WIPOD – Page Points: Transcript of Episode 17

Intellectual Property and Making a Living from Music

David Stopps

Make music first. Don't let all this stuff you know, swamp your music. Your music is the most important thing, and some artists have done too much of this and find it too pressurized, and have had mental health issues, so do keep focused on the music throughout all of this.

Lise McLeod

Whether it’s commuting to work or school, doing housework or relaxing, music plays a core role in our own well-being. We multi-task our music like listening while we game, we watch music concerts livestream, and we’re passionate about our physical formats. There’s an entire music industry that makes this all possible, and today’s guest is going to take us through the ins and outs of the business.

Hello Page Points listeners, I’m so glad that you've joined us. Today we have David Stopps, who is the author of the WIPO book, How to make a living from music. It's in its third edition and was published last year.

Welcome to the podcast. David.

David Stopps

Great to be here. Lise, thank you very much.

Lise McLeod

David, how about we begin by you telling us about yourself and about your career in the music business.

David Stopps

OK well, basically, I'm a failed musician. I used to play guitar, keyboards, and I was a singer when I was young, but I wasn't very good, so I moved into the business side of music. And when I got into the business side of music, I discovered there are lots of failed musicians there, so I was in good, good company. First of all, I went into Artist Management. Then I became a promoter in the UK and promoted bands like Pink Floyd, Queen, the Ramones, The Clash, Genesis particularly, U2, and, of course, David Bowie. And last week, we put on Blossoms, who were a band from Stockport near Manchester, and they were fantastic, complete sellout.

I then went into Artist Management. I managed Howard Jones. We sold 8 million albums. The Thompson Twins, Tom Bailey, we sold 10 million albums there, and we've just done a Mini World Tour with Tom Bailey in South Africa, Dubai and New Zealand, which was very successful. I was a director of the CMO PPL in the UK for 10 years. PPL is the second biggest CMO in the world, representing performers and phonogram producers, the biggest of course, is Sound Exchange. My wife and I created the first statue of David Bowie in the world in 2018 in our hometown of Aylesbury in the UK. And as you say, I'm the author of ‘How to make a living for music’, the third edition, which can be downloaded for free from the WIPO website.

That's me.

Lise McLeod

That’s a lot of experience David. I love those artists!

So how has the music industry changed? And why did the transformation from analog to digital take so long?

David Stopps

We have to go back to 1999 which is when the recorded music industry was absolutely booming with the CD boom. In the 90s, they knew about downloads, but a CD quality track would take hours to download due to the huge size of the file and the narrow bandwidth available. MP3s were developed in the 1990s and they were 9% the size of a CD quality file, so they were much more flexible and nimbler, and then broadband rolled out, which made downloads faster. These two students in America, Shawn Fanning and Sean Parker, thought that would be fun to share music with their friends with MP3s, and they developed Napster in 1999 which changed the recorded music industry forever.

It was the first peer-to-peer file sharing service, unfortunately, in 2001 the record companies decided they didn't like Napster and it's free music, and they closed it down. What they should have done was embraced it and developed it. If that had happened in 2001 it would have been a different story. But if you ban something, everybody wants it. And what happened was that we had 14 years of rampant piracy as it went underground. And then in 2001 also, Steve Jobs released the iPod and the iTunes platform. He licensed the music from the record companies. And then in 2003 he launched the iTunes Store.

Very soon, he had 80% of the world's legal download market. He wasn't interested in selling music. He was interested in selling computers, but he saw music as a way to sell computers, and it worked beyond his wildest dreams. In 2007 he wrote to the record companies and asked them to remove technical protection measures from digital files, which he was successful in persuading them.

So in 2008 Spotify launched. So things were really moving on by this time, Spotify was inspired by the Pirate Bay. And Daniel Ek just looked at Pirate Bay, studied it and worked out a way to do a legal version of it. The Apple story is incredible because of Steve Jobs’ vision, how music is so powerful, and how, how it can influence things so much. In 2011 Apple became the most valuable corporation in the world by market capitalization. Music was one of the main drivers for that, and Apple has remained the biggest corporation in the world now for 14 years. It's now worth $3.5 trillion and it's largely driven by music.

