Background Vocalist. money.futureofmusic.org/case-studies. PRIMARY GENRE R&B Soul Pop. SECONDARY GENRE Jazz Electronica Rock

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1 Background Vocalist The following is the breakdown of income from a Background Vocalist, who performs as a background singer on network TV, live on tour, and on recordings. She also writes songs and performs and records her own music as a solo artist. She produces records for herself and others. For the purposes of this case study, we will look at her income from her work as a session musician and background vocalist only both in the studio and live on tour. This Background Vocalist tours regularly as a background vocalist for several different featured artists. Previous tours have included performances at concert halls, theaters, opera houses, resorts, and festivals. She is also part of the regular music crew as a background vocalist on a live network television program with a house band, appearing on 34 episodes over four seasons. She has also performed on over 50 recordings as a background vocalist for more than 30 different artists. The Background Vocalist does not have formal musical training. She is a member of SAG-AFTRA, NARAS, SoundExchange, and ASCAP, and is registered with the AFM & SAG-AFTRA Fund. Through her affiliation with SAG-AFTRA, she qualifies for health insurance and earns pension credits. She does not have a manager or bookkeeper. PRIMARY GENRE R&B Soul Pop SECONDARY GENRE Jazz Electronica Rock ROLES TV background performer Film background performer Live background performer Background recording artist YEARS ACTIVE 1997 present TIME SPENT ON MUSIC 100% INCOME DERIVED FROM MUSIC 100%

2 A note about session work They might call themselves background musicians or sidemen, guest musicians, session musicians, freelance musicians, or backup singers. To simplify the language for this study we call them all session musicians. These are the musicians and singers who are usually hired by a producer, record label, featured artist or bandleader to perform in a live or broadcast setting or on a recording. Session musicians can solo, may get billing, or even appear to be a regular member of a band. What makes them different than featured artists is that session musicians are paid a fee or a predictable salary for their time and expertise as musicians or singers. Generally, they do not assume any of the risk in a recording or live performance endeavor; they get paid even if the recording or tour loses money. Session musicians often accept a buyout a one-time payment for work in a recording studio or in a live performance in exchange for signing over most or all of their rights. While they are entitled to some income that flows from copyright, session musicians are not considered the featured artist in a performance or recording. This is not a hard and fast category. Like everything else in the music business, the lines between roles are fluid. Color coding for Background Vocalist We have tried to use a consistent color palette across all the graphs and charts we have generated as part of the Artist Revenue Streams work. For instance, income from compositions is red, and live performance work is blue. We have used shades of these colors to signify specific types of revenue in these broad categories. If we were to religiously stick to this color palette when describing this Background Vocalist s income, the graphs and charts would all be shades of teal, as all of her income included in this case study is session work, in one form or another. In order to provide a visual differentiation, we have added another color to the palette. In the case of AY, her TV- and film-based session work is brown. 2

3 About Television and Film Work, Appearance Fees and Mailbox Money All payments for this Background Vocalist s television and film appearances are governed by the union scale, which is a standardized rate negotiated by SAG-AFTRA (AFL-CIO) the union that represents vocalists who perform on television, film and radio. (Instrumentalists are represented by AFM, the American Federation of Musicians.) These rates for film and television session work are usually renegotiated every three years between SAG-AFTRA and the employers (record companies, TV and film producers, commercial producers, network TV, etc). Musician appearances on television can range from being in a house band for a live show (as on many late night shows), to appearing on a scripted television show with musical numbers (ex. Glee), appearing as a special guest on a program like a talk show, or appearing on a musical contest show. Musician appearances on film can range from on-camera acting or singing to offcamera singing (i.e. an animated musical feature film of the kind that Disney often makes) to using previously recorded tracks (if these tracks were originally recorded under a union contract). There are set rates for each kind of appearance. For more specifics on how much artists who are covered by SAG-AFTRA get paid for various television and recording appearances, refer to In this report, we refer to two different categories of payment for television and film work. When the artist goes into the television or film studio and performs, we call it a TV/Film Appearance. If the television show or film does well, the artist shares in the success of the show and will continue to get royalty checks or residual payments (which we call TV/ Film Mailbox Money ) when the show is rebroadcast, when there are new uses (e.g. DVD, itunes), and when the artist is entitled to a portion of royalties (e.g. foreign use) from various uses of the show. We use the phrase mailbox money here because artists sometimes refer to this second category of payments that way. Some of these additional payments are explained below in Appendix A which is an overview of how SAG-AFTRA calculates mailbox money in different media. 3

