Humbolt, an indie-centered streaming music service, vows to pay artists and labels their fair share. Yet, even before its launch, the company has failed to answer one key question – why should music fans and artists choose this clearly inexperienced service?
According to David Crosby, don’t expect to get paid very much on streaming music services if you’re an artist.
After 1 million plays on popular streaming music services – including Spotify, Pandora, and Apple Music – the former Byrds member claimed to earn just $5.
Crosby isn’t the only artist complaining about low payouts from streaming music services. Zoe Keating, an award-winning cellist and composer, earned just $167.31 from Amazon Music after 44,366 plays.
Taking a closer look, most streaming services offer artists – especially indies – terribly low payouts.
Despite earning $1.49 billion in revenue during the second fiscal quarter of 2018, Spotify only pays artists approximately $0.00437 per stream, according to data disseminated by artists and labels. Napster, with fewer subscribers, pays more than quadruple that amount. And, unlike Spotify, the service manages to turn a profit.
So, where does most of the money generated on these services go? Major labels, tech companies, and radio stations keep the majority. According to a report by Citi, artists receive just under 12% of what the music industry generates each year.
Now, one new streaming music service claims it will finally pay back artists their fair share of royalties. And, it will provide incentives and rewards to listeners who willingly line up behind the service.
Introducing Humbolt – where every artist receives direct payments.
Humbolt, a self-described ‘ethical’ indie streaming music service, has launched on iOS and Android. The service allows listeners to stream music from their favorite up-and-coming indie artists.
Users on the service can create playlists, build a record collection, preview thousands of tracks ad-free, and stay social with regular updates. Humbolt also promises listeners incentives and rewards just for choosing the service.
Users can subscribe to individual artists and indie labels. Subscribing to an artist unlocks their label’s catalog. Subscribing to a label unlocks their catalog.
Humbolt claims to have signed deals with over 2 dozens labels, including Omnian Music Group and Bloodshot Records.
So, what makes this service different than all the rest?
According to founder and CEO David O’Brien, the $2.99/month fee goes directly to indie artists and labels. This allows him to claim Humbolt gives “more money back into the independent market than any other streaming service.”
Explaining his vision for the service, Humbolt adds,
“As a former musician, I wanted to create Humbolt in order to bring great and unique music to the masses while also supporting the indie music industry in a sustainable way. We believe that, in this new streaming economy, every artist and label should benefit directly from their fans.”
The service also allows artists and labels to directly control their content directly to their audience.
But, why should you use Humbolt?
Speaking to its potential audience, Humbolt boldly asks,
“Why pay $9.99 for millions of songs you’ll never listen to?”
A convincing argument.
But, the service faces a few key problems it has yet to address.
First, Humbolt doesn’t have deals with Sony, Universal, or Warner Music Group.
So, don’t expect to find Drake or Cardi B’s next album on the service. Looking at Spotify and Apple Music’s recent numbers, that’s what the majority of music fans want to enjoy.
Second, not much is known about the company nor its reputation. Even less about its team members.
If the company gives 100% of the $2.99 per month subscription fee to artists and labels, how will it sustain itself?
Third, Humbolt has built its business model around people desperately yearning to support their favorite indie artists on streaming.
The company explains on its website,
“You should use Humbolt if you value helping small businesses, are an ethical shopper, and favor supporting independent artists.”
But, how many people actually want to pay extra on top of their existing music service subscriptions just to support indie artists? After all, you can already find Bloodshot Records and Omnian Music Group’s catalog – along with other indie labels – on free streaming services.
Sadly, the brutal reality seems to be that consumers are less concerned about artist payouts. And look no further than the wildly-successful YouTube Music and Spotify for evidence of this.
But other workaround are emerging. Currently, many indie artists already use more profitable and established online platforms to raise money – Patreon and Bandcamp, for example.
So, how do O’Brien and his team expect to convince listeners to pay for Humbolt?
Clearly, the company hasn’t thought about these questions too much.
Placing more importance on its own unproven – and frankly, unsustainable – business model, the company writes,
“We think we are more impactful to the independent music community than any other platform out there today and we hope that our business model helps shape other startups to reward their partners rather than squeeze them out.”
