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Streaming Isn’t Saving the Music Industry After All, Data Shows…

riaa2013a

(source: RIAA)

Yes, streaming is reversing recording industry declines… in countries like Sweden and Norway.  But it’s still not happening in the largest music markets, including the United States, the largest recorded music market in the world.

According to data recently released by US-based recording industry trade group RIAA, streaming revenues are still failing to compensate for plummeting physical and download income.

In 2013, recording revenues fell below $7 billion for the first time ever, according to inflation-adjusted stats released by the RIAA.  The group has been tracking recording revenues since 1973.

Here’s a closer look:

(a) Streaming revenues are booming, thanks to players like Pandora, Spotify, YouTube, and Sirius XM…

riaa2013b

(source: RIAA)

(b) But downloads were earning more…

riaa2013c

(source: RIAA)

(c) And CDs were earning much, much more…

riaa2013d

(source: RIAA)

Written while listening to Down.

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Comments (193)
  1. Anonymous

    …begs the question why the labels are willing to lose most — or all — future download sales in return for streaming revenues that account for less than 10% of the current download revenues.

    (Several labels recently accepted YouTube’s new controversial contract that is forcing content providers to release their entire catalogs on YouTube’s free service for online AND off-line “streaming” on release day. This means that consumers no longer have any reason to buy downloads.)


    Reply
    1. Vail, CO

      Because they don’t have a choice! Would you rather have 15% of your old business, or 0%?


      Reply
      1. Anonymous

        Musicians and labels certainly have a choice:

        YouTube and other streaming services only made $220 million last year — about the same as vinyl records – while download sales made $2.8 billion!

        In other words: Numbers prove that streaming is worthless compared to download sales.

        So don’t give your download sales away in return for streaming revenues — and that’s what you do if you sign YouTube’s infamous contract.


        Reply
        1. GGG

          I don’t even think Spotify calls themselves “massively successful.”


          Reply
      2. TuneHunter

        There is many avenues to make real money on music – time to remove SLEEPING DOGS from management of music. They are abusing and misusing someone else property.

        You do not have to be a genius to SEE $100B MUSIC INDUSTRY. Streamers in current mode will SHRINK $100B of music goodwill and $43B of actual Radio revenues to just 35B in 2025.

        WHY BOTHER?


        Reply
        1. DNog

          Do us all a favor and at least use proper grammar when you type your repetitive spam replies. At least it won’t be as annoying to read. Thanks.


          Reply
          1. TuneHunter

            Become my translator, you might become hero helping to return MUSIC INDUSTRY back to NORMAL.


            Reply
            1. DNog

              I’ve got a better idea, don’t post the same comment on every article on this website. Everyone wins! Yay!


              Reply
              1. TuneHunter

                Invest some time in Discovery Moment Monetization – you might become my advocate – it is the only way out of current drift to oblivion.

                All current streaming and web Radio business models are COMPRESSING $100B of music goodwill and $43B of actual global Radio revenue to at the best $35 of ASHES.

                Charts above should help you to believe me!


                Reply
            2. Kevin Robb

              What is Normal. We could go back to the normal when actors and musicians (minstrals) played anywhere they could attract a crowd and hope some attendees threw a copper or two into their bowl.
              We could go back to the normal when composers played to buyers in any store that sold sheet music hoping they could sell a few sheets that the store held on consignment.
              We could go back to the normal when there were literally thousands of rockabilly and early rock artists paid to have their music recorded then spent the next months trying to get some DJ to play it.
              We could go back to the normal when the major record compnaies made 95% of their income on a dozen or so artists.
              So which normal would you prefer.


              Reply
    2. Anon

      The labels aren’t worried, they’ll make up for the revenue losses on the backend when they sell their stake in the digital distributors and get 10-11 figure payouts.


      Reply
      1. Paul Resnikoff

        That’s plugging a leak, not saving an industry or truly adapting. Getting $1 billion off of Spotify is the strategy, sure, but it buys time, not a new business model or sustained growth.


        Reply
    3. Anonymous

      In order to fully understand the fact that streaming failed, it should be added that YouTube and other streaming services only made $220 million for the music industry last year — about as much as vinyl records — while download sales made $2.8 billion, according to the New York Times.

      In other words:

      Those who still believe in streaming might as well believe in vinyl.

      So let’s forget about streaming and vinyl and all the other failed platforms of the past.

      Numbers prove that the only way to make money from recorded music today is to sell downloads.

      And you only sell downloads if you stop streaming your songs for free on services like YouTube and Spotify on release day.


      Reply
      1. Anonymous

        At one point a little over a decade ago the numbers said the only way to make money selling music was via CD’s.

        “Today” is a very fleeting concept, and last I checked the streaming numbers showed downloads sinking and streaming growing….exponentially, and three new absolutely massive platforms entering the market.

        Call me a futurist, but I actually believe in streaming, and vinyl…and while the net rev on both are rather different, the numbers seem to look rather bright for them.


        Reply
        1. Anonymous

          Futurists believe in crowdfunding, not streaming.


          Reply
      2. Tony

        The problem with the music industry is the “one or nothing” mentality. Rather than embrace streaming and explore additional revenue, or get creative, they cling to archaic models. It’s no different than when Napster hit. Stealing isn’t cool, but had the industry gotten on board back then, stealing music wouldn’t be so ubiquitous.


        Reply
    4. Erik P

      Labels like it because they’re in control of their product once again.


      Reply
  2. GGG

    I mean, if anyone thought streaming rev would bring back late 90s, early 00s CD revs, that’s your own fault for being dumb.

    The issue is just recorded music in general actually bringing in any money.

    If you think people will download music in 5 years, you’ve got another thing comin….


    Reply
    1. Anonymous

      +1


      Reply
      1. Anonymous

        -1


        Reply
        1. FarePlay

          GGG, what your really talking about is a zero sum game. People have been talking about alternative streams of revenue for over a decade and it just didn’t happen. If artists can’t sell their music and that downward slide of sales continues to happen, it is going to get very bleak out there.

          The die is cast, interactive streaming destroys the music financial eco-system and drives whatever profits there are to the distribution channel. And that doesn’t even look like a reality. Why do you think Westergren liquidated all his stock holdings as quickly as he could? Why anyone would be a cheer leader for this outcome is beyond me. Unless they have a vested interested in this scenario.


          Reply
          1. GGG

            First off, a decent model of it wasn’t implemented until recently. And yes, people sort of talked about alternative revenue streams for the last ten years, but people talked more about how to get people to buy music again for the last 15 years. And which has worked out better? Which has grown?

            Why do you hate the idea of monetizing almost every time plays a song? It makes no sense.


            Reply
          2. GGG

            Also, Westergren cashed out because that’s what tech entrepreneurs do. Build a company until they can make their millions. That’s what everyone would do. You’d cash out millions in stock if Fareplay was worth it, don’t even try to say or believe otherwise.


            Reply
            1. FarePlay

              Now we’re talking.


              Reply
  3. jw

    C’mon, Paul. Why is streaming having a bigger effect in Scandinavian countries in the US? Because they didn’t delay Spotify’s launch. We’re years behind those countries in consumer adoption because of the labels’ digital download fetish. The recorded music industry itself is responsible for writing that story.

    Streaming will transform the industry when revenue is being generated from all consumers LISTENING to music, not just all consumers actively PURCHASING music. That’s the vision of streaming, not a 1-to-1 replacement digital downloads to streams. Understanding the streaming economy requires vision & foresight… streaming is not justified by whether or not it can keep pace with the decline of music ownership, that’s completely missing the bigger picture.

    Obviously it’s not STREAMING that’s doing something wrong, compared to digital downloads or physical purchases. It’s the US MUSIC INDUSTRY that’s been doing something wrong, compared to the Scandinavian music industries.


    Reply
    1. David

      I hazard a guess that streaming revenue is bringing an increase in total revenue in Scandinavia because total revenue has a lower baseline to start from. Sales of recorded music since 2000 crashed even further in Scandinavia than in the US because piracy was even more rampant in the home of The Pirate Bay, and sales of downloads never caught on in the same way as they did in the home of iTunes and Amazon. I repeat that that is my *guess*, because I haven’t found all the data, but I would certainly want to see an inflation-adjusted graph for Scandi revenues since 2000 (not just 2010 or 2008) before getting too excited about the ‘increase’.


      Reply
      1. Anonymous

        I think there is another explanation:

        Swedish, Norwegian, Danish and Finnish social democracies and welfare systems (democratic ‘soft-core’ variations over and deviations from communist ideology) made a wide range of non-commercial ideas very popular in Scandinavia during the past century.

        Very few of these ideas will ever make it in the US. :)


        Reply
        1. David

          So you don’t have the figures either?


          Reply
          1. Anonymous

            Sorry no, but I think most Scandinavians will confirm my theory.


            Reply
            1. jw

              >> Sorry no, but I think most Scandinavians will confirm my theory.

              LMAO. You are delusional.


              Reply
              1. hippydog

                >>>> Sorry no, but I think most Scandinavians will confirm my theory.

                >LMAO. You are delusional.

                +1


                Reply
                1. Anonymous

                  Are you sure you ever heard of the Nordic model?

                  Streaming is text-book social democracy: Individuals are not expected to be stars; society is based on social solidarity, co-operatives and a huge public sector.

                  That’s why streaming succeeded in Scandinavia and failed in the rest of the world.


                  Reply
                  1. hippydog

                    Quote “Are you sure you ever heard of the Nordic model? Streaming is text-book social democracy”

                    Ever heard of Canada?
                    Then your argument falls flat, as we are also very social democratic..

                    Sorry, but your argument is basically .. “a dog has tail, a cat has a tail, ergo a dog must be a cat.”


                    Reply
                  2. jw

                    Bullshit. Look at the colorful graphics at the top of the page.

                    How far off is the trajectory of streaming versus the trajectory of subscription/streaming versus single/album downloads? Consider iTunes store launched in 2003, & Spotify launched in 2011. And the digital download had 4 years of runway before iTunes launched… Napster launched in 1999. (You could say Spotify had runway via Rhapsody, but Rhapsody didn’t have anywhere NEAR the press coverage of Napster, plus the consumer technological landscape didn’t really support streaming at the time.)

                    You’re operating entirely on bias, despite the facts. Streaming is a failure? That’s absolutely ridiculous. Absolutely ridiculous.

                    Moreover, as I’ve said time & time again, the real money in streaming is in monetizing all music LISTENERS rather than just music PURCHASERS. And that mainstream adoption is years away… maybe 2 years, maybe 5 years, maybe more. But it’s the future. And not just in Scandinavia, it’s the future for every country that is built on mobile technology & cloud access to data. There’s nothing intrinsically socialistic about streaming. NOTHING. Would you say the same thing about Netflix? About cable tv On Demand services?

