Decentralization empowers creators with control of their intellectual property. Find out why that’s so important by looking through music history…
By Miguel Angel Martinez — Community Manager
When I was in school studying audio engineering and entertainment business, I remember having a week of lectures focused on the worst contracts in the music industry. The one that sticks in the mind most is Little Richard selling the rights to the memorable song “Tutti Frutti” for $50 back in 1955 — which would be approximately $462.44 today. The song that took Richard to stardom and peaked at #12 when sung by Pat Boone in 1956 would never earn Little Richard anything more than just that measly $50.
Later on he filed two lawsuits, hoping to get what was rightfully his. “I was educated,” he explained in a New York Times profile. “I learned about investments. I learned how to be in charge of things, which is just as important as talent. First, I didn’t read my contracts right; I signed bad contracts. And I didn’t have good management or a good accountant. I was just a dumb entertainer, and I paid a big price. I paid dearly for it.”
Understanding how the infrastructure of the legacy music industry functions — made up of pillars such as record labels, recording contracts, royalties, music publishing, and intellectual property — can be challenging, even for many experienced and so-called “professional” musicians. That’s why there’s an army of intermediaries like managers, A&R reps, publishers, and distributors required to turn music into the music business. Over the past century, the music business has proven to be fraught with inefficiencies and inequalities for the artists themselves, and musicians have struggled to find ways to bring their creative vision to reality.
Before we begin to discuss how SingularDTV offers creators a better way, here are some key terms to freshen up on:
- Sound recordings can refer to any audio recording, including the sound accompanying motion pictures.
- Copyright owner is the entity that legally owns rights to a work.
- Performances refer to how copyright holders have the exclusive right to perform the work in public, or to license others to perform it. This right applies to “literary, musical, dramatic, and choreographic works, pantomimes, and motion pictures and other audiovisual works.” Playing a CD in public, or showing a film in public is “performing” the work. 
- Compilation refers to work formed from already existing materials in a way that forms its own original work, including collective works.
- Copies are physical objects that hold, fix, or embody a work such as a music tape, film, CD, statue, play, or printed sheet music.
- Digital rights management (DRM) is a set of access control technologies for restricting the use of proprietary hardware and copyrighted works. DRM technologies try to control the use, modification, and distribution of copyrighted works (such as software and multimedia content), as well as systems within devices that enforce these policies. 
- Intellectual Property — a category of property that includes intangible creations of the human intellect, and primarily encompasses copyrights, patents, and trademarks. Artistic works like music and literature, as well as some discoveries, inventions, words, phrases, symbols, and designs can all be protected as intellectual property. 
- Royalties — Royalties refers to the monies you, as a songwriter, can earn from your songs and/or recordings of your songs.
With those terms in place, we can begin to have a streamlined conversation.
Who hasn’t had the dream of being a rock star? Whether you prefer Madonna or Motörhead, David Guetta or David Bowie, musicians are heroes and cultural icons. But those dreams likely don’t include the often vicious reality of dealing with the many legal issues, fragile revenue streams, and cutthroat business practices that stand in the way of making a living off your talent.
Let’s look back at some of the most striking examples…
The beloved Detroit label Motown produced amazing music, so much so that it’s name inspires a whole genre, but it treated its artists unfairly, locking them into low-paying, long contracts that did not reflect their true value.
By 1972, the already beloved Stevie Wonder wanted to gain more control of his IP, musical and lyrical writing, royalty payments and management of his own career, which had until then mainly consisted of covers and b-sides by force of the label and his contract. To get around his label’s control over his creative output, in 1972, Wonder released Talking Book, one of two albums he recorded independently to be able to force renegotiations with Motown
Music of My Mind and Talking Book were the beginning of the classical period for Wonder, and the pathway for other artists from Motown to start looking at other options when it came to recording contracts. Diana Ross parted ways with the label to go with RCA, signing a $20 million advance, the largest ever at the moment, and gained more control of the rights and royalty payments in the process.
Then you have situations like Prince’s battle with Warner Bros, after the label inhibited the Purple One from releasing music to his fans. Prince changed his name to a symbol while and wrote “Slave” on his cheeks as protest, because the label would not allow him to release the music he wanted to his audience. Talk about rights management! That’s when the term “slave contracts” became known.
