Streaming Music Will Change Culture For The Better. Here’s How:
Guest post by Eliot Van Buskirk of Evolver.fm.
Forget, for the moment, about how much Spotify pays out to artists. Focus instead on the nature of those payouts.
In the olden days (i.e. 20 years ago), recording artists had to convince you to fall for their music once – just long enough to buy a CD. Since the inception of pop music as a physical format, this need to impress the music buyer for a short length of time gave record labels a big incentive to look for one-hit-wonders capable of moving product quickly. (It also meant I used to walk home with lots of terrible music I never listened to again.) Granted, labels often put considerable effort into grooming those artists for a full career, because it’s easier to sell music when fans already like the people making it. But each time music was released, the purchases only had to happen once.
The rise of the iPod and iTunes made it harder for labels to pack long-playing albums with subpar “filler” tracks. It also made it easier for music fans to fall for a hit single for the low price of 99 cents, arguably exacerbating the tendency of artists to impress a fan for only long enough for them to click “buy.”
That landscape is changing.
Recorded music and the formats that deliver it have always influenced each other profoundly. Pop songs tend to be three minutes long because five decades ago, that’s how much music fit on one side of a vinyl single. The compact disc is said to be 74 minutes long to handle longer operas and Beethoven’s 9th Symphony. MTV made recording artists get more adventurous haircuts. The list goes on.
As more of us switch to streaming our tunes from online services with millions of tracks (Spotify, YouTube, Pandora, MOG, iHeartRadio, Rdio, Rhapsody, etc.), music’s format is set to have another impact on content and culture — especially as today’s younger music fans, who know music as an online thing, grow up and start having less time to track down music for free than they do money to spend on subscriptions.
Some would say this is happening just in time. Neil Young claims digital music sounds bad, while none other than Gene Simmons of Kiss and Tommy Lee of Mötley Crüe think pop music is rotten to the core. They are far from the only ones lamenting that hits are crafted in laboratories for an audience that data shows changes the channel after seven seconds unless a hook grabs their ear. Even hardcore indie music fans who read Pitchfork discard yesterday’s buzz bands faster than a bath salts addict… nevermind.
What matters here is that the same digital technologies derided by music purists contains the solution to what might be called music’s “quality problem.” It’s no longer enough to convince fans to buy a disc once; instead, artists and labels have to turn them into lifelong fans. The Beatles succeeded in doing that for generations. It eluded Milli Vanilli, another erstwhile chart-topper.
It is perhaps the height of irony. “Aren’t those the same services that rip off artists by paying a fraction of a cent per play as opposed to doling out 70 cents per song purchase the way iTunes does,” you might ask, “or paying even more per disc, the way those disappearing record stores do?”
Yes. This new phase of music consumption — represented by services that let you listen for free, or for $5, or $10 per month, or customizable internet radio stations that also pay out on a per-song, per-listener basis — is just what music fans who are sick of one-hit wonders and flashy pop hits need. By paying out only when people actually listen instead of suckering fans into buying something only to leave it on the shelf, Spotify, MOG, Rdio, Rhapsody, and other on-demand unlimited music services build an incentive into the music business to create works of lasting value.
When I mentioned this idea at a SXSW panel I moderated in March, panelists including MOG CEO David Hyman and Turntable.fm creator Billy Chasen agreed that while we may not have seen this effect in action yet, it is real. The economics are there for an emphasis on long-lasting quality in music – perhaps even a return to the “golden age” when labels used to spend years or decades developing an artist instead of releasing whatever they think will sell that week.
A rational way for music-makers to respond to these new economics is not by complaining or withholding their music from these services and therefore the future, but by making stuff we might want to play for the rest of our lives.
For anyone who loves music, that should come as welcome news.
“The sales cycle of [a] record is anywhere from four to 12 weeks in most typical cases,” Spotify CEO Daniek Ek told Evolver.fm, echoing that sentiment. “With Spotify, we keep seeing the effect up to 25, 35 [weeks], or even a year… And every time someone plays a song, we pay the music industry.”
Sales of recorded music have declined precipitously in the past ten years. There’s truth to the idea that the money is falling out of music — and with it, the capacity of artists to take a year off from touring to craft an album with a highly-paid producer. But in the battle over what money there is left, only those artists who convince lots of people to listen to their music over long periods of time — the way the Beatles did — will come out ahead.
So the next time a curmudgeon, Luddite, or lamenter-of-those-goddamn-kids-today complains about the sorry state of music, please, tell them to calm down. Music is a business. And now, for perhaps the first time ever, its economics favor long-term quality over a flashy first impression.
Photo courtesy of Flickr/AJ Shuster
Maybe – but it depends on whether Spotify, Youtube, etc, will eventually pay enough to allow anyone to spend any time (or their own money, these days) putting together music of that kind of quality. Most of those companies offering streaming are as opaque and unlikely to explain just exactly how they work out how much to pay artists as the old label system was – in a lot of ways, the new boss is just the same as the old boss, only worse. They either don’t pay anything at all, or very little, and they certainly don’t pay advances or help out in any way whatsoever.