                    You’re totally biased, there is no reasoning behind your arguments. They’re bologna.


                    Reply
                    1. Anonymous

                      Well, you can’t deny that streaming failed outside of Scandinavia.

                      It has been around for years and years — and still loses money by the hour.

                      At some point you just have to let it go.

                      Look at the numbers: The only thing that makes financial sense today is download sales. Combine that with user-friendly crowdfunding and you have a winner.


                    2. jw

                      Streaming’s success or failure isn’t dependent on whether or not it grows in revenue proportionate to dwindling cd & digital download revenue. That’s an arbitrary criterion.

                      If you want to define failure, look at formats whose sales are falling. CDs are a failing format. The digital download is a failing format. You can define true failure as consumer abandonment, which is exactly what we’re witnessing. Look at the chart. If, year over year, the color section for a given format is growing, the format is succeeding. If it’s getting smaller, the format is failing.


                  3. Anonymous

                    Last I checked the Nordic model was built off of billions of dollars in oil….granted that boom is tapering off now, the last century or so seemed to serve them well.


                    Reply
                    1. Anonymous

                      You’re turning everything upside down. The Nordic model is more than a hundred years old; oil came decades later and had nothing to do with it.

                      I’m not saying that the model doesn’t work btw, it certainly does for Scandinavia; I’m saying it’s never going to work anywhere else.


                    2. jw

                      I would love for you to explain precisely why music streaming works in Sweden, but won’t work in the U.S. What are the factors directly involved? You can’t just say, “Streaming is working in Sweden, but Sweden is a Nordic country, ergo it will not work in the U.S., which is not a Nordic country.” That’s not real logic.

                      The Nordic Model would apply to, for instance, government funded art projects. So you could say that Sweden’s model is unique in that albums that receive government grants don’t necessarily have to recoup. But the success of Spotify is relative. Even if you factor in those recording costs, the industry has still rebounded to 69% of it’s size relative to 10 years ago (adjusted for inflation), assuming government payouts remain consistent (again, adjusted for inflation). Additionally, a lot of the Swedish music industry’s revenue (certainly not all, but a lot) is based on the sale/streaming of American releases, so the Nordic model is only relevant to a percentage of songs streamed.

                      The only other distinction related to the Nordic model so far as I can tell is socialized internet access. That may make Swedes some degree more likely to upgrade from the ad-supported tier, but this is much less a product of the Nordic model than it is the U.S.’ supremely fucked up internet access situation. Even still, Netflix’s stateside success suggests that this is a non-issue.

                      In reality, the relevant distinctions are these… 1) Sweden had the wisdom to observe consumer behavior & the foresight NOT to adopt the singles-oriented digital download model, which is essentially a revenue eating cancer to the U.S. industry. You could argue that they didn’t have to bed up with Apple because their new releases weren’t being funded entirely by sales revenue, they were being subsidized by tax dollars, whereas the U.S. industry was more in a situation where it had to saw off an arm or a leg in order to survive, but ultimately they chose to invent a solution that made sense, rather than just taking what was offered. And none of that means that the U.S. rebound won’t eventually come despite the ultimately flawed transition to digital downloads, it just means that we’ve simply retarded the format transition & delayed the rebound. And the other distinction is that 2) Spotify has been around longer in Sweden, so is much closer to mainstream adoption than the U.S. This is a result of, again, the U.S. industry delaying Spotify’s launch with licensing negotiations. Streaming isn’t about converting cd purchases or digital downloads to streams, it’s about monetizing music LISTENING, rather than just music PURCHASING. If you haven’t wrapped your head around that, you haven’t wrapped your head around streaming.


        2. Anon 2

          Dude you are a Fox news Shill. Scandinavian countries are among the most intensely competitive, hi tech capitalist countries in the world. They just have a better grip on handling balance than the US. From where we stand the US is completely Jurassic in almost everything related to the well being of its population. We actually pay less tax than the average American and get way more back for it than a bunch of drones.


          Reply
          1. jw

            >> We actually pay less tax than the average American and get way
            >> more back for it than a bunch of drones.

            Classic.


            Reply
        3. lassial

          There is no unified Scandinavian model or market.

          Before streaming, Sweden and Denmark had a pretty decent digital downloads sales, Finland did not. Now the Finnish market _decline_ has stopped, mostly due to Spotify. But I would not argue that it is still sustainable. In Finland, YouTube is still the biggest streaming music service, but due to quite recent agreement with local IFPI, it is unknown how much money it will return for the artists.

          As for the claim
          a wide range of non-commercial ideas very popular in Scandinavia
          I think that is widely exaggerated. Besides the political principles these countries may share, the consumer world is a similar place for competition as in US, for instance (not to mention that EU/Scandinavia is not the only region subsidizing industrial production)


          Reply
      2. Paul Resnikoff

        I have some data I can look at, but you’re right, this isn’t an ‘increase’ in those countries as much as it is just a bottom. But, recoveries are recoveries, just don’t be foolish enough to think anything is soaring above past highs.

        Maybe someday; not now.


        Reply
        1. jw

          Paul, interested to see what you get. Here’s my calculations.

          Swedish Recorded Music Industry Revenue (source: GLF via DMN)
          2003: $36,052,508 2014 USD (212,173,468 2003 SEK adjusted to 242,910,985 2014 SEK)
          2013: $25,122,471 2014 USD (169,086,490 2013 SEK adjusted to 169,304,635 2014 SEK)

          What that means is that Sweden’s industry is more than 69% of what it was in 2003 (the year the Pirate Bay launched).

          Compared to the U.S., which was at ~$15b USD (adjusted) in 2003, & is now at ~$7b, which is like 46%.

          So I would say you’re all very wrong.

          Keep in mind torrents are generally file PACKAGES, meaning torrenting actually encourages the consumption of full albums. So they never experienced the compression inherent to the singles-oriented digital download transition. We’re seeing that the transition from CDs to piracy to streaming will actually, in the longterm, be the healthier route.


          Reply
  4. Anonymous

    This article and the anonymous post above imply that there is a choice for the recorded music industry — to either support streaming or not support streaming. If there was an option to not support streaming, the recorded music industry would be able to quickly close down uncooperative streaming services like Grooveshark in markets with rule of law (if not services like VKontakte in markets with no government support). Therefore, recent history and practical experience clearly show that there is no option not to support streaming. The music industry has to work with cooperative streaming partners to maximise revenues from this new form of music consumption. It is too early to tell whether the reduction in average music consumer ARPU will be outweighed by a volume increase as growing global connectivity creates new markets and new consumers where music sales never existed before.


    Reply
    1. Anonymous

      “recent history and practical experience clearly show that there is no option not to support streaming”

      Wrong!

      All practical experiences with windowing — Adele, Coldplay, Black Keys, Taylor Swift, Beyoncé, etc. — prove that consumers buy millions of albums when they can’t stream the songs for free during release week.

      Time Magazine even selected Beyincé as the cover star for the magazine’s special 100 Most Influential People issue because her total streaming-boycott during release shattered music-industry rules — and sales records.

      Streaming just didn’t work, it’s not an alternative to anything; it only made $220 million for the industry last year. Compare that to download sales for $2.8 billion.


      Reply
      1. Anonymous

        Let’s assume that you are correct and that, if the industry could shut down all streaming services, this would support legal album download volumes. How would the industry do that? First, the industry would gradually pull its license from all legal streaming services (i.e. Spotify, Deezer). Once this happened, streaming users would migrate to unlicensed streaming services (i.e. Grooveshark, Vkontakte). These unlicensed services do not respect windowing strategies. In fact, they upload new albums as soon as they are released. Therefore, by shutting down legal streaming services, you would end up with a market with dominant, unlicensed streaming services with all the latest content regardless of any windowing strategy. This would then undermine any positive impact from windowing strategies. Am I missing something? It seems that the success of windowing strategies rely on supporting the popularity of cooperative streaming services…


        Reply
        1. Anonymous

          “How would the industry do that? First, the industry would gradually pull its license from all legal streaming services”

          I’m not suggesting it’s going to be easy for the majors to get out of the mess they’ve made for themselves — particularly by signing the controversial YouTube contract.

          But then again, they’re only trapped for 5 years and I can assure you they’ll run away as fast as possible in 2019. They will have a lot less money by then, but they’ll have so much more experience.

          “by shutting down legal streaming services, you would end up with a market with dominant, unlicensed streaming services with all the latest content regardless of any windowing strategy”

          But we’re already there — you’re describing 2014!

          And yet millions of fans choose to buy their favorite albums.

          So, to repeat myself, why don’t we ask why?

          Is it because fans want to support the musicians they love? If that’s the case, then let’s see if crowdfunding can be made even more user friendly.

          Is it because all the new anti-piracy laws begin to work? If that’s the case, then let’s put even more effort in educating our politicians (they do have other things on their minds too, you know).

          Is it because the combination of short, free YouTube previews and an easy-to-use paid download platform like iTunes was perfect? If that’s the case, then let’s create a new and even better alternative to YouTube: a site that still allows short previews to co-exist with exclusive iTunes releases.


          Reply
          1. Anonymous

            But then again, they’re only trapped for 5 years and I can assure you they’ll run away as fast as possible in 2019. They will have a lot less money by then, but they’ll have so much more experience.

            2018: Google announces acquisition of Universal Music, Warner Music and Sony Music for 5 Big Macs and a Chinese finger trap.


            Reply
            1. Anonymous

              “and a Chinese finger trap”

              lol


              Reply
      2. Casey

        That bar looks a lot higher than $220 million….


        Reply
        1. Anonymous

          All numbers are from New York Times last week.


          Reply
          1. truthiness

            $220 million is wrong. It’s more like $1.2 billion, but why let details get in the way of a good snipe hunt.


            Reply
            1. Anonymous

              “It’s more like $1.2 billion”

              No, I think you’re confusing streaming and internet radio. YouTube, Spotify and similar services only generated $220 million for the industry last year.


              Reply
              1. truthiness

                You are confused. Those companies are all flavors of streaming. There is: (i) “ad-supported” streaming, and (ii) “subscription” supported streaming.

                YouTube alone paid more than $220m to “the music industry” last year. So did Spotify. So did Pandora. So did Vevo. Each of those companies paid that money to “the music industry” for the right to stream music to an end user. Stop spreading misinformation. Learn something.


                Reply
                1. Anonymous

                  “YouTube and other so-called on-demand, ad-supported services made $220 million in revenue for the music industry last year, about as much as vinyl records; by comparison, download sales were $2.8 billion”

                  SOURCE: New York Times, June 24, 2014

                  Again, you’re confusing internet radio with on-demand streaming.


