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Music Industry News Roundup #3

Music Industry News Roundup Here’s some interesting music business news from the last week. As always, it’s surprising how some old topics keep on coming back to life, and the new topics that we never expected pop up.

Streaming music has surpassed YouTube music views. They said it would never happen, but streaming music is now more popular that YouTube for listening to music. This is extremely important because it’s really a paradigm shift happening right before our eyes, as music streaming becomes the big dog of music distribution. Watch the financial pie get bigger for everyone in the food chain!

Spotify and Apple Music are beating YouTube with blockbuster hits. Huge hits like Drake’s “One Dance,” Rihanna’s “Work,” Desiigner’s “Panda” and Zayn’s “Pillowtalk” don’t appear as much on YouTube as on the streaming services.

Spotify paid subscribers now at 37 million. That’s a good strong metric for success, except that so many of subscribers are on a discounted $0.99 per month or 3 months for $10 plans, so there’s no telling what will happen when those run out. Spotify figures they’ll lose between 1 and 1.5 million subs, but experts figure it will be higher. Still, the streaming service continues to grow at a faster rate that the competition.

Sony/ATV’s purchase of the other 50% of Michael Jackson’s catalog is in jeopardy. It appears that European regulators may block the acquisition because it will give Sony too much control of the publishing world. I guess that owning 60% of any industry would get anti-trust regulators to open their eyes.

Speaking of Sony, it’s being investigated in the U.S. for colluding against Rdio. The streaming service filed for bankruptcy last year (a lot of its assets were purchased by Pandora), but Rdio’s 3 founders are filing an anti-trust suit saying that Sony colluded with Warner Bros and Universal in licensing issues to force them into bankruptcy.

The music and tech industries are out of touch when it comes to copyright laws. That’s the conclusion from an article in the Wall Street Journal, but most industry experts think that the existing copyright laws need a serious updating since they apply more to a time before the high-tech age we live in today.

A classical composer has a similar viewpoint. It’s not only pop and rock songwriters that are suffering from existing copyright laws. Jennifer Higdon feels she’s not getting free market value for her compositions, which are played by orchestras worldwide.

Distrokid has created a new system for getting artists paid. This allows for multiple people to get paid, even with different percentages of ownership, instead of the current system of a single payment to one person that has to be divided after the fact.

Soundcloud is taking another step to becoming a full-fledged streaming service. It’s added a new radio-like feature similar to what other services have. Users have said it’s very “Pandora-like,” although I’m not so sure that’s a good thing.

That’s the News Roundup of what went on in the music industry last week. Let’s see what next week brings.

The Music Industry’s Big Data Problem

Big DataOne of the hopes that digital music brought was for a faster and more accurate way for everyone in the food chain to get paid. That sounds good on paper, but unfortunately hasn’t quite panned out the way anyone in the industry expected. While it’s true that it’s easy to count online sales and downloads in the digital realm as well as streams and views, digital accounting lags far behind the expectations of artist, label or publisher alike. But now, music’s big data problem is beginning to be changed thanks to the efforts of companies like Kobalt Music and DistroKid, a trend that hopefully will be adopted by the rest of the industry at some point.

One of the major problems in the current world of music big data has been that although the streaming services could provide accurate info to labels and publishers, it came in a format that was incompatible with their accounting systems. That meant that all those reams of data (more than ever, thanks to the services ability to granularly collect everything)  was delivered in stacks of hard copy, which then had to be manually input into the label or publisher’s system. And of course, the problem was that the person doing the inputting was often an intern or a low-on-the-totem pole employee who was not equipped to deal with some of the more complex decisions that would come up in the course of inputing, which lead to inaccurate statements for artists and songwriters. And let’s not forget the inevitable human error that goes along with manual data entry that didn’t help matters.

This is a problem that continues to plague the majority of the industry every quarter, and in some cases, every month. In fact, many publishers secretly complain that the cost of the manual labor involved exceeds their revenue in many cases. Still, it’s their fiduciary duty to carry on despite these difficulties.

Now to be fair, accounting software systems are expensive, usually custom designed, and take a very long time to both implement and overcome their inevitable growing pains. While changing to something that’s more digitally compatible is in everyone’s best interest, it’s still a painful process, both financially and morale-wise. It’s not a remodel, it’s almost a full tear-down and rebuild.

However there is a light at the end of the tunnel. A few years ago Kobalt Music, lead by Swedish entrepreneur Willard Ahdritz, launched the Kobalt Portal, the first online dashboard that Kobalt artists and songwriters could use to discover their earnings in a timely fashion. In fact, the portal has now been turbocharged so it can even report in real-time, an innovation that has attracted over 8,000 artists and songwriters to the service, including such heavyweights as Paul McCartney, Prince, Gwen Stefani, Bob Dylan, Tiesto and Kelly Clarkson, among many others. [Read more on Forbes…]