Digital gold: Internet can be friend to musicians

E.J. Wells works on a commercial project in his Waterville recording studio.

You may never have heard of the Toledo-born electronic pop band Rediscover.

The original group broke up two years ago, but you can buy "Dance Transylvania," "Your Pretty Eyes," and other songs recorded by the band at major Internet retailers such as mp3.Walmart.com, iTunes, and Amazon.

You can watch their live performances on YouTube.

And you can share your opinions about the group and listen to their songs at music-focused social networking sites such as last.fm.

Just a few weeks ago, a 15-year-old girl in Germany wrote on last.fm: "I really adore Rediscover -- one of my favorite bands." She is among 80,000 visitors to the Web site who have played Rediscover songs 1.1 million times, according to a tally on last.fm.

The band isn't especially famous or played on mainstream radio -- the traditional track toward popularity and record sales.

But according to a lawsuit filed in U.S. District Court in Toledo by a former member, Rediscover continues to generate significant revenues more than two years after the band broke up.

And newly won fans are downloading the band's most successful tunes to their laptops, iPods, and other listening devices at 99 cents each up to five years after some of the tracks were recorded.

The experience of the band from Toledo demonstrates that there is hope for musicians more than a decade after the onset of a digital revolution shut record stores, led to widespread music file-sharing that is condemned as theft, and disrupted revenue streams of record companies and many performers.

The Rediscover story even points to a potential upside fore recording artists, especially lesser-known acts, that aren't hugely famous but that have attracted a following and have the ability to generate buzz.

"I'm making more money than I ever did," says guitarist Jeff Kollman, a former Toledo resident who now lives in Los Angeles and who has played with artists ranging from UFO to the Michael Schenker Group, Bruce Hornsby, and Lyle Lovett. He recently received a check for $2,000 in payment for his songs that were downloaded from the Internet over a 24-hour period.

Michael Corwin strums a guitar in his downtown apartment.

Bad news/good news

The Internet, once dismissed by some in the music business as a vehicle for piracy and theft, is generating serious cash for many performers.

Purchases of digital copies of songs on the Web, subscription to digital music services, and royalty payments from songs played on the Internet now produce nearly half of all music revenues nationally, according to figures from the Recording Industry Association of America.

Such purchases generated 41 percent of the industry's $7.7 billion in sales last year, up from just 9 percent in 2005, the association reported.

For sure, the digital revolution has devastated music industry sales revenues overall. They have plunged by nearly half from $14.6 billion in 1999, figures show.

While bad for record companies and some performers, that news is not as ominous as it first sounds.

Fans aren't listening less. Despite the huge drop in revenues, the number of records sold, music downloads, and other products rose 60 percent over the decade, according to the figures.

But rather than being forced to buy a compact disc album for $12 with six or seven songs they aren't interested in, listeners download the one or two songs from the album they actually want for 99 cents each. CDs and other hard copies of music generated 59 percent of revenues from music sales in 2009, down from 91 percent four years earlier, the Recording Industry Association says.

Nontraditional track

Fans of Toledo's Rediscover have downloaded its songs 31,000 times, according to tracking by the firm Nielsen SoundScan.

But downloads cover only a portion of the income opportunities open to groups like Rediscover not only as a result of the digital revolution but the explosion of television programming brought on by the rise of cable channels and world-wide expansion of audiences eager to view U.S. shows and movies, experts say.

Other factors that are boosting band revenues:

• Sale of song snippets to fans for use as ring tones on their cell phones

• Ease of getting hard copies of CDs and songs along with digital versions included in the massive electronic catalogs of major Web retailers such as iTunes.

• Royalties paid by Internet radio stations each time a song is played These payments more than tripled in three years to $156 million nationally last year.

• Placement of songs in movies and TV shows, an arrangement that typically begins to pay dividends with re-broadcasts on cable TV and in foreign markets.

