Tag Archives for " streaming music "

Spotify’s Paid Over A Billion Dollars To Record Labels This Year

spotify royalty paymentsThe major record labels seem to have it out for Spotify, but the platform is contributing mightily to their bottom lines. It’s been reported that the company has already paid $1.2 billion dollars in royalties to the music industry this year, and over $5 billion lifetime. The platform is paying out around $133 million per month, and over $4.4 million a day, according to Music Business Worldwide.

Spotify recently announced that it now has 40 million paid subscribers, which goes a long way to contributing to that royalty payout. Apple Music, the next most popular streaming music platform, has less than half that at 16 million. The music industry currently favors Apple Music because it doesn’t offer a free ad-supported tier like Spotify. Allowing users to access music for free, even with ads and listening limitations has been ridiculed by artists, songwriters, publishers and labels, but many platforms, including Spotify, feel that it’s important to introduce users to the the value of streaming music first before asking them to pay. That said, many users are now hip to the the benefits of streaming music and that introduction may no longer be as necessary as it was previously.

Regardless, Spotify’s royalty payments are now a huge part of the revenue stream for most labels. Even though that amount still doesn’t make up for declining CD and download sales, the streaming user numbers are steadily rising, and many feel that it’s only a matter of time until streaming makes up the largest segment of recorded music industry income. Spotify might be leading the way, but until it eliminates its free tier (which has been rumored), the company will still receive the wrath of the industry. It won’t be alone, however, as other companies offering the same free tier will be lumped in the same boat, as the industry tries to move away from anything free.

YouTube Misses The Point With Its Lyor Cohen Hire

youtubeIf you want to start a music label executive ranting and raving, just mention YouTube. It’s currently public enemy #1 to the music industry thanks to its relative intransigence over royalty payouts that execs and artists alike feel are way too low. That’s a good reason why Youtube may think its brand new hire of music business insider Lyor Cohen as head of global music will help smooth over its difficulties with the labels, but that line of thinking will probably turn out to be somewhat misplaced when the dust settles.

Cohen comes from his own indie label, 300 Entertainment, after years as a senior exec at Universal Music subsidiary Def Jam, then Warner Music. At Warners, he helped oversee that company’s transition to digital distribution, being instrumental in signing licensing agreements with both Spotify and YouTube, so on the surface this looks like a great hire. Get an insider who knows everyone in the business and how the game is played, and YouTube’s trouble may be soon over, or so the thinking probably went.

The problem is that Cohen isn’t exactly a beloved figure in the industry, so he’ll not be welcomed with open arms to any negotiation, especially if he’s there to play hardball and keep the status quo regarding the royalty rate. Right now YouTube pays only 55% of ad revenue for monetized views, while other music distribution services are in the 70% range and even higher. That’s where the music industry wants to be, but YouTube doesn’t feel compelled in the least to acquiesce, and why should they? If a major label withholds a license, its songs will still find their way onto the platform thanks to the many fans uploading their own videos with the songs attached. YouTube is immune from any copyright infringement prosecution thanks to the Safe Harbor provision of the Digital Copyright Millennium Act.

While it’s possible to identify videos with unlicensed music via YouTube’s Content ID system, most labels feel that it doesn’t identify enough of them, leaving millions of possible monetizable videos views unreported. An improvement to the algorithm is something that the industry is also demanding.

Reportedly, all three major label’s license agreements with YouTube are now out of contract and updated versions of these agreements are currently on the table. Presumably, that’s what YouTube wants Lyor Cohen to handle, but unless he brings a substantial royalty increase with him, you can be sure that the company will continue to remain in the cross-hairs of the music industry, even with an insider at the helm.

[This article originally appeared on my Forbes blog]
September 26, 2016

Apple Music At 17 Million Subscribers After 70 Exclusives

apple music exclusivesRecord labels hate giving exclusives to streaming services, but they appear to be working when it comes to signing up new paid subscribers. During Apple’s latest product rollout, CEO Tim Cook mentioned that Apple Music was now at 17 million subscribers thanks to over 70 exclusives with artist like Taylor Swift, Frank Ocean and Drake. The service now appears to be growing at just under a million per month.

While exclusives are great for the streaming networks, the rest of the music industry isn’t so sure of the benefits. For one thing, there’s a belief that they cause confusion in the marketplace. What happens is that a listener can readily find the new release from a hit artist on one streaming site, but then gets frustrated when she can’t find it on another. Many consumers apparently don’t care or pay attention to the “exclusive” factor, it seems.

For an artist, exclusives are a mixed bag. They make get a modest cash advance for the privilege, but the big carrot is the promotion that goes along with it, especially with Apple Music. That means not only online hype but traditional promotion on billboards, print and television as well.

A big problem that’s only just raising its head is retaliation from other streaming services over an exclusive. Katy Perry is said to have been deleted from all Spotify playlists and refused promotion over her exclusive with Apple Music, which caused her latest single to fall completely off the radar.

