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User-Centric Dreaming

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User-Centric Dreaming → The user-centric streaming royalty model — explained and critiqued here — was the focus of a new study by the National Music Centre in France. Using data from Deezer (who are publicly open to exploring this model) and Spotify (who aren’t but might be shifting), the study determined a small advantage for niche artists, offset by the amount of major label back-catalog material that makes up the majority of streams. Here’s Stuart Dredge in Musically:

There is plenty more to parse from this new study, such as the likely increases for genres like classical music, jazz, metal and blues (and corresponding drops for streaming’s biggest genres: rap and hip-hop). Meanwhile, catalogue music is a beneficiary, which – again, as indicated in previous studies – is one reason why user-centric might not be the redistribution of revenues from major labels to independents that might have been expected.

The user-centric model dispenses of the system of pooled royalties that go out to artists streamed on platforms like Spotify. Instead, a listener’s subscription money only goes to the artists that a listener streams. So, if you listen to nothing but Merzbow1preferably at an ear-splitting volume on Spotify Premium for 30 days, then all of your $9.99 monthly subscription fee goes to Merzbow.

This model may not change the royalty pay-outs much, according to the study. But I’m still into the model for two reasons. First of all, I feel like it would give listeners more emotional investment in the artists they stream. I want to think we’d feel an additional connection with our listening choices, knowing that our streams contain direct support for our favorite artists. Though it’s worth noting, the much-maligned per-stream rate isn’t likely to change.2Though, as a Spotify Premium subscriber, if you only listened to one Merzbow song in a month, then that single stream is worth $9.99. Crazy, eh?

Second, and more significantly, the user-centric model would destroy the shadow industry of stream farms. These are the “pay X amount of dollars for ten thousand streams” folks who load songs into a wall of smartphones, playing a song on each repeatedly to increase stream counts. These plays also theoretically increase the royalties paid to the farmed songs, but it’s at the expense of other artists legitimately streamed on the platform because of royalty pooling. Under a user-centric model, if the stream farm pays $9.99 for a premium account, then the only potential royalty from that account comes out of that $9.99, even if the song is looped a kazillion times. And it won’t affect the royalties of valid artists.

As the Musically article points out, right now, this is all pie-in-the-sky thinking. That’s because for the adoption of the user-centric model, the major labels — many of whom are Spotify shareholders — would have to agree to it. As the model helps niche artists, even slightly, the majors are not going to let this happen.

Anyhoo … want to grok some more pros-and-cons on user-centric streaming? This analysis of how the model changes an artist’s digital marketing strategy, via Bas Grasmayer and his excellent MUSIC X newsletter, is an illuminating read.

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Daniel Lanois on WTF with Marc Maron + Rick Rubin on The Moment with Brian Koppelman → Possibly the best thing I did all week was listening to these two podcasts back-to-back. These conversations illustrate how a music producer’s role can overlap with some combination of philosopher, personal coach, and crisis manager. It’s not just about drum sounds and reverb. Lanois talks specifics about the process of wrangling great work from icons (and their giant egos), and Rubin expands on that with the big picture view. I recommend you listen in that order — a masterclass in the mindsets required to inspire others into action, not just applicable to inside a recording studio. Bonus: this interview with Trevor Horn conducted by Prince Charles Alexander (also a producer of renown) has a lot more ‘shop talk’ than the previous two but is still a fascinating listen. Horn is such an engaging interviewee. 

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Burdy – Satellite → Back in the ’90s, all of us downtempo-headz listened to lots of Fila Brazillia and the other artists inhabiting the Hull, UK, imprint Pork Recordings. One act that stood out was Baby Mammoth, a duo who shared Fila’s knack for melody and sly rhythmic constructions. An amicable gent named Burdy was one-half of Baby Mammoth. We ended up becoming friends thanks to his semi-frequent sojourns to the US, where we often DJ’ed the same club nights. After a couple of solo releases and a stint as an Australian, Burdy took a long break from music-making. Now he reaches out from his new base in chilly Canada, surprising us with a delightful album of fresh music. Satellite is out today on Filtered Deluxe Recordings and features ten tracks that won’t disappoint fans of the Mammoth or their Pork label-mates. The songs feature Burdy’s sense of melody, sense of humor (“Murder Hornets,” anyone?), and his sense of style. Meaning, this is stylish stuff — pleasantly sloping beats, a rush of organic and electronic instrumentation, and vibes for days (or daze) make me wistful for when we used to pack dance floors with 100 BPMs and below. Start with the second track, “Kananaskis,” with its road-movie guitar, watery bounce, and cryptic chants, immediately pulling you in for the long haul. 

