Friday, November 17, 2006

Share and Share Alike

One of the movers and shakers over on the Ville, spit, asked me the following question:
I guess what I'm confused about is the lack of a
connection between music video sales (through itunes
and dvds) and music video budgets. The itunes store
sold over a million music video downloads in little
over two weeks when it first opened, and it seems like
these days every artist on a major label is
practically required to release a dvd with live
performances and music videos. This month, a video
that I directed was slapped on to a special edition
"re-release" of a cd that had already been out for a
year. The only incentive for fans was the additional
music video, and its been selling pretty well. All
this to say that I think the demand for music videos
seems as high now as any other time in the medium's
history, and for the first time ever, record labels
are able to use them as more than just promotional
tools. Even the existence of youtube doesn't seem to
be stopping consumers from spending money to actually
own the content.

My question is, when will this new source of revenue
benefit the people on our side of the fence? It's
probably unrealistic to assume that any of the money
will ever see our pockets, but you'd think that it
might at least encourage bigger budgets. Is most of
the money just seen as a general recoup for the cost
of the video itself, is it being funneled into new
projects, or is it just helping the majors keep the
lights on?

I am not an industry sales or financial analyst, but here’s my semi-educated answer.

Since the sales of music videos on-line began, I have been writing about the issue. Even the Old Grey Lady covered it. Please don’t read my random thoughts and then NYT piece back to back – it’s embarrassing.

An organization of music video directors has also been on the case for a while as well – trying to gather the support so that they can get a piece of the financial pie. This effort by the MVDGA has even gotten some attention of it’s own. But have they received any money?

No directors have been paid for their music videos selling well. Unlike feature films or television shows – the director of a music video has no legal claim to any profits. That is what the MVDGA is trying to rectify – create an organization to try and leverage their position. The people at the MVDGA are definitely on the side of angels in my book, but their efforts have been (and will continue to be, IMO) fruitless.

When a video gets shot, a director signs a contract with the label stating that the video is a work for hire. Every bit of film on the set belongs to the label. The label grants the director the right to put the clip on their reel for promotional purposes only, but they could rescind that at their discretion. Even a snapshot of the director posing with the lead singer between takes is technically owned by the label.

Contractually, the director has no standing. A given director could fight to get that changed, but it would definitely be a big struggle to get the label to switch up their boilerplate contract to satisfy a single MV director. And that is IF the label agreed to give up money – which never happens. I can see why a director would want to get paid, but the label is very likely to just say “Pass” and commission the job with a competing director. There are lots of those out there.

Music videos have been getting sold for a long time. Spit asked about DVD and enhanced CDs – both decent-sized sources of revenue for labels. I found some sales charts for DVD content (old school stuff like Stones concerts and Creed compilations which directors are not paid for) – but none for the individual video sales at iTunes or other outlets.

Seriously, I could not find any specifics about which videos were selling well on-line. Other than that “1 million sold” announcement – not much has been written about the sales. The labels and Apple seem to be keeping those details as their little secret.

Look at the “million” announcement again (and again and again) – it is really a press release from Apple. It got tons of hype and coverage – but we all just took Cupertino’s word for it. Did they sell those videos? I’m sure Apple did – but the announcement was made to drive more sales and that is all. Who knows how many they are selling a year later? (If you have any charts or specifics, please pass them along).

I also have to believe that the rise of Das Tube and myspace is also making kids less interested in owning a video. Why buy the “BAWLLIN” Jim Jones clip when you can find it on YouTube at any computer?

Not only does the director/prod co have no legal claim to residuals or royalties, because of the contracts they also have no way to know what they might “deserve” based on sales. Apple (and other on-line retailers) and the labels are keeping a very tight lid on things.

So that answers the part about “will directors ever see money from the sale of MVs.” The other part of spit’s question asked if these sales would ever make it into increased budgets for future videos. My short answer to that would be “not now, but it might in the future.” I am not really known for my short answers …

For labels to spend more on music videos because they see an increased income stream from selling them off later, I believe these things would have to happen:

1. Labels would need to believe that they were really making money off selling individual MVs as downloads. If the sales of the videos (which the labels split with iTunes) requires additional book-keeping and the like – the money may “seem” like less of a plus to them. And how many different videos were sold to make up that million? A single video selling 300k times would attract label attention – a whole bunch of clips each selling 114 times would not.
2. Labels would have to believe that bigger videos mean more on-line sales for them. Without sales charts, I can only guess – but I’m sure the labels have a very accurate sales count. My guess is that some of the top video sellers on iTunes are cheap stuff like “Chicken Noodle Soup” or even “OK-GO” – which means that the specifics of the song or clip, rather than the budget determines it’s sales potential. Labels will spend more IF spending more means they make more. Period. Even if “Hey Ya!” were the top-selling video on iTunes (just guessing, of course) – does that mean it sold well because the budget was over $500k, or because the song was so damn catchy? My guess is the top selling videos on iTunes are the kiddie clips OR videos the catalog album charts – “Thriller”, “Smells Like Teen Spirit” and “Welcome to the Jungle.” That probably won’t make the labels want to spend more on videos.

The end of spit’s question is sort of the answer. I will re-cap the question here to save you from scrolling all the way past my own, lengthy answer-like-writing. “Is most of the money just seen as a general recoup for the cost of the video itself, is it being funneled into new projects, or is it just helping the majors keep the lights on?”

There you have it. If the labels are seeing much new money from selling music videos on DVD or on the web – they are using it to offset the fact that Tower Records is closed and once-dependable artists like Janet Jackson (and maybe Beyonce) now absorb millions and millions of promo dollars only to generate barely platinum sales.

There are lots of new opportunities for music videos. Product placement will continue to grow. I can see future videos being combo MVs and ads for particular product where the band/song/clip is paid to bring eye-balls to whatever is being sold. Some people hate product placement, but I think it will continue to evolve and get more insidious and accepted.

Since we can’t wait for Big Daddy Label to come and pay us – where else will the opportunities be?

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