                  Reply
                  1. jw

                    Quit being difficult & check the source’s source.

                    Paid subscription: $628m
                    Ad supported streaming: $220m
                    ———–
                    Streaming Total: $848m

                    Soundexchange (Pandora, etc): $590m

                    And of course these are US ONLY figures for 2013.


                    Reply
      3. hippydog

        Quote “prove that consumers buy millions of albums when they can’t stream the songs for free during release week.”

        wow!
        thats some dodgy logic, not even based on fact..

        Windowing causes an uptick, it does not cause a 100% increase.. maybe a 5 to 20% uptick, which then becomes less then 5% after a few weeks..

        either way..
        it doesn’t matter..
        The old format is almost dead (CD’s) , an 80% decrease in 10 years!
        Downloads will most likely follow the same route..

        Streaming pay outs suck ass, but at least it actually has a chance of competing against torrents..


        Reply
        1. Anonymous

          “not even based on fact”

          Yes, it is based on fact:

          Beyoncé and other super successful streaming hold-outs literally proved that consumers buy millions of albums when they can’t stream them for free.

          I’m aware that it defies everything Spotify has told you — but it’s a fact, and the proof is in the pudding (the sales numbers) for all to see!


          Reply
          1. GGG

            Yes, if you are Beyonce, or another enormous band with ubiquitous exposure you can sell a lot of records still. We’ve been over this.

            Now, show me some indie band that sold 500K records and I’ll give your argument some clout.


            Reply
            1. Anonymous

              GGG… we’re discussing if consumers buy their favorite songs when they can’t stream them for free.

              Some posters here say they don’t — but they can’t argue with facts.

              And facts say that millions of consumers buy their favorite songs if they can’t stream them for free — even though they could steal them instead.

              I think we should take a good close look at the ‘hows’ and the ‘whys’ instead of trying to deny facts.

              So exactly why is it that millions of fans choose to buy music when they could steal it instead?


              Reply
              1. GGG

                Yes, SOME consumers still do. Just like SOME consumers still buy CDs or vinyls or DVDs or whatever else. But MOST don’t, which is the issue here.

                Beyonce proved that Beyonce can do whatever they fuck she wants because she’s Beyonce. However, selling to 1/62nd of your fans (based on arbitrary Facebook fan metric) isn’t exactly the best statistic in the world. And the rest of the examples you use are, again, not only ubiquitous superstars, but their sales bottom out almost immediately, with a few exceptions like Adele, Mumford’s first album, etc.

                As for the hows and whys, why don’t we focus on universal streaming so every single person on the planet is generating revenue when they play a song! A million people buy Beyonces album, great. That’s $10M. What if the other 61M streamed music. They’d be generating half a million bucks PER SONG at the least. Instead probably 60M of those people probably don’t even know Spotify/Rdio/Rhapsody/etc exist.

                For why they buy? Plenty of reasons, just like no old tech has ever died in one night. It think it’s bizarre how you look at a million sales and think that’s a win, as opposed to looking at what sales were over the last 10-15-20 years. 100M people could sign up for Spotify tomorrow. Many others will still buy downloads, still buy CDs, still buy vinyl etc. They like owning something, it’s easy to pop on iTunes, they care about the artist, whatever. Let’s all thank those people, but most don’t/won’t give a shit.


                Reply
              2. GGG

                People still buy vinyl and CDs and typewriters, etc too. Doesn’t mean they are largely relevant. Also, still continue to find it amazing that you think major, arena filling artists selling half a million records is a positive thing. Leave digital DLs available, window if you want, but don’t deny the future of streaming in whatever form. It’s dumb.


                Reply
                1. Anonymous

                  You didn’t answer my question:

                  Why is it that millions of fans buy music when they could steal it instead?


                  Reply
                  1. GGG

                    Oh, the master avoider of answering questions is yelling at me now to do so? Classic.

                    Anyway, for many reasons. Why do people still buy CDs? Because they just fucking want to. Gonna tell me CDs are relevant? Reasons for buying: they want a CD, they want a vinyl, it’s easy to just log into iTunes and buy in one click, they want to support the artist, they don’t know how to pirate, they want to “own” something, they don’t know streaming exists, YouTube doesn’t have the full album in good quality, they don’t know how to rip it off YT, etc etc. Buying music isn’t going to disappear over night. Your entire argument hinges on this idea that if like one person still buys music somewhere that means the world at large is still interested. Beyonce, a person with 62M Facebook fans, sold a million records and that’s a win for you? You are in so much denial it’s ridiculous. We can do anything we want to squeeze out every last dying penny from music sales, I have no problem with that. But doing it at the expense of trying to figure out a better paying streaming model is just stupid. The longer we wait, the less leverage we will have.


                    Reply
                    1. Anonymous

                      Thanks, lots of good thoughts. Let’s look at them:

                      * “they want a CD, they want a vinyl”. So let’s give them something physical along with the downloads.

                      * “it’s easy to just log into iTunes and buy in one click”. So let’s ask Apple (and I mean over and over again, until they get it) to make it even easier and faster.

                      * “they want to support the artist” So let’s make crowdfunding easier to use on all artists sites. You’re not going to hear me recommend YouTube ever again but their new Fan Funding initiative is the way to go (obviously not in their version, though — it takes 5% PLUS a 21 cents cut per donation which translates into a 26% cut if most fans donate $1).

                      * “they don’t know how to pirate” So let’s make piracy even more complicated for ordinary users.

                      * “YouTube doesn’t have the full album in good quality” So keep it that away!

                      * “they don’t know how to rip it off YT” So let us keep asking Google to block YT downloaders.

                      That’s a start.


                    2. GGG

                      * “they want a CD, they want a vinyl”. So let’s give them something physical along with the downloads.

                      - Those options are still there. By now most (new releases at least) vinyl come with DL codes. The point is still the desire of people to own a physical thing is clearly diminished. The future is about everything available on one device. Do you own a smart phone or do you carry around a duffel bag of all the stuff it’s replaced?

                      * “it’s easy to just log into iTunes and buy in one click”. So let’s ask Apple (and I mean over and over again, until they get it) to make it even easier and faster.

                      - We can do that until we’re blue in the face, won’t make everyone who’s moved on buy music again, if they ever did. I mean, I have a friend who also subscribes to Spotify and prior he MAYBE bought like 1-2 albums a year. A subscription and/or higher paying streaming service isn’t only about replacing those that bought music, it’s about monetizing the VAST MAJORITY that never did or bought very little.

                      * “they want to support the artist” So let’s make crowdfunding easier to use on all artists sites. You’re not going to hear me recommend YouTube ever again but their new Fan Funding initiative is the way to go (obviously not in their version, though — it takes 5% PLUS a 21 cents cut per donation which translates into a 26% cut if most fans donate $1).

                      - I could get on board with this. There’s a site FeedtheArts I was pitched on for a band, that uses rev share to support artists. That could potentially work. Haven’t looked into it enough yet.

                      * “they don’t know how to pirate” So let’s make piracy even more complicated for ordinary users.

                      * “YouTube doesn’t have the full album in good quality” So keep it that away!

                      * “they don’t know how to rip it off YT” So let us keep asking Google to block YT downloaders.

                      - All that, sure. Imagine, every single person listening to music ever was giving the artist half a penny to a penny because it’s all tied into subs or ads. That shit would add up real fast….


                    3. Anonymous

                      So it seems that pro-streamers and anti-streamers might agree on crowdfunding.

                      I have to admit it took me a while to warm up to the idea. But there’s a lot of evidence that it works. Check out Patreon, if you haven’t already.

                      Then there’s this Arena thing — I’m not sure if anybody except hippydog heard about it, :) and maybe it’s just another scam, but see some of the last comments in the “F*QK It: Here’s the Entire YouTube Contract…”-story.


                    4. GGG

                      Eh, I mean, I agree on crowd-funding if there’s a way to do it beyond just constantly being asked/begged for $25 every day of your life if you’re friends with more than 10 people in bands. The idea of just transferring ad rev is good, and might get more people involved if it’s not their own money really.


            2. David

              Windowing is certainly not confined to big commercial acts like Beyoncé. I recall it was a long, long time before Boards of Canada’s latest album got onto Spotify. And the hot new UK indie band London Grammar released their first album in September last year and it still isn’t on streaming services. It doesn’t seem to have done them any harm: the album has been very successful in the UK and Europe (not yet so much in the US), with total sales so far (according to Wikipedia) of over 350,000. Indeed, if we just consider the logic, windowing makes a lot of sense for an indie artist. The arithmetic is simple: it takes over 100 streams to equal a sale, so selling 10,000 copies of an album is worth more than a million full-album streams. For a niche artist there may not be a million people who have even heard of them. For a big commercial artist the logic is more evenly balanced. Hundreds of millions of people have heard of Beyoncé or Taylor Swift or Miley Cyrus, many of whom would be interested enough to stream a new album but not necessarily to buy it. For them the balance of advantage may be with a short window period or none at all.


              Reply
              1. GGG

                Of course windowing isn’t confined to large artists, the issue is it’s effectiveness. For any of those acts, I can’t prove a negative, but you bring up the potential effect yourself. “For a niche artist there may not be a million people who have even heard of them.” If you play a million people a London Grammar track, how many do you think would buy it or the album, even if they liked it? Using the data of sales from the last 15 years, not many. Now, we have a way to monetize all those people that never bought music but still listen. How many more would stream their tracks and possibly become fans? I think a substantial amount. And many of the old school people in here severely underestimate the power of simple fan-metrics, no matter how arbitrary. The amount I can ask/demand for licensing/tracks/remixes whatever between a band with 5K Facebook fans and 50K Facebook fans is enormous.


                Reply
                1. David

                  From a purely financial view, I think that for any niche artist *not* windowing would be crazy.

                  By a niche artist I mean one who has a following (not necessarily hardcore fans) in the tens of thousands. Less than that is a beginner or a hobbyist, more than that is getting into the lower reaches of the mainstream.

                  For a niche artist in this sense consider the downside risks of windowing versus not windowing.

                  NOT WINDOWING
                  The main downside risk is that people in your ‘following’ who would otherwise have bought the record will just stream it instead. A key point to grasp is that these are *permanently* lost sales. It is very unlikely that one of your followers will take a considered decision not to buy the record after streaming it then change their mind months later. The only way to claw back the lost sale is if the follower streams the record a large number of times (more than a hundred). But this puts them into the category of hardcore fans who would buy the record anyway.