Even worse, Humbolt doesn’t have agreements with CD Baby or Ditto Music. It’s also available on an invite-only basis. So, if you’re an indie artist, don’t expect to be accepted right away and start earning cash.
For artists to sign up, they’ll have to submit their information to the company for an individual review. Humbolt promises to review each submission “on a case by case basis.” Unfortunately, the company doesn’t state what will happen once they reject an indie artist.
At first glance, Humbolt appears to be a promising and inexpensive indie-centered streaming music service. Unfortunately, the clearly inexperienced company has yet to prove why listeners – and even artists – should use the platform.
The real question remains.
“Why pay $2.99 for a service that can’t meet the needs of indie artists and their listeners, or even its own?”
That’s not very logical. Nor ‘ethical.’
Featured image by Vivian HW Wang (CC by 4.0)
I actually can not believe that somebody thinks an indie label only streaming
platform is going to attract users. It blows my mind how these people convince themselves that there is a problem that needs solving
The problem that exists is that CEO’s of streaming services pay themselves millions….and the Artists $0.00006….if you cant see a problem with that then your a…..?
What about start up founders that actually have the nerve to pay themselves $100,000 a year while their company makes no profit and they take rev-share from artists?? They just raise investors money to pay themselves a salary….
Thanks for bringing that up. If Mr. Sanchez would have done his homework he would have informed you that I make $0 unless these artists or labels are profitable.
That is fair and I’m going to download the app and support you because of this transparency . Thats exactly the type of startup I can get behind. I think too many people here have presumed that most start up founders are in it for an exit and ask their investors for a big salary and never think of how that makes the music start up look when the artists aren’t getting paid. Good luck and you’ve got a new adopter here!
So happy to hear the founder isn’t being paid! I will support the artists and the founder and download the app and see what its all about! There is so many music tech companies giving you guys a bad name with founders being paid six sum salaries with unproven business models and no revenue in the company & i think artists and fans are sick of those type of startups! Congrats on launching and thanks for trying to make the indie artists money not just pay yourself a salary on the back of artists work
Honestly what chancer gets investors to believe in this? Seriously? An app for indie music only? I just want to know who bank rolls these ideas till they fail?
Well, that was quick.
For the record, I have no problem with bad press and we don’t expect everyone to jump on board with Humbolt. However, the ones who already have, Love us.
Mr.Sanchez has not signed up for Humbolt, did hardly any research on this article, and really most of this article is opinion rather than fact. He and Paul, and the rest of his staff know how to get a hold of us. They chose not to. More likely because we didn’t buy ad space a few months ago.
Based on this article, who need Digital Music News when you already have Billboard, Variety, and 100’s of others?
The independent music market is a $2.6B industry, 15% of that, and you have a credible business. Believe it or not, we went into this knowing we’d never compete with Spotify or AppleMusic because it’s 1/3 of the market. So we stopped basing our success off of those platforms.
2 years of research, outreach, and studying trends show the lifelong lesson that money talks and people are more motivated to champion your service when getting paid. To suggest we didn’t put any thought in Humbolt is very telling of the fact you didn’t put much effort in writing this article.
I”;m sure you’re ready to ignore the clowns who think Cardi B and Drake is music worth listening to, let alone paying for.
I do think you should not reject anyone, but let people pay to post their work, and let the play numbers and fans speak for themselves.
This notion out there that quality music is automatically stuck in a contract with a label is deliberate audience ignorance. I can tell you I want no label in between my income and my wallet. I’ll pay the label fees for services rendered. The biggest problem isn’t just getting ripped off by one label, but them selling your copyright to a bigger fish, and the artist having no say about it. This is happening with other online creative product as well, on the imagery and writing side. Brainless consumers who create nothing don’t even know what’s going on. They just want the free ride, many of them.
I don’t know about the streaming model in general. It seems to me selling by song and album still makes the most sense. 50% of an album for 9.99 or even 5.99 is far better than some miniscule piece of garbage per play.
