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The music industry
with the recent hubbub of services like $$$$$$$$$$ getting taken down and protests against sopa/acta/etc i thought this may be an interesting topic; so i was checking out theverge.com just now
and they've got a long article/opinion piece about the music industry and the debate over subscription music services such as Spotify its not free music as theres a fee its very much like radio
some prominent artists seem to hate the idea of it and have had their music removed, such as Adele, Black Keys, Cold Play
here's it quoted (spoilered most of it to save space)
Quote:
For the conscience-laden music consumer, streaming music services present an interesting quandary. By separating the concept of "legal access to music" from the age-old paradigm of "paying the artist for an entire song or album," they've presented us with a whole new set of ethical dilemmas to worry about. Instead of buying your music, you pay a subscription fee that is in some way filtered down from Spotify to record label to artist, based on some opaque algorithm of pay-per-play, which is based on some opaque deal struck between the label and Spotify, and then the label's opaque individual contract with each of its artists.
I suppose what I really want is some sort of "free range" sticker slapped on my music consumption, so that I know the artist was ethically treated in this transaction. Unfortunately, the current state of the industry is rife with finger-pointing, and I have no idea who devours — and who's getting screwed out of — the $9.99 I drop into this darkened pool every month.
What I do know for a fact is that some artists aren't happy with streaming services. Notable pullouts include Coldplay, Adele, and the Black Keys (each of whom have removed their most recent albums from one or all of the services), while many artists and catalogs have never been available at all.
The telling quote to me is from the Black Keys interview where they explained their decision to pull their new album, El Camino, from streaming. "I always pay for music," says Patrick Karney, the drummer and apparent spokesman for the band, as if to say that paying for a streaming service is different than paying an artist for music.
He goes on to say that "there's a lot of stuff about some of these services that a lot of people don't really know," and that deals are "more fair" for labels than artists. This lack of knowledge is a big hangup for a lot of the parties involved, and before we can all embrace the beautiful future that streaming services provide, it might be nice if somebody could clarify who exactly these deals are "more fair" for.
I spoke with the CEOs of Rdio and MOG about this, and neither could shed much light on these mysterious deals. Their agreements with labels are mostly confidential, and the payout contracts labels have with artists differ artist-to-artist. One problem is that song royalties aren't the only money that's changing hands — services pay for exclusivity, and labels cut deals to get their artists more heavily promoted by a service, and those upfront costs and windfalls may or may not be passed along to artists.
Still, the general consensus from everybody I talked to is that a "larger revenue pie" in music can only be a good thing, as long as it's distributed well. "The average iTunes consumer spends $40 a year," says MOG CEO David Hyman, "of which the labels are getting about 60-70%." In comparison, labels get 65% or so of MOG's income, which is $10 a month for a premium subscription (though $5 subscriptions and a free service are also available).
"The average American spends only $17 a year on music"
"I have my own black hole in knowledge when it comes to individual deals between artists and labels," admits David, "but I do know that the content owners, the labels and the publishers, are getting a lot more money out of these subscription services than they're getting from iTunes."
Things look even better for streaming services when you consider that the average American spends only $17 a year on music, a number cited to me by an indie label executive who wished to remain anonymous. "If you get more folks spending $17 a month on music," he says, "there's a bigger pot of money to split up and it lets us use the power of our own marketing rather than gatekeepers to develop fans and convert that most precious commodity — attention — into revenue, however that consumer might choose to engage."
Spoiler!
The word "attention" is very important, because while many people get hung up on straight revenue (you know, people who like making money), streaming services are also a perfect place for artists to be discovered, and subsequently promoted, by people who wouldn't risk buying their album blind. Of course, that's the line piracy proponents have been pushing for a decade, but when you combine painless exploration with an actual "revenue pie" to be divied up, things get very exciting for the future of music.
My indie exec says Spotify is already "a top revenue account worldwide," along with YouTube. "But they are also promotional. That's why this is all so interesting... a video on the home page of YouTube is a incredible promotion, but it's also cha-chinging." I don't know what the word "cha-chinging" means in labelspeak, but it sounds like a positive adjective.
