Showing posts with label streaming. Show all posts
Showing posts with label streaming. Show all posts

Friday, May 28, 2021

What Does Pro-Rata Mean? Especially With Reference to Streaming Royalties.

Pro rata is a Latin adverb or adjective meaning a proportionate allocation.

When services calculate streaming royalties to licensors on a pro rata basis, it usually means allocating earnings to each licensor according to its share of a pool of total earnings.

However, licensors of content that attracts the most profitable per-stream users are apt to find such standard pro-rata methodology to be unfair and may favor user-centric royalty calculations instead of those that are pool-based. In a user-centric calculation, a streaming service instead pro-rates earnings from each individual user to the relevant licensors and does not first pool earnings matched to individual users.

Pro rata calculations can be used to determine the proportionate shares of any given whole and it is often used in business finance.

Monday, October 19, 2015

Visualizing Decimated Revenue in the Record Business

Since 1999, the old "record business" (i.e., of manufacturing and distributing physical consumer products) has dropped over 70%.  See charts below based on RIAA data:






Record companies collectively lost control of music distribution, albums unbundled into tracks, and downloads have had their day (note: downloads are declining in market share at this point). 

A small number of digital music services have seized control of music distribution; YouTube, Spotify, Amazon and Pandora compete with Apple to offer consumers better, faster and/or cheaper experiences, making streaming one of few recorded music market segments with strong growth.

Losing control of distribution to digital companies has weighed heavily on music license fees, resulting in controversially low royalty rates, which are often based on subscriber or ad revenues. See Boschan Corp.’s estimates below of roughly how many digital downloads or streams are required to achieve $1 Million in US recorded music revenue on many of the popular services:

Note that actual rates do vary based on the services deals with record companies and/or SoundExchange as well as the type of exploitation (e.g., subscriptions vs. ad-supported).

Also, it is important to note that while recorded music revenues have dropped, so have costs (e.g., for physical product), and that record companies have a multitude of other income streams that they classify as "investment" or other types of income or offsets to costs.  As a result of these and other factors, the profitability picture is not quite as grim as it appears when we focus solely on revenues of the recorded music sector.

Sunday, February 22, 2015

Top Tweets YTD from the Auditrix 2015 Twitter Feed

Below are the popular tweets from the Auditrix twitter feed, which focuses on music economics and royalties, during 2015 YTD:

Best Unfinished Twitter Conversation with Glenn Peoples @ Billboard and John Strohm @ Loeb

Tuesday, October 21, 2014

All the Ways One Can "Buy a Record"

My favorite octogenarian attorney recently asked me:
"Please give me a list of all the ways someone can buy a record."
I came up with the following and included uses that may not strictly constitute sales or phonorecords under the U.S. Copyright Act:

1 – Consumers can purchase permanent copies of recordings in various configurations, such as:
a.      From retailers (online like Amazon.com or brick and mortar like Target and Walmart) or directly from an artists’ website or at a concert (e.g., together with merchandise):
i.      Vinyl Record
ii.     Compact Disc
iii.    DVD
iv.    Embodied on video games
b.     Permanent downloads from music services (e.g., from iTunes and Amazon.com) and video game console manufacturers (e.g., Sony’s PlayStation network and Microsoft’s Xbox store)

2 – Also, consumers pay for access to listen to recordings by subscribing to a music service such as the following:
a.   Interactive services like Spotify and Beats (where users can stream on demand)
b.  So-called "non-interactive" services like Pandora and Sirius XM (which offer users less control over programming)

3 – Alternately, companies pay to advertise to listeners or viewers of free programming on services like YouTube, Vevo, MTV and the services mentioned in #2 above.  In this case, access to the recording is “free” to the consumer because the advertiser subsidizes the cost, but the consumer must watch or listen to ads in exchange for such free access.

4 – Finally, consumers who purchase electronics devices such as a Samsung phone or iPhone may find that music has been bundled with the device by the hardware seller, which pays the music rights holders for the right to do this (and thusly must build in the music cost in the device's price).

What ways to buy a record did I forget?

Please tell me what I failed to mention below!