Category Archives for "Streaming Music"
While radio airplay used to be the lifeblood of a hit (and in some cases still is), today it’s the playlist that really sets the tone for listener discovery. If a track is added to a popular list, its streams will spike and listeners will add it to their personal playlists, which sometimes adds a viral element that spreads to playlists on other networks as well. What’s more, hot playlists are now watched by radio programmers to see both what’s trending and what’s not.
Not surprisingly, pay-to-play has come to the digital age as a new form of payola now attempts to influence what consumers listen to. Playlist promotion, or “playola,” has become a big part of the promotional campaigns for many managers and labels. In fact, prices for playlist promotion can be as little as $100 to a small blogger with a modest following, to as much as $10,000 for a six-week campaign for a major playlist owner. A quick Google search will find dozens of promotion companies that specialize in getting your songs on playlists just about anywhere.
Just like in the old days of radio promotion, competition is now fierce for these playlist spots, so don’t be surprised if the prices continue to rise.
While the playlist culture has been great for music discovery for the listener, it turns out it hasn’t been that great for artist development. Where before listeners were getting to know the artist’s music via multiple songs on an album, that’s all changed as streaming has made the business more song-driven instead of artist-driven. As a result, songs tend to come and go faster, as do artists. The good news is that means there are are always spots open on a playlist for new songs. The bad news is that it’s more difficult for an artist to get long-term traction as a result. Check out this post to improve your chances of getting placed on a popular playlist.
Neil Young pulled his music off of every streaming service in 2015 because of the poor sound quality in favor of his own Pono service, but in a reversal, now he’s back. Although last May his music was made available on Tidal, now it can be found on both Spotify and Apple Music.
Pono was Young’s idea for a high-resolution streaming service complete with it’s own player, but the timing, as well as expectations for demand, were off. By the time it launched, music lovers had abandoned music players like the iPod for streaming, so putting an expensive, oddly shaped device in the pants pocket was out of the question, regardless how it sounded.
While Neil Young has always used the argument that his fans wouldn’t stand for the lower quality sound and expected more from him, that doesn’t seem to be the case, and his entry back on the various streaming services is an admission to that premise.
This is another example of how fans care more about convenience than anything else. Although improvements in sound quality have frequently come with new delivery technologies that the music industry has adopted, that’s never been the reason why most people would buy or use the product, although for many it was a happy coincidence. It’s been improved ease of use that’s always won the day, and streaming has been the best example of that ever.
Although the sound quality isn’t up to par with vinyl and CDs, the fact that you can access literally millions of songs almost anywhere anytime is a far more attractive feature to most users. That said, the streaming quality is getting better, and high-quality tiers from both Deezer and Tidal are available for anyone who cares enough.
I predict that by the end of 2017, one or more of the mainstream streaming services will also make the move to high-resolution, which may put the quality issue to bed for good (unless you’re an audiophile, of course).[Photo: Andy Roo]
Many artists, bands and musicians don’t think much about metadata when creating a song but record labels take it very seriously. It’s a major way to be able to track a song to make sure that all the stakeholders get paid. That said, metadata isn’t standardized and is sometimes filled out incorrectly, defeating its purpose. That’s why the new Recording Information Notification (RIN) metadata standard rolled out by the Digital Data Exchange consortium (DDEX) is so important.
The Recording Information Notification (RIN) standard is an XML-based file format that makes it possible to describe all aspects of a recording session, from the participants to the instruments and equipment used to the time, location, length and other technical and creative elements of the recording. It’s designed to be implemented by digital audio workstation manufacturers and to be interoperable with all other DDEX standards as well.
DDEX also announced the release of an updated version of its Digital Sales Report (DSR) Flat File standard, which is designed to track sales and usage data in streaming-based platforms. DSR allows song streams to be reported in a form that allows music publishers and rights societies to allocate the correct royalties from each sale or use of a work to the appropriate rights holders and organizations, rather than use a percentage, algorithm or market share to determine the payout. The original DSR standard was developed in 2006 and was designed to track and report downloads. The latest version is more in tune with music consumption of today and the future.
