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All Is (Not) Fair In Love and Streaming

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Complete Music Update:

Artist managers argue that they need to know more detail about the deals done between the labels and the streaming services, so that they can properly audit the streaming royalties their artists receive. This would allow them to better understand the streaming business and advise their clients on which platforms to champion. They could also then be reassured that the value of the booming streaming market is being fairly shared between all stakeholders within the music community, ie artists and songwriters as well as labels and publishers.



Noting that the new deal struck between Universal and Spotify – and the pending deals due to be agreed with Sony Music and Warner Music – continue to shrouded in secrecy, the CEO of the Music Managers Forum, Annabella Coldrick, said: “The news that Spotify and Universal have struck a new licence deal to help support continued streaming growth is welcome. However the lack of transparency around the terms of such deals means it is still impossible to properly understand and verify the flow of money from fan to artist and ensure those who create the music share in the growth in its value. Transparency is essential and should be baked into any new deal, not hidden behind NDAs”.



Music Tech Solutions:

The same criticism could equally be made of non statutory direct agreements by digital aggregators like CD Baby, Tunecore. LyricFind, Pledge Music, the Orchard and Loudr, each of which offer varying degrees of transparency of their own books, much less the deals they’ve made with digital services on behalf of the artists, songwriters, labels and music publishers appointing them as agents for relicense of music.



It would be very simple for aggregators to disclose the terms of their deals or to at least summarize them so that artists or songwriters who are considering who to sign with could compare payouts. It’s fine to tell people what their royalty split, flat fee, or distribution fee might be, but the assumption is that the revenue stream being shared is identical from one aggregator to another.



A related hot topic I encountered on more than one occasion at last week’s Music Biz 2017 conference was access to data, and how this varies from deal to deal. For example, it’s well known that the majors have negotiated access to more detailed ‘play’ analytics from Spotify (such as listener retention, more demographic options, and so on). And a plausible rumor is that the majors have negotiated others not have access to this information, giving preferred partners a leg up. Herein lies the danger of a few companies becoming the sole distribution portals for music streaming.

Ninja Tune’s Peter Quicke: “Spotify is our Biggest Revenue Source”

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[PIAS]’s The Independent Echo blog regularly posts wonderful and informative interviews with various record label managers. The latest features Ninja Tune‘s Peter Quicke who has been managing that label for 25 years. It’s always interesting to hear the perspective of a label that once made its bacon through vinyl and CD sales, now that we are well on our way into the streaming age. Says Quicke:

Spotify is our biggest revenue source. Would it be better if streaming never existed and we carried on selling vinyl and CD? I don’t know. In a way, the reverence for the artifact is tied up with the emotions of the music. Streaming is gradually breaking that down – people’s relationship with music is possibly becoming more incidental and less involved and emotional. But on the other hand, it makes it possible for people to listen to music all the time.



{Spotify feels} like an honest broker paying a fair royalty. But the other thing they’re doing is making the long-tail thinner and probably making the pool of music that gets listened to thinner. That’s not a good thing. It’s the tyranny of choice. People don’t know what to listen to so they listen to the Spotify playlists. From our point of view it’s fine [with a large catalogue], although we’re always learning what works and what you have to be careful of. Whether culturally it’s good long-term is an interesting debate.



It probably is harder now {to start a successful label}. But when I started doing this, for years I worked all day and all night, and it was fucking hard. Nobody wanted to review our records. There were a few fans, but nobody cared. We sold 2,000 or 3,000 at best. It’s hard whenever you start a record label. In a way it’s easier now because you don’t have to spend loads of time fretting over manufacturing. Starting a label at any time in history is just shit-tonnes of work for years.



Be sure to read the full interview HERE.

Pandora Premium Takes the Service On-Demand

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As we’re talking a little about Pandora, I would be remiss to not mention the company’s long-awaited foray into on-demand streaming is launching this week …

Fast Company:

The idea of launching a new music subscription service in 2017 would be utterly insane if it weren’t for one detail: Pandora already has 78 million monthly active listeners. If the company has a shot at competing, it will come primarily from its ability to upsell some of these listeners to its new $10 subscription tier. The rollout of Pandora Premium will be iterative and targeted. It begins this week and will continue through mid-April in phases, selectively coaxing existing Pandora users that might be likely to sign up based on their listening activity. People who hit the song-skipping limit or frequently thumb-up songs by the same artist, for instance, are prime targets for the new service.