BTW, the most important question YOU can answer as a CEO is what prevents you from selling out your company when you get big enough to cash out? Nothing probably, which is why it’s the Musicians Union of Earth that should be forming a streaming company, a group that isn’t just gonna vaporize when it’s time for the owners to buy a yacht.
Thanks, Blobbo
This is the last comment we will make in this article:
“I do think you should not reject anyone, but let people pay to post their work, and let the play numbers and fans speak for themselves.”
This assumes we’re not working towards this, which we are.
“BTW, the most important question YOU can answer as a CEO is what prevents you from selling out your company when you get big enough to cash out?”
We give too much money back to be attractive for a larger corporation to purchase us. We’re bypassing the Billionaire Silicon Valley Mindset that DMN and every other person assumes of a startup.
Again, another reason why this article is a hack job at best.
My comment was not meant to be confrontational. I’m just outlining the dangers for content creators online. I, personally, think there should be a nationally standardized accounting for plays and single sales, and a nationally, or internationally set percentage rate for creators, and then the labels can be paid from that, NOT vice versa, where the label pays the artist and the streaming company can claim whatever numbers it feels like.
THAT’S the system to get on board with.
You got it Blobbo
Why pay $2.99 for invite only artists? For artists to sign up, they’ll have to submit their information to the company for an individual review. This is so dumb
Wow, $2.99 is gonna really break your bank, isn’t it? Hey, can you go buy me a burrito cheapskate? I want something for free, and you should give it to me. Generation momlicker.
From a product design point of view they are going for indie with a social feed, current streaming platforms lack some of the important social actions, mainly commenting. But within these popular platforms an artist does have a voice and can share photos, tour dates, sell vinyl, sell merch, post a status to their followers – all the other major social network platforms cover the connecting the artist to his fans dilema. The two plays are 1)streaming makes no money for the artists our new platform will pay better 2) we connect the artists to his fans in a better way.
This makes new entrants to the streaming market all look like they are trying to solve a problem that isn’t really there. This is when you get into the “wouldn’t it be cool if” investments from angel founders. Most music start ups all thought it would be cool if Spotify looked like this but we do it “better”. You speak about innovation and what that would look like but we can all see that all the major platforms are aware of the importance of sociality and are slowly adding to the feature sets. Spotify this week launched crediting system to the IOS app where all the producers and writers are listed. Tidal and Apple all display lyrics as the song plays. Soundcloud allows users to comment on tracks. What could a new social streaming product bring to the game here? What would the point be? To earn money for the struggling indie artist? Another place to post photos and content? Social music is a waste of time, space, effort, energy, eyeballs, attention, bandwidth, creativity, investment and good times.
No thought has gone in to the fact that nobody wants to pay for the same thing twice
You just are not going to pay 2.99 if you already pay 9.99 for the same music and more
No thought went into writing this article. Half of the content Mr.Sanchez uses is suggestive that we spoke. We have not.
A new streaming service at this stage is going to really struggle to get users interested. They have built something and I don’t want to take away from that but it sounds so unproven and its frightening how many new platforms that keep opening up. If you actually look at how many streaming music apps that have launched in the past 2 years and are now ghost towns
Much appreciated, Nik
I think the idea here is they have a social feed and they want the indie artists to direct the fans to pay extra to support them on the basis that the whole $2.99 goes to the artists. Thats kind of cool. It would be shit if they were saying “come to our platform and we rev share with the indie artists” because then it would just another bunch of people trying to get rich off the artists back
The elephant in the room is even if they want to pay the artists fairly and not take rev share from the streaming price…. and they get a couple of thousand listeners on the platform…. the artists still will be paid very poorly because its only a small portion of fans/listeners paying. The business model is flawed
“every indie artist should connect to its fans and they should make money from their art” – Every new streaming platform launched that nobody uses
Hey I’m more than happy to give money to ANYONE but Spotify, Google and Amazon, the biggest ripoff MBA dloads on the planet. They are the enemy of the world at this point. Why does the bald bitch Daniel Eck get to own music? He needs to catch something with velocity badly.
^ someone gets it.
Why give to a few people when you can spread it around for EVERYONE to benefit.
