Why Music Streaming Is More Lucrative For Labels [JAY FRANK] - hypebot

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Corey

I'd like to see those stats. I don't know any artists making more money from streaming than music sales.

Jay

There are several. It may be harder to see because you have to look at it over several months.

Johnny Grammar

Labels making more via streaming than sales, combined with artists having to wait longer to see their earnings, should be a justification for larger up-front advances from labels to artists, correct?

Of course, the weasels at the labels don't want you to think that way...

Steven

Not really. Who is to say that any artist is going
be successful. Labels have to dish an extreme
Amount of capital to make artist successful
so that advance is worthless for new artist. And
when those albums flop artist NEVER pay those
advanceback. artist take advances, use up marketing
money and PR employees, consultants, radio
campaigns that start at 40k. Then ungrateful artist
say their weasels when it's time to pay back their loan
but their touring and collecting awards cause that label
backed you when no one else would.

Евгений

a song listened for 34+ months? come on its not real, how many hits could show such a record??

Johnny Grammar

Future success stories can't be predicted with 100% accuracy, no, but if a label or Head of A&R can't do its due diligence in assuming potential P&L, they should be working in a different business.

If a label is earning more across the board due to streaming revenue from its catalog, that should absolutely be reason enough to loosen the purse strings regarding an advance component.

And don't get me started on record label executive salaries & benefits as compared to the paltry up-front advances offered to new signings. Please.

Metaform

I`ll stand by this article. Not sure about all the stats, but I can say that as a 100% DIY label/artist, my monthly payouts have increased 200-300% because of streaming. It`s a long game for sure, been pushing this boulder for 6+ years.

Jay Frank

Not the majority but if it's not a hit then it didn't make money in any format.

Jimmie

Wow thats soo a 2002 statement.

Евгений

yes, actually that means that a vast majority of wannabes would stay as they are now, no change.

jktneck

what does that mean in "real" terms though.
If you've been making $ 1000 a month before and are now making 2-3000k that's significant, but if you have been making 20-30-50 dollars up to now - as most artists have from streaming income - it still doesn't even move you close to the poverty line. As a hobby musician that's fine probably, but if you're doing this professionally it's a failed model. All of this talk about 34 months and more doesn't consider at all the notoriously short attention span of the consumer who is barraged with new music on an unprecedented level and pace these days. It would take an extraordinary amount of effort from the artist to still be active after that time plus of course other resources to survive.
If you don't have funds to stoke the fire all that time the streaming system will put you under.

Nelson

Wait EVERYONE one Major record label made more money streaming then everything else. PROVE IT. Until then, please can we just stop this nonsense. Streaming has only made the various streaming companies founder rich in stock since the stockholders don't have earnings and the artist make pennies and dollars who does this even help the eco system of the entertainment economy.

BTW I love posting the end of years sales number on the Digital only people parades since Digital when down this year and CD while going down are still 57.3% of Sales and proudly sold at every Starbucks and Wholefoods, truckstop, Mall and Mom & Pop record shops. Plus Amazon.......

Richard

It doesn't say that. It states that the label, not the artist, is making more ARPU from streaming users then a la carte users.

Dave Philp

If I spend $14 a year on CDs, I'm probably buying 1 CD. Hotel California, for example, still costs (retail) anywhere from $12 to $16. Beyonce's new CD carries a retail of more than $14. What kind of CDs can I buy at less than $5 retail per disc?

And downloads are $1.29 at iTunes and Amazon (sometimes $0.99), where most people go. Where'd the $0.79 come from?

Meanwhile, the labels are shareholders in Spotify. They've made money from advances PLUS Spotify is an investment for them. If/when it goes public, the labels stand to reap additional rewards.

Jay is right about streaming working over the long haul. If you're Pink Floyd or ELO or (name catalog band here), you're going to do well with streaming because people know your music and will continue to listen to it until they die. That music was a part of listeners' lives. Since it's so much easier in 2014 than 1980 to listen to EVERYTHING we want whenever we want, it's that much harder for the next Who or U2 to break through.

The world for the music listener is just different now. As soon as musicians and writers and managers understand that, they'll hopefully come up with strategies to make up the short term revenues they need that leads to greater incremental revenues from streaming down the line.

music streaming insider

All the above is true. But the real reason why labels make more money out of streaming is because their negociation power allows them to ask huge advance fees (Minimum Guarenteed) on further revenues. Those advances often surpass the total of progressive revenues, and then the un-redistributed money stays in the label's pocket. we're talking about millions of un-redisributed dollars a year.

mosesavalon1@aol.com

Nice peice Jay, as usual. Here's one more fact for your stew:

Lables LOVE streaming b/c they do not have to account to aritsts for much of the initial "advance" revenue. The start up fee paid by streaming services as a licnce is often deemed an "unallocated receipt" and gets parsed out to thier favorite artists. For more on this see the end section of a peice I wrote last year along with some sobering numbers on actual lable revenue and how streaming will ensure the talent bottle-nck that the internet helped loosen up.

http://t.co/sIAPoRun8T

mosesavalon1@aol.com

Sorry, the above was the link to my CNN intervew on the same subject. Here's the link to the peice.

http://www.mosesavalon.com/will-music-streaming-kill-the-music-business-for-good/

Nighthorse

Corey, these guys are out to lunch. I've been in top level muisc meetings on Muisc Row in Nashville and can tell you they have admiited to devaluating our royalty rate to mere pennies, practically nothing for streams. And then alone comes "Jones" to put out BS needed to hopefully keep us all happy. It is a fact that no label can sustain its self on single sales alone, and for sure can't do it on streams, this is total insanity. So you ask, how does a label stay in business. My friend, they got in bed with the owners of the tech world and streamers to get a percentage of every song that is played or used, while the writer and artist struggles to collect his pentance owed him on his one song. The creator is nothing more to these fast talking Kings of control than a slave in the fields earning his daily bread crumbs.

payusnomind

Artists can make more from streaming than sales. What keeps artists from doing so is ourselves. We tend to give the milk away free using free streaming platforms like Soundcloud and Bandcamp for music distribution and looking for fans to be the ones to drive streaming revenue from subscription based services. You should read: http://payusnomind.info/spotify-can-make-streaming-sales/

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