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More subscribers, more problems. As Spotify continues to grow, in both users and catalog, so do its detractors. Thom Yorke and producer Nigel Godrich recently took a stand against the streaming music service, citing that it’s “horrible for new artists.”
We’ve seen this before. The Black Keys recently refused to put their newest album “El Camino” on Spotify citing its detraction from album sales.
There’s a common thread here. Only established bands who have already made their money are the ones taking the stand against streaming music. New and upcoming bands are more willing to cast a big net to get ears to their music. It’s been proven time and time again that artists make more money off touring than album sales, so why not do everything you can to maximize your exposure to potential new ticket buyers?
It has become commonplace to hear artists, management, agents and labels complain about how streaming will crush the music industry. This same mentality arose during the transition into the CD and digital downloading eras. Don’t fear the numerous myths that have saturated our industry, streaming is not evil; merely different. And it is about to become the next powerhouse, quite possibly changing music distribution in a way never seen before. This transformation has already commenced in television and film. The music industry has fallen behind, but is quickly catching up with vengeance.
The US Supreme Court is hearing an appeal that could change your ownership rights to music.
If you purchase music as physical media or license-free downloads, you are protected by the so-called First Sale Doctrine of the US Copyright Act, which gives people the right to lend, resell, or give away the works that they’ve bought, even if those works contain copyrighted elements.
But the case of Kirtsaeng v. John Wiley & Sons, currently being heard by the US Supreme Court, could undermine First Sale Doctrine, making ownership feel more like licensing. How could you be affected?
So you’re an independent recording artist, casting about everywhere you can for airplay and exposure. Pandora, the internet-radio service with the taste-smart music library, has just accepted one of your original recordings for rotation. Great, right? Pandora provides access to your music on one of the most talked-about music platforms out there. It’s a step in the right direction, a win.
Except it isn’t anymore.
Pundits say music ownership is passe. But if an army of music owners demanding high-fidelity and personal choice suddenly converted to streaming audio as their only music source, could the Cloud deliver? Let’s run the numbers.
So, most of you are probably aware of the recent changes that Spotify has made in regards to opening up its platform for developers to build apps upon. In March, the social music service will be opening up an app store to help app developers get paid for their hard work. Last week, I read a really interesting article on the Gaurdian titled Spotify: ‘We have to turn ourselves into the OS of music’.
As a heavy user of the free version of Spotify , I really love what they are doing for social music but there are few major problems that I feel will prevent it from becoming the OS of music.
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 ?
A question was brought to my attention after a chat with a friend, and I’m not sure I have an answer… So of course, I’ll turn to you. It went something like this: Friend: Spotify and Rdio both seem to either limit your amount of free music or play ads. I guess I’ll have to switch back and forth between them. Me: Or you could just pay for one? Friend: We pay after we know it’s good. We listen for free. Isn’t that the new standard?
What does streaming mean to an independant artist? Is streaming worth the loss in income so more fans can listen to your music? Can you ever break even? Is it better to just ignore the whole deal?
This essay is neither for nor against subscription music services, and will focus on answering four questions. 1) What is the revenue potential for subscription music services? 2) What are the most likely rates per stream? 3) How much money can an artist expect to make from subscription music? 4) Is a compulsory rate a sustainable business model?
One of the interesting aspects of the Rethink Music conference back in April was hearing MOG CEO David Hyman and (separately) Pandora CEO Joe Kennedy discuss the present and future of online music subscription services.
MOG is all about access. Outside of the usual holdouts, MOG’s catalog contains just about everything, including most of the releases on our Static Motor imprint. For fans, it makes for an intelligent (Echo Nest-driven) music discovery experience that seamlessly blends the mainstream and the independent. For artists, getting your music onto MOG is a cinch. As long as you’re distributed via an indie aggregator (CD Baby in our case) your music will soon pop up on MOG. For fans and artists alike, MOG is an excellent platform. Easy access for all, with top-notch audio quality to boot (and no ads!).
A different business with a very different model, Pandora certainly talks a similar talk, which is why I was struck when Joe Kennedy commented (paraphrasing):
Pandora is all about connecting people to new music.
I used to think that when it came to listening to music, what I and everybody else wanted was simple. We wanted everything, now and forever, wherever we are. And if we enjoyed the process, we’ll pay for it too (honestly, we will). But this isn’t strictly the case.
As the effort (time and cost) required to create a highly-personalized listening session of music (see blue bars below) decreases, the per-person rate of music consumption will proportionately increase (see green bars below).
If there has been one constant in the music industry over the last one hundred years, it has been the constant migration to listening formats (easier formats) that reduce the effort required to create highly-personalized listening sessions. You can’t play a phonograph on the bus or clip it to your shorts at the gym.
Moreover, easier formats that can be summoned on-demand (for any given situation) will displace any format that requires more effort to produce the same result.
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