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Article: Streaming Music Services - There's Money To Be Made


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Thanks for the article.

 

Not sure where you got your figures from, but 9.6M streams x 0.006 per stream is ~$57K. From that the label or aggregator takes a percentage. Still a very nice income but not close to what you have listed.

 

These days with social media and aggregators like TuneCore and CDBaby, it has been much better for the individual artist to get a piece of the pie.

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Thanks for the article.

 

Not sure where you got your figures from, but 9.6M streams x 0.006 per stream is ~$57K. Still a very nice income but not close to what you have listed.

 

These days with social media and aggregators like TuneCore and CDBaby, it has been much better for the individual artist to get a piece of the pie.

Hi tranz - good question. It's 9.6 full album streams. The album contains 16 tracks.

 

9,600,000 x 16 x 0.006 = $921,600

 

to

 

9,600,000 x 16 x 0.0084 = $1,290,240

Founder of Audiophile Style | My Audio Systems

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Chris, your article is correct but incomplete.

 

In the days of physical media there were set royalty rates that performers and songwriters received from record sales,airplay, and publishing. Even when the rates were low, successful product produced quite a good income for artists.

 

With the advent of streaming, the rules about physical media no longer apply. Essentially the artist has no power. The labels negotiate rates with the streaming company and the artist is basically left out in the cold. The record labels are now taking a much higher percentage of the income stream than they once did. Why? Because they can. Corporate greed...you pick the reason that appeals to you.

 

It is just this situation that was part of the Jay-Z pitch when he took over Tidal. Most perfoming artists receive a very small amount, and songwriters receive literally almost nothing. Songwriting was once a pretty good way to make a living if you succeeded. In the streaming world, even if the song you've written succeeds, you will still need a day job. Forget about living off the royalties. I think your commentary doesn't take this into account.

 

Those of us who value music also should want a world where the artists who create it can make a good living from it.

Main listening (small home office):

Main setup: Surge protector +_iFi  AC iPurifiers >Isol-8 Mini sub Axis Power Conditioning+Isolation>QuietPC Low Noise Server>Roon (Audiolense DRC)>Stack Audio Link II>Kii Control>Kii Three >GIK Room Treatments.

Secondary Path: Server with Audiolense RC>RPi4 or analog>Cayin iDAC6 MKII (tube mode) (XLR)>Kii Three .

Bedroom: SBTouch to Cambridge Soundworks Desktop Setup.
Living Room/Kitchen: Ropieee (RPi3b+ with touchscreen) + Schiit Modi3E to a pair of Morel Hogtalare. 

All absolute statements about audio are false :)

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Chris, your article is correct but incomplete.

 

In the days of physical media there were set royalty rates that performers and songwriters received from record sales,airplay, and publishing. Even when the rates were low, successful product produced quite a good income for artists.

 

With the advent of streaming, the rules about physical media no longer apply. Essentially the artist has no power. The labels negotiate rates with the streaming company and the artist is basically left out in the cold. The record labels are now taking a much higher percentage of the income stream than they once did. Why? Because they can. Corporate greed...you pick the reason that appeals to you.

 

It is just this situation that was part of the Jay-Z pitch when he took over Tidal. Most perfoming artists receive a very small amount, and songwriters receive literally almost nothing. Songwriting was once a pretty good way to make a living if you succeeded. In the streaming world, even if the song you've written succeeds, you will still need a day job. Forget about living off the royalties. I think your commentary doesn't take this into account.

 

Those of us who value music also should want a world where the artists who create it can make a good living from it.

Hi Firedog - Thanks for the comments. For the most part I agree with you, but I disagree that the artist has no power. The more money an artist brings in the more power the artist has with the label. Not all artist receive the same percentage from the label for streaming income.

 

I hear you that artists and song writers used to make a good living and it would be nice if they still made a good living. However, the public has spoken and they don't want what was being sold to them (CDs and downloads). Now it's up to artists to negotiate with the labels for a larger percentage of the streaming pie. It's nonsense to complain about the streaming services when the real culprit is the artist / song writer and the label / rights holder. People need to look inward rather than blame external sources. If they want a big label record deal they will have to live with the consequences.

Founder of Audiophile Style | My Audio Systems

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I keep hearing that the public has spoken but what is not being said is that streaming services came about by business's looking for new business and when the consumer started getting things for free they of course said, MORE PLEASE!