A number of companies and organizations, including Apple Music and SECAM, have already endorsed the new releases.
This is potentially a big step in the right direction for getting everyone in the streaming pipeline paid both more fairly and in a more timely fashion. Of course, it depends upon all of the industry adopting it, but it’s a good strong start so far.
Note: Here’s a guest post from Caroline at Culture Coverage.
In a world of free music, not all streaming services are created equal.
Between premium subscriber systems and free platforms with limitless libraries, there are a lot of options that can cloud a music lover’s desktop and not provide any real advantages. For these five industry leaders, however, it can be a different story. To figure out the future of streaming, check out this list of what’s up and what’s worth a listen.
As the behemoth winner of the streaming music world, Spotify started out just like any other digital age streaming startup, but it’s as much about what critics would consider faults as it is about its apparent successes; the truth is, everything is working for it. The easy-to-use interface, the completely free use of its music catalogue and mobile listening features make it perfect for all ages. Customizable playlists, radio stations, and great social features that mean easy sharing—it’s easy to see why Spotify is top dog in a world of free music. From customized Discover Weekly playlists tailored to your likes and cool features like the one that matches your songs to your running pace, this service is one that only gets better.
While the streaming service isn’t free (and therefore a huge negative), Apple is the leader in everything else tech related, which gives the service strong staying power even if it’s had slow success since debuting in 2015. With only 15 million followers since it launched, Apple Music has been rumored to be acquiring Jay-Z’s TIDAL, which is predicted to be a smart business move. While it may have only 4.2 million subscribers, the clout TIDAL has with big musicians like Kanye West and Rihanna is suspected to boost the listener experience and advantages of subscribing to the Apple Music service.
YouTube is the uncontested largest music streaming music service around with over a billion monthly visitors, and since it launched YouTube Red, it’s finally available without pesky ads. YouTube also leads in the music category by allowing users to search concert tapes, music videos, live recordings, and a plethora of uploaded work ranging from wedding videos to covers. While sifting through all the noise can be a drawback, the lyric video revolution and payout to artists means this globally unifying music source isn’t going anywhere soon.
With 80 million active users, Pandora gets away with having a limited number of skips for one reason: it’s the best way to discover new music. With personalized radio station features and the opportunity to use the app across multiple platforms, the music service has a great price, and it’s perfect for customized listening. While the geographical limitations on this one are a little archaic (though nothing a Virtual Private Network can’t fix), and it’s not your best option when you’re looking for a specific song, it’s free level is one that can’t be beat. The ever-updating and shifting song selection also make it a road tripper’s go-to.
A hotbed for indie artists, remixes, and the Next Big Thing, SoundCloud is still free, though this could change in the next year with its execs looking for a buyer. In the meantime, it offers something none of the other streaming services can. With raw mixes, unreleased EPs and fresh demos, this platform is where untested, undiscovered and underground artists flex their chops, which means it has serious staying power for listeners who want something outside of the commercialized music industry. Plus, there are options for sharing privately with friends or on social media; and with SoundCloud Go, you can listen anywhere.
From on-the-go to at-home listening, these five streaming services are providing the bulk of the industry’s listening platforms, and for 2016, they’re the masters of their trade. What’s next for the 2017 leaders? Only time—and the ear—will tell.
About Me: Caroline is a music junkie and streaming service lover, uploading any and all of the available service apps to her phone to continue her hunt for the next best one. Currently leaning toward the platforms that let her take the music with her, she’s open to being persuaded if you feel like leaving a comment and pointing her in the right direction.
Many artists and bands think that they’ll automatically make money when their videos are viewed on YouTube, but that’s far from the case. In the last part of my series on streaming royalties and an excerpt from my new Music 4.1 Internet Music Guidebook, you’ll see all of the variables that go into how YouTube views are monetized.
“First of all understand that just because your video is being viewed doesn’t mean that you’re getting paid. Your channel must first be signed up with Google Adsense (who supplies the adverts), then set for monetization, then the monetize option for each video must be selected. It’s only at that point that your videos can begin to be monetized
There’s more to it than that though, as with everything involving digital music. The commercial on the pre-roll must be watched all the way through or else it doesn’t count towards monetization. If there’s a banner ad across the bottom of the video, it must be viewed for at least 31 seconds before it counts as a monetized view.
