1. Streaming exclusives penalize paying music fans.
The typical music fan pays for one music streaming service, if at all. But for an industry that constantly complains about free-loading fans, it’s also great at punishing those who pay.
If you’re paying for Spotify, you can’t get the Apple Music exclusive. If you’re paying for Apple Music, you can’t get the Tidal exclusive. If you’re paying for Rhapsody, you can’t get the Spotify exclusive. That’s a frustrating mess for the music industry’s best customers, and a great way to stunt revenue growth.
2. Streaming exclusives scare away casual music listeners.
The biggest industries and most successful companies understand that massive scale comes from reaching beyond the core. Budweiser isn’t playing to the craft brew expert, just like Hyundai isn’t targeting seasoned racing pros. In the 90s, the industry offered ease-of-entry for people who didn’t really love music (or, could at least live without it). In terms of delivery, CDs were easy, ubiquitous and worked everywhere; the radio just turned on, and so did MTV.
Steve Jobs understood that, but unfortunately iTunes downloads are quickly going poof. Replacing that with a patchwork of battling streaming music services, each with its own bundle of exclusives, is a great way to discourage millions of casual fans who want something simple and easy. They’ll go do something else, and that includes thousands of other entertainment options (and illegal services).
3. Streaming exclusives encourage piracy.
Just look at The Life of Pablo. According to some estimates, more than a million started Tidal trials to hear the release. But half-a-million torrented the album on the first day. All of which proves the new digital adage: if it’s difficult to obtain, music fans will frequently choose convenience over doing the right thing. The comfortable platform simply trumps artist loyalty.
4. Streaming exclusives alienate core fans.
Even if they’re not stealing, they’re getting pissed off. Why? Because a streaming exclusive basically shows that an artist cares more about a some special streaming deal than the fan relationship.
5. Streaming exclusives send the wrong message to emerging artists.
Smaller artists shouldn’t be striking exclusive deals, or excluding specific streaming services (unless there’s serious money involved). The reason is that withholding access to music at an early career stage increases the chances of obscurity and missed connections, all of which translates into zero long-term sales.
It also prevents happy accidents, such as those that happened to Perrin Lamb, who was suddenly included on a popular Spotify playlist (and collected more than $40,000 in the process).
6. Streaming exclusives encourage low-paying free trials.
Free trials give users a taste, but exclusives can encourage temporary trials. A few forget to cancel, but that only complicates the real subscriber growth picture for services.
Even worse, artists get paid poorly on free trials, if they’re getting paid at all (see Apple Music).
7. Streaming exclusives are a poor substitute for real ‘windowing’.
Music industry executives famously dropped the ball on new technology, and lost about two-thirds of their entire business in the process. So what are they missing right now? One giant miss is happening around windowing, or rather, the lack of a well strategized, smart windowing approach.
Hollywood has had a highly successful windowing approach for decades. And despite major problems transitioning into the digital era, Hollywood is at least forging ahead with some semblance of a windowed release strategy. Whether it’s MGO, Netflix, Screening Room, Cineplex Odeon, or Delta Airlines, the film business is actively thinking about a windowing release strategy that will make sense for them.
By comparison, the music industry has chaotic, one-off streaming exclusives, with few best practices or industry-wide guides to help. That’s disorganization and in-fighting, not real industry growth or strategy.
8. Streaming exclusives complicate the path towards paid subscription.
What artists like Taylor Swift and Adele want is simple: exclusion of their content for paid-only streaming channels. And if there’s going to be a ‘streaming exclusive,’ it should be for paying music fans only — across all platforms.
Why this approach? Streaming music is growing at an unprecedented rate, but there still aren’t enough paying fans to sustain a real recording industry. Spotify has 30 million paying customers, but an estimated 70 million non-paying customers. In that light, a Spotify exclusive with Drake only complicates the broader music industry mission of getting people to pay.
It’s simple: If you’re paying, you get access. If you’re not, you have to wait. That’s the type of broad-scale streaming exclusive that will make this industry truly grow.
Image by stantontcady (CC by ND 2.0). Written while listening to Sturgill Simpson.
Exclusives have worked wonders for Netflix and Amazon? Why can’t they work for music?
I feel like they’ve worked a lot better for Netflix than Amazon but they have different intentions from what I can tell. Netflix seems to want to go more for the premium content while Amazon seems to be more interested in providing a launchpad for content creators.