An Accommodating Tinge of Distortion

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An Update on Bandcamp Fridays → You can’t have too much of a good thing. Since the very beginning of COVID-times, Bandcamp has waived their revenue share on the first Friday of every month. That means after payment processor fees, artists (or their labels, if managing the account) got an average of 93% of the total.

Bandcamp Fridays were a rousing success for everyone involved, not the least Bandcamp itself. Though the company led us to believe these first Fridays ended with 2020, I suspected these events would continue. And here’s Bandcamp with breaking news: 

Although vaccines are starting to roll out, it will likely be several months before live performance revenue starts to return. So we’re going to continue doing Bandcamp Fridays in 2021, on February 5th, March 5th, April 2nd, and May 7th. As always, isitbandcampfriday.com has the details.

Also, in the announcement, Bandcamp rightly points out that fans shouldn’t think these are the only days to buy music and support artists. Normally, “an average of 82% reaches the artist/label” through Bandcamp on a day that’s not the first Friday of the month. That’s still pretty good and remarkably better than those other guys. 

So why have these special Fridays, then? Well, they’re a lot of fun. Bandcamp Fridays remind me of Tuesdays at the record store — new releases came out every Tuesday in the olden times — and fans would line up at the door before we opened in anticipation of their favorite artists’ fresh music. Nowadays, Bandcamp Friday’s excitement carries over to social media. The social platforms come alive on Bandcamp Fridays with recommendations, exclusives from the artists, and praise from fans. It’s a nudge to the broader public that there’s something more than Spotify, that an inclusive music community bubbling with intention and enthusiasm exists in 2020. And because of that, I expect Bandcamp Fridays — or some version of it — to continue well beyond next May.

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In 2021, support people. Screw the brands. → The argument over streaming royalties and how the services don’t adequately pay artists often loses sight of an important factor. If a recording artist releases through a label, that label might take as much as 90% of the streaming royalty pie.190% would be a really bad — but not unheard of — major label deal. Then, there’s the issue of labels that don’t pay at all — whether that’s intentional or due to a combination of laziness and bad accounting. 

In 5 Magazine, Terry Matthew calls out labels that infamously don’t pay artists. Terry mentions classic Chicago house music labels like Trax, defrauding pioneering Black artists like Larry Heard and Robert Owens. But Terry notes a more significant problem: as fans, we sometimes mythologize the labels at the expense of the artists behind the music. We continue to support labels while (often unknowingly) hurting the artists. Here’s Terry:

Too often as an industry, we elevate packaging over product, memorabilia over music, brand over artist. All might be forgivable except the last, because there are real people involved in this, many of them are still alive and still active artists.

Terry’s prescription: Stop fetishizing labels at the expense of artist fandom. Buy releases directly from the artists when you can (via Bandcamp or artist sites). And be aware that the classic record you’re buying might be a dodgy label’s make-a-fast-buck repress.

There’s also a reminder not to get caught up in our beloved artists’ catalogs of classics, ignoring their current output. Many pioneering producers are still making vital music. A lot of it is self-released. The best thing we can do as fans is to follow our heroes as they continue their musical lives, supporting them when we can. 