In 2015 we had the tipping point. The music industry had been declining ever since 2000 going down and down every year. But in 2015 it started to go up again, and that was entirely due to Spotify and Daniel Ek. In 2013 for example, Universal Music Group was worth $6.5 billion in 2025 it's worth $40 billion which is six times bigger. That's all down to streaming. Legislation also helped stronger copyright legislation and enforcement. The graduated response rules in some countries were very, very effective, particularly Korea, and there was education of fans that took place all over the world. Website blocking was also very useful, and search engine traffic shaping, wherein search engines such as Google would prioritize legal services and downgrade anything that was illegal. So that's really the history of it, and we're finally there, and the whole thing is booming, but we'll talk a bit more about that in a minute.

Lise McLeod

Thank you, David, if we may, could we pick up the bit about streaming? Before consulting your book, I had the impression that streaming might be hindering the music industry, but you outline the opposite scenario. How has streaming come to the rescue?

David Stopps

So in the CD era, you bought a CD and it was only one transaction. The record companies didn't know whether you'd played it 1000 times when you got home with it, or whether you hadn't played it at all. So there was no information about that. But in the streaming world, all the stakeholders get paid every time a stream happens, and that includes, of course, the music authors on the track and the performers.

So digital marketing is all about persuading fans to stream again and again and again and again - and every time you get paid. Before in the CD era, there are about 10 data points per year for every music fan. You bought maybe six concert tickets and four CDs or something like that. That gave the marketeers 10 data points. Now it's estimated that every music fan has about 30,000 data points per year with streaming data, socials, associated analytics, marketing is much, much more focused.

So the split on streaming at the moment: is in the region of 18% for free streaming services, that's Spotify and YouTube and a few others who have a streaming channel; premium streaming, which is where all the money is, is about 50%; downloads 4% roughly, and they're declining of course, now, after the boom in the mid-2000s; physical, which is, of course, vinyl, CDs, some cassettes, even now, is 18% and as you know, vinyl is booming at the moment; the broadcast and public performance from the CMOs is about 10%; and sync is about 2%. A lot of people think that synchronization is really important, and it is, but it's only 2% of the market.

As for the biggest streamers, Spotify is clearly the biggest at 32%, Tencent in China is about 15%, Apple is 13%, Amazon 11%, and YouTube Music 10%, with others following behind. It's interesting that Steve Jobs was always dead against streaming, and so Apple came to the party very late, and you can see it's cost them dearly, because Spotify are at 32% and they're only 13% for premium subscribers. The number of premium subscribers in the world is about 700 million, which is 8% of the world's population. If that could be doubled, the music industry would double. And 8% isn't such a high percentage, and I would like to think in the future that will happen. The number of tracks on Spotify, Apple and Amazon is over 100 million. For your $10 a month, or whatever it is, you have over 100 million tracks to listen to, which is an incredible service when you think about it.

The number of tracks on SoundCloud is 375 million because they have all the ‘do it yourself’ artists on there as well. So that's even more incredible.

Artists often complain that they're not getting paid enough on streaming, but the reason for that is that contracts are stuck in the physical era. With digital distribution there is no manufacturing costs, there's no trucks on the roads delivering to stores. There's no faulty returns. So all those overheads are gone from record companies, and yet the contracts, royalty rates, etc, remain much the same as they did in the physical era, which means that the record companies are making a lot more money as a piece of the pie.

Many artists think they should get a bigger piece of the pie, ie, higher royalties. And there is certainly an argument for that. Artists with old contracts are particularly badly affected, and my suggestion is that they try and renegotiate with the copyright owners. They might only have a royalty of 10% in the digital era, and that's totally inappropriate.

