Stop Thinking of Yourself as a Good Person: The Ethics and Economics of Music Streaming

another interesting thing that i think wasn't considered by DJP & co in the big quote upthread is: the amount of music people consumed increased A LOT after it became free. but the amount they were purchasing before was really small. from panda article:

Even in the 1990s at the height of the music industry, when Americans spent more on music than ever before, the average US consumer only dropped $28 a year on the medium.

so now you have all these people who got used to listening to free music all day... and if you can somehow figure a way to charge them just 10$/month, revenue would explode to tenfold of the nineties peak

As of June, Spotify had 75 million users and 20 million paid subscribers ($10/month). Like I said above, it's a loss leader, and I'm quite sure their plan will be to soon start restricting access to certain content to free users, hopefully converting a certain percentage of them to paid subscribers.

As I discussed in my article, just limiting free content will not be enough. They are going to have to add value to the experience that currently does not yet exist. Columbia House is for sale. Imagine if licensing of all the music and labels CH had would be inherited. That would be extremely valuable. Even if not, the brand is worth something. It would be really interesting to see a company like Netflix buy the brand, adapt it to their model in a modified form, such as $15/month for 3 digital albums a month (all the common formats, including lossless and hey, why not the option of renting the CDs like they are doing with DVDs), $25 for 6, $35 for 10 and so on. If they want to really do it right, offer incentives for the more dedicated fans such as concert tickets, fan clubs, t-shirts, special edition CDs/digital albums with bonus tracks, etc. Maybe partner with Spotify, or a competitor.

Are you saying subscription rental streams? Because emusic already did subscription downloads.

> ($10/month)

£9.99 a month in the uk = $15

Emusic didn't do it very well (interface, available selection, competitive pricing, lossless, etc). It doesn't mean it wouldn't work when done properly.

I see on the Spotify Foals page they have three t-shirts on display to buy from the band. It's a start, of sorts. Friggin' ridiculous there's no links to buy the music.

Hills - Frid is out today, but still only one song from the album is available from Spotify. They should make it so subscribers can stream it the first month, and free users can buy the download for $4-5 and also be able to stream.

"Even in the 1990s at the height of the music industry, when Americans spent more on music than ever before, the average US consumer only dropped $28 a year on the medium."

People listened to the radio more back then too.

t flopson: you've heard of this thing called bandcamp, right?

paying for self-released digital content thru bandcamp is the only time I feel like an "ethical music consumer" ever anymore. everything else is bullshit

ok

even if they get most or all of the money i don't think bands make very much money off bandcamp cause people don't seem to buy tonnes of music off bandcamp and streams are free and i don't see it taking off in a huge way? but i'm glad it makes you feel good i guess

i guess i don't think "which way of buying music online gives ilx posters a warm glow" is as interesting as "what's a viable model for the music industry" maybe this is the wrong thread

> paying for self-released digital content thru bandcamp is the only time I feel like an "ethical music consumer" ever anymore. everything else is bullshit

buying cds at gigs?

only "gigs" I go to anymore are DJ nights haha

... although come to think of it, I would probably "buy" mixes from some of my DJ friends -- I think this used to be called "bootlegging" and I would be quite happy to take part in it :)

Please be more thoughtful when you parrot party lines offered by Pando et al. Tech sites are very snugly in the pockets of the companies they cover.

(I very much believe that the flood-the-zone nature of tech sites and their employees' lack of knowledge about the music business/pandering to the crowd that thinks culture appealing straight to them is just hatched because they've been used to having marketing directed at them all their lives helped accelerate the current untenable situation. Remember when all those sites thought QTrax and SpiralFrog were going to be huge?)

Please be more thoughtful when you parrot party lines offered by Pando et al

do you have a debunking of any of the stuff i quoted from it or you just don't like the url/byline?

oh I just realized Pando is the website that the posted article I pointedly ignored upthread v_v

it was directed at me

(I very much believe that the flood-the-zone nature of tech sites and their employees' lack of knowledge about the music business/pandering to the crowd that thinks culture appealing straight to them is just hatched because they've been used to having marketing directed at them all their lives helped accelerate the current untenable situation. Remember when all those sites thought QTrax and SpiralFrog were going to be huge?)

― maura, Friday, August 28, 2015 11:04 AM (3 minutes ago) Bookmark Flag Post Permalink

you should read the article i posted it's good it's not related to what you're describing

"even if they get most or all of the money i don't think bands make very much money off bandcamp cause people don't seem to buy tonnes of music off bandcamp and streams are free"

but there are often payment options for CDs and vinyl and i do think people buy these after listening to the streams. maybe not a ton, but if i were an artist i would rather take my chances there than with the big sites like spotify.

the Legendary Pink Dots make a living wage off of their Bandcamp, according to them

That's good to hear. They certainly have a huge catalogue to sell.

I thought maybe "Pando" was a merger between Pandora and Panda Express. Discount lunch deliveries with yr tunes.

