[Chris sez: It is not enough for a Silicon Valley company to have a good idea or a compelling product or service. No, no–like Elizabeth Holmes the convicted felon, or Google, who probably should be convicted felons, these people have to convince themselves that they are saving the world. Literally. This is true no matter how ordinary their accomplishments.
Like the self-hypnotist, they convince themselves that their powers of commerce are transcendent and otherworldly. History begins with them. Never should their revelatory accomplishments be compared to building a better mousetrap.
Spotify is no different, and they will damn well prove that their mission statement has no less than the predictive power of the oracle of Balaam. But of course they fail, flesh and blood being what it is in this time before the Singularity.
Tim Ingham fries up Spotify’s “mission statement” in this must read expose. (Read the post on Music Business Worldwide.) But realize this–you can rest assured that if Daniel Ek didn’t write this claptrap himself, he definitely must have approved it. So if you ever wondered whether Ek had a grip on reality, it appears that his grip is weak. But you know, in the beginning was the word, et cetera, et cetera.]
In Spotify’s words, Loud & Clear exists for one reason above any other: “[To] provide a valuable foundation for a constructive conversation”.
Thing is, it’s not the surface-level data on Loud & Clear – the data that Spotify wants you to pay attention to – that makes for the most “constructive conversation” about the music industry and where it’s headed.
To get to the good stuff, you’ve got to dig a little deeper than that….
Taken at face value, these figures point to the ever-widening base of artists earning decent payouts from the world’s largest subscription streaming platform.
Spotify obviously likes that narrative a lot. As its Loud & Clear site boasts: “More artists are sharing in today’s thriving music economy compared to the peak of the CD era.”
Thing is, any half-credible analysis of these numbers has to take into account how they’ve changed over time.
And when we start treading this path, these figures begin to take on a different nature – one that flies in the face of Spotify’s wonderfully earnest, but laughably silly, mission statement.
The US is still the only Western democracy that stiffs artists on royalty payments for radio airplay. Let’s fix that!
[Editor Charlie sez: Anyone who tells you that artists can’t pass legislation to get fair pay for radio play is either a charlatan or full of shit and they are not on our side of the football.]
U.S. Senators Marsha Blackburn (R-Tenn.) and Alex Padilla (D-Calif.), along with Senators Thom Tillis (R-N.C.) and Dianne Feinstein (D-Calif.), introduced the bipartisan American Music Fairness Act to ensure artists and music creators receive fair compensation for the use of their songs on AM/FM radio. This legislation will bring corporate radio broadcasters in line with all other music streaming platforms, which already pay artists for their music.
Congressmen Darrell Issa (R-Calif.) and Jerry Nadler (D-N.Y.) led the legislation in the U.S. House of Representatives.
“From Beale Street to Music Row to the hills of East Tennessee, Tennessee’s songwriters and artists have undeniably made their mark,” said Senator Blackburn. “However, while digital music platforms compensate music performers and copyright holders for playing their songs, AM/FM radio stations only pay songwriters for the music they broadcast. This legislation takes a long overdue step toward leveling the music industry playing field and ensuring creators are fairly compensated for their work.”
“California’s artists play a pivotal role in enriching and diversifying our country’s music scene, but for too long, our laws have unfairly denied them the right to receive fair compensation for their hard work and talent on AM/FM radio broadcasts,” said Senator Padilla. “As we celebrate the accomplishments of our musical artists at the Grammy Awards in Los Angeles this weekend, we must commit to treating them with the dignity and respect they deserve for the music that they produce and that we enjoy every day.”
“Protecting one’s intellectual property is the signature right of every American who dares to invent. Every artist who first picked up a drumstick, sang to their mirror, or wrote lyrics from the heart did so because they had a dream and wanted to share it with the world. I look forward to working with stakeholders and colleagues to achieve this overdue reform,” said Congressman Issa.
“The United States is an outlier in the world for not requiring broadcast radio to pay artists when playing their music, while requiring satellite and internet radio to pay,” said Chairman Nadler. “This is unfair to both artists and music providers. I’m proud to sponsor the American Music Fairness Act which would finally correct this injustice. This is what music creators want and deserve.”
“It’s clear that the movement for music fairness continues to gain momentum, bringing us closer than ever before to ending Big Radio’s ability to deny artists the fair pay they deserve. This week’s House and Senate introductions of the American Music Fairness Act is evidence of that. We thank Senators Padilla and Blackburn and Representatives Issa and Nadler for their leadership in the effort to secure economic justice for our nation’s music artists and creators, and look forward to working together to drive continued progress in the coming months,”said Congressman Joe Crowley, Chairman of musicFIRST.
“Music creators have been forced to give away their work for far too long. It is time for Congress to demonstrate that they stand behind the hard-working Americans that provide the music we all love by finally passing the American Music Fairness Act. This bill has the broad support of artists, labels, small broadcasters, unions, and others because it strikes a fair balance by respecting creators for their work and protecting truly local broadcasters. No more excuses, no more waiting in line for their turn. Music creators demand the economic justice AMFA provides,” said Michael Huppe, President and CEO of SoundExchange.
