For crowdsourced music to work, legalities must be simple, says startup Musikpitch

Two weeks ago, the American Society of Composers, Authors, and Publishers (ASCAP) held its Music Creator Conference at Los Angeles' Renaissance Hollywood Hotel. Highlights of the conference included sessions with music celebrities John Mayer, Jason Mraz, Quincy Jones, and Rupert Hine (who produced albums for Rush, Tina Turner, Howard Jones, Suzanne Vega, and dozens more).

The messages from all of these professionals, as summed up by
Paul Zollo in American Songwriter this week, were all variations of the same theme...

Mayer: "The most important thing...is to enjoy the journey."

Hine: "Success has to do with success as an artist, with expressing yourself was well as you can."

Jones: "Allow your love to drive your life and that's what will make it worthwhile. "

A friend of mine who has been publishing music for the last decade translated the message of these musical luminaries to me in a slightly different tongue: "Learn to like getting f***ed."

From his perspective, there is no way to write, publish, and sell your own music online without passing money along to someone else in the chain. When artists get involved with major labels, they're often only taking a tiny fraction of the money being made.

The research firm Information is Beautiful recently put out a shocking infographic that shows just how much music an artist has to sell to earn minimum wage. In it, it compares independent CD sales with label-backed retail CD sales and MP3 downloads, as well as other revenue streams.

In retail CD sales, the artist makes 30¢ per disc while the label makes $2.00. In iTunes, the artist makes 94¢ when the label makes $6.29. The streaming model used by Rhapsody, Spotify, and Last.fm is included in the comparison and is even worse, requiring between 800,000 and 4 million streams per month just for the artist to make as much as he'd be making working at a retail job.

And then there are the artists who actually have to work retail jobs. How does anybody make any money?

There's always the job of songwriting for others. Musikpitch, a just-launched Nashville startup that applies the crowdsourcing model to songwriting gives composers the potential to score cash for their music up front.

Members who need a song for their movie, video game, commercial, TV show, etc., pay $39 for a listing on Musikpitch that describes what kind of music they need for their project, and how much they're willing to pay for it. This listing then becomes a "contest" for the musicians who have about 14 days to submit their compositions to the contest. The one the contest holder likes the best gets the prize money plus 50% of any performance/mechanical royalties, which are then paid out by rights groups like ASCAP or BMI.

If the contest holder pays more than $5,000 for the song, he gets exclusive rights to it. If he pays less, he gets a non-exclusive license which lets Musikpitch license the same song to another user if someone else wants it. The service also charges contest holders a 10% handling fee.

No other users except the contest holder can actually hear the submissions, and if your submission doesn't win the contract, you retain 100% of your rights and are free to submit it to as many different projects as you want, free of charge.

"We looked at the crowdsource design sites, saw their best practices, read their histories, and read their feedback. 99designs and Crowdspring are obviously the biggest of these types of sites, and we actually used both of them for our logo and Web site design," Musikpitch founder Scott McIntosh told Betanews over the weekend. "Honestly, it was a very easy design to adopt, and we wondered why nobody had already used it for music."

McIntosh told us he had the idea for the site on January 3, and it was officially launched late last Thursday. While there are similar services already such as Minimum Noise, and Taxi, they charge musicians membership and submission fees, and unique licensing deals are drafted for every contest. McIntosh feels the flat rate will work a lot better for his site, and its straightforward nature prevents confusion.

"Not everybody reads EULAs," McIntosh said. "And it's really hard to make a kind of 'lesser document' that effectively summarizes all the legalities of licensing, so it's all got to be right out there."