Tag Archives: music business
I would like to elaborate on two arguments being made in the comments of the article (link at the end of this article):
Argument: labels should better compensate songwriters / authors
This argument stems usually from a basic misunderstanding of how music is created and who does which job. A songwriter writes a song. He then licenses this song to whoever wants to use it and is generally only paid a fee for the song if it is commissioned, which, as far as I know from colleagues, is a rare case because most of the times, the songwriter writes his songs and then shops them around. The songwriter profits when the song is being used. Usages are
- duplication (CDs, vinyl, etc)
- performance (concerts, public mechanical performance like radios/jukeboxes in businesses like bars, hairdressers etc)
- broadcasting (TV, radio, cable, satellite)
- downloads (iTunes, Amazon etc…)
- streaming (Spotify, Deezer, Beats, etc…)
- film (use of a pre-exisitng work in a film)
In all of the above use cases except film the songwriter has very little to no personal influence on the level of compensation. The license fees are set / negotiated between the performance rights organisations (PROs) and the businesses behind the use cases above. Once a song is published the songwriter _must_ license his works under theses conditions and the PRO _must_ license to anyone asking. It’s called a compulsory license.
Argument: a stream pays more than a radio spin
While it is true that streaming does in fact compensate better per “person” consuming the work, we have to look at this from a different perspective to make it obvious why that is the correct way to handle it. It is important to understand the differences for the end consumer between streaming and radio:
Streaming means: free choice of
- on what device
to listen to
Radio means: listening to whatever someone else decides at any given moment in other words, no real control and freedom of what to listen to.
From this I think it should be abundantly clear, that the end consumer is getting a way better experience with streaming than with any other form of consumption. Which is obviously the reason why many people choose to consume music in this fashion. And rightfully so!
But there is absolutely _nothing_ wrong with songwriters asking for a better compensation for this sort of service to the end consumer. It’s a great service and great experience and it is worth something. To suggest that we cannot or should not make our voices heard in this power network is a specious argument that denies us free speech and access on a level playing field to a marketplace. That’s just wrong.
And like Aloe Blacc says: songwriters get nothing from the fees that streaming services pay to labels, because that’s not how the licensing is set up. Songwriters license their works (the composition/lyrics) directly (to the labels, to the stations, to the streaming services etc) while the labels license their product (the particular recording) to the streaming service.
For many years now, the tech industry has told the music industry to “get with it” and create “new” business models.
Well, they`re here now in the form of
- outrageous ticket prices
- constant marketing mailing/viral campaigns
- increased corporate sponsorships (which is just splendid for artistic freedom, but who`s watching, right?)
- investment in venture capital and thus tech startups as you can see from the article below
What`s gone is:
- investment in A&R
- advances for producing albums for young bands / artists
- the middle class career in music
- the small indie label investing in niche music out of love
There is only one solution to this whole dilemma that will bring back freedom to create art:
The audience has to come back with their wallet and directly (!) support the artists they like. Even if those artists happen to be signed to a label. Not all labels are Mega-Corporation-Labels with terrible deals for their roster. A lot of the do really great work and love what they do.
Support and buy the albums directly from artists
Have a winner-take-all music world dominated by corporate / artistic relationships based on marketing research and capital.
I don’t care, that he gives away his stems or even his physical instruments or every third bit on his hard drive or even his left finger.
I care, that he uses the lingo and reasoning of the copyleft movement in order to be popular and promote his giving away his stuff (the giving away part, I’ll say it again, I don’t care about either way!!)
This is a political statement that enforces, validates and promotes the arguments of all the copyleftists.
And this I do care about deeply. And coming from him, who had his career built on millions upon millions in marketing dollars when those dollars where still flowing because the people believing in him could actually sell something, it is an outright slap in the face of all the people who helped him and at the same time to all the people who have to negotiate their fees on a daily basis with filmmakers, studios, stations and agencies. Because we get asked: but hey, even Moby is giving away his stuff, why don’t you?
This race-to-the-bottom is a reality every single day in my work.
I don’t know how else to say it and if it’s still unclear that I don’t care about the fact that he gives away his stems I’ll say it again for good measure:
I don’t care that Moby gives away his stems!
I care that he makes an opportunistic political statement that deeply weakens the artists that start out today, because it severely weakens their position against every filmmaker, studio, broadcaster, developer, advertising agency and web platform that want to use their work.
I read this very noteworthy article recently on the sustainability of the music subscription services and here are my thoughts on it.
I’m sure Spotify can be very successful and profitable in just offering those all-time mega hit songs and the summer hit songs. Those songs tend to engage the audience throughout their lifetime.
But when you look at what kind of service that would make, it seems to me to be the model of the “oldies but goodies” radio stations. A very conservative form of both media “broadcast” (in the wider sense not the technical sense) and listener behavior.
I would like to ask a different question:
Would spotify as a service that focused only on those all-time-great songs and not on a catalogue as big as possible be an attractive place for the curious music lover?
I remember an instance in 2006 or 2007 when I visited my friends in Los Angeles and drove around in my rental car listening to the world famous KROQ. What happened was that I felt like every time I turned on the station and drove for about 45 minutes (the average drive time in LA) I would hear
* City of Angels, Red Hot Chilli Pepper
* Enter Sandman, Metallica
* The Pretender, Foo Fighters
This is all fine and dandy, they can play whatever they want and how often they want, that’s not my point and on top of that, I love those songs.
The curious music lover
But from a curious listener standpoint those forms of media are becoming less and less interesting to me. I would like to explore new songs, find voices I haven’t heard before, dive into the experimental, challenge my taste expand my horizon and so on. Which is where all the indie artists come into play that make up the bulk of Spotfiys catalogue and in my opinion, they make up the real attractiveness of the service.
Unfortunately for those artists, music subscription services will never amount to a reasonable or even noteworthy level of income stream as the calculations in the article reveal. But the calculations in the article make it abundantly clear that the royalty rate that the subscription services pay today are the only ones that are viable with the currently assumed listening behavior. I get that and I respect that. Please read the section on the promotional aspects in the article for consideration of that argument. Basically subscription based music consumption promotion will lead to more subscription based music consumption and as such to the lowest possible roaylty for the artist.
Subscription services are great discovery tools if they actually work at presenting you things that you don’t know. But if you truly would like to support an artist, there is no other and no better way than to purchase the music from him or her directly. And hopefully the artists retained enough rights to the music to be able to sell on a distribution platform that has a fair revenue sharing model. I don’t want to advertise any, we can discuss them in the comments if you like.