Interview by Fast Moving Targets during Eurosonic / Noorderslag music conference & festival 2013.
2013! The Triumph of DIY Musicians and Songwriters
I am not the type of person looking back at the past but before revealing our 2013 mission I would like to recap 2012.
Tribe of Noise started this year with promising figures: 13,000 members from 145 countries shaping a stronger Tribe community, our in-store music service got noticed by new international partners (Getty Images, Mood Media) & retail clients and during the music industry conference Midem we launched our new “all rights included” music licensing platform, Tribe of Noise PRO with a big party.
We hired more talented people and shook off our magic “we are still a startup” blanket. Tribe of Noise is growing up and closing in on 20,000 Tribe members from 160+ countries: Our head of music is spoiling our customers with the best possible music, our community manager gives all her love to our creative crowd and in our kitchen more legal voodoo, technology wisdom and our “power to the people” message are melting into a powerful alloy.
But still, call me impatient, we need to speed up and scale. My mission for 2013 and beyond is to scale Tribe of Noise to a business level where we can tell more and more talented and successful Tribe musicians to quit their daytime job and focus on their big passion: music.
This means Tribe of Noise should generate enough money to at least offer them the opportunity. The icing on the cake.￼
So our two magic words for 2013 will be “scaling up”. I can’t disclose the details but the future looks bright. In the meantime the stars seem to align even more in favor of DIY musicians and singer songwriters ready to take back control of their rights.
Without boring you to death with legal mumbo jumbo here are a few developments you might want to pay attention to if you are in the music space:
- From 2013, the U.S. Copyright Act permits composers and recording artists who signed away rights to their works on or after January 1, 1978, to recapture their rights.
- The European Commission will introduce guidelines on collective management of copyright and demands more transparency and good governance from collecting societies. Another priority of the upcoming Directive is to stimulate multi-territorial music licensing. You will not see the full effect of this in 2013 but at least accountability will be on the agenda.
- More national initiatives empowering artists to renegotiate their contracts with music publishers, like the “use it or lose it” (non-usus) initiative in the Netherlands.
And on that bombshell and in the true spirit of the season, I wish you peace and joy… and some insane good music to listen to! Let’s make some Noise!
Hessel van Oorschot
Chief of Noise
Opportunities in a Crisis
We’ve reached a major milestone thanks to the thousands of musicians on Tribe of Noise! If you are one of them: thank you for your loyalty, trust and involvement in moving our online music licensing business forward.
So, what happened? We have signed a partnership with the world’s leading in-store media solutions provider, Mood Media. If you’ve never heard of them or don’t fully understand why this is great news for independent artists let me explain and share my vision on how this will impact the music industry.
I’ve been in the industry long enough to understand that most musicians are passionate people, not business people. They love to make music, get exposure and engage with fans who hopefully buy their music and merchandise and visit their gigs. Every single day you can read a new story online on how making money from fans is changing. Musicians who are not able to cope with this new reality are having a hard time. We (the industry) need to reach out, test drive new business models, share our learned lessons and guide musicians along the way.
Back to our milestone, signing with a multinational company, Mood Media. Their business - in-store media - is helping its clients to communicate with consumers resulting in incremental sales at the point-of-purchase. Music to them is one (and in my opinion the #1) medium to connect with millions of consumers daily in shops, supermarkets, hotels, etc.
Does this mean every store, restaurant, supermarket, hotel will start calling our in-store music partners today to solely license Tribe of Noise music from now on? Can all the participating Tribe members submitting music to our all rights included in-store music catalog give up their daytime job next month? We’re hopeful… but not yet.
Having said this, with any crisis, financial or otherwise, comes opportunity for creative expansion and alternatives. We’re confident that we’re a viable solution for both in-store media and artists.
With partners like Mood Media, our impact grows exponentially: Mood Media reaches 100 million people everyday from 580,000 locations in 41 countries. We have the capability to insure that their customers are not sacrificing quality for value. Tribe of Noise will offer a cost effective solution coupled with high-end, royalty free music from our members. And last but not least we are paying out more money to our members month to month.
So yes, this is a big moment for us, but more importantly for our artists. The Tribe of Noise mission continues!
With two trial court victories for DMX a significant change is brewing in the music industry
In response to: DMX Wins Landmark Decision against ASCAP and BMI
Earlier this week, DMX won a massive court battle against ASCAP and BMI signaling a significant turn for the music industry. In order to understand the impact of this court ruling let me first explain who DMX is.
DMX began in 1971, as a music service to license and program original artist music. DMX’s primary focus was custom music programs for businesses. In the 80s, the company began providing services to international airlines, as well as residential and cable television systems.
In 2012 Mood Media bought the company for $86.1 million. You should also know that Mood Media was bought the year before by Fluid Music based in Canada for $200 million (changing the name to Mood Media). The “new” Mood Media went on to round out their portfolio by acquiring Muzak for $345 million, positioning themselves as the largest in-store media specialist company in the world.
So the largest in-store media company in the world wins two court cases against the two largest performing rights organizations in the world, ASCAP and BMI? Why is this massive?
As stated in the press release the ruling resets fee structures and limits market power long held by ASCAP and BMI. It set a precedent allowing performing artists and composers to negotiate and license their music directly with commercial music providers such as Mood Media and in our case, Tribe of Noise.
One of the biggest hurdles facing the music industry is the segrated markets and the collective performing rights organizations (PRO’s) managing those regions. Billions of dollars are collected by PRO’s like ASCAP, BMI, PRS, GEMA, SACEM and hundred of other smaller entities. However it’s the management of this money that really stifles artists because their cut is generally not enough to sustain their work.
In the Netherlands, where Tribe of Noise is based, our infrastructure is already set up so that we are executing “all rights included” music services together with (in-store) media companies as an alternative to performing rights organizations. Essentially this ruling in DMX’s favor is a giant step forward in closing the gap between how licensing structures are regulated, aligning the U.S. and European regions more closely. In other words, there are now more opportunities for artists to showcase their music globally with less interference from dubious middle men.
If in-store media companies can pay-out the musicians directly without having to deal with performing rights organizations, the fees for the customers can come down (or more services could be offered for the same price) while the pay-out to the participating musicians will go up. Shorten the value chain, use technology for improved efficiency & transparancy and pay-for-play to the rightful owner(s) of the songs involved.
While respected industry experts can’t stop nagging these days about piracy and the lack of successful digital business models making up for the losses at major record labels, the music licensing business IS the #1 revenue generator in the industry. In fact the fastest growing product that Mood Media offers is royalty free music. It seems obvious to me that this is where the industry’s efforts should be focused instead of trying to reinvent the wheel.
To give you an idea how big this industry is. In The Netherlands (Europe) the local BUMA/STEMRA and SENA together collect roughly $125 million a year for in-store media royalties.
As with anything involving change, the implementation will likely be slow – there will undoubtedly be roadblocks along the way. Many businesses in need for media don’t know there is an alternative and last but not least: ASCAP and BMI are huge performing rights organizations but they are US based. Meaning, every single European country has its own ASCAP/BMI who will argue that the legislation doesn’t apply. It will be interesting to see how this is challenged on a global scale and what countries may be next in line.
This victory for DMX is not only significant for the music industry but it also aligns with my vision for Tribe of Noise and what we have been doing to facilitate artists through all rights included music. The best news is, direct licensing deals to (global) businesses in other industries like mobile, television and cloud services are just a matter of time.