July 22, 2011 at 10:21 am

Earbits Streaming Radio Takes ‘Pay for Play’ to the Next Level

The Beautiful Girls

For bands, radio exposure has never been the end result. It’s always been the means. Whether to boost album or ticket sales, artists have traditionally seen the radio as a method for promoting a product or good.

So has Joey Flores. Last year the Venice, CA, musician-turned-marketer launched Earbits, a site that masks direct marketing and outreach efforts from bands in an online radio platform that costs users nothing, and yet won’t annoy them with loud, boring advertisements.

Bands and labels get their music onto Earbits by submitting it to an editorial team. If they’re approved, which presumably means they are at least somewhat decent, they can buy airtime for two cents per play. The whole deal is also available as a free iPhone or Android app in addition to the web version.

Nationally, the idea for bands is to use Earbits as a way to get exposure in places they may not be able to play live, with the hopes that someone will like their music and buy their music. It’s a novel idea, and it actually produced some great playlists in our testing.

But these days, plenty of music fans don’t buy much music anyway, which is why Earbits is wise to focus on promoting concerts instead. It makes us wonder why more apps don’t use location to promote shows from the currently-playing artist.

SF Gate Marie Hines

SFGate Radio shows tour dates, concert announcements, and provides valuable artist information for Bay Area artists and bands.

Knowing that music is returning to the live and local, Earbits launched its first city-specific site this week, SFGate Radio, which will also run on the San Francisco Chronicle‘s website and play music exclusively from Bay Area bands.

The local nature of the site allows the 235 bands who paid to be included to promote their shows (and releases) cost-effectively, which should help San Francisco’s vibrant live music scene get the attention it deserves.

“I always thought of this company from the standpoint that it’s really painful to market shows,” Flores told Evolver.fm. “I never [realized] that it was also really painful [for fans] to find good shows… I can go back into Earbits, turn on the Hard Rock & Metal channel, find a band I like, and then see when they are playing around town.”

SFGate Radio’s artist-friendly design (after all, they’re the ones paying for it) looks much like the national Earbits outlet, which launched in January. High-definition art graces the top of the site, which is categorized by broad genres, followed by a link to Facebook and Twitter sharing and the artist’s discography, photos, and biography.

The big difference is that the local SFGate Radio web app — because it assumes you’re in the Bay Area — pops up show announcements whenever you’re listening to an artist with local shows coming up. You can scroll down on the page to find tour dates for both that artist in particular as well as any artist that you may find on the station you’re listening to. If you find something you like, SFGate taps Bands In Town‘s API (application programming interface) to make it easy to buy a ticket without having to search.

The idea behind SFGate Radio will likely spread to other cities. Flores says he would like to launch local Earbits services in New York, Los Angeles, Nashville, and New Orleans, and told us it already has a partnership arrangement with Hearst Publishing, which means that it could set up shop in any city with a Hearst presence.

If such growth occurs — and if other sites copy this idea of using location to promote shows by local bands who pay to promote those shows takes off — the notion of using Myspace to audition bands and find their show dates and hear bands could feel outdated.

  • http://www.echolouder.com Bruce Warila

    Thanks Joey,

    I have often wondered if artists can actually waive or suspend rights that have been assigned by Congress?  I believe that in a free and open marketplace, they should be able to. 

    However, I can’t inexpensively purchase (or promote and sell) many products (e.g.: automobiles) by waiving taxes, safety regulations and inspections, I wonder if waiving one’s rights to mandated royalty collection is similarly impossible?

    It would be great to discuss what you have researched and uncovered about this issue.  Please contact me at your convenience if you want to continue the discussion; doing so here is also fine. 

  • http://www.echolouder.com Bruce Warila

    Thanks Joey,

    I have often wondered if artists can actually waive or suspend rights that have been assigned by Congress?  I believe that in a free and open marketplace, they should be able to. 

    However, I can’t inexpensively purchase (or promote and sell) many products (e.g.: automobiles) by waiving taxes, safety regulations and inspections, I wonder if waiving one’s rights to mandated royalty collection is similarly impossible?

    It would be great to discuss what you have researched and uncovered about this issue.  Please contact me at your convenience if you want to continue the discussion; doing so here is also fine. 

  • http://twitter.com/earbits Earbits Radio

    Hey Bruce,

    I didn’t see an email address to contact you directly but chatting here is fine.

    The compulsory licenses provided by the government are there so that broadcasters who want to use content, and a lot of it, can do so without being overburdened to go out and get deals with everybody who owns that content.  They aren’t the same as regulations put in place to protect the public safety.  They’re less about protecting a particular party and more about taking friction out of the marketplace.