4 Revenue This section reviews the overall gross income numbers for for this Background Vocalist, as well as definitions for each category. Revenue, Recording TV/Film Live Performance In , the Background Vocalist makes 52% of her income from TV and film work, both from appearance fees as a background/session vocalist on a popular TV network talent show where she is a salaried performer, and from TV/film mailbox money from previous TV and film appearances as a background/session vocalist. Performing as a background vocalist in live performances on tour, primarily with one artist, makes up 41% of her income in The remaining 7% comes from her work as a background/session musician in the recording studio, and consists of both direct session payments for her time spent in the recording studio and regular (annual) income streams from recording mailbox money from the AFM & SAG- AFTRA Fund for her work as a background/session musician. Graphs do not have a Y-axis dollar value in order to observe the conditions of our privacy policy. In addition, graphs and visuals in case studies are not comparable within or between case studies. Information detailed in case studies is based on data received directly from the artist or their authorized representative. The data analysis and lessons learned here are based on individual experience, and do not necessarily reflect the experiences of all musicians in genre or roles. Case studies are one of three ways this project is looking at musician income. Learn about methodology at money.futureofmusic.org. 4

5 Revenue, 2009 In 2009, the Background Vocalist performed as a live background vocalist on many performances with mostly one featured artist, and also appeared as a live background vocalist at a few other events. As a salaried crew member, she taped episodes of her current primary TV show. Since her primary TV show is popular, she also received new use fees for taping episodes of a related spin-off talent show that uses footage from the primary show. Live Performance 56% TV/Film Appearance 22% TV/Film Mailbox Money 17% Studio Recording 4% Recording Mailbox Money 1% This Background Vocalist also received fees for performing on studio soundtrack recordings of her primary TV show. She received TV mailbox money for two previous seasons of her current primary show, from her previous primary television show (on which she appeared on numerous episodes over six seasons in the late 90s-early 00s) as well as from other television appearances. Most of this mailbox money was for domestic syndication and foreign use. She also received recording mailbox money from studio recording credits with seven artists from recordings released from ; all were recorded under SAG-AFTRA contracts. This Background Vocalist appeared on three recordings that came out in Two of these were soundtrack collections related to her current and previous television work. One was a greatest hits compilation of songs recorded with a featured artist years previously. All were released on major labels. Only one of these was recorded in 2009; the others were recorded in previous years. Revenue Category 2009 Details Background Vocalist Live Performance 55.4% 72 engagements with five different groups TV/Film Appearances 21.5% For 10 appearances on 2 television shows for work as a salaried performer TV/Film Mailbox Money 17.4% Session Musician in Studio Recording Mailbox Money 4.4% 1.3% Cable, Domestic Syndication, and Foreign royalties for 2 seasons of Artist AY s current primary show, 6 other television appearances, 1 film appearance from 2009 and 1 film appearance from 2004 Fees for recording sessions associated with current primary show for 1 audio major label release. AFM & SAG-AFTRA Fund income for 17 recording credits with 7 artists. Records were released in

