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Friday
Jan272012

Spotify: Millions of DJs

(David Dufresne is the CEO of Bandzoogle, a website platform for musicians. This post originally appeared on the Bandzoogle Blog)

Spotify: Millions of DJs

As a music fan, the growing number of free and subscription based streaming services can be a dream come true. Install Spotify (or Rdio, Mog, Slacker, Rhapsody, Deezer, etc.) on your computer, your mobile phone, your internet-enabled stereo, and you have instant access to pretty much all the music that’s out there. Build playlists, see what your friends are listening to, those services have become a great tool to discover and enjoy music. Amazing.

From the artists that create this abundance of music, there’s been a very mixed reaction. I strongly suggest you read this 2011 recap by Bandzoogle friend and Nashville music marketing genius Charles Alexander. In it, he links to many articles and posts about Spotify that give you a good sense of why so many are worried or pissed off about it. You can also read the comments section to any post about Spotify on Hypebot, or Digital Music News and you’ll see that very graphic language is often used.

The short version ?

 

  • The revenue that labels and artists get is pocket change (even established artists).
  • Indie artists and labels are treated somewhat unfairly vs. majors
  • There is a lack of transparency in reporting (so you can’t know by who and where and how much a certain song was streamed, and how much royalties this means, and who gets it).

 

All valid concerns (especially the third one, if you ask me). So I’ve been discussing the topic with many musician friends and many Bandzoogle members that aren’t sure what to think. Should I make my tracks available on those services ? Is it going to cannibalize my music sales ?

My answer to the first question is “Yes, I think you should embrace it”. My answer to the second question is “Maybe, maybe not. So focus on other parts of your business and view it as an opportunity to grow those revenue lines”.

Here’s what I mean…

You can look at Spotify as an alternative to fans buying your music. “My fans stream my tunes on demand, for free or almost-free, so they’ll stop buying my records. Man, this sucks. Hard.”

And, from that point-of-view, absolutely, it sucks.

But what I tell my artist friends is: Instead, you should look at Spotify as “a tool that enables millions of radio DJs to add your songs to their radio show (audience = 1)”.

If you’ve ever had the happy experience of learning that a DJ at a radio station in your town, or somewhere else, really loves your new single and has played it many times, it’s an amazing feeling, isn’t it ? You haven’t made any money here, but you know that getting this exposure opens the door to getting more fans interested in you as an artist, your music, you next gig, etc.

There are flaws in my argument, but, usage of streaming services will only keep growing, and through streaming services, fans and potential fans can discover and enjoy your music as much as they want, for almost free, at their fingertips. That’s a good thing. (And by the way, my opinion on private file-sharing is somewhat similar…). Get over the fact that streaming won’t ever pay you in any meaningful way, and focus on the opportunities it opens up.

Your job, as a serious artist, is to then find ways to reach those listeners, engage them, and figure out ways to monetize them as fans of your art (and not just “consumers of your shrink-wrapped product”).

This is where your creativity as an artist needs to kick in. We’ll post more soon about innovative ways to engage and monetize your fans (and music sales are still a huge part of it), but you can get ideas from this list that the Future of Music Coalition put together a while ago. I’m personally super excited by everything around fan-funding and patronage and, if your tracks aren’t available where people might discover them, you might be missing out on future financial backers and patrons of your art.

 


 

Addendum:

The day after I started writing this, the main business news item is “Kodak Files For Bankruptcy Protection”. Apparently, this huge, established, dominant company was not able to foresee and adapt to huge shifts in how people create images, and in what services and products they are willing to pay for. Makes you think, doesn’t it.

 


 

Question: What do you think of Spotify? Do you have your music available on Spotify? Why or why not?

Reader Comments (6)

While I respect your view on these types of services, I can't help but see this article as yet another post asking Artists to "look for another way to monetize". The business model of actually "selling songs" to the general public is dead.

For non-performing Artists these services are simply an ego-booster as there is no financial compensation in having more people exposed to your music if they're not buying it. This is the reason that more & more songwriters are moving into the licensing part of the industry every day. At least there you are paid for your work.

January 27 | Unregistered CommenterGus Caveda

"Your job, as a serious artist, is to then find ways to reach those listeners, engage them, and figure out ways to monetize them as fans of your art "

-And how do you do that when Spotify doesn't allow you to link to your website, or collect emails, or even get any significant info on your listeners ?? All that info is there to serve Spotify's interests and they're not ready to share it with you.