                  WINDOWING
                  The most obvious downside of windowing is that the artist foregoes revenue from streaming during the window period. But for a niche artist this would usually be peanuts, and unlike lost sales it is not necessarily lost permanently. With windowing there is the potential to make up for lost streaming revenue when the window is ‘lifted’.
                  A less obvious downside is the possible loss of sales to people who would have ‘tried and buyed’, but who would not otherwise have bought the record. This is surely a relatively small group of people, and as before there is no reason to suppose ‘try and buy’ sales are permanently lost, rather than just deferred.

                  I think the downside risk is much larger and clearer for the ‘not windowing’ option. The only counter-argument I can see is that an artist might occasionally lose the opportunity for very high volume streaming in the immediate post-release period. It always seems to be possible to find examples of little-known bands or artists (usually in Sweden!) who get astonishingly high streaming volumes. But these are the freakish exceptions, which is not a basis for rational decision making. It is like someone deciding to buy a house because they expect to win the Lottery.


                  Reply
                  1. bp

                    it’s closer to 150-200 streams equaling a sale, otherwise i agree with your points about windowing being a good idea.


                    Reply
                  2. GGG

                    I think windowing is good some of the time for sure, but when I don’t agree with it, it isn’t really an issue of money, it’s an issue of fans. For example, a band I work with is set to release an album for July. They have 18K Facebook fans. Now, that’s big enough, and based on past sales, we’ll probably sell over a thousand records regardless, but it’s not big enough that we’re remotely known outside already fans. So we still need substantial PR. So that’s what the tricky part is. We have come to the conclusion that we’d much rather have the music accessible, where we still collect SOME money, while the PR is going on, and maybe lose 100 sales, than block curious people from hearing the music and becoming fans. It’s all a game until we see more data. Nobody really shares it though, and it’s also pretty impossible to ever know since you can’t go back in time and redo releases.

                    But yea, a band like The National or something is probably better off windowing for a bit to get tens of thousands bucks more.


                    Reply
                    1. Anonymous

                      “We have come to the conclusion that we’d much rather have the music accessible, where we still collect SOME money, while the PR is going on, and maybe lose 100 sales, than block curious people from hearing the music and becoming fans”

                      I’m frustrated beyond belief because I no longer can use my Non-Cannibalizing YouTube Previews argument. :)

                      You have no idea how annoying this is. I now know how TuneHunter would feel if he couldn’t mention Discovery Moment Monetization ever again.


                    2. GGG

                      I wouldn’t buy that argument anyway. 18k fans is still unknown. Nobody is searching for previews or going to be anything but disappointed when they saw one. We have behind the scenes videos up, sure, but not bullshit song previews.


                    3. Anonymous

                      YouTube previews were certainly not bullshit.

                      Why do you think Hollywood uploads trailers instead of movies?

                      YouTube previews + exclusive iTunes releases = the most powerful combo ever.

                      So Google screwed it up, and now it’s over.

                      But that just means we need a YouTube replacement.


          2. hippydog

            “not even based on fact”

            Yes, it is based on fact:

            LOL!
            um.. no its not..
            heck, lets start with the “fact” part..
            right now there is no real numbers even showing how much of an uptick was based on the windowing..
            Beyonce received a heck of a lot of free press by the news of the windowing, and then the FACT that it was heavily advertised on top of that..

            again!
            how much was due to windowing?, and how much was due to it being a new release? How much was due to it being a special promotion ? (etc etc)

            I’m not arguing that windowing causes an uptick..
            I’m simply saying the difference is most likely not as much as you think it is..

            (P.S. I normally dont argue with “anonymous” as I dislike trying to figure out if I am even talking to the same person)


            Reply
            1. Anonymous

              hippydog, what I said is indeed a fact:

              “consumers buy millions of albums when they can’t stream the songs for free during release week.”

              Instead of denying facts, you should ask yourself why millions of consumers buy their favorite music when they could steal it.

              When we know the answer, we know where to go from here.


              Reply
              1. hippydog

                >>>>> “not even based on fact”

                >>> Yes, it is based on fact:

                >> LOL! um.. no its not..

                > hippydog, what I said is indeed a fact:

                repeating yourself does not make something more “factual”..

                what you have is a theory..
                a plausible theory I give you that..
                but its not a “fact”

                http://dictionary.reference.com/browse/scientific+fact


                Reply
                1. Anonymous

                  hippydog, do you understand the difference between documented facts and undocumented theories?

                  It is a documented fact that “consumers buy millions of albums when they can’t stream the songs for free during release week.” Several successful streaming hold-outs prove it.

                  It is an undocumented theory when Spotify claims that consumers will steal music if they no longer can stream it for free. Several successful streaming hold-outs prove it to be wrong.


                  Reply
                  1. hippydog

                    Quote “hippydog, do you understand the difference between documented facts and undocumented theories?”

                    i do, but obviously your definition of what is a fact is completely different from mine…

                    The only FACT that would PROVE your THEORY,
                    is if two identical artists (or two artists where the numbers can be normalized to each other)
                    both release at the same time and one windows and the other doesn’t..

                    but you dont have this proof.. no one does. We have been thru this argument multiple times..
                    A bonafide pro economist would have trouble normalizing two artists to each other (at least right now as there is not enough numbers to crunch and average out the multiple errors..)

                    I’m actually seriously thinking of writing into Freakanomics and seeing if they would be willing to try and come up with some actual FACTs..

                    but until someone does,
                    the numbers,
                    the proof,
                    the facts,
                    are NOT there.


                    Reply
                    1. Anonymous

                      Let’s put it like this then:

                      Consumers bought millions of albums when they couldn’t stream the songs for free.

                      It’s not a matter of opinion. It’s not up for discussion. It happened. They did it. I can prove it.

                      Get it now?


                    2. GGG

                      They also bought millions when they could very easily steal it for free. Your argument would only hold up if there was some industry wide growth of record sales.


                    3. Anonymous

                      “They also bought millions when they could very easily steal it for free”

                      Exactly. :)

                      Spotify said people would steal their favorite songs if they couldn’t stream them — but that was just a lie.

                      Millions of fans proved that.


                    4. hippydog

                      Quote “Consumers bought millions of albums when they couldn’t stream the songs for free.
                      It’s not a matter of opinion. It’s not up for discussion. It happened. They did it. I can prove it.
                      Get it now? ”

                      Wow,
                      I’m done this back and forth.. How many posts did you mention you could “prove it” and never once did..?
                      sad..

                      You cant prove it..
                      Why?
                      cause any thing you show me i will ask the simple question..
                      “what percentage of the initial sales was due to it being a new release, and marketing, and what percentage was due to windowing?”

                      YOU CANT ANSWER THAT question! because you dont have the ability to separate the numbers out..


  5. Anonymous

    Interesting how much the rate of decrease in overall music revenues has really leveled off as streaming has come to the forefront.

    If the music industry’s leading streaming player (Youtube) paid as much as Spotify pays per stream, we’d be making as much from streaming as from downloads.


    Reply
    1. Paul Resnikoff

      Funny, we’ve all noticed the elephant in the room now… though I think it’s more a wooly mammoth 17 times the size.


      Reply
  6. Casey

    Streaming still has a long ways to go in the US. Especially when it comes to paying subscriptions. The number of paid subcribers continues to remain rather low. With carrier bundling/promotions hopefully we will see a sharp increase in the number of paid subscribers in 2014 which in turn will generate more revenue. Ad revenue per hour from free users is also climbing as is the number of users and the number of hours per user. The idea that free users are valueless is changing.


    Reply
    1. FarePlay

      The charade’s over guys. Listeners never demanded “streaming” the streaming industry created a cheap way to access music without an upside for anyone with skin in the game, but the principal stakeholders and investors at the point of sale. These aren’t companies built on a solid foundation of fiscal responsibility, but credit default swaps.

      Spotify is the shadow of Napster, they pulled the con and used equity to get what they wanted. They even operated on a bit torrrent P2P network that they are currently taking down. Hmm, wonder why.

      Stop dancing, the music’s over. Paul Williams, ASCAP’s Pres., presented a telling point in yesterday’s Congressional Subcommittee Copyright Hearing. In 2011 Lady Antebellum’s smash hit “Need You Now” garnered 72 million plays on Pandora. The four songwriters received $1,500. each from Pandora. A million plays is worth $16. or two hours of work at Walmart.

      And you’re still arguing? Scale, my ass.


      Reply
      1. Casey

        That is interesting. But by some estimates, Pandora pays between 2-4.5 times more per listen in songwriter royalties than terrestrial radio. Of course no one likes to think about the significance of that when you are trying to milk Pandora for more money.

        By ASCAP’s own math, 1 million plays is equal to $80 in all. It gets divided up among songwriters, publishers, and the PROs themselves, but that isn’t something Pandora can control.
        http://www.ascap.com/~/media/files/pdf/advocacy-legislation/ascap_onepager_facts.pdf


        Reply
        1. FarePlay

          Yeah I caught that from the gentleman from the NAB during the Congressional Copyright Hearing. Once upon a time Terrestrial Radio could accurately claim that they sold music and they did. Terrestrial Radio will now endure significant collateral damage from this entire fiasco.


          Reply
      2. GGG

        Charade of streaming demand? Have you heard of YouTube? It’s this little site, gets a couple visitors a month, I think. I think it’s going places.

        Also, they didn’t receive $1500 from Pandora, they received it from SoundExchange.


        Reply
        1. FarePlay

          I would be very interested to hear more about YouTube from you guys. Now there’s a hot topic.


          Reply
          1. Anonymous

            I don’t think anybody wants to talk about YouTube anymore.

            It was there, it was great, and now it’s gone.


            Reply
      3. Oliver

        How much should they get? Or just more?


        Reply
        1. FarePlay

          The delta between what they deserve to earn and what interactive streaming can pay as a replacement for an artist to sell their music is so vast that it simply can’t work. Many, including myself, question whether the existing services are financially viable even with these rediculously low licensing fees.

          Pandora, who is far closer to break even than any of these other major players, including Spotify, has and is aggressively pursuing any and every opportunity to pay less. Sirius is doing everything they can to promote formats that play pre-1972 recordings, that until legislation changes, are free.

          Music is treated as a loss leader for other business like mobile phones. Going into a Sprint Store and see all the Spotify messaging, sign up for Amazon Prime and get their streaming service.

          Indie artists will begin to understand that they need to pick and choose, outside of terrestrial radio, where they want their music to be available. Hopefully, artist owned distribution channels will arise from this virulent destruction.


          Reply
          1. Casey

            If you want more money, I suggest you find a way to make streaming profitable for the services. Companies cannot operate in the red forever and the idea offering music at a loss from companies like Sprint isn’t going to last either. They are not a charity for artists.

