Artists saying "No" to Steaming Services

Another editorial piece on the analysis of current music business and beyond.

This is a US figures and stats only but pretty sobering to see how streaming gut the business in last 15 years. I had no idea revenue stream for purchasing music has plummeted by 70%.

The train has departed.

Ride or Die

Good read Kuma. Thanks for the link.

I think that the pendulum might come back eventually.

According to this article, none of streaming service are making any profit.

Never mind the sound quality.

They all might become obsolete if they don't figure out the way to monetize. 

Maybe one day, old storage media such as CDs and Vinyl sound mighty fine. :0

Streaming Service will Never Become Profitable...

I suspect that most likely a substantial increase in subscription fee need to occur...

I wonder how many of Millennials who grew up in *free music* age would go for that. 

The number of streams in a week passed the 500m mark in the week ending 16 July, up almost 100% on the same time last year. First half 2015 up 80% on 2014.

Keith

Kuma,

I've often wondered if, like old vinyl, there might be a renaissance period for old CDs. That a generation weaned on MP3 downloads might discover there was something to be had in the silver discs, possibly even greater SQ, and at a pittance versus the cost of a download. Shopping at second hand stores coupled with the additional inconvenience of the ripping process using the ever headed for obsolescence disc drive.

Nah, CDs and their jewel cases likely headed for the dumpster.

But per article above, if a streaming isn't a sustainable business model then what would be the main way people consume *new* music in 10 years from now?

Ripping CDs and tagging meta data manually already feels so archaic to me.

I would rather have the ability to do this myself than to be obliged to accept someone else’s interpretation. The default tags that databases already pass onto ripping software contain some appalling howlers and bad English. 

I find the statement from Neil Young very insincere and antiquated. Why should the streaming be guilty for bad sound quality? He blasphemes about the 320 kbps mp3 / ogg-vorbis from e.g. Spotify - why not about his probably good selling 320 kbps mp3's at Amazon, why not about his probably good selling 256 kbps aac's from the iTunesMusicStore? Why is only streaming worse?

I think that streaming is not the platform for musicians to earn a lot of money. Today musicians earn their money live / playing concerts / going on tour. The streaming is only for promotion - like radio. No musician was ever interested on "how much money do I earn on the platform radio" - radio was ever seen as a tool for promotion. Radio was always there and it was normal to use it. My song is often played on the radio > many people visit my concerts, many people buy my cd, lp ...

When Taylor Swift blasphemes about streaming, than this is only for promotion too - she is being discussed - and "suddenly" have a deal with the "much better" streaming boys of apple.

I think that bad sound quality is a problem of the recording - not of the platform and not of the format. I have recordings that sound in 256 kbps mp3 very very good, I miss nothing - and I have recordings in 24 bit / 192 kHz that sound always lousy. Why should a cd with 16 bit / 44 kHz suddenly be "bad quality". There are cd's with recording that sound great and cd's with recordings that sound boring.

All these technology yet can't avoid a manual inputting still.

It gets to be pretty tiresome if you have a large collection.

I found Meta data tagging is practically useless for classical music. It's been a while since I looked at the online data base info but back then ( 10 years ago ) there was no production notes. i.e. engineers/venues/equipment used etc.. all had to be manually inputted. 

Anyways, do you think the streaming will be around 10 year from now as the main music distribution system?

If not, what would replace it?

256 kbps mp3 file might sound easy on ears and often *sounds nice* but what's missing is the dynamics and timing. 

But they are good enough to pass it through earbuds or in a car.

Unless DA technology is so advanced now that can fool the brain to fill the missing bits.

I agree that 24/192 files are over hyped. If they are upsampled from a lower res. source, they sound worse than a straight red book files. 

Also my experience is that the playback DA isn't good enough, even tho a device can play a *high res* file, it sounds a bit out of timing. ( could be a poor DA struggling to cope with crunching large number of bits )

I am guessing here but there are only handful of high res. files that I thought was very very good. Buyer be aware for sure.

I think the comparison of lossy streaming to radio play is a good one both in terms of how it sounds and what it represents. 

I completely agree with you! My statement was a bit exaggerated . But I think that many people don't enjoy the music an listen to music kindly - it's first the music and second the "quality" - they think only because it is 24/192 it must be perfect and only because it is an mp3 it must be "bad music". 

The statement "24/192 are over hyped" pleases me. 

