How Spotify got to 205 million paid subscribers: timeline and statsSpotify recently became the first music streaming service to surpass 200 million paid subscribers. As the streamers is quick to point out, that’s led to $30 billion paid to rightsholders. Continue reading
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Do you need a Music Manager, and how do you find one in 2023?A key member of a professional musician’s team is their music manager. But do independent artists need a manager, and how exactly do you go about finding this person in. Continue reading
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Everyone hurts – the problem with ‘fixing’ streamingApple’s Q4 2022 revenue fall was further illustration that the global economic environment is affecting everyone. During such times, companies look for ways to avoid the worst of the impacts, partially through ‘efficiencies’ but also through growth, by exploring new income streams and improving deal terms. The music industry is no exception. With global streaming revenues slowing – despite a strong performance from Spotify– there is growing pressure on music rightsholders to identify new growth drivers. This is especially the case for major labels, who have new institutional investors who have become acclimatised to rapid growth. All of which leads to streaming royalties taking centre stage. But the problem is that everyone in the streaming ecosystem has problems with the model. So, can any fix make everyone happy? [TL;DR, no]

To heavily oversimplify, streaming has three main constituents:

Creators (songwriters, artists, etc.)

Rightsholders (labels, publishers, distributors, CMOs, etc.)

Streaming services 

At the start of 2023, all three have issues with streaming:

Songwriters continue to push for higher royalties while long and mid-tail artists cannot make streaming economics add up

Publishers continue to lobby for higher rates while UMG is now advocating for a new royalty system

Spotify just reported a net loss of nearly half a billion dollars for 2022

Then add in all the perennials: too much music being released; no artist longevity; the commodification of music; listening fragmentation; the decline of superstars etc.

We have a streaming market in which none of the stakeholder groups feel entirely content with the current market and all would like a larger share of the revenues to flow to them. Because they all extract value from the same revenue pot, the arithmetic is simple: one stakeholder’s gain is another’s loss.

None of this is an argument for, or against, the relative merits of the case of any of the three main interest groups. But it does mean that any change to the system will leave someone unhappy. This is the impossible equation that must be balanced.

What further complicates matters is that market benefits to different stakeholders can be perceived as negatives to others. For example:

Streaming helped democratise the means of production and distribution. Long-tail and mid-tail artists benefit, and superstars lose their share

Streaming helped make music the soundtrack of daily routines. Suppliers of mood music benefit, traditional artists, and labels lose listening share

Streaming helped level the playing field, making it easier for smaller labels to compete. Larger labels faced stronger competition

The debate around new royalty regimes has been around for some time, but momentum is picking up. When the CEO of the world’s biggest record label weighs in, then you know that change is going to come. But as the above illustrates, what might make a major label happy, has the potential be detrimental to other stakeholders. There is no ‘make everyone happy’ fix.

Here are two pragmatic alternatives:

Lean forward premium 

One of the cleanest fixes would be to create a two-tier royalty system based on the nature of the plays:

Lean forward plays (higher royalty): when a consumer plays from their own collection or seeks out a song to play it

Lean back plays (lower royalty): when a consumer listens to music in an algorithmic ‘radio’ channel or listens to curated playlists

As with all streaming ‘fixes’, the approach would not be without problems. Mood-based music would certainly find itself generally collecting a smaller share of royalties, but also, many of streaming’s hits (including those from majors) rely on driving larger numbers of streams in curated playlists and ‘stations’ – which in turn help fire up the algorithms and power songs to further success.

Penny per stream

Another approach would be a fixed stream rate, which would effectively mean metered streaming. For example, if every stream generated $0.01, a subscriber would be able to listen until their subscription fee was used up, with the ability to top up to listen further or upgrade to a higher capacity tier. This would certainly help drive increased ARPU (something all parties want) but could deter some subscribers as it would mean an end to the all-you-can-eat (AYCE) proposition. But maybe it is time for that. Music is not a scalable resource in the way that, say, mobile data is. Everyone’s song is someone’s creation. Also, there would need to be a solution for free streams.

Don’t forget the listener, ever

Of course, there is a massive missing detail in all of this, the missing stakeholder in the streaming economy: the listener. Crucially though, for all the problems creators and rightsholders face, consumers are not complaining en masse. They are content with a proposition that not only represents exceptional value for money but that also evolves to meet their tastes and behaviours. 

Streaming’s problems are supply side issues, not demand-side. All industry stakeholders should be careful about pushing solutions that could favour the supply side without proper consideration of the demand side. The history of business is littered with the corpses of companies that did not properly consider the needs of their customers.