"Get over the fact that streaming won’t ever pay you in any meaningful way, and focus on the opportunities it opens up."

- Yes, that's the message that Spotify &co have been working hard at hammering in everyone's brain. "Get over it, we won't pay you. Your job as a musician is to work hard as helping us get the company valued at more than 1.1 BILLION $ (as of August 2011) . Go focus on the opportunities of selling some tshirts while we're busy becoming bigger than iTunes "

Yes we dig it. Artists are not supposed to make a living out of their work. It's Spotify's job .

January 27 | Unregistered CommenterGee

Hey Gus, thanks for the respect, and for the informed comment.

I agree with you. Being a huge music fan that can't really play any instrument, write lyrics or, god forbid, sing any... I have a strong bias in that I see the FAN-ARTIST connection as a great driver of future value for the music economy.

This doesn't help the non-performing songwriter or composer, since you rarely see fans of Bernie Taupin (while everyone just loves a good Elton track).

"Another post asking Artists to "look for another way to monetize"

True.

"This is the reason that more & more songwriters are moving into the licensing part of the industry every day."

Smart.
Let's think of other parts to "move into".

January 27 | Registered CommenterDavid Dufresne

@Gee

"-And how do you do that when Spotify doesn't allow you to link to your website, or collect emails, or even get any significant info on your listeners ?? "

I agree. And noted it in my post. We all need to lobby Spotify (and others) to make them better aware and concerned of indie artists' needs. I'm CEO of a DIY band website platform (the best), trust me, I'm with you.

"Get over it, we won't pay you."

You're 100% wrong. They will pay you. But it used that be anyone that wanted to enjoy your music at their own will had to shell out between $10 and $20 to acquire either a plastic disc or some mp3s, and then enjoy it.

Wether they played it once and then forgot about it, or played it constantly for 5 years didn't matter. You were payed the same.

Now with Spotify you get payed a tiny amount, and you'll grow it only if a whole lot of people listen to your tracks and very often. And that's hard because there are milllions of tracks on there, very low barriers to entry, and everyone still only had one pai of ears and no more than 3600 minutes in their day.

The new currency is attention, not units of content.

The artist-fan equation needs to move from a "high-volume-low-margin" industry to "low-volume-high-margin" game.

Think of the quality of your fans, not the quantity.

Think of your margin on a superfan who becomes a patron of your Art vs. some dude that buys your album on iTunes once every 3 years.

Think about how Spotify can be instrumental on getting new fans interested, and current fans engaged with your music (vs. all other music).

How many of those fans will you convert into superfans / patrons ? Can Spotify help you get there ?

January 27 | Registered CommenterDavid Dufresne

David,

I think this was a very well put together piece. And as an artist who has definitely has been on the staunch disapproving side, and now openly adopting the service, I get where everyone is coming from.

I think the thing to consider (that may or may not make things easier to swallow) is that streaming is here to stay. This is not a format change. This is not an 8 track, or a Mini Disc that will come and go. This is really just a matter of time and who funds/owns these services until they're running at scale. When this happens, it will be better than anything standard sales could provide in regards to fluidity and sustainability. It's the time in between (now) that's the hardest and will literally make or break some people.

The lack of transparency sucks, on many levels. I've had to dig through too many sources and ask too many people endless questions to figure out how this thing even works. In the end, it makes a lot of sense once it's explained well, and simply. The problem is, even then it's lightyears different from standard durable goods sales, and that's scary to most (especially those who have been in the industry for a while). In the end they will have to pony up the info if they start to really gain traction.

The lack of transparency in my opinion is an attempt to thwart specific types of speculation that could kill the service prematurely. It sucks, they're not addressing a lot. But in the end they need the consumer to hop on board first, and they have enough catalogs of popular music to make that happen for the most part. They're less worried at this time about a few indie artists or DIY folks crying foul.

From a songwriter perspective, you have to remember that you're getting a performance from every spin on Spotify, Not sure what BMI or ASCAP are paying you for that? go knock on their door...

January 28 | Unregistered Commentergaetano

I'm pretty sure Spotify has a deal where they circumvent ASCAP/BMI, however Pandora does not & it will probably spell the end of Pandora in the long term.

I think the digital stream of the universal jukebox is a huge thing that will eventually change all medias that can be accessed this way (video, audio, text, games) & it's going to be interesting to see if the result is less musicians/artists (as in the way sound recording & video recording greatly reduced the numbers of musicians & actors) & how the money is going to work as far as if it is paid by consumers or advertisers.

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