Artists may (or may not) have noticed YouTube’s implementation of the “TipJar.” When I heard the news, I didn’t think much of it, as TipJar has become one of many – Kickstarter, Patreon, Indiegogo, etc. It wasn’t until I received a call from one of my favorite writers at Billboard Magazine who asked the question – “how is the money allocated with major Label Artists” – that I took an interest. It’s a valid question – where does this money go and how is it allocated? The answer is grey, and it comes in layers. This particular writer forced me to think about a seemingly insignificant issue.
The inevitable will occur – some indie Artist will generate large revenue from TipJar, ultimately leading to a record deal. Much like Vine sensations, the fight is over the Vine account, not necessarily the Artist. Possibly a major Label Artist will generate tip money that goes unpaid to the Label, and the Label sues for lost revenue. In short, Tipjar will be a problem – for somebody. I don’t mean this in a negative sense; rather it’s an issue that has yet to be framed. Under current Recording Agreements “Tipjar” isn’t addressed in specific language, so what happens if (a) you’re an indie Artist who gets signed, or (b) you’re a major Label Artists that starts using the service? Where does this money go? It comes down to four (4) key concepts, so if faced with the situation, you’ll know what to look for and the right questions to ask.
Full review at: Music Globalization