. So and there’s actually been a lot of examples of that already just since they instituted these changes last year. In 2021, over 175 songs that trended on TikTok actually charted on the Billboard Hot 100. Wow. And the vast majority of those are people that had never had a hit song before. So it really did. I mean, just them changing their algorithm led to a much wider exposure to new artists. I mean, so while that’s great and good for TikTok, well, I mean, obviously not all platforms are built alike so not all of them are nearly as artist friendly. Which segues nice into talking about Spotify.
Ryan: [00:04:43] Oh man, don’t get me started with Spotify. There’s a love-hate relationship with Spotify. It first started back in Europe, and I remember when it was first coming to the States. All these music industry professionals, myself included, were so excited about what that was going to mean to the music industry. And while it’s true that Spotify pays billions of dollars each year in royalties, it kind of that number $7 Billion, was last year’s royalty. It kind of hides the fact of just how little they pay per one single stream. So I wanted to ask you, just just test you on this. What do you think the average Spotify royalty is for one single play?
Bo: [00:05:26] Well, just on the basis of the question, I’m guessing it’s not high. I guess it gets not 50 bucks to play.
Ryan: [00:05:31] Oh, no, definitely not.
Bo: [00:05:32] So I’m going to say a penny $0.01 a play.
Ryan: [00:05:37] No, it is much less than that. Unfortunately, the average royalty rate for one single stream on Spotify is 0.0004 cents.
Bo: [00:05:53] Wow. So that means what? You’ve got to be played 40,000 times to get a penny.
Ryan: [00:06:00] Right. That’s correct.
Bo: [00:06:01] Oh, boy. Yeah, that’s not great.
Ryan: [00:06:05] So then you can quickly see how only people that are getting billions of streams are actually making any money under Spotify. And, you know, it’s a little disheartening because you’ve got all of these industry insiders that have actually exposed ways that Spotify is gaming the system. They have flooded their platform with these so called fake ghost artists. They will essentially hire musicians, work for hire, and they’ll create these fake artists, these fake songs, and they’ll promote them in their own curated playlists. And when Rolling Stone first exposed them in 2019, they found that 50 ghost artists had accumulated over 2.85 billion streams on the platform.
Bo: [00:06:58] Jeez. So I guess the thought process on Spotify is people are going to listen to us. We might as well have them listen to something that we don’t have to pay for.
Ryan: [00:07:08] Right. Yeah. So to add insult to injury, you’re already paying 0.0004 cents, let’s let’s now create some work so we don’t have to pay anything. So just to put that number in perspective, those 50 unknown acts actually had more streams than the top performing superstars on Spotify, including Beyoncé and John Legend.
Bo: [00:07:30] Whoa, man, it’s amazing. I mean, so I think it’s pretty safe to say, and of course, you’re the musician, you’re the music industry expert here at our firm. But you know, from from what I have seen, I think it’s pretty safe to say that the music industry has definitely completely changed over the last several years. I mean, is it possible that we are ever again going to have a music artist that sells millions of albums?
Ryan: [00:08:00] I just I just don’t see it happening ever. I mean, the the the makeup, the fabric of the music industry is so different to the point in the streaming age where I think consumers really see music as just a endless resource. It’s like turning on the faucet. It’s just it’s always going to be there.
Bo: [00:08:18] I mean, that’s true. I can’t even imagine walking into a record store and buying an album now, not when, you know, you could just tell Siri or your car to just start playing whatever song you want to hear, and then it’s just instantly there.
Ryan: [00:08:34] Now, the only thing that I’ll say and, you know, since since I’m a lifelong music fan, there is something really satisfying about going to a rock show and seeing an act and being really taken with them. And then after the show, going up to them, giving them $10, $20 and buying a record from them, I mean, that’s a moment, you know, that’s different than what we’re talking about here.
Bo: [00:08:58] That’s true. If you have something to play it on.
Ryan: [00:09:01] Right? Yeah, a good point. I mean, CD’s my my laptop doesn’t have a CD player on it, you know, And not everybody has a vinyl player.
Bo: [00:09:09] Right. I don’t even think most car new cars anymore have CD players, right? So well I know we talked about before a few weeks ago we were talking about a question I heard at a trivia contest, which were the top ten best selling British artists of all time.
Ryan: [00:09:30] That was fun.
Bo: [00:09:30] Yeah, it was crazy. I mean, they were literally in the top ten artists we had never even heard of before, which right nuts. But you know, that having been said, who would you guess is the top selling American recording artist of all time? And how many albums do you think they sold this?
