Music Industry in the Philippines - Part 2: Music Recording

Music Recording is where the initial investment comes in. This is when someone --- either you or a record company --- gambles on your song and puts money into music recording, with the expectation of getting that money back when sales start to come in.

The most thrilling part in a music composer's life is music recording. Incidentally, music recording is also the most risky part for the record company's money.

And real success is still a long shot for a new artist today. Of the 32,000 new releases each year, only 250 sell more than 10,000 copies. And less than 30 go platinum. (Courtney Love, extracted from Salon.com)

Music Industry in the Philippines - Part 1: Musical Creation

How does the music industry in the Philippines operate? Does anyone know? Probably the more correct question is, does anyone care to know?

Music composers and artists are too engrossed in their music writing and performing skills (perhaps rightly so) that they leave the rest --- their bank accounts --- to the experts.

The question is, who are the experts? and whose interests are they really protecting? I don't mean to say the experts are bad people. No. All I'm saying is trust them but . . . verify, verify, verify.

Internet Radio Stations Pay 25% to Copyright holders

What does the agreement mean for big name internet radio stations? They will pay up to 25% of their revenue to copyright holders, in exchange for the right to play any music they so choose. (Source: dbtechno.com)

You wish that piece of news is from the Philippines, don't you? As a matter of fact, that piece of news comes from Boston, USA. Copyright owners there are "bitching" the radio stations as well "about not getting their royalty cuts from air time."

It's not just in the Philippines where music copyright holders complain against radio stations. "Music on actual radios is considered free promotion for the artist." The same argument you hear here.

Money in Music Copyright - Part 3: Performance Rights

Performance rights (or "performing rights") is the "right to perform music in public," as opposed to private performance, which is to be "within a normal circle of family and friends" (see Wikipedia's definition of "performing rights").

Potentially, performance rights fees can be a huge source of passive income for very good music composers (if rules are followed).

Remember Paul, our fictitious music composer? He just wrote a song that is a hit in the listening public, right? The ideal story for Paul with respect to performance rights fees will be as follows:

Money in Music Copyright - Part 2: Mechanical Royalty

The second "money" or royalty in music copyright is the mechanical royalty. Every music composer must familiarize themselves with mechanical royalty.

Mr. A-Producer will most likely produce an album of several songs, which can be as few as 5 songs, or as many as 16 songs. The next thing Mr. A-Producer does is to reproduce copies of the music CD and distribute these copies to the music stores.

For every CD sold, the composers are entitled to between 7.5% to 10% share of the wholesale price. If the CD is sold at a wholesale price of P100 (people buy it on retail at P200 or more), Paul and the other composer get between P7.50 to P10.  This is the mechanical royalty, or sometimes called "mechanical reproduction license fee"; But let's stick to "mechanical royalty" in this blog.