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As Music 2.0 Gains Traction: How Do Artists Get Paid?

MUSICAL AD SITES (Hypebot) — A plethora of new and re-tooled sites are offering free ad supported music via streaming and download. Spiral Frog, Qtrax, imeem, We7, iLike, YouTube and others each offer their own platforms to listen to almost any song or video on demand and sometimes to even download it.

Each service has made their own unique deals with labels and publishers for compensation. Some pay a fee per play or download. Others share a portion of ad revenue received; and rumors have a new MySpace music service trying to compensate labels with stock options.

But how much of that money will find its way to the artist and how many of these new deals conform with existing label and publishing contracts or the statutory rate legally due songwriters? I don't know of a single artist contract that mentions stock options or ad revenue as acceptable compensation.

Artist managers are just beginning to question where their share is of large settlements with the original Napster and others. Thus far, however, payments from ad supported services have not drawn much attention perhaps because they are too small or because the deals too arcane to understand.

The web services are not to blame for pushing the envelope and attempting to offer consumer choice. But just as they always have (eMusic payments are a recent example) record labels large and small are bending the rules in search of revenue and hoping that artists don't have the means or motivation to argue with them.