There’s plenty of misinformation floating around about streaming music these days. We thought we’d clear some of it up.
1. Streaming music is all about exposure.
Streaming can be great for exposure, but for most artists, it’s not. Because without serious promotion and marketing, most stuff on platforms like Spotify stay buried.
The real reason to be on a streaming platform is not to be invisible; it keeps the connection going for fans that are looking for an artist because of something they saw outside of streaming. And, if you’re lucky, it can convert a fan into paying a concert attendee, vinyl or merch buyer.
2. Windowing is bad for your fans.
Spotify says windowing is bad for fans, but it’s mainly bad for Spotify.
Windowing refers to the practice of delaying the release of an album or song, and restricting access to better-paying platforms first. Every artist and every release is different, but prioritizing higher-paying platforms often makes good business sense. Formats like vinyl and iTunes downloading simply pay better, pound for pound, and core fans will purchase them (along with cassettes, merchandise, and other higher-revenue items).
That’s been the experience of Bandcamp, which prioritizes those formats and has been experiencing increases among those ‘traditional’ sales.
Streaming typically comes last in the sequence, simply because it pays the worst (by far). And if your fans can’t understand that, they’re really not your best fans.
3. Spotify, Apple Music, SoundCloud, or other streaming services are helping artists out.
Streaming platforms aren’t philanthropic organizations, they are self-interested businesses trying to maximize their own success (not yours).
That’s capitalism, but the reason why artists have such a problem with streaming platforms is that most of the benefits are going to a tiny group. That includes the three major labels, who receive giant upfront cash advances and premium advertising slots; and Wall Street partners like Goldman Sachs, who are already minting millions structuring loans and positioning a public offering for Spotify. Others, including Spotify employees and executives, are making handsome salaries.
The one exception to this rule might end up being Tidal, a company that insists on making people pay, thereby driving up royalty payouts.
4. Playlists will make you famous.
Playlists can give an artist a serious boost, but getting on a plum playlist is extremely difficult. In fact, major labels are increasingly controlling what is included on top playlists via playlist payola. But even getting onto a killer playlist doesn’t guarantee success: according to one marketing expert speaking recently at Canadian Music Week, artists that find themselves on big playlists sometimes don’t get the pickup or interest they expected, despite being played millions of times.
5. Playlists will make you wealthy.
Getting on playlists is a big deal, but it typically doesn’t lead to a big payout. Nashville singer-songwriter Perrin Lamb got 10 million plays and $40,000; another band got one million streams and less than $5,000. That’s not zero, but the far bigger value comes from other, higher-paying platforms, including live concerts and vinyl.
6. ‘Streaming Is the Future’
On-demand, streaming media is rapidly becoming the method du jour for music fans, but the future is probably more complicated. The reason is that two of the largest players in streaming music are catastrophic financial disasters, and their long-term future is anything but guaranteed. Spotify is losing hundreds of millions and carries more then $2.5 billion in financing and debt; SoundCloud is losing heavy tens of millions according to their latest financial reports. These aren’t home runs, and Wall Street remains a speculative bet.
So yeah, streaming is the future. But it’s probably a little different from what we’re imagining, with fewer horses running the race.
7. People will ultimately pay for streaming.
Currently, there are approximately 50 million paying subscribers to on-demand streaming platforms. But there are hundreds of millions of listeners paying nothing beyond their mobile or broadband bill. And assumptions that paying subscribers will reach 100 million, 200 million, or 1 billion are completely speculative.
Maybe they just want it for free, or not at all. We don’t really know at this stage.
8. Streaming killed piracy.
Free streaming put a serious dent in piracy, especially torrenting. But it didn’t kill it. Part of the problem is that the number of broadband-connected users keeps increasing worldwide, and that means more people hitting torrenting platforms. But fans have routinely shown that they are more-than-willing to pirate and torrent if the content they want isn’t readily available via free streaming.
9. Artists exclusives are in any way good for the music industry.
Mega-artists like Drake, Beyonce, and Kanye West are making tens of millions off of streaming exclusives. But the only people who benefit from those deals are those specific artists, and the fans that happen to be subscribed to the platform with the exclusive. Everyone else is out in the cold, forced to wait or pushed back towards piracy (see #8).
But even worse, exclusives like these actively punish fans that have made a decision to pay for streaming music, and discourages them from paying in the future. It’s bad for the long-term health of the music business.
10. YouTube is in any way beneficial to artists or the music industry.
YouTube is great for two groups: (a) fans, who get everything for free; and (b) YouTube, who makes millions. Everyone else is getting left out, simply because YouTube’s royalty rates are so incredibly low, it’s almost not worth tracking. Channel monetizations are a joke, and artists are really only on the platform because they have to be (see #1).
11. You’re getting all of your streaming royalties.
Lady Gaga’s ex-manager Troy Carter flat-out admitted that major labels never paid his artists a dime from streaming. But even artists outside of the major label system are probably missing something, either from incorrect metadata, a lack of knowledge over where to collect streaming revenues (from all sources), or what certain royalties like ‘mechanicals’ actually are.
12. Apple Music can somehow coexist with iTunes Music Downloads.
It’s oil-and-water; it will separate eventually. Already, iTunes users are complaining that the two formats are fighting within the same app, that downloads are getting mangled, and that download exclusives make no sense for streaming subscribers. Eventually, streaming will become so large, and downloads so small, that having them side-by-side will seem ridiculous.
13. All streaming platforms pay the same.
They definitely don’t. There are extreme differences in what streaming services pay, and artists that know the difference are making more money. Tidal and Microsoft’s Groove are paying multiples over what Spotify and YouTube are paying, which means getting on a featured Groove playlist is worth a lot more.
Image by Will Temple (CC by 2.0).