Ryan: [00:09:52] I’m going to be I know I’m going to be wrong. This is so hard to guess because the heyday of album sales was we’re talking about the 1980s, 1990s, where everybody was driving Lamborghinis and people were selling millions and millions of copies. And if you sold a million records, that was considered a failure. So I mean, I American, you know, that obviously cuts out the Beatles, who I think is going to be, you know, the highest selling artist of all time but American. I would probably say Michael Jackson. And I would put his domestic sales at around 80 million.
Bo: [00:10:33] You’re well, you’re actually very close. First, you’re 100% wrong. It’s not Michael Jackson, but you’re very close on the number of albums. Michael Jackson was in the top ten. He was actually number four. And he had sold 89 million albums thereabout.
Ryan: [00:10:50] So not too bad.
Bo: [00:10:51] So there are three American artists in front of Michael Jackson that have sold more. You ready for this? Number three, the Eagles, 120 million albums.
Ryan: [00:11:03] People like Hotel California.
Bo: [00:11:06] Number two, which is I’m surprised you didn’t guess Elvis Presley. Yeah. Still selling albums to this day. So, you know, he’s had a long time to build those numbers.
Ryan: [00:11:16] And how many albums did he sell?
Bo: [00:11:18] He sold 147 million albums. So, but now, are you ready for this? There is an American artist who has sold more than Michael Jackson, then the Eagles and even Elvis Presley. Okay, are you ready for this? I’m ready. The number one selling American artist all time, Garth Brooks.
Ryan: [00:11:44] What?
Bo: [00:11:45] Garth Brooks has sold 157 million albums, almost double Michael Jackson.
Ryan: [00:11:53] That’s amazing. Those are some crazy numbers. Good for you, Garth.
Bo: [00:11:58] Well, you know, so that’s kind of the current state of the music industry in its heyday is selling albums. But, you know, obviously, this is theoretically a legal podcast. So, you know, as a music attorney and heading up our music division here, you know, what are some of the legal tips and advice you could give somebody that’s interested in the music industry?
Ryan: [00:12:24] So we talked about, you know, it’s very hard to make money in the music industry from selling albums these days. And if you’re relying solely on streaming, you’re going to have to really up your numbers and you’re going to have to hope that you’ve got billions of listens and plays. So, you know, the things that I would say are most important to to a musician today to protect themselves is sign up with a royalty collection agency and register their music with the US Copyright Office.
Bo: [00:12:53] So, you know, I don’t I’m not 100% sure what a royalty collection agency is, so why don’t you elaborate?
Ryan: [00:13:01] Yeah. So you got you got two of them. And any time you think about music and music copyrights, you’ve really got to think about two different copyrights that are created. You’ve got the copyright in the composition, the song itself, and that is a copyright that’s owned by a songwriter or a publisher. You also got the the copyright in the sound recording or the master, and that’s generally owned by a label or the artist. And sometimes if you’re an independent musician, you own all those rights together. So you’ve got a what are called performance rights organizations, PROs, as they’re known in the music world. You’ve got BMI, ASCAP and SEASAC are the main ones, and their sole job is to collect and distribute performance royalties for compositions.
Bo: [00:13:51] So BMI and ASCAP, they’re not going to collect anything for you unless you actually, as a musician, go and register with them.
Ryan: [00:14:01] That’s right. So you buy registering and I think it’s probably $150. You fill out an application, you can do it online, but you affiliate with them for life and you start entering your catalogues, and you say to them, here’s the songs I’ve created, here’s where to look for, for money.
Bo: [00:14:17] And so no matter where your song plays, you’re going to get your royalty from it.
Ryan: [00:14:22] That’s correct. Yeah. Any any public performance, because that’s one of the rights under the Copyright Act. And any time it’s played in a bar, played on TV, played in a coffee shop, you’re going to get a chunk of that.
Bo: [00:14:36] Anything else a musician needs to do to try to collect royalties?
Ryan: [00:14:39] So there’s also, so that’s just going to get you the songwriting side of things that just for your composition, right? We still got the other side, which is the sound recording. So when you want sound recording royalties in addition to the streams that we talked about with Spotify in the sales that you might get at shows and iTunes and all that other good stuff, you have to look to Sound Exchange. Sound Exchange is an organization that was created by Congress under the Digital Millennium Copyright Act, and it seeks to collect royalties for public performance, royalties for the sound recording for the artists, the featured artist, and for the label. So that’s the other side of that, that music, that music copyright.
Bo: [00:15:28] All right. So I think that makes sense. You’ve got registering with BMI ASCAP SEASAC and then also registering with sound exchange. So those are two steps any musician ought to take immediately.
