Category: New Music Strategies

[OK, I was lying about that being the final edit… THIS is the final edit – http://blog.bandcamp.com/2014/12/30/eu-digital-vat-changes-and-bandcamp/ 🙂 ]

[final EDIT: read the follow-up post here, with Bandcamp’s new tax info – http://www.stevelawson.net/2014/12/bandcamp-and-the-new-eu-vat-law/ ]

[another EDIT: Read this by Rachel Andrew: http://rachelandrew.co.uk/archives/2014/11/25/how-small-companies-and-freelancers-can-deal-with-the-vatmoss-eu-vat-changes/  it’s looking more and more like there is no loophole, unless you a) stop selling downloads to people in the EU or b) distribute your ‘downloads’ via physical media. Read on for the historic discussion, my initial understanding, and the comments thread that is helping to make sense of this…]

I’ve been somewhat aware of this for a while now, and couldn’t quite believe that a piece of legislation so utterly insane was actually going through.

The laws around paying VAT (Value Added Tax) and ‘Supplying Digital Services‘ within the EU are changing, as of January 1st 2015, and it may well affect you. Here it is, as I understand it thus far (I asked the Musician’s Union what their position on this is and they say they’re going to be providing info to members in December). If you have more info, please include it in the comments [EDIT: especially if you work in tax law/accounting: For clarity’s sake, I’m NOT a tax expert or lawyer, so my interpretation of the legal situation should be viewed in that light, but I have been dealing with my own tax affairs for 20 years, without the help of an accountant, so am definitely in the ‘experienced amateur’ camp here]

• WHO DOES THIS AFFECT? Anyone who sells music downloads (or eBooks/videos/any other digital product) off their own website.
• WHAT DO THE CHANGES MEAN? For a full exploration using software companies as an example, see this brilliant post by Rachel Andrew. [EDIT: and this follow up piece by Rachel about implementation]
  In short, the arrangements around selling digital products to people in the EU are now defined by the country the customer is in rather than you. Meaning you’ll need to be registered for VAT no matter how much you earn, if you sell your music direct from your website. This means you’ll have to charge (and pay) VAT on ALL your work unless you set up a company to sell your digital products that’s distinct from your self employed business as a musician/teacher etc. You’ll also have to file a quarterly VAT return (which is WAY harder than a self assessment form). In short, it’ll ruin your business.
• IS THERE A LOOPHOLE? YES.

This is the important paragraph on the government’s page describing the new arrangement:

Supplies via internet portals, gateways or marketplaces

If you supply digital services to consumers through an online portal, gateway or marketplace then it’s important to determine whether you’re making the supply to the customer or to the platform operator. Where the platform operator sets the general terms and conditions, authorises payment or delivery, or doesn’t clearly state the name of the supplier on the receipt or invoice issued to the consumer, then they’ll be seen as making the B2C supply even if they’re contractually only an agent.

What this means is that if you sell your music via another service, you’re OK. If you sell it via a ‘hand-rolled’ site (off your own server with your own CMS), you’re screwed. So this means that iTunes, Amazon and crucially Bandcamp sales are all exempt [EDIT: see comments for an exploration of this…] . Those sites are all platforms that “set the general terms and conditions, authorise payment or delivery” .

So, if you sell your music direct from your site, you may want to switch to Bandcamp for your sales, or get your VAT situation in order. The same goes for eBooks (I use Leanpub) and Video (any suggestions, please put them in the comments)

You may also want to sign this petition to provide an exemption to this very, very stupid piece of legislation. Cos it’s going to royally mess things up for so many creatives and small businesses.

Oh yes, another blog post about Spotify. Just what the world needs. I’ll try [edit: and fail] to keep it brief.

There seems to be, at the moment, a massive gulf between the opinion of many artists-still-making-music and the labels that many of them are signed to. The major labels LOVE it. But artists are talking about Spotify as a wholly bad thing for artists – not enough money… ‘free’ music is bad… Rosanne Cash (a woman for whom I have an enormous amount of respect as an artist, writer, thinker and human) called Spotify ‘legalised piracy’. Why the gulf?