Pandora is peddling a very polished, well-designed product, but it’s unlikely to reel in many people who are already committed to a service like Spotify or Apple Music. That’s because there’s very little here, aside from aesthetics and a legacy of smart music curation, that can’t be found on other services. Even perks like personalized new releases and the “add similar songs” button found their way into Spotify in the time that’s passed since Pandora acquired Rdio. Unfortunately for Pandora, Spotify has vastly improved its own curation and discovery features over the last year and a half. Pandora Premium is solid, but if you’re already invested in another service, you’re likely to find enough here to



Macworld on what, if anything, sets this service apart from the others:

Pandora Premium offers automated playlist generation: You choose one or two songs and the service creates a full playlist based on their properties. Other services have similar features. Apple’s iTunes Genius, for example, automatically creates playlists from a user’s personal playlist. The advantage for Pandora, however, is that its ability to match songs is widely considered superior to what other services can do {due to the company’s long involvement in the Music Genome Project -ed}.



The company is also very proud of Premium’s search capabilities and even managed to throw some shade at other services when discussing it. “Pandora’s team of curators, music analysts and data scientists have sifted through tens of millions of tracks to help you quickly find what you really want,” Pandora said in its announcement. “No more wading through covers, karaoke versions or tribute tracks to get to your favorite tune.” Spotify’s vast catalog includes numerous karaoke, cover, and tribute tracks that often come up in a search before the song by the original artist.



Update: Jim Dalrymple over at The Loop is optimistic about Pandora’s offering, citing a focus on catering to the listener as the key to making it a potential improvement over other services.

DJ Set Monetization Platform Dubset Gets Monetized

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We haven’t heard much from Dubset in a while. Like all good start-ups, they’ve been biding their time collecting cash. Via Hypebot:

Dubset Media has scored a $4 million Series A funding round, led by Cue Ball Capital. Founded in 20o8, the company had previously closed two funding rounds for undisclosed rounds from investors including Rhapsody and Three Six Zero.



Dubset’s MixBANK technology identifies musical recordings used in mixes and remixes, determining the appropriate rights holders (a DJ mix could have as many as 100 different rights holders), and simultaneously clearing the mix or remix across all rights holders. That enables record labels and music publishers to set permissions for access via a simple rules-based system which enables catalogs to be efficiently monetized and precludes the need to conduct time consuming searches and initiate claims.



Music Business Worldwide:

Dubset enables record labels and music publishers to set permissions for access via a rules-based system which aims to prevent the need for time-consuming searches and initiate claims.



Last year, the company signed agreements with Spotify and Apple Music for its system to be used on their platforms – potentially allowing user-generated/amateur remix content to be uploaded onto the services for the first time.



We’re still waiting for this technology (or something like it) to make serious waves in the monetization game.

Previously and Previously.

Speed It Up and Start Again

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Ubergizmo:

There are a number of ways that music streaming services can set themselves apart from one another. This can be done through price, the size of their catalogue, and also exclusives. However Tidal seems to be going one step further and that is through features where they will now allow users to edit song length and tempo.



Dubbed “Track Edit”, this feature is basically what its name suggests. Users who feel that certain songs could do without a lengthy intro or could be faster can now edit these songs and save the edited versions to a playlist.



Engadget:

While playing a song in the Tidal app, you can change the length and speed with the new Track Edit feature from the options menu. To make any tempo adjustments, you will need to select a segment of a song before you can do so. The tool also allows you to make changes to how the song fades in/out.



This is novel, but I doubt many artists outside of the dancier genres would approve of their songs being manipulated in these ways (especially the ability to dramatically speed up the tempo). Prince – who until recently was touted as a Tidal exclusive artist – would certainly be unhappy with the prospect. I wonder if catalog can be excluded when an artist wishes his or her songs to remain untouched by Tidal’s users.

The Endurance of Hype Machine

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Technical.ly Brooklyn:

The Greenpoint-based Hype Machine is a website that conglomerates music blogs and forms music charts out of what the blogs are covering. The more blogs are writing about a particular song, the higher it is on the Hype Machine’s Popular chart. As music blogs tend to be on the early adopter side of the industry, the songs you hear on the Hype Machine’s popular playlist are unlikely to be those you hear on the radio, or Spotify for that matter.