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Shea Betts – Sea / Sky → This album is the first release from NYC-via-Canada librarian and music-maker Shea Betts. As evidenced by the title Sea / Sky, the album is an ode to both, with the first half inspired by the ocean’s movement while the second reflects the windiness of the atmosphere. Shea tells me that he had “a desire to make a more ‘abrasive’ ambient sound – something more distorted and overdriven than the subdued ambient that I often listen to.” That abrasiveness is anything but, closer to an accommodating tinge of distortion on keyboards that sustains like church organs. This organ-like quality gives Sea / Sky a religious air, an almost worshipful respect for the natural world inhabited by the album’s two subjects. With measured difference, the ‘Sea’ half conveys roughness while the ‘Sky’ portion is lighter and flowing. And the songs in the middle are a combination. “Where the ocean meets the sky,” says Shea. Despite its simplicity, Sea / Sky is expressive and visual — listening in full, with the concept in mind, is movie-like. I imagine a vertical slow-motion camera pan from the water to the clouds. Probably in black and white and dramatically contrasted. Is Béla Tarr available?

This Space For Rent: Showing Up on Spotify’s Endcap

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Spotify is floating a tool (reportedly called Discovery Mode) that would allow users — labels, artists, and marketing teams — to influence its mysterious streaming algorithm. Importantly, this applies to the algorithm that recommends the music played in Spotify’s non-interactive autoplay functions. Rather than affecting placements in algorithmically determined playlists, the program pushes songs played in ‘radio’ streams. These are the streams of music that automatically play once an album or playlist ends (if you haven’t turned off this feature in your settings) or while using Spotify’s radio functions. It’s like how we usually think of Pandora — an endless stream of songs inspired by a particular artist, album, or algorithmic choices based on a user profile.

Here’s the clincher: To participate, the song selected for algorithmic spotlighting will receive reduced royalties on streams resulting from the program. In other words, on-demand streams from fans intentionally listening to the song on Spotify or hearing it in a playlist are unaffected. Spotify only increases its take on non-interactive (radio) streams of the music that has opted in.

The optics are bad, and Twitter is not amused. It’s no secret that Spotify (and, to be fair, other streaming services) pays out at miserably low rates. Reducing this rate further appears insulting. If we give Spotify the benefit of the doubt, this future fee in exchange for participation is meant as a filter to keep labels and artists from opting in every song in their catalogs. And we could consider the lack of an upfront fee as egalitarian outreach. But less benevolent speculation is more worrying.

First, I must point out that non-interactive streaming — ‘personalized radio’ like the Pandora example — pays out at the lowest royalty rate of all. Without going into the weeds1Here’s a quick explainer., this is a legally mandated difference, and it’s true for every service that has a somewhat unpredictable radio-like component. It’s also why US listeners can’t skip around on Mixcloud — that ability would make the stream ‘interactive’ and the royalties owed would jump significantly. Thus the rate that Spotify pays for personalized radio is already tiny. 

In my view, the reduction in the low non-interactive rate for artists won’t make much difference, both in what Spotify gains and the artists lose. That supports the ‘benefit of the doubt’ view. Despite the tone-deaf appearance, Spotify’s decision-makers may feel like this is a gift to artists.

What’s worrying is the possible (and, frankly, probable) expansion of this tool. I don’t know for sure, but I’m guessing an artist opts-in to this program via Spotify’s much-lauded playlist pitching tool in the Spotify For Artists dashboard. When an artist presents a song to Spotify for playlist consideration, I bet we’ll find a box to check for participation and rate-reduction. As this pitching tool is primarily geared toward playlist inclusion, it’s not a stretch to see algorithmic playlists — with their higher per-play rates — becoming a part of the program. Discovery Weekly and Release Radar are obvious candidates, as these are two popular Spotify playlists that are wholly determined by an algorithm. But other popular ‘non-algorithmic’ playlists — think RapCaviar and Your Favorite CoffeeHouse, among others — are starting to mix algorithmic selections within the human curation. Could these playlists become a mix of tastemaker choices sprinkled with paid-for insertions?

Some have pointed out that this isn’t that far removed from traditional record store practices. Labels would often pay stores to feature new releases on the endcaps of CD bins prominently. Of course, others say Spotify’s recommendation-influencing tool is closer to payola. That fits when the program is influencing selections on personalized radio. But once this program starts placing songs in playlists, it’s similar to a new release incentively displayed for discovery in a record store.

