Country Music Association Study on Streaming a “Kick in the Teeth” to Swift, Borchetta and Aldean. And Why Billboard = Torrent Freak

As the civil war over free vs paid streaming rages within the record labels, we have to note the curiously timed “study” on streaming by the Country Music Association.   The study purports to show that “Streaming drives Sales” at least according Billboard. The study was reportedly  unveiled at a private CMA membership luncheon on Nov 20th.

The timing of the study’s release seemed curious to many in Nashville since it came on the heels of two go CMA’s biggest performers Taylor Swift and Jason Aldean pulling their catalogues from Spotify.  Although it was likely purely coincidental timing one Nashville source called it a “kick in the teeth to Swift, Borchetta and Aldean” and wondered what kind of “damage control was now going on behind the scenes” at the venerable CMA.  (Let’s hope the damage is limited to bruised egos and that this study doesn’t end up in front of the CRB in an attempt to lower our digital royalties.)

I have not seen the study but I will say that it is highly unlikely that the study really shows that “streaming drives sales” as reported by Pravda-oops I mean Billboard.  We all know now that many consumers prefer access over ownership.  By definition this means lower sales, as some consumers will buy less (or nothing) and stream instead.  This has never really been open to debate even by proponents of streaming.  Further the data I’ve personally seen from a multi-year longitudinal survey of students confirms the common sense notion that streaming does reduce sales amongst certain consumers.

The real and honest debate has always been, “by how much does it reduce sales and what should be the rate?”  No one except certain Billboard headline writers seem to actually think it increases sales.

While the timing of the study may be coincidental in regards to the Swift-Spotify debacle, it appears a little more sinister when you note it comes two days after a similar Pandora “study.” Here’s Billboard’s Glenn Peoples dutifully covering the “study” that was conducted in-house by pandora employees!

Pandora will use the in-house employee conducted study to claim it’s service deserves a reduction in royalties from the rate courts and the CRB.  Just watch.  (Remember we were the blog that was right about the dumb-as-fuck Merlin/Pandora deal.  As we predicted, it has now been submitted to the CRB to argue for lower rates.)   Mark my words Pandora will push this study to the rate courts and CRB.

Let’s just hope the Country Music Association isn’t planning to do something similar with their study.  I mean they would’t right?  They are the Country Music Association.  I’m sure they thoroughly vetted the researchers and motivations of those who conducted the study.  right?  Country Music has always been loyal to it’s performers and Songwriters.

Then again The Country Music Association is essentially a broadcaster.   From an accounting viewpoint performers and songwriters are on the expense side of the ledger.

Maybe some Nashville songwriters ought to go over and ask just what in the hell the CMA is up to with this study?

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UPDATE BREAKING:  BILLBOARD = TORRENT FREAK

PS.  We just noticed that Billboard Senior Editor Glenn Peoples has published a third article on a study streaming increasing sales.   This time-oh man you are not gonna believe this.. are you ready?  I mean are you sitting down? seriously.  I shit you not…  This time he cites an in-house BitTorrent “study” that shows peer to peer filesharing increases sales!

“That’s right! after I download the file for free and it resides on my computer, I go to iTunes and I download a second copy of the file so I have two on my computer”  

He also cites two studies saying similar things that have since been discredited under peer review by actually scientists.  Here is a summary.  

Has Glenn Peoples gone totally pro-piracy?  Citing discredited studies showing P2P files sharing increases sales?  Are you kidding me?  has Billboard.com become Torrent Freak?   Next we’ll start seeing Glenn a the Pirate Party Rallies.   We’re sending him this hat. 

 

 

 

 

New Math $.00666 : Billboard’s New “Consumption” Chart, Free Streams and the End Of Meaningful Metrics?

The purpose of a chart is to provide meaningful metrics to determine the relative value of a title in the marketplace. The new Billboard 200 “consumption” chart moves away from the traditional metric of album sales. In doing so, the new chart also creates questions about how meaningful this new information will be to artists, managers and labels. As album sales continue to decrease a method of measurement that addresses today’s environment is absolutely important.

The move from a “Sales Chart” to a “Consumption Chart” acknowledges what we already know…  More music is being consumed than ever before and conversely musicians are being compensated less than ever before, for that consumption.

Track Equivalent Album sales for measuring the volume of individual songs by a single artist has been a helpful and accurate method of comparing unit sales in the ala carte song era of Itunes (and others) in that every 10 song sales equal one album. This is easy to quantify as logically ten songs sold at 99 cents really does equal the revenue of one album at $9.99. So for comparative purposes this makes sense both in terms of the underlying logic and the economic reality.

