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Digital Audio Insider is David Harrell's blog about the economics of music and other digital content. I write from the perspective of a musican who has self-released four albums with the indie rock band the Layaways.

My personal website has links to my LinkedIn and Google+ pages and you can send e-mail to david [at] thelayaways [dot] com.

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If you enjoy this site, please consider downloading a Layaways track or album from iTunes, Amazon MP3, Bandcamp, or eMusic. CDs are available from CD Baby and Amazon.

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November 24, 2008

Last.fm Artist Royalty Details
by David Harrell

Last.fm banner

A disclaimer: Although I often write about how much money my band receives from various digital retailers and subscription services, I sincerely hope it doesn't come off as tacky or an obsession with my music "income." The actual dollar amount is usually small enough that it's an academic discussion at best.

Our first statement from Last.fm's artist royalty program definitely falls into the "interesting numbers but not a significant amount" category: For the third quarter of 2008, we received less than one dollar. However, we're only collecting "on demand" royalties directly from Last.fm for a three-song Christmas EP, which was definitely out of season during the second quarter of the year. CD Baby delivered our first two albums to Last.fm, so any on demand royalties for those tracks will appear in our CD Baby account. While CD Baby takes 9% cut from those royalties, it reportedly negotiated a higher royalty rate, enough so that artists will receive more that they would directly from Last.fm. (I'll post those details as soon as I see them.)

Last.fm pays royalties for two types of online plays -- on demand plays of individual tracks and a digital performance royalty for radio plays. The latter is the royalty collected (in the U.S.) by SoundExchange, so it's only paid directly to artists who haven't signed up with SoundExchange. Plays by Last.fm members of their own digital files or CDs are included in the totals plays for each artist, but they obviously don't result in any royalty income.

Here's what the numbers looked like for our third quarter report:

Free on demand: 0.5 cents per stream

Premium on demand: no royalties received

Premium radio: 0.1 cents per stream

Free radio: .057 cents per stream
The details:

On-demand plays: Last.fm pays out separate rates for free on-demand plays and premium on-demand plays (by subscribers). Last.fm's FAQs stipulates a payment of 30% of net ad revenue for each free on-demand play. We received 1/2 a cent for each play, which implies that Last.fm is receiving 1.67 cents in net ad revenue per play, though there's no way to be certain if that's the actual amount. Last.fm could be paying more than 30% to boost the artist payout level, if it believed that 30% of the actual ad revenue was an insufficient amount to keep artists/labels in the program. There were no premium on-demand plays for us in this statement. (We actually received the stipulated payment for premium on-demand plays for our free on-demand plays, so maybe Last.fm is using that amount as a minimum payout rate...)

Radio plays are paid at two levels -- premium radio (paid Last.fm subscribers) and free:

Premium radio: Last.fm promises the greater of 10% of net ad revenue or 1/20th of a cent for each premium radio play. We received 1/10th of a cent for each premium radio play, which would translate into net ad revenue equal to one cent for each radio play.

Regular radio: For our free radio plays, we received .057 cents per play -- a little more than 1/20 of a cent. Last.fm promises a 30% cut of the net ad revenue for these plays, implying net ad revenue of .19 cent per track. Again, though, it's certainly possible that Last.fm chose to pay out more than the required minimums.

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November 17, 2008

Monday Odds and Ends: Lala, Verizon, and an Innovative Pre-Sale
by David Harrell
The very first payouts from Lala.com showed up in our CD Baby account last week. We received 1/2 a cent per stream after CD Baby's 9% cut, meaning Lala paid out about .55 cents per stream. That's slightly more than we received for free "on demand" streams from Last.fm. (Look for a detailed post on Last.fm royalties later this week.) No revenues have shown up yet for Lala's 10-cent web songs, however.

We also had our very first Verizon sales (one song, that is!), which paid out at 85 cents, before CD Baby's commission. No indication here if the purchase was online or a wireless phone purchase.

And Chicago's Umphrey's McGee is conducting a fairly successful pre-sale campaign for its next album, due in January. The interesting twist here is that they're giving fans a reason to encourage others to buy the presale. From band manager Vincent Iwinski:
The gist of the concept: We give away more free content the more pre-orders we receive. The fans "unlock" levels of content by getting more fans to pre-order. The goal is to give the fans incentive to spread the word, post our widget on their Myspace and Facebook pages, blogs, etc. In just over a week, we've sold out of our 1000 deluxe packages, and have taken more pre-orders than any release in our 11 years as a band.
More details here.

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November 11, 2008

Experimenting With Free
by David Harrell
Oops -- meant to mention this earlier today. I wrote a guest post for the Know the Music Biz blog about free music (and other promotional strategies):
Yet in all of these cases, "experiment" is probably a misnomer --there's no "control group" receiving the placebo treatment. Absent a trip to a parallel universe where you could buy Kid Rock's last album (or the single) from the iTunes store, we really don't know for certain if Kid Rock helped or hindered his total sales. (It's possible, of course, that some record companies have been using control groups of some sort. You could make an album available in iTunes for a specific country or region, and compare sales to those in non-iTunes regions. Though the demographics and fan bases probably aren't identical across regions, so you're still guessing somewhat...)

