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So what does it all mean for the little guy?
That's the core issue here.
For the independent artist or small specialist label, the main thing seems evident to me is that, if you haven?t done so already, 2004 is the time to get practical. With a shrinking CD market and an explosion of on-line action, we need to find a way to access the promised land of download income streams.
For the little guy, independent digital distributors offer a way in.
They will need digital rights for the exploitation of your music, of course, and you will need ISRC encoding so those rights can be controlled and managed.
International Standard Recording Code (ISRC) is a digital fingerprint for each track. It provides the means to identify recordings automatically and allows effective management of your digital rights (DRM) and royalty payments. You will need it. You won't be able to trade without it. Your digital distributor will likely be able to offer it. Expect to be charged on a per track or per CD basis.
Digital rights are what you will be trading in.
Once upon a time, such rights were usually intended to be subsumed under a broad generalist contractual ambiguity referring to something like "all media and formats, whether now known or hereafter devised". Nowadays, though, with those previously un-named new media and formats already re-defining the future of the music industry, the new-style agreements get more specific.
Talk with your lawyer and learn what you can.
My opinion is that these rights should be defined explicitly. Don't go for the vague and woolly blanket ambiguities of the past. Whether tracks are available by individual sale or subscription, or any other method - make it explicit. If they are to be made available for paid download, or for streaming, or for listening-posts, or jukeboxes, or consumer electronics, or cellphones, or personal players - make it explicit. If there are to be allowable unpaid uses of your tracks or clips for promo purposes - make it explicit.
You should also expect an agreement to contain some clear statement about service delivery conditions and terms. That they use DRM encoding, for example, and that their download delivery is secure. And specifically how many burns and downloads (and to which devices) the consumer gets under their End User Licence Agreement (EULA).
Just pay attention to what Forrester and the IFPI have to say about how on-line business models operate and how they are competing to deliver what the customer wants. Recognise that whichever strategies they adopt, they will need the digital rights before they can do it with your music.
But first, of course, you need to find yourself a digital distributor.
Here are some tips to help inform your choice:
What are their routes to market?
Digital distributors deliver content to on-line download services and e-retailers. So, which ones? And in what territories?
The IFPI report spoke of the competitive innovation in strategic partnerships geared to increase market penetration through deals with the cellphone industry, computer manufacturers, established brand-names and the like. What does your digital distributor have going on?
How well do they sell?
How many tracks in their library? How many tunes did they deliver in 2003? How do they do promo and where do they post sound-clips?
What level of data-gathering do they use, and how can it serve your interests in targetting the right niche consumers?
What is the background and career history of the company principals?
This is the way to pick up the most crucial intelligence. Here's where to look out for the significant connections that enable those strategic partnerships reaching into the market. Specialist insider industry knowledge, networking contacts, marketing expertise, resources - figure out if they look to you like having the "right stuff" to establish good positioning in the digital universe.
One final comment...
Up-front, it is important to remember that all this nonsense takes place within the context of what I've called Stage Three of the Digital Revolution, where the industry is locked in the struggle for dominance and survival.
Clearly, everything about it is purely speculative, and no-one truly knows how it will shake out in the end.
Thus it is also my opinion that the preferred digital distribution agreement is one which reflects this horse-race of a reality by being non-exclusive.
Go for it.
And good luck.
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About Colin Lazzerini
Colin Lazzerini is an experienced Jazz lyricist and an artist with Road House Records.
Colin works primarily with song-writing collaborator, Pat Coleman, owns ‘Hip Pocket Music’, and two small independent specialist labels – first the decidedly jazzoid ‘RoadHouse’ and later a little singer-songwriter imprint called ‘Root Cellar’.
Colin Lazzerini - Full Site Crew Profile
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