Flopson is right, Bandcamp and buying CDs at shows are fine options for the more dedicated fans. But the masses are not going to go out of their way to spend money out of any sense of obligation or guilt. There needs to be a well-planned approach that gets people excited about getting music and paying for it. It really isn't rocket science, and shouldn't be that hard. Music is way more fun to buy than most of the other shit we have to buy and spend way more money on. There have to be incentives, perks, deals, swag, all the stuff that make people feel they are getting value, not ripped off.

Aside from actual physical merchandise, the rest is all ones and zeroes, and it's just a massive, massive failure of the music industry to not even try capitalize on it on good faith, and while treating their customers with respect rather than bludgeoning them with lawsuits, since 2000.

Pando has a much more adversarial relationship to most of the tech industry than any other tech site i can think of.

even if they get most or all of the money i don't think bands make very much money off bandcamp cause people don't seem to buy tonnes of music off bandcamp and streams are free and i don't see it taking off in a huge way? but i'm glad it makes you feel good i guess

some indie artists who focus their thing around Bandcamp (i.e. making it the only place to get the record) make most of their money from it. you can get an idea just from the little avatar squares that show up for each person who has bought a record and also have a 'fan' account. like, looking at a recent fixed-price album for a pretty popular indie rapper, that's $3,600 right there, minus $540 for Bandcamp's cut. And there are probably a bunch more people who bought it without creating a fan account.

Maybe that's not very much money in the grand scheme of things, but it's not nothing either (and you get it in your pocket right away too). And it does feel like the go-to place to directly support an artist. For a couple albums that I found myself streaming all the time, I bought them on Bandcamp and didn't even download.

xxxxp

i have definitely bought vinyl from artists after listening to their stuff on bandcamp. not a lot, but if you can get me to buy something new online you are doing something right. i also like buying stuff from labels on discogs. new stuff. a LOT of people buy new records from discogs as opposed to a label's website! which seems weird, but it's a browsing thing.

Pando has a much more adversarial relationship to most of the tech industry than any other tech site i can think of.

― I wear my Redditor loathing with pride (ShariVari),

"slight pushback that comes after a female founder realizes that the industry she covers has a lot of inherent sexism" is not "much more adversarial."

but whatever, sorry for getting this off topic.

(that said, like... the question posed in the headline assumes that apple doesn't also have 'destructive greed' tendencies, which seems like a BIG leap.)

People listened to the radio more back then too.

― One bad call from barely losing to (Alex in SF), Friday, 28 August 2015 14:32 (1 hour ago) Bookmark Flag Post Permalink

Not much more, though. Average Time Spent Listening is still about 2.5 hours per day in the US, compared with almost 3 hours a day 10 years ago. It's a bigger fall for young people (obviously) - but under 21s still listen to more than an hour a day

Lots of food for thought in the article Flopson posted upthread. I was surprised that Apple only wanted to charge US$5 a month for Apple Music, but the reasons given are solid – higher takeup, probably higher revenues. An idea the labels sensibly shot down, if Pando has it right.

Apologies if posted before:

[quote]Earlier this year, analysts at Ernst & Young estimated how streaming revenue is shared [...] after the IRS takes 16.7 percent of the revenue, streaming music platforms collect 20.8 percent. That's not a bad haul, but out of the remaining 62.4 percent, the record label keeps three-fourths of that, leaving only 10 percent of the total to be split between publishers and songwriters and only 6.8 percent for artists.[/quote]

That percentage looks quite familiar – the cut an artist gets from a major-label CD sale is talked about in this article from 2006, and another from 2013 that's somehow more dated. There are obvious differences in the business models and amounts of money involved, but streaming seems less like a new world, more like "seen it all before".

That isn't a defence of major labels. Just shows they're very slow to adapt, maybe, unless it involves upping their own percentage. (On past evidence, the way to create another Beatles will be to pay new artists at the Beatles' rate of... 1.87%?! Get on it, EMI-UMG.)

But the way it is today, I'm cautiously optimistic – I hope the labels' greed will reduce their power in the long run. In April, the "Information Is Beautiful" graphic of all the different music-revenue sources was updated. Who knew Youtube would be so stingy?

But the way it is today, I'm cautiously optimistic – I hope the labels' greed will reduce their power in the long run. In April, the "Information Is Beautiful" graphic of all the different music-revenue sources was updated. Who knew Youtube would be so stingy?

How the hell can the percentage of "signed users to hit minimum wage" on Beats be 140%

300,000 users, but 420,000 plays needed in a month, apparently. Guess we'll never get to see if it actually happens.

xp Because it doesn't have enough users? (Only 300,000 according to the chart)
That statistic means "What percentage of the entire Beats userbase would need to stream a song for the artist's cut to exceed the monthly minimum wage" and the answer is >100% because even if every Beats user listened to a song, it still wouldn't be enough!