DIY artists who have their own label are doing particularly well from streaming. Some digital distributors will pay you 100% in return for a modest annual fee of perhaps $25. So the new artists that are doing it themselves are doing very well out of streaming. Authors are also doing well out of streaming. The mechanical rate on a digital file is about twice that as it was for a CD, so it's around the region of 16% as opposed to 8% for CDs. If you divide the digital dollar, the streaming service takes about 30%, the author 9%, the publisher 4%, the featured performer, which is the artist, about 11% and the phonogram producer, takes 45% and that's the new reality of where we are in the music industry today.

Lise McLeod

Those are really interesting figures. Very insightful. Thank you for that. If I may take advantage of your extensive experience in the industry, can I ask, where should an early career musician begin? Should they learn the fundamentals of copyright and related rights? Or does this knowledge become clear while working through the other elements of the business?

David Stopps

Well, when you're starting out, you need to make great music, basically. You're in a situation where there's a massive amount of competition out there, so you've got to be really good. You've got to play your instrument really well. You've got to try and write music right from the start. I think it's a good thing to do. You might just do covers to start with, but start writing your own songs straight away.

The other important thing is to choose a unique name. If you don't get that right, and as you find out there's another band with the same name halfway through your career, to change it is very, very difficult. So choose a unique name, and think hard about it. You could use your own name, of course, hopefully isn't too common a name, but a lot of people do do that. Other people choose another name, like Elton John was called Reg Web, and he changed his name to Elton John, which is probably a good move, because it sounds more interesting.

And if you were going to choose a band name, say you were going to choose the name The Forks for your band, F, O, R, K, S, if you did that, and you look on Google, you'll see that there's all sorts of other entities called The Forks. There's a town in Canada, there's cutlery companies. There's all sorts of different things called The Forks. So on search engine optimization, you'd be very, very low down the list. However, if you changed the name to F, O, R, C, S, The Forcs, you would be unique, and that would be at the top of search engine optimization. So that's something to bear in mind, a classic example of that, of course, is The Weekend. He wanted to call himself The Weekend, W, E, E, K, E, N, D, but he found out there was another band in Canada called The Weekend, and so he just dropped the E out of the weekend. So it's W, E, E, K, N, D, and he was in the top slot at Search Engine Optimization because it was a unique name, and nobody's going to have that name ever apart from him.

Play wherever you can, do as many shows as you can. Play for your friends and family, at birthday parties, in bars and pubs, in private events, and open mic nights are really good to learn your craft as a live musician. Street busking is also really good. I'm a huge fan of street busking. I think street busking you get music on the streets. You feel happier if you're walking down the street. I do anyway, and you learn your craft, if you're a street busker, you know. If they get someone goes by and they put coins in your guitar case, they liked that song. If you don't get any reaction to a song, maybe that's not the song you should be doing. So you learn so much from street busking.

You then need to make a great recording. And you engage a digital distributor who will put your track on 50 digital platforms globally, including the big ones, Spotify, Apple, Amazon, etc. Typical examples of digital distributors on the DIY level are CD Baby, Ditto, Distrokid and for an annual fee of, you know, $30 or so, they will give you 100% of the money.

Then you create an EPK. An EPK is an electronic press kit, and that's got interviews on it, videos, biogs, photographs, that's what you send to people, if you want shows or if you want press articles, etc. Create a website. There's plenty of free templates out there. WordPress, for example, Wix is a common one that a lot of artists use. It's very good, and there's many others.

You engage a CRM service for email marketing, such as MailChimp or Fan Bridge, and then that's the way you build a fan base. You create a constant stream of new content for socials, and you understand your fan base and engage with them as much as possible. You join the appropriate CMOs, and we'll talk a bit more about that in a minute.

As for understanding the fundamentals of copyright and related rights, it's very important right from the start. In the book I talk about, I hope I talk about it in this fairly understandable way, but there are many other sources out there too. But do understand the basis of copyright and related rights. Basically, music has value, and you've got to understand the music has value wherever it's used. It needs to be paid for. So if it's on the radio, it's on the television, it's played in hairdressers, it's played in a sports stadium, it's played live. Wherever that happens, it has value, and every time that value is there, it needs to be paid for.

