Monthly Archives: March 2016
Monthly Archives: March 2016
It’s been rumored for months, and it’s finally happened. SoundCloud has launched a subscription tier to its streaming service called SoundCloud Go and it’s priced at what’s now become the standard – $9.99 per month ($12.99 for iOS).
The fact of the matter is that SoundCloud Go seems like it’s more to appease the major labels than anything. All 3 majors have now licensed their catalogs to SoundCloud in an effort to get a piece of the DJ remix space they’d been missing.
As for the consumer, there’s not all that much of an advantage. The free tier provides 125+ million tracks while the SoundCloud Go offers the same plus an “expanded catalog” (no idea what that means), offline listening, and it’s ad free.
One of the big problems for consumers is the lack of big names on the platform, or extensive catalog from major label artists, although the platform seems to be adding more content to Go today. Still, the majority of available songs consists of remixes or user uploaded tracks.
SoundCloud has had a major problem with DJ remixes using unlicensed material, and has had to revoke the subscriptions of many of them as a result, which has led to bad blood in the community and mass defections to MixCloud and Dubset. It’s going to be difficult to get them back, if for no other reason than from a logistics standpoint of moving a catalog to a new service.
It appears that SoundCloud Go will pay artists according to their market share, which means that the top 1% will continue to enjoy a higher revenue stream regardless of whether they own the copyright of their material or not.
SoundCloud currently has 175 million active users, so even a conversion rate of 5% would make it a player in the streaming space with nearly 9 million subscribers. SoundCloud Go is only available in the U.S. market for now, but will roll out globally later this year.
By the way, you can avoid the extra $3 iOS charge by signing up on your desktop instead of your iPhone.
Radio is still a big part of an artist’s success, but did you know that an artist doesn’t get paid for radio airplay in the United States? Songwriters get paid from money collected from broadcasters by ASCAP, BMI or SESAC, but there’s no mechanism in place for an artist to get paid for the same airplay.
As an example, the Righteous Brothers “You’ve Lost That Lovin’ Feeling” is the most played song on the radio ever, with more than 15 million plays since its release in 1964, yet the group never received a dime from all that radio play. The writers (Barry Mann, Cynthia Weil and Phil Spector) got rich, however.
Unbelievably, the U.S. is one of only 4 countries in the world that doesn’t pay artists for radio airplay. More unbelievably, the other 3 are North Korea, Iran and China, none of which are exactly known for their artistic freedom or copyright protections.
So what’s the problem in the U.S.? Lobbyists, to put it simply. The National Association of Broadcasters is very powerful and contributes to many political campaigns, so they’ve always managed to quash any legislation that gets introduced to Congress.
The NAB has always threatened that radio and television stations would go bankrupt and be forced to go off the air if legislation was passed mandating them to pay artists for playing their songs, all while the industry was raking in billions of dollars of profits.
Sadly, this situation won’t change soon, mostly because radio is in a true downswing (especially AM) with advertisers moving their money away from radio to social media instead (streaming platforms do pay artists for airplay, by the way).
Radio still helps break a song as millions of people continue to listen at work and in their cars, but it’s mostly from the top 1% artists or those backed by the major labels. It’s irrelevant to young artists and bands since airplay is out of reach.
While the rates seem low, music streaming is an artists friend, since at least you get paid something. Because unless you’re the writer, you’re not going to see any money from radio airplay. And at least online is a place for a young artist to build an audience, since local radio (once the champion of local music scenes everywhere) barely exists anymore, and many colleges have shed their terrestrial radio stations.
For a deeper look into the subject, check out this article on Medium from CD Baby’s CEO Tracy Maddux.
Gen Z is coming of age and they have a whole different take on communication than the generations before. Gen Z is generally defined with birth years ranging from the mid or late 1990s through the early 2010s or starting from the early 2000s.
Notice that Twitter isn’t a part of the social mix. This goes to show that pictures and video are a big part of the Gen Z lifestyle, so if you’re fan base is in this demographic, this is something to strongly consider in future marketing campaigns.
Many fingers are being pointed at YouTube for not contributing much to label and artist bank accounts despite the enormous number of streams it generates.
For instance, YouTube claims that it had 50% of the 317 billion streams last year, yet paid only a fraction of what the paid tier from Spotify paid.
How much? We don’t have the exact breakouts, but a combination of YouTube, Soundcloud, and all the ad-supported tiers from all streaming services accounted for $385 million in the U.S. in 2015.
Premium tiers of Spotify, Apple Music, Google Play and others amounted to $1.22 billion last year.
While everyone is disgruntled with YouTube for paying such low rates, its response as been that it’s paid out over $3 billion dollars to the music industry, which is deceiving in that it’s over the services lifetime, not last year.
