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deadbees on 09/19/2016 at 12:48PM
Why The Streaming Business Model Is Broken
per stream revenue
So report are claiming more and more users are embracing the subscription streaming service. As a matter of fact, Spotify just passed the 40M milestone.
Should we actually celebrate? Is this good news for musicians, creators and all copyright holders? Or this just a revenue growth for Daniel Ek and his fellow startups moguls?
So here's the deal: streaming services are gaining more audience everyday, scoring more subscribers.
If the streaming business was just any business, this would make a great revenue raise for everyone involved, Daniel Ek, Spotify coding gnomes, you broadband provider, records labels, recording artists, songwriters...
But the music streaming business ain't any business. It's virtual. It's selling thing that don't even exist, but yet are available in countless supply. There's no selling out on music streams. As long as kids are hitting the "play" button, the services are delivering a fresh stream a music bytes. And all these are included in the user's plan.
That's the catch. Unlimited plans.
So here's some basic maths:
streaming revenue is fueled by ads and subscriptions - well, mostly subs, actually.
charges, on the other side are royalties and advances paid to distributors, labels, publishers... for each single stream.
Ever wondering which of those numbers are growing faster? Let's clear it out by making the per stream revenue breakdown over the past years.
The streaming business model clearly fails to make profits from its tremendous audience acquisition.
The more people play stream, the smaller the piece of the pie to be shared with each copyright holder. The availability of unlimited streaming for subscription users makes it impossible to keep revenue in sync with spins.
The per-stream-revenue ratio keeps plunging down as more and more users make the jump and quit physical and even downloads to switch to streaming services. Even if a large fringe a them may subscribe to a plan, may it be Apple Music, Spotify, Deezer or Tidal, the revenue won't match the huge tidal wave of stream spins - over 200 billions as the industry expects for 2016.
This means that streaming services won't have any other options than lower the producers and publishers revenue shares. Who's gonna pay the price for this broken business model? Just as we feared, artists, creators... music makers.
Don't feel sorry about the big hit makers, they've got it all sorted, are getting paid advances when the regular guys get the dimes wired with a six months delay... and they will all needed support for the industry's big hot shot lawyers to negotiate guaranteed fees.
In the bottom line, the record industry of the digital age is just as evil as the old analog one: the chart winner takes it all!
deadbees on 12/12/2015 at 08:47PM
NO POP — music genre, ethical guideline, as penned by Toronto music writer Lonely Vagabond:
“rooted in the attitude that people should search for the music that moves them, away from the corporate machine and towards artists who haven’t lost their capacity to be creative, experimental or boundary-pushing.”
No Pop. I wish I had thought about this myself. With that “label” or tag — call anyway you want — Lonely Vagabond perfectly nails the reality of today music dilemma. New alternative? Not so sure about that. The Pop vs. No Pop antagonism is a reality. Is it a fact. And it’s not only about economics — actually it’s not only about music either. The whole contemporary western world can be read through the No Pop lens.
Anyway, let’s stick to music. Let’s start with the Record Industry. Actually no, let’s take a look a the Music Industry. There it is: Music Industry. Am I the only one uncomfortable here? Does anyone else pick the oxymora? Music & Industry. Do these words go together well? How come the juxtaposition of Art and Industry doesn’t raise any concern?
We’ve basically been drowned into that evil blend for too long we don’t even notice how much of an evil non-sense it is. Let’s get this straight: the Music/Record Industry only concern is its own wealth and growth. The industry must grow. Call it economics entropy if you like. Whenever it fails to get any fatter analysts will raise the Crisis emergency flag.
The Record Industry feeds itself harvesting the fruits farmed by musicians, songwriters, producers, managers, promoters… The revenue must remain high and stocks should go up. Profit. Holding companies profit. Shareholders profit. That’s the corporate Music Industry’s gospel. Do you think this may provide opportunity for spawning challenging artwork? No chance. Art is out of the picture. Long gone.
As any other industry, the Music Industry is dealing with assets and products. How does it raise substantial revenues? By releasing profitable products, addressing the consuming masses in the most straight forward way. Give people an easy to get along music. Take away all adventurous creative outbursts. Make it shallow. Make it light. Get it on repeat on every television network. Make it POPULAR.
So what’s the alternative? What’s the NO POP way? Music driven by art. Driven by songwriting urge over profit perspective. A lot of people around me claim that the Record Industry biggest failure is its failure to bring them revenue. Musicians, songwriters, independent record label managers… all those brave music soldiers who fought hard without looking back and expected a paycheck down the line. And never got one. I hear you fellows. I feel for you. But in the most twisted way I do believe that dire pass you remain stuck in is your only pathway to truth worthy music creation. Don’t get mad. Just hear me out. It’s art integrity over career. The Gospel over greed.
Look around, there’s no point into making desperate career plans. Musician entrepreneurship, that’s bullshit. It may bring down some dough but won’t make a decent album. Not even a song.
Come on, look around. Every single artist you may be into, look for their best piece of work. I don’t mean the most successful nor the biggest seller. But their highest artistic achievement. I doubt you may find any of these among releases being crafted after a wealthy deal. Get this straight, financial success kills the creative urge if not the ability.
So people, don’t run after fancy career plans. Don’t fantasy yourself as the next Record Industry shooting star phenomena. That would be just the end of your genuine artistic career.
That’s my point you may ask?
Shouldn’t you entitled to retribution for your work? Yes you should. Shouldn’t you be making revenues off your music? Yes you should. And as an indie record label I will make any possible effort to make this happen for my artists. But remind this: all fancy stardom plans will lead you to no good — if you may ever achieve them. Stick to solid songwriting. Maybe you won’t be able to leave your day job. So beat it. Better this than turning into a rich spoiled musician.
My advice won’t get you a fancy car but will keep you crafting great music.