Thursday, Apr 14, 2022 • 56min
Amy Thomson: How To Fix The Music Business in 3 Easy Steps
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Amy Thomson has pretty much done it all as an artist manager, and is now disrupting the modern music industry from another angle as Chief Catalog Officer of Hipgnosis Song Management.
Before joining Hipgnosis in 2020, Amy ran her company ATM artists, and has managed acts including Seal, DJ Snake, and Swedish House Mafia.
Most famously, Amy took Swedish House Mafia from being a baby band to kings of the globally dominant EDM scene of the early 2010s.
She also worked closely with Kanye West on the stunning marketing campaigns launched during his Yeezus era.
On this MBW Podcast (supported by Voly Music), Amy discusses the three areas of the music business that she believes need drastic change.
Those areas are: (1) NDAs. That's nondisclosure agreements in artist and songwriter contracts; (2) Data – as in the flow of data to music makers and the vast inefficiencies that bad data is causing; and (3) Service and royalties, particularly the level of service that catalog artists are receiving from labels.
Claims Thomson: "I think that the service of record labels for 99% of artists since 2006 has been absolutely shocking. In 2006, when streaming was launched 30 million records got re-released [on streaming platforms]...
"Labels are getting better at [marketing catalog records]. But when I say better, that means instead of 500 catalog projects a year [being prioritized for marketing by the major record companies], maybe there's now 700 catalog projects a year.
"There are 30 million records on Spotify. [And] 75% of streaming is catalog, and that grew 10% last year." The Music Business Worldwide Podcast is supported by Voly Music https://www.volymusic.com/
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Talking about
Speakers
(2)
Amy Thompson
Tim Ingham
Transcript
Verified
Break
Tim Ingham
00:28
Hello and welcome to the latest Music Business Worldwide podcast.
Share
00:32
My name is Tim Ingham, founder of Music Business Worldwide and today I'm joined by Amy Thompson.
Share
00:38
Amy is a music industry executive who has pretty much done it all as an artist manager and is now disrupting the modern music industry from another angle, as Chief Catalog Officer of
Hipgnosis Song Management
.Share
00:51
Before joining
Hipgnosis
in 2020, Amy ran her company ATM Artists, and she's managed acts including Seal, DJ Snake
and Swedish House Mafia
.Share
01:01
Most famously, Amy took
Swedish House Mafia
from being a baby band to kings of the globally dominant EDM scene of the early 2020s. With Amy on their side, Swedish House Mafia
ended up selling out Madison Square Garden
in just four minutes. As if that wasn't impressive enough, Amy also worked closely with Kanye West
on the stunning marketing campaigns launched during his Yeezus
era.Share
01:26
Two questions have been on Amy's mind for some time. How do we make the more complicated elements of today's music industry make sense to artists and songwriters? And where the music industry flat out does not make sense, how do we fix it?
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01:40
On this podcast. Amy explains the three areas of the Music Business that she believes need drastic change.
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01:47
Those areas are number one: NDAs, that's "nondisclosure agreements" in artist and songwriter contracts.
Share
01:54
Number two data, as in the flow of data to music makers and the vast inefficiencies that bad data is causing, the global music industry.
Share
02:03
And number three service and royalties, particularly the level of service that catalog artists are receiving from labels.
Share
02:11
I will pre warn you, Amy's mind works fast. So even though she was trying to keep her commentary on this podcast simple for a dummy like me, there are a couple of things mentioned that would possibly benefit from some prior explanation, most notably, Amy mentions the
C. M. A.
, that's short for the Competition And Markets Authority
in the UK
, which is about to undertake a wide-ranging market study, looking into whether artists and songwriters are being treated fairly on an economic basis by the labels, publishers and streaming services.Share
02:46
Amy Thompson, thanks for joining us. The first thing I want to get out of the way before we get into your three easy or not. So easy ways to fix the music industry is to understand your objective for doing this podcast. What do you want? People listening to take away from it?
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Amy Thompson
03:03
Hello Tim. Well, it's never been easy for me as a manager and despite having done billions of streams in in my career to ask questions about royalties.
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03:14
I'm not sure if that's because people think I won't be able to understand it or I don't need to know. But I think that at this point in the rage that's going on in the debate around streaming and pay, we just need to just go back to the very beginning, which is, let's all be real here, creators make the songs, they are the supply and without any of them, we don't have a job.
Share
03:36
So why don't we speak their language? You know, I've dealt with geniuses in the last 25 years gifted with ADHD, Asperger's, bipolar, you just... genius-level staff. And yet we choose to speak to them in a way that patronizes them, you basically may as well speak to them in a different language and I just really feel that as I got to
Hipgnosis
, I was kind of given a lot more power and access backed up by some of the greatest songs in the world to be able to get my questions answered.Share
04:08
But I really feel that I'm one of the lucky ones, but whenever I sometimes bring this up at a super high level I kind of get eyes rolled out me or you don't get it and I'm like well if I don't get it whose fault is that you know, you have failed to educate me and I'm a billion streamer manager how the artists feel and I think that's where this rage is coming from.
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04:29
So I'm trying to dispel some of the panic that comes around even a royalty conversation and sort of have a more fun open debate about what I think needs to happen.
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Tim Ingham
04:42
Great fun and open debate is what we're here for. There are three things that I believe you're gonna talk about today. I'm just gonna name them quickly to tease what's coming linda's is one, data is another and the third part is the services and royalties that artists are offered by the industry partners.
Share
05:00
So let's start with the da's and try and keep your rage in check if possible. But explain to people what the problem is ultimately and how you want to fix it and how you think it might be able to be fixed in the years ahead.
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Amy Thompson
05:14
Thank you Tim. I'll try and keep my rage at bay. Well, major labels and the deals they have with the stores or in a lot of the press you'll describe them as DSPs. But to every normal person it's a store.