The site grew to become a place where tastemakers would go to hear new music, and, thus, a critical part of the music industry. In 2008, Billboard described the Hype Machine as “One of today’s most groundbreaking online music services … emerging as a juggernaut of growing influence.”



But the world moves on. Where Hype Machine was well-positioned in the new universe of music blogs, the industry has continued changing. People still write and follow music blogs, to be sure, but not as they once did, when Vampire Weekend went from unknown to indie kings off the strength of blog buzz.



“It definitely changed the type of blogs that are out there, it’s way more professional [now],” said Volodkin. “And that’s another thing I’m thinking about, too. If we don’t have blogs in the same way we did what are some other ways we can accommodate?”



It may surprise you how popular the aged (in internet years) Hype Machine is among young starting-out independent artists. Getting massive blog notice and thus moving up the Hype Machine chart is a strategic priority among the SoundCloud set, even more so than Spotify plays and Pitchfork reviews. As the article alludes, it’s one of the last outlets for breaking emerging / unsigned artists. However, the purity of the process has been tainted by pay-for-play blogs and repost channels, and many young artists have no problem ponying up for a blog placement.

Facebook’s inevitable foray into music streaming could harness some of Hype Machine’s approach by utilizing social media shares, posts, and mentions to build its own automated music charts (much like Hype Machine presently does with its Twitter chart). Integrating a streaming service with an already vibrant social media community has innovative potential and, somehow, is uncharted territory.

Vinyl Nostalgia and the Album Experience

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Music Industry Blog:

Vinyl sales may have hit their highest level in the UK since 1991 but this is hardly a sign of what is to come. Indeed, a quick look through the top 10 vinyl albums of 2016 reveals that all but one of the artists were releasing music back in 1991! The exception is Amy Winehouse and she’s dead. The majority of the volume of vinyl sales is driven by nostalgic older music fans.



Not only is vinyl not the future (it was just 2.6% of sales in 2016), the big differences between the most popular vinyl, streaming, singles and album artists reveal just how fragmented the music business has become. Each of the top 10 charts (album sales, singles, top streaming artists, vinyl sales) almost reads as a standalone group of artists with remarkably little cross over. In fact, only 2 artists appear across streaming, singles and albums. None appear across all four charts.



As large volumes of older consumers switch to streaming (and Amazon should play a key role here) there will be more opportunity to join the dots. But do not mistake this simply as an opportunity to try to revive yesterday’s formats in today’s platforms. The album is clearly fading. According to MIDiA Research survey data, 68% of subscribers state that playlists are replacing albums for them. It is time to start investing though and effort in rethinking what album experiences should be in the digital era. And that conversation should have no bounds, everything should be on the table (number of tracks, street date vs continual updates, interactivity, changing content etc.).

Streaming’s Two-Sided Effect on Downloads

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TorrentFreak:

From the beginning, one of the key software engineers at Spotify has been Ludvig Strigeus, the creator of uTorrent, so clearly the company already knew a lot about file-sharers. In the early days the company was fairly open about its aim to provide an alternative to piracy, but perhaps one of the earliest indications of growing success came when early invites were shared among users of private torrent sites.



“People that are pirating music and not paying for it, they are the ones we want on our platform. It’s important for us to be reaching these individuals that have never paid for music before in their life, and get them onto a service that’s legal and gives money back to the rights holders,” {Spotify Australia managing director Kate} Vale said.



Of course, hardcore pirates aren’t always easily encouraged to part with their cash, so Spotify needed an equivalent to the no-cost approach of many torrent sites. That is still being achieved today via its ad-supported entry level, {General Counsel of Spotify Horacio} Gutierrez says. “I think one just has to look at data to recognize that the freemium model for online music consumption works.”



Spotify’s general counsel {also} says that the company is enjoying success, not only by bringing pirates onboard, but also by converting them to premium customers via a formula that benefits everyone in the industry.



The Guardian:

The digital download, ushered in to the mass market more than a decade ago by Apple’s iTunes music store, is in rapid decline as people shift to streaming services such as Spotify and Apple Music.



So how much longer do downloads have? A few years and they’re dead, says Mark Mulligan, music analyst at Midia Consulting: “It’s going to die before the CD. The CD has a fairly universal player, where there’s always at least one in a house. And the people who grew up buying CDs are the older music consumers – the CD will literally die out only when they do.”



