Over the last year or two a lot of people in the music industry (mainly the so-called “content creators”) have started to get a bit nervous about digital streaming services. These services aren’t particularly new - Napster, Last.FM and many others have been around for a while now - but the one that seems to be getting the most (mainly bad) press is Spotify. Recently I had a friend on twitter basically tell me that I was behind the times for expressing the opinion that the logical conclusion of everyone using services like Spotify was that the “content creators” would no longer be able to afford to create the content. The main thrust of his and many other peoples pro-Spotify argument is that it is a great way to get publicity for your music and you will discover stuff that you may otherwise not have ever heard of. This is not an entirely inaccurate observation. Ditto Music, the company I use to distribute our Hot Donkey stuff, has a page telling you how you can use Spotify to get wider exposure. It includes tips like giving your song or album the same name as something released by one of those big popular artists - then you will turn up in search results and there is a chance that the searchee will erroneously click on your track instead of the one just above it by Lady DuhDuh (or whoever) and will discover, presumably accompanied by a fanfare and a shaft of blinding heavenly light, that your music is much more original and interesting than whatever bilge is still being spewed out of the increasingly irrelevant bumhole of whichever major labels still exist at the time you’re reading this.
Statistically this might not be wrong. I agree that there is a small chance of this happening. I also agree that the newly elucidated listener could be so wowed with your staggeringly original blend of skiffle and dubstep that he or she might nip over to iTunes or Amazon or wherever and buy your whole back catalogue. Or maybe they won’t. Maybe they will just carry on streaming your stuff from their service of choice and you can sit back safe in the knowledge that your pension just went up by 0.001 pence. Unless that streaming service is Grooveshark. I think Grooveshark take money out of your bank account and then come round and punch your granny in the tit. Think that’s right...
Anyway, to illustrate this point a company called Information Is Beautiful recently posted a graph showing roughly how much an artist needed to sell each month to earn a minimum wage. I will give you the short version.
A self pressed, self distributed CD - 143 copies
An allbum download from iTunes (or similar online store) - 1,229 copies
Track downloads form iTunes, Amazon, etc. - 12,399
Rhapsody stream - 849,817
Last.FM stream - 1,546,667
Spotify stream - 4,053,110
Now the first thing you will notice is that it is extremely difficult to make money from music. This is not news. The second thing you will notice is how much the figure jumps from actual downloads to streaming. The third thing you will notice is how staggeringly bad the royalties must be from Spotify. Last.FM pays you two and a half times more than Spotify. Rhapsody pays you nearly five times more than Spotify.
So here we come to the crux of my argument. Spotify has recently joined up and integrated with Facebook and Virgin Media and several other platforms. They would like to be the way we all consume music. They have services and App’s that provide a very flexible, easy and friendly way for people to listen to music. They don’t do anything to push or even highlight new artists in the way that other services do, however. And they struggle to make money. They lost money for a long time, in fact. But in 2010 their revenue shot up, as they did deals and spread out, by around 450% to roughly £50 million. Their losses during the same year were roughly £27 million... Most of the other streaming services are still making losses. And on some levels Spotify are no better than the major labels as they continually refuse to enter into a decent and informative discussion about how the revenue is shared out. As usual the artists get the shitty end of the stick. Some things never change... And this is my main problem with them. It’s not the idea of streaming services that I have an issue with. I just have an issue with the old-skool arrogance and seeming intransigence of the people that run the company.
And a lot of artists quite rightly use things like Spotify as another tool to get people to their gigs. In the US and UK the live music scene has expanded significantly over the last few years despite the closure of many small venues. This is generally a good thing although it is incredibly difficult to make a profit from a gig unless you already have a decent following. But you do it because you hope that people will toddle off home with a Hot Donkey t-shirt and will go buy your latest album. But if most people are consuming their music via streaming services then you will just get another couple of 0.001p’s which you can soon make into a whole penny which you can then frame and hang on the wall and stare at as you sit wrapped in blankets eating Lidl own-brand potato flavoured soup.