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05:27
The major labels and the deals between those two parties are under the N. D. A. and that is a non disclosure agreement which in english means it's secret. So basically they are saying that that is to be competitive and I say that's absolute nonsense.
Share
05:43
There are large advances paid between the stores and the record labels and in many cases we're told but we don't know because they're under N. D. A. that they then go ahead and set the rates at which they'll pay through to. The artist is very important to remember in this streaming debate that
Spotify
and Apple
and everyone don't actually pay artists. They pay middlemen in this case the major labels.Share
06:07
So for me and I know how my artists feel and I know how all my new right
Hipgnosis
feel, their royalty statement is your pay slip. It is what you log on for, be it monthly bi quarterly, whatever to see what you're going to get paid. And obviously everyone has rent to pay and everything else. You know your pay slip is pretty much one of the key points in everybody's life in order to survive on this earth.Share
06:31
So you know a general you know worker on an hourly rate which is essentially what streaming is.
Share
06:38
You know you would have your pay slip, you would have the number of hours that you've done and you'd have your rate of pay on a pay slip for a creator, your rate of pay is under N. D. A. So in the rate of pay little square it would just say under N. D. A. So imagine
Paul McCartney's
pay slip and it says the number of hours that he's done on streaming which I'd imagine is extremely excessively wonderful. And then his rate of pay is under N. D. A.Share
07:07
And I'm just wondering in what other industry that would be allowed now every three years you do have a right as a recording artist or a publishing artist to be able to go and do an audit and audit is when you pay a slightly differently qualified accountant to go into your books with the record label.
Share
07:27
And you get access to sort of a lot more of the back end and you get to query stuff. You get to check your water rates were right. You get to check that recoup herbal items were correctly deducted from your statement.
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07:39
You get to check that the international flow of your money's all good. Now this is actually something that's quite rare. I mean it's quite a limited skill set to be honest. There aren't that many great auditors in the world but it's expensive and you have to do it yourself. And then if generally the rule is you find more than 5% missing I. E. You know they didn't pay you through that.
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08:02
The mistake was more than 5% of your earnings. Generally they'll pick up that cost but they'll pick up that cost at the end of the all so you've got to be ready to front the money for the audit. Now what happens is is that the order still go into your statement and what they used to see was they go through and they'd see H. M. V. for our spirits tower records for America knack for the French.
Share
08:27
They go in and they'd see the number of units that that store had sold and you'd see some things have been broken in transit. You'd see how many were manufactured, how many were returned. And you'd be able to get access to what we would now call the source files which means okay prove that to me, prove they've sold 2000 because we're sure they sold 4000. So you could really get to the real grips of what was going on.
Share
08:54
What's happening now is you go in and you see
Spotify
which you know at least one statement that I see all the time. There are actually I think there's 31 plans now on Spotify
four lines four lines because apparently only four plans but then you say,Share
09:11
"OK cool. Show me the source data. Show me how that was calculated because I need to understand the rate you agreed with that store. How much was I do for each of those plans? How many units? I did. And therefore is this number on my statement? Right and you are stopped?"
Share
09:30
Sorry that's under N. D. A. So to me my audit is now useless so I get to the end of my audit and I want to shout out one major record label where I have a query on an audit with 19 months unanswered.
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09:45
Now I'm still fronting this audit I'm six figures into this audit and I still will not know at the end even though I have actually managed to claim back seven figures, I still will not know at the end if my streaming, which is 92% of that artists money was it right? But what's more important about that is okay. So I spent a whole load of money on a video in my last album.
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10:12
I invested a bit more in a producer and I decided this time to use a proper studio and I decided to actually take the whole band to a beautiful location to really get creative. And I want to really understand, did that make a difference? What did that mean for me in terms of money? Because I'm thinking of planning my new album now.
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10:34
Now we're already having to wait for that money to come through nine months on record, 18 months on publishing. So I'm already delayed in being able to make that financial decision and then I get it through.
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10:47
And without waiting for my auditor to maybe be able to get into what that means for me. How do I plan my business? And it's really important that people remember that creators are actually in England. I don't know if you call it the same elsewhere, but we call it a micro business a business of one person.
Share
11:06
They can grow and become a bigger business. Maybe sign some other writers and artists to them. But what's really important is an artist now is building a portfolio.
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11:15
Every single song is a business, you have shares in that business. You may own 100% of that song, but most people have someone else participating in the record. You've got, you know, an average catalog of 150 businesses that will now last until 70 years after you pass away when you're a writer.
Share
11:36
And you want to be able to maybe value your portfolio, you want to be able to leave it to your children in a very clear way. You want to be able to just generally look with your family on a Sunday, see how you're doing figure out when you're going to recoup. And it's just absolutely impossible when you don't know what you're getting paid.
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Tim Ingham
11:56
Yeah, I'm not a recording artist or songwriter of any note anyway and I know what I'm going to learn and when I know what my salary is going to be at the end of the month. So that certainly does allow me personally to economically plan and that's ultimately what you're calling for here, right? It's just information, basic information and artists to have access to that.
Share
12:16
I guess the counter argument there is that the information is complicated by the fact that, you know, you mentioned these 31 plans or so that
Spotify
presumably around the world, all the different plans that people can subscribe to via their mobile operator or, you know, as part of a couple or part of a family or individual, et cetera.Share
12:32
And then it's further complicated by the fact that there's so many different global territories, different services in those territories with different agreements with the record companies. So the key question here is how do we get to a point where artists and songwriters have a level of understanding without being overwhelmed by the global data in all of these different territories?
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Amy Thompson
12:52
Yeah, correct. So obviously, you know, streaming is a gift and I know that's not a very popular opinion to some creators who feel very angry at the stores, but tech has always saved music. Always steve jobs came along with itunes.
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13:06
You can also destroy music, Alan napster.