It’s easy to see nothing wrong with this. Listening habits and user profiles are recommendation factors, and the algorithms will probably remain weighted to those specs. A paid-for promotion is only another point of influence. If you listen to EDM all day, you’re not going to find death metal in your playlist just because someone paid for it. 

But I worry about normalization, not only on Spotify but across all streaming platforms once the genie is set free. And history shows how commerce’s manipulation of art (as loosely defined here) often ends up poisoning the well. If the program’s demand increases, it’s realistic to imagine the ‘paid-for’ metric of the algorithm edging out the other user-defined factors. 

Here’s another observation. This program is a new and experimental feature focused solely on music, but it requires little investment from Spotify. There’s not much relative cost in adding the technology to manage this. Correspondingly, the return won’t be enough to make a difference in Spotify’s finances. The contrast is Spotify’s increased investment in podcasts and podcast technology. Of note, just today, Variety announced Spotify’s $235 million purchase of podcast ad-tech firm Megaphone.

Follow those millions. If we believe that Spotify intended this algorithm-influencing feature as a helpful tool for artists, it’s still obvious where the company sees its future. And they’re probably right — I’ve no doubt Spotify will find profit and success as a Netflix-hybrid mixing original ‘audio’ content with a side of music offerings. In that case, that new release endcap display you’re paying for isn’t in a record store — it’s in the music section at Best Buy.

🔗→ Spotify’s new artist tool could boost streams (with a discounted royalty rate)
🔗→ Spotify to offer artists and labels the option to promote their music in your recommendations
🔗→ Promotion or ‘payola’? Spotify faces backlash over new personalised recommendations feature
🔗→ Could Spotify’s New Discovery Mode Be Considered Payola?

Tony Wilson’s Three-Way Proposition

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Lest we forget, Factory Records impresario Tony Wilson was a digital music pioneer. Marking 13 years ago today since his untimely death, The Guardian profiled Wilson’s ill-fated start-up, Music33. This venture was an online MP3 store, launched three years before the iTunes shop (but, to be fair, a couple of years after eMusic). 

Wilson approached the majors, but they wouldn’t get on board. If you remember, the prominent record labels were, at the time, adamantly opposed to download stores and even more resistant to unbundling songs from their albums, a built-in feature of Music33. “People want to buy songs,” Wilson insisted. He did enlist some cool indie labels like Skam (home to Boards of Canada), Mark Rae’s Grand Central, and Blood and Fire. The latter was a dub/reggae reissue label that I adored and had no idea until today that Simply Red’s Mick Hucknall was partly responsible. 

Music33 didn’t go well, ahead of its time like a lot of Tony Wilson’s endeavors. Download speeds circa 2000 didn’t cooperate, users had to redeem their purchases via passwords, and the management of micro-payments was impossible. Music33 was doomed to fail. 

In just a few years, technology solved all of those problems for Music33’s successors. But there was one idea Wilson had that didn’t carry over to our modern paradigm. From The Guardian piece: 

Wilson conceived Music33 as an online record store. The price of a song would be split three ways – 11p apiece for the website, for the artist and for their record label. Wilson felt, as he told me in 2000, that “these shits” – the labels – “saying to the artists: ‘You can have so much per cent’ can go screw themselves.”

The three-way split is an intriguing proposition. That arrangement strongly favors the artist as, after recouping, the artist also gets part of that label split — or all of it, if self-released. That’s in addition to a mandatory third of the total proceeds. Of course, the artist would need to be in direct contact with the store to get her 1/3 share which is problematic. But, as we’re dreaming here, imagine that neighboring rights organizations like SoundExchange handle the artist’s portion. That direct relationship for artist payments already exists with SoundExchange, and gathering performers’ royalties from downloads (or streaming) isn’t that far from what the organization already does.

What if Music33 had taken off and set the tone for the structure of download payments, evolving into the standard rates for streaming payouts? With artists guaranteed to receive at least 33% of streaming royalty, today’s landscape would look quite different. 

Update: As I tweeted, songwriters and publishers would still get the short end of the stick in Music33’s alternate timeline.

