CRIME of THE CENTURY — How the streaming music industry is virtually killing independent artists — by IRMINSUL
It wasn’t supposed to happen to people like him.
Gary Numan, world famous musician and pioneer of an entire music genre, dropped a new track in anticipation of his upcoming album. He was anxious to see how it did, and sure enough in practically no time it logged over 1 million streams. Soon after, his quarterly earnings for those track plays were headed his way. To the tune of 37 £. That’s a whopping $48.60 cents, US.
Of course, there was an outcry and rightly so. Even legal actions that really came to naught. The carrier, streaming giant SPOTIFY, got away with the goods as usual. The entire fiasco raised an issue not limited to the famous, when it comes to streaming music: Independent artists being literally stolen blind, or having their careers killed, by the excesses of the unbridled streaming industry.
Where did it go so wrong?
True to its nature, streaming music started out literally as a crime. In the 1990s, the now infamous NAPSTER launched its presence online, as a format that helped itself to any music that it could find, and made it available as a free download by anyone who wanted it. Outright thievery. When they were finally sued over it (an action prompted by the big names in the music industry, for obvious reasons) their excuses went from the philosophically airy-fairy, to the ethically bizarre. In a nutshell, they simply believed that music should be free to humanity, via the then burgeoning internet…after their profits from ads are culled, of course. Where was the artist in all of this? Well, not their problem. Music, after all, was cheaper than ever to produce and Napster thought that translated into “nothing special” in which the artist should be grateful to another thing they have been conditioned to worship — exposure. Or, in today’s pleasant market speak, “reach”.
In a temporary victory, Napster was finally stopped dead in its tracks. In it’s thieving tracks, anyway. Thanks to court actions, online music had new protections and regulations, making sure copyrights are observed and that there was a semblance of financial return to the artist. Online music thieves had to huddle and rethink strategy, now facing the distasteful premise that they would have to run legitimate businesses.
The birth of the Streaming Service
Out of the dust of Napster came a start up, headed by Daniel Eck, called Spotify. He had quite a task ahead of him. One, how to come up with a business model that observed the rights of the artist, returns to the artist, and still turning a profit for the company. What seemed attractive and “just” to Eck was a rate that sounded just fine to a businessman. But to an artist, it was an outright insult. Spotify offers $.0033 — $.0054 per track. That means a track would have to be played three times before the artist got a penny. The guys at the top? CEO Ecks take home pay remains today at €336,462, which doesn’t really raise an eyebrow. But there are 11 executives on the board, the top earner makes $7,484.00. Spotify uses the so called “freemen” model which means it makes money through paid subscriptions and advertisement.
The ones who create the very content which pulls in these subscriptions and ads…well, let’s just say it the vast majority of them would not pull in enough for the proverbial pot to piss in. In order to understand the roots of the problem here, we have to take a look at a snapshot of the music creator market.
Yes, it’s that bad
As you can see from the graphic (the choice of pyramid was not accidental) the market state of music performers, creators and performer/creators is abysmal at best. As with the broken general market of the USA, the wealth is concentrated to a tiny tip at the top, with the great “vast middle” wallowing in substandard and unlivable wages, commissions and benefits. With this kind of market power, or shall we say an obscene lack of it, musicians have absolutely no leverage on industries seeking to make a profit from their work. They are not in the cat seat. As such, they are expected to and indeed in most regions have come to expect, being blessed with peanuts or the ever glorious “exposure” which graciously tosses their work as a drop in the ocean of music out there. To add insult to injury, there is no implied or tacit attempt at marketing from these services to help the artist hone in on their markets, outside of the usual “let’s help you find your users group” or the almighty hashtag. Basically, you’re a speck of sand in the Sahara, who might get a few pennies if they are lucky. All that and a “Good luck!” from those who make millions a year in guaranteed contracts. How special.
Streaming rates are, of course, at the heart of the debacle. But there is much more to the problem of streaming music, which needs to be examined, discussed and reimagined for a better way to help professional music creators to make money. Let’s take a peak at some, most definitely not all, of the worst aspects of this awful industry.
It’s obscenely top heavy
Take a look at that graph again. It’s so outrageously top heavy it makes a pyramid scam look legit. Everyone understands the operating costs of a business, and the need to attract the best talent to run it. But as with most large corporations, you can see the super majority of the wealth is concentrated at the tiny top, with that Vast Middle we spoke of fighting over the scraps left from the King’s table. The ones who exactly create the very content making the business possible are all ending up on the losing end. I wouldn’t want to wind up on the bottom blue, would you?
It doesn’t serve the diversity of global music
For companies that sell music to the world, they sure don’t act like the world is their client. Music today is more diverse than ever, and growing moreso every day. The current streaming model does not grapple with that diversity in a beneficial way. It doesn’t seem to know what a niche market is. It’s SEO is geared to push its notion of pop music to the fore of features, searches and recommendations, completely disregarding the vast ocean of unique music forms that have paying audiences somewhere — if only they weren’t too lazy to find them. A steady diet of pop pablum may net the top execs their coin, but it does nothing but a disservice to the vast horizon of new and intriguing music content being lost to time and a pathetically misfocused medium.
It doesn’t have all the working parts for its service
Simply plopping a track on a server and walking away not only betrays one as lazy, but shortsighted and bad at business at the same time. Why? Because streaming music is completely missing some of aspects of the business that once made music thriving for many. I speak of the two oft abandoned brothers of the game, marketing and promotion. Pop, it’s jewel in the crown, doesn’t need all that. For the most part the top pop artists are already carried on a label or major production company who do that. Instead, the business should put efforts into M & P for the lesser known, the obscure, the odd, the unwalked paths, to connect them to audiences. They should do this not just for the artists, but for their own pocketbooks: Every newly discovered audience puts money in their pockets.
It has killed the concept of The Album
The single most important revenue generation unit for the artist remains the album. According to stats from Forbes, even though CD sales have fallen badly since 2000, they are still bringing in money. A lot of it. 2.5 billion dollars just last year. Per artist, it is still the revenue unit bringing home the gold. At the average concert, an artist is prone to make a lot more from ticket sales plus CD sales, than they are from just ticket sales alone.
Streaming music is the death from a thousand cuts to an album. Selling it off one little bone at a time, for pennies (if that), in a series of seemingly disjointed and unmeaningful tracks added to someone’s personal mix, while others that could accompany an album of work and go for a thousand times more than a streaming track, are often forgotten and abandoned. An album is a concept. It is a collection of the artist’s work rather than just a bunch of one offs. It shows polish, refinement of one’s craft and creativity of thinking beyond one song. The artist can get the entire revenue from them rather than a tiny portion. Want a review? Forget about it unless you have an album. Serious reviewers don’t care how many likes you have on Youtube or the Flavor of the Month streaming service.
Reverse consequences
Striving to improve and refine the business model might be a case of too little too late. One paradoxical consequence of streaming music has been a revival of interest in local or regional music for those audiences. Events where an audience can see a concert by a local talent, and likely score an album of their work. Someone buying a ticket to see you is almost 90% more likely to buy your album than they are to purchase your track on stream. The personal experience, even intimate experience of a small hall or house concert is garnering ever more interest precisely because streaming is a behemoth. An enormous, cold, impersonal, almost antihuman behemoth.
Putting music back up close and personal to its audiences is an important take away from all of this. In doing so the artist not only stands a better chance of *gasp* making an actual living, but sustaining it as part of a smarter working regimen. It would also bring back the lost arts of marketing and promotion, an art for hungry entrepreneurs who want to master a living by connecting real music and artists to real people again.
Topple the pyramid. Everyone wins that way.