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13:10
And then streaming comes along into, in, in, in 2006. And it was, it was complicated. And, but what it did was re released 30 million records in 2006 and now your record to be on sale 24 7 in every market in the world.
Share
13:25
And that's hard to understand and that's fine. But we've had 16 years for companies that are posting to their shareholders on the NASDAQ their share prices pretty accurately. And pretty sure they're able to do that. When investors are asking questions, are you telling me that in 16 years?
Share
13:43
Universal
warners and Sony
could not have in any way, build a clear educational program with tutorials with online classes for people to be able to go and understand what people want is. Okay, give me an average per million. Can you help me understand per million streams roughly how much I'm going to do because you know why I'm un recouped.Share
14:08
I just kind of want to know when I'm gonna earn, I want to go to bed at night and think next year I can move next year I can buy a studio next year, I can buy a car for my family, whatever that is. These are like basic human rights at this point.
Share
14:23
And I don't understand why the record labels, you know, are not able to put together a system that educates songwriters and their teams, artists and their teams unless they think they don't need to know unless they think they shouldn't know or unless that they feel we can't understand. And I'm telling you that we can, we're bleeding into 0.2.
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Tim Ingham
14:50
So I'm gonna jump to it. Which is, which is data. So if the first point is about these nds in the contracts, breaking those down and basically getting the information flowing. You know, let's say that information is flowing. You now want to talk about data.
Share
15:02
Obviously you wear two hats, you wear your
Hipgnosis
and annual manager hat coming at that from particularly the manager perspective, what would you like to see change? I think things are gonna get technical. So I may interject and try and explain things to the listeners best I can. But what would you like to see change?Share
Amy Thompson
15:17
Sure. I want to try and explain it as simply as possible. Because again, I just hate the way all of this is made so complicated when it actually isn't as terrifying as it sounds. So for me, I want that we have one global copyright database, one global database of all songs.
Share
15:37
Now, at the moment, what happens is and I think this is a really interesting point that a lot of people don't understand. A lot of singer songwriters don't realize this.
Share
15:46
Now when you have a record and you hand it into your label, it has a code. It's called an I S R. C. But for this we'll just call it the record code.
Share
15:57
Now the writers may well hand their splits into on time and writers please do this. Please sort your splits out before you hand a record in its you're not pushed enough to do it and it would really benefit you.
Share
16:09
Now the writer's hand their splits in and you're diligent manager sends in. Here's the splits. Here's the producer, here's who did backing vocals, all of that. And you live in this illusion that the songwriter part which has got a different code that's called an SWC. But let's just call it the song code.
Share
16:28
You're under the illusion. All of that information has gone to
Spotify
or Apple
music or any of the other stores. And the illusion is further highlighted because the writers then look on Spotify
and go, oh look in this lovely credit section there I am.Share
16:43
That's actually not true.
Share
16:45
There is actually no song codes in stores fact. Now that means that if
Florence Welch
gets sucked up into Spotify
for her rather glorious new album that's coming out.Share
16:58
She split into Florence the artist with her record code has gone into
Spotify
. Florence the writer with her song code hasn't gone anywhere yet.Share
17:11
Now what happens is every month the DSPs, the stores send a report to every PRO. In the world. Now P. RPRO a performing rights organization, You'll recognize the big names. Most people are members of
Ascap
, BMI
, PRS
, and so on.Share
17:28
The writer, you are represented there And these DDX reports go from the streaming services and they drop into the PROs Worldwide. Every country pretty much has one all with their own members. Generally you're a member of where you live, it drops down and they go in and they try and match it.
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Tim Ingham
17:49
Sorry. So I'm clear
Spotify
and Apple
and etcetera - the stores as you put them - they are sending these long DDX. I use the word reports to the PROs To the collection societies and all the different territories.Share
18:04
These reports don't actually contain any of the song code as you put information. The SWC, just the recording code and then the PROs Are having to manually try and figure out which song codes should match to the artist codes. I've got that right?
Share
Amy Thompson
18:20
That's absolutely right. Now, just also remember that from a stream 100% of the stream rights for a pound or a dollar. You got 30P going to
Spotify
, 55P going to the record label, and 15P going to the songwriter. So the songwriters already getting a much smaller portion than anybody else.Share
18:45
Now that 15% is then hacked away by the fact that the stores are sending the DDX reports. They get dropped down into the PROs. The PROs have to try and match everything mismatches going on all the time. Sometimes even the record code is missing. Less so than that. But we're looking at, I think it's a widely accepted figure that 35% of song codes are not matched.
Share
19:12
Now you tell me how that's good for a songwriter?
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Tim Ingham
19:16
It just doesn't make much sense in 2022. I don't want to be the Luddite here but we were talking before this podcast, I went to the states two weeks ago now I get off the plane, I get a text from
Vodafone
- who's my UK
cell provider - explaining exactly what is at that month, exactly how it's going to work and exactly what the charges are.Share
19:36
I use my credit card or debit card in the U. S same thing. I know exactly what I'm being charged for exactly what currency conversion rates are for example.
Share
19:46
And that's pretty much up to the minute information.
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19:50
I don't understand I do understand that the music industry is complicated. I do understand that there are trillions of lines of data all over the world. I don't understand how we get to 35% inaccurate.
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Amy Thompson
20:00
It absolutely flabbergasted me that that is allowed to happen now. There's a whole load of oh well you know copyright law which by the way dates back and is actually designed for piano rolls that go in automated pianos in the late 18 hundreds. So you know, I'm figuring we need a refresh at this point now. I don't really care about copyright law in regards to data.
Share
20:23
It doesn't stop the ISWC or the song going into the store at the point it goes out now you can argue. Well, the songwriters don't hand their splits in time. Really well do they know about this? I'm pretty sure that 90% of songwriters knowing the urgency that if you can get your song code into the store from day one you will guess all of your money, would sort the splits out before it comes out.