            Streaming is the future. There is no going back.


            Reply
            1. Anonymous

              “If you want more money, I suggest you find a way to make streaming profitable for the services”

              Why would we want to do their job? :)

              If Spotify and Pandora can’t make money, they’ll just have to die. That’s not a problem.


              Reply
      4. GGG

        The streaming charade? Have you heard of this little site called YouTube? It gets some hits, I think.

        Also, Lady Antebellum wasn’t paid $1500 each from Pandora, they were paid $1500 each from SoundExchange.


        Reply
      5. Casey

        Not sure what happened to my other reply. But as I mentioned in it, there are estimates that Pandora pays between 2-4.5 times more to songwriters/publishers per each unique listener than terrestrial radio. ASCAP loves to ignore that.

        And according to ASCAP themselves, 1 million plays on Pandora generates $80 which gets broken up between songwriters, publishers, and ASCAP. If the songwriter is not getting enough of that, that is ASCAP’s fault.


        Reply
        1. Anonymous

          “And according to ASCAP themselves, 1 million plays on Pandora generates $80″

          Which is good because…?


          Reply
          1. GGG

            It’s not that it’s good or bad, it’s that many of these “pro-artist” arguments in this whole debate are just trying to line their own pockets, too.

            It’s why I get upset when people say Pandora pays some artist this much, instead of clarifying that it’s SoundExchange or a PRO, who takes a cut, and their might be 3 songwriters, none of whom are performers, etc.

            Or when people say Spotify pays this much to (signed) artists, instead of the label pays royalties.

            It seems innocuous omissions to some, but it’s incredibly important information in how money flow works, and leaving out relevant facts to bolster an argument is harmful to the whole debate.


            Reply
            1. FarePlay

              GGG , your just clouding the conversation, trying to make it about the labels or the PROs or whoever. Or invalidating the conversation because you have another number from somewhere .

              Triple what these streaming services pay and it still doesn’t work for artists.


              Reply
              1. GGG

                Oh, I’m sorry to cloud the conversation with relevant information instead of dumbing it to to a uselessly and flagrantly false portrayal of what happens in the industry. My bad.

                Also, I’d gladly take 1.8 cents/stream. Again, you have this completely incorrect notion that some band that can’t live off 500 streams at half a penny would have 500 $1 single sales if streaming didn’t exist. They’d probably have like 10 sales max. So I’m sorry I’m costing the band lunch at the horrible risk of more people knowing you exist.


                Reply
  7. KnobTwiddler

    but vinyl sales are ‘booming’ – they’re gonna single-handedly save the industry! ;)


    Reply
  8. Oz

    As far as pop goes, CDs were always a scam anyway – an overpriced piece of plastic with alot of filler.
    structurally they never actually fitted into the dominant pop paradigm of producing cheap, high volume product.
    As a product they’re actually more suited to lower volume, more expensive, high quality music in non-top 40 genres, jazz, classical, whatever.
    To be harsh, the real value of much music – artistically & monetarily – has been exposed during the current transition. And that value is pretty negligible.


    Reply
    1. Versus

      Would not you not also allow that there are great pop and rock albums, with little or no filler?


      Reply
  9. J

    Labels are reactive, they follow where the cattle go, the cattle start grazing elsewhere, the Labels follow to the new patch, the new patch for music currently is streaming…


    Reply
  10. J

    Labels are reactive, they follow where the cattle go, the cattle start grazing elsewhere, the Labels follow to the new patch, the new patch for music is currently streaming…


    Reply
  11. take action

    If you have a Twitter account, tell this guy what you think of the YouTube contract. He is one of the people responsible for it.

    Google Germany GmbH Legal Counsel – Copyright and Litigation

    twitter.com/Georg__Nolte


    Reply
  12. Humble

    Just some simple mathematics:
    Music spending with Spotify Premium: 10 Euro x 12 = 120 Euro a year.
    Average music spending in 2003: 17 Euros a year.
    When people log in to iTunes more than half of their money (out of 70 %, so basically 35 %) goes to movies and apps and only 35 % of the funds goes to the music industry. When they log-in to Spotify 70 % of the revenues goes to the music industry.
    If the music industry can work to increase the number of music subscribers and embrace both models (as they did in Scandinavia) the result will be that fans will embrace it as well and average spending on music will be higher than ever before.
    Your negative attitude unfortunately is a central part of the problem!


    Reply
  13. DRMHunter

    In the US Streaming Isn’t Saving the Music Industry YET! Still to early to tell. It has only just begun.


    Reply
  14. johnc

    1. So many people listening Music “on the go”…… the hearing-aid industry will be making a lot of Money.
    2. The Audio quality of streaming and mp3 downloads is really bad, most of the consumers are growing up without any notion of “taste”.
    3. The big Labels have invested in Spotify and Co., AND receive huge license payments from the streaming Providers.
    4. When the VC´s stop investing tons of Money, this model will be dead, as there is not perspective for decent revenue in streaming.


    Reply
  15. Reality

    Music is still as valuable as it ever was and will be. What we’re looking at here is a group of millionaires who are sad because they can no longer make money like they used to and they have no innovation in them to go further. The labes, RIAA, ASCAP, and whole bunch of them are no more useful than the US Postal Service. Another outdated industry we need to let die.

    Things change, industries change, this is reality as it always has been. No one guaranteed the manufacturer of the wooden wagon wheel that he could always make the same profits as long as he complained loudly and kept enough money flowing in to congress.


    Reply
    1. FarePlay

      Your argument is dated. That argument is from the Lars Ulrich era , over a decade ago. Not sure about the postal service insight.

      You need new material.


      Reply
      1. Anonymous

        ASCAP can go to hell. They take money from artists doing live performances, even if that artist is only playing songs that they wrote. They use this money to enrich the top 200 songwriters and pretty much no one else.


        Reply
        1. Tippy H

          Agreed 101%


          Reply
    2. Casey

      The Postal Service and the RIAA are nowhere near on the same level. The Postal Service is absolutely essential to our economy and anyone who says otherwise is simply an idiot.


      Reply
  16. Veteran - US MUSIC INDUSTRY 1970-today

    A couple of observations.

    First = I have never worked for one of the “major” labels. I have only worked as a lower level independent my entire life. That said, most of you all seem fixated on the “industry” as a national / international structure. I, and my clients, have never ever reached that level, and yet, here I am 40+ years in the game, still earning a reasonable living – as are many of my friends, peers, colleagues, and clients.

    Indie artists will begin to understand that they need to pick and choose, outside of terrestrial radio, where they want their music to be available. Hopefully, artist owned distribution channels will arise from this virulent destruction.

    I don’t know shit about major label structure. I also do not know the back end of streaming services. I teach “control the message, and control the delivery of the message.”

    RE YOUTUBE: Forgone conclusion = it is now necessary, whether we like it or not. I’ve sat in several meetings this year with potential buyers. EVERY SINGLE ONE OF THEM DEMANDED A YOUTUBE PRESENCE. I, nor anyone I am involved with, cares about revenue from YouTube since there isn’t any revenue in it for us. We care that it assists us in selling the “show.”

    Last night I managed a show for a local band of note and I told the audience to pony up to the merch table because that was the “new” record store. People “obeyed.” They bought the cds and the vinyl. I see this in action daily.

    A member from another known regional act showed up with a van full of vinyl and began seeding hi profile members of the audience with free vinyl. WHY? Because we’re going to go out and talk to our friends who are responsible for building shows etc.

    The question that always has to be asked is “how much do I want to make a year, and what’s my strategy for doing it.”

    As part of an overall business strategy, nickles and dimes matter —- or I would not still be in business after all these years. I never turn away from a penny dropped on the ground.

    As a history buff I can assure you that what we are seeing is perfectly natural in the world. Devolution happens. Industries die. New industries arise. I’m not interested in anything more than how to help folks make $30,000-$40,000 a year. Over 99% will fail to achieve that. That too is natural.

    RE radio … don’t count on it. I service radio.

    RE final thought … for years I heard, “let’s take down the industry.” Okay. That happened. The INDUSTRY got taken down. Why are folks crying about it? Look up the words manufacture and industry and reflect on that. Then, if you’re truly a “local” independent band looking to make a living IN MUSIC related activities, get busy. I know too many who are successful who light the path for others coming up behind them.

    and all you big “industry” types who hang out here? wow …just wow. I am happy being a peon. I’d rather made 30 doing what I do than making 30 collecting a check from behind a desk any day.

    Peace


    Reply
    1. hippydog

      Hey!
      we are trying to have an argument here.. you throwing around common sense and stuff is not helping things..

      ;-)


      Reply
    2. FarePlay

      The way you deal with YouTube is you start posting videos on other video streaming sites as well. You don’t just post on YouTube. Over time, other services will become more widel used and you end up with multiple points of visibility. Over time these become viable alternatives. Otherwise you are just a victim of a monopoly. It will take time to rebuild this business, starting from the ground up.


      Reply
    3. FarePlay

      RE-YouTube. While I agree that YouTube is the natural default for many, BUT people do use search and go to whatever site has what they want. The part your leaving out in your comment is the fact that you are using a local strategy to create a fan base for the bands you represent. (Cause it doesn’t sound like your bands are signed to a major label.) That’s why you can sell product at gigs, they have a following, a following that may have been supported by videos on YouTube.

      But the reality is, your band sent them to those videos on YouTube. And if the bands are good, those videos were passed along by existing fans to their friends. That is primarily your social media strategy, correct? You’re talking about you and the artists you work with living a modest life, which leads me to believe that none of your bands have had a monster viral hit on YouTube. As few do in reality.

      So let me put this another way. I think you’ll agree that monopolies are a problem. They wield to much power and are able to do exactly what YouTube is doing with music and Amazon is doing with literature. So why not hedge your bet and add your videos to other sites as well, which I’m sure your doing anyway. And over time if you choose to point your fans to alternative sites, YouTube’s death grip will begin to lessen.

      It may take years to happen, but if you suck it up and just keep doing what your doing the monopolies will become even more powerful and more predatory. That just seems to be the nature of the beast these days.

      Who knows, someday Grooveshark may be up for sale, cheap, and musicians and their handlers will not have to learn all that back room stuff after all. Certainly stranger things have happened in this age of Disruption.


      Reply
    4. stephen craig aristei

      Hey” Veteran” – I totally agree….And would love to make “contact” with you……What people don’t realize because of lack of experience, is that what you are doing “is the business” ! Having been in this game for now over 50 years (Holy fuck, am I that old…LOL !), I too have witnessed the expansion and contractions of many industries and businesses, including the one we take part in. I find it fascinating how no one seems to have a grasp on this industries’ history…..I think it goes to the point and importance of how “important factual accuracy” in is history, as the untruths become repeated in print, they quickly become quoted as “the truth”…which they are not !