 

If a food chain started giving away something on their menu in order to get new customers then you better believe they'd get new customers, even if they were losing money in the process.

 

Of course the public wants steaming now.

David

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In one of Kurt Vonnegut's novels St. Peter tries to convince poor people hoping to get into heaven that they could have been rich if they'd only tried harder: if only they'd known there was oil in the backyard! That Uncle Ed had $500,000 in Coca Cola stock in the garage! "Sorry you missed it!" says St. Pete. "Not our fault!" I paraphrase, but you get the gist.

 

Your feckless argument that artists should "look within" strikes me the same way. You seem to blame the artists for record label executives inability to realize they were in a burning building. Really: It would be "nice" if artists could make a living? Artists and songwriters are "culprits"? Wow. Some of these artists make less in a year than the cost of some of the gear you review. People who can appeal to mass taste will usually make money. Those who don't, but still make valid music, won't. What happens to them?

 

Consumers have spoken, you say. Of course they have. They want all the music in the history of recording available to them for $10 a month. Who wouldn't? But an artistic community needs to be sustained, or it will wither and die. What are you going to listen to on your megabuck system then? Further, as artists and labels fail, what happens to sonics and fidelity, the whole point of this website? As record companies fade, so do budgets and time in REAL studios? Artists will always make music, whether or not they get paid, but do you want everyone to wind up recording in "Garageband" ? How's that gonna sound on your $5000 DAC?

 

Record labels and Streaming companies have colluded to manipulate outdated intellectual property laws to their advantage. They've done this willfully. They continue to lobby congress to avoid paying terrestrial radio royalty rates. Why? Because they "expose new artists"! The cynicism on display here would be hilarious if it weren't heartbreaking.

 

Abbie Hoffman used to say Nancy Reagan's telling drug users to "Just say no" was like telling a schizophrenic to "just cheer up". Do you really believe that all of this trouble would just blow over if artists went back to their plantation owners and asked "Please sir, may I have some more?"

 

Doubtful. The streaming financial battle has likely already been lost for artists. The companies have won. But that doesn't make it right.

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2014 Year End: Top Billboard 200 Albums Chart | Billboard

 

So how many of the top 200 albums of 2014 according to Billboard were from artists who did not have a record label deal?

 

I don't like what record labels do in regard to artists. It seems a terrible deal at best. Nevertheless, just looking at results do record labels make for bigger selling albums? Now the other thing one could look at is do artists working via streaming and other means without record labels make more money. Success and name recognition beget success. So getting a 'breakthrough' even once is very valuable for future income of artists.

 

So let us just say labels only pass on 10% of what an artist could earn without the label. Do labels generally increase total career sales of artist by more than 1000%. If they do, as bad as it seems, they are beneficial to an artist. If they don't, there is room for another path to make for financial success of artist beyond what labels take part in. Maybe you are only in the top 500 of albums, but make more money than a record deal putting you in the top 50.

 

I really hope streaming and direct sales by artists or a new kind of record company that only minimally inserts itself in the process for a small slice of the pie happens. It would make for more independent artists making a living wage. More variety and creativity in music. And not needing a giant hit album to quit your day job. I haven't seen it happen yet though.

 

Spotify giving 70% to rights holders looks pretty good. Perhaps the amount paid per stream is too low. But is is hard to demonize Spotify when that 70% number exists.

 

I would have thought around a decade ago that labels would be on their way to oblivion by now or they would have drastically changed how they do business. You could argue both are partially true, but it hasn't changed as much as I would have expected. Labels may do more than is being given credit for here.

And always keep in mind: Cognitive biases, like seeing optical illusions are a sign of a normally functioning brain. We all have them, it’s nothing to be ashamed about, but it is something that affects our objective evaluation of reality. 

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In one of Kurt Vonnegut's novels St. Peter tries to convince poor people hoping to get into heaven that they could have been rich if they'd only tried harder: if only they'd known there was oil in the backyard! That Uncle Ed had $500,000 in Coca Cola stock in the garage! "Sorry you missed it!" says St. Pete. "Not our fault!" I paraphrase, but you get the gist.

