We talk endlessly about royalties, which is really a way of talking about centralization — giving power to a service or organization and asking them to sort out the model that pays people. Centralization will always lead to a system that can be gamed. Anything less than every participant acting altruistically means things go funny. And the truth about our world is that things always go funny. In art as in business there are ebbs and flows of power. In those tides decisions are made and people find ways to break models to their own advantage. A break is a break whether it comes from Thom Yorke or Taylor Swift — let’s take them their word that they’re after a greater good — or if it happens when a major label demands equity. Things collapse and people can get hurt.
People are just not willing to pay for music anymore. According to IFPI (International Federation of the Phonographic Industry), recorded music revenue peaked at $38bn worldwide in 1999, collapsed down to $16 billion (2011), edged up somewhat the year after, only to fall back down again to $15bn last year (2013).Total recorded music industry revenues in 2013 were less than half of their 1999 peak. Less artists are getting record deals, labels don't have as many resources to promote artists, and most artists don't earn nearly what they used to. Although the most successful artists still live lives of luxury, the music industry doesn't have the same glamourous, rockstar perception that it once did.
Spotify released its 2013 financial report which showed both rapidly growing revenue and significant net losses. Revenue grew 73% from 2012’s €430.3 to €746.9 million or $931 million USD last year. But losses also rose 16% to $116 million in 2013. The new report covers global results for all territories including the UK and France, both whom recently reported that their global operations were in the black.
Once only available to major players, direct deals with digital broadcasters and services are starting to trickle down into the music indie sector. The latest defection from SoundExchange is indie music and film distributor The Orchard, who announced the move in a letter to its artists and labels. Some of the better know labels distributed by The Orchard include Cleopatra Daptone, Eclipse, Frenchkiss, Purenoise, Nuclear Blast, Sesame Street, TVT and Shoot to Kill Music
Streaming services, most notably Spotify (by far the largest) use what could be called a parimutuel royalty system: all the money collected goes into a big pool, Spotify takes their 30% off the top, and whatever is left is distributed to artists based on their share of overall plays. Spotify explains how it all works right here. It sounds perfectly fair and reasonable: if an artist wants to make more money all they need to do is get more plays. But there’s a major disconnect in this economic model that has not been discussed widely: Spotify doesn’t make money from plays. They make money froms subscriptions.
Music industry analytics firm Next Big Sound and FRUKT, a marketing company dedicated to the creating and delivering of smart ideas for brands through strategic partnerships with entertainment influencers, just concluded an in depth study of the relationship between brands and bands. Their research illustrates a progressive shift among artists and brands alike, illuminating the path of possibility for exponential growth and gain if the partnership is properly aligned and executed correctly.
If bands and brands can set their sights further down the road of a lasting partnership instead of a one-off collaboration, possibilities abound - and FRUKT has the stats to prove it.
Just days after taking Taylor Swift to task for removing her music from Spotify, musician and activist Billy Bragg has apologized and offered her his "full support." More than about free streaming music, Bragg's criticism had been more about why he believed to Swift's decision to 'secretly' side with Google and YouTube over Spotify. "Google are going after Spotify and Taylor Swift has just chosen sides," wrote Bragg. But after learning that most of Swift's music had also been kept off YouTube's new Music Key, he quickly changed his tune.
The Financial Times yesterday reported that Apple is planning on integrating Beats Music into an iOS update as early as the first quarter of 2015. Which means the entire base of Apple’s 500 odd million iOS devices suddenly become Apple’s acquisition funnel. As I wrote back in May, this was always the strategy Apple was most likely to pursue. Of course being available to 500 iTunes customers is not anything like converting them all. Just ask U2. But it does give Beats Music – if Apple keep the name – a reach like no other subscriptions service on the planet. Especially if Apple is willing to roll out free trials to them all. Currently just 8% of consumers in the US and UK have experienced a subscription trial, which translates into approximately 30 million people. Even if Apple does not quickly succeed in taking subscriptions to the mainstream it is about to take subscription trials to the mainstream, which is the crucial first step.
BitTorrent has tasked themselves with the building of a sustainable ecosystem for artists and fans alike. Fostering a community where fans can connect directly with artists and vice versa, BitTorrent demonstrated their commitment to sustainable art with the launch of BitTorrent Bundles, a publishing project that allows fans to access content via a key that becomes available when users provide an email address or a direct payment to the artist. In September, BitTorrrent asked 2,500 users about the presence of and interaction with content, creativity, music and film in their daily lives. Despite the recent manifestation of streaming as the enemy and the thought that if music isn't available for free it won't be heard, 50% of users still purchase music monthly and 52% buy films. Streaming is holding its position as an inevitability, but according to the BitTorrent survey, their average user still wants more.