🔗→ ‘You’ve been smoking too much!’: the chaos of Tony Wilson’s digital music revolution

Why a Tip Jar on Spotify is a Bad Idea

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In discussions with artists, in think-pieces, in Twitter threads — here’s an idea that comes up all of the time: streaming platforms (Spotify, etc.) should add a ‘tip jar.’ If you enjoy an artist, you can ‘tip’ them, like a dollar bill in a busker’s guitar case. It’s a way of helping the artist in a time of dwindling streaming payouts.

The suggestion is well-meaning and, at first, sounds like a great idea. But there are a lot of problems.

Let’s start with logistics. The streaming platform would need to implement a direct payment system. And the only way a ‘tip jar’ would work is if the payment goes directly to the artist. A label or distributor could be a conduit, but if the idea is to eliminate the ‘go-between,’ then having someone in the middle — accountable for payments and likely taking a cut — defeats the purpose.

For this ‘tip jar’ to work, the artist would need to contact the platforms and set it up personally. And, unlike a single distributor that maintains relationships with multiple platforms for an artist, the artist would have to directly manage each platform (assuming different spaces come on board to the idea).

But could we even get to that point? This concept wouldn’t work unless Spotify came on board. And what’s the incentive for Spotify to do something like a ‘tip jar?’ It would take an investment and change in infrastructure to set up this feature and facilitate direct payments. What’s in it for them? As a shareholder-controlled company, there needs to be a profit motive embedded in everything they do. And, again, if a platform takes a cut of the ‘tips,’ then the purpose is defeated.

I don’t harbor an illusion that Spotify would install a ‘tip jar’ without a profit motive simply to support the artist community. It’s not hard to discern Spotify’s interests, given the company’s recent moves: the opposition to raising copyright payouts to songwriters, the shift to podcasts, Daniel Ek’s insistence that Spotify is an ‘audio company,’ not a ‘music company.’ Spotify, and other corporate platforms, seek profit above all else, and a ‘tip jar’ doesn’t fit into that equation.

Now let’s pull back and look at some broader problems. We have to accept that, on its face, a ‘tip jar’ on streaming platforms is a bad idea. It disguises the insufficient payouts to artists — as well as the lousy record deals where many artists find themselves trapped — by claiming they can (and should) live off tips. There are already ethical problems with paying service industry workers far below minimum wage due to the possibility of ‘tips.’ We shouldn’t continue to normalize this practice by extending it to recording artists.

Also, an artist tipping system harms non-artist songwriters. Songwriters would not receive these tips. If fact, non-artist writers would probably receive less royalty. It’s possible services and labels would use the tipping feature as an excuse to reduce royalty payouts.

If we can ignore this bad behavior, then there’s an additional danger. A tipping system on Spotify, used by artists for income, would ironically increase reliance on the platform. It’s another method of separating artists from their fans, with Spotify standing in the middle. If the domination of corporate streaming platforms is what brought us here, wouldn’t it make better sense to offer solutions that lessened an artist’s ties to them? I worry that including Spotify et al. in plans to help independent artists shuts us off from outside-of-the-box ideas that further artist independence.

I also don’t think that artists should have to busk and beg on the side of a road that runs alongside corporate property. It’s a bad look, and it’s demeaning, and, despite what we’re led to believe, there are other options. Yes, artists need to make a living, and streaming payouts are awful, especially in the niche genres. But ‘if you can’t beat ‘em, join ‘em’ isn’t the answer here.

The answer lies in fandom — it always has — and finding ways to cultivate and engage an audience without a middleman controlling access. For starters, a robust artist website is key. Create a hub that draws new listeners and repeated visits from diehard fans. Reward with bountiful content, consistent updates, surprises (very important), and full streams of the catalog. Your website is where you send people, not Facebook or Spotify or another platform that controls access to fans. One can still use those platforms, of course, but use them merely as tools to get people to your site. And, if you want, that’s where the tip jar goes.

Spotify’s Auto-Play Means Less Royalty For Songwriters

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An astute observation by Billboard:

Although songwriters, publishers, or everyday people may not be aware, Spotify — like YouTube — has now moved to a model that auto-plays songs after a user listens to one they selected. […]

On the plus side, what this does is keep listeners engaged on the site, which is a benefit that Spotify likes. And it has the potential to turn listeners on to more music, a benefit that all rights owners, publishers, songwriters, labels and artists should like. And it steers payments to artists and songwriters whose songs weren’t chosen to be played.

