Herrera interview - Alt-Strum Business Development

SayburrSayburr The Always Informative Rock Band Forum Guru
edited April 2010 in The Rock Band Network
Thought the things brought up about the royalities was interesting:

http://www.theaquarian.com/2010/04/12/interview-raymond-herrera-alt-strum-productions-rock-band-needs/

The biggest push back that we’ve gotten is the fact that labels are already very pissed that they have to pay out 30 percent to iTunes because they’re the highest aggregator as far as digital distribution. Technically, Rock Band Network isn’t digital distribution, because it’s a whole different entity. It’s New New Media. The biggest hurdle is trying to get them to agree to the 70 percent that Harmonix and EA and MTV Games is taking. That’s a huge chunk.

So companies like Alt-Strum and any other companies doing authoring and charting for bands, all of those proceeds have to be taken out of that 30 percent or charge an upfront fee. What we’re doing now is figure out a way where the bands are happy, the labels are happy, the publishers are happy, and we still have a cut to justify the work we’re doing.

...if you wanted to get your song onto Rock Band and the Rock Band Network didn’t exist, if you got approved, it’s between six to 12 months out. To get a song charted could take 50 hours, it could take 100 hours, depending on how hard the song is.

Oh yeah. It’s funny because I’ve talked to the Harmonix guys a couple of times like, ‘Look, this 70-30 business is killing everybody. This is what labels are used to paying, and you guys are more than double that.’ I understand. This is software they created, it’s on their intellectual property. I understand the investment put in, but it’s what the market will bear.

It’s just like the mid-‘90s, when licensing music for video games was unheard of because the budgets weren’t there, and record labels were used to getting $40-60,000 for a song in a movie and they’re saying ‘Why can’t we get the same for a video game? We don’t want to do it.’ They thought they were getting screwed over. By ’98, ’99, every band had music in a video game and it became its own industry.

Just like with this, there’s such a learning curve not only from the music industry but also from the video game publisher and developer standpoint, where this is new for them too. It was a pretty ambitious idea to make the software available for anybody to upload music to it. That’s a forward-thinking idea in itself. Who knows where this is all going to settle? We’ll see how it goes, but there’s definitely some room to play with on the 70 percent side where it would still be worthwhile for all the parties.

Some of the smaller bands who own their own publishing or other bands who aren’t signed yet and have their master recordings, it’s not that bad of a deal. But when you’ve got a publisher, record label, and band, and you’re splitting the pie even more, that’s when we’re running into an issue.

Comments

  • MagnetMagnet Moderator
    edited April 2010
    Wow, I had no idea that Fear Factory's "Frequency" was actually written for Harmonix's game of the same name. That song was awesome. Shame we haven't seen more from them since.
  • GeneralGilliamGeneralGilliam Opening Act
    edited April 2010
    I agree with their point on costs. I feel stupid telling bands that they'll get a mere 30%, which is also then split up into profits between me and them. So after all is done, the band ends up making around 22.5%, which is crap. I was actually talking to Killswitch Engage's manager the other day about the RBN, and it was kinda funny, it was like:

    "This sounds like something I'd be interested in doing, so, what percentage of the royalties would we be seeing"
    "Well, after all cuts are taken out by Harmonix, their associates, and us, um, 22.5%"
    "Oh, I see."
    "Yeah"
    "umhmm, well, yup."

    And then silence.

    "Well, I'll get back to you"


    I'm not expecting a call back lol
  • PankrazzoPankrazzo Road Warrior
    edited April 2010
    Viacom is greedy. Big news.
  • Casto21Casto21 Rock and Roll Statistician
    edited April 2010
    I think the 70/30 split is completely reasonable.