The world was abuzz this week with reports that Taylor Swift removed her music from Spotify. She called the service “a grand experiment” and said she wanted no part of it. Music writer Bob Lefsetz said it’s just a PR stunt. 80's rocker Sebastian Bach (who looks kinda like Taylor Swift) said that fans appreciate music more when they have to pay for it.
[UPDATED] In what most in the music industry see as a long overdue move Nielson Soundscan will add both streams and downloads to their weekly Top 200 album sales chart published by Billboard. Beginning with the Dec. 3rd chart (sales for the week ending Nov. 30 which includes Black Friday), music streams from Spotify, Rdio, Rhapsody, Beats and others will become part of the ranking using the calculation of 1500 song streams as as equal to an album sale.
The music industry has drastically changed in recent years. We no longer live in a world where we anxiously wait outside of a record store to get a new album. In fact, we no longer want to buy albums at all. Today, streaming music is the go-to way to consume music. Companies like Spotify have begun to fill the needs of illegal downloaders who want to support artists but not have the pressure of buying the music themselves. Although Taylor Swift believes that music streaming is one large experiment, Cherie Johnson believes that it is here to stay.
1,112 members of the TuneCore community responded to the survey they dispersed asking indie artists and label management about the current state of the music industry. The industry has been and is continuing to rapidly evolve and as those changes take place, artists are both challenged and expected to keep up. TuneCore posed the survey looking for helpful answers - their users did not let them down.
This article originally appeared on ChinaMusicRadar.com
It may come as a surprise to those not familiar with the Chinese indie scene that BandCamp is fairly widely adopted as part of local artists’ promo toolbox – at least for serious gigging bands with releases under the likes of Genjing Records and Maybe Mars. BandCamp chief executive Ethan Diamond told the Guardian recently that the service would be giving every artist the ability to create a subscription service of their own on the site. The offering can be tailored to an artist’s audience, with flexible pricing and the option to include back-catalogue bonuses for subscribers being some of the variables on offer.
Reports surfaced yesterday that Apple will relaunch Beats Music in March inside an updated version of its iOS operating system. But even placement within the core of Apple's eco-system does not mean Beats will become a music subscription market leader, according to a top anlayst. It could, however, be an important tool to help convert iTunes users to paid streamers.
Apple is planning to relaunch Beats Music in March, according to new reports. The "new" paid streaming music service would reportedly be a part of a new version of Apple's iOS operating system. If true, it would be consistent with how Apple handles most of its core applications and services keeping each within Apple's closely integrated eco-system.
Last week's SF Music Tech Summit was crammed with expertly curated sessions, industry acclaimed panelists, and inspired attendees that cultivated contemplative conversation. If you weren't able to make the conference or were torn between two sessions occurring simultaneously, you can make up for lost time by streaming the conference sessions on the SF Music Tech Soundcloud.
Singer and activist Billy Bragg has taken exception to Taylor Swift's decision to remove her music from Spotify, calling the move a part of a "corporate power play" between Google and Spotify. In a post on his Facebook page, Bragg takes Swift to task, suggesting that her decision to pull her music from Spotify was part of a deal with Google to headline the beta launch of their new Youtube Music Key streaming service.
Tayor Swift "Sold Her Soul To Google"
What’s with pop stars these days? It’s as if they don’t appreciate steaming services giving their music away for free! Taylor Swift’s July editorial in the Wall Street Journal might have been easy for snarky pop media to denigrate, but the singer made some cogent points about the future of the music industry. Her experience as a multi-millionaire superstar was used against her, but it actually makes her someone whose opinions need to be considered.
By Olsy Sorokina on Hootsuite Blog
A revolution is underway in the music industry, and it will not be televised. It will be streamed on YouTube. Then, someone will write a song about it, leading to the subsequent creation of lyric videos, remixes, or maybe an acoustic cover. The importance of YouTube in the distribution and discovery of music in the digital world is undeniable. Over half of top 50 YouTube channels with the highest view count are dedicated to music, mostly made up of official artist and record label channels. On Wednesday, YouTube made the network’s strong connection to the music industry and the listening habits of their users official: they launched a separate music streaming channel along with a beta version of their own music subscription service.
Steve Albini, author of The Problem with Music, an essay published in 1993 challenging the efficiency and stability of the current music industry, delivered the keynote address Saturday at Melbourne's Face the Music Conference where he did an about face on several of his previous predicition. Albini applauded the internet's role in re-structuring the music industry and addressing prior inefficiencies in a way that he believes will enhance and uphold the music industry moving forward.
Some simple simple statements just hit the mail on the head, as do these from Rdio CEO Anthony Bay at the recent Web Summit.
“[Artists] say ‘Wow, I have a million views on YouTube!’ That’s a badge of honour. But if they have a million plays on a streaming service, then it’s ‘they should be paid more’…
On Taylor Swift:
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