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Jared Leto Explains Why Streaming Is Short-changing Artists…

66ème Festival de Venise (Mostra)

From a recent interview with The Hollywood Reporter

quotation-marksThe market’s going to react to what people want, and it obviously seems like there are a lot of people out there who want to stream music, because it’s fun.  But there’s also another side to it: there’s a perception that music is free.  Even if you’re paying for a premium service, you still have music at your disposal.  It’s the sort of thing where sometimes you watch a movie on Netflix, and if it’s not good in the first five minutes, you’re likely to just turn it off and go look for something else, not knowing that if you put in the time, maybe thirty minutes later, maybe your mind will be blown.

“We all know that, as content creators, artists and musicians, a great deal of our work is going to be streamed, but the issue is that artists are getting the short end of the stick.

“The streaming companies are paying record labels, but record labels are not paying artists. I’d welcome anybody to debate that.”

“I think artists don’t have a seat at the table when it comes to being part of the conversation about the future of technology and creativity. There’s a blueprint being made, and artists should be part of the design.”

“Record companies are taking giant advantages, they’re taking pieces of stock options or technology companies in exchange for guaranteeing rights to artists’ streams, there’s all kinds of deals being made, and artists aren’t a part of those deals.”

“I think we’re in a state of transition — the power [record labels] once had has been eroded, with the help of technology, social media, and new and alternative distribution methods, but there still isn’t a clear new model.  You see people experiment and
have success, but largely, they’ve been one-offs and gags, and they haven’t been duplicated with much success.  I do believe it’s an industry ripe for disruption and has a massive amount of potential, but for people taking a traditional route, when you get to a place that we are at, I think that things are likely to get worse before they get better. You have to be innovative or you die.

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Comments (38)
  1. Willis

    Finally, information on the subject from an expert.


    Reply
    1. Anonymous

      He’s half right, there’s no label to blame when artists are going direct to streaming sites and STILL not making any money. I think Mr.Leto would find this out very quickly if he were to self release an album.


      Reply
      1. Anonymous

        ” there’s no label to blame when artists are going direct to streaming sites and STILL not making any money. I think Mr.Leto would find this out very quickly if he were to self release an album”

        That’s definitely true.

        But self-release is still the most reliable way to avoid streaming during release.


        Reply
        1. Anonymous

          Fundamentally wrong to say record labels have nothing to do with it if you release independently.

          The reason there’s no money being made when an artist is using a streaming site is because most of those streaming sites broker deals with record labels and publishing companies to have access to those company’s catalogues. Profits per song are then paid out in a percentage weighted towards majors and skewed against indies, hence the petty royalty rate per-song. That is also in conjunction with the defined statute for mechanical royalty rates that justifies those royalty rates.


          Reply
          1. Anonymous

            “The reason there’s no money being made when an artist is using a streaming site is because most of those streaming sites broker deals with record labels and publishing companies to have access to those company’s catalogues”

            Yes, that’s one of the two reasons. The other is that audio-only streaming failed as a business model because it just wasn’t profitable.

            But I think we should look ahead now and focus on the ways to avoid streaming for artists who still have the choice.


            Reply
            1. GGG

              Eh, I don’t think there’s really enough going on to say it failed yet, plus we’re still in a transitional phase of tech. Every audio-only streaming company except Spotify is small to the point of might as well not exist to most people. Then you have Spotify, who has done such little marketing to the point of might as well not exist to most people. Even Beats having kinda shitty numbers doesn’t really say “streaming is failing” to me too much, for probably the same reason Apple hasn’t jumped in yet; people aren’t even necessarily ready to stream. It’s not that they don’t/won’t want to, it’s that people still like “having” stuff.

              The fact that so many people still pirate so much music, whether it’s torrents, or ripping from YouTube, (not to mention vinyl sales) says to me that people still like the idea of ownership. Otherwise, Spotify would have like a 100 million free users. Apple obviously has a huge reason to hold out and keep trying to get people to buy music. But I also think they can easily turn a substantial chunk of those 800M accounts into streaming subscribers, and knowing Apple, probably figure out a way to get people to spend $300 on some device, like a streaming watch or something silly. But they will wait, because there’s still enough value in the iTunes store. I think the generation of people who truly don’t care about “ownership” of music is still too young to be making any decisions or even consciously think about it. 40s and up have gone most of their life with physical product, 20 and up were in our prime during the switch so still have nostalgia for physical but enjoy digital, and below 20s still contains a large chunk of people who don’t have phones/device for streaming. As that increases, as it has been and will only grow more, the desire for having music will increase. And as studies seem to show, people aren’t growing up and buying music off iTunes. But they are buying stuff. So wait a few more years til that generation is in college and bam, Apple’s streaming service will crush everything.