 

Your feckless argument that artists should "look within" strikes me the same way. You seem to blame the artists for record label executives inability to realize they were in a burning building. Really: It would be "nice" if artists could make a living? Artists and songwriters are "culprits"? Wow. Some of these artists make less in a year than the cost of some of the gear you review. People who can appeal to mass taste will usually make money. Those who don't, but still make valid music, won't. What happens to them?

 

Consumers have spoken, you say. Of course they have. They want all the music in the history of recording available to them for $10 a month. Who wouldn't? But an artistic community needs to be sustained, or it will wither and die. What are you going to listen to on your megabuck system then? Further, as artists and labels fail, what happens to sonics and fidelity, the whole point of this website? As record companies fade, so do budgets and time in REAL studios? Artists will always make music, whether or not they get paid, but do you want everyone to wind up recording in "Garageband" ? How's that gonna sound on your $5000 DAC?

 

Record labels and Streaming companies have colluded to manipulate outdated intellectual property laws to their advantage. They've done this willfully. They continue to lobby congress to avoid paying terrestrial radio royalty rates. Why? Because they "expose new artists"! The cynicism on display here would be hilarious if it weren't heartbreaking.

 

Abbie Hoffman used to say Nancy Reagan's telling drug users to "Just say no" was like telling a schizophrenic to "just cheer up". Do you really believe that all of this trouble would just blow over if artists went back to their plantation owners and asked "Please sir, may I have some more?"

 

Doubtful. The streaming financial battle has likely already been lost for artists. The companies have won. But that doesn't make it right.

 

Hi Radio Jim - Thanks for the honest comments. Obviously I think you are way off, but that's OK with me :~)

 

The main gist of my opinion is that streaming services aren't the problem and the party to be blamed for artists not making money. Nobody forced artists into contracts with businesses that are out to make money for themselves first and foremost. Artist's pointing the blame finger at streaming services is absolutely the wrong thing and isn't going to get them anywhere. Streaming services can't hand over 100% of their income. Artists need to look at the business model they have chosen to use. Do everything yourself and make all the money from streaming services. Work for someone else (a record label) and make money like an employee. Artists aren't special when it comes to the free market. The public doesn't want their CDs, it wants to stream their music. The same can be said for horse and buggy manufacturers. I'd like to see everyone make a living doing what they want to do, but life doesn't work that way.

 

"Those who don't, but still make valid music, won't. What happens to them?" They are subject to the free market just like every other business in most of the world. Make a product that people like and you will succeed monetarily. Make something most people don't care about and you will be rewarded as such. Yes, some artists make less than the cost of gear reviewed here on CA. That's life. Some artists are arguably much less talented and make more money than this entire industry. That's life.

 

 

I agree that the artist community needs to be sustained. Streaming doesn't change this. The record labels are making the money, not the streaming service. Same as it ever was. Artists should ask themselves if they can sustain themselves on a paycheck from a label or doing all the work required to run their own business.

 

 

I don't believe "all of this trouble would just blow over if artists went back to their plantation owners and asked "Please sir, may I have some more?" I believe artist need to stop blaming streaming services first and foremost. In the long run streaming can and will make more money for artists than physical music sales ever did. I also believe artists can't play dumb and raise hell for signing a contract that screws themselves. History has repeated itself so many times with the age old artist - record label battle.

Founder of Audiophile Style | My Audio Systems

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2014 Year End: Top Billboard 200 Albums Chart | Billboard

 

So how many of the top 200 albums of 2014 according to Billboard were from artists who did not have a record label deal?

 

I don't like what record labels do in regard to artists. It seems a terrible deal at best. Nevertheless, just looking at results do record labels make for bigger selling albums? Now the other thing one could look at is do artists working via streaming and other means without record labels make more money. Success and name recognition beget success. So getting a 'breakthrough' even once is very valuable for future income of artists.

 

So let us just say labels only pass on 10% of what an artist could earn without the label. Do labels generally increase total career sales of artist by more than 1000%. If they do, as bad as it seems, they are beneficial to an artist. If they don't, there is room for another path to make for financial success of artist beyond what labels take part in. Maybe you are only in the top 500 of albums, but make more money than a record deal putting you in the top 50.