Share
20:51
They think it's all oh it's fine, we'll sort out after my publishers got me. It's fine. No no no no no no no. We need that major labels. Absolutely and utterly do their next deal with the stores where the stores have to ingest the song codes. When those DDX reports goes out there already matched.
Share
21:11
Now if you then have a global copyright database, other people with all of those records already. And
Spotify
would be able to go in and start cleaning their data.Share
21:22
Now the reality is we can all have a hissy fit about the state of data and that the fact that this is the only industry in the world which actually profits from bad data because that 35% falls into a black box and is shared due to market share. So if you're
Universal
, you're the biggest, you get the biggest chunk.Share
21:39
So we're actually profiting from bad data here. So we're gonna have to have a data amnesty where everyone calms down and to do that. A good example of that actually is the mlc in the
US
where I've seen so many bad reviews of all the potatoes in. It's bad and this and the other. Okay, cool.Share
21:59
Well if the data is bad, it was likely bad for a very long time before that the difference was we couldn't see it couldn't do anything about it. We couldn't fix it. So the reality is that everybody has a role in this. I have a role as a manager. I have a role as the head of copyright here for
Hipgnosis
.Share
22:16
The songwriters have a role. All of them have their lovely song businesses going on. The business managers have a role, lawyers have a role. Publishers have a role.
Share
22:26
There needs to be an amnesty where there is a global copyright database with a solid system for you to be able to go in and amend the splits to be correct. Now, if you also haven't registered a record where it's full, so 100% is accounted for. If it's under or over, it's highly likely your record isn't working anyway.
Share
22:47
How many of those do you know? You know, So we need a global copyright system where all of the PROs play ball with Zach who's actually the sort of organization across the top. And we need that the song codes are now transparent with a solid plan for people to be able to go in and start cleaning it now there will be mayhem.
Share
23:07
But there's mayhem now anyway. So, you know, we've got to get to a point where there's a data amnesty and we've got to be able to get song codes into the stores. Otherwise, let's say you live in England, you do a stream in
Brazil
.Share
23:22
The DDX report will drop down the Brazilian PRO will actually collect it first and then they send it back to the UK PRO, who wait and then they pay it through to you.
Share
Tim Ingham
23:37
You're talking about the money here to be clear is that the Brazilian PRO gets the money it takes its commission, it passes it back to the
UK
, take their commission, their admin fee and then that passes on to the writer. Am I right?Share
Amy Thompson
23:47
Right. And it will get into world is later. But my point is is that the data has to be right in
Brazil
. If I'm a member of Prs
Sam. Dave Stewart
, Sweet Dreams
, Eurythmics
, brilliant record, someone streams it in Brazil
, Brazilian PRO claims it from the deduct reports. It's a Brazilian stream.Share
24:11
They send it all the way back. What if it's not registered correctly? I see translators getting added on different, different song codes. I mean I've got I've got 47 different song codes and one of my on one of my clients on one of their base hits, where does are you telling me that works then?
Share
24:28
The Brazilian, the Brazilian PRO are harging me? What? Exactly? And how much are you withholding before you send it back to
Prs
and how long did that take? And why did it take that long? Why does it take eight, 18 months for a stream to come back to me?Share
24:43
But because the promos have actually gained so much of a share of this with streaming because they are now really controlling all streaming revenue on behalf of the writer, Your publisher isn't the person getting that money for you.
Share
25:00
The publishers, the person who puts your registration with the PRO. You tell your publisher.
Share
25:06
Publisher tells the PRO. You've got this incredible powerful PROs
Share
25:11
Who are generally a monopoly within their own market, non transparently telling me how many deductions there are not telling me the exchange rate of the currency and need 18 months to send me back my money, which was only 15% of the beginning, possibly lost 35% for bad matching and took 18 months to get back and then you take a piece of that. What you're talking about is absolute nonsense and it has to change.
Share
Tim Ingham
25:41
So the first part we were talking about there was the actual information that goes to the stores and goes out to the PROs, and you were saying that what you want the if I understood correctly what you want, particularly the major music companies -
Universal
Sony and Warner
- to do is in the next round of licensing with the likes of Spotify
is to get Spotify
or Spotify
and others to accept the song codes, the ISWCs as part of the information that actually goes in when a when a record or a song is hosted by that service. Have I got that bit. Right. So the information in the DSP already.Share
Amy Thompson
26:12
That's correct and I want to make sure that everyone understands that to my knowledge. I don't believe why stores would have an issue with that. I don't think it's a store issue. The majors have to make that sure that's a contractual point and then make it happen.
Share
Tim Ingham
26:25
Great. The second point is about this global copyright database.
Share
26:29
The problem with that, or the interesting counter incentive to that is that those pros will know that if there is one centralized database for the globe regarding all song copyrights and indeed, or recording copyrights, particularly song copyrights, that will ultimately lead to better efficiencies in the PRO network globally. It will lead to more transparency for songwriters and their representatives and it will ultimately mean that there is less resource needed in each PRO.
Share
26:57
And therefore people will start asking difficult questions about why am I paying admin fee X or commission fee X for PRO in territory X, when all of this information is globalized. Therefore, and this, you know - tell me if I'm being conspiratorial here - therefore, those pros may not be incentivized to actually rush towards this central database. And indeed, I understand that, I don't know about 10 years ago now, there was an attempt and it ultimately fell apart because there wasn't consistency between those PROs in the various territories.
Share
Amy Thompson
27:26
In 2006, when every record had the potential to reach a global market, the copyright database had to mirror that need and that's just a fact, and everyone needs to put their ego down and make that global copyright database happen, enable for songwriters to participate in the clean up.
Share
27:46
Now, again, conspiracy theories. I could do a different podcast. Stranger things kind of vibe we could do all of that be amazing. But you've got to ask yourself while we're all arguing about the data that we can't see and the agreements that are under N. D. A.
