This is now threatening to become an ingrained release strategy for chart-topping superstars.
And the latest superstar holdout on Spotify is Rihanna, who has opted to keep her latest album, Unapologetic, off the streaming platform – at least during the critical initial release window.
That closely follows a high-profile holdout from Taylor Swift, whose Red remains unavailable on Spotify (and most other streaming services). And just like Swift, Rihanna is the proud owner of a number one, chart-topping album, both in the US and other countries.
In other words, these are among the biggest-selling, highest-profile artists on the map today. See the emerging issue here?
Unapologetic was released ahead of Thankgiving, and more importantly, just ahead of the crushing Black Friday consumer blitz. That featured a snarl of traffic to big box outlets, which introduces lucrative opportunities around the crusty ol’ CD. And if you want it online, you’re being asked to pay a premium: currently, the singer is offering one song to Spotify, ‘Diamonds,’ while feeding a full-blown, deluxe version to iTunes.
This appears to be happening across all of Spotify’s global territories, including Rihanna’s home turf of the US. We’re awaiting confirmation on those details, as well as confirmation that the holdout applies to competing streaming services. Ahead of those confirmations, this appears to be part of a dangerous release strategy, at least from the perspective of Spotify and its emerging rivals.
So what happens next? Ultimately, players like Spotify seem to be getting sloppy seconds, but only after the bulk of upfront revenues have been realized by the artist, management firm, and/or publisher and label. And it’s a strategy that seems to be working quite well, at least for heavily-promoted, pop-focused, superstar releases.
Spotify has not yet responded to a Tuesday morning inquiry from Digital Music News.
There is no evidence that it is actually working. As a long time Rhapsody subscriber, I can wait for music to become available. That’s not to say I won’t buy music. But the only reasons I buy music is either that I want to support the artist, I want to have a physical copy of the music, or because the artist will probably never be available on Rhapsody. I don’t buy music that is simply not yet available on Rhapsody. And I think most people that pay $10+ per month feel the same.
There is a reason staggered releases are a time honored tradition in the movie industry Theater->DVD->Rental->Netflix/HBO->Basic Cable etc. Different markets, difference audiences more chances to monetize the IP. Same principle and I think it makes plenty of sense in music given how much better a CD/Download sale is for an artist than a hundred streams. There just isn’t much of a downside financially from an artists perspective to witholding the album from streaming services during the initial release window and it definitely incentivises fans to go out and buy the CD in the all important first week.
Also, I’m willing to bet the vast majority of people on streaming services are ad-supported listeners and not subscribers. I think services like Spotify should look at talking to these mega-artists about making these new releases available to premium subscribers only. It would be another hook to try and convert the ad-supported listeners to subscribers.
I think Spotify should definitely look into making new albums Premium only. Unfortunately they seem to be dead set against the idea. All tiers are equal unless Spotify gets exclusive rights to music, which doesn’t seem to be happening.
Honestly, I think some of these companies should change the way they pay royalties. And that doesn’t necessarily mean paying more in the long run. Rdio currently pays ~$.01 right now per track. Why not pay more for new tracks… say $.03, but in exchange, get a break on tracks older than 18 months, such as $.005. The numbers would have to be worked out, but I bet it would average out.
Don’t fall for these windowing tactics. It’s a slap in the face of people who are willing to pay $10 a month for access to all music.
It’s time to strike back! No need to wait.
You can stream the entire album right here Thanks to the brilliant Toma.hk and Tomahawk.
Why don’t we wait and see what the market says? I mean this is america right? not the old soviet union. We don’t just legislate how people monetize their music. We let everyone experiment.
If artists/labels are losing money by windowing their releases eventually it will become apparrent and artists will stop doing this. Or conversely if the Rhiannas of the world are right, Spotify must adjust.
Simple. Let it work itself out.
Well spoken. You are absolutely right. Maybe it is time for Spotify to tweak the system a little?
How about this solution?
– Release the album on Spotify as a Premium/Unlimited exclusive
– Show Free users buttons to buy the album or upgrade to Unlimited or Premium
– Reward the artists with $10 for every user who upgrades to premium because of his/her album.
Expected result: Label happy (more sales), Spotify happy (more Premium /Unlimited subscribers), Unlimited/Premium users happy (more music), artists happy (more money).
I have submitted this idea to the Spotify Community Forum. 51 Kudos so far.
http://community.spotify.com/t5/Spotify-Ideas/Option-for-labels-to-release-new-albums-as-Premium-Exclusive-and/idi-p/182650
Sorry, you’re overhyping the reality. Checking the top 20 albums on iTunes, only two are missing from Spotify: Taylor Swift and Rihanna. Everyone else is there, even Kid Rock and Coldplay’s new live album. More importantly, Taylor’s and Rihanna’s big hit singles ARE on Spotify, which is what most Spotify users are interested in. Spotify is here to stay, unless the labels shut it down. An album here and there being windowed while the hit singles are allowed through will not change the dynamics for those who enjoy the streaming services.
Spotify is still losing money, last thing I heard, so it is not ‘here to stay’ unless it somehow turns around its finances. It needs to sharply increase the proportion of paying subscribers to freeloaders. The only other option is to follow Pandora’s lead and try to reduce its royalty rates. But that will only lead to more artists and labels withdrawing their content – and unlike Pandora, Spotify doesn’t have a statutory entitlement to use content without permission. Or maybe Spotify will try to get Congress to change that? Nothing would surprise me.