As a result, major labels are said to be putting a hold on the practice of offering exclusives from now on, choosing to take their chances with traditional label promotion instead.

Exclusives may become a thing of the past, but for about a year, they were the hottest thing in music industry and streaming music.

Will The New Cheap Tier From Pandora And Amazon Be Worth It?

pandor more skipsEver since music streaming began in earnest, there’s been a mantra inside the music industry that’s gone something like this – “Until the paid subscription rate gets to $5 per month, streaming is never going to scale.” That’s only partially been true, as subscriber numbers have grown steadily at the now standard $10 per month, but not to the level that the industry wanted or expected. The question is, will they truly take off even when they reach the $5 cheap tier?

It looks like we might know soon enough as Pandora is reportedly about to launch a brand new service at that magic price, with Amazon to follow shortly thereafter.

But is what you get for that $5 going to be worth it?

According to reports, Pandora’s $5 tier is just another version of its other tiers, but with the ability to skip more songs and store several hours of playlists. And Amazon’s $5 tier will only apply to owners of its Echo smart speaker. That sort of limits the reach of these $5 tiers a bit, don’t you think?

While all streaming services are feeling the pressure to reduce prices, they’re bound by their agreements with the major record labels, which doesn’t provide a lot of wiggle room for lower prices. In fact, it’s rumored that Apple wanted to set the price of its Apple Music to $8 at launch but that idea was quickly laid to rest by the major label’s powers-that-be.

Pandora and Amazon dipping their toes in the $5 water could be a gateway to a new round of streaming discounts though. Whenever Spotify runs a sale (like the recent $3 for three months student special) its paid subscriber numbers rise pretty quickly, although it’s yet to be seen what the churn rate for those new subscribers is. That’s not enough evidence for the labels however, who still cling to the $10 per month price point as the floor that will never go lower. [Read more on Forbes…]

September 13, 2016

Engineer Tom Weir On Episode #126 Of My Inner Circle Podcast

tom-weirIf you ever wanted to hear a true Hollywood story, then you’ll love this week’s episode of my Inner Circle podcast. Engineer Tom Weir has had some studio experiences that you could only get if you grew up in Southern California, and you won’t believe how cool some of them have been.

Tom is also the owner of Studio City Sound, and we’ll discuss just how different having a Hollywood-area studio is compared to almost anywhere else in the world.

In the intro I’ll take a look at what people are really listening to when streaming (it’s not what you think), and talk about the famous console from Abbey Road Studio 1 being up for sale.

You can listen to it at bobbyoinnercircle.com, or via iTunesStitcher, Mixcloud or Google Play.

September 7, 2016

Which Music Streaming Services Will Survive 2016?

Music Streaming ServicesNote: 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. 

Spotify

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.

Apple Music

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

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. 

Pandora

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. 

SoundCloud

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. 

[Image courtesy of Nickolai Kashirin under CC BY 2.0]

August 26, 2016

Will Amazon Break The $5 Streaming Music Barrier?

Amazon EchoThere’s been speculation for some time that Amazon was going to launch it’s own streaming music service to rival that of Apple Music and Spotify. While such a service could be formidable indeed, another me-too platform might not shake up the streaming landscape much. That could change if Amazon is able to launch a lower-priced service, which could be a game changer based on price alone.

Reports are that the company is considering a streaming service priced at either $4 or $5 per month, but it would only be available on Amazon’s Echo player, and not on phones or other devices. The service would have features much like its competition in that it would be fully ad-free and on-demand. Reports are that the company would also launch a $10 per month full-line service as well that would be available on all devices.

While an Echo-only service seems like a serious limitation given that Amazon has only sold a few million units so far (predictions say that there will be 4 million in use by the end of the year), it’s the precedent of breaking the $5 per month barrier that’s more important than the service itself.

Many industry analysts have railed against the standard $10 per month price point, with the premise being that the price is too high for the industry to reach the tipping point it needs to fully replace physical product. It’s long been predicted that $5 per month was the point that would reach consumers who were reluctant to subscribe at a higher price and finally have them sign on.

The $5 price point has been resisted by the major labels as being too low, and they have fought with the streaming services to keep it at $10. While that might have been a wise decision when streaming was ramping up, in order to truly grow to the heights that most in the industry believe can happen, an adjustment downward is necessary to overcome current consumer objections based primarily on price. The adoption of the proposed $5 per month of the Echo-only service would make music execs more comfortable with the idea that a lower price means more customers, enough so to make up for any perceived money being left on the table. [Read more on Forbes]

Goodbye MP3, We Hardly Knew Ya

Goodbye MP3When it comes to technology, the music business has always been about convenience. It’s ultimately never about the sound or even a lower cost, it’s always comes down to what’s easiest to use. Still, it’s surprising to see the MP3 file format (or the “download” as many know it) accelerating so quickly towards the end of its useful service life.

From the beginning of the modern music business, consumers have quickly gravitated to the latest technology that made it easier for them get their music fix. Going way back to the 1880s, the business consisted of distributing sheet music that the family musician would use to play the latest songs in the living room. When the player piano was introduced, piano rolls became the must-have product.