    Artists (or better yet, rightsholders) can make their content available under any licensing terms they want.  There are even organizations like Creative Commons (http://creativecommons.org/), which provide a number of standardized licensing agreements for artists and people who want to use their content to operate under.  Artists can post content and say it’s available for certain uses but not others, and Creative Commons licenses make it easy to do that, and for people who want to use that content to know what is in the agreement.

    Every site that allows user generated content, such as Youtube, basically says you are licensing that content to the site (or in some cases giving it to them).  Most of them say that you are waiving any right to be compensated for use of the content and that you cannot upload that content if you don’t have the authority to license it to them.  The government then has DMCA rules in place so that if copyrighted material gets uploaded without authority, the copyright owner can have it taken down.  If artists or content owners didn’t have the right to waive those royalties, Youtube would be broke and there would be no need for the Digital Millennium Copyright Act.

    Joey Flores
    CEO, Earbits.com
    joey@earbits.com

  • http://www.echolouder.com Bruce Warila

    Thanks Joey,

    I realize that SoundExchange does not collect for on-demand, interactive streams, and that one can assign a CC to a file (which is distinctly different from a stream in terms of licensing).  However I am looking for examples of “internet radio” companies that have legally bypassed the statutory license administrated by SoundExchange by asking rightsholders to waive their rights.  To my knowledge, this not a common practice?  Asking a rightsholder to waive a performance royalty – as many rightsholders are not the performers – seems like selling a house and then skipping out on the carpenters or the plumbers…

    Just to be clear, I am all for services that enable artists to compete on price – even if the price is free or less than free (paid insertions where nobody gets paid whatsoever).  I am just wondering if it’s unequivocally legal?  It seems me that you not only need a waiver from the controlling rightsholder(s), you also need a waiver from every performer on the track?  Go through the SoundExchange registration process as a performer / rightsholder to get an idea of the extent of the per-track admin that’s required to pay and verify everyone.  Google my name to find me.  Cheers.

  • http://twitter.com/earbits Earbits Radio

    I see what you’re saying and it’s a good point, and to be frank you probably know more about this business than I ever will (I knew your name looked familiar).  However, my understanding would be that the compulsory licenses only mandate the royalty rates required if you are using those licenses.  If the content is licensed to you directly, then the compulsory licenses are no longer relevant and therefore any terms of those licenses no longer apply.  That means that you may be able to use the music differently than is provided for by those licenses, as well as under whatever financial terms are outlined by your private agreement with the content owner.

  • http://www.echolouder.com Bruce Warila

    There’s a few of us that are trying to get SoundExchange to weigh in on this thread.  I actually don’t know enough about this issue, but thanks for the kind compliment. 

    Look at @soundexchange:disqus on Twitter for their recent remarks on this topic.

    You have a solid idea.  However I believe Earbits will have to confirm that each performer on, and the copyright holder of, each track has expressed his/her willingness to grant a royalty free license.  Once again, try signing up for SoundExchange as a rightsholder (and experience the pain…) to view the gargantuan effort SX goes through to pay everyone that is entitled to payment.

    It’s great that SX is collecting a performance royalty for Internet radio (terrestrial radio in the US does not pay this), as many performers (unlike songwriters) don’t collect much of anything in the US but SX royalties. 

    In conclusion: don’t forget performers as rightsholders when it comes to Internet radio; the person granting you the royalty free license to a track has to have the legal right to speak for not just the copyright holder of the song, but also for the drummer :)

    I hope I have this all correct.

  • http://twitter.com/earbits Earbits Radio

    Hey Bruce,

    Certainly we want to honor both the spirit and letter of the law.  That being said, this is still a case that falls under the DMCA.  Our terms and conditions say that you can only upload content that you are the copyright owner of, and for which you have the authority to license it to us under the terms and conditions of the website.  If a record label has the authority to “speak on behalf” of the drummer and license the music *for promotional purposes* under different financial terms than are outlined in the compulsory license for streaming radio, then everything is working as it should.  If they do not have that authority, they’re not supposed to use the service and parties whose rights have been infringed can ask to have the content taken down.  In both cases, Earbits has operated legally under the DMCA.

    I know that signed bands may not have the right to license music to us, and that their label could request a takedown.  The question then becomes, if a record label uploads content that they own, stating they have the right to do so under the financial terms of the agreement, does the drummer have the right to request a takedown?  I would definitely be interested to hear opinions on that, and I suspect the labels themselves would be up in arms to find out that their artists suddenly have the power to reverse their licensing decisions online.

    Regardless, we provide a platform that sells no traditional advertising, no commercials, and no subscriptions.  We provide ways for artists and labels to sell music, merchandise, concert tickets and more, and it’s all opt in.  I can honestly say that we have had virtually no push back from performers whatsoever, and only occasionally labels.  The vast majority of performers are excited to have a platform that leverages radio for more than selling McDonald’s ads.