Flash memory is becoming ever cheaper. Maybe music available on a SD card or USB stick as opposed to the CD. Obviates the need for a disk drive. Don't smartphones have a SD port? (don't know as I don't own one). This could presumably offer some form of copyright protection to the industry as I assume the download software process could check the CPUID. Alternatively or in conjunction, a simple kiosk with wifi connectivity located at your local coffee shop, grocery store, airport, etc., using the same copyright protection. In any event, the key would be for the industry to regain control of digital music ownership as a download to a single purchaser, not transferable. Seems improbable with the internet though, everything available on Youtube and the majority happy with MP3s. Just throwing out straw horses.

Incorrect, for a couple of reasons.  As ever, things are different at one end of the industry than the other.  On one hand, radio play can and does generate money for artists.  When one of my bands recorded a session for John Peel, the resultant airplay got us a few hundred quid.  That made a huge difference to us even if it was a one-off, because we had no money.  At the other end of the scale, heavy radio rotation on mainstream pop stations brings in a lot of money via PRS (or equivalents).

But streaming doesn't occupy the same place in people's lives as radio.  It might do among audiophiles, but the way a lot of (younger) people use streaming is not as a supplement to, but as a replacement for owning.  So streamed music doesn't generate album sales, it replaces them.  Sure, some people might buy music after enjoying a stream, but the net effect certainly isn't that album sales are lots higher since streaming became popular.  Streaming doesn't generate much revenue at all compared to album sales for anyone bar the biggest artists.  That means it simply harms smaller or niche artists when everything slides towards streaming.

So where playing live and album sales were once two sources of income, rather than a rebalancing, it's more the case that the latter has simply been partially removed (albums do still get bought, just not as many).  The rebalancing comes with higher ticket prices for gigs.  But the massive rise in ticket prices over the last few years has been asymmetrically stacked towards the top of the industry.  Tickets for big acts cost lots more than they used to, but at the smaller end, things haven't changed very much.  Although it may seem inevitable, I don't think music as a whole benefits from making sure all the revenue goes to the top, as the innovation is often at the bottom.  That's especially the case for studio projects and/or those artists who don't/can't play live often.

It's a complex issue, and I'm not trying to address it all.  Just to point out that the easy rebalancing act hinted at in your post isn't actually how it plays out.

Interesting that there is a lot of talk of "rebalancing"  which seems to imply that things were ok before streaming/downloading and we need to return to a similar situation. Before music went online a typical CD cost north of £15 over 20 years ago. This was way more than an LP at the time when both were on sale and bore no relation to any reasonable cost. Basically the record companies took us for every penny the market would bear and the crumbs from their table led to artists believing if they spent a few hours in a studio and made a  record that was  popular they should never have to work again.

The idea that home taping/piracy is killing music is absolute bollocks. Music was made before there was any means of recording it - musicians played music and got paid when they played. just like when I gave a lecture at University I didn't expect to do it once, record it, and then have an income for life - I did it every bloody week for years and earnt a fair living. I'm not saying musicians shouldn't get paid when I hear their recorded music - I'm happy to pay my Qobuz subs and pay for anything I download - just that there's nothing so very terrible that musicians also actually have to go out and play once in a while to earn a living.

If I had a shred of musical talent I would love to play and many musicians will take any chance to perform. It seems to be the mega stars who play a handful of times and put out  an album every 3 years who are squealing loudest.

Joe,

I just don't see the mainstream audience wanting to go back to a tangible media. 

Smart phone is now many's playback device. A probable scenario I could see is that the music subscription becomes phone service providers add on service. You pay an extra 5.99$/month ( or whatever the threashold people are willing to pay ) then get your access to the library. 

Bundling of service is ever popular. Music becoming ( or has become ) a commodity so why not?

I would think that AT&T or Comcast are large enough company to buy out financially struggling streaming service providers.

Now how's that's gonna pay out to the artists I've no idea. 

People want more for less. Less usually does not mean quality, tho.

iTunes changed people's listeing habits from album based listening to a tune based listening. In the age of Twitter and IM, noone has an attention span of sitting through an entire album. This activity became more of a novelty than a norm.

Pono player seems to be a failure. 

Pity that look at this video, how it was compared against Apple's. They used the same shitty stock ear buds for this comparo. No wonder they can't hear anything through it.

Pono vs. Apple

Some recent global music revenue data shows globally streaming subscription services is part of the music business transformation. Approx 12% of global music revenue is now dervided from streaming services, with a 38% year on year growth, offsetting in the digital sector a global 8% decline in digital album downloads. Also globally digital and physical media revenues are now approx equal.

http://www.ifpi.org/news/Globa...sales-for-first-time

To the point of streaming royalties, they appear to be paid per track streamed, but they do look on the low side to me... albeit these were from 2014.

http://thetrichordist.com/2014...-plays-means-to-you/

An interesting conclusion in the above is that Silicon Valley executives appear far more exploitative of musicians than the record labels ever were...