And, because many smaller bands release songs independently without a record label, they are able to keep most of the proceeds brought in from these sources, experts note.

Social networking

It is unclear how much money Rediscover has made. Guitarist Michael Corwin, in a copyright lawsuit filed Sept. 24 in federal court in Toledo against founder and singer Wesley Quinonez, claims that Quinonez "received large sums of money" from licensing agreements and other uses of the group's music.

Corwin, who alleges that as co-author he holds a 50 percent ownership stake in nearly three dozen songs, says in the complaint that he has received nothing from the works but is owed at least $75,000.

Besides downloads of Rediscover songs tracked by Nielsen SoundScan, the firm says the band sold 2,000 copies of its albums.

SoundScan doesn't keep track of licensing agreements or royalties for radio and Internet play. But the Internet played a major role in the success achieved by the group, which originally consisted of Quinonez, 27, and Corwin, 26. They later added drummer Rob Wagner and bass player Daaron Davison.

Corwin, who today tends bar at a popular downtown Toledo nightspot, attends audio engineering school, and plays occasionally, recalled in an interview how he and Quinonez made use of a popular social networking site when they first began touring nightclubs around the country in 2005.

"We would spend eight hours on Myspace when we were going to a city," he related. "We would use an advance-search function to identify kids in a certain age range who liked bands that played music similar to ours."

The bandmates would ask to be added to the Myspace member's friend list. Some replies would come back telling them to buzz off. But lots of recipients accepted and then received a personal invitation to the Rediscover show.

It worked, Corwin says. "You'd go to a town 10 minutes outside New Orleans where you knew nobody and there would be 50 people waiting to see two guys from Toledo."

The marketing technique, adopted by numerous bands, is difficult now because of security features added to most major social networking sites, Corwin says.

But performers note that plenty of promotional opportunities remain for fledgling bands on the Internet. Inexpensively produced music videos, typically shot with simple camcorders, are a staple on Youtube.com.

Some bands — including Rediscover for a time — offer free downloads of their music to help spark interest.

Corwin, from Perrysburg, and Quinonez, from Sylvania, were introduced by mutual friends and began collaborating on songs in early 2005 a few months after Quinonez started Rediscover as a solo project. Each evening after leaving his job in a a steel plant, Corwin would go to Quinonez' house where they would head to the basement to work on music, Corwin recalls

He says he added guitar and melody and Quinonez contributed lyrics and vocals.

They and their bandmates eventually produced four albums: "Out of Touch" in 2005, "Call Me When You Get This" in 2006, "Sleepless Nights" in 2008, and "Lost Songs" released this year as a compilation of earlier works.

‘Age-old dispute'

Quinonez, who moved to Los Angeles and has since re-constituted Rediscover with different members, didn't respond to an e-mail requesting comment on the lawsuit.

"Whether someone wrote a song or merely contributed to the arrangement is an age-old dispute among band members," says his Toledo attorney Larry Meyer, who declined to comment directly on the lawsuit.

Corwin says that he never received any payments despite the relative success achieved by the band.

To promote albums, Rediscover members went on nightclub tours — mostly in the United States but occasionally in Canada and once in Japan.

For road tours, they loaded equipment into a trailer, hitched it to Quinonez's van, and headed out for engagements where some nights they performed before crowds of up to 1,000 people and other nights before the "sound guy and the bartender."

Performance fees and proceeds from T-shirt and CD sales went for gas, hotels, and other expenses, Corwin says.

Tours were never profitable and were subsidized by band members with money earned at odd jobs, he recalls.

"We had to work," he says. "We would work at a job for 1 1/2 months, save up $800, go out for four weeks, come back broke, find another job, and do the same thing over again."

Despite tough times, they landed a record deal in 2006 with One Big Spark, a subsidiary of Warner Music Group with bases in Boston and Los Angeles.

The contract led to a performance at the popular Key Club in Los Angeles. But the deal didn't result in the success they had hoped.

How much?