There’s also the fact that YouTube doesn’t sell ads on all of your views. Then some views on mobile devices just don’t register unless the viewer uses an official YouTube app.
Another major factor is the advertiser and the type of ad that’s placed on your video. If your audience happens to like expensive cars, jewelry or clothing, then an advertiser would probably be willing to pay a higher ad rate, which means that each video view would earn more money.
Yet another variable is the time of year the video is viewed, as many advertisers pay more for the holiday season than in January, for instance.
And then there’s the type of ad that’s used on the video or channel. This can vary from a skippable video ad that runs before your video begins (a “pre-roll”), to a transparent overlay add that takes up the bottom portion of your video, to a display ad featured to the right of your video and more. Each pays at a different rate.
That’s why there’s a wide range of payouts that can go anywhere from around $2.50 to $9.00 per thousand views. That means that a monetized video with 1 million views may generate anywhere from $2,500 to $9,000. YouTube takes a 45% cut however, which then puts the income to the copyright holder to between $1,375 and $4,950.
A generally accepted average of what to expect from a million video views is around $1,750, or $0.00175 per view after the split with YouTube, although its also common to see payouts as low as $0.011, or $1,100 per million views.
Don’t forget that if you’re signed to a record label, that this is what the label takes in, and you’re paid at your label royalty rate (15 to 22% of the net amount) minus any recoupable deductions. No wonder why you’re not seeing any YouTube money.”
You can read more from my Music 4.1 Internet Music Guidebook and my other books on the excerpt section of bobbyowsinski.com.
In Part 3 on my series on streaming music royalties, we try to make sense of streaming income as we look at why it varies so much and why the sales parameters we set in the days of vinyl and CDs no longer apply in the digital age. Once again, this is an excerpt from the latest version of Music 4.1: A Survival Guide For Making Music In The Internet Age book.
“By now, we’ve all read the horror stories of the artist or songwriter making what seems to be an incredibly small amount of money after millions of streaming plays. What’s more, it seems even more outrageous when you see that the amounts paid look random, with not many of the tiny payments at the same rate.
Hopefully, here’s a way to make sense of those payments based on what was just presented in the previous two sections.
Back in the days of vinyl, cassettes, CDs, and even downloads, a million was a substantial number that amounted to a lot of money in sales. Today, a million doesn’t mean what it used to, especially when it comes to streaming. In fact, a million streams barely registers on the industry’s radar these days; they begin to take notice at 10 million, and 50 million is considered a minor hit. Major hit records routinely rack up hundreds of millions of streams and views.
That’s why it’s important to keep the “million” figure in perspective when discussing streaming. It’s a good starting place, but not as impressive a number as it once was.
As stated earlier in the chapter, every time a song streams, a royalty is generated for the owner of the sound recording. This is usually the record label, but it can also be a DIY artist without a label.
Sound Recording Rate Variables
Before the royalty is even paid to the artist or label, the royalty rate has lots of variables, some of which we’ve covered already:
The last two points aren’t frequently brought up in sound recording royalty discussions but are equally as important as the type of service and its tiers. Let’s look at the country variable first.
Each country may have the same tiers, but each may pay at much different royalty rates. This is because many services charge the consumer different rates to subscribe in different countries (usually lower than the United States) because that’s all the market will bear. For instance, an Apple Music subscription costs $9.99 per month in the United States but only $2 (120 rupees) per month in India and $3 (169 rubles) per month in Russia. The royalty rate paid on the sound recording will reflect these lower amounts for streams in those countries.
This is one reason why a million streams for one artist may generate more or less money than another. If most of your streams come from outside the country, chances are your royalty check is a lot lower than an artist with streams mostly from inside the United States.
Another unmentioned variable is that some services calculate their royalties on more than streams. Take Spotify, for example. One of the little known facts about the service is that the artist’s market share is also taken into account when determining the monthly royalty. As a result, an artist with a huge hit effectively gets paid a bonus for her increased market share that month.