The Victrola brought the 78 RPM shellac record in the early 1900s, which was soon replaced by the much more durable 33 1/3rd RPM vinyl record that could hold more than twice as much music. But vinyl records weren’t portable, so in the 1960s 8 track tapes became a big hit for taking your music with you in your car. Cassettes were more convenient however, since they were smaller and operated more like a record album, having two sides. They also provided the ability to fast forward and reverse to quickly find the song you wanted, features not available on the 8 track.

The CD was a revelation, not so much for the digital audio it provided, but for its random access ability that let the user easily select a track with no rewinding or forwarding. This is where the music industry got greedy and included a “technology charge” on every CD, jacking the price up far higher than need be, which eventually caused a consumer backlash after the newness of the format wore off.

That dovetailed into the rise of personal computers and the internet, and the ability to share music was high on the list things that the average computer user craved. In Germany, the Fraunhofer Institute developed the MP3 file format in 1993, but it wasn’t until 1997 when it finally took off thanks to the advent of the Winamp player and popularized by MP3.com website.

An MP3 file “let the air out of the tire” of a standard digital CD file, making it about 10 times smaller in size. As a result, music files could then be easily transferred over the low bandwidth online connections of the times (remember, we’re talking the old 32kbd modem days). Not only that, a user’s favorite songs could be ripped from a CD then freely shared with friends without having to pay those sky-high CD prices. Before you knew it, the revolution had arrived as piracy ran rampant, sales waned and record stores closed.

After several feeble attempts to open up an online music store by the major labels, Apple came to rescue with iTunes in 2003, the first large scale way to monetize digital music, a move that the majors rue till this day. [Read more on Forbes…]

A SoundCloud Demise Would Create A Void For Indie Artists

SoundCloudSoundCloud is seeking a buyer, and that could make it much more difficult for indie music artists across all genres to have their music heard. The streaming music service is reportedly seeking a sale in the $1 billion range in a deal that could alter that part of the music landscape for a long time.

According to Bloomberg, SoundCloud execs are currently mulling over a strategy that would result in the sale of the company. No potential buyer has been identified however, and one may not be on the horizon at the valuation the company appears to be asking. Either way, it’s beginning to look as if the streaming service’s days are numbered, at least in the form that we know it today.

SoundCloud has sometimes been compared to an audio version of YouTube in that it’s basically a free service for user generated content, most of which is posted by indie music artists. It’s been good for that niche in that it’s easier and cheaper to post a music file to SoundCloud than to host on the artist’s private website or social media network. That said, the company was never going to earn enough revenue just from usage fees by artists, and it’s really not much of a draw for music fans when compared to any of the sites like Apple Music or Spotify that feature commercial music from label-signed artists. It may have 175 million users a month, but most are not high-volume listeners like on the larger services.

But what really hurt SoundCloud’s prospects for turning a profit is the fact that it was forced to sign expensive licensing deals with the major networks in order to avoid pending copyright issues, and to clear the way for the service to offer a subscription tier in an effort to finally increase revenue. While that sounds good on paper, the biggest distinguishing feature of SoundCloud is its indie artists, and that hasn’t proved to be enough of a draw when its free, so it’s difficult to imagine how it could work for a monthly fee. [Read more on Forbes…]

Deezer Launches In The U.S., But Does Anybody Care?

Deezer-logoAfter a year run up, the streaming service Deezer has finally launched in the United States. Spotify’s major competitor in Europe is now in the world’s largest market, but the question is, does it have enough to differentiate itself from the rest of the current streaming contenders in the space? The Paris-based service launched in 2007 and is already live in 180 countries and has 3 million paid subscribers.

Deezer is available on iOS, Android and Windows phone apps and features a catalog of 40 million songs and 40,000 podcasts, but most significant is that it won’t have a free, ad-supported tier. The service is instead opting for a free 30 day trial period with no ads and no usage limitations. That should make artists, their managers and their labels happy, but it may not be much of an incentive to get people to jump from an existing service of choice.

The platform allows users to create multiple playlists, import MP3s of songs they already own so all their music can be found in one place, and even listen while offline. A feature called Flow also provides song recommendations based upon the user’s listening experience and existing library, and something called Deezer Sessions features live music from festivals and other venues. There are also curated playlists and recommendations, and lyrics are available for the songs you listen to.

Deezer is rolling out its U.S. service without a top Stateside executive though, as former CEO Tyler Goldman is apparently no longer with the company, according to TechCrunch. You can hear Goldman discuss Deezer on my Inner Circle podcast from September 13, 2015.

The company postponed its IPO last year after receiving only lukewarm interest, but raised an additional round of funding worth $109 million this year that made the U.S. launch possible. Deezer has been active in the territory for a while though, as it had previously acquired Muve Music from AT&T as well as the podcast service Stitcher, and also partnered with Sonos last year to support its $19.95 per month high-resolution tier. [Read more on Forbes...]