Brief Outline of Monetizing Music on Orfium
In this post I’ll provide an overview of the monetization options offered on Orfium and hopefully create a better understanding of what Orfium offers. I’ll follow up soon with a more comprehensive post for each monetization category.
One of our goals at Orfium is to provide every possible digital revenue stream to artists and content providers. Currently all services are offered on a simple 80/20 revenue share with 80% going to artists and no up-front costs. In the case of digital distribution we are exploring an alternative model that would pass 100% of revenue back to artists after recovering our costs, however we intend to keep it so that it would still cost nothing up front because we believe that we should not make money until our artists do. Also our goal is to create solutions, not problems, therefore all of our services are offered non-exclusively on an individual opt-in/out basis with no long-term contracts whenever possible. This way we can easily accommodate any deals our users make with 3rd parties.
You can consider all of the monetization options on Orfium to fall under the following categories:
Onsite Retail
Offsite Retail (Distribution)
Major Publishing
Minor Publishing (Micro-licensing)
Onsite Rights Management
Offsite Rights Management
Onsite Retail:
Liberally defined, this includes all revenue derived from direct sales to end-listeners. This includes selling digital downloads and subscription revenues for streaming and radio. Currently we only offer digital downloads but plan to expand to streaming and radio subscriptions in the future. The default price for tracks and albums is $0.99 and $9.99, respectively, however artists may also set their own prices.
Offsite Retail:
Offsite retail is simply distribution to other retail outlets such as Spotify, Apple Music, Pandora, Amazon, etc…
Major Publishing:
This includes revenue derived from commercial placements of music such as in film and TV productions, advertisements, and also songwriting. The revenue can be in the form of a lump sum or ongoing royalty depending on the deal. Major Publishing differs from Minor Publishing in that it generally involves much larger deals for prominent placements that are often actively sought out and custom negotiated.
Minor Publishing (Micro-Licensing):
Revenue derived from standardized royalty free licenses purchased directly on Orfium for a one-time lump sum. This is a much more automated process than publishing that makes smaller licensing deals much more accessible. For example a YouTube user could simply buy a standard micro-license to use a song as the background music in a YouTube video that would otherwise be inaccessible through the traditional publishing route. One thing that sets Orfium apart from other royalty free licensing platforms, aside from the 80% payout ratio, is the versatility of the license. Three different licensing tiers are offered ranging from $40 to $500 (artists may also set their own prices) and the highest license permits music to be used in projects that have a total production budget of up to $50,000 and up to $50,000 in lifetime revenue. If the song is significantly placed in a musical product, such as a remix, cover song, guided mediation, musical theatrical performance, or other musical product that features the music as a primary core component, then the revenue allowance is significantly reduced. The license is very simple which means it can cover a much wider variety of cases than typical micro-license offerings.
Onsite Rights Management:
Rights management revenue is derived unauthorized uses of music, such as remixes, cover songs, mashups, and 3rd party podcasts. Onsite rights management covers infringing uses of music by users on Orfium. The original rightsholder is granted control over the monetization of the infringing use and keeps 100% of revenue generated. While we don’t officially support podcasts yet, we plan to in the near future and users will be able to monetize unauthorized uses of their music in podcast episodes.
Offsite Rights Management:
In addition to offering onsite rights management services, we also offer this service for external websites. Currently YouTube is the only effective system that has audio fingerprint detection and monetization capabilities, however Facebook announced plans to release a similar system and we are also following developments of such a system on SoundCloud. The way the system works on Youtube is that it will automatically detect use of music in videos and when it finds matches it will start displaying advertisements around the video that generate revenue. As other rights management systems besides YouTube are added to our offering, artists will be able to individually opt-in/out of each property on which they want Orfium to represent and monetize their rights.
I hope you found this overview to be helpful. If you have any questions or suggestions please don’t hesitate to contact us at [email protected]
Cheers!
Chris