Not every startup is focused on being billionaires. Thus “ethical”
It’s what we all hope for. Unfortunately, I think it needs to be made law by governments, and Republicans will never get on board. Democrats MIGHT, but they’ll prob sink it at the last minute by selling it out.
Just wanted to say congrats on the launch and good luck with it! Just wondered if you could answer if you are self funded or have raised capital to built the platform? Thanks – JD
I find this article so negative!! Ok, so its not going to be Spotify with 200 million users but they might find a niche. The CEO has said it isn’t trying to be Spotify. It all depends on scale and what they spent to get here. If Humbolt have spent a lot of cash developing it they might be in trouble because then they do end up competiting against the major platforms but as they state are trying to help earn indie artists some more money and that is a good thing. If they have spent millions to get here and are just another start up trying to sell a company then its different but the CEO is saying that is not the case!
Mildly interesting.
Actually I have no issue with any of these new services. This actually reminds me a lot of Trebel music, where they make you watch ads and the songs are free for a certain number of plays, but if you go beyond that you pay credits to continue to listen to the music. You can get like 1,000 credits for 99 cents.
But Trebel is for signed artists. Humbolt appears to be a cross between Trebel and Jango, where artists pay for their own spins, or utilize a service that can make that possible. So, with Jango, you get a mix of independent and signed.
Humbolt is not competing with Spotify it is competing with Bandcamp and Jamendo. I like variations on the regular streaming service. No, these apps aren’t as smooth or as polished as I would like them to be, like Trebel continues to show music that is not available for downloading, and likes to say that the music is coming soon, but they are worth looking into. I have a lot of credit on Trebel I need to use up, maybe I’ll download it to my device again. They could use a web interface which would make managing my collection on there a lot easier. But these apps are often more interesting than your regular Spotify, iHeart, etc.
We’ve been on Humbolt for a little over a month and we’ve made more money than we have ever on Spotify or Apple Music combined. This troll has no idea how hard it is to make money these days as a musician and then shits on a platform that is trying to figure it out. Their data can be better but they keep us in the loop on changes.
We fully support Humbolt
The hope is that a band can start on this service, then get famous, and then NOT leave the platform, thus denying the majors access. THIS is what the newbs need to do the establishment.
What happens when more artists come on humbolt does your cut stay the same?
How come every day there is another blockchain or music streaming app being launched all claiming that they are going to fix the low streaming payout model? As a fan you are expected to download and buy into new platforms and as an artist you are supposed to trust that if you invest your time and energy onto another new platform that they won’t sell you out in time. The problem isn’t trying something new or building the new platform, they problem is who is behind it and how much venture capital has been pumped into it< then you see that in order for anyone to make money, the artists end up getting screwed, because you get CTO's and founders claiming they want to help when they owe their investors millions of dollars and end up selling out or going bust leaving the indie artists no where
Will there be a place for producers and songwriters on Humbolt?
I assume Humbolt’s deal with indies is that sound recordings are provided gratis (no streaming royalties to SoundExchange) but what about publishing and mechanicals?
Welcome to the problematic world of music licensing rights.
Correction.
I assume Humbolt’s deal with indies is that sound recordings are provided gratis (no streaming royalties to the indie label or SoundExchange) but what about publishing and mechanicals?
Welcome to the problematic world of music licensing rights.
All plays, rights, and royalties, (mechanical as well) are account for.
Finally there is a new music streaming service that does not contain Major Label Catalog, a dedicated indie music service is what is needed now.
Not really in the know are you? Indie artists need to be on the major platforms due to their scale and will continue to be on the major platforms. Thats the point here. If these artists were only on an indie-only platform then it would be different. The same artists are on ALL the platforms and it becomes difficult to know what a fan is supposed to be supporting. Does a fan need to sign up to 6 different platforms to hear the same music presented in a different way?
Okay, you are missing the point here…..I am not saying that the indie artists should only be on indie-only platform. A music fan should be given multiple choices on how they can listen too and support their fav. music artists. Also, they don’t need to sign up with 6 music services…. enough said
There is another indie only streaming service called PEOPLE that has some never done before features. You can discover who made the music possible by hyperlinked digital music credits to the songwriters, the producers and then it links out to all the other stuff they have worked on. You can discover and explore music and the creative process on People not just listen to music on spotify
These are all great comments and criticisms about our product Humbolt. We never expected everyone to be onboard with Humbolt and, again, indie-music is 1/3 of the market share of streaming revenue of digital music.
