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On Withholding Music From Spotify & The New Economics Of Album Releases

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Guest post is Scott Perry of New Music Tipsheet and entertainment industry marketing and consulting firm Sperry Media.

Don't care what anybody says, artist has a right to withhold their music from streaming services in order to make a couple extra dollars from physical & downloads. It ain't greedy, it's business -- if you can sell out Madison Square Garden in 10 minutes (Black Keys, pictured left), if you can sell out 3 nights at the Hollywood Bowl (Coldplay), if you are on the verge of sweeping the Grammys (Adele), the world can afford to pay full price for your art.

But then again, the #5 album on the charts last week sold under 30,000 units (Coldplay, btw), so how long do you withhold an album before opening it to streaming? Maybe this won't matter in 2 years, when revenue grows as streaming services have 30% market penetration (Apple 15%, Spotify 10%, the rest 5% combined), but for now, acts need to make as much money as possible from each channel without one area cannibalizing the other.

An Escalated Window Schedule

We're not too far off from an escalated window schedule, just like the movie industry -- leak first single to blogs 8 weeks in advance, drop video 6 weeks in advance, preview album stream a week in advance on NPR, offer album as physical or download for first four weeks, then make it available to streaming services after maximizing album sales to fans (likely by week 4 -- or earlier if one service is willing to pay for the exclusive).

So yes, there will be windows, albeit small windows -- acts like Civil Wars and Bon Iver will need to do this in order to protect their revenue. These are the kinds of acts that can sell 50,000 units to their core fans in the first couple of weeks ($500k gross), but will need streaming services to keep growing their base in order to build their potential live audience base, especially since mainstream radio ain't exactly burning the airwaves with their tunes. This model will let them record an album for $50k, put up $50k for hard marketing and tour costs, and still make a few bucks after paying out their management and promo teams ($100k) -- and that's before ticket, merch, and licensing revs kick in.