Here’s my take – The financial world of the major labels has, for a LONG time, been focused on back catalogue – music that’s already been successful. Reselling something that’s already in the public consciousness is WAY cheaper than marketing new, untested music. Licensing old tracks is also easier, because people know them. And there’s the simple question of scale.

Reality check: for the Majors, the vast majority of the music they will ever release has already been released. Continue reading “Why The Major Labels Love Spotify”

Right, now the subscription is up there, we can have a chat about what it might mean, right?

After all, the word ‘subscription‘ has become somewhat tainted amongst musicians by the conversation around Spotify’s pricing model. Little work seems to have been done to look at what in particular people are listening to on Spotify and the degree to which its impact on sales is asymmetric (sales lost and streams gained not being to the same people) not to mention the whole ‘correlation or causation’ conundrum. But generally, lots of musicians are now thinking subscribing to ‘everything‘ = booo!! hissss!!

So what does it mean to subscribe to just one artist rather than ‘nearly all music‘, and what kind of artists and their listeners are going to benefit from this?

First up, it’s important to acknowledge that this isn’t new. It’s new to Bandcamp, and as a service integrated with the Bandcamp platform, it may well end up being revolutionary, but the idea has evolved from the pioneering work of quite a few people, not least of all (as is so often the case) Kristin Hersh, whose Strange Angels supporters club is exactly this – an annual subscription members club that gives those subscribers access to all kinds of things. Her pricing is tiered, so you can get all kinds of awesome exec perks if you pay a tonne of cash, but for not very much you can get a whole load of music and sometimes cheaper tickets at gigs, things like that. For someone as prolific as Kristin (she has three main projects on the go – her solo work, Throwing Muses and 50 Foot Wave) it’s the ideal way to not be reliant on the vagaries and speculation of the standard model of

• borrow money,
• make a record,
• hope it sells,
• wait to recoup before doing the next one,
• or just pile up the debt in the hope you get a track on a film soundtrack and clear the decks at some point’ deal…

Continue reading “More (long) thoughts on subscription services.”

There’s one story that’s been circulating a lot over the last few days amongst musicians on social media – “2014 is first year ever with ZERO platinum-certified records” – it tells us that 2014 is (barring some kind of unforseen massive sales surge) the first year ever (ever??? no.) when no single band has had a platinum selling record. In the US. Even though the Frozen soundtrack has sold 3 Million copies.

Meanwhile, 60 songs HAVE sold a million copies in the US.

So what does this tell us? Without some much deeper analysis, not much. Continue reading “Why the ‘no platinum albums’ story in the US probably doesn’t mean the sky is falling.”

So, here are my favourites of my blog posts from 2013. Hope you find something useful in here:

Steve, Why Is Your Music So Cheap?
http://www.stevelawson.net/2013/12/
steve-why-is-your-music-so-cheap/

Being A Good Citizen Of The Internet:
http://www.stevelawson.net/2013/10/being-a-good-citizen-of-the-internet-what-would-the-internet-be-like-if-everyone-behaved-like-me/

Who Is Your Audience?
http://www.stevelawson.net/2013/09/who-is-your-audience/

What Do Singles Sales Tell Us About The Health Of The Music Industries?
http://www.stevelawson.net/2013/08/what-do-singles-sales-tell-us-about-the-health-of-the-music-industries/

How To Talk About Music On The Internet:
http://www.stevelawson.net/2013/08/how-to-talk-about-music-on-the-internet/

“Conversational Hegemony” or, How Lobbyists Hijack The Terms Of Engagement:
http://www.stevelawson.net/2013/06/conversational-hegemony-or-how-lobbyists-hijack-the-terms-of-engagement/

Expanding Audio Orthodoxy: Recording/Mixing/Mastering
http://www.stevelawson.net/2013/05/expanding-audio-orthodoxy-recording-mixing-mastering/

Twitter Brain Dump About The New Music Economy:
http://www.stevelawson.net/2013/05/twitter-brain-dump-about-the-new-music-economy

How To Send Bandcamp Download Codes Via Mailchimp:
http://www.stevelawson.net/2013/04/how-to-send-bandcamp-dl-codes-via-mailchimp/

Our Glorious Dilemma: How To Release A Huge Amount Of Music:
http://www.stevelawson.net/2013/03/glorious-dilemma-how-to-release-huge-amount-of-music

So, at the end of my post about the FingerPainting Sessions best-of albums, I said I’d blog about why I sell my ‘complete works‘ USB Stick so cheap.