6 Revenue, 2010 In 2010, the Background Vocalist performed as a live background vocalist on many dates with one featured artist, and also appeared as a live background vocalist at one other event. She taped a season s worth of episodes of her current primary TV show as a salaried background vocalist, and received new use fees for one episode of the spin-off show that uses footage shot from the primary TV show. As in 2009, she received fees for recording studio versions of songs from her current show. She received TV mailbox money for a previous season of her current primary show, multiple seasons of its related spin-off show, as well as mailbox money from her previous primary television show (on which she appeared on 41 episodes over six seasons in the late 90s-early 00s) as well as from multiple other television appearances. Most of this mailbox money was for domestic syndication and foreign use, though she received a significant amount of money from a ringtone royalties settlement that was paid out in 2010 as well. She also received recording mailbox money via the AFM & SAG-AFTRA Fund from recording credits with seven artists. TV/Film Mailbox Money 39% Recording Mailbox Money 1% Studio Recording 9% Live Performance 21% TV/Film Appearance 30% The Background Vocalist appeared on one recorded soundtrack of her television work that was released on a major label in The other record released in 2010 was an urban record released on an independent label where she was an arranger and background vocalist. Revenue Category 2010 Details TV/Film Mailbox Money 39.1% TV/Film Appearances 29.8% Background Vocalist Live Performance Session Musician in Studio Recording Mailbox Money 1 previous season of current primary show; 2 previous seasons of spinoff show; multiple appearances on 5 other shows; 1 film appearance from 2009, 1 film appearance from episodes of current primary show as a salaried performer; 1 episode of spinoff show; 7 other appearances on 4 different television shows, mostly live shows. 21.2% 29 performances with one featured artist; 1 other live appearance 9.0% 0.9% Fees for recording sessions associated with current primary show for 1 audio major label release; 1 other studio recording AFM & SAG-AFTRA Fund income for multiple recording credits with 7 artists. Records were released in and

7 Income v Expenses The pie charts below show aggregate gross income, and the related expenses, for Income and Expenses, Live performance 41% TV/Film appearance 25% Overhead 36% TV/Film mailbox money 27% Touring expenses 64% Recording mailbox money 1% Studio recording 6% The pie chart for expenses has been scaled visually to represent that expenses consume about 10% of gross income. The table below provides details about expenses from Expense Category Details Touring 63.6% Travel, Meals Overhead 36.4% Office Expenses, Legal and Professional Services, Postage, Professional Dues, Music Purchases Unlike other case studies, this musician s expenses are more like those of a professional orchestra performer or sideman in that she doesn t have a lot of expenses. While she tours extensively, the featured artist pays her travel costs. 7

8 Income v Expenses and Net This chart below shows income versus expenses on a year-to-year basis. The grey line indicates net income, which varies depending on factors like whether the year s income includes a lengthy tour backing a featured artist - which would pay a background vocalist soon after the performances, or if the year s income depends more upon TV/film work and their associated mailbox money, which can take much longer to receive. Income v Expenses and Net, Recording mailbox money Studio recording Income TV/Film mailbox money TV/Film appearance Live performance Overhead Touring Expenses Mailbox Money: An Overview of Impact on Income This Background Vocalist makes her money from two main revenue streams: 1) salaried TV work, which has led to more core TV work, and 2) live performances and recordings as a background vocalist. As a result of these initial income streams, she continues to earn the TV/film mailbox money or residuals that are a byproduct of the union contract governing TV and film work. The recording mailbox money from the AFM & SAG-AFTRA Fund is a byproduct of the recording session work. 8

9 Over , mailbox money from both television/film and recordings has clearly represented a substantial part of this Background Vocalist s income. TV/Film Appearance Fees vs. Mailbox Money, Studio Recording Fees vs. Mailbox Money, TV/Film Appearance 48% TV/Film Mailbox Money 52% Studio Recording 85% Recording Mailbox Money 15% How Television Mailbox Money Works The Background Vocalist only taped 13 TV appearances in 2010, but the income continues to flow long after the original taping. She s typically paid for appearances by the production company or a third party payroll company that the production company has hired to administer its royalty payments. She receives the mailbox money from different sources depending on the kind of reuse and the union administering the reuse. This income is often received as individual checks for each TV episode and production company. Typically, television mailbox money flows in this way from the network to the artist: How money flows back to TV/film artists TV Network Production company Payroll company Union Artist 9