In fact, the primary "cha-chinging" innovation in streaming services right now is all centered around discovery. According to David, the internal mantra at his company is that "MOG does the work for you." They personalize the home screen based on personal interests, and have been working hard on their radio algorithms, monitoring tracks you skip and favorite, and working in deeper cuts over time from artists you like. If it sounds a lot like Pandora, that's probably intentional.
Spotify is doing similar work on "radio" playback. "Radio contributes to the overall music discovery experience," a Spotify representative told me, "which is why Spotify Radio has recently undergone a top-to-bottom overhaul making it a bigger, smarter and an altogether cooler music discovery experience."
Rdio's on board as well: "Passive listening is something that's critical in the overall experience," says Drew Larner, the service's CEO.
Despite Pandora's big head start, the huge libraries and lack of radio-style licensing restrictions on for-pay streaming services means there's a ton of opportunity here to offer something people have never heard before — namely, everything. And the seamless operation is a big leg up on ad hoc music piracy: "Even if 14 million songs were free, people would still gravitate to radio services," says David. "I hate to say it, but my mom listens to the music stations that come with her cable TV."
Still, as these services grow to prominence, they're outmatched by iTunes in terms of library control and management. Of the "Facebook wave" of streaming services (Spotify, Rdio, MOG), only Spotify offers a local app that can play regular MP3s, while Rdio and MOG live entirely in the cloud. Both CEOs admitted to me that they consider making a move to offer a "locker service" like Google Music, Amazon, or iTunes, on a regular basis, but that they have other priorities right now.
"[Rdio's] hope is that in time it's not going to be necessary," says Drew. That hope is a hope in the magic of "scale," and a dream that everything anybody would want to listen to will be available for streaming. Having a 14 million song library can do wonders for a streaming service CEO's self confidence.
"It's been on [MOG's] roadmap for years, but it's always the bastard child that never gets done, because there are almost more important things that we end up doing" says David. What's more interesting for MOG is the possibility of scanning local collections to further improve recommendations, and David doesn't think it's that hard to just switch apps when you want to get your music from a different source.
Something else that isn't being addressed just yet is playlist lock-in. In the beginning there were iTunes playlists and burned CDs, but these days I have dozens of playlists across Rdio, Spotify, MOG, iTunes, and Rhapsody (I admit, I have a bit of a loyalty problem). It's even worse when I consider all the playlists my friends have made on services I'm not on that I therefore don't have access to. I've been trying to wean myself off Rdio this week in favor of Spotify's superior, hiccup-free playback, but losing the ambient recommendations of my peers (most of which use Rdio) is really troubling.
I asked Drew if Rdio was looking into helping me move to Spotify, and he didn't seem very interested: "From a competitive standpoint, why would we do that?"
MOG sees the need, but David says that all efforts at a single standard for playlists (I'm not sure which efforts he's referring to, he admits that the streaming CEOs don't chat regularly) have all failed in the past. "The best chance we have for interoperability is Facebook," he says. He seems to be right. While my highly curated Rdio friends list can't follow me everywhere, it's hard to go anywhere on the internet these days without knowing what my general Facebooks friends list is listening to right now.
"Cannibalization claims are 'absolutely bogus'"
While music streaming services aren't a "new" idea in internet years, they've really brought serious change to the industry in the past year or so. Perhaps part of the problem with understanding that change is that it's different place to place, and artist to artist. Even the Black Keys admit that streaming services are great for discovering smaller artists, while larger artists like themselves don't necessarily need the exposure. Of course, while that dissension gets a lot of exposure, it's a minority view — in fact, a good number of the notable holdouts, like Metallica, Red Hot Chili Peppers, Gillian Welch, and the Black Keys themselves, are all represented by a single management company called Q Prime, who is rumored to have a dispute with labels over the streaming deals. I reached out to Q Prime for comment, but didn't receive a response.
A recent study by analyst group NPD, which came to the obvious conclusion that streaming services like Spotify discourage the purchase of music in other formats, prompted STHoldings to pull more than 200 labels of music from streaming services — mostly in electronic music genres, in case you didn't notice the disappearance. Meanwhile, Universal Music Group's Rob Wells, who is a client of NPD, says that cannibalization claims are "absolutely bogus," and that each of the bands it's been tracking on Spotify over the last six months "has earned more money from its album being on Spotify than it has from being on any other services."