              Reply
              1. Anonymous

                I don’t think ownership or gadgets will be the deciding factors.

                People just want a fast & easy service that offers everything digital for $10-20/month.

                Could be YouTube or iTunes or, more likely, a new giant. Only one thing is certain: It won’t be Spotify. :)


                Reply
                1. Anonymous

                  Streaming actually makes total sense, it’s a tried and true business model that supports with TV industry for decades with money musical artists can only dream of. There is no fundamental reason why music needs a “sales” business model.


                  Reply
                  1. Anonymous

                    Like it or not — audio-only proved to be a failure.

                    It just didn’t attract enough customers to make money.


                    Reply
                    1. Anonymous

                      streaming is not working because it too is competing against (not replacing) illegally free at the top of the food chain. the downstream economics from zero dollars don’t look so good…


                    2. Anonymous

                      “streaming is not working because it too is competing against (not replacing) illegally free”

                      You’re turning the whole thing upside down:

                      Streaming is the direct consequence of mainstream piracy. Remove mainstream piracy, and streaming — audio as well as video — is dead.


                    3. GGG

                      But it’s not. People still listen to radio, whether it’ terrestrial, satellite or internet. People still buy CDs. People still buy vinyl in an increasing amount. Spotify IS growing, however slowly. A substantial amount of YouTube views are actually just listens because it’s a media search engine. You can’t keep just saying the idea of audio-only consumption is dead and purely compare YouTube to Spotify. You have to compare it do life, which does not say most people are staring at a screen while they listen to music.


                    4. Anonymous

                      “You can’t keep just saying the idea of audio-only consumption is dead”

                      OK. I also think movie-only consumption is dead.

                      People want a supermarket.


                    5. GGG

                      Sure, if there was an option to play videos on Spotify or search audio only on YouTube, one of those would take over for sure. I don’t disagree people love choice, but I don’t think either is necessarily winning out over the other in terms of what people want. I mean, if anything, more time listening to music is still spent without a visual, based on radio alone.


  2. Anonymous

    “You see people experiment and have success, but largely, they’ve been one-offs and gags, and they haven’t been duplicated with much success”

    It’s certainly true that innovation is more important than ever, but finding the best strategy is not exactly rocket science:

    1) Don’t sign away your rights unless you absolutely have to.
    2) Never use Spotify or similar services during release week.
    3) Use a good anti-piracy service during release week.
    4) Use short YouTube videos for exposure.


    Reply
    1. sank

      “Never use Spotify or similar services during release week.”

      some people don’t have that option to block Spotify from distro.
      i don’t agree with it i think all distros must provide this option:

      1) make release avail to all streaming
      2) block all streaming except those selected….
      3) block from all streaming for [select time period], then release to selected retailers.

      BUT NO DISTRO WILL DO THIS or bother with the hassle unless you are Skrillex or Metallica or whatever’s big today.


      Reply
      1. Anonymous

        Just use CDBaby or Tunecore, upload a transactional download version of the album, and then 90 days later upload a special edition “streaming version” of the album. Problem solved.


        Reply
      2. Anonymous

        “some people don’t have that option to block Spotify from distro”

        True, that’s the reason for #1: Don’t sign away your rights unless you absolutely have to. As I said above; self-release is still the most reliable way to avoid streaming during release.

        “all distros must provide this option:
        1) make release avail to all streaming
        2) block all streaming except those selected….
        3) block from all streaming for [select time period], then release to selected retailers.”

        Indeed. TuneCore and similar services already offer the options you mention.


        Reply
        1. JTVDigital

          When using our service, just untick the Spotify box if you do not want your music to be delivered there. Simple.


          Reply
          1. Anonymous

            Nice — Spotify is so unpopular now that it’s a selling point for you to explain how easy it is to avoid the service. :)


            Reply
          2. Anonymous

            Uncheck Spotify….hmm, that’s simply genius. I am signing up today.


            Reply
    2. Anonymous

      “3) Use a good anti-piracy service during release week”

      … and here’s a few:

      Toppletrack
      Audiolock
      Digitalrightscorp
      Nukepiracy
      Muso
      (I’ll post the links in a separate comment below)

      These services make a huge difference, particularly during the first weeks. They work for torrent sites, cyberlockers, social media, etc. and send automated DMCA notices so you don’t have to.