Share
28:02
The real questions can't even happen yet. And everyone's wondering why everybody's angry. But while we're being angry. Aren't we being slightly distracted about the fact that actually what's going on here? I'm not getting paid enough. Why are you taking this long to get my money home? Because the real question, oh you don't understand it? Oh really? Then why don't you just lay it out for me? How about that?
Share
28:22
Just lay it out for me and then maybe I'll understand it. And if I don't understand it I'm gonna ask you another question and well I do. So I just get the feeling that it's just a really marvelous smokescreen of like oh the data, oh my God, like... Come on guys, come on. I mean you know maybe just hire Microsoft or google or
Apple
and maybe they'll help you out. I mean it's absolute nonsense.Share
Tim Ingham
28:44
I do know that before we spoke, you just wanted to give a brief shout out because one of the problems you highlighted there was that in the first place, songwriters in the studio aren't jotting down and making clear the splits of what each of them should be, how much of the song they should own. And there is technology coming in to help them with that. And indeed embedded into software that they use in the studio.
Share
Amy Thompson
29:04
Yeah, I wanted to shout out your no vase actually from
ABBA
who has become a dear friend and he created the Session app with Niclas Molinder
and Max Martin
.Share
29:16
And basically the Session app, you log into your Session online or in the studio using a QR code, It tracks everyone that was in the room, goes right through to the end and you finalize your splits and gets you your song code.
Share
29:29
So basically, if you could plug that into the major labels, they get the song code off you, they tag it to the record code, it goes off to the stores. But I think it's, I think it's a really important step for fixing the next generation. And I think the work he does when he absolutely doesn't need to do deserves a huge shout-out.
Share
Tim Ingham
29:48
Great, thank you. And yeah, you know, reiterate what you're saying really. You laid out a number of problems like dominoes and that's ultimately the first dominos that someone's fixing, that may well lead to improvements up the chain. So the third point, the third fix you have for the music industry is to do with services and royalty. So explain what the issue is and then we'll try and figure out what the solution is.
Share
Amy Thompson
30:13
Okay, so services, dear lawyers, I haven't seen yet a contract that actually nails what the record labor has to do for you in terms of services, you will focus on a royalty rate that we discussed earlier. Which is pretty meaningless by the way, when you don't know what the rate of payers because it's under N. D. A. everyone's fighting over. I'm 80% grade 8% of what? But that will recover that at the beginning.
Share
30:43
But there really isn't anything in there about the service that you required during the term of your agreement. And I think most, most artists kind of accept that, you know, you'll be heavily service in the first six months while they're kind of, you know, you're seeing how your records will do. But your records both new and your catalog are active 24, days a year.
Share
31:08
Now for me, I think that the service of record labels for 99% of artists since 2006 has been absolutely shocking. So in 2006, when streaming was launched like I said earlier, 30 million records re released. Yes, of course, there have been campaigns around great catalogs anniversaries.
Share
31:33
Perhaps they've had a moment like Fleetwood Mac with dreams last year or whatever, but it really is reserved for the very, very successful artists. You know, the Metallica's the Beatles blah blah and and labels are getting better at it. But when I say better, that means instead of, you know, 500 catalog projects a year, maybe there's now 700 catalog projects a year.
Share
31:54
There are 30 mil records on
Spotify
or more now, I'd imagine. But 75% of streaming is catalog that grew 10% last year, largely actually they believe triggered by, you know, TikTok
and everything. Kids just loving records of any age, just loving great music, great songs. Now, the reality is is most artists since 2006 have not heard from their record label.Share
32:21
And that means, you know, their contract often didn't include digital. Some did because people were starting to anticipate
Apple
, but many, you know, the sixties, seventies eighties that they didn't include. It didn't include digital. And so they've lumped it into a royalty category, kept the streaming rights and then failed to service them in any way, shape or form.Share
32:45
And you know, if you're not able to service catalog, you should let it go. I've been reading about, oh, we're gonna, you know, we're gonna recoup your balances really because if they want to sell most of the intel that I'm getting about the people getting that on recruit balances wages if they then choose to sell and I'm not trying to pick anyone to sell to
Hipgnosis
here.Share
33:06
You know, anyone can sell to anyone your un recouped balance is put back on your sheet. So that sucks. First of all, but the reality is if you are a catalog artist, you had a one hit wonder in the eighties, you had a beautiful album in the nineties or you're a superstar and you're really tired of them focusing on three records because they happened to be in the best of the eighties playlist.
Share
33:29
And you actually wanted. Well, hold on, that record is on a beautiful album that I wrote about when I was getting divorced and how I fell apart and put my life back together again. I want to do something around that record. You no longer have a product manager, you're not notified when they put your records on new services, you're not all best practices.
Share
33:48
You know, maybe you want to get involved with
TikTok
, maybe you want to get involved with a new social media. Maybe you want to know how you use an Instagram link so that you can swipe up or you know, use that little link button that they use. Now, these are basic tools where a songwriter or artists can actually engage in making that record bigger, everybody can now compete on the streaming platforms.Share
34:11
It is a free for all glorious space for all music to be discovered, but it's algorithmic. So if you're not doing well, you're probably never going to do well. You know, you're doing well, it might pick up some tracks, You're getting some moreplaylist, this is awesome.
Share
34:25
But if you're not doing well and you would like to have a shot, because your record is finally back out again, pre-2000 and well, pre-1997. You know, you needed that your record label were willing to print more vinyl. That they were willing to print some more Cds. And I understand why you then wouldn't if there's no demand. Of course, that's very difficult for any record label to do.
Share
34:47
But now they chose to put 30 million records on
Spotify
. They got equity for putting 30 million records on Spotify
. So now they have to figure out that from those billions that they're making, they need to set up services that will now support the records that are on Spotify
.Share
35:04
And that is why there's such rage. You can't get hold of anyone, you don't know what's going on. Like how do I be better at the I love my records. Like, you know, this is creation. We're talking about people's heart broken stories online, being ignored by major record labels.