But the new Billboard chart has a bigger problem when incorporating streams. The new metric of 1,500 streams per album and 150 streams per song would make sense if there were in fact a fixed price point for streams of $.00666 (as in $.0666 x 150 = $.99 and $.00666 x 1,500 = $9.99). We’re gonna have some fun with this, stay tuned…

Maybe Billboard has a sense of humor in that the calculation of streams to song and album equivalent’s are $.00666 per stream?

It get’s worse because we know from our Streaming Price Bible that neither Spotify or YouTube are paying anywhere near those rates on an summed, averaged per stream rate. From what we’ve heard Billboard is excluding plays from YouTube (for now) but we have a feeling streaming from YouTube Music Key will be included just as those are from Google Play.

The problem here is that the free tiers dilute how meaningful this data is actually going to be to everyone. As we pointed out in one data set we reviewed Spotify’s free streams accounted for 58% of total plays, but only 16% of revenue in the USA. On YouTube (by any name) the amount of streams to revenue is likely to be far more extreme.

FreePaidChart

What’s worse is that we can clearly see that over time, as fixed revenue streaming services scale the per stream rate will drop. The bigger the services scale, the less each stream is worth. This is unless of course the labels demand a minimum per stream rate that actually matches the metric the chart is suggesting ($.00666) and no streams from free tiers should be included.

Suddenly, we’re not feeling so lonely on this point, see here:

WME’s Marc Geiger Sides With Taylor Swift, Calls Free Streaming Services ‘F—ed Up’ | Billboard

Add one more name to the list of industry figureheads who’ve sided with Taylor Swift in her battle with Spotify: Marc Geiger, William Morris Endeavor’s head of music, who called the ubiquity of free, ad-supported streaming music services “a f—ed-up, torturous thing for 15 years”

And…

Essay: Why Streaming (Done Right) Will Save the Music Business | Billboard

As the first music-streaming service to be licensed by all major labels — and the No. 2 on-demand music service in the United States — it may surprise you to learn that we at Rhapsody support, and generally agree with, the decision by Taylor Swift and other artists to not make their new albums available on free streaming services immediately after release.

If we can all agree that Free Streams are problematic for the business, why can’t we agree that free streams are bad for a chart?

SpotifyNetMONTHLY_Charted

Combining the free and paid steams defeats the purpose of what the chart is attempting to achieve, a meaningful metric of paid consumer demand.

Free streams must be filtered out of the chart for it to be meaningful.

Giving away a million of something to gain chart positoning is not new and has been controversial. Lady Gaga’s “Art Pop” album benefited from a 99 cent sale at Amazon.com. However albums given away for free by Jay-Z (in partnership with Samsung) and U2 (in partnership with Apple) have not qualified for charting. There is a reason why.

Add to this YouTube views are known to be gamed regularly with many services offering “pay for plays”. We’re also seeing a growth market for services that provide “pay for plays” on Spotify as well. We recognize that in the early days of Soundscan there were attempts to game that system as well by buying off heavily weighted indie stores with free goods, cash or both.

In a digital world where more consumers are streaming on free tiers than paying subscriptions, where the price per stream is falling as services scale, and where there is no fixed price point as a baseline one has to wonder what the true value of the new chart will really be? If it is to illustrate just how wide the gap is between consumption and revenue, then that may be it’s only real purpose.

It’s not like any of this is new, or news. Big Champange, Music Metric and others have been tracking not only sales data but social media metrics for engagement, free streams (youtube and soundcloud) and even p2p filesharing data for years. If we’re going to get honest about “consumption” charts The Pirate Bay has a Top 100 why not include those rankings? To be clear, this is sarcasm, not an actual suggestion. It also illustrates the grossly mislead notion of including free streams in the new chart. It’s not that hard to determine how we are not making money…

REALTED:

Streaming Is the Future, Spotify Is Not. Let’s talk Solutions.

Why Spotify is not Netflix (But Maybe It Should Be)

How to Fix Music Streaming in One Word, “Windows”… two more “Pay Gates”…

 

 

The Problem With Steve Albini | AdLand

Just last year, during a Reddit AMA, Albini had this to say in a response to a person asking about music piracy and whether or not it hurts him economically.

I reject the term “piracy.” It’s people listening to music and sharing it with other people, and it’s good for musicians because it widens the audience for music. The record industry doesn’t like trading music because they see it as lost sales, but that’s nonsense. Sales have declined because physical discs are no longer the distribution medium for mass-appeal pop music, and expecting people to treat files as physical objects to be inventoried and bought individually is absurd.

Quite simplistic, as we all know not every musician wants their music being shared for free, in exchange for exposure. Also quite simplistic as google happily places ads on such infringing sites, making it tons of money. Keep it in mind before you put up a straw man argument, google did not create the sites, so they can’t hide behind all the hard work it took to build such sites. It merely placed ads on it, with a nice 32% share of the profits to boot.