It’s been stated before but again frequently overlooked: there’s almost always a middleman between the streaming network and the artist. Most of the time, it’s a record label that’s collecting the revenue and then paying the artist at the royalty rate set forth in their label agreement. For digital royalties, this usually ranges anywhere from 15 to about 22 percent, but you can see how the majority of the income that was generated doesn’t make it to the artist in this case.
This is the same to a lesser degree for the DIY artist. Most services will accept song submissions only from major record labels or large indie labels. As a result, most DIY artists are forced to use an aggregator like TuneCore, CD Baby, or DistroKid.
Some of these aggregators charge a flat fee per song or album for uploading to the various digital services, some charge a yearly fee, and some charge a percentage of the streaming royalty that’s earned. This can be another finger in the pie that the DIY artist isn’t prepared for.
An aggregator provides the convenience of not only distributing your music to multiple services at once but also collecting the money for you as well, but that service does come at a price. If you’re really in a DIY state of mind, consider forming your own label and affiliating with the Merlin Network indie label association (merlinnetwork.org) as a way of submitting to each service separately.”
For more on streaming income, check out Part 1 and Part 2 of this series.
You can read more from Music 4.1: A Survival Guide For Making Music In The Internet Age and my other books on the excerpt section of bobbyowsinski.com.
Artists and songwriters, even some publishers, very often misunderstand how streaming income and royalty rates and payments are determined because it’s a immensely complex subject. One of the things that I’ve done in my new Music 4.1 book is provide an overview of how streaming royalties work and are paid, in many cases following the revenue stream down to the last $0.001. Here’s an except from the book explaining how the streaming performance royalty rate for songwriters is determined, since that’s the area that’s frequently quoted in articles and more often than not blown out of proportion. We’ll also introduce a brand new royalty that only applies to on-demand streaming services like Spotify called the streaming mechanical.
Just like when it’s played over the radio, when a song is streamed, a performance royalty is generated. It’s almost always collected by one of the performing rights organizations (PROs), like ASCAP or BMI, and then distributed to the publishing company and songwriter.
Performance Royalty Rate Variables
There are a staggering number of variables when it comes to the different performance rates paid on a stream because there are a lot of different streaming services, and each has a slightly different way of determining the royalty it must pay. Just this section alone could take up at least several chapters, but because this isn’t a book on publishing, here are some of the situations you should know about where the performance royalty rate might vary, along with a short explanation of each:.
The average composition royalty rate per stream is around $0.0005, according to Audiam.
In the case of on-demand streaming services like Spotify or Apple Music, there’s an additional royalty generated on the composition called a streaming mechanical.
The Streaming Mechanical Royalty
The streaming mechanical royalty is relatively new and was created on the premise that on-demand streaming closely resembles a permanent download because the user has such a high level of control.
When the Copyright Rate Board ruled in 2008, it mandated that the streaming mechanical rate would be around 21 percent of what’s paid to the record label for the sound recording if paid directly to the publisher, or around 18 percent if paid to the record label (depending on a set of variables too deep to get into here). That means that the average streaming mechanical rate per stream is somewhere around $0.0067, according to the digital music accounting firm Audiam. As a general rule, the owners of a sound recording often end up with five or six times more revenue than the owner of the musical composition on a particular song stream.“
As you can see, there’s a huge number of variables when it comes to royalty rates paid to songwriters, and they each pay at a slightly different rate. That’s why whenever you read a figure about how much a stream pays you have to remember that it’s usually an average, and might not apply to your particular situation. Remember, we’re talking royalties only paid to songwriters here, and not to artists, which is a separate subject. In the coming weeks, we’ll look at other aspects of online streaming royalties that you probably won’t see anywhere else.
You can read more from Music 4.1: A Survival Guide For Making Music In The Internet Age and my other books on the excerpt section of bobbyowsinski.com.
