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The Music Industry's Latest Shortsighted Plan: Killing Freemium Services

An anonymous reader notes that there have been rumblings in the music industry of trying to shut down freemium services like Spotify's free tier and YouTube's swath of free music. The record labels have realized that music downloads are gradually giving way to streaming, and they're angling for as a big a slice of that revenue as they can manage. The article argues that they're making the same mistake they always make: that converting freemium site listeners (in the past, music pirates) to subscription services will be a 1:1 transfer, and no listeners will be lost in the process. Of course, that's no more true now than it was a decade ago. But in doing trying to do so, the labels will do harm to the artists they represent, and shoot themselves in the foot for acquiring future customers by getting rid of several major sources of music discovery.

8 of 244 comments (clear)

  1. Downloading MP3s FTW! by TechyImmigrant · · Score: 5, Insightful

    The last two records I purchased I paid for and downloaded from the artist pretty directly. I assume they were paying the hosting service a fee.

    This is the way of the future. I'm sure the artist in question got > 50% of the revenue direct into their pockets, compared to the tiny slice a record company would pay them, this is huge.

    --
    I should use this sig to advertise my book ISBN-13 : 978-1501515132.
  2. Music discovery by Loopy · · Score: 5, Interesting

    That's a good phrase. I've purchased perhaps a third of the music I own because I heard a song (or snippet of a song) in a video or just tripped across something I liked while surfing youtube. "This video has been muted due to an audio copyright claim by FuckMeI'mAnIdiot Publishing" would seem to be quite as self-defeating as normal folks claim.

  3. Writing a custom darknet to fix this... by Anonymous Coward · · Score: 5, Interesting

    Yeah as I type this I'm listening to pirated music that I just started downloading due to Grooveshark getting shut down.

    On the 30th they shut it down. By the 3rd of May I downloaded 250 gigabytes of pirated music and got back every song I had on my grooveshark playlist.

    Now I will *never* use the internet to stream music. I keep losing my damn playlists which took hard work to properly set up. Then whatever site gets shut down or bought and I'm suddenly lost one morning unable to even get my playlists (lost many great obscure songs I loved and couldn't remember the names/bands to)

    First I was an Imeem user, then that got shutdown and bought by Myspace. (Fool me once)
    Then I went to grooveshark who also years later got shut down. (Fool me twice)

    Now I'm just pirating like a mofo and working on streaming software (which I'll be keeping private and not sharing) to give to people close to me (friends, family, etc) which will just provide a front end to the massive collection of music I've pirated. Basically creating my own streaming service which can't be shut down if no one but my close circle knows about or has access to.

    Here I thought by disabling adblock on streaming sites I was actually being a "good person". Now I regret that decision after they shut it down anyways. If they don't want me watching ads to listen to music I guess I'll just fucking pirate all of it then... They had their chance.

    Now I'm using my prowess as a software developer to stream my pirated collection to everyone I know with a custom program that can't be stopped. Darknets will be built by people like me.

    Anyone remember that one no-name company with source code control tools that tried suing the Linux Kernel Developers? I don't either, they prompted Linus to write Git which is all everyone uses these days..... That crappy product from that crappy company isn't at a single place I've worked. Are they out of business yet for their greed?

  4. Record companies had their run by glsunder · · Score: 5, Insightful

    Their model for distributing music has only been around a little over 1/2 a century. New technology invalidated their business model. Guess what? That's how it's always worked. They can either adapt, or they can die.

    So a few bands will make less because they won't have the album sales. Most musicians have traditionally made their money by playing live, and that's what'll happen. The difference now is, streaming services will help introduce people to new music, and some of those will go to their live shows. Some of those will buy the $30 t-shirt to further support the band. You might not have as many multi-millionaire musicians, but the internet should benefit the ones who never sold enough to make a profit on an album anyway.

  5. Re:Labels do harm to the Artists ? by antiperimetaparalogo · · Score: 5, Insightful
    I can't understand this hate from non-artists for the record labels, based on some kind of "love for the artists" - artists use record labels for so many things (of both artistic and non-artistic nature), so i think this idea of "the (ab)used by the record label artist" to be most of the times just a hypocritical justfication of piracy.

    I am an amateur musician - if i wanted i could use a record label to help me in a professional career, or i could self-promote/publish my work.

    --
    Antisthenes: "Wisdom begins by examining the words/names." - excuse my English, i am (slightly...) better with my Greek!
  6. Re:But... by Immerman · · Score: 5, Insightful

    >Of course they deserve to be able to live off their work.

    Do they? Any time prior to a few centuries ago, a musician only made money via patronage and live performances, and maybe selling some sheet music or other products on the side. And sure, I've got no beef with anyone claiming a (decent) musician should be able to make a living off their work in that fashion. Today though we've created the strange idea that an musician should be able to record their music once, and get paid for it repeatedly over the course of the next century. This is very much a historical anomaly. Even authors and other creators of much more involved and substantial works were historically only granted a decade or two of profits from their one-time labor. This is an aspect of our economic system that's still very much evolving.

    There is much to be said for patronage or government grants, done well. Grants especially though have the issue of who decides which artists receive them? It's easy to abuse the position of spending other people's money to support something as nebulous and subjective as art. Especially considering the elitist "echo chamber" effect that often surrounds such things. Personally I'd consider the world to be better off without much of modern art, by what right are my taxes spent on such things?

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    --- Most topics have many sides worth arguing, allow me to take one opposite you.
  7. Re:Labels do harm to the Artists ? by Dunbal · · Score: 5, Interesting

    Personally I find it amazing that we still need "labels" and "publishers" for anything nowadays. There's a huge global distribution network out there available for almost no money, there are facebook and twitter addicts that will gladly do massive "word of mouth" advertising for you for free. I think some artists need to realize at some point that in a world where pictures of a blue/black or white/gold dress can take the whole world by storm almost overnight, maybe the reason no one wants their music is actually because it sucks.

    --
    Seven puppies were harmed during the making of this post.
  8. Re:Labels do harm to the Artists ? by Jason+Levine · · Score: 5, Insightful

    I think labels might still have a place, but not with the kind of power that they traditionally had. They still employ people who are good at publicizing albums whereas the bands might not be good at it themselves. (Yes, social media and other tools makes it easier, but it doesn't mean everyone becomes a marketing expert.) I envision the future label to be a glorified ad agency. A singer/band would sign a contract for the label to promote their album for a certain period of time. The label wouldn't own the copyrights and would merely get a cut of the profits. (As opposed to the current "gobble all the profits and generously give a crumb to the artists" model.) If the artist didn't like how the label was doing, they could fire them or wait until the contract expired. Then, they could pack up their albums and go to another label. (No more: "Artist X can't play popular Song Y because they left Label Z who now owns the rights to it.")

    Of course, these new labels will need to trim a lot of fat out so many music executives will lose their jobs. Here's an actual size tear that I will shed over their lost jobs: .

    --
    My sci-fi novel, Ghost Thief, is now available from Amazon.com.