      If you were in or studying the record/music business in 1958-9 – you would have heard and witnessed the same things….Record companies contracting; Major artists complaining about how their record sales were dwindling and they were making most of their income from the “road”; general apathy amongst the record/music buying audience; stagnation of radio. Yes there were those “bursts” of interest – Frankie Avalon, Fabian, Annette, Shelly, and then came “folk”…But nothing major changed in the selling of recorded product until 1964-5 when the British Invasion occurred. Just as today, the “teen” market NEVER goes away….Neither do “niche” markets (jazz, classical, etc.)….However, the British Invasion, stimulated mass interest in a new record buying market…A market that had grown tired of their parents music, bored with their Radio and had no interest in seeing their parents artists perform their “greatest hits” on stage….Does any of this sound familiar?

      I find it further fascinating how the entertainment industry as a whole seems to enjoy “driving itself” or “hyping itself” in to believing “drama”! Vinyl is dead = “Drama” ! CD’s are history = “Drama”….Record Labels are a thing of the past = “Drama”….I remember (though most hear will not remember) being told that “stereo is dead” and “Quad” will the “IT” and the future ! ….I also remember hearing how the CD would totally replace Vinyl and how cassette players are a thing of the past because of “DAT” ! Can anyone find a “dat” machine today?…LOL ! I bring this up because all this “drama” about “streaming” and “downloads”, is just that….”drama”!

      The industry is in the process of changing….It was stagnant for a long long time….All these technological advancements will be assimilated and short of the “4 & 8-track”, I believe the modes of listening and eventually purchasing music will all be “in place”….I further expect, that “old models” that were utilized in developing the market and marketing of recorded product will “resurface”. Many of these young “whippersnappers” don’t realize that there were nearly “no” record stores in America before 1965….And short of the music store that sold instruments and sheet music and had a few bins with singles and albums – and a few Five and Dimes, who had “racks” of the top selling singles and albums, if you wanted a new record and it was not in the “bin” or could be ordered out of the Schwann Catalogue – you were “shit out of luck “ ! So that “new record store” that “Veteran” mentioned is right on the money regarding “natural evolution”!

      I think we are all on the verge of a “new beginning” and a “new music”…I don’t have a crystal ball, and I have no idea what it will be, but I know that it “IS NOT HERE – YET “ ! And if you are on the “Top” of the game now, your days are “numbered” ! When that new next big thing comes, you will go the way of all our parents favorites….Maybe you will have a “revival” ten to 15 years later, but, other than that, I hope you are saving your coupons !

      If you are “not” at the top, you may very well be a part of that next big wave ! No one knows what it will be, but it will be something at all us “adults” will most likely “hate”…LOL !

      And “Veteran” – please contact me, as I would like to learn more about what specifically you are doing ! I am on Linkedin – FB and my direct email is: Therightscompany@gmail.com and my phone number is -424-206-9286


      Reply
    5. stephen craig+aristei

      Hey” Veteran” – I totally agree….And would love to make “contact” with you……What people don’t realize because of lack of experience, is that what you are doing “is the business” ! Having been in this game for now over 50 years (Holy fuck, am I that old…LOL !), I too have witnessed the expansion and contractions of many industries and businesses, including the one we take part in. I find it fascinating how no one seems to have a grasp on this industries’ history…..I think it goes to the point and importance of how “important factual accuracy” in is history, as the untruths become repeated in print, they quickly become quoted as “the truth”…which they are not !

      If you were in or studying the record/music business in 1958-9 – you would have heard and witnessed the same things….Record companies contracting; Major artists complaining about how their record sales were dwindling and they were making most of their income from the “road”; general apathy amongst the record/music buying audience; stagnation of radio. Yes there were those “bursts” of interest – Frankie Avalon, Fabian, Annette, Shelly, and then came “folk”…But nothing major changed in the selling of recorded product until 1964-5 when the British Invasion occurred. Just as today, the “teen” market NEVER goes away….Neither do “niche” markets (jazz, classical, etc.)….However, the British Invasion, stimulated mass interest in a new record buying market…A market that had grown tired of their parents music, bored with their Radio and had no interest in seeing their parents artists perform their “greatest hits” on stage….Does any of this sound familiar?

      I find it further fascinating how the entertainment industry as a whole seems to enjoy “driving itself” or “hyping itself” in to believing “drama”! Vinyl is dead = “Drama” ! CD’s are history = “Drama”….Record Labels are a thing of the past = “Drama”….I remember (though most hear will not remember) being told that “stereo is dead” and “Quad” will the “IT” and the future ! ….I also remember hearing how the CD would totally replace Vinyl and how cassette players are a thing of the past because of “DAT” ! Can anyone find a “dat” machine today?…LOL ! I bring this up because all this “drama” about “streaming” and “downloads”, is just that….”drama”!

      The industry is in the process of changing….It was stagnant for a long long time….All these technological advancements will be assimilated and short of the “4 & 8-track”, I believe the modes of listening and eventually purchasing music will all be “in place”….I further expect, that “old models” that were utilized in developing the market and marketing of recorded product will “resurface”. Many of these young “whippersnappers” don’t realize that there were nearly “no” record stores in America before 1965….And short of the music store that sold instruments and sheet music and had a few bins with singles and albums – and a few Five and Dimes, who had “racks” of the top selling singles and albums, if you wanted a new record and it was not in the “bin” or could be ordered out of the Schwann Catalogue – you were “shit out of luck “ ! So that “new record store” that “Veteran” mentioned is right on the money regarding “natural evolution”!

      I think we are all on the verge of a “new beginning” and a “new music”…I don’t have a crystal ball, and I have no idea what it will be, but I know that it “IS NOT HERE – YET “ ! And if you are on the “Top” of the game now, your days are “numbered” ! When that new next big thing comes, you will go the way of all our parents favorites….Maybe you will have a “revival” ten to 15 years later, but, other than that, I hope you are saving your coupons !

      If you are “not” at the top, you may very well be a part of that next big wave ! No one knows what it will be, but it will be something at all us “adults” will most likely “hate”…LOL !

      And “Veteran” I would still like to “connect” with you and learn more about what you are doing……I am on Linkedin-FB and my direct email address is: therightscompany@gmail.com and my phone is 1-424-206-9286


      Reply
  17. Miketheswede

    If you are writing music you want to get paid for it.
    The format isn’t important Spotify could be great if their
    buisness model wasn’t a steal from rights holders.


    Reply
    1. Casey

      So what should they be doing different? Clearly they are not “stealing” enough as their debt continues to pile. Yet rights-holders want to be paid more….


      Reply
      1. FarePlay

        Some businesses just don’t work. This is especially true of tech.


        Reply
        1. Anonymous

          Tech industry is doing fine. You mad?


          Reply
  18. Nissl

    The biggest story in that chart to me is really that iTunes ending CD sales in favor of single purchases absolutely hammered the music industry in the ’00s.

    Anyway, I’m generally pro-streaming looking at the bigger picture because I believe it’s necessary for music to compete on convenience with streaming movie/TV services like Netflix. However I really, really don’t get why the labels are agreeing to put absolutely everything on the free tier on release day, for either Spotify or Youtube. The free tier should be for radio-style services and back catalogs, and maybe it should never get deluxe editions. Right now the free tier is just too good. Spotify’s own graphs show free users growing exponentially and paid users growing linearly (http://musicindustryblog.wordpress.com/2014/05/21/what-10-million-spotify-subscribers-actually-means/). That *must* change for streaming to work as a replacement for downloads. Maybe the idea is to get ‘em hooked, then change the game? But these contracts seem to be for 5 years. Too long.

    The Music Industry Blog also had an interesting take on the difference between the Scandanavian countries vs. US/UK that’s a little more nuanced than I’ve seen in this comments section so far. Sure, part of it is that piracy destroyed those countries’ music industries much more, but that’s not all. The basic idea was that in countries where downloads didn’t take hold and bundling with phones has been widespread for years, they picked up lots of consumers who had been paying $10/month who switched so far. That’s not a recipe for growth. Is the answer just more time? I dunno.


    Reply
  19. Nissl

    I guess my last comment got eaten for having a link to an article I was referencing… apologies if this winds up being a virtual duplicate.

    The biggest story in that chart to me is really that iTunes ending CD sales in favor of single purchases absolutely hammered the music industry in the ’00s.

    Anyway, I’m generally pro-streaming looking at the bigger picture because I believe it’s necessary for music to compete on convenience with streaming movie/TV services like Netflix. However I really, really don’t get why the labels are agreeing to put absolutely everything on the free tier on release day, for either Spotify or Youtube. The free tier should be for radio-style services and back catalogs, and maybe it should never get deluxe editions. Right now the free tier is just too good. Spotify’s own graphs show free users growing exponentially and paid users growing linearly (link deleted). That *must* change for streaming to work as a replacement for downloads. Maybe the idea is to get ‘em hooked, then change the game? But these contracts seem to be for 5 years. Too long.

    The Music Industry Blog also had an interesting take on the difference between the Scandanavian countries vs. US/UK that’s a got a slightly different framing than I’ve seen in this comments section so far. Sure, part of it is that piracy destroyed those countries’ music industries much more, but that’s not all. The basic idea was that in countries where downloads didn’t take hold and bundling with phones has been widespread for years, they picked up lots of consumers who had been paying $10/month who switched so far. That’s not a recipe for growth. Is the answer just more time so conversion spreads from the mavens to the casual fans? More bundling? I dunno.


    Reply
    1. Nissl

      Argh, the end of that should read “in countries where downloads didn’t take hold and bundling with phones has been widespread for years, they picked up lots of consumers who had been paying $10/month who switched so far. That’s not a recipe for growth. Is the answer just more time so conversion spreads from the mavens to the casual fans? More bundling? I dunno.”


      Reply
  20. Jeff Okkonen

    These charts refer sales and licensing of recording industry product only, a large but albeit partial segment of the music industry.

    It would be very interesting to see a comprehensive view of the music industry that included publishing revenue, concert revenue and other ancillary revenue on a global basis.

    There are also a few other big factors to consider:

    1) The current economic value of the support infrastructure, such as manufacturing, staging, crew, etc.
    In other words, a valuation of all those folks who work in cd plants, publishing houses or as stagehands.
    2) What is the current number of creative personnel such as musicians, writers and producers,
    especially compared to that number over the past several decades?
    3) How much creative product has been released in any form over the past several decades.

    I believe that items 1, 2 and 3 are likely to show growth, even to the point of market saturation. And that might partially explain the devaluation in sales.