Oh my bad I thought users here meant artists (as in, percentage of artists who use the service to hit minimum wage), hence it didn't make sense

I've worked in the music business for twenty years now, the last twelve as my day job - I don't obsess over digital distribution so this is a casual observation, not an "I looked at all the data and I'm telling you all the TRUTH" or anything, but many smaller labels (Hells Headbangers and NWN! are the ones I'm most familiar with because that's stuff I listen to a lot, but this is also seems to be true among the label owners I know) have made Bandcamp a pretty huge part of what they do; nobody's becoming a millionaire off Bandcamp, but it's making an actual I-noticed-that difference in people's monthly paychecks. It compares to the P&D/distro places that dropped like flies in the post-Napster era: it gets the stuff up & available on a place people know about and feel comfortable using. I'm an outlier but I've been buying new music almost exclusively from Bandcamp this year. People can minimize "oh, cool, you got twenty dollars instead of a dollar, go buy 1/4 of a cart of groceries" but that's kinda the Bandcamp difference imo. Its impact isn't minimal, I think -- it'll remain niche, I guess, but it has given actual relief to already-extant labels and bands.

i enjoy buying on bandcamp. since I have the disposable income I still buy all my music, esp since most of it is made by bands who are lucky to sell 10,000 copies of anything.

Bandcamp also has FLACs available and I like the format of the site - BandCamp is getting notorious enough to where if you can't immediately find the album you just type the band's name and bandcamp in google.

LOL 90's...

https://scontent-dfw1-1.xx.fbcdn.net/hphotos-xpf1/v/t1.0-9/11902430_10154189395117137_3466540928732263849_n.jpg?oh=115a170cbd930b7c9340b860336314a4&oe=5680A69E

Ï don't understand how this would work. (Not saying it wouldn't work, it's just not well explained in the article.)

http://www.theguardian.com/music/2015/sep/13/musicians-back-pay-as-you-play-coding-solution-to-win-fair-deal-artists-streaming

But there's a few tidbids:

“They claim to share their vast advertising revenue with creators, but they make the rules. YouTube only shares 55% of advertising revenue with those who achieve over 700,000 views per upload in a quarter [3mths], so it is in YouTube’s interest for multiple people to upload the same content to dilute the viewers so they pay out less money to creators.” (Hélène Muddiman)

I was gonna post this in the forks thread, but fuck that thing. I'm posting here instead.

Spotify have no control over what record labels or publishing companies do with royalties once they hand them over. It's funny how people villify Spotify while using YouTube, since YouTube pays significantly less in royalties even though it has more than 10x the users and streams than Spotify has. YouTube also takes 80% off the top of all ad revenue earned by a YouTube video and only pays royalties on "monetized" videos, a.k.a. videos with ads. It's usually only the official artists' YouTube videos that receive ads in the first place, meaning that artists often do not earn royalties on most unofficial YouTube streams. It's possible that the industry and the artists are fighting against the wrong enemy here. The labels, who use outdated borderline-crooked methods for paying royalties and YouTube/Google who can't bother to pay artists a fair rate even though they have all the money in the world.

Nice post.

I can't possibly read this whole thread but anyone who thinks that Spotify is any better or worse than the music industry has always been should google the name "Morris Levy."

they're just more of the same, which is the problem.

i feel like people consume things differently on youtube. yes you can listen to almost anything on it, but it doesn't function as smoothly as a replacement music library. i'm probably building a strawman here but fuck it.

let's tax inherited wealth at rates that produced the 1950s blues and 1960s rock booms again. oh wait, wrong thread!

I thought this was a good summary of where things stand in 2019:
https://www.npr.org/2019/07/22/743775196/the-success-of-streaming-has-been-great-for-some-but-is-there-a-better-way

This article repeats, again, the reasonable-sounding but incorrect assertion that the pro-rata payment model is biased towards the most popular artists. In fact, as a general pattern the people who stream more than average on Spotify tend to stream less-popular artists, so the current pro-rata model acts as a slight subsidy of the less-popular by the most-popular, rather than the other way around.

The thing that has a bigger effect on streaming equity is the current industry practice of counting any stream of :30 or more of a song as a "play". This penalizes artists for producer longer/fewer songs, and allows abusive gaming of the system like this:

https://open.spotify.com/album/3glK7aKuf8ZccIvLTQBGC2?si=N_srvhXaRm-L8pnL0zOZJQ

(an 18-hour German audiobook delivered as 2,037 :31-:35 tracks)

Spotify’s payment rates to all artists are bad, and pointing out that consumers based on your data stream less popular artists more doesn’t change that. Seems like you’re just saying less popular artists algorithmically could be be paid less and should just just be grateful for this insignificant subsidy they allegedly receive based on amounts of streams.

Also your subsidy argument doesn’t account for the other factors :

Streaming payouts to artists vary wildly however, depending on whether they are signed to a major or independent label, and whether or not they're songwriters of an individual tune, as well as the performers. And within these situations, the terms of these contracts can make one artist's pay stub unrecognizable to another's.

Also your subsidy argument doesn’t account for the other factors :

Streaming payouts to artists vary wildly however, depending on whether they are signed to a major or independent label, and whether or not they're songwriters of an individual tune, as well as the performers. And within these situations, the terms of these contracts can make one artist's pay stub unrecognizable to another's.

I thought it was a given that Spotify et al. were just a convenient way to steal music for a small fee, as opposed to the less convenient but completely free methods that the under-40 set have been using to steal music for the last 20 years.