iTunes Chart-Toppers (a/o February 21st):
It's one of the sharpest statements yet from a major label executive. And it comes just as a growing number of bands are withholding their content from Spotify, on the grounds that it directly cannibalizes discrete album and singles purchases from places like iTunes. "That argument is totally bogus," Universal Music Group head of digital Rob Wells told an audience in London, as reported by Billboard.
Don't tell that to Coldplay, Adele, or the Black Keys, but Wells pointed to six months worth of data to defend his assertion. "We've done an awful lot of analysis over the last six months in terms of value to individual artists and specific genres from subscription services around the world and specifically through the model of payment, comparative to other modes and methods of consumption," the executive continued. "Every single one of those [studied] bands has earned more money from its album being on Spotify than it has from being on any other services within a [set] period of time."
The Black Keys are the latest to bail, citing cannibalization as a major reason. But they also noted that major labels have a lot more to gain from Spotify than artists, an assertion that is backed by lopsided deal structures. In the case of UMG, the label has not only reaped huge upfront licensing fees from Spotify, but they also carry a stake in the company. "There's a lot of stuff about some of these services that people don't really know," the Keys' Patrick Carney stated in December. "It's set up to be little more fair for the labels than it is for the artists, and that's why we made that decision."
HansH Wednesday, January 25, 2012
Jasper Wednesday, January 25, 2012
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ZZZ Wednesday, January 25, 2012
"But they also noted that major labels have a lot more to gain from Spotify than artists, an assertion that is backed by lopsided deal structures. In the case of UMG, the label has not only reaped huge upfront licensing fees from Spotify, but they also carry a stake in the company."
This. Case closed.
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JSS Wednesday, January 25, 2012
Since I've started using Spotify (as a paid subscriber) my music buying has increased. I'll be clear the bulk of that is catalog material that I've passed on over the years but gravitated to after having the opportunity to sample. BUT it has included some new material that friends, bloggers, etc. have deemed 'must hear.' I'm not the musical gambler I was 15 years ago. I don't have the disposable income I had then. I have to spend wisely. There are more out there like me who are streaming music and converting it to money in artists’ pockets via album and ticket purchases. New media is the way forward. Artists and Execs who turn away from this truth for the purposes protecting a failing status quo are perpetuating the industry's recurrent error, making the absolute wrong decisions at the right time. Still haven't bought the Black Keys. It's going to be a while before I do since there are other acts I can hear today...
steveh Wednesday, January 25, 2012
Many people, led by Spotify founder Daniel Ek, have trumpeted the idea that with total access to streamed music will replace music ownership.
If people who take up streaming cease to purchse downloads or CDs how can this not be cannibalization?
I mean it's so damn evident and simple, is it not?
By their own megalomanica definition the streaming services have admitted the likelihood of cannibalization. How can this be denied?
gaetano Wednesday, January 25, 2012
Great point.
To many who use the service, it's just common sense...especially when one considers that for the premium rate you can stream offline...which is essentially turning Spotify into what Itunes is...
Why buy when you can rent (and pretty much own)? At that point it's a semantic argument. Why do I go to blockbuster and pay late fees when I can keep my netflix as long as I want??
Then of course there's all the other lovely features that come with the service that send it over the top as an experience compared to Itunes etc.
Until the service scales up (literally millions or tens of millions) this will be a viable argument. Also, there still no metric to measure how Spotify thwarts piracy overall, or how and if it cannibalizes sales in the end. There are too many different user demographics and consumer purchasing habit profiles to say definitively one way or the other.
In the end I would like to see it work, because from my findings it would be a more fluid and sustainable model (once about 20 million paid users are on it). But as an artist I understand the reality of it all as we're in the midst of the paradigm shift.
Sweeping generized statements made by less than coal faced major label execs aren't helping the situation in my opinion..just creating more backlash and speculation on both sides of the fence.
J Wednesday, January 25, 2012
This isn't how it works. It isn't cannibalization because the argument is that there is a much bigger base of consumers stealing music than purchasing, the accepted number is 95% of all music consumption is illegal. If you can scale streaming services to eat away at illegal downloading the new base of customers more than makes up for it.