10 Television Appearance Income vs. Mailbox Money Here is the Background Vocalist s income distribution for 2009 and 2010 for her television and film work: TV/Film Appearance Fees vs. Mailbox Money, TV/Film Appearance TV/Film Mailbox Money Salaried work for TV and film appearances makes up about half of the Background Vocalist s television and film-related income in 2009 and The other half of her television and filmrelated income is mailbox money. This singer earns nearly as much from mailbox money from TV/film appearances as she does from the appearances themselves. The mailbox money provides a significant, long-term revenue source that can grow as TV and film content is repurposed, made available on new platforms, and in a widening number of markets. Kinds of Television Mailbox Money In addition to the annual payment scale negotiations, SAG-AFTRA also negotiates and oversees residual payments the mailbox money for vocalists who appear on commissioned music or live performances on television or movies. After the original taping, artists can receive additional payments if the show is rebroadcast on network television or cable, goes into syndication, is shown on foreign television, or reused in other ways. Below is a chart that 10

11 explains different residual uses, how the artist fee is calculated, and the payment schedule for such uses. These examples apply to all SAG-AFTRA members, but not necessarily to this Background Vocalist s particular situation. Residual Use Example Calculation When Paid On Traditional Broadcast Television Network TV: anything re-aired on ABC, NBC, FOX, or CBS. Usually for work originally done for the same network. FOX re-airs Glee episodes (featuring commissioned performances of music). Percentage of the artist s original payment. Paid per episode aired. Within 30 days of airing Syndication Exhibition, local broadcast: Usually originally produced for network and sold to a local free TV station. CBS s I Love Lucy (featuring original music) is broadcast on free local Me-TV stations. Percentage of the artist s original payment. Paid per episode aired. Varies, but no more than 1 year from rebroadcast Cable/Basic Cable: replay on a cable channel. Usually for work originally done for a network Reruns of NBC s Saturday Night Live (featuring a live band and musical guests) are broadcast on VH1. Percentage of the artist s original payment. Paid per episode aired. Varies, but no more than 1 year from rebroadcast Pay TV: Reruns of works, usually originally produced for Pay TV (HBO, Showtime). Showtime re-airs Weeds (featuring commissioned performances of music) on Showtime. Percentage of distributor s gross, divided among all the performers on the show. Varies, but no more than 1 year from rebroadcast Residual Use Example Calculation When Paid Internet Distribution Electronic Sell Through (EST): TV show downloads and other permanent copies (ringtones etc) distributed through the internet itunes Percentage of distributor s gross, divided among all the performers on the show. Varies, but no more than 1 year from purchase. Download to Rent or (DTR): Online Subscription Services that stream TV Netflix Percentage of distributor s gross, divided among all the performers on the show. Varies, but no more than 1 year from purchase. Ad Supported Streaming: Online stream on demand services that require you to watch an ad before accessing content. Hulu, or a distributor s official YouTube Channel Percentage of distributor s gross, divided among all the performers on the show. Varies, but no more than 1 year from purchase. 11

12 Residual Use Example Calculation When Paid Foreign Markets (Traditional Broadcast TV) Foreign: reused in foreign territories CBS s The Late Show with David Letterman (featuring a live band and musical guests) is broadcast in Sweden. Either: 35% of original scale is paid up front to cover multiple uses and reuses in multiple markets. This is a one-time only reuse fee. Most do this. Or: Each market is paid for individually (around 5-10% of original scale) when each episode airs. Varies, but no more than 1 year from rebroadcast Residual Use Example Calculation When Paid Physical Distribution Home Video, Videocassette or Disk The Muppet Show (featuring commissioned performances of music) goes to Home Video. Percentage of distributor s gross. This percentage paid is divided among all the performers on the show. Varies, but no more than 1 year from purchase Here s a chart that represents the breakdown of this Background Vocalist s identifiable TV/Film mailbox money from Nearly half of her residual income is from domestic syndication, and 11% comes from foreign syndication. Forty percent of residual income comes from the digital marketplace. The income generated here is from dozens of episodes of nine different television shows. Kinds of mailbox money earned from TV appearances, Domestic Syndication/Free TV 47% Electronic Sell Through 13% Foreign 11% Electronic Sell Through, Ring Tones 27% Network Prime Time 2% 12