While the debate still rages in the US, in countries like Spain and Sweden where piracy had totally destroyed commercial music distribution, streaming services have been an unqualified godsend — creating significant revenue where there was none.
Hopefully we'll eventually get more transparency about how these deals work. Widespread piracy has caused so much outcry from labels and artists, so it would be nice if widespread monetization could get some more vocal proponents from the same camp. In the meantime, the hope is that someday soon artists won't have to step out in faith when putting their music up on Rdio or Spotify or MOG, betting their paychecks on streaming services making them more money than iTunes and physical sales alone — it'll just be fact.
in my opinion (which seems to be an issue lately )
Im surprised these "artists" dont call for a ban of their music from Radio waves then.... or from being sung in karaoke bars
I don't believe music should cost anything, it is as natural as the elements to me; i dont recall hearing about prominent artists in the classical era or even our grandparents era suing other musicians from replaying/mimicking their songs
music, to me, is something that should be shared with the world so as to enrich societies lives
the only time that you should be charging for it, if you must, is when performing for an audience (concerts)
But if an artist feels that their music is deserving of a price tag then so be it, but no ones going to want to buy the song if they've never heard it at all and here in lies the need; the demand; the wiggle room for services such as Spotify to exist, no one listens to the radio really anymore, heck people don't even watch music videos on tv anymore.
So artists, imo, should be fully supporting services such as these if their desire is that people will hear and want to purchase their music and as with traditional radio artists will be getting some royalties so its not like the music is being given out for free
the music industry was already slow to react to changing times/technologies when it came to embracing MP3s/digital media is subscription services such as spotify a repeat?
i would pay for music if it was some quality music or song that has some deep meaning or it touches me emotionally.
I'm not going to pay for some thug artist trying to look balling riding in a rented Escalade repeating the same elementary school vocabulary over and over again telling me how he had sexual intercourse with "dem" females
ive been downloading music for years now, buying tracks here and there off itunes. what i like about it is i dont need to buy a whole cd when there are only 2 good songs on the whole album. i rather pay for the 2 good songs, than spend the 15-20 bucks to buy a whole cd.
I'm going to preface everything I say here by saying I don't know jack about the music industry(or music really for that matter).
I get why people are pissed.
First, whenever I see "the plan" for the music industry presented by those outside the industry as being music is free, and you make money on live performances, that would piss me off.
I used to create an album. Then I'd go on tour to promote it. I'd make some from the tour and see most on the backend through sales. Now you are telling me that I need to work for my supper. Tours would be hell! I've got a great house! But I never see it. Bought a new car! Never drive it.
I see why people all have opinions. Music lovers were abused in the system before Napster. The one story that always sticks out is that of Nine Inch Nails asking why their album was priced higher than Britney Spears. They were told that they have a loyal fan base that will pay more for their product. Nice! I actually go out of my way to listen to you, and get gouged to do so.
What I don't get is how the artists continue to go for the old system. Distribution is highly irrelevant now. There has to be enough artists with enough money to start a direct supply model. I know many start their own labels, but they all distribute through the same old companies.
The only reason I can think of, is they are still stuck sucking the teat of the same old companies and are going to have a problem going into direct competition with their cash cow.
So it needs to be outside money. Apple took it on, but they only replaced the pressing of cd's. A little promotion within their system, but are still fed by the same old companies.
The companies, through the RIAA and MPAA all want to go back to a system that puts them right back in the middle of a system that for the most part doesn't need them anymore.
But that brings me back to my original point. Everyone looks to live performances as a carrot to dangle in front of people.
"Yeah, we stole your shit. Oops. You sued us, it didn't work. iTunes kinda converted a few people back to paying, but now your 'cd pressing' company gets a cut per track. But hey! You can still sing and dance for me live!"
What if, just what if, I developed a way to pirate a live performance? Sneak 30,000 people into an arena. Eventually people are going to call for live performances to be free too, right? I mean, I already sneak into Black Eyed Peas for free, so it should be everybody.
Dangling live performances as that carrot is like a concession prize for people, after you went through and ransacked the store.
I fully believe that they need to adapt to the new system. As I said, suing didn't work. Going after website after website is like fighting weeds. They still come. But asking these companies to adapt to a system where the customer calls the shots and dictates what you can charge them for isn't the best answer.
