8Sided Blog

a zine about sound, culture, and the punk rock dream

Streaming’s Song Disparity

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Buzzangle Music’s 2018 U.S. Music Industry Report has tongues wagging this week as there’s a lot of information to analyze and digest. Everyone agrees it shows a music industry in transition (though, when was it not in transition?) and growing financially. I may highlight other aspects of the report in future posts but, for now, let’s focus on this nugget via Rolling Stone:

The most popular 10 percent of songs accounted for 99 percent of all audio streams. … Flip that statistic around: 90 percent of streamable music is responsible for just one percent of actual streams.

That concentration was only a smidgeon less severe at the top of the distribution in 2018, according to BuzzAngle’s latest report. The top 500,000 most popular songs in 2017 accounted for 93.6 percent of all streams. The comparable number in 2018 fell the tiniest bit, to 92.4 percent of all streams.

Music Business Report takes a rosier view of these statistics:

The interesting bit: in 2017, the USA’s Top 500,000 tracks racked up 14.6-times as many audio streams as every other piece of music. In 2018, however, this multiple had fallen significantly, down to 12.2. Despite on-demand audio streaming’s overall volume growing by 41.8% in the US in 2018, the actual number of plays dedicated to the Top 50 tracks fell harshly – down by a pretty shocking 74.6%. […]

In other words (give or take a couple of billion streams): pretty much all of the growth in the US audio streaming market last year came outside the Top 500 tracks (aka outside the weekly Top 10 chart).

I suppose that could be interpreted as great news for independent labels though the popularity of back catalog on streaming platforms might cancel out some of the joy. But is this disparity really a consequence of streaming? Twenty years ago, I’m not sure if 10 percent of songs represented 99 percent of what was played on the radio, or sold in all record stores, but I bet the statistic was close. I’m not as alarmed by the statistic as some.

And if the disparity has indeed gotten worse, then that may also be representative of other factors than the platform. I’ve thought about this a lot, and I was pleased to see Rolling Stone hit the nail on the head with this easily overlooked sentence:

… the fact remains that the rampant inequality that has become pervasive in other aspects of American life is similarly acute in the streaming-verse.

We Now Return To The SoundCloud Soap Opera …

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FACT:

The Performing Rights Society for Music has taken legal action against (SoundCloud).



In an email sent out to PRS members, the body explains that “after careful consideration, and following five years of unsuccessful negotiations, we now find ourselves in a situation where we have no alternative but to commence legal proceedings against SoundCloud.”



PRS is responsible for collecting publishing royalties for musicians, for radio plays, public performances and more. Its issue with SoundCloud stems from the fact that despite having over 175m unique listeners per month, SoundCloud “continues to deny it needs a PRS for Music licence for its existing service available in the UK and Europe, meaning it is not remunerating our members.”


Now here’s a thorny situation for SoundCloud to address, especially if other PROs (BMI and ASCAP especially) choose to follow in PRS’s lead. There are rumblings that indeed these US counterparts are also considering action. I’m thinking an amicable resolution is required as part of SoundCloud’s impending alliances with the three majors (see below) but, if not, is it a realistic possibility that litigation from the publishing royalty collectors could finally bring the site down, Grooveshark-style? Do the majors, with their shiny new percentage stakes in the company and cash advances, even care?

Let’s reminisce about the early days of SoundCloud, pre-2010. It was a godsend to producers and musicians, promising a social network where they could not only post and share their own material, but also create embeddable players for their own sites. I know I was excited and, like many, ponied up the $500+ a year fee for the convenience and potentially powerful new avenue for self-promotion. I believe this was the early intention of SoundCloud: a place for audio content creators to share and promote their own material, and royalty and rights weren’t a concern. The fact that we’re uploading our own material implies compliance, and how easily we can spread our SoundCloud players was an agreeable trade-off.

Of course, SoundCloud’s growth seems to have gotten in the way of that good thing we took for granted. Remember the numerous times the site was down five years ago? Running all those audio streams isn’t cheap, and I’m figuring the powers that be saw mainstream adoption as a way to solve revenue drought. The nearly $1000 a year ‘Pro’ accounts suddenly were reduced to about $99. SoundCloud was becoming less of an exclusive club, and it seems a lot more users – and not just ‘content creators’ – came on board. (Side note: I remember, a mere few years ago, telling a friend to check out my SoundCloud account for my new music. This friend – not a musician, but probably a bigger, more obsessed music fan than me – had no idea what SoundCloud was. Never heard of it. It was an interesting realization that SoundCloud was kind of this insular club house, and this was probably the root of its woes at the time.)

As SoundCloud’s earliest adopters were electronic musicians (who, more often than not, double as DJs), DJ mixes have always been a major part of the offerings on the site. Growth meant that DJ mixes were becoming more commonplace, especially as mixes were the sole offering of many accounts (it would be interesting to know how much DJ mixes make up the total percentage of site content). The issues with these mixes weren’t completely under the radar in the early days – I received a take-down notice for a DJ mix containing a Marvin Gaye track about four or five years ago – but there certainly seemed to be a permissiveness, or at least a fingers-in-ears “nah nah nah” approach to the problem. PRS, in the article above, claims to have been speaking with SoundCloud about this for five years … probably mainly about their represented tracks included in DJ mixes.

It’s far too late, but it would be great to see SoundCloud try to pivot back to their content creator-focused days. Perhaps they can have a two-tiered system – a paid option for musicians to post and embed their own work without the hassle of advertisements, and then one for the DJ mixes and whatever else is being posted outside of the uploader’s copyright authority. I can’t imagine this happening … now that the majors are stake holders I’m not sure that they would like to see SoundCloud re-focus back towards independent and unsigned artists.

