The next great rock n’ roll swindle

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30 June 2015 | 0

Niall Kitson portraitThere are some wonderful contradictions at the heart of the Internet. I’m going to discuss two of them and how they dovetail given the arrival of Apple and Google’s new music streaming services.

First there is the relationship between media and medium. Take print media as an example. Online distribution has brought more choice than ever before to more readers around the world. The fields you would expect to have benefitted most from this, however, have lost the most money because of it. The migration from paid print distribution supported by premium-rate advertising to free online distribution supported by low-cost pay per click advertising has devastated the revenue base, leading to mass lay-offs in sub-editing, a decline in standards and even the setting of traffic targets for staff writers. The medium has delivered increased choice at a cost to the overall quality of media. The introduction of paywalls has stopped some of the rot but a proper discussion of the merits of this strategy falls far beyond the scope of this piece.

The second contradiction I want to address is the fallacy that ‘content is king’. This argument says it doesn’t matter where material comes from, the best will out. Be it an investigative report in the New York Times or an analysis piece by an expert security blogger, the wisdom of crowds will ensure it lands in your RSS/Facebook/Twitter feed.

This, too, is nonsense. Quality has no bearing on success. Trawl through any trending list of articles or videos and you’ll struggle to find much beyond advertising, cats, babies, celebrity gossip and comment chatter – all designed to be snacked upon in less than three minutes.
So, if medium matters more than media and quality is irrelevant, what does that tell us about consumer’s relationship with content? It’s never about being good, it’s all about being easily used. Convenience is king.

Multi-media mania
The music and film industries have been on the giving and receiving end of convenient consumption since the introduction of the record button. The arrival of illegal file sharing, large hard drives and broadband, however, have turned it into a way of life for some users who proclaim they will never pay for music – it’s just too expensive in the shops, too easy to download, and the industry is such a monster it won’t notice of ‘Superguy69’ wants the latest Nickleback album.

As a ‘least worst’ solution, the music industry has taken to streaming services as a way to turn pirates straight. The appeal is that streaming is a more convenient alternative to downloading, takes up no space and discovery features make finding new material less of a crap shoot.
The trouble is streaming is now eating into downloads to the point where streams are now taken into account in calculating the Top 40 charts. Still, getting people used to paying something is still better than paying nothing.

What does it mean for artists if listeners continue to migrate to cheaper and more convenient platforms like Spotify, Tidal and Apple Music?

This infographic on Informationisbeautiful.net gives a musician’s perspective. According to the graphic, in order to earn the minimum wage of $1,160 a month an artist needs to sell 143 self-pressed CDs – the most profitable recording medium. Signing to a record label with a favourable deal increases that to 1,161 for larger distribution. The return continues to decrease when you hit iTunes, where the artist needs 1,229 downloads. The trend is bucked by a low-end royalty hardcopy deal, needing sales of 3,871 copies a month before we get to streaming services.

In order to make that monthly minimum wage our artist needs 849,817 plays per month on Rhapsody; 1,546,667 on Last.fm; and 4,053,110 times on Spotify.

Going on those figures, there’s a lot to be said for playing small gigs and setting up a merchandise table in the corner for after the show.

Catalogues
You can see why Thom Yorke pulled all his music from Spotify and Taylor Swift – one of the world’s biggest recording artists – followed suit after receiving less than $500,000 in royalties last year.

Apple Music, as the new kid in town, will be held to a different standard by artists owing to iTunes massive reach (800 million registered accounts at time of writing) and lessons already learned.

Based on her Spotify experience you can sympathise with Taylor Swift’s decision to pull her album 1989 from Apple Music when Cupertino announced it would not be paying royalties for the duration of the service’s three-month trial. Whether it be a blow for artists or a canny pop princess maximising her appeal (can’t it be both?) the climbdown was a valuable lesson in treating recording artists as artists with work of merit, instead of content creators posting on forums. Would Apple have made the same decision with app developers before opening the App Store? Of course not.

Plan of action
So what is a budding artist to do? Gamble on the small shows with bigger rewards? Set a major label deal as a goal? Take a punt on streaming in the hope of building a following that will make either of the above viable?

In the past I’ve argued on TechRadio that there must be a sweet spot where artists’ do rely on a balance of revenue from recorded media, merchandise and live performance. I hope there is but streaming ubiquity and reduced royalties will make it harder to find.

As Taylor Swift’s Spotify experience showed, those will the most to lose in royalties gain the least from streaming. Conversely, those who make the least in royalties have the most to gain by taking a chance.

From a service provider’s perspective you need high-profile acts to keep their services relevant and justify a subscription price. Taylor Swift as a loss leader? Apparently so.

Zane Lowe, one of the star DJs behind Apple’s Beats 1 radio service that comes as part of Apple Music, said the measure of the station’s success would be in how many new artists it discovers. So, the answer is another Internet-fuelled contradiction: get new, get known and get out. It’s just crazy enough to work.

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