$167.

Think about that amount. In data from a few years ago, a one-bedroom apartment in Manhattan cost $1800 a month. Your electric bill is somewhere around $150 to $200. Internet. Phone. Cable or satellite. Food. And, most expensive of all, gasoline. 

How far will $167 go? Or more importantly, who will the money go to?  

In this case the answer is Lady Gaga, the biggest star in the world at the moment. It was given to her by Spotify as songwriting royalties on a song that had garnered millions of plays. I think it's a safe bet that your average independent artist is getting far less than that. 

Back in 2009, Swedish recording artist Magnus Uggla opined that "I'd rather be raped by The Pirate Bay than shafted by Hasse Breitholtz and Sony Music." (While many are hailing this as an end to the music industry- and I hate the industry as much as anybody- and a victory for independent music, Spotify is, in fact, owned by Sony and other major labels.) 

Oh, and Spotify is also, based on what I've heard from tech people, nearly impossible to use. 

All of this wouldn't be a problem in and of itself. Online music piracy has been an issue for years and the only difference here is that Spotify is making you pay for it and acting as if they're a legitimate business. The problem is that they are a streaming service and if this catches on it will be the single worst thing to ever happen to music. 

I've experimented with streaming services before, back when Google had Lala and I have found that you end up listening to far less music. Allow me to walk you through an average streaming session.

"I think I'll check out that new punk band my friend was telling me about.....This is pretty cool, but if I want punk, I'll listen to Black Flag...Hey, I wonder if that's on here....Black....whoa, cool. They have Black Sabbath....I think I'll listen to that instead...."War Pigs," what a great anti-war song.....Let's find some Phil Ochs. I'll come back and listen to this later....Damn, I love Phil Ochs. I think some of his songs were every bit as good as.....Dylan! Yeah they have Modern Times on here. That was a hell of a record sort of like old school blues mixed with....wait. Let's hear some Junior Wells......Love that harmonica.....Which reminds me. Mickey Raphael is a great harmonica player. I'm gonna go listen to Willie. Red Headed Stranger. Don't you love this old West theme? Hey! I wonder if they have Marty Robbins on here....." 

All of that in a span of 10 minutes. You rarely complete a single song, let alone an entire album. That is what this modern ADD world has given us. More music, but less listening. Tom Petty said, way back in 2006, ""I was up until the middle of the night sequencing [Highway Companion]. And I am starting to think, 'Who cares? 'Cause they're just a bunch of button pushers.'" The album is quickly becoming a lost art and not only will Spotify end it for good, but it will also eventually destroy independent music in this country. 

And Lady Gaga's getting $167 out of it. What's Fifth on the Floor getting? They are easily one of the best bands out there right now, melding together old school rock and roll with real honky tonk and a touch of blues. And they are constantly touring. If streaming takes over and nobody- even those who happen to click on them- hears their music, what happens?  And they are not alone. I predict here and now that, if Spotify succeeds, 99% of the artists covered here will not be able to afford releasing an album in 10 years. 

But what the hell? There's a lot of good music there. Let's go listen to it now and screw the consequences.  

Views: 3519

Comment by Kim Ruehl on July 22, 2011 at 11:00am

As I just said on Grant's post, maybe I'm a severe exception to the rule, but I'm far more inclined to listen to a single artist at a time on something like Spotify. Also, it's the opposite of "nearly impossible to use" and I would hardly call myself a tech-head. 

 

Not sure Spotify deters people from finding Fifth on the Floor any more than old school radio stations and bricks-and-mortar retailers would have. There, you'd have to know to look for them, or have a clerk suggest them to you in a "if you like this, you may like that" kind of way. Spotify does the latter and gives an opportunity for the former. It's just a different way of doing the same thing. 


How they pay artists, well that's another thing. And that's definitely not okay. But the streaming model ruining music itself? I don't think so.