But it represents a downside in per-stream payments for songwriters and artists, too. Since the payout pool is divided by streams, the more streams that occur in a month, the further the per-stream payout decreases. In addition to songs that users choose to play, their devices will automatically play other songs after they hear the song they wanted. Who knows how many additional plays accrue due to automation — but it’s safe to say those plays are further diluting the per-stream payout for artists and songwriters whose songs the consumer chooses to play.

I also believe Spotify’s auto-played songs fall under ‘non-interactive streaming’ (AKA ‘internet radio’). This means that mechanical royalty does not apply. So this auto-play feature may partly serve to lessen a user’s amount of ‘interactive’ streams, allowing the platform the decrease its overall royalty pay-out.

Please correct me if I’m wrong. But if I’m right, and you’re a Spotify user, maybe think about turning off the auto-play mechanism in the app’s settings.

🔗→ The CRB Rate Trial Explained: How Publishers, Digital Services Weighed In At The Time

SoundCloud’s Distribution: Not Taking a Cut?

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Kori Hale in Forbes:

SoundCloud’s new Premiere distribution channel should streamline the money artists receive from various platforms, and help monetize their music through a revenue sharing program. By Investing in tools artists need, CultureBanx reported they can offer more value and potentially become a more profitable company, instead of trying to directly compete with Apple Music and Spotify.{…}

SoundCloud won’t take a cut of the payouts artist receive from the other music streaming services. The new distribution tool will be available to eligible SoundCloud Pro $6/month and SoundCloud Pro Unlimited $12/month subscribers.

As MusicAlly reported, SoundCloud’s distribution engine is powered by FUGA. I can’t imagine FUGA isn’t taking a cut, so my guess is that SoundCloud won’t take anything off the net received from FUGA. If SoundCloud is selling this as if artists will get the full distributor percentage from Spotify and Apple Music it’s disingenuous. Does anyone know the deal?

🔗→ SoundCloud’s Urban Culture Streams Into Spotify & Apple Music

Micro-Licensing and the Act of Crossing Fingers

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Micro-licensing sites — where you add your music to an online library portal and licensing rights are granted for a small fee — have an allure. For one thing, they’re convenient as you merely upload your songs and fill in some info. The only other step is to cross your fingers and hope your music takes off on the site. Micro-licensing sites promote royalty in scale — that if your music is successful, it won’t matter that the license fee is $15 (or whatever). Thousands of those will add up.

But it’s common knowledge that it’s a 1% of 1% that have such success on these sites. And I’d wager these successful composers work super-hard at it, doing quite a bit more than crossing fingers.

You also have to accept that, in most cases, you’re losing complete control of your work when you supply music to one of these content providers. You don’t know who’s licensing, and you certainly can’t deny a license, and you won’t be able to gauge or benefit from a commercial entity making loads of money off your work.

Stock photo sites operate the same. Which brings us to this story reported in Petapixel:

It turns out a Newfoundland-based company called Islandwide Distributors (IWD) had licensed [Michael] Stemm’s photo royalty-free from Shutterstock for just $1.88. The company then turned around and made at least 500,000 units of products with it [and sold the products in Walmart stores across Canada] — Stemm learned this number after reaching out to the company. So while Stemm’s experience may seem unfair, it was likely entirely lawful and within Islandwide’s rights.

The salt on the wound:

Unfortunately for Stemm, he isn’t even able to withdraw the $1.88 he earned, as his account needs to reach a balance of $50 before he can see the funds.

Techdirt has no sympathy for Stemm:

Stemm said Shutterstock could license the photo. Shutterstock did exactly that. The fact that Walmart has more than 500,000 items featuring Stemm’s photo is probably unexpected, but if you really want to retain full rights to your creation, you don’t hand part of those rights over to a middleman. When Walmart licensed the picture from Shutterstock, it didn’t seek Stemm’s permission because it didn’t need Stemm’s permission. […]

It certainly seems unfair when a company can make hundreds of dollars from a $1.88 license. But there’s nothing unfair about a process that involves a voluntary relinquishment of control. Shutterstock can certainly find a greater market for someone’s photos, but no one should go into this relationship believing it will result in newfound personal wealth.