READ THE FULL POST AT ADLAND:
http://adland.tv/adnews/problem-steve-albini/451760552

A Response to Steve Albini About The Internet and Musicians by UNSOUND Film Director

Originally posted on The Trichordist:

By Count Eldridge

My rebuttal to Steve Albini’s bullet point post. Steve Albini’s poorly reasoned piece was posted, so I feel obligated to try to correct some of the glaring misinformation. I’ve spent the past 2 years working on a documentary called Unsound that addresses the issues that Steve brings up in his post.

You can read the original story here:
http://www.stereogum.com/1678835/steve-albini-thinks-the-internet-solved-the-problem-with-music/news/

On free global music sharing: “The single best thing that has happened in my lifetime in music, after punk rock, is being able to share music, globally for free. That’s such an incredible development.”

It is only an incredible development if you give CONSENT to share that music. Steve seems to have missed the most important aspect of ‘sharing’. Its not sharing without consent.

On consumer choice: “Record labels, which used to have complete control, are essentially irrelevant. The process of a band exposing itself to the world…

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Grooveshark “Offline by Christmas”… | Digital Music News

Infringement should not be a business model.

On September 29th, the United States District Court in Manhattan found Grooveshark guilty of massive copyright infringement, and specifically named CEO Sam Tarantino and CTO Josh Greenberg as bad actors. Now, the curtains are starting to drop: just days after that decision was rendered, federal judge Thomas Griesa issued another decision that removed all doubt that the plaintiffs — a total of 9 recording labels — had triumphed in the case.

READ THE FULL POST AT DIGITAL MUSIC NEWS:
http://www.digitalmusicnews.com/permalink/2014/11/21/grooveshark-offline-christmas

Strike Three for Sirius vs The Turtles: Court Denies Appeal

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.”

Ouch.

 

Artists, Know Thy Enemy – Who’s Ripping You Off and How…

trichordist:

With all the talk about Spotify and YouTube Music Key, let’s remember the source of the real problem…

Originally posted on The Trichordist:

Musicians have been getting the short end of the stick for a long time. There are no shortage of stories about the wrong doings of managers, booking agents, etc and of course record labels.

But today we find ourselves in a battle with an enemy few of us understand. If we were to believe the writings and ramblings of the tech blogosphere, than they would have us believe that our enemy is our fans. This is simply not true.

The enemy are the for profit businesses making money from our recordings and songwriting illegally. Let’s be clear about this, our battle is with businesses ripping us off by illegally exploiting our work for profit. This is not about our fans. It is about commercial companies in the businesses of profiting from our work, paying us nothing and then telling us to blame our fans. That is the ultimate in cowardice…

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Is Irving Azoff sending a signal to all digital services and is Pandora receiving 5×5?

Trichordist Editor:

Here we go…

Originally posted on MUSIC • TECHNOLOGY • POLICY:

Is Irving sending a signal to all digital services?  Oh, I just betcha he is.

There’s actually a pretty simple answer to the very public demand letter to YouTube from Irving’s Global Music Rights.  If Irving’s GMR has the public performance rights to these high profile songwriters it’s probably because the writers transferred their songs to GMR from wherever they were.  The songs had to start somewhere.

If those songs transferred out of the ASCAP, BMI and SESAC environment, then it’s likely that none of them are subject to blanket licenses granted by those societies.  That also means that those songs aren’t part of the US government’s iron fisted control over songwriters, either.  Which means that unlike at least ASCAP and BMI, GMR is under no obligation to license anything to anybody.

That means that it’s possible that anyone who had a blanket license with the societies now has to…

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Timing is Everything: Sirius May be Barred from Appealing California Loss to Turtles #irespectmusic

Trichordist Editor:

The Sirius legal smackdown means things don’t look so good for Pandora…

Originally posted on MUSIC • TECHNOLOGY • POLICY:

Rut ro.  For those of you following along, remember that Flo & Eddie won a tremendous victory against SiriusXM on a motion for summary judgement in federal court before U.S. District Judge Philip Gutierrez in California in a putative class action on behalf of all pre-72 recordings.

Sirius appealed the Turtles case.

Also recall that the major labels filed a separate case in California state court before California Superior Court Judge Mary H. Strobel.  The labels essentially won that case when California Judge Strobel followed similar reasoning to federal Judge Gutierrez .  However, the California judge handed down her opinion after Sirius filed its appeal in the federal case applying California law.

So because Sirius lost both cases, the Turtles may be able to stop the Sirius appeal in the band’s federal court case if they can rely on the decision in the major label State court case.

Two parallel cases in…

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Absolute Must Read : How To Make Streaming Royalties Fair(er) | Medium

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:
https://medium.com/@sharkyl/how-to-make-streaming-royalties-fair-er-8b38cd862f66