Cutting off the free service would almost certainly turn them into a profitable company over night. But money is not their biggest concern. Their biggest concerns are market share and total users. With those comes leverage and therefore power.
How long did Amazon go profitless? The thinking is Spotify needs to sacrifice profit for growth and world domination. We’ll see if it works out, but I do think in the foreseeable future, investors will continue to pour money into it. Only the labels could kill it by yanking licenses.
Lynn I fear you may be missing this is about the first window of sales period.
MIA during the first window:
Coldplay
Adele
Deadmau5
Taylor Swift
Rihanna
list goes on.
Remember all it takes is for it to be your favorite artist then you are completely reconsidering your monthly dues.
sorry
“the first window of the sales period”
Adele was never really a windowing decision if I recall. It had to do with Spotify’s refusal to limit access to paid users. Services that do that, such as Rhapsody, had the album.
Actually, I think that is less a problem than people simply having no interest in these services. They either only want to own music or just prefer Pandora to pick songs for them. Spotify is still much better than, say, Netflix in terms of getting a ton of new music out the day it is released.
It hasn’t stopped me from continuing my subscription. I was surprised by what Rihanna did, because most pop artists put their stuff on right away, but I shrugged my shoulders since her albums are usually a collection of hit singles + filler. Mumford and Sons are much smarter, and have sold over a million copies in addition to wracking up record streams of their album. I actually don’t think Taylor Swift’s move affects anything since her fans will buy her record whether it’s on Spotify or not.
My philosophy on Spotify is that it is a great place to try out new music, make fun playlists, plus listen to the odd old favorite that isn’t quite worth a purchase. I still buy albums and songs that I love and wouldn’t want to live without. I realize that is not realistic financially for everyone, so I would suggest they stick with Spotify Free and buy what they love. Anyone who reads about music knows that Spotify pays very little, so to support artists, one has to buy the recording and attend shows.
Spotify Unlimited is great for music discovery. I think this tier is too often overlooked. $5 per month is truly a wonderful deal. And since it is not mobile, it doesn’t impact music sales as much as Unlimited does because most people still want music on the go.
Unfortunately Spotify has not done a good job selling it to subscribers.
Bye bye, Spotify!
As long as the service offers some sort of cloud storage integration to fill these gaps I’m totally fine with it. Ironically, these big, well marketed artists are exactly who are easiest to find on BitTorrent.
You will see an absolute avalanche of karaoke and tribute cover versions, until the album appears on Spotify.
Stars like Rhianna have less influence than they’ve ever had, I think that’s a gimme. This is no different than iTunes. We can debate all day long about what effect this has on sales right now, but a time’s coming where windowing will clearly be a giant momentum killer. Just ask AC/DC, Kid Rock, Metallica, the Eagles, etc.
The notion that an artist like Rhianna could be a roadblock for streaming music is just laughable. Have you all been asleep for the last 10 years?
Netflix: Charges 100% of their users
…gets only the aftermarket movies
Spotify: Charges 15% of their users
… will soon get a lot less than Netflix
Its inevitable, folks. This model won’t hold up. The instant that an IPO isn’t a slam dunk (or a better alternative shows up), investors will head for the hills. Spotify’s model is only approporiate for catalog music, not the latest hits.
Use your brains, people!
It’s only approrpriate for catalog music how? In terms of the payout structure?
People want their music to be all in the same place. If I’m watching a film, I don’t care if it came from Netflix, Wal-Mart, Comcast On Demand, Redbox, iTunes, or Santa Claus… it’s all the same to me. The film industry can hold Netflix at arm’s length because there is no pressure from the consumer for movies to all come from the same place. Movies don’t end after 3 & a half minutes, it’s a self-contained experience. You don’t go into a film already considering what you’re going to watch next. Plainly & simply, new music releases don’t stand on their own in this day of age the way that a film does. This is why you can rent movies but not music. All you have to glance at the number of digital single downloads to understand that. And so you can’t compare Spotify & Netflix because the platform is paramount when it comes to music, rather than the new releases. Streaming music services can & will exist without Rhianna, but there will be a point where Rhianna won’t be able to exist without streaming services. That’s simply what consumer behavior dictates. Use your brain.
And if you think that digital downloads (ownership/iTunes) are going to endure as a format, you should consider that the film industry seems to be putting very few eggs in that basket. And I don’t think anyone in the film industry sees today’s landscape as anything but transitional. No one knows what tomorrow’s infrastructure is going to allow for, but it’s quite clear that services like Google Fiber are going to change things dramatically, & the future is CLEARLY extremely high rates of consumption of full-quality, on demand, streaming content. So we don’t know what kind of influence Netflix or Hulu are going to have 3 or 5 or 8 years from now, so to makes bets on the future based on today’s Netflix is just silly. The post-digital disruption film industry is actually far LESS mature than the post-digital disruption music industry is (given that more bandwidth is required to stream or download a movie, the disruption occurred later & more bandwidth advancement is required before maturation), so Netflix is actually much more likely to look more like Spotify in the future.
The album was delivered without streaming rights. No need for a reply from Spotify. WARNING to all Streaming Services!!! Unless you fight these label decisions, this will be a rule of thumb to all Top Artists in a near future. Here’s a suggestion on how you can apply some pressure on the labels: If a new album from a Top Artist is windowed from your streaming service, just take down all the catalogue from that artist, during the window period of the new album. Labels with understand it on the next Royalty Statement they receive from you. Believe me.