Im surprised these "artists" dont call for a ban of their music from Radio waves then.... or from being sung in karaoke bars
The royalty calculation must be sufficient from radio, TV, and establishments if they are not challenging it.
Quote:
Originally Posted by StylinRed
I don't believe music should cost anything, it is as natural as the elements to me; i dont recall hearing about prominent artists in the classical era or even our grandparents era suing other musicians from replaying/mimicking their songs
There was no internet then, duh.
When the cassette was first introduced as a viable means for the average Joe to copy music, these same debates were had. The industry introduced a levy to recoup forecasted loses due to piracy.
What year was the cassette introduced? It might help you understand why your grandparents had no issues.
Quote:
Originally Posted by StylinRed
music, to me, is something that should be shared with the world so as to enrich societies lives
the only time that you should be charging for it, if you must, is when performing for an audience (concerts)
When even then? Why not make it like a giant open mic night?
Quote:
Originally Posted by StylinRed
no one listens to the radio really anymore
No true. Radio has expanded online, I can listen to my favourite station streaming. Furthermore, you don't see artist backlash against radio streaming online - so why only against pure online streaming companies. Again, it comes down to royalty calculation.
When music cd's were in, artists would get pennies on each sold. Nowdays they don't have that, but with elaborate show displays and PR, they are making insane money off touring, appearances, sponsorships, features, movies etc.
Nowdays an artist could be a CEO of a record label, their own producer, a manager of other artists, and have a clothing line, while headlining a massive tour...and they don't even need to be very well known outside of their region
if artists are gonna tell me tehy're making less now than before, i call bullshit. instead of thinking of free music as a long term PR and brand building strategy reaching more people, tehy're thinking short term and being greedy. A businessman not willing to invest in the growth of their brand is an idiot.
we've seen artists like wiz kalifa, soulja boy, and others all get local fame from local buzz, and then seen them utilize myspace and internet-distributed mixtapes, to get a bigger buzz, radio play and eventually global fame. So WTF is all this bs?
From what I gather it's more the record labels who are lobbying to have these sites shut down and are losing money from them, not the artists themselves.
As mentioned, artists are making as much, if not more money from these new media compared to the pennies they got from record labels, and seemingly few of them are outspoken against piracy and new media.
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i would pay for music if it was some quality music or song that has some deep meaning or it touches me emotionally.
I'm not going to pay for some thug artist trying to look balling riding in a rented Escalade repeating the same elementary school vocabulary over and over again telling me how he had sexual intercourse with "dem" females
^^ truth brother
oh yea and fuck dubstep/electronic music. its annoying and reptitive
The reason they don't complain about radio is you can't pick your own songs to listen to on the radio. Oh sure, if you go to the streaming version of the station you can go back and pick previous songs to listen to, but who would bother with that when you can go to Spotify and create your own custom playlist and leave out all the songs you don't want to listen to?
I have a hard stance against copying/piracy, but of the things that can be copied (music, software, movies/TV) I have the least sympathy for music being copied. I did a calcuation awhile back and it seems relevant to bring it up again.
If game companies and movie companies used the same distribution methods and markups as the record labels, then a typical top-rated game would sell for $700 and a top grossing movie would sell for around $3,500. This is how crooked the music industry is.
The reason they don't complain about radio is you can't pick your own songs to listen to on the radio. Oh sure, if you go to the streaming version of the station you can go back and pick previous songs to listen to, but who would bother with that when you can go to Spotify and create your own custom playlist and leave out all the songs you don't want to listen to?
I have a hard stance against copying/piracy, but of the things that can be copied (music, software, movies/TV) I have the least sympathy for music being copied. I did a calcuation awhile back and it seems relevant to bring it up again.
If game companies and movie companies used the same distribution methods and markups as the record labels, then a typical top-rated game would sell for $700 and a top grossing movie would sell for around $3,500. This is how crooked the music industry is.
Can't even compare the models though. Movies make their money on theatre showings. DVD sales/PPV and airing rights on TV are the icing on the cake. If you don't make money on first run, then you aren't going to make a fortune on the icing either.
Movies and Hollywood also fall under 'Hollywood Accounting' which just brings up a whole new host of issues affecting an industry about how a profitable movie can be made to have a loss.