 

I really hope streaming and direct sales by artists or a new kind of record company that only minimally inserts itself in the process for a small slice of the pie happens. It would make for more independent artists making a living wage. More variety and creativity in music. And not needing a giant hit album to quit your day job. I haven't seen it happen yet though.

 

Spotify giving 70% to rights holders looks pretty good. Perhaps the amount paid per stream is too low. But is is hard to demonize Spotify when that 70% number exists.

 

I would have thought around a decade ago that labels would be on their way to oblivion by now or they would have drastically changed how they do business. You could argue both are partially true, but it hasn't changed as much as I would have expected. Labels may do more than is being given credit for here.

Hi Esldude - Thanks for the comments. I agree with your logic.

Founder of Audiophile Style | My Audio Systems

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"The public doesn't want their CDs, it wants to stream their music"

 

Certainly I am NOT one of those, and would be shattered if the only choice would be streaming. I am okay with having CD physical go to CD download as that saves me a ripping step and helps the environment. However, to be prisoner to a streaming service and have them determine which albums are available for me to listen to or whether they decide to have network issues...UGH!

 

And on top of that, Tidal still sounds like internet radio, albeit good internet radio, and does not compare with my CD rips!

 

I am all for streaming for both the consumer and artist as it is yet another income stream for the artist and another way for the consumer to find artists to enjoy. It has never been easier for artists to enjoy income streams from internet (including streaming services, download services, youtube, etc.) and you do not need to be at the mercy of a label, whereas before that was the only way.

 

Cheers.

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Chris-

The problem with your argument is that the markets aren't really free. We live in a semi-competitive system which gives us the illusion of a truly free competitive market. A truly free market is conditional on no actor having market influence. In almost every market you can think of, this condition doesn't exist. Most markets are dominated by corporate interests who through influence on both the legal system and the market have tilted the playing field in their direction. Certainly this is very true in the music business, on all levels.

 

So under these conditions, for you to stick to the idealistic position that "nobody forced the artists into contracts" may be technically true, but it isn't true in the economic/social reality; and it is odd that you demand the artists work as if in an ideal world of free markets, but don't see an incongruity in the fact that the markets aren't really free, and that the other actors are reaping the benefits of this situation at the expense of the artists.

 

The real solution isn't to make demands on the artists, but to try and level the playing field, so there can be something that more resembles a free market. There are someways that this could be done, I'm doubtful they will happen, as powerful interests don't want them to - they stand to loose the unfair benefits they've managed to accrue to themselves. Occasionally there is a corporate/business actor that sees the really big picture, and doesn't try to grab an unfair share, but this is rare.

Main listening (small home office):

Main setup: Surge protector +_iFi  AC iPurifiers >Isol-8 Mini sub Axis Power Conditioning+Isolation>QuietPC Low Noise Server>Roon (Audiolense DRC)>Stack Audio Link II>Kii Control>Kii Three >GIK Room Treatments.

Secondary Path: Server with Audiolense RC>RPi4 or analog>Cayin iDAC6 MKII (tube mode) (XLR)>Kii Three .

Bedroom: SBTouch to Cambridge Soundworks Desktop Setup.
Living Room/Kitchen: Ropieee (RPi3b+ with touchscreen) + Schiit Modi3E to a pair of Morel Hogtalare. 

All absolute statements about audio are false :)

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Quoting David Byrne - "Same as it ever was" is very appropriate. A lot of musicians from the 60s and 70s had contracts that were so rapacious that they didn't make enough money to keep up their instruments. A few stories have been pretty frequently re-told - how little Jefferson Airplane made for all the hits they had, John Fogarty's long silence, Billy Joel's stop-out to be a piano man while waiting for a contract to expire.

 

If you're a marquee artist - meaning, you've been very successful, enough that you could re-negotiate your contract, you probably can make really good money on the streaming services. A couple young up and coming artists I know have had to keep their day jobs through their second successful album. Easy to blame the streaming services because their take is visible. But I think you're on the right track that for a large number of artists, the biggest cut is going to the agents and labels.

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Great topic - And I am with Chris for one reason:

Publishing has never been easier than it is today.

 

The hard part of being an artist nowadays is not (as it used to be) getting the music recorded, printed, distributed, published.

 

Instead the hard part is getting an audience and attention on the internet. Therefore - once someone has the attention of a following on the web, they need to take ownership of all that implies, including the rights to streaming of their content.