Share
Tim Ingham
35:20
There's a lot going on here because you're speaking from a place of personal and professional passion that that's obvious with artists that you represent, both as a manager. But also the approach
Hipgnosis
is taken to catalog catalog is everything, but the majors are making the bulk of their money off music.Share
35:37
They're not actively marketing. I completely understand that obviously the majors have to only have so much resource, they have to choose what they're going to actively market. But also back to this philosophical point isn't it?
Share
35:48
That the majors have for so long and all record labels have for so long been fixated on the front line, partly the reasons you point out, you know, they have to manufacture, they have to create demand with marketing and then they have to get the return on investment there.
Share
36:01
So is it that actually maybe there's a mind mindset shift that is taking place but perhaps needs to accelerate at those companies where the the fixation on frontline is balanced with the idea of like come on, what's making the majority of our money 70% plus is catalog.
Share
36:20
Maybe we need to put more resource into telling the stories of those artists who have been and gone because it's no longer a problem. They're not getting on M. T. V. Or
Radio One
. Spotify
is accessible to all. Is there just a mindset shift that would really help this at those companies?Share
Amy Thompson
36:36
Yeah, I mean, I'm kind of tired of hearing the argument that it's all about, you know, we have to focus on the front line, we're investing so much in in the front line.
Share
36:45
If you have a catalog artists, I'm gonna use Seal as an example who's on
Warner's
and I'm not singling out Warner's
here, but I'll give him as an example because I worked with him for a very long time. So you're looking at Seal. Seal is on Warner's
and Seal has incredible records kiss from a rose crazy blah blah blah.Share
37:05
Now, are you telling me that he has to in any way suffer because the record label has
Julita
.Share
37:15
Well, Seal doesn't have a piece of
Julita
- God bless you Julita
by the way, shout out and all that, girl power - but Seal doesn't have a piece of Julita
leaper. These catalog artists where they are paying for. As in they are not receiving the service in an equal measure.Share
37:34
They're not getting anything from those people. They're not getting equity when the when when they all I. P. O. themselves, they didn't get a share option pushed through to their royalty statement.
Share
37:45
So how is that fair? Now, obviously, I'm not suggesting that, you know, next week, a catalog artist on
Warner's
, let's take Moloko
, laugh or Róisín Murphy
. Actually just say Róisín now, she's on tour at the moment, has her record label rolled out anything to do with the tour? I severely doubt it.Share
38:06
Now, am I saying that every catalog artist deserves a julie level campaign every Monday? No, of course not. Absolutely not. But are they owed regular newsletters and updates with how they're doing the play listing? How do you download
Spotify
for Artists? Is it Spotify
job to tell you that? No, of course it isn't. It's the person that owns the recording to help and support you.Share
38:29
So, you know, getting best practices through regular video tutorial classes that you can log on to ask questions. You know, you are allowed to interact with your record and have the level of service that record deserves.
Share
38:43
Now, different records will deserve different levels, you're popping off on tick be nice, if someone hit you up and told you, you know, maybe you want to join in. I mean, you know, it's not it's not too much to ask that with the billions rolling in the expansion of helping people run their own business, which the record labels then own for them is serviced.
Share
Tim Ingham
39:07
So I'm just going to pick up on the regime
Murphy
point at my local because if she's on tour at the minute, I'm quite sure she'll have an active record company now, maybe in the independent sector, who probably are working her latest record.Share
39:18
But the point you're making, if I understand it is she has since left, quote unquote active business relationship with, I presume, the major record company that owns her most famous recordings from the past. Why isn't that record company jumping on on the tour and still working with her?
Share
39:33
And I do think that there's a hang over there, because the moment that that record company, she either left that record company or in the case of hypothetical artist, that record company dropped that artist, that has traditionally been the end of the business relationship, but actually streaming has created a new business relationship where all parties could benefit if that record label had more of a relationship with the catalog artists, Is that is that a good summation?
Share
Amy Thompson
39:58
That's correct. They chose to re release 30 million records in 2006. So what was the plan then?
Share
40:04
You know, was it just that everybody was going to be like, okay, great, thanks. I don't understand my royalty statement and I haven't heard from you.
Share
40:11
Not really a vibe, is it?
Share
40:15
I also want that in terms of service. You know, you go into your record label, and you if you if you go in there, generally all on one floor of a big building and you will go in and you will see your A and R. You'll swing by the marketing guys, you'll go over to the radio lady. You know, you'll you'll go and see the whole team, Where's the royalty desk gap?
Share
40:36
You know, where's my money at? Can I ask the money question while I'm here? Because I'm kind of confused. Why isn't that there? Why am I not able to go and see the money side of things in an equal level to the marketing that I'm highly likely paying for myself? Because it's a recoup herbal cost.
Share
40:54
In most cases, why am I allowed to go and see them? Why isn't there a genius bar for royalties or an in entire floor for royalties? Where you can go and sit down without needing to pay a business manager without needing to pay an auditor, why can't you just go in and ask questions about your royalties effectively?
Share
Tim Ingham
41:11
You're saying like the experience of being in an
Apple
Store, my laptop's broken, my ipad is three generations old. What should I do now? You you mean that level of feedback and reaction and expertise but for specifically for royalties.Share
Amy Thompson
41:25
Yeah. I actually really went into one of my royalty porter's the other day and I was like okay, I'm really gonna test my theory here. Can I? And I actually walked the government around one of them which was a joy and we were trying to figure out we won't get into all the royalties.
Share
41:37
We didn't understand, we're just trying to figure out where to get help. And there was there was just no number was like could you call the helpline?