I think the outcome is likely to be the opposite. The only ones likely to generate enough plays to make it pay in any way beyond pittance level will be those with deep pockets and a hefty promo campaign. The rest simply won’t get the plays. So the pressure to make music ever more short term and ‘commercial’ will be ever higher. Even the most experimental obscurist now has to be pushy and ‘commercial’ about their activity, just to get anyone to click play even once. The plays will go to those with the expensive promo campaigns- ie, big label artists. for the rest, treat it as a hobby, You are NEVER going to make any money out streaming, and you can watch Google and the rest walk off with the advertising money from all those illegal downloading sites.
Agreed! I’m doing a Tedx talk touching on this a little. I call it “The Fan Experience.”
This sounds less like an article and more like an advertisement. Written by Evolver.FM…..
So the author’s business relies on the success of streaming music.
I love hypebot but I think it’s becoming more than obvious why they seem to be getting so many contributed articles from streaming music brands/companies. Maybe a louder disclaimer at the top of your articles would be appropriate.
Did he just say that artists that do what the Beatles did will come out on top?? I’m all for streaming services and its potential to change music enjoyment and industry culture for the better, but this is a poor example imo.
“And every time someone plays a song, we pay the music industry.”
We just pay much more to some than others. And, not coincidentally, its the giant pop companies that we pay the most too. That is what the truth is. But, if artists are able to do what the Beatles did, I’m sure they will be fine. Mentioning that the Beatles aren’t on Spotify seems appropriate here.
I think there may be some truth here. I worry about the amount of music in the pipeline. It seems we have way more releases now then in the past. None of the services mentioned can control this. I do believe we will see the return of quality music or the new golden age in music but I still think we need a crap filter…and we need the labels to make a turn towards releasing quality music.
It would be interesting if the individuals writing these guests posts actually played in a band, managed a group, went on the road, or maybe held more than an internship position at an indie label. Perspective people! I have just about had it being preached to by self-serving techies, whose only goal is to built a company, sell the myth of profits and then walk away from the wreckage. With Spotify, the big question really is can they make money from their business model? Without the advantage of an IPO in the next 18 months and VC funds taking a step back after the Facebook debacle, I’m willing to bet Spotify will crash and burn under its mounting debt. Eilot, you probably told everyone 6 years ago My Space was the future of our business.
Not a bad sentiment being put forth here, but this guy is pretty ignorant of the economics of music production
You are nuts if you think streaming music services are going to usher back in an era of label artist development and higher production values. They simply don’t pay out enough revenue.
They aren’t bad. They drive more revenue than an non-ad supported youtube video. I’m not against them, but they aren’t going effect things in the way this author claims.
Hypebot needs more perspective from the creators side- managers, producers, and artists (NOT AMANDA PALMER). Too many people trying to peddle their blogs and music start-ups.
I find it really funny how people (nevemind the labels but even the consumers themselves) just dwell on the idea that music should become a solidified money making machine. It was a model that worked for a while (several decades, yes) as there was no channel for music to be distributed easily.
Many people seem to forget that real music had only been available live until the invention of the phonograph. As a music enthusiast who devours 5 albums a week and tosses them aside, or nowadays just leaves them far behind my playlists of albums on Spotify, I wouldn’t be able to finance my insatiable lust for new stuff if all this weren’t for free – or virtually free if you pay for the subscription. Streaming services at least cover the “shipping and handling” fees for the music to get to me by paying back the labels, and in return create a medium for me to find new tunes with ease without the hassle of having to deal with RAR files or data hosting services.
Music business has changed, get over it. What hasn’t changed is music itself and the way music is appreciated. Out of those 5 albums that I listen to, on average I end up listening to 1 of them live anyways. And how much is a concert ticket?
What decides the winner is a combination of good marketing, hype (pitchfork, duh), luck, and just a tad of originality – I’m sick of arcade fire knock offs..
Sorry this comment is so long, but someone here needs to back up the point being made here.
To all you musicians commenting about us “techies” who should go start a band and see things from your perspective, or think people like Elliot are just here to push his service, I kindly hope you end up stocking shelves at a supermarket because of your inability to realize that this business is changing and that streaming is the future. You can either sit here and complain about all the details or embrace it.
It’s people like Elliot who are out there trying to figure out this whole damn music business model thing out FOR YOU. The articles he writes are FOR YOU to read and digest and maybe think twice about the business you’re in. Does he have a blog and business to promote? YES. Would you get mad if you read an article about a guitarist discussing his new signature axe? Or discussing an upcoming tour?
Here’s why I agree with Elliot that, over time Spotify payments could make sense, and that’s because I am a huge Spotify fan and it has opened a world of music to me.