It’s a question I’ve been asked a lot. It’s even caused some skepticism about the contents from people who can’t work out why 24 albums, a 45minute live video and my novel on a USB stick would *only* cost £25.

There are a couple of different reasons, but the existence of the question, I think, stems from a somewhat strange anomaly of the old recording industry. That of there being VERY few artists as unknown as I am that have extensive back catalogues. It’s growing, because the internet makes it possible for people to do what I do (it’s made it possible for ME to do what I do!) and more artists are taking advantage of that, but it’s still pretty rare to have put out 34 albums as an artist who still sells on average a few hundred copies of anything they release… Mostly, with a label, you got to try and ‘make it’ with your first album, or sometimes two or three, but if you weren’t selling quite a few thousand by then, it just wasn’t feasible to go on making records. The fixed costs were too high…

So all of our perception of what people do with their back catalogue is based on what famous people do with their back catalogue. and for a large number of those famous people, they or their label are trying to squeeze yet more money out of their uber-fans. Boxed sets are often remastered, repackaged, even reformatted (DVD-A/Blueray Audio/108gram vinyl etc) to try and get people who already love the music to buy this ‘exclusive’ version again.

And, buried in there is often the desire on the part of the person selling it to not have to make any more music like that. If I can sell enough of these premium packages, I’ll be able to retire… Which is great if you’re Led Zep, or The Eagles or whoever.

If you’re me, the story’s a little different:

• I don’t have anywhere near enough ‘super-fans’ to make creating ‘product’ just for them remotely viable. The wider community of people who are interested in what I do runs to several thousand. The inner core is just a handful (as far as I can tell!)
• I have neither the desire not the likelihood of being able to retire on the sale of my music.
• I’m actively involved in making more and more music. I’ve released over 10 hours of music in the last year, and will probably put out another 4 or 5 albums in the next 6-12 months.
• Most of my gigs are house concerts, and at house concerts, I’m generally playing to people who haven’t heard me before but who mostly have had a fantastic evening by the end, and would often like to take some music home. A £180 25 LP set isn’t going to be that…

So a USB stick allows me to bundle it all up, at a pretty low unit cost to me (the USB sticks work out about £6 each, which is about the production cost of 3 short-run CDs) and because I put the music on them myself (it takes 8-10 minutes per stick to load them up) I can keep adding to what’s on them – I’m not stuck with those 24 albums until I’ve sold out of the current stack of merch. I can keep adding things as I release them.

But most importantly, I can make my ENTIRE back catalogue an entry point. It’s a thing that someone whose just seen me playing a support slot might buy (that’s happened a few times), it’s something that people on Twitter, who previous have downloaded an album or two for free, or for a couple of quid, might buy (that happens a lot). And at £25, it’s even an investment worth making to save yourself the trouble of downloading it all off Bandcamp. You get the stick, plug it in, drag all the music off it, and you’re left with a perfectly useful 4Gb USB Stick 🙂

£25 for 24 albums is an invitation into my musical world, a ticket onto the bus. It’s a chance to catch up, to drop it all into iTunes and put it on random while you work, switching to album-mode when you hit on a track you REALLY love. There are PDF sleevenotes, and the aforementioned video and novel. I’m sure I’ll add more as I go along.

But at it’s heart it’s a friendly, sustainable way of getting lots of music out to curious people. So it works perfectly for me. 

OK how cool is this? A lovely new addition to the Bandcamp UI – the option to send any download as a gift. 

Click on the ‘Send as Gift’ option and you get to put in a friend’s email address, and a note to them before heading off to pay for it in the usual way.

Then it drops into their inbox as a glorious surprise containing delicious hand-picked, valued music. All the adrenaline-fuelled SQUEEE! of a physical present 🙂

want to try it out? Head over to http://music.stevelawson.net, pick a favourite album and send it to a friend. They get music, we get paid, you get karma.

Win/Win/Win