Michael Bailey Deputy editor

Michael has been a business journalist for 12 years. He has extensive experience editing magazines covering funds management, commercial property and the travel industry. In 2011 he won a Citi Excellence in Financial Journalism award for a BRW cover story on economic indicators.

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Independently minded: Nick Arnold

Published 12 December 2012 13:26, Updated 31 January 2013 07:48

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Independently minded: Nick Arnold

Even though they once advanced his band $US250,000, Nick Arnold is not a fan of major record labels.

In Los Angeles playing bass for an outfit named Ether during the early 2000s, one might assume Arnold enjoyed the last days of the music industry’s pre-downloading golden era. Instead, he says the money turned the band into the “puppets” of a label determined to squash it into a “hard rock” pigeonhole.

“Creative frustration is a constant state of being for an up-and-coming band that is under the menacing wing of a major label,” he says.

On the other hand, Arnold also knows that a lack of money is constant for most independent artists. His experiences inspired him to create The Holding Pattern, a platform on which artists and independent labels can host, share, sell and licence their work while retaining control of copyright.

The world’s most popular subscription-based music streaming service, Spotify, might have 20 million songs instantly available, but Arnold says that is “barely scratching the surface” of the creativity out there. Plus, the four major record labels all own a piece of Spotify, somewhere between 2 and 6 per cent each, so the royalty payments to artists and songwriters from a Spotify stream “will be kept under wraps and not made transparent”.

What is clear is that those royalty payments will be very small compared with those from a spin on traditional radio, the sale of a compact disc or even from a download.

“The devaluation of music has hit an all-time low,” Arnold laments. “We must reward artists for inspiring us and find a transparent mode of payment.”

Artists and labels can choose the price of music they sell through The Holding Pattern, which takes 20 per cent – a deliberate differentiation from the iTunes stores’ 30 per cent.

Arnold emphasises licensing as a potential income earner for bands uploading to his site, with buyers encouraged to explore songs based on genre and mood through a “visualiser”, a tool based on searches of “key words” attributed to the tracks by the artists themselves.

Funded by an angel investor friend for the past nine months, Arnold needs $5 million in the next three years to build his vision for the site, which would include hubs for merchandise and album artwork, a smartphone app and possibly partnerships with recording software providers that would allow completed tracks to be uploaded directly for sale. The plan is to have 250,000 songs available by the end of the year.

The independent catalogue of distributor MGM is already up and more are on their way but most of the distributors want a fee to deliver their catalogue – one asked for $40,000 – on top of the 80 per cent they will take from each sale. “You can bet the artists will see none of that delivery fee,” Arnold sighs.

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