I’ve had Amazon Prime for over a year and Netflix for around 5 years. I can’t remember the last time I really used Netflix but I do sporadically and it’s never for original content while I’ve only watched video on amazon one time ever, and it was because it was the only site I could legally find the HBO show Carnivale.
Name one Amazon show.
Still waiting…
ok, you got me there. netflix has had some great originals though. house of cards, bloodline, marco polo, narcos, etc.
Transparent.
Bosch. The Man In the High Castle. That’s two amazing Amazon shows.
Because people likely don’t have the same relationship with programs the way that they do with artists. Watching a TV show/film/Documentary what have requires a degree time commitment that music does not- I can listen to music while driving, working out, cooking, walking the dog etc. on whatever app I prefer. Music is more portable where as programs are not.
I’m so frustrated when I can’t find the music I want on Spotify, especially when I know it’s there, just unavailable in my country. I’m paying, but I don’t have access to all the content the service has. The same goes for exclusives, and being one of the subscribers I’m glad the article points out that withholding the content hurts us unfairly. Every time there’s a new exclusive, all I wish is that people download the album for free like there’s no tomorrow. People will buy CDs only if they want to anyway. They won’t be forced by the decision of making the music as little available as possible on legal platforms. Labels and artists are going in the wrong direction with this. They’re creating reasons for people to find piracy more attractive than streaming.
I agree with the post, up to a point, but Paul seems to have the wrong target in view. Streaming exclusives were pioneered by Spotify, who (presumably) paid labels and/or artists like Led Zeppelin and Metallica big bucks to get exclusive streaming rights. (I say ‘presumably’, because of course Spotify bragged about the exclusives but didn’t say how they got them. And incidentally, paying some artists more than others makes a nonsense of Spotify’s vaunted ‘transparency’ statement.)
I’m not aware that Apple Music has paid for exclusives in this way. Taylor Swift’s albums are available on any service which is prepared to limit them to paying customers.
Tidal may have some exclusives, but only from artists like Kanye West who have some equity stake in the business.
Apple has paid Drake some 15+ million for exclusives. And have paid on numerous other occassions as well (remember U2!).
U2 was an exclusive for iTunes, not Apple Music streaming. You are right about Drake, and maybe others, but in the case of Drake, at least, the streaming exclusive only lasted a week. This contrasts with Spotify and Led Zeppelin, where the exclusive lasted 12 months. I don’t approve of streaming exclusives in general, because they are anti-competitive, and can be used by market leaders (like Spotify or Apple) to suppress less powerful competitors.
I don’t understand why you can admit that streaming exclusives encourage piracy but still insist that windowed releases don’t.
Has vehere been some solid numbers on this? To what degree do ees piracy go up with an exclusive as opposed to releasing everywhere, or windowed for that matter? I’ve only seen speculation about all of this.
As far as known numbers, I thought piracy was actually up this year, despite a huge increase in streaming accounts.
That’s a good point. I didn’t really define that point well enough. Sure, piracy is always there: MusicWatch just estimated that 53 million Americans have pirated in some fashion over the past year.
http://www.digitalmusicnews.com/2016/02/26/57-million-americans-illegally-acquire-music-study-finds/
Then again, you have 41 million people worldwide paying for Spotify and Apple Music alone. Toss in Deezer, Rhapsody, and Tidal and you’re over 50 million. That can get to 100 million, but it will be a lot harder if the 50 million aren’t being rewarded instead of penalized. Those are some of the music industry’s best customers!
Now, if you’re Kanye and restrict everything to Tidal (which has 1 point something million subscribers), how could you not expect massive piracy? Restrict it to paying streaming subscribers (regardless of service), plus vinyl, CD, and paid download, then the story changes. Heck, let’s throw in anyone who’s purchased any ticket to a Kanye concert — past or future.
Now that torrent figure is suddenly a lot lower.
“If you’re paying for Spotify, you can’t get the Apple Music exclusive. If you’re paying for Apple Music, you can’t get the Tidal exclusive. If you’re paying for Rhapsody, you can’t get the Spotify exclusive. That’s a frustrating mess for the music industry’s best customers, and a great way to stunt revenue growth.”
But you do get the exclusives for the service you pay for…So: you get what you pay for. That should drive revenue, no?
You’re assuming that music streaming’s going find a way to be profitable.