    Reply
    1. Nissl

      Go look up “The Great Music Industry Power Shift” at Music Industry Blog. (I’d link it but links are apparently caught by the spam filter here.) Global music industry revenue across recordings, live music, publishing, and merch is down 3% between 2000 and 2013. Live music revenue grew 60% and merch revenue grew slightly, nearly offsetting a 41% decline in recorded music revenue. (From the recorded music number I’m almost certain those values are all inflation-adjusted, though it’s not explicitly stated.)

      However, the artist’s share of live revenue declined every single year from 2000-2013, and their share of overall revenue declined every year since 2009. And I’m guessing the picture would probably look worse if you focused only on developed countries.

      It’s not as bleak as often portrayed here but it’s not *good*.


      Reply
  21. Alex Jarvis

    Effing YAY! Now maybe the Majors who support that crap will stop.


    Reply
  22. Dawn Els

    music streaming services are parasites. These services make their income on the backs of creators, ‘renting’ music out to their own clients the listeners who like a cheap or free deal. Imagine how many clients some ‘services’ get for offering a free item in order to sell a product? And all the subscriptions some have per month? These services should be treated the same as any other business that have to pay royalties for what they use to get clients. Streaming is saving these parasites. Piracy, to parasitism, there are always some that want to make a quick buck.



    Reply
  23. Paul Hayworth

    no shit


    Reply
  24. Simon Tait

    Duh


    Reply
  25. Steve Sussmann

    I don’t believe streaming is a bad thing. It is the way things are moving, and we have to get used to it. But nothing will “save” the music industry if by “save” we mean return us to the old days.


    Reply
    1. Versus

      By “save the music industry” we mean (or at least I do) bring it to a sustainable condition of profitability for a middle class of musicians, rather than just a minuscule group of superstars, which entails controlling piracy and infringement via “user-generated content”, and negotiating reasonable and fair pay-out rates from delivery services (whether download, streaming, or other).


      Reply
      1. Anonymous

        So bring the music industry back to the days before recorded music?


        Reply
        1. Versus

          Not the only way to have a musical middle class, surely!


          Reply
  26. Eric Picot

    With all the respect I have for DMN and its contributors, I am sincerly getting tired of their lack of faith in any change in the business. It will be fine guys, we’ll sort it out.



    Reply
  27. Kellie Knight

    New technology is great, don’t forget it helps us as musicians too, because recording is cheaper. Also, it would be great to regulate the ever growing industry with a fair deal to the artist, namely better streaming royalties!


    Reply
    1. Anonymous

      “New technology is great”

      Yeah, we could really use some of that in the music industry.

      Old school audio-only streaming failed big time, and YouTube seemed to commit suicide last week.

      So what’s next for us in the tech department?

      Let’s cross our fingers for a modern YouTube replacement that pays artists — and doesn’t try to tell us whether we should make exclusive iTunes releases or not.

      New and more user-friendly types of crowdfunding would be nice, too.


      Reply
  28. Dave 5000

    I don’t see how this would be surprising to anyone. Think of it this way. A lot of people who pay for subscriptions were the same people who at one time were downloading everything. Now they are at least paying something. I knew from day one that when these streaming sites started they weren’t going to replace the old industry financially. The old industry is gone. With the internet comes a lot of downside for artists but the internet also offers a lot of advantage that artists didn’t use to have. For any artist looking to get things back to the way it was you are not living in reality. Artists need to understand that new media economics are here to stay and take advantage where you can. That means concentrating on branding and marketing and building up core fanbases and doing what work…..such as crowdfunding which is the only thing I’ve seen that artists can do if they are worried to death about people copying and sharing their music which in my opinion isn’t that big of a problem. Most artists have the problem of being too obscure for anyone to care in the first place and that is honestly what they are complaining about. I don’t see too many successful indie artists who are putting in the work complaining.



    Reply
  29. Dave 5000

    Streaming royalties could be regulated, but honestly they are only going to be set by what the market wants. It is all based on demand. If people aren’t willing to pay more than $10 due to things like the economy and what so forth there isn’t much any regulator can do. I guess they could work on making the percentage rate higher for artists, but I wouldn’t hold my breath and expect it to match old school licensing fees which were actually pretty high in some regards to the market.


    Reply
  30. John Kill

    I’ll say it again. This ship has sailed. Look at the illicit drug market. All the regulation in the world can’t stop the demand. Where there is demand someone will fill it – legally or illegally.

    Regulating, enforcing higher royalties, setting price floors… All this will only kill off the streamers trying to be legit. Illegal or unsanctioned streaming sites will pop up to replace them.

    It’s better to have 15% of something than 100% of nothing.


    Reply
    1. David

      Yes, let’s look at the drugs market. People are prepared to pay very large amounts for illegal drugs. It is therefore worthwhile for other people to supply drugs illegally, even if they risk heavy legal penalties and other downsides (turf wars, etc.)

      None of this applies to music piracy. The financial rewards are modest (I doubt that even Kim Dotcom made much money from music, unlike films) and the kind of geeks who run pirate sites would shit themselves at the prospect of a modest prison sentence.

      As for your ’15% of something is better than 100% of nothing’, that assumes that the necessary investment of time and money has already been made. If it hasn’t, nothing might well be better than something.


      Reply
      1. Anonymous

        There already exists heavy penalties (10+ years of jail time PER copy, $150,000 fine) for copyright infringement.


        Reply
        1. Anonymous

          Personally I think we should be dealing with the pirates the way we used to in the 1600. Hang the fuckers.


          Reply
          1. Anonymous

            Nah, $150,000 per infringement is OK.


            Reply
          2. Anonymous

            Put their heads on stakes around LA.


            Reply
  31. Ben Stewart

    People are just gonna get what they can for free or almost free, we should buy the artists music we like to support them directly. Streaming is getting better but it’s still a hassle, give me the cd or record any time. If you want Cold Plays new album you won’t get it on Spotify – get it on cd at least it’s worth every cent.


    Reply
    1. Nissl

      So Youtube’s paying out $.003/stream to the rights holders for Avicii’s music, less than half of Spotify’s rate. Nice to get a hard number there.


      Reply
    2. Anonymous

      EDM and other forms of “electronic” music is a cancer on the music industry.


      Reply
      1. Anonymous

        Paul, we need a facepalm smiley…


        Reply
        1. Anonymous

          EDM isn’t music. It’s just computer-generated noise.


          Reply
          1. Anonymous

            Like you.


            Reply
            1. Anonymous

              No you.


              Reply
  32. Versus

    The answer is simple: Increase the pay-per-stream.

    This would require, at minimum:
    - Serious negotiating with the streamers (probably requiring something like a “union” group threat to pull music from the service)
    - Effective crackdown on piracy and “free” infringement (that is, not the joke known as DMCA)


    Reply
    1. anonymous

      yeah sure. “i can’t write music that’s commercially viable, so maybe governments should just force the companies that I rely on to pay me more. that way I can make an income based on my own feelings of entitlement, and not on the basis of the economic rationality which is supply and demand”.

      higher payout rates shouldn’t be compensating for actual demand for the artistic work. Artists should be compensated based on the demand for their content. If you don’t think streaming monetizes it in a way that’s beneficial for you, then innovate or partner with someone who does. Don’t cry to the government because your voluntarism resulted in what you perceive to be exploitation.


      Reply
      1. Versus

        I never said the government should force higher payments. I said negotiation (as in collective bargaining for higher rates). Although government protections are a considerable option as well (as seen in other countries, like France).

        What government should do is enforce intellectual property laws, and punish violations seriously and consistently, so the market is actually a fair system of supply and demand.

        There clearly is demand for artists’ work, but the pricing cannot be set fairly by any standard of supply and demand when there are illegal free versions so readily available. Frillegal content destroys any pretense of a fair market and undermines the natural price setting by supply and demand.


        Reply
  33. Anonymous

    Burn the Internet to the ground!
    So musicians can be free.
    We will make a lot of money.
    And have a big party!


    Reply
    1. PiratesWinLOL

      Free like Danger Mouse, yeah? If it wasn’t for the internet and them knowing what will happend, the copyright trolls would have come after others like Girl Talk too.


      Reply
    2. Versus

      Only time will tell whether the advent of the Internet was a net good or evil for humanity. Or maybe even in retrospect our descendants (if any) will still argue both sides.


      Reply
  34. Tomas

    Interesting to see that many of you “know” how things are in the music industry in the Nordic or Scandinavian countries, while it’s obvious that you do not have a clue.
    * The internet infra structure in Scandinavia and Finland is way better than in the US, better than most countries in Europe, although they are speedily catching up. This is due to the “state” having the foresight to invest in it, before the “free market” sees the need to. An investment that has paid off.
    * The commercial music industry do have to cover their own losses, make no mistake! Non-commercial, more “cultural” endeavours may receive governmental funding, but not commercial ventures. The Scandinavian music industry has also had to cut off an arm and a leg to survive, US is not alone.
    * Noone knows how much YouTube will pay to the composers yet, that remains to be seen, so do not pass judgement on unknown numbers. What they pay to labels is a different matter.
    * Legal streaming is way better than the alternative, an illegal Napster/Pirate Bay.


    Reply
    1. Versus

      “* Legal streaming is way better than the alternative, an illegal Napster/Pirate Bay.”

      True indeed. However, the low pay-out rates of streaming services are a direct result of Napster/PirateBay and other forms of thievery, which nuked any possibility of determining fair market value, because everything now has to compete against “free”.


      Reply
  35. Ray Johnson

    I haven’t bought music in such a long time an I’ll tell you why. I have explored several avenues and none of it appeals to me. I grew up in the 60′s and had one hell of a time in the 80′s. My CD collection is enormous but it cuts off at around the mid-nineties. Forget about the band and get back to the music then you just might sell again.


    Reply
    1. Versus

      Did you mean to say “forget about the brand”?

      Agreed that the 90s-present were a general wasteland of interesting music, at least in the mainstream. However, in the so-called “underground”, there has been fascinating and worthwhile music — some might dare call it “art” — through all this time. You just won’t find it in the monopoly-controlled radio. Satellite radio gives some taste of it; online radio even more. Any of the “discovery” services are also worthwhile, as are certain blogs, for finding the gems.

      I love classical music as much as classic rock, but of more recent genres, there is great music in indie rock, nudisco, ambient, electronic, neoclassical, international hybrids (see Bill Laswell’s stunning discography, for example), and so on.


      Reply
  36. Chuck2

    Interesting numbers and graphs. I can only assume that the graphs are tracking gross sales and not actual profit. As is true with most things, it is not what you make that is important but rather, what you keep. If downloaded and streaming content has take the place of CD sales, which is logical, overhead costs have reduced significantly. It costs money to physically produce the hard copy of the music, downloaded and streaming content cost practically nothing to produce in comparison, thus a much greater return on investment. Graphs can be misleading.