      They can’t remove stolen property from criminal sites like the Pirate Bay, but they do remove Pirate Bay links from Google which is extremely important.

      Most of the services charge $1-5 per track/month, and many have free trial periods so you can compare takedown speeds and other important features.

      Highly recommended…


      Reply
    3. hippydog

      Horrible advice for an indie..
      Great advice if your a well known artist.


      Reply
  3. JTVDigital

    Good to hear an artist who is not complaining but has understood what the underlying problem of this streaming ‘issue’ is: (big) record labels who are not accounting and paying streaming royalties properly / in due course.

    As an artist ask yourself why you need a major label before signing and what would be the downsides of the shiny deal that’s just been offered to you.

    Going through a major for your digital distribution has no added value compared to using an independent digital distributor.
    The only thing you’d get with a big company is less % on royalties since they always try to align it with the “old-world” model inherited from physical.
    Within 5 – 10 years CDs will have disappeared, and it will most likely not be replaced by any other physical media.
    Downloads sales’ trends are down.
    Streaming is the future. Like it or hate it but you need to embrace it for not becoming completely invisible.
    It’s better to be one in a million in the sea of Spotify than not being foundable at all.

    Jared is right when saying consumers perceive that music is free. They do. This is reality and we all have to live with that.


    Reply
    1. Anonymous

      “Streaming is the future”

      Video streaming is the future, but audio-only failed.


      Reply
      1. GGG

        What percentage of YouTube videos of music do you think are actually watched?


        Reply
        1. Anonymous

          What percentage of Spotify tracks are actually played?


          Reply
          1. kevin

            How can anyone say audio-only streaming has failed? I feel its far too early in the game to say that…


            Reply
            1. Anonymous

              No, it’s late and the game’s almost over.

              The world’s most successful audio-only streaming service has been around for more than five years — and it’s still a failure:

              It’s not only losing money by the hour; it’s also losing crucial and influential releases such as Adele, Coldplay, Black Keys, Taylor Swift and Beyoncé. Releases that turned windowing into the most interesting trend in the industry today.


              Reply
              1. Anonymous

                Is Netflix a failure because it lacks a metric ton of published movies?


                Reply
                1. Anonymous

                  No, consumers are not yet used to having a complete movie catalogue at their fingertips.

                  But four important factors separate Netflix and Spotify:

                  Netflix makes money. Netflix reinvents itself constantly. And Netflix is respected among content creators because of factor number four: Netflix creates its own — extremely popular — content.

                  Spotify, on the other hand, loses money, stays the same, is hated by content creators and never creates anything of its own.


                  Reply
          2. GGG

            Irrelevant. Or I could just ask you what percentage of YouTube video have next to no views.


            Reply
    2. Versus

      “Jared is right when saying consumers perceive that music is free. They do. This is reality and we all have to live with that.”

      This is not reality; just a decadent phase of cultural devaluation. What goes down can come up. Cultural values and norms of morality can be changed.


      Reply
  4. R.P.

    Thanks for stating the painfully obvious from years ago already. Oh, and thanks for using the words “disruption and innovative”… -_-

    why would anyone ask this guy about music?


    Reply
  5. Heiko Schmidt

    The underlying question isn’t asked here.
    With a global inventory of 650 million songs, 20 million new coming in every year, music business is getting mature and music becomes a commodity. Took me a long time to finally realize the ugly truth – and still scares the hell out of me – coming from the creative side.
    Only, in the existing hit driven (and focussed) music market, consumer interest shifts to known brands of superstars – who are able to skip music income for marketing exposure – because it is just a very tiny portion of their revenue mix. And all others – artists, songwriters, music producers, artist managers and indie record labels and indie publishers are suffering – left with little revenues from streaming – very costly to administrate and collect – because it is all international income. Bottom line: 200 Super Stars and top level music exec’s are making more and the rest of us less.
    So it comes down to the real question: Who is paying for your music and who is paying to promote your music.
    Answer: The existing system of players and rules will not provide a solution. Commodities needs a real market place, where everyone can trade it – and market value is provided by market participants and supply and demand – not knowledge, power and network (like it is now).
    And this isn’t a dream anymore – we are opening now: https://www.youtube.com/watch?v=aIySN2Dbc34


    Reply
  6. Versus

    The music industry is “ripe for disruption”???
    Hasn’t it been completely disrupted already?

    It’s time for reconstruction, not more disruption.


    Reply

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