Comment by Kyla Fairchild on July 22, 2011 at 1:02pm

I listen to way more music with streaming than I ever did before and only full albums so I disagree with what you're saying here. My son also listens to more music than he could have before and he also listens to full albums. Then he tells his friends about new bands and buys tickets to their shows when they come to town.

 

Once streaming has been fully adopted and people across the entire population are paying the monthly access fee it will really start to add up. We're just in the uncomfortable spot between the old model and the new model at the moment.

 

There was a great in depth article about Spotify in Bloomberg last week. Check it out.

 

Here's an excerpt:

 

Spotify Ratchets Sales-

On Spotify, whenever an artist appears on a talk show or releases a single, plays of her entire catalog increase on Spotify, then plateau at a higher level. Albums follow a bell curve. Spotify is a ratchet, a step function. “LOP,” Sundin says, “life of product, it used to be six months. Now it’s 10 years.”

Spotify provides much more revenue for Universal in Sweden than iTunes, and the kroner per stream is following a linear path upward. In a meeting set up by Spotify, Mark Dennis, Sundin’s counterpart at Sony, explains the same ratchet effect.

Dennis says the industry has had a hard time understanding that, as streaming takes hold, the way it makes money will change. Labels get an immediate payout when an album is purchased by stores. Spotify provides only slow growth. “It’s hard for people to grasp,” Dennis says. “Would you rather have a million dollars now or over time?”

Comment by Adam Sheets on July 22, 2011 at 1:07pm
I don't know. Maybe I'm the exception when it comes to the streaming thing. I think I'm at least half right though. And until there's a better system in place to pay artists or writers, I can't see this as anything more than a glorified torrent site.
Comment by Paul Dionne on July 22, 2011 at 2:04pm
Streaming software conduits are not important for my habits in listening mainly because I've got quite a few years under my belt, but your point about Spotify here just points to your own listening habits Adam. If I want to listen to something I will, wherever it comes from, instead of blaming the messenger. Granted, I am not a  fan of the way the cloud carriers such as Spotify are beginning to coalesce the big money out there to start paying attention, but a hell of a lot of folks seem to find it useful, whether it's spotify, or rhapsody, or whatever. Just apply yourself to what you're paying attention to Adam.
Comment by Lisa Havekost on July 22, 2011 at 2:40pm
Wow, I was going to talk to you about this today Adam! I was thinking about the way they, Spotify, have their set-up and was wondering how the artists would get paid, it seems very obvious that they aren't. Thank you for another great article, I hope more people will realize that they are contributing to the demise of music, not to mention their favorite artists.
Comment by Kyla Fairchild on July 22, 2011 at 2:50pm

The CD business is over and quickly on it's way out. Nothing will change that so the only way to insure artists get paid in the future is to come up with new business models for the future. That's what Spotify and others are trying to do.  A quote from Jeff Jarvis' book "What Would Google Do" comes to mind:  "Preserving the past is not a recipe for success in the future."

 

It's not entirely clear what the new model will be but streaming music will be a large factor in whatever it is and will also cut down on, if not eliminate, piracy which is one of the most significant problems the industry faces today.

Comment by Adam Sheets on July 22, 2011 at 4:35pm
The Swedish artist I quoted above (to be fair, I should point out I haven't actually heard his music) called Spotify worse than piracy because not only is his music, for all intents and purposes being given away at no profit to him, but the people making money off of it are the big players in the industry. I pretty much agree. I understand what you're saying about not holding on to the past when it comes to this and I do agree that streaming can be a part of the solution, but I also think that the continuing resurgence in vinyl, etc will play a part and since it seems logical to think that the latter will be the one the artists are pushing, it will eventually win out. The music industry's biggest mistake was when it replaced vinyl with CDs and today the independent artists and labels are correcting that. I even know of one band who plan on coming out with a cassette-only release and I've heard that this is a growing trend. Physical formats are far from dead, but the CD very well may be.
Comment by Easy Ed on July 22, 2011 at 5:13pm

"The music industry's biggest mistake was when it replaced vinyl with CDs and today the independent artists and labels are correcting that."