And even if we knew for certain if an individual experiment was a relative success, it's not necessarily transferable. Just because something worked for Radiohead doesn't mean it would work for R.E.M. Further, in addition to the non-interchangeable nature of audiences and albums, the music retail environment itself is changing on a daily basis.

Yet music is art, not science, and even if these different business tests aren't controlled, repeatable experiments, there does seem to be a few obvious takeaways. One thing that seems certain is that for acts of a certain stature, deviations from the standard sales approach will result in increased attention, perhaps enough to generate additional sales. Offering free music certainly seems to have helped Trent Reznor SELL a lot of music, music that is readily available for no charge. And maybe AC-DC's new album wouldn't be selling as well without the promotional push behind the Wal-Mart exclusive.
Read the whole post here.

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Today Is the Day
by David Harrell

The Layaways The Space Between banner

Today is the official release of "The Space Between" by the Layaways. (My apologies for two self-promotional posts in a row!)

It's really something of a soft launch, however. While the album can be purchased on CD or as downloads from CD Baby and it's live on Last.fm, it's going to take a few weeks for it to show up in the various download stores. CD Baby began delivering the album to its digital distribution partners last week, but it's essentially a waiting game at this point.

As far as I know, neither CD Baby or Tunecore can currently guarantee a specific digital release date for most self-released musicians, though CD Baby says it's coming soon.

In keeping with our "free" experiment, here are links to mp3 files for all of the songs:

The Layaways - The Space Between
  1. Keep It To Yourself - free mp3
  2. Where The Conversation Ends - free mp3
  3. All Around The World - free mp3
  4. On Any Given Saturday - free mp3
  5. January - free mp3
  6. Come Back Home - free mp3
  7. Note On The Door - free mp3
  8. Too Little Too Late - free mp3
  9. The Space Between I - free mp3
  10. The Space Between II - free mp3
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November 03, 2008

The New Layaways Album
by David Harrell

The Layaways The Space Between banner

Please excuse the self promotion...but the new Layaways album, "The Space Between," will be released on Tuesday, November 11th. Here are a few preview tracks:
Keep It To Yourself -- free mp3

All Around The World -- free mp3

January -- free mp3
As discussed here before, we'll be making a free version of the entire album available, as well as selling digital downloads (and physical CDs). Of course, given the ubiquity of free music these days, we're still struggling to figure out exactly how a relatively unknown act can garner attention by offering free music. So look for some follow-up posts over the next few weeks as we sort through our options -- and attempt to measure the relative success of different approaches.

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    THE LAYAWAYS

    Out Now -- "Maybe Next Year" -- The New Holiday Album:

    <a href="http://thelayaways.bandcamp.com/album/maybe-next-year">Joy To The World by The Layaways</a>

    "This is a sweet treat, deliciously musical without being overbaked for mass media consumption." -- Hyperbolium

    "Perfect listening to accompany whatever holiday preparations you may be making today." -- Bag of Songs


    O Christmas Tree - free mp3 lyrics and song details
    Away In A Manger - free mp3

    Download from eMusic, iTunes, Amazon MP3, or Bandcamp. Listen to free streams at Last.fm.



    album cover art from The Space Between

    <a href="http://thelayaways.bandcamp.com/album/the-space-between">Keep It To Yourself by The Layaways</a>

    "...about as melodic and hooky as indie pop can get." -- Absolute Powerpop

    "Their laid-back, '60s era sounds are absolutely delightening." -- 3hive

    "...melodic, garage-influenced shoegaze." -- RCRD LBL

    Where The Conversation Ends - free mp3
    January - free mp3
    Keep It To Yourself - free mp3

    Download from eMusic, iTunes, Amazon MP3, or CD Baby, stream it at Last.fm or Napster.



    album cover art from We've Been Lost

    <a href="http://thelayaways.bandcamp.com/album/weve-been-lost">Silence by The Layaways</a>

    "The Layaways make fine indie pop. Hushed vocals interweave with understated buzzing guitars. The whole LP is a revelation from the start." -- Lost Music

    "Catchy Guided by Voices-like rockers who lay it on sweetly and sincerely, just like Lionel Richie." -- WRUV Radio

    Silence - free mp3 lyrics and song details
    The Long Night - free mp3

    Download from eMusic, Amazon MP3, or iTunes, stream it at Last.fm, Napster, or Rhapsody.



    album cover art from More Than Happy

    "These are songs that you want to take home with you, curl up with, hold them close -- and pray that they are still with you when you wake up." -- The Big Takeover

    Let Me In - free mp3
    Ocean Blue - free mp3

    Download from eMusic, Amazon MP3, or iTunes, stream it at Last.fm, Napster, or Rhapsody.

    More Layaways downloads:

    download the Layaways at eMusic download the Layaways at iTunes

    the layaways website