13 Total Income Over Time from One Television Appearance This chart illustrates the Background Vocalist s income from one episode of her main television show. The receipt of this income is spread over six years. Each column of this chart represents an amount of income received from residuals at a point in time over those six years. If measured as one financial transaction, 39% of income from this television appearance derives from mailbox money, though the income trickles in over an extended period of time. TV appearance income: time series from initial work to residuals for one show residual payments initial work Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Time from initial work to >+6 years Recording Income: An Overview The Background Vocalist has performed as a background vocalist on over 50 recordings released between 1997 and In any given year she may appear on anywhere from one to ten releases, and she does roughly equal parts work on independent releases and major label releases. The independent work contract structure is typically a buyout, where she is paid a flat fee for her time and expertise. For recording sessions that are made for signatory companies (usually larger record labels who have a standardized negotiated rates through SAG-AFTRA) she gets paid through SAG-AFTRA. 13

14 In addition to earning flat fees for her work as a background vocalist in the studio, the Background Vocalist s union performances on successful sound recordings can generate mailbox money. Recording Income vs. Mailbox Money Here is this Background Vocalist s income distribution for 2009 and 2010 for her recording work. Studio recording fees vs recording mailbox money, Studio Recording Recording Mailbox Money Fees for session musician work done in the studio make up the majority of the Background Vocalist s recording-related income in 2009 and The remaining recording-related income comes from mailbox money. While this singer earns 77% of her income from her initial studio recording fees in 2009 and 91% in 2010, she still makes small sums of money from recording mailbox money every year. In fact, some of the mailbox money included within her earnings for these two years is from releases as far back as This income provides a valuable additional revenue source that can grow as recorded music is made available on new platforms and services, from Spotify, to Pandora, to itunes Radio. 14

15 About Mailbox Money for Background Musicians Just as TV/film mailbox money is money earned after the (flat fee) initial performance for additional uses of a film or television performance, a session musician earns a flat fee for a studio recording and then receives royalties from the AFM & SAG-AFTRA Fund flowing from copyright law for additional uses of the works on which they ve appeared. These funds are from a variety of foreign and domestic sources, including 5% from non-interactive webcast radio services like Pandora or Sirius XM. In addition, SAG-AFTRA requires payments to background musicians when sound recordings are used in new mediums, such as TV or film, or when they sell over certain sales plateaus. For a complete list, visit Reflections on Mailbox Money, Dependencies and Unions One thing is clear from this case study: mailbox money makes a difference. This session musician makes as much and sometimes more from TV and film residuals she does from the appearances themselves. Reuses, new uses and royalties from television and film appearances have a huge impact on this session musician s ability to make a living. Similarly, record royalties or recording mailbox money has a positive impact on this musician s bottom line, even if the amount received from recording mailbox money isn t as substantive as that from television and film. Session work has pros and cons. While a session musician makes money from residuals and royalties without having to do anything for it after the initial performance, the opportunity to earn that income is the result of third-party decisions over which a session musician has no control. For example, if an older song on which our background vocalist initially performed was licensed for use in a new hit television show, the song would begin to generate royalties for many rightsholders. The song s sudden popularity would generate sales and plays on online radio, both of which would generate royalties that trickle back to the background vocalist. Or if a television show on which a session musician has appeared becomes popular on a new online television viewing platform, the episodes of the TV show might be broadcast more often, which would later translate into residual checks for a session musician. However, income from mailbox money isn t guaranteed. A reuse of a TV or film appearance depends on its ongoing success and audience demand to watch older content. Income from recording mailbox money is not only dependent on the popularity of the featured artists, but also on a willingness from the record label to license to new and existing 15