But it’s not all bad news for SoundCloud … or is it?


Digital Music News:

Universal Music Group and SoundCloud are now ‘days away’ from finalizing a momentous agreement, with sources close to the negotiations pointing to a pact potentially by the end of this week. The deal follows a massively-protracted, multi-year and cantankerous tug-of-war over licensing costs and a range of other issues, with critical financiers and a stable of lawyers hovering on the sidelines.



According to key sources with knowledge of the negotiations, the deal with Universal contains a substantial percentage stake in SoundCloud, with a significant upfront payment likely but not confirmed. That bears similarity to ongoing major label licenses with mega-streamers like Spotify, and reflects an interest in capturing an elephantine payout around a ‘liquidation event’.



“The majors are getting more interested in making money around the acquisition or IPO,” one industry lawyer told Digital Music News. “That’s more important than the huge advance but a lot of times they’re getting both.”



Indeed, we may be looking at the beginning of an entirely different SoundCloud, one that would replace billions of unpaid streams with actual payments to rights owners. Great news for artists, right?



Not exactly. Fast-forward a few months, and a fully-licensed SoundCloud is likely to replicate the problems currently dragging rival Spotify, with artists seeing tiny micro-payments while labels hoard gigantic lump sum payments. That includes proceeds from a massive acquisition or Wall Street IPO, something the largest rights owners will now enjoy as part owners.


The entire Digital Music News article is worth reading, as it goes into great detail about these sorts of deals and the aggressive maneuvering of the major labels. As a music publisher myself, I certainly know and applaud the benefit of royalties accrued from DJ mixes – especially those reaching thousands of plays – but I’m not certain that the deals that are being made will deliver for songwriters, especially independent ones. These agreements aren’t being made with the artists in mind, as evidenced by the lack of distribution of the upfront cash payouts (at least the PRS grievance is legitimately in representation of affiliated songwriters). Instead, my concern is that SoundCloud will become crippled or useless as a ‘level playing field’ promotions platform, and we’ll look back wistfully at the site’s golden days as we receive yet another tiny ‘micro-payment’ for our trouble.

Musicians Sue Universal, Sony And Warner Over Streaming Payments

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Music Business Worldwide:

The American Federation of Musicians (AFM) claims that the majors signed a collective bargaining agreement in 1994, and further amendments over the next decade, in which it committed to paying AFM members 0.5% of all receipts from digital statutory and non-statutory music licenses – including audio streams, ‘non-permanent downloads’ and ringback tones – both in North America and abroad.



The AFM’s Pension Fund has now filed a lawsuit in New York claiming its independent auditors recently discovered that the majors have failed to make promised contributions in three areas: (i) from streaming receipts outside the US; (ii) from non-permanent downloads outside the US; and (iii) from sales of ringback tones in the US and abroad.



“The record companies should stop playing games about their streaming revenue and pay musicians and their pension fund every dime that is owed,” said Ray Hair, AFM International President. “Fairness and transparency are severely lacking in this business. We are changing that.”


We’ll probably see a lot more of this over the next several years as we continue to navigate our covered wagons through the wild west of the streaming economy. It’s common knowledge — almost to the point of being grudgingly accepted — that the majors (and many independents) practice fuzzy mathematics when it comes to bookkeeping. But this will get tougher to obscure as the exact science of calculating ones and zeroes connecting to a user’s device replaces hand-counting the number of CD units leaving on a truck from the distributor’s warehouse. Keeping the gatekeepers honest (Spotify, Pandora, etc) will be the key. They aren’t angels, but they don’t have as much of an incentive for smoke-and-mirrors as a record label does.

Tape A Penny To A Card Of Condolence For Columbia House

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The Verge:

Columbia House offered you Incredible Deals™ when you signed up: you’d get a bunch of free albums for a penny, and in turn you promised to buy a set number of albums over the coming year. (To make things easy for you, Columbia House would automatically send you some albums unless you told them not to.) Mail-order convenience was big back then, and the idea of a subscription music service that came to your door was pretty appealing. But times change and mediums mutate, and now Columbia House has filed for Chapter 11 bankruptcy protection.



Columbia House, my nostalgic heart will miss you. You taught me how much fun it was to buy music, and you taught me to avoid mail-order offers at all costs. In a way, you were the good and the bad of capitalism, all wrapped up in one shiny TV Guide ad.


Columbia House was such a strange thing, and is there anyone out there over the age of 35 who didn’t try it (or try to scam it) at least once in your teenage years? Or who isn’t amazed that it was still around until just now?

Is it a coincidence that, after not entering our thoughts for years, Columbia House was a recent topic of social media conversation, when this excellent article came out exactly two months ago on The A.V. Club? :

Filmmaker Chris Wilcha captured what it was like working at Columbia House during this boom time in a low-key, first-person documentary called The Target Shoots First. Incredibly, few people seemed to bat an eye at the camera, which allowed Wilcha to capture the weird tension between the freewheeling creative department and responsibility-burdened marketing team, the old-guard music executives and the younger employees versed in the nascent alternative music culture, and a corporate environment not quite sure what to do with the next generation.



Twenty years after it was filmed, what’s incredible about Wilcha’s documentary is how the experience of working at Columbia House informs (and, at times, even parallels) the modern media landscape.


The article becomes a fascinating roundtable discussion between the filmmaker and three of his Columbia House co-workers. There’s a lot of talk about the culture at this red-headed stepchild of the music industry, as well as attempting to decipher the nuts-and-bolts of how “8 CDs for a penny” could actually be so profitable. It’s a long read but highly recommended.