Share
41:45
And then I was like, oh look here's his query at major label dot com. And then I sent a query and I've got a ticket number and I haven't heard from Anyone since I was just wondering, you know, maybe you should rethink that and you should think about the fact that creators geniuses that right?
Share
42:03
Beautiful records that are one off standing the test of time that you will happily reap the benefits of 24-7365.
Share
42:11
You don't think maybe they want to have a little chat about this very complicated streaming system that no one explained to them and you don't think that they might want to like go over the royalty statement that you keep, you literally do press releases about the upgrades in your royalty portals and yet there is absolutely nobody to support you.
Share
42:31
If you didn't quite understand how you've done it, that would not be allowed anywhere else on this point.
Share
Tim Ingham
42:41
How does it improve? I mean obviously the the addition of resource into the majors, the idea to sort of keep referencing the majors because ultimately they own the most powerful record companies in the world, but you know the addition of the expertise, the addition of the accessibility and the explanation all of that I appreciate.
Share
42:57
Is there anything else that that could be being done to help fix this? This problem, a sort of a wrap up if you like from you on How you would like this issue to be resolved over the next 10 years?
Share
Amy Thompson
43:10
Well, in relation to service, I want genius bars in the labels, I want royalty tutorial videos that try and break down streaming in an understandable way much better than the video tutorials available online, which basically just kind of tell you how to navigate your royalty portals and I want record labels to start reaching out via the royalty portal where you can add your email address and your contact your, all of your contact information.
Share
43:38
I want new databases of everybody that those royalty portals have inside where they can receive best practices even if you started off with an annual report, how you doing, playlist. Do you know how to log into
Spotify
for Artists? Do you know how to log into Apple
for Artists? Noth phenomenal services.Share
43:57
We've just signed a new deal with
TikTok
. This is what this means for you. Here's a video on best practices. Here is how you set up your own TikTok
channel. Help us help you.Share
44:07
That's what I want from the record companies. I want them to start understanding that they are representing on mass and servicing the few. And that needs to change Or end perpetual agreements at 20 years and let small record labels start again. Who will actually take care of this catalog?
Share
44:25
They will actually go into the depths of the catalog. They will enjoy it. They will love it. We'll see vinyl factories popping back up again in Manchester record labels in Brighton. You know, we need that back. And if you want to own everything, I'm afraid you're going to have to service everything. So you need to start figuring that out.
Share
Tim Ingham
44:43
It's a really interesting point. I can't see a day when it would it would ever happen voluntarily from, from those with the largest commercial interest in the music industry. But it's a very interesting point that basically if you are Seal or an artist who had some monumental hits, very, very talented individual with a story to tell.
Share
45:01
But perhaps records that have gone a little unrecognized or a little unloved beyond the hits. If your record company isn't servicing you to the level they are servicing a
Dua Lipa
, etcetera.Share
45:11
You're suggesting that that artists should get their rights back after 20 years, that the record company should essentially say, you know, we're no longer, we're no longer actively servicing this music, have it back. And then that would allow that artist to set up new business relationships with that copyright with independent labels who would ultimately love it and amplify the stories correct?
Share
Amy Thompson
45:32
Which was which I think would be a much deeper user experience as well. There's a you know,
Neil Young
who is very happy with the record label, I hasten to add began Neil Young
archives and the record label will openly say, you know, we thought it was a bit much, there was going to be a lot of content planning through may be better to kind of focus on one thing a year from Neil and what they actually learned together.Share
45:55
Was there actually Neil constantly revisiting and re dropping his catalog in different ways and different formats just generated constant traffic and really deep engagement for people who love
Neil Young
and, you know, you know, I can I can name 100 artists where people want that experience.Share
46:17
Now, if you are a perpetual artists, you haven't been serviced and you are allowed to leave, then I think we will really start to see a far more intelligent, deep dive service. But if you're allowed to leave and let's say, I don't know, 10 new great record labels popped up representing, I don't know, 10,000 perpetual bands.
Share
46:40
Remembering how many bands around the world? That sounds crazy. But 10,000 perpetual bands, or even just, you know, a large chunk we could prove a large chunk of great catalog artists have not heard from their record labels. You'd be shocked what I see here.
Share
46:54
Maybe there's a DSP model at 4 99 for the consumer, which is what the government here are looking for, where it's only catalog and that catalog, you know, we're looking for also how the consumer can benefit. Is there a deeper dive DSP service? That's just all great older records. My mom would love that.
Share
47:12
So, you know what, what is that new industry with new independent labels, new independent promotion companies working around that, the record labels. I'm not saying record labels need to lose this, but I'm saying guys, you've got you've got to get to a place where you start to service the needs of those of those artists or let them go.
Share
47:34
I'm talking about people deep diving into catalog like they never have before. And the business opportunity that is for every artist that's on
Spotify
and that they deserve for that demand to be met.Share
Tim Ingham
47:45
It's the business opportunity that fascinates on this and the industries, and the balance of investment in front line versus catalog, which has changed and how it will continue to change.
Share
47:54
But I find it really, really interesting because I'm not gonna pick on any new frontline artist. But if you're a 16, 17 year old today, we're told constantly by the music industry that the key in the modern age is storytelling and you need an amazing story.
Share
48:08
Are you honestly telling me that 16 or 17 year old is not going to be completely enraptured by
Kurt Cobain's
story over the story of someone who is 19 years old who's just signed a $3 million record deal. Maybe they will, maybe that person will be Billie Eilish
. But but in terms of odds, in terms of probability, I would put my money on the Kurt Cobain's
story hitting that young person harder.Share
48:30
And therefore, I think that that we we as an industry, I need to think about where the investment is going by all means that investment should continue to flow to frontline A and R. Is the lifeblood of the next generation's catalog. All of that is true.
Share
48:44
But I do think that that balance is something and ultimately, that's what you're hitting on here is the balance of attention and investment that those catalog artists get versus frontline artists.
