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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.
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.
Broadcast radio was quite dead before streaming. The death of radio even predates napster. It was pretty sick and almost dead before the internet ever was a thing even.
In the usa you can thank clearchannel for that. 12 stations all playing the same songs. all day long. and talk radio.
Let me preface this by saying I am totally on board the RIAA and record company hate train. I'm the guy pulling the whistle even. Choo Choo! They are greedy organizations who will ruthlessly do anything for profit.
That being said, I have become convinced over time that the artist-record company relationship is actually fair. Artists don't make the majority of the money that gets plunked down for their songs. But, you know, what? They aren't really doing much of the work either. Artists write and perform the song.This takes work, surely. Let's be generous and say each individual song takes a full person year to write and get good at. Record companies dump enormous resources into promoting it. This includes the work of hundreds (thousands?) of people resulting in the expenditure of many years of person effort. It seems to me like the record company is actually the one contributing more value. What happens to artists who try to succeed without record companies, or grants from universities? A tiny percentage of them earn enough to subsist. There is a reason for this.
To be frank, at the end of the day professional musicians who make a good living aren't really any better than many of the ones who are struggling. I've seen so many really talented musician friends go through school to finely hone their skills, only to find no one in the real world cares (ie they can't make money). The reason no one cares isn't because people don't value music. They do. That is why so much money goes into buying music. The problem is that reaching the threshold at which most people consider you "good" is attainable by a VAST portion of the population. Probably roughly the same percentage of the population who can be considered good at physically lifting things and then setting them down elsewhere. Good musicians are a dime a dozen.
I know the musicians out there are going to crucify me for this. You'll all point out it is possible to discern the difference between the violinist who makes 10 mil and the one who can't get a job. I'm sure you can. The point is that most of society can't, and doesn't care to. This is why most of you make nothing and have to pursue other careers. I wish you would all wake up to it before dumping a decade or more into it. Unless of course you are wealthy enough to pursue it whether it brings you income or not.
Music and the arts are for everyone, as a hobby, because any human can be good at them to some degree. The skills it takes to do them are part of what it is to be human. They have been pursued professionally by the rich, or friends of the rich, historically. This is because the rich can afford to spend 20 years getting good to maybe get paid well at the end. If you are a middle or lower class person trying to pursue music you are being irresponsible. You are more than likely wasting your time, except for the rare people who value the honing of skills higher than standard of living.