Some information about the music is business and the revenue distribution model here:

https://forums.naimaudio.com/to...ook-at-the-music-biz

The streaming companies are distributing a % of their revenue to the labels, on the basis of number of streams,  but it looks like a small proporton of it is getting to the artists themselves.

Overall the reality of the situation is that, overall,  people are spending significantly less on music than they did in 2000, and it is being spread amongst a much larger number of artists,  regardless of the technology, the industry has to adapt to this reality.

David

The music now is stolen rather than *purchased* these days..

For years I resented that fact that record companies were overcharging for a CD but at least artists were getting paid. 

Interestingly in the UK, evidence suggests illegal downloads and P2P is believed to be in decline whilst streaming rises from the likes of Google, Spotify etc.

Simon

David the revenue per stream play per artist and revenue per publisher/composer/writer per stream per play is listed in my second reference for the main global streaming service providers. The streaming royalties goes to the correct artists/writers/composers... Just not very much per stream play.

+1

Online streaming is not the only contributor to lost income, and may not be the prime one: With people ripping their CDs (and LPs) for home streaming and selling the discs, others are buying (cheaply) with no revenue to artist or industry - I have no idea of the scale of this, but it is an increase in the s/h market compared to just selling when tired of an album. Then, particularly for the sector of listeners content with MP3, there's a huge availability of pirate copies  downloadable online - I know some people of the mobile phone listening generation (ie post iPod, and generation not specifically in terms of age), who rarely buy anything yet have large music collections, 

And with reference to an earlier posting linking streaming to younger audiences, it's certainly not universal, as my observation of numbers of young people in their late teens to late 20s shows they do like to have collections that they can easily use to select tracks or albums for repeated playing Anywhere anytime, and tend to regard streaming as just a way of checking out new music before downloading (whether to limit cost of download, or effort spent locating a 'free' source)

Whilst I am very concerned about the impact on fair payment for artists, as without them we would have no music, the excesses associated with 'stardom' do not engender sympathy - neither do the antics of the record industry, and I suspect that the lack of guilt some people have for downloading/saving 'free' music when available may in part be a backlash against the feeling of having been fleeced in the past.

As for live music becoming a more significant income stream for artists, whilst on the one hand it is good if they play more often, live music (virtually) always being better than recorded, I decry the move to ever larger venues with ever higher ticket prices - for me music is best in small to medium size venues, and prices should be lower for huge venues, but maybe the actuality is explained by that having become a major income stream.

Simon this is undeniable, and the labels retaining the majority of the revenue paid out by the streamers reduces it even further.

Per my reference Spotify pays out 70% of revenue to labels, distributed on the basis of % of total streams (it is not clear if this is total streams or paid streams only) rather than a fixed fee per stream. Income is therefore dependent on the size of the pie (spotify total revenue) as well as how much of the pie each artist has (%of total streams) .    A study by Ernst and Young in France shows that the labels retain 73% of this paypu,t and 11% and 16% are paid to artists and song writers respectively.  Which means that less than 18% of the streamers revenue is flowing to the artists and composers.

The total spend on music has been declining since 2000, at least in the US, so there is less money to distribute to the people creating the music,  and there are more of them.  Delivery models are changing, first the ability to download individual songs and now pay per listen, resulting in more much smaller transactions,  This has impacted artist revenue streams the same way that cloud computing has impacted the software industry's licence revenues,  instead of up front payments there is a revenue stream over time based on usage.

Given that the streaming model is in it's infancy perhaps it is too early to say whether this delivery model is less effective in rewarding artists than CD's or downloads. 

According to Donald S. Passman, All You Need to Know about the Music Business 7^th ed. (New York:  Free Press, 2009), 74,  with a CD retail price of $10 and a typical CD 10% artist royalty, after deductions, an artists should expect to receive only 75 cents - ie 7.5% which would indicate streaming could be a better revenue model than CD for the artist - excluding the CD-R self publish route.

Simon

In the US, MSRP on a new CD was 17$ for a long time.

Sometimes store would discount a few bucks for new release but 10$ CDs were cheapo *best of* reissue type CDs and not the majority.

Current classical CD pricing I see are anywhere between 13-24$ some label like ECM are over 30$+ PER CD.