So anyone still think the Spotify digital streaming business model, as it stands, is a good idea? It seems that an increasing amount of labels and distributors don’t. The recent big headline was from one distributor who pulled over 200 labels off Spotify. Of course most of these labels are tiny one man operations - much like our very own Donkey Werks - so you can argue that this won’t have much impact. But it will if this trend continues and I hope it does because it’s the only power we have over such companies. And it isn’t just digital distributors pulling stuff from Spotify. The “content creators” are doing the same thing. Here are some of the bands who have pulled their stuff from Spotify recently and also a few that refuse to have their stuff on there.
Arcade Fire, Blink 182, Bob Dylan, Gronibard, IAMX, Justice, La Roux, Paul McCartney, The Postal Service, Mistabishi, Rammstein, Spandau Ballet, Speech Debelle, Suede, AC/DC, The Beatles, Cardiacs, The Eagles, Feeder, Robert Fripp, Peter Gabriel, Intermix, King Crimson, Led Zeppelin, Mad Caddies, John Maus, Metallica, Momus, Joanna Newsom... It’s actually quite a long list and it seems to change on an almost daily basis so you might find an innacuracy or two here.
Now I know there are a lot of old bands in that list and you might just say, as my friend so tactfully did, that they need to “keep up or get left behind”. And on some level he is right. We all need to keep up or get left behind. Since iTunes was launched the music industry has changed beyond recognition. Some of this change has been good - most people have a much more diverse music collection than they would have done in the 80’s or 90’s and the stranglehold that the major labels had has all but crumbled to dust. But some of this change has been bad - nobody, apart from people like that pretentious fuck-ball Bono, knows how to make any money from it anymore. We’re all scrabbling around trying to figure out which of the hundreds of music sites we should sign up to. Soundcloud, Bandcamp, Last.FM, Reverbnation, The Brick Effect, Next Big Sound, etc etc etc. Or do we earn from gigging? Or do we earn from trying to place music with licensing companies so we can end up as the anthem to Tiddle’s Happy Cat Food (*now with macerated horse leg!) Do we earn from limited edition vinyl? Do we earn from iPhone App’s? Of course it has to be a combination of all these outlets. And it seems unlikely that piracy will ever be stamped out. I don’t think it should be or can be either but that’s another blog for another day. I will stress that my argument and problem is with Spotify.
So, is digital streaming the future of music consumption? Probably, in some form or another. In the short term services like Spotify are another way to get your music out into the world at very little cost to yourself - although the fees that digital distributors charge, no matter how small, are basically impossible to recoup. We all need to be creative about how we spread the word and make use of the freedom that new technology generally brings. I do think there will always be a niche market for vinyl and CD and what ever other physical formats might pop up (datacube, amorphous audio-blob, MiniDisc - hahaha, ok not MiniDisc) because people inherently like collecting and surrounding themselves with stuff. This is certainly true of people who would consider themselves music fans. It is not true of the large percentage of the population who just buy Now That’s What I Call Some Auto-Tuned Slapper Volume 73 from Tesco. I have the misfortune to know some people like this and a couple of them have stopped buying music at all and are now subscribing to streaming services where they listen to the same old shite that they would have done if they’d bought the aforementioned compilation album...
Is Spotify the future of music consumption? I hope not otherwise all that will be left will be a bunch of “hobbyists”, Lady PooPoo and whatever vapid turd the brain-in-a-jar of Simon Cowell decides to exploit. Again I say that I don’t have a problem with the idea of digital distribution - it makes a massive amount of sense. Just please not Spotify.
As an artist (or “content creator” if you frigging prefer, you nu-speak wank-wipe) we have to be clever about this. Instead of the rampant short-termism that has so merrily fucked the rest of society, we should be thinking about ways to protect what I believe is the most valuable art form that humans have created. And we most certainly do not do that by pricing the creators out of business or refusing transparency or making back-room deals that cheer up the investors whilst pissing on the very people that create the product they sell. That way we end up with a music industry as broken and unfair as the one we’re just killing off.