16 interactive online music services. It also depends on the applicable union s ability to negotiate rates effectively, and on the music services commitment to accurately maintain and report the music metadata that ensures income can flow back to the right session musicians and singers. The increasing digitization of older catalog repertoire represents an opportunity for older sound recordings to gain a new audience, but without correct metadata to match sound recordings to the original performers, session musicians stand to lose out on potential income. Similarly, while it s likely the appearance of new online music services in the marketplace represents a net positive for background musicians, it s no guarantee. Though only applicable to the rare artist with the power to withhold licensing of sound recordings, a few very popular featured artists are choosing to forego making their music available on new digital music services (most notably, Spotify has experienced this dynamic). While not likely to become a trend because of the way contracts are structured, the incomes of the background musicians who perform on the applicable recordings may be negatively impacted as a result. For the person who chooses to make music as a career, having unpredictable amounts of income arrive seemingly at random so many years after the initial outlay of time and effort makes it difficult to plan for professional or personal expenses. Though it s clear that residuals are a significant part of this background vocalist s income stream, it s important to underscore that this livelihood is only possible because of the unions, AFM and SAG-AFTRA. This Background Vocalist relies on SAG-AFTRA to negotiate her payments and ensure they adhere to union scale. Since she received 144 checks (!) for TV/Film Mailbox Money in in amounts as small as $0.01, the unions provide a valuable service by collecting income she s earned but would otherwise have to figure out how to access. Even within our two-year sample, the unions collected mailbox money for three seasons of our Background Vocalist s primary show and two seasons of its spinoff, not to mention all of the previous work she s done. If a production company changes midstream or a show changes networks or gains syndication to a new broadcaster domestically or abroad, she doesn t have to renegotiate a rate for her work or fill out more paperwork; the union manages the changes. Practically speaking, without unions to do that negotiation and administration, she probably wouldn t receive most of her residual income, and what she did receive would not have benefited from collective bargaining power. The same applies to the recording mailbox money she receives from the AFM & SAG- AFTRA Fund. Without the union s work collecting royalties from multiple domestic and foreign sources, this money would require much more time, effort and organization on the part of the session musician to collect. The AFM & SAG-AFTRA Fund makes it possible for union and non-union session musicians to collect the income they ve earned simply and efficiently. 16

17 Certainly unions have more relevance for some genres of music and some musician roles than others. For example, classical orchestra players and session musicians like this Background Vocalist benefit most directly from union affiliation, as the unions often represent their interests at the bargaining table. For those whose work fits within a union s mandate, a musician union can bolster income with its mere presence, administrative know-how and negotiating power. Nevertheless, all musicians union or not benefit from the unions advocacy on behalf of artists. 17

18 Internet Rental Exhibition, Netflix, etc. No residuals (with some exceptions) Electronic Sell-Thru Exhibition, itunes, etc. No residuals (with some exceptions) Appendix A: Residuals Income Triggered by Exhibition Beyond What Your Initial Compensation Covers In addition to negotiating the rates for initial compensation, SAG-AFTRA also negotiates and enforces residuals payments or tv/film mailbox money for television programs and theatrical pictures when artists are paid for exhibition of the program or movie that is beyond what was covered by initial compensation. For example, after the initial broadcast of a scripted dramatic television program made for network primetime, additional compensation is triggered in the form of a residuals payment whenever the show is rerun on network television, syndicated, released to foreign television, or to other media such as DVD or internet. There are two types of residuals calculations. Residuals can be based on a percentage of distributor s gross receipts (referred to below as gross receipts based), or the artists initial compensation or percentage of union scale at the time of production (referred to as fixed or run based residuals). Below is a chart that shows an overview of the various kinds of SAG-AFTRA uses and type of residuals payments triggered by exhibition in different media. Theatrical Exhibition Network Exhibition, NBC, ABC, CBS, FOX Syndication Exhibition, local broadcast Foreign Free TV Exhibition, outside the US/Canada Home Video Exhibition, VHS, DVD, Blu Ray Pay TV Exhibition, Showtime, HBO, VOD, etc. Basic Cable Exhibition, TNT, F/X, Syfy, etc. Internet Streaming Exhibition, YouTube, Hulu, etc. Made for Theatrical No residuals Made for Network, Syndication, Foreign TV, Pay TV, or Home Video and and Made for Basic Cable and and Original (high budget) made for Internet and No residuals Original (low budget) made for Internet and No residuals Derivative made for Internet and and