So that's a really fundamental thing to understand. Many artists and authors and performers have missed out because they didn't understand the basics of copyright and collective management. Artists should get involved with every career decision, and usually the most successful ones do. If Taylor Swift is a great example where she's very involved with the business side of what she does.

Lise McLeod

How do collective management and collective management organizations play a role, and why are they necessary?

David Stopps

You have to understand, there's two sides to the music industry. I always like to think of it as train tracks. So on the left train track you have authors and publishers. That's the song writing side, the writing side of music. On the right-hand side, you will have performers and record companies and recordings. And whatever you do in the music industry, you have to always remember there's those two sides to the industry, and you have to deal with both of them. If you wanted to clear a sample, you might clear it with a record company who owned that sample, but you then have to go and clear it with the publisher who owns that sample on the author's side.

If everybody who used your songs had to contact you and get a license from you personally, that would be impossible, because that means every radio station would have to contact you, every shop, every hairdresser, would have to contact you. It's totally impractical. So CMOs or collective management organizations do that for you. That's what they're there for. Their function is to license users. Users could be radio, TV, public spaces, shops, clubs, sports stadiums and digital platforms, of course, for streaming and downloads. So wherever those users are, they need to be licensed.

CMOs process the data and collect the money. They then take their administration costs off the top, and pay out to the stakeholders. They have reciprocal agreements with other CMOs around the world. For authors, if a UK track, for example, is played in Korea, the author’s CMO in Korea, KOMCA will pay through the money to the British authors, CMO, PRS. Similarly, if a Korean track is played in the UK, then PRS will pay KOMCA. That's how reciprocal agreements work. When it comes to digital there can be several intermediaries in the chain. As far as authors are concerned, before the money reaches the author, and many publishers have decided to license digital platforms directly by digital hubs such as ICE or Armonia, thus bypassing the CMOs.

On the performer side it is different. The National CMO for public performance and broadcasting will license, collect and distribute those royalties. However, if the delivery is interactive, as is the case with downloads or streaming, the record companies will license the digital platforms directly, thus bypassing the CMO. This is due to a right called the making available right, which says that if a music fan accesses a piece of music from a time and a place of their own choosing, then the making of available right applies. If that's the case, the record company will license them directly.

Like author CMOs, performer CMOs have reciprocal agreements around the world too.

An artist or band who has their own label and writes their own songs, needs to join four CMOs. One: is the author's CMO for public performance. Two: the author’s CMO for mechanical royalties. Three: is the performer’s CMO for public performance. And fourth: would be a phonogram producer CMO. Now in many countries, the first two, the first two author CMOs are combined, so you get the public performance and the mechanical in one CMO. And in some also the performers and the phonogram producers are combined as well, such as in the USA and the UK, but you need to make sure you've joined all the correct CMOs and that you register correctly. Also make sure that every track has an ISRC code and every song has an ISWC code for identification.

Lise McLeod

So that touches on the money related to the fundamental licensing and royalties. In the book, you also cover the essentials of live performances, touring and merchandising. So how do those all work?

David Stopps

Okay. So on the music author’s side, all the money comes through the CMOs and publishers. And that money comes from public performance licenses of the song, broadcasting licenses, mechanical licenses for physical product and digital platforms, sync licenses when music is synchronized to film, TV, adverts or video games, printed or digital sheet music, private copying levies or public lending of sound carriers.

Now, mechanical licenses are issued by a publisher or a mechanical CMO when a phonogram producer or an audio-visual producer wants to incorporate a work into a recording. They are called mechanicals because they come from the old gramophone when it was invented at the beginning of the 20th century. Private copying levies are levies that some governments place on recording hardware and even storage devices and hard drives, which is like a tax, which goes back into the music industry to compensate them for fans copying at home. Some countries have them. Some countries don't.

On the music performer’s side, money comes from various sources. From public performance licensing, from broadcasting licenses from non-interactive digital delivery via the internet, and they're all through CMOs. And then you get fees for live performances, concert venues, festivals, clubs, bars, public places, private events, live performances on radio and television.

