Dave Allen

Musicians versus Spotify: It’s about scale

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When the audience for streaming music services grows, the money will flow.

Anthony Rue points me to a great article on The Quietus by Charles Ubaghs. It’s premise is simple: the current audience for streaming music services is tiny.

Coincidentally, after a conference call yesterday about a music panel, that included Hank Shocklee and Molly Wood, I found myself in thought and the idea of scale popped into my head. I swear that I had not yet seen Charles Ubaghs’ article until this morning.

My thoughts began with the idea that if Michael Jackson sold 29 million copies of his album Thriller in the USA, what were the other 220 million people buying? At the time, was 29 million albums the most you could sell to an audience of music fans? I believe so.

The music buying audience in the USA is small. This is probably true of most countries. As Ubaghs points out: …Spotify is not a globally mainstream platform. The last time Spotify officially released user numbers in April 2013, it announced 24 million global users, with six million of them paying subscribers. To put that into context, 47.7 million Brits (90% of the population) listened to radio in the third quarter of 2013. Apple announced in June that it now has 575 million active iTunes users. YouTube currently lists its monthly user numbers at one billion, with over six billion hours of video watched each month – that 2013 viewing figure is up 50% from 2012 – and it is officially the largest streaming music site in the world.

He also rightly says that what has happened in the interim is that music fans have switched from stealing to streaming.

The musicians who complain the loudest are looking down the wrong end of the telescope. Music fans have shown a preference for the digital music file, however it’s delivered, and musicians who understand that [see: Moby] have benefitted from meeting that demand.

If Spotify, Beats Music and YouTube Music manage to persuade 100 million people collectively, to switch from listening to free radio and instead paying $9.99 per month for access to unparalleled amounts of music that they control, there will be a lot of money swilling around.

Of course we’ll still hear complaints from musicians about how “they’re not getting paid enough,” and that’s because they are not addressing the real problem: they signed a recording contract.

Comments

  • http://north.com/thinking/author/dallen Dave Allen

    Yes Maurice I fully agree. As Rishad Tobaccowala has said, “the future will not fit in the containers of the past…”

  • MauriceOnAnIsland

    The biggest impression I had after reading the Quietus article is the principle of an “emerging market”. The article re enforced in my mind how little patience an established artist usually has with such a phenomenon, and how that mindset is probably directly related to how comfy they got working with the older model. That, and how bad at espousing economic theory Thom Yorke and his cabal are.

    Streaming will not just “emerge” as a distribution model, it will also develop as an artistic sub-culture within a larger (digital) medium with overarching production styles resulting in still unknown formats that will exist as counter-arguments to the old concept of ‘song’ and ‘album’. In short, music will be written and performed while artists and producers hold a concept of the stream in their minds. Just as they did when AM verses FM radio formats were viable old school ‘streams’ that shadowed their artistic decisions.

  • Sami O’Malley

    Fantastic last line!! I think as time progresses, and the younger generation gets older, there will be more push for streaming, maybe to the point of the end of terrestrial radio. But there is still a lot of the old generation left, and they’re not quite so digital. My parents can kind of get into youtube, but not much. I showed my dad how to pull up videos on torch music, and tried to buy him a spotify subscription. He had no desire. Can’t push it I guess, just takes time.

  • David Kahl

    The Interstate freeway system that supplanted (but didn’t replace) the old US highways took some serious time to build, but, more to the point, these roads didn’t amount to much more than a faster way of getting from point ‘A’ to point ‘B’. A much deeper level of functional convenience – rest stops, shopping, fuel, amenities – took a much longer time to develop, first brought on by some risk takers, and continuing on.

    Brick-and-mortar retailers had to adapt to the Internet – survive, maybe thrive, or perish. Many mom and pop operations grew to levels that they could never have envisioned under the old model(s). So, too, many large concerns, in an effort to retrofit the old square peg and, not understanding the principles behind the process, thought much past basic enterprise. The graveyards, physical and virtual, are filled with their remains.

    Contracts are leases. Some businesses, even in struggling, honor their commitments to pay the rent. Others declare bankruptcy and move on. That’s the way the rest of the small business world works. Now, are we really the exception? Is working from a state of denial really helpful? Does it accomplish, let alone produce, one positive thing?

    That’s my rant. Patience is difficult when one lives in presence of fear; its proximity is much too close for most musicians. Fear, however, cuts a much smaller figure, against a much larger backdrop, the further away it is viewed. Context is the handmaiden of patience. We need more of both.

  • PE Preston

    I had an impulse for a moment to rise to the defense of musicians who signed these contracts (particularly those signed prior to the time that the true nature of the interenet and how it was gointbto work became clear) given that the labels had all the leverage and got the deals the had angled for, but then I realized that there’s no point. The past deals are done. But now the
    Internet is pounding away at all that leverage with a very large mallett (or maybe the better metaphor is that its building a business bypass around the label’s downtown business district?). To those whose creative works are tied up in the old regime that screws you, I’m sorry. But much good will come from breaking down this old model. And maybe the old deals will work out better than you think If Dave and others are right about the scaling up of streaming in the years ahead.

  • David Kahl

    It really does need to be put to rest. A contract is an offer and a consideration. If someone made an offer and you signed, there must have been some compelling enough reason to do so at the time. It all goes back to that old joke: How do you get a musician to complain? Give him a gig.

  • http://north.com/thinking/author/dallen Dave Allen

    I’m hoping to put all of this behind me with a year-end post. Stay tuned…

  • http://www.mattselznick.com Matthew Wayne Selznick

    Can I get a “hell yeah” for this post?

    “Of course we’ll still hear complaints from musicians about how “they’re not getting paid enough,” and that’s because they are not addressing the real problem: they signed a recording contract.”

    Yep. Also, some musicians will always complain about this revenue stream they didn’t even have five years ago. It’s a chronic case of checking every tooth in the gift horse’s mouth.