Streaming was built for yesterday’s music business

The saying goes that in a good compromise, no one is truly happy. So, there is an argument that streaming is already the balance of compromise. Against this though, streaming was built for an industry that is very different than today, so it is only logical that the model needs honing to catch up, and many of streaming’s second-order consequences cannot be undone. On the demand side, music consumption has become commodified, transformed from a largely artist-centric fan experience (radio excepted) into an audio soundtrack to everyday life. On the supply side, there are simply more people than seats at the table.

Any significant ‘fix’ is going to come at one, or more, stakeholder’s expense. And even then, increased royalties will only go so far. For example, an independent label artist might expect to earn around $2,000 from a million streams (after distribution and label deductions). Members of a four-piece band would thus take home $250 each. Even doubling the standard royalty rate (which could not happen without breaking the entire model) would still only mean $500 each, which is not going to turn streaming into a living wage for most mid-tail artists, let alone the long-tail. So, ‘fixes’ will only go so far. Perhaps it is time to double down on building new things on top of and around streaming, and nurture those that already exist (Bandcamp, etc.). 

Absolutely continue to focus on improving streaming economics but do so alongside building a new industry infrastructure that is built to meet the needs of today’s creators and business rather than those of the noughties. In short, grow the pie rather than simply look at how to re-slice it.

Pixies' Joey Santiago Talks Tour, Recording With Steve Albini, Alt-Rock's Early '90s ExplosionIn May, Pixies will launch "leg one" of their 2023 North American tour in support of their eighth studio album overall, Doggerel. Guitarist Joey Santiago spoke with AllMusic about the band's history and future plans.

‘Songs are the engine of the music industry and sometimes people can lose sight of that’Amy Allen discusses writing some of the biggest pop hits of recent times, the joy of collaborating and making Grammy history
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Last week in music industry commentaryCommentators in the thick of the industry last week shared their opinions and thoughts on the future of the Copyright Royalty Board, new support for the TikTok ban, and more…. Continue reading
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Primary Wave Music strikes ‘multimillion-dollar deal’ with Stevie Van ZandtDeal includes stake in producer royalties from his work with Southside Johnny and the Asbury Jukes, along with band member and producer royalties from his collaboration with Bruce Springsteen
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Getting It Done: The week in D.I.Y. & Indie MusicLast week, our tips and advice for the independent, musical do-it-yourselfers out there covered how AI can curate personal playlists for you, how to legally cover a song, and more…. Continue reading
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REWIND: The new music industry’s week in reviewA busy week by any definition, and the music industry was no exception, with the announcement of this year’s Rock Hall nominees, Spotify getting a bit more social and more…. Continue reading
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Solar Guitars Debuts European Master SeriesIn concert with Solar Guitars’ 5th Anniversary, the company has launched the first instrument from its new “Made in Europe”, European Master Series. The first model, a striking X shape with an explosive maple flame top burst sets the stage for what the company describes as an onslaught of top-notch instruments created with the finest craftsmanship. The “X” is not only describing the shape, but further boasts the X-treme approach to heavy metal guitar design embodied in the soul of the brand and now unleashed with the XF6FRFSB.

For more information on Solar Guitars, visit www.solar-guitars.com

Solar Guitars is owned by Chugs & Hugs AG, an international M.I. company that manufactures and distributes products worldwide.

From Universal’s TIDAL partnership to TikTok limiting access to music in Australia… it’s MBW’s Weekly Round-UpOur biggest stories of the week, brought to you in association with Centtrip
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Spotify [NYSE: SPOT] stock ends week up 20%UPDATED: On Friday morning, Spotify [NYSE: SPOT] stock was trading at $122.57, up $21.90 or 21.75% s since the streamer offered Wall Street a mixed Q4 report on Tuesday. After. Continue reading
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Focusrite Offers Audio-Over-IP Expert GuideThe Focusrite Group Audio-over-IP (AoIP) Expert Guide is now available, designed to provide all the information needed to understand what’s possible with AoIP solutions. The guide takes you through the basics of AoIP equipment and options as well as the multitude of use cases for this technology, including education and instruction, studios, post-production, broadcast, rehearsal and performance spaces, and more. Case studies show the implementation and practicalities of investing in an AoIP system and the benefits you'll experience. 

Download the guide

Spotify asked how to improve Artists, Album Pages & it’s not too late to tell themChris Stoneman, a product exec at Spotify, told the Twitterverse that his team “is spending lots of time right now on how we might improve the Artist & Album Pages”. Continue reading
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Google says YouTube Shorts now gets 50 billion daily viewsYouTube Shorts are now viewed 50 billion times a day, according to Google this week. That’s up from 30 billion daily views this time last year. That’s an impressive number. Continue reading
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