“There’s no end date … our music iTunes business is doing very well,” Eddy Cue, Apple’s senior vice-president of internet software and services, told Billboard magazine in June. “Downloads weren’t growing, and certainly are not going to grow again, but it’s not declining anywhere near as fast as any of them [in record labels] predicted. There are a lot of people who download music and are happy with it and they’re not moving towards subscriptions.”



But in the long run, streaming is the only game in town – along, perhaps, with the CD and vinyl. The download once looked like the future; now, the question is how much more of a future it has.

The Gatekeepers of Streaming’s Long Tail

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Harvard Business Review:

Digitization has brought new strategic challenges, and falling revenue, to the industry. Yet it has also brought new opportunities to a wider variety of artists. By reducing search costs, the digitization of music makes it easier to discover new artists and albums. It is {also} less costly to release new music, leading to unpredictable successes from artists who might not have been discovered or produced an album in an earlier era.



With subscription pricing and the ability to easily skip among artists (as opposed to per-album or per-song charges, which were the norm), streaming pushes users to listen to explore new artists. This has the potential to reduce the concentration of the very top artists and albums, while also helping music lovers find what economists refer to as the “long tail” of the industry.



The Guardian:

“Spotify has democratised the universe,” is the dramatic, understandably Spotify-centric view of Spotify’s George Ergatoudis, who joined the service this year after a decade as pop’s most powerful tastemaker at BBC Radio 1. “One of our editors can find something, believe in it, put it in a playlist, see an interesting result from the audience then accelerate the song.” Systems inside Spotify automatically create playlists of what Ergatoudis describes as “emerging stories” (songs) which editors then trawl through when they’re compiling the playlists vital in achieving true hugeness. “There’s a lot of human curation time spent on saying, ‘Right, there’s some noise there, but what do we think about it editorially?’” Ergatoudis says.



It’s reassuring that discovery isn’t left entirely to algorithms, but this editorial aspect creates another question. Namely: has streaming liberated new artists from the constraints of regimented radio playlists and the whims of ego-crazed music critics, only to replace that system with a different set of gatekeepers? “The term ‘gatekeeper’ assumes we’re blocking something worthy coming through,” Ergatoudis insists. “I’d argue we’re not doing that. We’re letting good stuff through, and amplifying it.”



Ergatoudis argues that the gate being kept is now an extremely large one, or perhaps a load of different gates, through which different artists can pass. Demographics differ from service to service – Apple Music and Tidal skew urban – but as streaming services aren’t restricted by hours in a day, like mainstream radio stations, we’re looking at the possibility of multiple concurrent musical zeitgeists. For the first time, something like the UK’s long-trumpeted guitar-music resurgence wouldn’t have to come at the expense or, say, grime’s increasing popularity.

‘Independents Are Front and Centre’

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Check out this lengthy interview with Merlin BV CEO Charles Caldas on [PIAS]’s fine blog, worth reading in full. A couple of excerpts:

[PIAS]: Did Spotify save the music business?



Charles Caldas: I don’t really subscribe to the ‘silver bullet’ view of the music industry. But Spotify’s certainly led the way to helping people to understand that there are different ways to monetise these rights. They showed you could marry those disruptive technologies with real commercial opportunities – not just threats.



Now if you look at the value Apple Music, Amazon and Google Play is bringing into the streaming business, you’re starting to see that’s shaping what the future of the business will look like.



[PIAS]: A lot of people are saying streaming isn’t mainstream yet.



Charles Caldas: That’s an important point. When I was younger, I was trying to sell records into HMV in Australia which was the epitome of the mainstream retailer. Let’s be generous and say there were 10,000 titles in that store. If you weren’t in those 10,000 titles you were invisible to the people in that store.



Now, the mainstream is whatever is on the services – every bit of music ever released. That’s why independents are front and centre in the market today. We’re not relegated to the specialist retailers or to the back of the shop.



Look into it from a consumer point of view: you can come into an environment like Spotify and what you’re discovering is no longer limited to what you hear on the radio, saw on television or read about in the press.



What we call over-indexing today is to me the rightful performance of independent music in the marketplace. The days of ‘if only the record store would stock this record’ have gone.