Zoë Keating released her Annual Music Sales & Streaming Data Spreadsheet a little bit ago and we stayed out of the fray, although we did also publish an update of the Music Streaming Price Index for 2014 as well.
This quote from Zoë in a follow up post about her open and transparent sharing of information on Hypebot got our attention.
I want you to know that I don’t release these numbers as a marketing tool. I’ve always tabulated stuff as part of doing my annual accounting and last year I decided to make a portion of them public. Music commentators were saying, over and over, that artists are not making a living selling music, they make all their money touring, etcetera etcetera. I noted that in my case that wasn’t true and never had been. In the commentary I wasn’t seeing a lot of actual numbers from artists and thought I’d offer some details of how it all works for me: a non-labeled artist whose career has existed entirely in the internet-age.
It’s curious to us that someone would insinuate the motivation behind sharing information in an open, human and transparent way was an attempt at self serving marketing. Shame on those who have made such comments. Zoë should be celebrated for doing what the interweb companies claim to do, and ask others to do, but do not do themselves.
We also found the following statement to be true of our experience of the vast number of artists we hear from who report similar experiences with streaming services ranging from Spotify to YouTube. These services only financially serve the very large artists and the very large labels. In other words, Spotify, YouTube and the like have not empowered artists towards financial freedom and very well appear to be achieving the very opposite.
Meanwhile yes, the big money is to be made at the top of the tail…and therein lies the promise of commercial music streaming services. It will be financially valuable to those who make hits and those who aggregate legions of artists. For a single artist like me commercial streaming will never be more than promo. I accept that. But will keep talking about it until streaming companies do more to make that promo more useful (i.e data).
But there appears to be more to this story. In this recently posted video clip by “Unsound” documentary filmmaker Mikeal Eldridge, Zoë reveals that she has dug a bit deeper into the realities of streaming economics noting that the more streams that are served, the less the artists makes per stream. Again, this is consistent with her observation that “the promise of commercial music streaming services… will be financially valuable to those who make hits and those who aggregate legions of artists.”
We’ve yet to see anyone propose how streaming can actually scale and be sustainable for artists. We love streaming services, what we don’t like are the economics.
92% of Zoë’s recording income is from transactional digital sales. If these streaming businesses are claiming to be the future, the question to ask is whose future?
| Downloads | Streams | Total | % Downloads |
| $75,341 | $6,380 | $81,721 | 92% |
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There is only one way that streaming or any other form of distributing digital music can work. That is to restore rights granted to creators provided in our constitution: “To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries” The key word is “exclusive.”
Currently people are not willing to pay for streaming music since it is widely available from multiple sites that provide a never ending supply of free music, and pay no royalties and escape any consequence due to the “Safe Harbor Provision” of the DMCA. In a market, the vendor supplying a good for the lowest cost sets the going rate.
Our founding fathers new very well that without exclusive rights, a creator really had no rights. A market cannot exist without property rights and protection. This is a basic principle of Econ 101.
If the Safe Harbor were eliminated, that would do a great deal to restore rights needed for a genuine market to develop. A contract between buyer and seller – which is needed for a market – could develop and streaming could then pay. A content creator would then have the right to provide or withhold their work from a streaming site that did not offer a rate the creator could agree on. In the case where rates are set by a royalty court, the creator would require the right to opt out if the rates were not acceptable.
If the safe harbor were eliminated – as it rightly should be, there would still be considerable market distortions from plain old piracy that is allowed to happen that does not even try to claim safe harbor. But the safe harbor is the method that the big players (like You Tube) have used the most. And since the safe harbor created an avenue for allowing massive legal piracy, it has sent the message that our government allows and even condones the profiting and consuming of content one does not own or have rights to. In essence, by creating the safe harbor laws, our government has itself interfered with the market for music and established a price of $0 for any work.