Quoting from todays ruling:
“While the Court is largely unpersuaded and sometimes baffled by Sirius XM’s repetitive or off-point theories about how reasonable jurists might read an unwritten exclusion into § 980(a)(2), the Court will not analyze the potential grounds for difference of opinion because certification of this Order suffers from an even more basic deficiency. At this stage in the litigation and under the operative scheduling order governing the case, certification of the Order for immediate appeal would delay rather than materially advance the termination of the litigation; therefore, the Court denies the motion.”
The record industry has completely disconnected the relationship between artists and their fans whereby the artists catalog is now an aggregated asset to leverage (the label’s) equity in a tech start up that is subsidized by musicians. Not cool.
This is an excellent piece by Sharky Laguna that looks at how all models utilizing divisible revenue pools are fundamentally unfair to the relationship between the artist and the fan. In short, the plays by each consumer should be compensating ONLY the artists that, that person plays (makes sense, right?). Further more 100% of the consumers subscription fee should only pay the artists that individual listens too – no matter how few or how many plays the consumer gives each artist.
Under this proposed revised accounting method, each consumer is once again reconnected directly to the artists they chose to support. This is exactly the kind of thinking that should be happening at the labels and music tech companies.
In a nutshell: Royalties should be paid based on subscriber share, not overall play share.
If I pay $10 and during that month I listen exclusively to Butchers Of The Final Frontier, then that band should get 100% of the royalties. I didn’t listen to anyone else, so no one else should get a share of the $7 that will be paid out as royalties from my subscription fee.
Please read the full post at MEDIUM:
Since we published the Streaming Price Bible we’ve been getting data submissions to crunch the numbers. According to one set of data it appears Spotify is reporting seven different streaming rates (in a single month). But the most interesting discovery in the data is the percentage of free streaming volume and revenue versus paid streaming volume and revenue.
We knew there were two price tiers (Free & Paid) but we didn’t anticipate discovering the other five tiers, even as limited as they are.
As we had suspected, the majority of consumption is generating the least amount of revenue.
Oh, and for those of you keeping score at home the net summed per stream rate, for all streams divided by all revenue is .00352 in the aggregate. That’s .00169 per stream LESS than reported earlier this year in the Streaming Price Bible of .00521. Just another indication that as streaming models mature the price per stream will continue to drop. Add to this that even Spotify executives have admitted as much.
If you have data that looks different than ours, send it our way and let us crunch it. This is the problem when there is such a profound lack of openess and transparency. There also appears to be an overall lack of consistency. Let’s have some real “disruptive innovation” by “sharing” our Spotify statements and comparing the numbers.
[The per play rates noted above are aggregated. In all cases the total amount of revenue is divided by the total number of the streams per service (ex: $5,210 / 1,000,000 = .00521 per stream). Multiple tiers and pricing structures are all summed together and divided to create an averaged, single rate per play.]
Forget exploitative pay from Spotify! Do you want your music on YouTube Music? Will you be alongside Hate rock songs? Jihadi Recruitment Music Videos? Probably. YouTube is full of this vile stuff. And we let our kids watch YouTube?
WE NOW HAVE THE PROOF. STREAMING RATES HAVE PEAKED.
As we noted yesterday The UN is airlifting calculators and behavioral economics textbooks to Hollywood and Silicon valley. So soon we hope some of the executives being paid to do the math on streaming will actually do the math on streaming.
In the meantime we crunched the numbers and it appears that Spotify rates per stream have peaked and are now dropping as they add more users.
Per stream rates started to decline in Sept 2013 (black vertical line) and continue to drop. Here’s the graph which runs from June 2011 – Aug 2014, from left to right.
Spotify rates per spin appear to have peaked and are now declining.
Per stream rates are dropping because the amount of revenue is not keeping pace with the number of streams. There are several possible causes:
1) Advertising rates are falling as more “supply” (the number of streams) come on line and the market saturates.
2) The proportion of lower paying “free streams” is growing faster than the proportion of higher paying “paid streams.”
3) All of the above.
This confirms our long held suspicion that as a flat price “freemium” subscription service scales the price per stream will drop. AND as the service reaches “scale” the pool of streaming revenue becomes a fixed amount. The pie can’t get any larger and adding more streams only cuts the pie into smaller pieces! Don’t expect it to be any different for the newly announced YouTube music service.
You can see this more clearly if you remove the US figures from the calculation and use only the more mature ROTW markets. In this calculation the streaming rate decline is even more pronounced. Yikes!
If you exclude the US and look at the more “mature” ROTW Spotify markets the decline is even more pronounced.
And the full data (for the first graph) is below…
The data above is aggregated. In all cases the total amount of revenue is divided by the total number of the streams per service (ex: $5,210 / 1,000,000 = .00521 per stream). Multiple tiers and pricing structures are all summed together and divided to create an averaged, single rate per play.
UN prepares to airlift badly needed calculators and behavioral economics textbooks to Hollywood and Silicon Valley. Above a A Norwegian UN peacekeeping soldier reacts to details of YouTube Music Key deal. Photo by Русский: Фото: Михаил Евстафьев English: Photo: Mikhail Evstafiev (Mikhail Evstafiev)
If only this story were true.
Yet again we are witnessing a catastrophic failure of mathematics and logic by the music business and their digital music partners:
1). If you offer something for free don’t expect anyone to pay $7.99 a month for the exact same product. After a healthy debate over the (bad) economics of free streaming courtesy of Taylor Swift, the record labels and YouTube have doubled down on their losing bet on free streaming with the YouTube music service. Full album streaming will be available on the free service as well as the paid service. So again no reason to upgrade to paying service. Well at least we can “opt out” of YouTube. Right? Can’t we?… I think we can…. (ed note- you can pull your tracks off Spotify but YouTube will hide behind the DMCA act and let their users upload it.)
2.) If you let YouTube have all our music at $7.99 a month how do you tell Spotify and all the other services they have to stay at $9.99 a month? You can’t blame Daniel Ek for being pissed off about the YouTube deal, now can you?
3) Let’s assume that people defy basic economic principles and pay for something they already get for free. Let’s assume streaming scales to as many US customers as Netflix. That’s 36 million subscribers. At YouTube’s rate of $7.99 you get 3.4 billion retail. 2.4 billion at wholesale. The current recorded music business is 7.1 Billion.
4) As the Cynical Musician eloquently notes: If flat fee streaming services really are the future of music consumption, at “scale” we end up with a fixed pool of money for ALL recorded music. This means the pie can never grow and the slices get smaller and smaller as you increase spins and add new albums. This looks like a death spiral. The only way out is to allow windowing. Oh but wait! The YouTube deal doesn’t let you do that!
5). Stop saying that $120 a year from each streaming subscriber is greater than the $71 a year per capita music consumption in 1999. PER CAPITA! Do you know what that means? Per capita means we are counting every single resident of the USA. Including infants and your 90 year old great grandparents. Unless you have a plan to get $120 a year from infants and 90 year old great grandparents please STFU.