You get royalties when a phonogram producer sells a recording on a physical sound carrier, such as vinyl, cassettes, CD or DVD, and then you get royalties when a phonogram producer receives income from a digital recording of the performer’s performance via the internet from download or streaming platforms, except for non-feature performers in many countries who don't get the digital royalty.

There's also master reuse when a recording is synchronized to visual images, video or film. There's then merchandising at live events and online private copying levies, sponsorship and branding and public lending of sound carriers. So those are the main income streams for performers and authors.

When it comes to live we go into great depth in the book. Have a very deep dive into the income streams from live. Getting started, obviously, you play everywhere you can, even for no money, but it's the only way to get experience on stage is to do lots of it. And I recommend that everybody who's in the industry who is an artist plays as often as they can live. It's very important to have a look at sound and lighting at gigs and make sure don't forget that the sound is massively important and lighting is too. You also always need a sound check. You know, I would never recommend playing without a sound check.

It's good to go to Sonicbids, because they create an EPK for you and put you in touch with promoters. You then later on, could engage a booking agent who can get you shows and build a touring team. It's very important to apply for visas and work permits well in advance of playing abroad, also freight agents, shipping and carnets. A carnet is a temporary import certificate, which is essential if you're playing abroad out of your home country.

Insurance, there's all these insurances. You always need cancelation, equipment insurance, travel insurance and public liability insurance. Very important to think about security. And a lot of artists are looking very strongly at sustainable touring, where the carbon footprint is reduced as much as possible. There's also holograms and virtual reality situations now, like Abba’s Voyage, which has been a huge success in London. It's often the major income stream, live, very important to look at it very carefully. In COVID of course, it was a complete disaster. Everybody suffered.

Lise McLeod

I really enjoyed your coverage of building a fan base through digital marketing and social media. You provide so many tools and tips that can be applied to many business interests, not just music. What would be your top three pieces of advice in this domain?

David Stopps

So the first thing I would say is understand the fan base. Build the fan base through live performances, socials and media, but then study the analytics. How old are they? What gender are they? Where do they live, and what socials do they use? If you know where they live, you know where to tour, because if there's a town where there's a lot of fans, that's obviously a place to find a show. So have a presence on a range of socials, but focus on the one where your fans live.

The second point, I would say, is to collaborate with other artists on recordings, both domestically and internationally, if possible. A good collaboration could double your fan base. Other artists’ fans will follow you, and your fans will follow them, so that everybody wins. The great example was Lil Nas X and Billy Ray Cyrus, who absolutely exploded their fan bases when they worked together.

The third point, I would say, is always create new content regularly. New content and ways to engage your audience are absolutely essential. Have Q and A sessions, have competitions, have podcasts, like or comment on every fan comment. Keep everything up to date, especially the website. It's better to have no website than an out of date website, but please don't overdo it. Make music first. Don't let all this stuff you know, swamp your music. Your music is the most important thing, and some artists have done too much of this and find it too pressurized, and have had mental health issues, so do keep focused on the music throughout all of this.

Lise McLeod

My last question for you today is the hot topic of artificial intelligence and the potential threat it poses to the recorded music business.

How do you personally see this unfolding?

David Stopps

As you say, it is the hot topic. AI has been developing for 70 years with robotics and AI assisted processes. It's only recently has music AI become sophisticated enough to cause concern. The warning bells went off in April 2023 when an artist called GhostWriter977 released a track called ‘Heart on my sleeve’ by Drake featuring The weeknd. It sounded totally authentic. The voices were totally authentic. GhostWriter put it on Spotify, Apple Music, YouTube, SoundCloud, Amazon Music, Deezer and Tidal. And on the 15th of April, he put a one minute snippet of it on Tiktok, which immediately got 15 million views. On the 17th of April, UMG, who is the record company for both Drake and The Weeknd took it down, asked the platforms to take it down, which they did.