To turn what is a ridiculously poorly researched article into a positive we will be addressing a significant amount of assumptions Mr. Sanchez has made in our iPhone App. If you’re in the US, UK, Canada, New Zealand, and Australia we look forward to shedding a light on our goals and mission
Music start up companies that spend 1-3 million on growth without any revenue won’t last long. The failure rate of music start ups is because founders seem to want to make money off the artist back by ‘focusing on growth’ first, but as soon as an investor see’s the amount of money needed to proceed with development costs he/she has to ask how a company would establish return on investment. If you spend 4million investing in development and growth how do you get your 4 million back? You end up creating this need for more and more money, raise more money, spend more money, and at some point you have to sit back and ask yourself; how is this 4 million dollars ever coming back? If app store closed tomorrow there would be nothing but your 4 million spent and if artists or fans dont support it which is what has happened in countless of hundred of music start ups then the you get this weird space of founders being paid huge salaries, trying to talk up their platforms by selling access to artist catalogue and content and artists never seeing a penny. Not saying this app has spent that money but licensing music is expensive
There is and always will be, indie music lovers interested in fresh underground content that’s separate from anything major labels have to offer. If the features grow there is a chance for you to be like a bandcamp for indie streaming. But to say indie-music is 1/3 of the market share of streaming revenue of digital music doesn’t allow the fact that 1/3 of that market share also includes indie fans who also want/subscribe to mainstream things as well. Due to current market saturation saying the independent music market is a $2.6B industry and aiming for 15% is a soaring overestimation of the size of the market, considering, a lot of that $2.6b industry has been because of increases to the rising number of music streaming subscribers on other establish platforms…. I wish you well and good luck
If people are already paying for music, what more can you sell them? If you have a USP for your product, ask yourself, can the other platforms copy it? If the answer is yes then what is to stop them copying your USP and leaving you with nothing new to offer?
According to data by comScore, most smartphone users now download fewer than 1 app per month. Apps is old news. Apps is ending and has been on the decline for the last 4 years. But developers and founders don’t want to know this. Big trouble ahead for app developers and companies building their dreams on apps. Watch this space and come back to me in 5 years when you say I told you so. AI and voice is the future.
yes, but apps are here now to transition into voice. Thus, leading with an app. Humbolt “Voice” will be out in 2019.
1) Founders must be paid under $100k per year until you’re profitable and VCs have seemed to agree upon this
2) All cofounders take salary equal, if you both work at a company and one gets paid more than the other the human response is that it feels unfair and will create issues when the other eventually wants equal pay from a VC
3) Companies in SF that have raised more than $10M the average salary is only $81,700.
4) A founder who says he needs to be paid over $80,000 to support his wife and kids and pay bills is never going to be successful because he is out for number 1
Sound Credit: Be more discoverable and get the next job. Be in control of the crediting process while adding a new revenue stream.
Use the Publisher to publish the full list of credits, equipment, album art, and other graphics to Sound Credit. Receive a short URL for sharing. Help others receive their credits and add them to the work so they can create profiles and lead the way in the song credit movement. Supported by Pro Tools, this rich music discovery tool will soon be embedded on Spotify and all major streaming platforms so we finally will have a place to view songwriters and engineers within streaming platforms.
Don’t just settle for Genius or Crowdsourced info. When you enter your credits in Sound Credit, you create a RIN file. RIN is the industry standard format for recording credits, created by the Digital Data Exchange (DDEX). That means that whoever you receive RIN files from, and wherever you send them to, your credits are stored in a reliable, standard format. Valid RIN files will always be compatible with Sound Credit.
The price point is good. 2.99 for indie label music and it all goes to the artist. That is awesome. I’m glad it isn’t another 9.99 all you can eat service rev sharing
I can’t support a music streaming start up where the CEO and founders are getting paid more than the artists on the platform. I can support Humbolt as the CEO isn’t getting paid more than the artists