EMI sues social network Hi5 and VideoEgg

AudioMicro read about Record Label EMI suing social network Hi5 and video distribution platform VideoEgg over the weekend. Records labels suing websites has become a common thing these days and we all need to accept the fact that the labels have the upper hand in the situation. They are just trying to protect thier IP. If you read the comments on that TechCrunch post, you will see that despite the fact that everyone likes to make fun of attorneys and point fingers that litigious folks when a lawsuit is filed, it’s simply a fact of life in the music business that if you steal music, you are liable for prosecution and the larger a company you are that continues to broadcast or facilitate the broadcast or distribution of music that’s not appropriately licensed, you may find yourself shelling out cash to your attorney and having a tough time defending your position against the deep pocketed labels. It’s just not a good idea for a social network like Hi5, Bebo, Facebook, MySpace, etc. to allow it’s users to post videos without the appropriate sync licenses secured. This TechCruch stirred up a great deal of comments, particularly for such a simple, editorial post. Video creators can purchase sync licenses for one dollar per minute at AudioMicro and then they, as well as the platforms that desitrubute thier videos – including, but not limited to YouTube, Hi5, MySpace, Bebo, Revver, and Daily motion won’t get sued. These sorts of legal actions by the record labels, which will not stop but are easy to criticze (as we are all programmed to hate lawyers), validate the micro stock music sync and performance licensing market. It’s exciting to see the micro stock sync and performance licensing market come to fruition right before our eyes.

Breakdown of the buyer side of the commercial music licensing market

The buyer / customer side of the commerical music licensing market breaks down as follows:
1. The Existing Commericial Music Licensing Market – a $3 billion market according to the Wall Street Journal in July 2007. Fun insert here – according to AudioMicro’s own internal number crunching, that it’s a $3.4 billion market
2. The Expansion of the Market Due to New Customers that were previously in the following groups:
A. Pirates / Theieves who steal music to sync with videos and broadcast without licenses
B. People who were priced out of the Rights Managed and Royalty Free Market because $1,000 to $25 per tracks is too expensive / not democratic pricing and negotiating usage is a huge hassle / time suck
3. Growth in the overall audio market as the overall video and online video markets continue to growth and proliferate the following areas:
A online video – YouTube, Revver, DailyMotion, Hulu, etc.
B film – including features, short films, etc.
C TV – both episodes, shows, & commercials
D Radio – both internet radio, satellite radio, and traditional
E mobile – video, ring tones, ring backs, etc.
F SMS, instant messaging, and text messaging
G podcasting
H amateur videos, home videos
I Corporate – e.g. Powerpoints, Google Docs, and SlideRocket presentations
J Websites incporating audio to engage visitors – e.g. most fashion sites already incorporate audio in the shopping experience – it’s like elevator music at “The GAP”

As one begins to segment the market and look and the growth potential, which is undeniably in an uptrend, the micro stock music market begins to look more and more attractive as it becomes clear that a market leader will emerge and rule this space within the next 3 to 5 years. AudioMicro aims to be that market leader.

What have you got to lose?

With micro payment, artists may think they are underselling themselves; however, the reality is that with micro payment, you are actually opening up your library to an entirely new group of content purchaser that never before would ever think about paying for a sync license – the YouTube crowd. As video continues to proliferate the internet, as internet video quality continues to improve (we can now watch HD videos and audio on free sites like Pluggedin) and video proliferates every website and blog, it’s obvious that audio becomes increasingly important in the equation. The importance of Audio is easy to overlook, but just try watching a movie without any sound, or try watching a video with only dialogue and no background music, sound effects, or other audio-visual goodness. It’s much less stimulating, if not totally unbearable. Without Audio, Video would be a dull boring and arguably meaningless mess. Licensing your content on AudioMicro opens up your portfolio to an entirely new audience, and and entirely new customer base. The market for online audio is going to continue to grow well into the foreseable future. Even bloggin softwares, including WordPress are incorporating one click audio (and video) insert options into all blog posts. Will bloggers be stealing (pirating) content or legally licensing in through a micro payment desination like AudioMicro. We believe that 90% of folks will “play by the rules” and do the right thing and purchase an AudioMicro subscription or credit package in order to properly secure the sync license required to add the meaningful, important, crucial audio content to their editorial and commercial projects, both online and offline.