Share
Amy Thompson
48:54
I think it's one of the Swedish hours, Matthew said to me years ago, and it really resonated with me. I think he was quite angry at the time, but I took his point, which was, you know, artists have one career and I think he said, you know, Amy you have 20 ahead of you.
Share
49:10
You know, you can manage someone else, you can get another job, you can walk down the street and not be recognized as the guy that used to be now. Artists have one career. And so when you know, in in this case it was connected to something completely different. But that's the point is that every single artist on
Spotify
deserves to have the best chance of making that record work.Share
49:34
Especially when pre-1995, you didn't even have the word digital in your agreement. This was not contemplated. This was this was not the model that's not what you signed up for. You signed up for a record company to take a large portion of the profit, but to front the money to press your CDs and your vinyl to take a risk on you.
Share
49:53
That involved heavy cash outlay and you took that risk with them and when your record died down and it wasn't on radio anymore and it wasn't entire records anymore. You accepted and they accepted that. That was it. Maybe you might get a crazy ass movie sink a few years later, like born slippy just complete turned the ship for where Underworld was perceived even though it's hugely successful before.
Share
50:18
But the but the tone kind of changed with it with exposure by a different source of attention. Yes, of course. But you know, all of these people now are in a business, they actually didn't sign up for whilst receiving no service and that isn't fair.
Share
50:37
So there's one other thing and it's the only thing I'm gonna say that's negative two stores and that is that there is a rule and it's not even an unspoken rule. It's a very spoken rule where you're not allowed to play your record on radio or other promotional tools before it comes out on a store.
Share
51:01
And as a manager that made my life really difficult when that change, you know, you used to have 23 weeks, you were doing the interviews on radio beforehand. You like playing live on
Radio One
, you were doing all this stuff and so when released they came, you were out the gates, you had a head start, right? You had a head start.Share
51:16
Now I appreciate the store's stance, which is that they don't want their customers to be able to get that record anywhere else. And that's okay. I understand. But here's the deal. You as stores have gone after the radio market by definition of what I just said, you've gone after the radio market. But when it gets to the record companies receiving the money, the record companies did a license deal.
Share
51:44
Now, a license deal on most record contracts is like a sync okay. You didn't sell anything, you're not getting a royalty on 9,99 there's no unit price on a stream. It's all very complexly broken down, as we discussed earlier.
Share
51:56
Now, a licensed rate is traditionally 50% And the record companies are passing it through as a sale, which is on average 20%. So we could just solve this whole thing while you pay it as a license and everyone gets 50%. But streaming is used in two different ways.
Share
52:12
It's used as a sale and it's used as radio, and radio for me is when you select how you're going to listen to a playlist, you don't know what's coming or you pick a song and then you let it keep playing algorithmic lee serves up what I love, which is exactly the same as me tuning into funk FM or tuning into a very classic FM tuning in or I know I'm going to be served something I'm going to enjoy, but every single record is paid through as a sale, which absolutely favors the record company.
Share
52:43
Now, radio is paid differently and we know the data exists between a passive play, which is basically when you didn't mean you didn't select it yourself, I didn't search
Ariana Grande
. It gave it to me because I previously searched Dua Lipa
.Share
53:01
So when that radio play happens, record companies need to pay me as a radio play, which is split differently. And in summary, the songwriter goes from 10.5% to 24.5 and the recording artist goes up 1%. So both sides win on the creative side. But for the songwriter, they've lost radio play because the market shrinking, radio is still very important.
Share
53:32
But the markets are shrinking and the stores are aggressively going after it, even in your car, they're going after it. Now, I'm then having everything as a record sale, where I'm earning 10.5% and the record company are going to come out at the very, very, very, very end with 38.5.
Share
Tim Ingham
53:49
When they've paid everybody else, 38.5, just to be clear, these percentages are the percentage of the total amount of royalties that is available from that particular stream of that record.
Share
Amy Thompson
53:60
That's Right. There's a lot of people involved in taking from a stream. So when you have a stream, like you said, you've got your 30%, then you've got your 55% of the record label, 15% publishing. But that publishing is split. I mean, it's so complicated. I don't even think I'll dilute it now. But the record label, we're assuming that the record label is obviously paying through royalties to the recording artists.
Share
54:23
Let's not complicate it with who gets what it's so it's it's so complex. I don't want anyone that's listening that is a songwriter to be like what?
Share
54:31
Because I'm literally looking at a diagram just by the way, while I'm saying it to you because I'm so nervous of getting it wrong, It's very difficult to understand classes need to happen and all that jazz, but a broadcast which
Spotify
and Apple
and Amazon
and Deezer
have all chosen to be able to do is not being respected by the record label when paying it through.Share
54:54
Now, I do not believe that the stores have any control over that, but the stores have to insist on it in the new deals with the majors and the majors have to pay through active streaming, which is searching for the artist, getting the records you wanted, like a sail flipping through a CD rack and picking up your CD and they have to pay radio as radio and allow songwriters and artists to make the correct amount of money.
Share
Tim Ingham
55:20
So you're saying it would be lovely to have a 50/50 split broadcast style, 50% of the recording, right? To keep it simple in the
UK
. We go to the record label, 50 go to the artists and performers would say that would be lovely to have that across streaming.Share
55:37
But actually it's, it's about the different types of streams. And if you haven't actively press the button, then you believe that should be a 50/50 split or paid out in the same way that broadcast would be. But if you have pressed the button, then that is more akin to a sale relationship, correct?
Share
Amy Thompson
55:54
I'm going to let record labels have it. You've already said, you've already told me it's not a license, which streaming is a license and you're paying me as a sale. Let's compromise. Split the data radio paid on radio rates, sales paid on sales rates. That's a compromise.
Share
Tim Ingham
56:09
Amy Thompson. Thank you very much for joining us on the podcast.
Share
Amy Thompson
56:09
Thanks Tim.
Share
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