 

Scarcity used to dictate the music industry. Now it is attention. What does the billboard top 40 even mean? Top 40 for who?

 

Artists should IMHO, work on building their own audience, and dictating their terms when people start knocking on their door for a share of the pie.

 

Regards

thebigmix

 

 

Quoting David Byrne - "Same as it ever was" is very appropriate. A lot of musicians from the 60s and 70s had contracts that were so rapacious that they didn't make enough money to keep up their instruments. A few stories have been pretty frequently re-told - how little Jefferson Airplane made for all the hits they had, John Fogarty's long silence, Billy Joel's stop-out to be a piano man while waiting for a contract to expire.

 

If you're a marquee artist - meaning, you've been very successful, enough that you could re-negotiate your contract, you probably can make really good money on the streaming services. A couple young up and coming artists I know have had to keep their day jobs through their second successful album. Easy to blame the streaming services because their take is visible. But I think you're on the right track that for a large number of artists, the biggest cut is going to the agents and labels.

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Instead the hard part is getting an audience and attention on the internet. Therefore - once someone has the attention of a following on the web, they need to take ownership of all that implies, including the rights to streaming of their content.

 

Scarcity used to dictate the music industry. Now it is attention. What does the billboard top 40 even mean? Top 40 for who?

 

Artists should IMHO, work on building their own audience, and dictating their terms when people start knocking on their door for a share of the pie.

 

I agree with you that it is now harder than ever for artists to get noticed. I frequent the Band Camp website to try out new music, I wonder how many of those artists who self publish are getting any traction.

 

The problem I see with your train of thought is how much skill do these bands have in dealing with the corporate streamers. A lot of people here on CA seem to look at Tidal with rose colored glasses but they are no more than a "recording company" for the current millennium. Can you imagine a hundred or thousand individual bands conducting individual negotiations with Tidal or any other service for streaming? There will be a standard contract, sign it at our terms or leave! The vast majority of artists have no skill when it comes to these types of negotiations. The companies will eat their lunch!

Jim

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I remember reading Mick Jagger talking about this, but can't find it googling... In my memory, Mick said there has never been much money in royalties. You earn it touring.

 

I sympathize with musicians, but Bryne was right, "Same as it ever was" while karate chopping his arm.

 

This is a harsh reality, but certainly better than than medieval times when traveling troupes were experts in swordsmanship because the alternative was being butchered on the road anonymously and sold as pork meat in the local market.

 

Thankx for CA Chris,

Augsburg grad, living in Jackson Hole

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Hi tranz - good question. It's 9.6 full album streams. The album contains 16 tracks.

 

9,600,000 x 16 x 0.006 = $921,600

 

to

 

9,600,000 x 16 x 0.0084 = $1,290,240

 

Chris,

 

But is this what he actually received or the label? Did you actually talk to them?

 

I asked a few friends who I build guitar amps for and basically this is what they are saying:

 

iTunes pays, the other stuff is bullshit. It's complicated, but the one guy I agree with is David Lowery. He pisses some people off because he's telling the truth. Look him up.

 

So I looked up David Lowery, there is a stream of articles about how the artist are not being paid. This one was the best out of the ten I read:

 

What Cracker’s David Lowery gets right (and wrong) about Spotify and Taylor Swift | PandoDaily

 

It get's even more complicated with older contracts. Think of it this way... when some of these smaller, medium and even large artists were still doing albums or even the first 10 years of CD's, they had no idea that music was going to go to downloads and then streaming. Do you think their contracts had any provisions for this? Hell No and do you think the labels are going to find them and offer up money for this?

 

Sure maybe bands that actually want to spend the $500 an hour to have some lawyer go after what is rightfully theirs but in most cases the band or artist is just going to take the hit.

 

I watched Willie Nelson the other night and he said

I don't expect to make money on albums anymore. I just hope the album excites some people to come out to my shows. That's were I make money.

 

I guess there is a bunch of this in his new book.

 

Chris I think the way you are looking at this is all wrong. You should really actually talk to some artists and see what is really happening.

 

Ok back to work, Barenaked Ladies tour starts on the 5th of June(http://barenakedladies.com/splash). Come out and see them, I made the amps for the band and what they used to record their new album Silverball.

 

Thanks,

Gordon

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