The fact of the matter is that YouTube is still the go-to service by most people to listen to music, yet it pays the least to artists, songwriters, labels and publishers.
Yet the company has the music industry over a barrel as it holds all the leverage. Whether an artist wants their music there or not, chances are some fan is going to upload it, so it’s always going to be available, and the price is still right at free.
Unfortunately, don’t expect this dynamic to change soon.
The RIAA has released its statistics for 2015 and, as always, there are some surprises. The things to remember about the RIAA is that it works for the record labels (especially the majors), so some stats you have to take with a grain of salt. Here are some of the more noteworthy data points.
Here’s the catch – the RIAA’s numbers reflect retail sales, which means that the above numbers don’t reflect how much the labels actually received for their music, although wholesale prices are from 65 to 70%.
Last summer I was a thought-leader at David Cutler’s wonderful SAVVY Musician program at the University of South Carolina, which is basically a mini-MBA program for musicians. The program not only teaches you have to think like an entrepreneur, but produce results as well.
Here’s a brief branding outline that I gave while there, which explains some of the very basic steps that any musician, engineer, producer, or music exec can do to develop your brand.
If you’re an artist or in a band then you’re probably on social media to reach your existing fans and to expand your fanbase. There’s a problem though, in that it’s getting a lot harder to do that, especially with the biggest social platforms available.
This is especially evident with Twitter, which still has 320 million monthly users, but most of those seem to be business, sports and celebrity users or journalists. Gen Z and younger millennials are staying away like the plague.
It seems that, unlike Facebook (which they reluctantly use), younger users really don’t have a good reason to use Twitter when other alternatives like Snapchat, Instagram and Kik fulfill their needs in a better way.
Twitter is hard to define and even harder to describe why you need it, but any social network is in trouble if the user doesn’t have any friends on it, as is currently the case with Twitter and the Gen Z and millennial crowd.
Brands are beginning to recognize this as well and spending less on the platform, understanding that it probably won’t be growing much in the future, and that you’re buying current users, not future ones.
That’s why it’s important that you know exactly where your fans are before you invest your time in a social platform. You only have a limited amount of energy and as a result, can’t be everywhere, so go where you can get the most bang for your buck in terms of time invested. If you know that your fans are on Twitter, spend your social capital there, but if more are on Instagram (for instance), that’s where you have to be.
We’ve all seen clubs and restaurants that were white hot for a while and suddenly petered out after the sheen had worn off. That’s what’s happening with EDM at the moment as the scene is slowly winding down on a number of fronts.
Although some big festivals like Ultra Music can still command large crowds, they’re not the instant sellouts that they once were. In fact, many formerly successful festivals like TomorrowWorld have been cancelled this year.
Why is this happening? There are a number of reasons why the scene is said to have peaked (some say back in 2013).
Both Las Vegas and South Beach, the respective ground zero for the genre, have seen mass club closings in the last year, and SFX Entertainment, who bet heavily on investing in EDM, has declared bankruptcy.
It looks like we’re ready for a new trend. Do you see it on the horizon?
This week’s guest on my Inner Circle Podcast is Rick Barker, who helped launch the career of Taylor Swift as her first manager. In the interview, Rick provides an overview of how Taylor became such a huge star, and gives us some insights into how the music business has changed since she hit the scene.
Rick is now is the social media mentor on American Idol, and offers a great Social Media For Music video full of tips and tricks on how to use Facebook, Twitter and YouTube to help you promote your music. Rick is cutting edge in this regard, and taught me a few things I didn’t know myself.
In the intro I’ll take a look at how the record labels are now changing their marketing strategy away from the short product release window to a “continuous loop,” and how the fifth Beatle Sir George Martin changed the finances of the music business.
Major record labels are are finally coming to grips with the fact that we’re going to be living in a streaming world where any sales are a bonus. That means their strategy is now changing from one of selling product to one of engagement, according to a great article on The Drum.
The article states that there’s now a rethink of how product should be marketed.
Instead of the short “release windows” of the past, labels are coming to realize that the more consumers are listening to an artist’s streams, the more money everyone is making. As a result, the marketing cycles are becoming much longer, creating a “continuous loop” that’s geared to keep people coming back to listen.
This movement is being spearheaded by Sony Music UK, but other labels are slowly adapting the strategy.
Sony began to look at other industries like traditional publishing and hotels to see how both are courting and keeping their customers, then incorporating that strategy to help increase engagement.
This can only be good for artists, who have long suffered from inadequate promotion when a song or album wasn’t an immediate hit.
In the past, there was still a chance that a record could catch fire if a radio station (no matter how obscure) would add the song to its playlist, but in these days of station groups, consultants, and less local radio, that’s more difficult than ever. Plus, radio is less and less relevant when there’s no product to sell, so any new ideas in music marketing is great news for every artist and label in our new Music 4.0 age.