Probably has nothing to do with it, but after MU got shut down, I bought a few digital albums from underground artists that I was on the edge about. These are the people that deserve my money.
Don't music artists make the majority of their money off live shows anyways? People like Wiz Khalifa started out giving their music out for free in the form of mixtapes and in turn got a "cult" following that attended their shows.
Can't even compare the models though. Movies make their money on theatre showings. DVD sales/PPV and airing rights on TV are the icing on the cake. If you don't make money on first run, then you aren't going to make a fortune on the icing either.
Movies and Hollywood also fall under 'Hollywood Accounting' which just brings up a whole new host of issues affecting an industry about how a profitable movie can be made to have a loss.
I'm not talking about where they make their money. I'm talking about how much money it costs to develop the initial product. A movie, for example, can cost $100 million to make, can employ hundreds of people and require well over a year by the time it's shot through to final post production.
Same thing with making a video game, which could easily employ one hundred designers, artists and programmers for many months or even years before it's finished.
A hit record can be cranked out in two weeks. Before music editing software, you could spend a lot of time in the studio doing take after take until you got it right. You could also spend a huge amount of time setting things up physically (instruments, performers, mics) in just the right locations to get the sound you wanted. Nowadays, you can do a couple takes and "fix" everything in software later on. How many records require 100,000 hours of rendering time on a server farm of 1,000 PC's?
^but ur assuming that net cost is what determines price, which is not true, as it is the type of good and what people are willing to pay for it.
People are also willing to pay close to $100 for a Microsoft Office Product, while no more than a dollar per pound for an apple at a supermarket. They are willing to spend a hundred thousand dollars on a rolex. Once again, the costs don't matter, but rather the type of good and people's price point based on consumer research.
People are willing to pay $12 for a CD and around the same price as a movie. The margins are much better for the cd, yes, but that's irrelevant. It's not about cost to produce, but rather, what people would pay for it. Of course in the long run movies make far more money than CDs, whether it be through syndication, various channels and packaging they're sold in, netflix etc. But that's a different argument altogether.
Note: I personally don't buy music or movies, nor do i buy software hahaha i'm just referring to the typical business modesl and pricing schemes and their basis
^ Of course most products are priced according to what the market will bear. However, the recording industry takes this to a whole new level since they have a lock on distribution, and use their position to massively overcharge for their product. This is why the RIAA has been fighting so hard against piracy - they see their gravy train of enormous profits going away and are fighting to keep them.
Considering the huge number of illegal downloads of music, and the enormous success of iTunes and the $0.99 price per song model, I'd have to disagree and say most people are not willing to pay $12 for a CD.
i would pay for music if it was some quality music or song that has some deep meaning or it touches me emotionally.
I'm not going to pay for some thug artist trying to look balling riding in a rented Escalade repeating the same elementary school vocabulary over and over again telling me how he had sexual intercourse with "dem" females
i still don't understand why people have to bash rap music so bad. there are plenty of other genres that have it just as bad..
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Most Rap sucks. I will say, there are some diamonds in that rough. Too bad its more like needles in haystacks the size of Mt. Kilimanjaro.
Hip Hop is a completely different animal. But you have to be real Hip Hop to qualify. True lyricists. With a message. Whatever that message may be. Nothing wrong some good Hip Hop IMO.
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Quote:
Originally Posted by taylor192
The royalty calculation must be sufficient from radio, TV, and establishments if they are not challenging it.
...
No true. Radio has expanded online, I can listen to my favourite station streaming. Furthermore, you don't see artist backlash against radio streaming online - so why only against pure online streaming companies. Again, it comes down to royalty calculation.
There have been standardized rates approved by the RIAA and the Copyright Royalty Board for internet radio that has slowly risen over there years its something like $0.002 each time a song is played now
but the thing with streaming sites like spotify, as noted in the article, they are paying royalties too to the studios
but i agree these guys likely just want More $$ but is it deserved? is it needed? shouldn't the exposure counter their concerns?
Quote:
There was no internet then, duh.
that isn't really a fair comment to make because in the eyes of people back then radio/concert/recods (LP) were their internet
and there was people performing/singing the songs and making their own records without royalty fees even in our grandparents era there was some anger over "copying" their songs not due to royalties it seems but rather racial equality issues
it just wasn't a big concern for them imo everyone was still making money and still getting exposure
A lot of valid points in here. Working in the industry, I'll try and clear a few things up.
