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Why the Major Labels Love (and Artists Hate) Music Streaming
Hugh Pickens DOT Com writes "Jay Frank writes that the big four music distributors and their sister publishers (Sony, Warner, UNI and EMI) make 15% more per year, on average, from paying customers of streaming services like Spotify or Rdio than it does from the average customer who buys downloads, CDs or both. Each label makes 'blanket license' deals with Streaming services with advances in the undisclosed millions, which is virtually the same as selling music in bulk; they receive these healthy licensing fees to cover all activity in a given period rather than allowing Streaming services to 'pay as they go.' 'Artists are up in arms, many are opting out of streaming services,' writes Frank. 'Lost in that noise is a voice that is seldom heard: that of the record companies. There's good reason for that: they're making more money from streaming and the future looks extremely bright for them.' The average 'premium' subscription customer in the U.S. was worth about $16 a year to a major record company, while the average buyer of digital downloads or physical music was worth about $14. Thus, year over year, the premium subscriber was worth nearly 15% more than the person who bought music either digitally or physically."
They don't want us to own our music collections!
I've been VERY careful with services like Spotify. If I really like a song, I still acquire a real copy that's mine, rather than depend on Spotify to listen to it when I want to.
The simple fact is that Spotify might be gone someday, yet my MP3s will still be sitting on my (backed up) hard drive.
Artists are up in arms because record companies make more money off of their work, and yet they end up making less!
Thirty four characters live here.
The Hypebot article gives a few reasons artists don't like streaming. It includes things like having to wait longer for revenue, songs have to have "legs" and longevity, and finally the pie is cut into smaller pieces.
Do you see a pattern there? It isn't so conducive to pop / top 40 / disposable type music. An example given is that instead of consumer buying 3 CDs over the course of a year (and thus the money only going to 3 artists), with streaming that same amount of money may be split up over 18 artists instead. To me that sounds very good for indie artists, and, well, for music in general (if quality means anything). If a consumer is only going to buy 3 CDs a year on average, then there's a good chance those 3 artists will be the flavor of the month as shoved down everyone's throats by radio stations, TV shows, etc.
The artists that would be doing the most complaining are the highest grossing superstars, and to be honest, I'm not all that concerned for their financial well being.
The real question is do the record companies get an even larger percentage of the revenue with streaming, and I didn't see where these articles said that.
Better known as 318230.