    Quick reasoning why:
    1) The obvious: unlike MP3 selling (hosting and minor front end) there is a lot more going on here as far as getting the product created
    2) The 70 is split between multiple companies (MS and soon Sony/Nintendo get a cut too) Selling the MP3 by someone like Apple only has 1 to pay.
    3) RBN is a massive undertaking that has taken who knows how many man hours for how many different companies. It is over 1.5 years in the making and there is nothing else like it. That is a lot of development costs that need to be recuperated.
    4) One of the basic philosophies of a band putting songs on RBN is that they will expand their fanbase / expose thousands of more people to their music. This will generate more revenue for them in terms of CD/MP3 sales, concert tickets, ...
  • ethicalpaulethicalpaul Opening Act
    edited April 2010
    4) One of the basic philosophies of a band putting songs on RBN is that they will expand their fanbase / expose thousands of more people to their music. This will generate more revenue for them in terms of CD/MP3 sales, concert tickets, ...
    Thousands I'm not so sure about. Dozens I could agree with. If an RBN song has thousands of downloads (or even demos), it's because thousands of hardcore RB players already know it (or it's metal).
  • Casto21Casto21 Rock and Roll Statistician
    edited April 2010
    ethicalpaul;3632434 said:
    Thousands I'm not so sure about. Dozens I could agree with. If an RBN song has thousands of downloads (or even demos), it's because thousands of hardcore RB players already know it (or it's metal).
    Not saying thousands will download the song, but thousands will be aware of it.
  • SkodeSkode Headliner
    edited April 2010
    Its was always going to a fantastic tool to use for exposure when it comes to the little bands... just as he said it. I find it no coincidence some of the smaller bands on RBN have made it clear on the forums they are even just doing for exposure and for the chance to get people to grow to love the music they made and love so much themselves - heck some said they would have released their material for free if they could.

    Its actually quite heart warming to see how much the likes of Markleford/Jawilroy (James William Roy band) and Lizard King (Bright Midnight) and even Ol Drake (Evile) have taken to RBN with such positivity and personally been looking into it for themselves.

    Labels on the other hand want as much as they can get their hands on - the music industry is not the money pit it once was and if they suffer financially the bands really suffer, remember the label will be getting the bigger piece of the pie in all this. Illegal internet downloads is choking the market tightening purse strings and meaning tighter purse strings, Warner and HMX have also famously failed to find common ground on a financial agreement for a spell with prices in regards to licensing their artists for the game and too many good bands are not getting the chance to step up with their labels down sizing or indeed trying to only go for the easier options over the perhaps just as deserving indie acts who would be massive if they had the backing.

    As Casto said - its not simply Viacom getting 70% but Microsoft will be taking a cut as well... theyve been bending over backwords to accomodate HMX for RBN to come as it has in its current form but yet i also agree between then that is too high a cut for labels to be agreeable with. This leaves the bigger labels taking up the option of the $3 download - this is not what the gamers want, probably not what the bands want and likely even what the labels want but they need to make it what they consider to be worthwhile from this. Sooner rather than later i see the biggest labels likely taking less of an interest in RBN but thats still cool with me - this more than anything should be about getting awesome bands small as well as big onto the "platform" as HMX have stated it was intented for a long time now.
  • MarklefordMarkleford Opening Act
    edited April 2010
    Insightful interview! Thanks for forwarding it.

    - m
  • ethicalpaulethicalpaul Opening Act
    edited April 2010
    4) One of the basic philosophies of a band putting songs on RBN is that they will expand their fanbase / expose thousands of more people to their music. This will generate more revenue for them in terms of CD/MP3 sales, concert tickets, ...
    Casto21;3632450 said:
    Not saying thousands will download the song, but thousands will be aware of it.
    So you are saying that thousands of RB players will become aware of a new band in RBN, not download their song in RB, and yet will buy the other stuff the band has for sale and buy tickets to their shows? I remain skeptical.
  • JinomotoJinomoto Opening Act
    edited April 2010
    ethicalpaul;3632737 said:
    So you are saying that thousands of RB players will become aware of a new band in RBN, not download their song in RB, and yet will buy the other stuff the band has for sale and buy tickets to their shows? I remain skeptical.
    That's right! People aren't all this much objective :p
  • Casto21Casto21 Rock and Roll Statistician
    edited April 2010
    ethicalpaul;3632737 said:
    So you are saying that thousands of RB players will become aware of a new band in RBN, not download their song in RB, and yet will buy the other stuff the band has for sale and buy tickets to their shows? I remain skeptical.
    Thousands will be exposed to the music -> dozens to hundreds to thousands might download it -> some of those will become fans and buy merch

    Don't see where I said everyone who previews / checks out youtube videos / downloads the demo / downloads the song will become a fan and buy stuff. But I would expect some will.
  • ethicalpaulethicalpaul Opening Act
    edited April 2010
    Don't see where I said everyone who previews / checks out youtube videos / downloads the demo / downloads the song will become a fan and buy stuff. But I would expect some will.
    That would be cool
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