Personally, I only (and am willing to) pay for music from Canadian artists, and upcoming independent artists. One track you buy from an independent artist is worth/means way more than buying all of Lil Wayne's CD's. The big names don't need any more of our money.
Record sales from the big record companies/labels are pretty redundant now. ALL the money goes to the label. An artist makes more selling a t-shirt than a CD. However, with independent artists, record sales is usually their only form of income.
Other than the A-listers getting royalties and endorsements left and right, musicians make most of their money from live performances (touring) and producing other artists.
Radio play is more of an exposure tool than a form of revenue. Like someone said above, with internet radio, you barely get a fraction of a penny. With commercial radio, you make $0.15-$1 every play, depending on the station.
On the other hand, when artists license their music to film/TV and video games, that's when they make some pretty paycheques.
The reasons why the artists don't even bother fighting these things is that it doesn't matter to them. They're still getting exposure, and it's not their money that they're losing. They just got a million dollar paycheque from their tour; they're not gonna bother fighting to get their $2 cut from CD sales.
Either way, I suspect record labels are going to be gone in the future. With Youtube being the top vehicle of exposure (not to mention viral capabilities and their advertisement payouts), it's pretty much useless now to sign with independent labels. All the giants will still be around, but unless an indie label has some crazy hookups in film/TV, they're pretty much chasing their tails. For example, unsigned Youtube stars like David Choi and Christina Grimmie are far, far ahead of signed artists like Hedley, Marianas Trench, and Faber Drive. The latter 3 are signed, touring, and producing, but I would bet dollars to donuts that the Youtube stars have a bigger following, more income, and more freedom than the signed artists. Everything the Youtube stars make, they keep. Anything they promote off Youtube and sell, they keep. They cross out the middleman of a record label, and are far better off.
The whole "signing a record deal" is all a big illusion at this day and age. Of course it does have its perks.. being on TV, being sold in (dying) CD stores, meeting celebrities, and most of all, it's a fast track. The label will take care of all your videos, sales, marketing, tours, whatever. But that comes with a price.
Indie artists have to do all their own work, book their own tours, find their own funding, and so on.
In a few years, the whole industry is going to be made up of Youtube and a handful of the big shot labels.
Everything else will be pennies in a goldmine.
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Quote:
Originally Posted by Nodnarb
Most Rap sucks. I will say, there are some diamonds in that rough. Too bad its more like needles in haystacks the size of Mt. Kilimanjaro.
Rap is always a bit of a touchy subject. I'll go ahead and say I listen to all music, including rap.
And yes, most rap these days is about money, sex, and cars. But that's what sells.
There will never be another Tupac. There are the few artists like Lupe Fiasco who raps about real things, but the majority is going to fall into the "brag" category of rap.
Honestly it doesn't take much to be a rapper these days. You have a catchy beat that you buy online for a dollar or make on Garageband, you write a sheet of rhymes, play around with syllables for a proper flow, have a singer sing a melodic chorus, and there's another mediocre rap song. This genre is all about attitude and brag now.
With other genres, much more knowledge, emotion, and talent is needed to write and perform a real song. Song structure, keys, change-ups, melodies, harmonies, not to mention a strong vocal if they're a singer as well.
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I agree you with stylin. "Selling music for mass consumption" is a very new thing. i mean, back in the victorian days the only way you could listen to beethoven was by going to his concerts. Now you can hear anything and everything. And to honest, half the stuff on the radio will be forgotten within the year. I barely ever pay for a cd unless I really feel like the artist gave his all into making the album. And I always believe in seeing a band live as apposed to watching the dvd or youtube videos. That's where the real experience is, that's where it all started. Live concerts. If you can sell out a venue at 25$ a ticket at 30 different 500-1000 venues a year then 5 people in your band are making 20,000 a year... That's fairly reasonable since most bands are in it for the fun or in it for the experience and you can do 30 shows in 2-3 months. To be honest, I'd never pay 80$ to see some big event concert unless it was important for the band. If its just another profit margin then its just another sales event for them, especially if it's some terrible pop band.
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