Digital media threw record labels and the surrounding industries into chaos. But Matt Pincus, CEO of Songs, a music publishing firm specializing in web-driven business models, is uniquely suited to handle chaos. He built his first business in the swirling, kicking, elbow-throwing chaos of the early late-'80s, early-'90s New York City underground music scene as a member of cult hardcore punk rock band Judge.
"I wasn't the best bass player, but I was really good at handling the band's business," Pincus tells Fast Company. "The big thing about the hardcore scene was DIY (Do It Yourself). The booking agencies, the record distros, everything was done for ourselves. Everything the mainstream music industry provides, there was a hardcore version of it. I was particularly interested in the business part—business affairs, publicity, touring. We even made our own ads and it was invaluable in building a career in the music business."
Judge was one of the better-known bands in the CBGBs/New York scene of the late 1980s; after the band broke up, Pincus worked as a journalist at New York magazine before returning to the music industry in a behind-the-desk role. Prior to starting Songs, Pincus launched indie label Some Records and worked at EMI Group. Interestingly, Songs, which has been around since 2004, focuses as much on A&R, advocacy, and in-house tech development just as much as they do on publishing. The emphasis shift is necessary for music-related businesses in 2012 who function in a drastically different ecosystem.
One important revenue stream for Songs' roster of bands and writers—Bright Eyes, Diplo, Brian Lee (Carly Rae Jepsen & Lady Gaga), Q-Tip, Sleigh Bells, and Ted Leo and the Pharmacists are among them—is song placement and the attendant synchronization royalties. Making money for musicians in 2012 is as much about placement in commercials and television programs as they are about record sales. So the company developed an in-house application, Songsearch, designed specifically for music supervisors of commercials, television shows, and other projects to find music for their projects and receive instant quotes for licensing rights. Instead of engaging in a complicated process of faxes, back-and-forth mailing of demo CDs, and phone calls, the process has been streamlined to take place online within the app.
Of course, if music supervisors aren't up for using an additional proprietary app, Songs is staffed to work the phones the old-fashioned way, too.
Working as a middleman between artists/songwriters and tech firms has turned into a crucial part of Songs' business. The company was one of the first indie publishers to sign a deal with YouTube and maintains relationships with nearly all major online music stores and streaming venues. While the growth of streaming internet services and cloud services have been a boon for legal online music listening, they're hell on accountants and lawyers: American copyright and royalty laws surrounding online music are highly convoluted. For music publishers today, navigating copyright law's implications for online music are a major concern.
The idea of building in-house tech projects also led Songs to develop a second app, yourSONGS, a "creative platform for songwriters." The app streamlines administrative cost and paperwork for songwriters by keeping track of paperwork, royalty reports, contracts, and graphic representations of recording history for instant access. Songwriters are also able to instantly submit music for processing through the app. According to Pincus, the system also serves as a home for demos and pitches from the company's songwriters.
Songs was also involved in a recent high-profile campaign against music video giant Vevo, who supply almost 40% of YouTube's content. Vevo, a joint venture of Sony Music Entertainment, Universal Music Group, and Abu Dhabi media, was alleged to be systematically depriving smaller songwriters of royalties. As Pincus put it, "We were publishing songs by Pharrell Williams, and Diplo, Vevo was streaming those but royalties weren't flowing back to the artists."
Music royalties and licensing laws are massively confusing to most outsiders; some royalties are legally defined while others are negotiated separately. This has led to digital music outlets such as Apple, Google, and Spotify independently negotiating rates with publishers and labels. Earlier this year, Universal Music Group signed a landmark agreement with the National Music Publishers Association (NMPA) to pay royalties on music videos, along with a retroactive payment for past licenses.
In fact, the music industry is being disrupted exactly because of these new media forms. While the effects of torrents and illegal downloading have been discussed constantly, they've also been accompanied by new forms of digital distribution such as iTunes and streaming audio. Unfortunately, the legal framework that all these services exist in is convoluted at best. Pandora and Spotify, two of the best known streaming services, are classified under two entirely different copyright statutes. Spotify's main service (which has faced allegations of not fairly compensating independent artists) pays royalty revenue based on each individual user-controlled streaming listen, while Pandora pays a flat fee to access artists' catalogues. That's why Pandora users cannot choose what song to listen to directly.
Because of streaming and downloading—both legal and illegal—the music industry is changing in fundamental ways. This is why Google purchased music licensing firm RightsFlow for integration into YouTube and how venerable music mag Spin ended up getting purchased by blogging outfit Buzzmedia. In the end, in order for music industry firms to thrive, they're forced to try entirely new business models, and nimble, tenacious, DIY-driven outfits like Songs are just better equipped for mosh pit-style business than the suits at the majors.
Correction: An earlier version of this article misidentified functionality features on yourSONGS.