I agree with Techdirt’s sentiment here — when you enter into an arrangement with a stock photo library, or a music library, or the record label that will own the rights to your songs, you need to accept what you’re getting into. Moving forward, any mistake is but a learning moment as you got yourself into the mess. According to Petapixel, even Stemm admits he didn’t read Shutterstock’s licensing terms before clicking ‘submit.’

That said, I do believe these sites could do a better job explaining what’s in store for content creators and to favor realistic expectations. The idea that an artist will make ‘easy money’ through a micro-licensing site supports a rare exception. The artist might have better luck buying lottery tickets. Just like the lottery, the allure is strong — I’ve certainly been tempted, by both these licensing libraries and the lottery. And it’s okay if you play — just understand the agreement that you’re entering, the potential outcomes, and how frustrating it is to be in Michael Stemm’s position.

Music Recognition and the Future of Venue Royalty

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DataArt’s Sergey Bludov, writing for the Medium publication Hackernoon, has posted an interesting rundown of Music Tech Trends to Bolster The Music Industry in 2019. He writes that 2018 may have been one of the more pivotal years for technology in music, both in innovation and adoption, which sets things up nicely for 2019. The article explores the potential of sexier tech-topics like artificial intelligence, VR/AR, and wearables, but the area I’m most excited about might seem mundane in comparison. Sergey places it at the top of his list, so I think he shares my enthusiasm. We’re talking about using music recognition technology as a tool to calculate accurate performance royalty payments from song play in venues. I swear — this is super-exciting:

The music industry faces a massive challenge when it comes to monitoring and tracking where and how often a song is being played. Without effective Music Recognition Technology (MRT) artists, publishers, and other rights owners lose their royalties each time music is played in a club, bar or any other venue. And, of course, this is a very serious problem, with some estimating that 25–35% of mechanical licenses in the U.S. are unrecognized on streaming platforms alone. Fortunately, a range of experts around the world are working diligently to solve this major issue through MRT innovations and implementation.

Automatic music recognition isn’t new. In fact, Broadcast Data Systems (BDS) was widely-deployed by the early 1990s for recognizing songs played on U.S. radio stations. However, even though the core algorithm for recognizing music has existed for decades, a large percentage of venues are still not adequately equipped with MRT. The good news is that many companies such as DJ Monitor heading up the technology side. And of course, once the music is effectively recognized, the data is sent to the performance rights organizations (PRO) that handle payment distribution. Paris-based Yacast is another tech company working in this space, as well as SoundHound Inc.’s Houndify, Google’s Sound Search, and others.

I’ve written about this before. Music played in venues (restaurants, nightclubs, hair salons, etc.) cannot be accurately tracked unless someone’s taking notes and submitting tracklists to the PROs. So, historically, the payments venues make to the PROs (mainly BMI and ASCAP here in the states) go into a pool. The top artists of that quarter — who the PROs assume are getting the most venue-play — receive payments from this pool. Of course, this is ludicrous — though there hasn’t been any other realistic solution — and causes frustration for the gothic club or the hipster coffeehouse that’s never playing ‘top artists.’

Shazam-like technology is a hope to solve the problem. With a device installed in venues, the music coming from the speakers can be monitored 24/7 with the info sent to the PROs. Theoretically (and realistically) that info is used to pay out accurate venue royalty to the artists receiving play.

A few countries and PROs in Europe are already testing this — PRS in the UK and GEMA in Germany are working to implement this technology — and it can’t come soon enough for the US and the rest of the world. However, most countries only have one performance rights organization, which makes it easy to select and install the device and have it report back to the appropriate party. The US is an outlier (go figure) in that there are technically four competing PROs. It may be a battle to get these companies to agree on a single device that will report data to each. I’m sure each fork of that data will need to be a private and trusted stream so, for example, BMI can’t see how ASCAP is faring. If they can’t agree then the untenable status quo may hold or — even sillier — venues may be asked to install a separate listening device for each PRO.