(Photo: courtesy of PDPics.com)
Streaming music royalty rates are such a morass of different percentages and possibilities that few people on the planet totally understand everything, and the ones who do are attorneys working in that narrow end of the music business. Even label and publishing execs who have been in the business for 20 or more years can be confused. That’s one reason artists and songwriters frequently cite low rates on what seem to be a large number of streams. It’s also why an average royalty rate is used in articles about this side of the business. Here’s an excerpt from my new Music 4.1 book that tries to clarify some of the misunderstandings by starting with the streaming royalty basics.
“Let’s see if we can at least make sense of why it’s frequently impossible to determine what an exact streaming royalty rate is.
First of all, there are two basic variables to remember that everything streaming works from:
1. There are two kinds of streams—noninteractive or webcast (Pandora), and interactive or on-demand (Spotify). On-demand pays more because it generates more money.
2. There are two tiers for each stream—premium (paid subscribers) and freemium (ad supported). The paid tier generates a higher revenue per subscriber than the free, ad-supported tier.
With this in mind, there are two different copyrights for each stream (the same as for a CD, vinyl record, or download), regardless of the tier, which provide a royalty stream:
1. A sound recording royalty (that the owner of the sound recording gets)
2. A composition royalty (that the publisher and songwriter get)
You can think of the sound recording as what you hear played on Pandora or Spotify (or a CD, vinyl, or download for that matter), while the composition is the notes and lyrics on paper.
Within those parameters there are a tremendous number of variables that can occur, all of which affect both the payout for the sound recording and the composition. Let’s explore the different types of streams first.
The Different Types of Streams
What most artists and bands don’t realize is that there are two types of streaming services, and they each operate differently and therefore pay at a different rate.
The first type of streaming is called a noninteractive or webcast stream and comes from either a platform that acts as an online radio station, like iHeart Radio or any traditional broadcaster with an online presence (like your local radio station), or a service like Pandora where the user has a certain amount of control over what plays but can’t directly select a song or make it repeat. Streaming platforms in this category include services like Pandora and Last.FM. SiriusXM and the music channels on cable television also fit into this category.
All noninteractive streaming services must obtain a congressionally created “compulsory” license with the rate set by an entity called the Copyright Royalty Board (CRB), which I write about in more depth later in the “How Royalty Rates Are Set” section. The CRB recently set the rates for 2016 and beyond for radio broadcasters with terrestrial radio stations at $0.0022 ) per stream. Noninteractive platforms like Pandora pay $0.0022 per stream from a paid subscriber and $0.0017 per stream on the free tier.
Interactive or on-demand streams are treated differently from the radio-style streams in that the rate is considerably higher (between $0.005 and $0.009, depending on how much the listener pays per month, among other factors). Services that provide interactive streaming include Spotify, Google Play, Tidal, Apple Music, and Slacker.
The down side here is that if you’re signed to a label, money from interactive streams is paid directly to them. You’ll then be paid by the label based on the royalty amount negotiated in your agreement with them. For instance, if you negotiated a 15 percent royalty rate, then you’ll be paid 15 percent of $0.005 (using that number as an average), or $0.00075 per stream.
If you’re not with a label, the money will be collected by SoundExchange or an aggregator like TuneCore, Ditto Music, or CD Baby if they distributed your songs to the online streaming services.
Average Streaming Type Royalty Paid
Interactive On-demand – $0.005 to $0.009 (average depending upon the tier)
Commercial Broadcasters – $0.0022
Noninteractive – $0.0022 (paid tier) $0.0017 (free tier)
On top of the royalty paid to the artist and label, there’s also a publishing royalty that varies yet again from the above rates, which we’ll cover in the next section.
You can see why artists, bands, musicians and even record labels can be confused about how much they’re receiving from streaming. As The Temptations once sang, it’s a “ball of confusion.”
This is just the tip of the iceberg when it comes to revenue splits and royalty payments from streaming music. It also doesn’t cover the publishing side of streaming, which is another issue entirely. That said, in the coming weeks I’ll go beyond the basics to explain more about how each streaming music royalty actually works.
You can read more from Music 4.1: A Survival Guide To Making Music In The Internet Age and my other books on the excerpt section of bobbyowsinski.com.
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.