To give you some numbers, itunes has 170 million registered users, around 30% of that make regular purchases. BitTorrent's software has around 200 Million users, VUZE has around 200 million, Megaupload had around 150 million monthly and thats not including the thousands of other sites you can get content from. Just looking at those major players the illegal base is 550 Million compared to a maximum potential of 170 million on itunes which is actually far smaller of a number.
If you can get it to scale, it will be profitable for everyone involved. The challenge is for these services to get to that point which none have proven it possible (yet).
Visitor Wednesday, January 25, 2012
gaetano Wednesday, January 25, 2012
I'm having trouble with a few parts of this, 95% being the accepted number being one, was that on this site? Shouldn't sales stats and their dips reflect that a bit more than just the halving of sales revenue we've seen over the past decade?
The other is that all the speculative nature of the traffic on those file lockers being compared the concrete Itunes sales data.
This isn't to say that there aren't enormous amounts of things being transferred that infringe copyright or eat away at sales, it's just hard to compare hard data, and then throw out numbers that are pretty aribitrary all things considered.
That said, I think I undestand what you're putting forth. Piracy vs Purchasing, rather than Piracy vs. Purchasing vs Streaming.
The only problem is if that's truly the cannibilization argument, then quite frankly streaming services scaling have nothing to do with anything.
People pirate because it's convenient and they don't want to pay ANYTHING. Not 5$ not 10$. They don't want to be beholden to anyone. If you can make streaming convenient, and completely free and have no holes in the catalog that's the only way for it to work.
that looks to be impossible. I'd love to be proven wrong though...
Darryl Reeves Wednesday, January 25, 2012
J,
You're making too much sense dude!
Especially pointing out the 550 million members of Torrent/File Sharing sites.
This is what I posted on hypebot last week in response to Zoe Keating's post about her $32 statement last month from streaming services:
"Thanks Zoe for posting your numbers . . . . I did some calculations and here's what I came up with. Currently, Spotify is available in 12 countries. The population of internet users in those countries is 590 million. Spotify has 12.5 million of those users. From those 12.5 million users + Rhapsody/Napster streams, you made $32 in a month. If we scaled the membership of Spotify/Rhapsody up to just half of the 590 million, 295 mil, you would receive $755.00. If you further heavily marketed yourself on streaming services, I wonder what the potential would be for monthly income? What if you had 5x the listeners scaled? That would be $3,776 a month. Seth Godin said something to the effect of, "the online model is about spreading, the offline model is about scarcity" My educated guess would be the more your presence spreads online, the more you're worth offline, i.e. vinyl/deluxe cd's, merchandise, concert tickets, appearances, master classes, licensing, endorsements, sponsorships . . . which still results somehow in more sales. As it stands, the most pirated music/movies is the most sold. Back to Seth Godin . . . the online model is about spreading, which is what will ultimately happen with streaming services, as they are viral themselves. Spotify's success is being built off it. And Cee-lo is slated to make 20 million in 2012 where very little of it will be from album sales. All signs are pointing to a new road." Regardless of Rob Wells being one of the leaders of the evil empire ;-) I believe he is totally correct. Seth Godin is correct. The enemy is not piracy, it's obscurity. Right now, it's an issue of scale. 12.5 million Spotify users vs. 550 million Torrent/File-sharing sites??? Who is really cannibalizing sales right now? And what if you could monetize those 550 million onto streaming sites? How much would Zoe be making per month then? Blue Note has put out a LOT of jazz records since the 1940's, but when I found out that it took some 40 years for one of John Coltrane's most accessible and heralded albums, "Blue Train" to go gold, that showed me how much the other less financially successful artists on Blue Note faired. Given, the music was for a niche audience. And it's no secret that many of those artists died broke. Meanwhile, Herbie Hancock's "Headhunters" was the first platinum jazz album, because it spread beyond the jazz market into the R&B and Free-Form markets at the time. Keyword, "spread". The online model is about spreading, the offline model is about scarcity. But the silver lining is that if streaming services reach scale, the online model will still generate revenue. . . . .and check out my band! http://www.darrylreeves.com
SMOKEFREE Friday, February 17, 2012
Visitor Wednesday, January 25, 2012
You want the artists to be OK with the pennies from Spotify because you did "an awful lot of analysis over the last six months"? SIX MONTHS?!