The impact of virtual reality and A.I. on music over the next few years will be fascinating to watch. But, to be honest, I am a lot more curious to see how this song-tracking technology develops.

The Digital Dispute Over Mechanical Royalty

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Lots of confused, angry, and wide-eyed rumblings due to Spotify’s latest legal pronouncement. The Hollywood Reporter explains:

What {Frankie Valli and the Four Seasons member Bob} Gaudio’s lawsuit alleges — as did the prior class action — is Spotify is violating the reproduction rights of publishers and songwriters. Those making a mechanical reproduction of a musical composition can obtain a compulsory license and bypass having to negotiate terms with publishers. However, those doing so have to follow certain protocol like sending out notices and making payments. The lawsuit claims that Spotify hasn’t done an adequate job of doing this.

In the past, Spotify has pointed to the difficulty of locating the co-authors of each of the tens of millions of copyrighted musical works it streams. It fought the class action mainly on jurisdictional grounds as well as challenging whether the lawsuits were ripe for class treatment. But Spotify seems prepared to go another step and set off a legal firestorm by now challenging what rights are truly implicated by streaming.

“Plaintiffs allege that Spotify ‘reproduce[s]’ and ‘distribute[s]’ Plaintiffs’ works, thereby facilely checking the boxes to plead an infringement of the reproduction and distribution rights,” states a Spotify motion for a more definitive statement from the plaintiffs. “But Plaintiffs leave Spotify guessing as to what activity Plaintiffs actually believe entails ‘reproduction’ or ‘distribution.’ The only activity of Spotify’s that Plaintiffs identify as infringing is its ‘streaming’ of sound recordings embodying Plaintiffs’ copyrighted musical compositions.”


Spotify is implying that digital streaming doesn’t entail reproduction; thus the service never owed mechanical royalties in the first place. If you’re confused (and that’s understandable), Complete Music Update gives a solid explainer:

In music, and especially music publishing, a distinction is commonly made between the reproduction and distribution controls – often referred to as the ‘mechanical rights’ – and the performance, communication and making available controls – commonly referred to as the ‘performing rights’.

When you press a CD you exploit the mechanical rights but not the performing rights. When you play a song on the radio you exploit the performing rights but not the mechanical rights. But what about digital?

Copyright law doesn’t usually state which controls the digital transfer of a song or recording exploits, though generally the music industry has treated a digital delivery as both a reproduction and a communication (or a reproduction and a making available) at the same time. A download only exploited the mechanical rights, while a personalised radio service like Pandora or iHeartRadio only exploited the performing rights. However, with on-demand streaming of the Spotify variety, it has generally been accepted that both the mechanical and performing rights are being exploited.


(The full CMU explainer is worth a read.)

I admit, applying mechanical royalty to digital streaming seems a stretch at first. But what’s important to remember is mechanical royalty is not meant to be tied to purchase or the consumer acquiring the duplicated composition. For example, if a label manufactures 1000 CDs then mechanical royalty must be paid for all 1000 copies, even if only 50 sell.

Technically, streaming does require a download, though that download is immediately deleted from the device’s RAM. So, even though the listener isn’t purchasing or acquiring the song, there is a duplication taking place.

This does get tricky when one examines the separation of radio-style services (such as Pandora’s traditional streaming ‘stations’ and iHeartRadio) and on-demand streamers (Spotify, Apple Music). I don’t know the technical specifics, but doesn’t a Pandora ‘station’ download the file to a device’s RAM as well? Almost every other country in the world seems to think so, as the US is an outlier in excluding digital radio-style services from mechanical royalty payment.

If the issue of mechanical royalty and streaming goes to court, it will be watched very carefully as the precedent set either way would be monumental.

Spotify has already paid out tens of millions in settlements over unpaid mechanicals which is likely to be seen as an admission of guilt, hurting the chances of the ‘we should be exempt’ argument. So the money is on the status quo. Regardless, songwriters have a right to be concerned. The line taken by Spotify’s lawyers reveals that the company believes writers should be paid even less than they presently are.