Ryan: [00:15:41] Absolutely. And it’s important to, of course, again, register those works and let those organizations know that you’ve got those songs out there.
Bo: [00:15:49] All right. So anything else that a musician needs to do in order to just maximize their protections and their and their royalties.
Ryan: [00:15:56] So no short list would be complete without a discussion of copyright and copyright registration. So under the Copyright Act of 1976, which is really the most recent copyright we have, there was the Copyright Act of 1909. There was it was retooled in 1976, and there’s been some amendments that I mentioned, the Digital Millennium Copyright Act, but there hasn’t been a a new copyright statute really since 1976. So we’re operating under that and under that statute, a copyright is created in the author who ever creates the work as soon as it’s fixed in a tangible medium of expression. So that means you get out a notepad the second you take pen to paper and you write something, the second you record something on your iPhone, the Copyright Act is going to give you common law rights to that. And that and that’s great. You know, you own that. You know, for the remainder of your life plus 70 years. But it doesn’t give you all the protections you could have if you federally register it.
Bo: [00:17:02] Now, that makes sense. I mean, copyrights are important throughout every sector of the entertainment industry. Whether you’re obviously music. But, you know, I’ve had more experience myself with people talking about screenplays, books, really. Any writing. It’s always important to get that copyrighted.
Ryan: [00:17:20] Well, yeah, I mean, that’s a good point. Well, I know you’ve helped other creatives register for federal copyright protection. Why is that? Why is that important?
Bo: [00:17:28] Well, and it’s just about locking in the protection if someone steals what you’ve written. You know, I mean, if you here are the benefits that I would tell somebody that ask me, do I need a copyright? Well, if you want to sue for a copyright infringement, you can’t do that unless you’ve registered a copyright. So it gives you a right to sue if someone steals your works. And it also gives you a presumption of ownership, meaning that you don’t have to prove you’re the owner at trial, you can just show that you have the federal copyright. One of the big factors, because sometimes damages can be very difficult to prove in a case. How can you prove, you know, well, I would have made this money if this person hadn’t stolen my writing, but instead I only made this money. Well, if you have it registered with the Copyright Office, then you can actually elect between actual damages, if you can prove them, or statutory damages. And statutory damages range from $750 depending upon the type of infringement, all the way up to $30,000 per infringement. Even all the way up to 150,000 dollars if you can show that the infringement was willful, they knew it was copyrighted and willfully stole it $150,000 per infringing act, I mean, which is pretty good. And finally, it also carries with it the automatic right to get your attorney’s fees paid. Important to them and important to us.
Ryan: [00:19:05] Absolutely. Now, when you said per infringement, I mean, that brings up a good point. You know, say somebody makes 500 copies of a CD of your work and sells 500 copies. We’re not talking about one infringement there. That’s 500 infringements.
Bo: [00:19:24] No, absolutely. So. Same thing. If you were to steal someone’s writing and post it on the Internet. Imagine how quickly those damages go up. When you can look at every single time someone viewed that page, that’s another infringing act.
Ryan: [00:19:40] Yeah, amazing. You know, as a litigator, why do you think these these statutory protections of federally registering would be helpful to a potential plaintiff?
Bo: [00:19:50] Well, I mean, first of all, obviously, it saves time. You know, you don’t have to prove all of these things that otherwise you would have to It saves you a ton of money for that exact same reason. It’s going to make it a lot easier to get a lawyer if someone comes to us and says, I want to sue for a copyright infringement. And we say, okay, show us where you registered your copyright, we’re a lot less likely to want to fight that battle if it’s never been registered before. So by registering, your copyright is going to make it much easier to get a lawyer down the road if you need one. And most importantly, it protects you against pirates.
Ryan: [00:20:31] OK, pirates. I like it. Kind of like how the Bowen Law Group says to every other law firm in the world, I’m the captain now.
Bo: [00:20:39] Exactly right. Another reason why, of course, we’re the most successful lawyers in the history of American jurisprudence, allegedly.
Ryan: [00:20:49] Well, that’s our show for today. Thanks for listening to the legal mastery of the highly intelligent and easily most attractive and true legal lawyers in Savannah. And remember, the only lawyers in the free world have never lost a single case, allegedly. To continue to receive free edge of your seat, legal anecdotes, mind blowing takes on hot topics, and a general master class in awesomeness, please head over to the BowenLawGroup.com/podcast, and look for …
Bo: [00:21:13] Dude. Why are we asking? Just hit subscribe already