TLC, Rolling Stones, Aerosmith, Toni Braxton and Little Richard had number-one hits, top-selling albums, worldwide tours, and Grammy awards, but some would have to file for bankruptcy because they would never be able to get real royalty payment audits. A very unfortunate case was Badfinger, in which manager Steve Polley disappeared with all the money generated from their royalties. The band was left in poverty, and Pete Ham, the bandleader, committed suicide.
Creatives, songwriters, artists and entertainers all have in common that they live for their art, their music. It is their passion, and they want to share their talent with their audience. Any industry built around music should put this first and foremost.
Traditionally, managers often ask for 50% of the profits from their client, and take home huge amounts at their expense. One case in particular was Aerosmith. The band’s original managers Steve Leber and David Krebs owned 50% of the catalog, comprising seven albums from 1973–1982. The ex-managers sold their catalog for $15 million to Mosaic Music Publishing back in 2002 [4 ]. Later on, Mosaic Music Publishing was acquired by Stage Three Music Ltd , which was acquired by BMG Rights Management in 2010 .
This means that if Steven Tyler performs, or was to gain anything from “Dream On,” like in a NFL Superbowl Kia Ad, it’d be split between BMG and himself. If he was to perform the song with the band, then the split would be something like this.
$1,000 for the performance
50% = $500 for BMG
50% = $500 for Aerosmith, split evenly between band members. So that’s $100 per person.
The owners of the catalog — who sold it for $15 million — didn’t pay anything to Aerosmith, because they were selling their 50%, through which they had been gaining more royalty payments out of these songs for over 20 years, while having nothing to do with Aerosmith.
What a great deal for the managers, and a lifetime of regret for the band! And it gets worse: Out of the 50% that Aerosmith had access to, they had to split that between their own music publisher, record label, producers, and other middlemen and/or gatekeepers, so that 50% quickly translates to less than 10% per member.
The question here is: Is it fair that after you spent countless hours of writing, arranging, frustration, investing in proper equipment, sweat, blood and tears, you don’t get 100% of what is yours?
“Record contracts are just like — I’m gonna say the word — slavery,” Prince told journalists in August 2015. “I would tell any young artist… don’t sign.”
How SingularDTV Fits In
SingularDTV empowers creators all over the world to fundraise their artistic endeavors by tokenizing their intellectual property. By tokenizing your intellectual property (IP), you control your rights. You choose with whom and how will you be splitting the tokenomics structure while making them part of the sustainable economy you are creating.
Through SingularDTV’s Tokit, any artist, songwriter, or creative is able to hold rights and know when, where, who, how, why the economic model is going to work because it is designed by them.
Here’s how it works…
Say you’re a 25-year-old artist who has been playing, writing, composing your own songs and lyrics for seven years now. After playing covers and originals, you decide to record your first album. You have your fans, followers, supporters, family members, and those who want to help propel your career to the next level as a serious recording artist.
You set your Tokit campaign. By creating your own token and inviting your fans and supporters to buy it, they are not only participating in a crowdfunding event, they’re buying into the creation of a tribe united around your vision.
As G.Thomas Esmay explains so well in Tokit vs. Kickstarter: “Under the old crowdfunding paradigm, project backers would simply donate money to a project. Value exchange was limited; in fact, it was really a one-way street between backers and creators. Creators would take their backers’ money and go off and make something. They might toss their backers a t-shirt.”
In contrast, when people buy your token through Tokit, they are participating in your success, ventures, projects, releases, special events; they have front row tickets to see your career go to the moon. Your value as an artist, along with your intellectual property and catalog’s success, becomes their success as well. The value your art gains is also theirs. This is the true definition of a 360 deal, where the artist and the fans share the tokenomic success!
You call the shots of your image, the time, and the desires you have because there are no labels, lawyers, managers, producers, or legacy “standard record agreement” stopping you from continuing to deliver the content you desire to provide at the time you want to do so. It’s you, your passion for your art, and your tribe.
I know, it’s a lot to take in all at once. But there’s tons of information out there about intellectual property in general, blockchain technology, and what SingularDTV’s decentralized entertainment economy can offer creators around the world. SingularDTV is here to help you disrupt the legacy music industry. We welcome and support your creative spirit.
Miguel Angel Martinez
Community Manager for SingularDTV