The band broke up in June, 2008. Corwin says he and Quinonez, who was the band's bookkeeper and manager, "were not getting along on many levels" and he believed the band was unprofitable when it broke up.

Friends would alert him when they heard portions of its songs in soundtracks of reality shows and other programing on MTV.

But Corwin says he thought the network used the music without payment in exchange for promotional value of the placement.

But then reports began to filter back from Los Angeles about the income Quinonez was receiving for Rediscover's work. Corwin declined to discuss the figures he heard.

Last fall, he contacted Toledo attorney Scott Ciolek, who specializes in intellectual property disputes — also known as copyright and trademark cases—and filed suit. The case has been assigned to U.S. Judge David Katz.

Despite signs that the digital revolution is beginning to yield benefits for performers, many in the industry are skeptical.

"It's damaged the music business as a whole," Motown legend Smokey Robinson said in an interview. "The bulk of artists are making money from touring. Music is being downloaded ...for free."

But Meyer, the Toledo lawyer representing Rediscover's founder, is among those who see a potential upside to the new way of doing business.

Under U.S. laws, performers receive a small royalty payment each time a song is played on Internet radio stations, points out Meyer, who manages the alternative country act JT & the Clouds. With traditional stations, only the original composer of the song gets paid.

The rise of the 99-cent digital download, Meyer suggests, is little different than when sales of 45 RPM singles drove the music industry.

E.J. Wells works on a commercial project in his Waterville recording studio.

Set yourself apart

Meanwhile, numerous for-profit services have sprung up that say they will link bands with producers of TV shows and commercials who are looking for songs to help set mood, transition between scenes, and for other uses in programming. While many performers remain skeptical about how often such services come through, there is demand for songs.

When the TV show Law and Order: Criminal Intent went looking for music for a 2008 episode about an aging rocker, suburban Toledo musician and songwriter E.J. Wells got the nod. He landed the gig through a long-time contact of his sometimes performing partner Dan O'Conner.

The pair produced a number of songs for the "Ruinion" episode, which featured performer Joan Jett. They were paid $15,000 initially (compared to $100,000 or so producers would have had to pay to use an established work by a better-known artist), recalls Wells, of Waterville.

But the real pay-off has come with re-play of the episode in U.S. and foreign markets. Every three months since the episode aired, Wells has received royalty checks ranging from $400 to $7,000. Despite the attention such deals get, he says they are relatively rare.

Wells, who records his own music and that of other artists at a small home studio, specializes in a country-influenced style known as "gothabilly" or "cowpunk."

The key to Internet sales, he says, is attracting notice amid a glut of independent musicians trying to do the same thing.

When an officer of a Denver car club focused on funeral hearses heard Wells' comic-spooky song "Hearsedriver" and asked him to do a video, the musician jumped at the chance.

The resulting work was a minor hit on Youtube and helped Wells sell more CDs.

"You're tying to find some way to set yourself apart," says Wells, who works in quality control at a stone quarry.

Kollman, the guitar player from Toledo who moved to Los Angeles in 1996, estimates that his income has doubled or tripled since the onset of the digital age, mostly through Internet downloads of his music.

He isn't signed up with a record company and instead releases music on his own label. "You see a big difference when you make all of the money on the music you sell," says Kollman, who records solo and also performs with drummer Chad Smith of the Red Hot Chili Peppers as Bombastic Meatballs.

Mr. Kollman's Web site ships CDs to Africa, Israel, and other places he has never played. Gradually, however, sales of actual CDs are being supplanted by downloads, regardless of the buyer's location.

In another offshoot of the digital revolution, music-themed video games like Guitar Hero are helping generate interest in Kollman's craft and classic rock music, he says.

His situation, he says, demonstrates that "you can make a lot of money and not be famous. Fame doesn't equal dollars and cents and hasn't in a long time."

Contact Gary Pakulski at:

gpakulski@theblade.com

or 419-724-6082.