What the hell is wrong with people these days. I mean, seriously. So many financial experts in this country. Economics professionals with decades of know-how on their backs. Decent people who try to make a living among sharks. Maybe, just maybe, we could ask for their analysis for a change?
Or is someone scared that the experts might expose the scam to the public?
Peter Wednesday, January 25, 2012
The Kids Know Wednesday, January 25, 2012
When Spotify launched I signed up for a premium account and gave the login information to my 17 year old daughter. Her response: "I am so bummed that I spent hundreds of dollars buying music on iTunes". She then asked "Why would anyone ever buy music again?"
Her iTunes purchasing has dropped nearly 100%. That's the reality folks.
Science Wednesday, January 25, 2012
The problem with this is it isn't scientific. The problem you're outlining is totally legitimate in some circumstances, but for every time you can point out that I can point out people who's purchases have INCREASED based on streaming services. I'll tell you I personally have been using streaming services for pushing 2 years now and my music purchases have increased. I've purchased far more vinyl than before, I've went back and bought entire cataloges based on trying it before I bought it on Rdio.
My experience is something I can point to for lots of people I know. I also can point to a lot of people who have switched to Spotify when it launched from stealing, because its far easier than downloading a bunch of files. These people went from spending 0 dollars a year to $120 a year on music, thats a massive jump.
I should also note the average person that legally buys music only spends $50 a year on music. Thats a factual number not my assumption, thus if you switch everyone to spotify you're actually getting them to spend $120 a year on music, over double what they're currently spending each year.
True Wednesday, January 25, 2012
Actually what he is saying is true. I represent a large cataloge and we've done similiar experiments as well as I've seen several confidential studies from others which say the same thing. Of all of these releases there has been no indication of any change at all to sales based on Spotify availability. Zero. Including the artists listed above.
The problem everyone needs to remember is you aren't keeping your music off of streaming services, you're just giving it exclusively to torrents, file sharing sites, Youtube and Grooveshark. The files are still very much available regardless of their availability on streaming services.
aa Wednesday, January 25, 2012
the statement is overly reaching and broad without data to back it up. windowing to Spotify makes sense for some artists, and doesn't make sense for others.
his statement's generalization does not make sense. what does make sense is that there are other factors (ownership in Spotify, upfront license fees that artists don't see) that make Spotify more attractive for UMG in particular.
FarePlay Wednesday, January 25, 2012
The vandals stole the handles.
This is a tough one. From one perspective, these cloud services like Spotify have found a way to low, low bid to get content and skirt the issue of P2P sharing. Artists signed to major labels without clout are auctioned off for pennies on the dollar.
Plus, I'm not sure how I feel about Sean Parker.....
The digital experience, as far as compensation goes, has been a disaster. Who would have ever thought that music would be back in the singles business after morphing into a legitimate "album oriented" buisness in the 60's.
While there is no question that iTunes and its' predecessors were needed to shore up the damage of Naptster et al, it plunged us back into a singles world; creating a major disconnect between the artist and the fan. Not to mention crushing, no annihilating album/cd sales.
Personally, I prefer to buy the cd and am ready to get back into vinyl. It is just a different experience.
And among the other things that our organization (and yes we would love for you to join us), FarePlay, wants to stand up for is the CD. Because the thought of just having a digital file of something that matters so much to me is downright depressing.
will buckley, founder, http://www.fareplay.org
@joelsephed Wednesday, January 25, 2012
MeMeMe Thursday, January 26, 2012
I would need to see the actual data. FRom what Rob is saying, the study compared only four bands, all of whcih had an album on Spotify -- so how can you say that Spotify does not cannibalize anything, if you have no control group.
If anything, the study might be bogu
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