For anyone concerned about selling their music on AudioMicro.com…

I’m a successful songwriter/composer who recently found out about AudioMicro, and became so enamored with the concept that I now am their Artist Recruiting Manager. In the past few weeks I’ve been talking to a lot of fellow musicians about AudioMicro, and the micro stock platform in general. There seems to be some mixed feelings and some misunderstandings about how artists fit into the whole micro stock picture.

For those who aren’t fully aware of the concept, micro stock simply means that the content (in this case audio/music) is crowd sourced – meaning ANYONE can submit content – and it’s sold for prices starting at $1 (in this case it’s $1 per minute of music). A few of my composer friends who make some decent money selling tracks for $30 or so in the royalty free space feel that micro stocking audio is going to devalue their music. It’s an understandable point of view, but in my humble opinion, a limited perspective.

See, whenever and wherever anything is sold, there is always the option of spending money on the high-end, or brand name version of the product, or the “generic” version of the product. If you use laundry detergent as an example, there is usually a few dollar difference between Tide and the generic brand, even though the ingredients are EXACTLY the same and we actually feel – sometimes better in the case of crowd sourced content.  Both brands make money and flourish because there will always be a market for both. Some people want to spend more money for the flashy brand, and some just want something that works regardless of the name or package. Sure you may make $30 or more by selling your music on a royalty free basis, but can it hurt you to open your “product” up to a consumer base that would rather spend less than that? Not at all in my opinion. People will still pay $30 for your music in that world just as fast people will spend a few bucks for your music in the micro stock world. You’re basically just opening up your customer base (the millions that can’t and won’t license audio for $30 a track) and creating new ways to make money by doing it. Not to mention the “theives” out there who only steal music — they’d also gladly pay $1 or 2 for music — it’s the same principle that has made iTunes so successful and has made people forget about scouring the internet for free music.

And above all, its risk free! At least take a handful of your tracks that haven’t ever earned a penny, and stick it up on this site. If you don’t like the way it works, just request to take em down. The artist has 100% ownership of their content and can remove it at any time.

In addition, AudioMicro offers the best royalty rate i’ve ever seen – 50% of every track sold.  As AudioMicro takes off, artists will be in position to make more money than ever before. When this site becomes the one-stop shop for stock audio, its not far fetched to think that many an artist could easily be making hundreds or even thousands of dollars a month, just in micro stock.

I can see how this will be the wave of the future, and as much as some musicians will resist the change, its the natural progression of things. Check out what has happened in the photography world and you’ll be amazed at how easy it is to find content, and how easy it is to make money from your art. Micro stock opens up opportunities for artists that never existed before, and makes it so much easier for those who need to place music in their visual medium. It’s the perfect give and take for both sides – its about as democratic as it gets. I see it as having your cake and eating it too – continue to sell some of your music for as much as you can. Take advantage of the high end and also upon up your content to an entirely new class of customer with micro stock. But while you’re plcaing tracks directly with high end customers you can put the rest of your stuff here on AudioMicro and make some extra money on the side and get a feel for the ease in which the micro stock concept works – for everyones benefit. We see some folks making over $100k per year in royalties in the micro stock photo realm and there’s no reason why this can’t be the case in the music space, which is actually a larger market than photos. It will just take some time for the concept to take off, but being there ahead of the curve will give you a huge advantage.

Thats my two cents. I’ve looked at other stock music sites, and AudioMicro is by far the most artist friendly, easiest to navigate, and the music upload process is a breeze. Not to mention that other sites offer only a measly 20% royalty rate or the ones that want you to “share your content for free” under a creative commons license or some other format. I applaud AudioMicro for seeing the future and trying to make sure that artists out there are well aware of the new market shift ahead of the curve and we encourage artists to jump on board and take advantage of the revolution rather than being resistant and scared of it.

Sincerely,

Gideon Black, Artist Recruiting Manager
www.audiomicro.com
Los Angeles, CA

(818) 651-6311