Is there an imaginary sweet spot where it all makes sense? Yes, according to longtime Metallica manager Cliff Burnstein, who recently orchestrated an exclusive deal with Spotify. Burnstein postulates that once streaming subscription services hit 20 million subscribers, payouts to artists will suddenly make sense — even if iTunes downloads get completely wiped out. “There is a point at which there could be 100 percent cannibalization, and we would make more money through subscription services,” Burnstein told the New York Times.
“We calculate that point at approximately 20 million worldwide subscribers.”
Early stats show a rather immediate cannibalization effect following Metallica’s Spotify ingestion late last year. But insiders say Metallica, now independent and in control of their masters, definitely isn’t getting screwed by its recent Spotify deal. In fact, Spotify likely added substantial sweeteners to the deal to secure Metallica’s exclusive participation.
But what about those that are less fortunate? This is the point where Spotify (and Pandora, and other streaming) executives might want to consider things carefully. An angry comment section on Digital Music News is one thing, but now, massive outlets like the New York Times are taking notice (yeah, they have internet access, too). “But as the companies behind these digital services swell into multibillion-dollar enterprises, the relative trickle of money that has made its way to artists is causing anxiety at every level of the business,” Times journalist Ben Sisario wrote.
“In the new economics of streaming music, however, the river of nickels looks more like a torrent of micropennies.”
Indeed, Sisario was interviewing industry-influential musicians like Zoe Keating, whose paltry payouts have ignited a discussion about what’s fair. “In certain types of music, like classical or jazz, we are condemning [musicians] to poverty if this is going to be the only way people consume music,” Keating starkly warned.
The question is whether this leads to more mainstream awareness of the payout problem, including the inconvenient truth that many artists never get paid – at all. Coverage by mega-papers like the New York Times could snowball, and shift the discussion entirely for millions of existing and potential subscribers.
There’s also another inconvenient truth: the industry is closer to 20 million than you might think. According to a tally compiled by Digital Music News earlier this month, worldwide streaming subscription numbers are already comfortably over 10 million, and quickly careening towards the 15 million mark. Which raises the question of whether 20 million is a happy tipping point, or another dissillusionment waiting to happen.