Nice graphics on the state of play from theoatmeal.com
OK let’s cut to the chase. I could demonstrate the merits of streaming as a promotional tool, a ‘try before you buy’ if you will. That’s the ‘cup half full’ take on the situation and a validation of the streaming model.
Here’s the problem though. How many people who used to use torrent sites now just stream either free or via a subscription streaming service. Probably quite a few who don’t bother to buy or download. Why should they? They are paying a subscription or streaming from an ethical source and they believe (however naively) that they are supporting the artists.
This myth about streaming music services (the subscription model) supporting artists is at best a crooked interpretation and at worst a malignant cancer coursing through the backbone of music culture and creativity.
Spotify have even refused to disclose their finances with regard to royalty payments. (Assume you will have to count through infinite decimal points before you find a positive integer), and yet at the same time they are paying huge amounts in licensing fees to the record companies (who co-incidentally are substantial shareholders in Spotify).
In reality the old music industry model of artists being contractually fleeced has been ushered in through the back door via the streaming model.
Sorry to mention Spotify again but the founder Daniel Ek was recently named no.10 in the UK’s rich list with a £190 million fortune. For a company only launched in 2008 that’s an incredible sum. I wonder where all the royalty money went?. http://www.hollywoodreporter.com/news/spotify-daniel-ek-net-worth-317745
Spotify and their refusal to become transparent (we can all make an educated guess on why that won’t be soon) is tantamount to an admission of guilt. On May 22nd 2012, Radio reporter Sophie McNeill published an interview with Spotify Managing director Kate Vale. The interview was astounding in that the secrecy and lack of transparency displayed by Vale was almost comical:
McNeill: Is Spotify going to make public its finances when it comes to contracts with the labels and how much they receive per play of the songs that they own?
Vale: I don’t think so at this stage.
Vale: I’m not sure.
McNeill: Well, can you understand then why music lovers, bands, people involved in the industry are worried about something like this that could so dramatically change the way we consume music? And then when I ask you about disclosing it, and you say, ‘no, I don’t have a reason,’ I mean-
Vale: Well, I just don’t know to be honest.
So, no i’m not convinced about streaming or the cloud streaming services that our kids will grow up with. The technology is fine but the archaic and manipulative way it is being used is frankly an outrage.
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Interesting infographic. Seems artists are getting the thin end of the wedge for both recorded work and live shows. Aurovine is changing this by giving all the control back to artists.
Found another interesting Infographic. This one is quite revealing considering the attempts by Spotify to put a positive spin on what they do!
There’s an uneasy tension in the digital music marketplace. Rumblings of unrest with streaming services such as Spotify, new platforms emerging empowering the people that matter i.e the artists and fans, CD sales plummeting and piracy (both in execution and attempted control) still a major issue.
Perhaps a tentative pointer to the future of the industry was the RIAA announcement that sales were on the up for the first time in over a decade. As ever the devil is in the detail.
Digital sales were up by 25% at 1.1 billion dollars while (more worryingly) subscription services were up 13% to $241 million.
The perplexing battle for control between the heavyweight music industry platforms (such as Spotify) and the more ethical services offering fairer accounting models is at the crux of the issue.
Ultimately, both models may survive but it is highly likely that useability, early technology adoption and development may prove more important than artist rosters. Getting a ‘deal’ is increasingly being seen as ridiculous and crass.
While stopping short of becoming an out and out revolution the situation does bear some resemblance to year zero when punk battled with the bloated industry and came out the other side semi-victorious having altered the landscape irrevocably.
2012 will be an interesting year, a veritable gold rush for developers, muso’s, hacks, pimps and thieves. The fittest and most intelligent will survive unless battered into submission by the old guard. Blood may well be spilled.
Well I didn’t really expect confirmation from SXSW but it now looks as though Spotify have been found out. A ‘Pennies from the Celestial Jukebox’ panel at SXSW found that they don’t really consider artists in their business model.
Attorney Edward Pierson outlined the desperate reality of the new streaming economic model. “We’re not talking about pennies, but pieces of those pennies,” he said .
Artist manager Nick Stern somewhat sidestepped the problem saying “Its not a problem with the economics of Spotify, it’s a problem with the economics of the music business.”
So the fact that the major labels are in bed with Spotify does tend to produce strong rodent odours.
Stern’s defeatist view that it would be stupid to fight the Spotify model is naive in the extreme.
This excellent article on the tragic situation by Greg Kot can be found here.