    Joey Flores
    CEO, Earbits.com

  • http://twitter.com/earbits Earbits Radio

    Hey Bruce,

    I appreciate that you’re supportive of what we’re trying to do and there’s no need to file this chat anywhere other than another online discussion with a smart guy who asks good questions.  If you’ve read our blog, you’ll know that we don’t shy away from talking about things like this publicly because we believe too strongly that we’re doing something meaningful and that a dialog with the industry is important.

    Earbits is founded out of necessity by musicians who thought ten cent fliers and two dollar posters didn’t do a very good job of marketing our music.  We’ve now generated thousands of Facebook fans for bands, helped them sell their music, concerts and more.  And, most importantly, unlike most tools out there, they didn’t have to do anything except have a good recording.  There are hundreds of places for bands to have a web presence that they’re responsible for driving awareness to, with all of them shouting “Look at me!  Look at me!”  We’ve picked the controversial format for our artist marketing company that we have because general consumers will actually use it to discover new music, it’s scalable, and it’s not about which band makes the most noise.

    In regards to your recommendations, on our Board of Advisors is the former VP of Legal and Business Affairs for EMI Music, who was later Associate General Counsel of Yahoo! Music.  We feel very confident that we’re operating legally under her guidance and have removed as much liability as we can for our business.  That being said, I am a high school drop out with three foot dreadlocks.  If any investor doesn’t have some uncertainty and doubt, maybe we need to find smarter investors.  I’ll have this and more jokes for you when we share that beer in September.

    Joey Flores
    CEO, Earbits.com
    joey@earbits.com

  • http://www.echolouder.com Bruce Warila

    “I am a high school drop out with three foot dreadlocks.”  I have ten-year old twin boys.  They may need your advice some day.  Great discussion.  I appreciate your confident rebuttals.  Excellent.  Hope to see you September.

  • Nafisen

    We’re sorry, but something went wrong.We’ve been notified about this issue and we’ll take a look at it shortlyradio does not turn out such a result. very sad … please help me. 

  • James Walsh1

    I heard it said that ASCAP objects to this trend. Does it mean that an Artist is shooting themselves in the foot with Pay to Play?… Here’s an example: Your Local Big City Car dealer wants to use a song by a Band. He pays a license fee. He gets the song; the band gets some cash they reinvest into their career. Both win. Car sales go up; band pay bills and does another tour.

    Radio: Song gets Band on Radio in heavy rotation; No royalties paid using waiver; Radio gets ad revenue and more listeners. Band goes in the hole to everyone. Radio station grows and prospers. Band folds because they can’t pay bills making $85.00 a week in revenue. Song continues to generate revenue for radio station forever. Sounds like Slavery to me! Can you live on $15.00 a day? Some Management Contracts are written like that! And smarter young Artists won’t sign them.

    Back in the 90′s “Hair Bands” on the Sunset Strip who didn’t have a following were charged “Pay to Play”(PTP) Fees by Clubs like the Whiskey. For Most of these bands The Money would be better spent attending music performance classes at M.I….Honing skills in a club was part of the 1960′s era where Talent got folks to buy a ticket. That PTP got wiped out when survival jobs became scarce & kids moved back into their parents houses. Pay at day jobs dropped to almost nothing due to non- paying “Intern Positions” at almost every business in Southern California. And when this splintered scene saw the rise of Kurt Cobain and Grunge Rock it had to happen; Youth is King in Hollywood! If you want profits you must always be able to justify expenses for promotions or find a new paradigm.

  • Anonymous

    Hey James,

    You’re correct, except that you misunderstand the Earbits service.  It’s more like:

    Earbits: Bands puts song into heavy rotation on Earbits at $100 for 10,000 spins.  Earbits generates 150 Facebook fans for the band’s official Fan page, and 30 email addresses for their mailing list.  Earbits generates 200 clicks on their customized ad, which promotes anything from their Kickstarter campaign, to a streaming concert ticketing page, etc.  Earbits reports back which of the songs on their album generates the most clicks for these various actions.  Band adjusts airtime strategy and gets 25% better results on the next $100 purchase.  $500 later, the same price as the band would have paid a publicist to get them a couple album reviews, they now have nearly 1000 new Facebook fans, 200+ email addresses and significant traction on their latest promo.  On top of that 50,000 people heard them.  Earbits actually generates profitable revenue, and the band has a more powerful promotional tool than anything else they’ve used before (that’s what our bands are telling us, anyway).

    Happy to share more about these results with you offline.  Feel free to email anytime.

    Joey@earbits.com