 

That may be an accurate statement on one level, in that moving to a digital product line by following a technological advance eventually led way to music being captured and distributed as a file (free at first, and now occasionally paid for). But, and I know you're a bit younger than myself so you just may not be aware, in the early eighties the music business was in a similar freefall pattern that they find themselves in today. Stores closed down, independent labels either shut their doors or were swallowed up by the majors and thousands of people lost their jobs. At the time it wasn't piracy that was the problem, it was greed. Too much product was dumped into the marketplace, the books were cooked, American businesses were bought out by multi-national corporations and then all of a sudden the business crumbled. Had it not been for the introduction of the CD, whereupon the industry came up with a very clever marketing plan of selling their customers the same thing they already owned, we might not have made to this point today. 

 

At issue with the "continuing resurgence" of vinyl and other physical product lines, is not the percentage of increase in sales that really matters, it's the actual numbers. Their small. Very small. Tiny, to be honest. Physical formats will probably never die, there is still a market and one that is actually growing. That's called a market correction. But they aren't going to come roaring back to save an industry. Just as people won't be trading in their cars for horses or their iPhones for a telegraph key, the transition to digital music delivery is a done deal. They just need to figure out the revenue streams. 

 

As far as Spotify, your description of what its like to surf around their app made me laugh, because I have definitely done that. From here to there and back again in thirty seconds. But at other times, like Kim, I've stuck to one artist at a time, and have already discovered a bunch of new music (and old) from listening to shared playlists from some of my friends who've signed up. The search engine is not shabby and they keep adding more and more music. If anything, in the last two weeks I probably have listened to more music than the past two months. Its fun, it's entertaining, its educational, its new, its (in some form) the future. 

 

I don't know about the Swedish artist, but as Kyla pointed out and what a lot of research has already shown is that streaming services actually translate into revenue for artists, especially independent ones that can't afford to compete on a marketing level with the major corporations. Not only is more product purchased when exposed , but there is merchandising, concert dates, possible use in other media, etc. You are absolutely correct that compared to getting paid .70 for someone downloading a single versus a mere fraction of that for streaming, it might on the surface sound like a crummy deal. But when I rent a car for a day it costs me $50. If I wanted to buy it, could be over $30,000. How does Avis and Hertz do it?

 

Abundance....the new reality. And its tail is very long. 

Comment by Hal Bogerd on July 22, 2011 at 6:10pm

Lady Gaga sold her latest album on Amazon for $.99.  How much money did she make on that even if she did sell so many downloads she did crash their server? I don't think she gives a damn about Spotify or  the $167.  She's embraced the new world order (for better or worse) and knows you can't bootleg or download a concert experience.

I'm of the old world order and still want to own my music. I tried Spotify and found some good stuff but it was mostly tunes I had in my 200 gb music library!

 

 

 

 

Comment by RP N10 on July 23, 2011 at 5:57am

Easy Ed : >>But when I rent a car for a day it costs me $50. If I wanted to buy it, could be over $30,000. How does Avis and Hertz do it?  Same way Tesco or Walmart can undercut the independent record store or you can't buy veg cheaper than at the supermarket.  Which is to corral off a large market share through low prices while stiffing the producer.  

 

Which is what the record companies did when they had a stranglehold on the music supply chain.  Streaming is not a lot different to Amazon's and Apple's clouds.  When everything's streamed without physical form the price will rise.  When it's all in a cloud you'll have to pay to access.

 

I think Adam's response is a bit OTT to be honest but then so are the streaming evangelists.  Over here spotify - once it had critical mass - put a 10 hour cap on the free service funded by advertising.  As their market share grows so the pricing policy will change in favour of themselves.  

 

The music world will always be an over-supplied market which means that many performers won't be able to make a living at it.  But if the amount of $$ people are willing to spend on music remain constant then every penny the intermediaries take is another $ out of the artists' pockets. 

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Created by No Depression Feb 17, 2009 at 9:06pm. Last updated by No Depression Sep 24, 2012.