    Reply
  37. Versus

    THE CLASSICAL MUSIC PROBLEM

    (The following ruminations came out of some discussions at MIDEM with classical music label owners and distributors, and their concerns about streaming. Some were choosing to withhold their music from streaming sites for this reason.)

    Even if streaming were to compensate for sales losses, this transition adversely affects certain music genres. Especially classical music and other “serious” music genres, since the listening habits are very different for such music than for commercial/pop forms.

    Streaming only generates income via quantity, that is, mass repetitive listening. Pop songs are typically listened to in this way, over and over (I’ve known listeners who back in the day created cassettes with the same song recorded over and over through entire length so they could hear it continuously; now they just loop it on iTunes). Of course, certain “pop” classical music is listened to in this way as well, as a sort of easy-listening background music. However, I am concerned about the music that requires focused attention. Call it “art music”, “serious music”, “unlistenable”, “challenging”, “demanding”, or just “exhausting”. Even if it is not your cup of tea, you may still consider it culturally significant and valuable enough that its existence matters.

    Even true lovers of serious classical and other art musics do not typically listen in the way of pop music. By “serious music”, I thus mean music that demands one’s extended and full attention, engagement on all levels, sensual, aesthetic, intellectual. One may listen to a given symphony, or certain jazz albums, or artistic electronic album, and so forth, rarely, even if one loves the piece. After all, it is a serious commitment of time and energy to really take in those works, and half-listening to something as intense and immense as a full symphony may be more irritating than rewarding. So, even a devoted lover of Beethoven, for example, may listen to a given symphony once a year. If the listener has to purchase the album to do so, it doesn’t matter how often the listener listens; the income generated is the same as for a pop album. If one streams the album instead, so rarely compared to pop, then such “serious music” is in serious trouble.

    The point is this: Streaming determines the value of pieces only by the number of plays. Yet this is not how music is valued, even by its listeners. Some of my favorite recordings are reserved for special occasions, or focused engagement, whereas I may listen more often to pieces I consider less artistically/musically valuable as they work better for background listening and such.

    Sorry for the long post. Interested to hear others’ thoughts on this. This strikes me as a very serious issue which has not been discussed much (or at all on-line?). May be worthy of its own thread if the moderators deem fit.


    Reply
    1. Anonymous

      Classical music/orchestration generate have always generated a big chunk of their revenue from tax money (federal/state/local art foundations)… and still do.


      Reply
    2. hippydog

      it could also work out the other way..

      With pop music a fan might buy a CD but only listen to a couple of songs off that CD multiple times,
      Whereas classical music is more likely to be an ‘album/opus’ experience..

      When translated to the streaming format,
      that pop album might only monetize the ‘hit’ single, where the rest of the ‘album’ gets little traction (or monetization)
      Whereas the classical album would be more likely to be ‘streamed’ completely (IE: more listen’s in total)

      Where streaming fails (and most digital formats also)
      is the QUALITY
      Classical/Orchestra music NEEDS to be non compressed.. IE: CD=good, MP3 & AAC = bad


      Reply
      1. Versus

        Hippydog -

        Good point. True that it could work out that way, but the (admittedly secondhand) experience as told to me by label and catalogue owners is that it does not, at least from my limited survey of the owners with whom I spoke. They found that when they moved portions of their classical catalogue to streaming, the effect on income was disastrous, compared to the same move for pop recordings.

        Of course, it’s dangerous to generalize from this small sample set, so if others with experience in this care to chime in, or if any general survey or statistics are available, please comment….


        Reply
        1. hippydog

          Quote ” They found that when they moved portions of their classical catalogue to streaming, the effect on income was disastrous”

          I would be interested to know what you mean exactly by “disastrous”?

          If you mean, the catalog was not streamed a lot.. That would make complete sense..
          but if they said it affected CD or download sales, that would blow my mind (and wouldnt make a lot of sense to me)

          In my opinion streaming is still pretty new and most used by the younger generation, attracts people who consume large amounts of music. also not “audiophile” quality.. IE: Classical music simply doesnt fit the ‘demographic’ of who is primarily using streaming..


          Reply
    3. Versus

      I found a report on a 2013 session about classical music streaming at Classical:Next.
      http://www.classicalmusicmagazine.org/2013/06/classicalnext-day-two-a-spotify-spat-over-revenue-streaming/

      “[Robert von Bahr, chief executive of Sweden’s BIS Records and chairman of eclassical.com] had no doubt that streaming was diminishing classical sales and he attacked the ‘nonsensical’ revenue model that paid rights owners as much for a 30-second work as a 40-minute one. ‘We are being discriminated against when it comes to payment.’”

      Stephan Steigleder, director of digital media at Deutsche Grammophon, defended Spotify and other streaming services, “suggested streaming was not cannibalising sales and may be boosting them, with people streaming tracks and then buying the album from which they came…It [streaming] is about listening to music over and over again, and in that classical music has an advantage, because it is listened to for years.’”

      This is important, however: Bahr “claimed that major labels received special revenue terms in exchange for buying stakes in Spotify. Mr Steigleder denied DG’s equity stake in the service gave it any such advantage.”

      So even in the rarefied world of classical music, the big fish apparently get preferential treatment?

      There is also some mention of the audio quality issues with streaming, certainly a concern, but one that technology (in the form of higher Internet transmission speeds) will presumably eventually resolve.


      Reply
    4. Versus

      One shocker from the article is this 11% statistic:

      “Jonathan Gruber, managing director of Ulysses Arts, said he worried that streaming will eliminate the tendency for many collectors to buy recordings they never got round to playing ‒ a significant source of income, to which Mr von Bahr added: ‘Only 11% of CDs ever see the inside of a CD player.’”
      http://www.classicalmusicmagazine.org/2013/06/classicalnext-day-two-a-spotify-spat-over-revenue-streaming/

      Interesting form of subsidization of the music industry. Nothing wrong with subsidizing an art form you care about, although simply donating money would be less environmentally damaging than acquiring all those plastic coasters.

      Is that 11% stat correct?? I listen to every CD I buy, at least once; if I don’t like it enough to ever listen again, I give it away. Perhaps that is not the norm.


      Reply
  38. Anonymous

    I think we need to look at the first sentence of the article – streaming has shown some sustainability in Norway & Sweden. Why? Both countries have invested heavily in broadband, have tech savvy & tech comfortable populations, and a social history of extended collective licensing. Additionally, the Scandinavian states subsidize the arts at a proportionally higher rate than in the US. I think to make streaming a viable and sustainable revenue stream, we need to have a comprehensive focus for reform.


    Reply
    1. Anonymous

      Scandinavian states subsidize everything at a proportionally higher rate than in the US.


      Reply
  39. FarePlay

    Time to do something for working artists and get out of this black and white argument. Selling recorded music is and always will be a positive income driver for artists. It’s not a battle, it’s about a new delivery system working in parity with existing models. There are a lot of us over forty who prefer to own music as well as younger listeners who feel the same way. One doesn’t replace the other.

    Also, it is important that the artist be able to choose how they want their music distributed, If the artist believes they are better off not having their music on interactive streaming services, that choice needs to be theirs. If they want to delay the release of their music on an interactive streaming service that choice needs to be theirs.

    If they are signed to a label and don’t have control over their digital distribution, they don’t have that choice.


    Reply
  40. DeezNizzuhh

    So iTunes made 3 times as much as Spotify, although iTunes has 800 million members and Spotify has, at the most, 30 million members? What if Spotify had 800 million???….And Spotify plays will continue to produce money over the years whearas iTunes purchases are truly a one time purchase???

    You left brained idiots…sharply focused on one tree, and a real live forest is screaming at your peripherals. Smdh.


    Reply
    1. FarePlay

      Smdh to you 2.


      Reply
    2. Tony

      Finally, someone who gets it while the rest of the industry buries their head further and further in the sand.


      Reply
  41. AcuVox

    Here’s a big part of it: musicians are still paying $3k-$30K to produce an album, and most of that goes to make it sound like the current trend which makes it un-noticeable. If you have a compelling live act, find the best room for it and record live. A world class live engineer is $500-$1K and you are done in one night. DO NOT screw with multi-track mixing, overdubbing, splicing, sweetening bs. If you can’t play it like you mean it for a full set, either practice more or stick to the day job.


    Reply
    1. FarePlay

      Thank you for making my point so directly. No. in this economy they’re not make sonic masterpieces any more. Although I am going to order the Allman Brothers Live at Fillmore East 6 CD collection with all 4 sets from Friday and Saturday Night and Their performance from closing night at the Fillmore.

      Tom Dowd, if anyone here knows who that is, set the mikes and ran the board. Lets see 1971, probably a 48 track Neve with 2 inch tape. For those who aren’t familiar with analogue recording you actually had to splice the tape for some cuts as they did/do with film.

      You may be aware also that the boom in vinyl sales has brought up the value of analogue recording and true fans of vinyl want analogue to analogue recordings.

      Anyway, there you go AcuVox


      Reply
  42. Nicholas West

    The end of vinyl and the advent of the CD was the biggest disaster ever to hit the music industry. The loss of vinyl because vinyl required the customer to buy a physical object that he treasured, was proud to own, that he would eventually wear out if he played it enough, and that he would buy again. The advent of the CD because it supplied anyone, for nothing, virtually a pristine copy of the master tape that could be bootlegged ad nauseum with zero loss of quality, forever. You want to revive the music industry? Make music available on vinyl only and stop all this digital crapola. Period. Flame away…I don’t give a shit.


    Reply
    1. FarePlay

      All so true. Unfortunately the record companies were all to happy to see vinyl go away 30 years ago. My how times change.


      Reply
  43. Patricia Shannon

    I believe there are a couple of typos. You say “downloads were earning more” and “Ds were earning much, much more”, but the charts show they were earning “less”


    Reply
  44. Versus

    Another article on how classical, jazz, and other such non-pop formats are particularly devastated by the movement to streaming.

    http://www.salon.com/2014/07/20/its_not_just_david_byrne_and_radiohead_spotify_pandora_and_how_streaming_music_kills_jazz_and_classical/

    Quote:
    “So far, Wang’s solution has been to drop out. It’s nearly impossible for artists to withdraw, but as a label head, he can pull all of Pi’s music off Spotify. After three or four months on the service, two years back, he received a royalty statement of about $25 for all of it, and decided it just wasn’t worth it. “What we found when we got out of Spotify — after these dire warnings — was that our sales went up; they absolutely jumped.””


    Reply

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