So you know, that was the moment where everybody thought, oh, right, okay, of course, Drake and The Weeknd knew nothing about this track at all. They hadn't heard of it or anything else. So that was the really frightening moment, I think, and a warning for the future. But basically, the human brain is a neural network, and AI is creating a digital artificial neural network. Music has always been heavily influenced by tech, if you take sound carriers, when 78s came out at the beginning of the 20th century, they were on shellac discs, and you could put five minutes of music on each side, so a total of 10 minutes on one record. You then got the vinyl album coming along, which was at 33 and a third rpm, and that had 22 minutes per side, so a total of 44 minutes on one disc.

We then had the CD, which had a capacity of 79 minutes on one disc. And then streams, of course, which are unlimited. Streams only get paid for if they're over 30 seconds long. And it's interesting that it doesn't matter how much over 30 seconds, it's the same payment. And as a result of that, tracks have been getting shorter in recent years. So you can see that tech has always affected the music industry.

Now, as far as AI is concerned, there's four types of tools out there. There's the ones that assist humans in making music. There's ones that generate music by stitching together pre-existing musical segments or stems based on certain criteria set by the user. The third is the AI that assists humans to generate tracks that imitate the style, sound or voice of a specific artist, and that was the case with the Drake and Weeknd track. And the fourth one is AI models that actually compose or produce original music. On the fourth one, we haven't really got there yet, but it was not far away. We think months rather than years.

Copyright cannot be granted to a fully AI created piece of music, but it can be if a human being is involved in that track’s process. So it's possible to get copyright, although that is still being decided in governments around the world. Training for these models can be brought in three ways, by commissioned music. That means the AI company commissions music and teaches its AI models from that. From production music, that's library music, which may also be legal, those first two. And the third is to use commercially released music, which is really what's happened, and that's technically illegal, although the jury is still out on that.

The music industry is saying that their models use commercially released recordings and songs to train their models. They must get permission from the copyright owner. Authors and performers are saying that in addition to the copyright owner giving permission, the authors and performers must also have to give permission. The tech companies are saying, no, they don't need any permission. It falls under the copyright exception of fair use. There is various copyright exceptions around the world in copyright, and this hasn't been decided yet, but it all hangs on whether it's fair use or not. Governments are considering this issue at the moment, but the future is uncertain and quite worrying too, especially in the light of that Drake Weeknd track.

Lise McLeod

Thank you. David, I'd really like to thank you for your time today and for sharing your wealth of expertise and practical knowledge. And for further bringing to light your book How to make a living in music, which is available in several places in the WIPO environment, our Knowledge Center , the Publications , and the Creative Industries . It's also available to order a print copy from your favorite book shop. It is the type of guide that an inspiring musician, or even one that's already well versed in the industry, could benefit from having a copy. Do you have any last words to share?

David Stopps

Well, I mentioned a couple of things in the book. I created a history of the music business, which takes us from 4000 BC in Iraq, where the first musical notation was discovered, right up to the present day. And that's sort of quite an interesting thing to possibly have a look at. And there's also a glossary at the back which explains all the different organizations in the music industry and terms that are used, and a lot of authors and performers have said that's very useful. So that might be worth checking out as well. But I thoroughly enjoyed this. And thank you very much for having me.

Lise McLeod

This conversation is very timely as this year we’re celebrating the theme of IP and music for World IP Day. This book addresses that theme perfectly and I can say even for myself, as not being a musician, reading through the book in preparation for our conversation, it has provided me with an even greater appreciation of what goes into the music that I enjoy. So thank you for this most helpful and practical guide. David.

David Stopps

Thanks very much.

Lise McLeod

I hope that you enjoyed my conversation with David and that it has peaked your interest to download a copy of his guide on Making a Living from Music. I am sure that it has provided valuable perspective about the music that we listen to from an expert in the music industry.

Lastly, I would like to take this opportunity to wish you a Happy World IP Day 2025 on IP and Music: Feel the beat of IP.

Until next time, and the next Page Points, bye for now!