A few months ago the new Van Halen album came out. I didn’t like the single at first and didn’t care. Then I started hearing good things about it. If not for Spotify, I never would have listened to it – I just don’t see the need to go buy a CD these days with all the media I consume on my computer, and rarely buy a digital album (I do buy indie albums from bands who sell direct to fans, but hate iTunes).
Anyway, I loved the album and listened to it oh probably a hundred times by now. And you know what else happened? I then listened to Van Halen’s ENTIRE DISCOGRAPHY a hundred times too. I was never a huge fan and didn’t have all the albums. But now because I got to hear them all I will be a fan for life. Add up the hundreds of album streams and the probably thousands of streams over the course of my life, and the money will probably add up to be more than the cost of just buying those albums once.
This same thing has happened with nearly every band I listen to. I went to see Danzig the other day and now I’m pouring over his entire catalog. Only because I can, there’s no way in hell I’m gonna go buy Danzig’s 7th album only to find out it may suck.
So how does this affect a new artist? Simple – get your music on Spotify and encourage people to listen to it. Isn’t it supposed to be about the music? If it’s good, people will be more inclined to listen to your entire catalog, not just the single.
Then over the course of time, if you play your cards right, tour, and market yourself correctly, you’ll start to see revenue trickle in. It won’t be a lot at first – this model will reward artists who know how to make a living doing hard work (touring, merch) and the streaming revenue will come down the road.
Will this replace the loss of revenue we’ve seen decline over the last 10 years? NO! THAT REVENUE WILL NEVER EXIST!
It’s not piracy or iTunes or Spotify that is “killing” the music industry – it’s the world evolving. The Internet and technology has opened up all sorts of different things for us to consume, and we have so many options and spend money on may different things. The music industry killed itself my selling us crap and when the big shiny lights of other things popped up, we decided to spend money on other things.
Spotify is to me the coolest thing to happen to music in a long time, and if more people opened their minds to what it does for the fan experience, to how it can be a positive thing for your careers, the better off we will all be.
The comments so far seem to have completely ignored the first sentence of the piece.
Maybe it’s van Buskirk’s fault for not emphasizing his point strongly enough, but it seems to me that he’s saying that everyone needs to stop using the sales figures and associated profit margins from the heyday of physical product as the metric by which they measure and bemoan the state of the industry. Instead, in the modern music economy, the new focus, as he sees it, is increasingly and predominantly the pay-per-listen model, where labels and publishers get to charge rent for the mere “experiencing” of music, rather than relying on listeners to make a one-time purchase of their very own brand-new copy of it. Think about it. People are increasingly thinking of music as something that they never own and always pay for, every time they hear it, even if they’re only shelling out pennies per song. In theory, that’s exactly what the industry has wanted for decades! Consumers who are wise to what you’re doing hate your freaking guts for it, of course, but who cares about them, they all just want to freeload anyway, right?
Unlike streaming, a sale nets you some pennies, or several rolls of pennies if the product is physical, in exchange for theoretically unlimited listens. So with sales, the per-listen return is quite small, often smaller than what you get from streaming, but you’re doing OK with it because you get it all up front. With streaming, the revenue flow is quite naturally a trickle, because it’s accumulated on a per-listen basis (notwithstanding the way it’s lumped together in billing cycles). The author’s point seems to be that you have no choice but to accept this and move on. Stop screaming that the streaming services should be paying out like ’90s retail. It ain’t gonna happen; it can’t happen.
It shouldn’t be so hard to grasp the reality that when you’re getting paid per-listen, your revenue is spread out over time, just like when you sold a CD, you had to wait until the consumer was ready to buy another copy, and in the meantime, the $5 you got for the sale was spread out among who-knows-how-many listens. Yes, you used to get $0.50/song, and you now get $0.0005/stream or whatever. When you were getting $0.50/song and someone listened to it 1000 times, you were getting $0.0005/listen, just like you are now. But what you were counting on was that a lot of CDs were sold and only listened to 10 times, 20 times, 200 times, tops. The more CDs someone bought, the less they listened to each song. But they had to buy the CD to get at least 1 listen. So they were essentially paying, per-listen, much more than the most devoted fans, with small collections, who got hundreds of listens out of each purchase. Nowadays, charging per-listen, with huge catalogs available, you don’t have the luxury of a percentage of people overpaying like they used to. That market is gone. This is one of several reasons why streaming just isn’t going to be the cash cow that physical retail was.
I think the underlying, much bigger problem is that people simply don’t feel music is worth paying very much money for, they only have so much money to spend anyway, and advertisers certainly can’t subsidize streaming (or terrestrial radio for that matter) at rates comparable to retail, per-listen.
We went to see Neil Young last night, in a solo concert. It was wonderful! He looks great, sounds great, and played all alone. Tickets were something positive at Casatickets.com . He played the organ, pump organ, piano, harmonica, electric guitar, and acoustic guitar.
I do agree that it appears Neil Young hasn’t sold out or whatever but aren’t his tickets outrageously cheap. But if that’s because he doesn’t use sponsorship than I guess that’s cool.