“As we prepare to focus our attention on celebrating music this weekend at the GRAMMY Awards, the Recording Academy also renews its commitment to ensuring music creators are always compensated fairly for their work. We applaud Reps. Issa, Nadler, McClintock, and Lieu and Senators Padilla, Blackburn, Feinstein, and Tillis for reintroducing the American Music Fairness Act and look forward to working with them to build on the historic progress we made last year on this important legislation,” said Harvey Mason jr., CEO of the Recording Academy.
“The American Music Fairness Act is practical compromise legislation that has already passed the House Judiciary Committee with bipartisan support last Congress. It takes a smart, calibrated approach towards solving a decades old problem in the radio industry. When enacted into law, AMFA will ensure recording artists and copyright owners are paid fairly for recorded music regardless of the technology used to broadcast it while carefully protecting small and noncommercial stations to preserve truly local radio our communities depend upon,” said Mitch Glazier, Chairman and CEO of the Recording Industry Association of America.
“For far too long, our broken and unfair system has let AM/FM radio stations — many of which are owned by just a few massive media corporations — get away with refusing to pay artists when they play their music. While these big corporate broadcast companies gobble up billions upon billions in advertising dollars, the session and background musicians, whose work makes all of it possible, receive no compensation whatsoever for their creations. It’s time to right this wrong, and the American Music Fairness Act aims to do just that. It’s vital that Congress protects the livelihoods of those who create the music we know and love,” said Ray Hair, International President of the American Federation of Musicians.
“I want to thank Congressman Jerry Nadler, Congressman Darrell Issa, Senator Alex Padilla and Senator Marsha Blackburn for their leadership on this crucial legislation. When you consider the billions of dollars the big radio corporations generate in revenue and profits, it’s shocking that recording artists, vocalists and musicians don’t receive a penny when their work is played on AM/FM radio. Since when do workers in America get exploited without pay? This is an unfair and egregious loophole especially since both streaming and digital services pay for the use of artists’ work. AM/FM radio has had a free ride for decades and it’s time to put a stop to it! I urge Congress to fix this outdated practice by passing the American Music Fairness Act,” said Fran Drescher, President of SAG-AFTRA.
“We are grateful that our champions are making it crystal clear that the fight for fairness continues in this new Congress. By reintroducing the American Music Fairness Act, Senators Blackburn and Padilla, along with Representatives Issa, Nadler, McClintock, and Lieu, as defenders of property rights and supporters of artistic expression, have put the mega broadcasting conglomerates on notice that it is time to erase their stain on America’s history,” said Dr. Richard James Burgess, President and CEO of the American Association of Independent Music.
Currently, the United States is the only democratic country in the world in which artists are not compensated for the use of their music on AM/FM radio. By requiring broadcast radio corporations to pay performance royalties to creators for AM/FM radio plays, the American Music Fairness Act would close an antiquated loophole that has allowed corporate broadcasters to forgo compensating artists for the use of their music for decades.
In recognition of the important role of locally owned radio stations in communities across the U.S., the American Music Fairness Act also includes strong protections for small, college, and non-commercial stations.
The American Music Fairness Act will positively impact artists and the music industry at large by:
The American Music Fairness Act is endorsed by: the AFL-CIO, the American Association of Independent Music (A2IM), the American Federation of Musicians, the Recording Academy, the Recording Industry Association of America (RIAA), SAG-AFTRA and SoundExchange.
Full text of the bill is available here.
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Tomorrow! Live stream 3rd Artist Rights Symposium at @TerryCollege with @MMercuriadis David Lowery, @MusicTechPolicy @richardjburgess @helienne @northmusicgroup Samantha Schilling @crispinhunt @smalldrinkofh20 David Turner @jkdegen Steve Carlisle, Janice Pilch Mary Rassenberger
Livestream tomorrow (Nov 15) at 9am ET at this link https://www.facebook.com/ugambus
By Chris Castle
[This post first appeared in MusicTech.Solutions]
Emmanuel Legrand prepared an excellent and important study for the European Grouping of Societies of Authors and Composers (GESAC) that identifies crucial effects of streaming on culture, creatives and especially songwriters. The study highlights the cultural effects of streaming on the European markets, but it would be easy to extend these harms globally as Emmanuel observes.
For example, consider the core pitch of streaming services that started long ago with the commercial Napster 2.0 pitch of “Own Nothing, Have Everything”. This call-to-serfdom slogan may sound good but having infinite shelf space with no cutouts or localized offering creates its own cultural imperative. And that’s even if you accept the premise the algorithmically programed enterprise playlists on streaming services should not be subject to the same cultural protections for performers and songwriters as broadcast radio–its main competitor.
[This] massive availability of content on [streaming] platforms is overshadowed by the fact that these services are under no positive obligations to ensure visibility and discoverability of more diverse repertoires, particularly European works….[plus] the initial individual subscription fee of 9.99 (in Euros, US dollars, or British pound) set in 2006, has never increased, despite the exponential growth in the quality, amount of songs, and user-friendliness of music streaming services.
Artists working new recordings, especially in a language other than English, are forced to fight for “shelf space” and “mindshare”–that is, recognition–against every recording ever released. While this was always true theoretically; you never had that same fight the same way at Tower Records.
This is not theoretically true on streaming platforms–it is actually true because these tens of millions of historical recordings are the competition on streaming services. When you look at the global 100 charts for streaming services, almost all of the titles are in English and are largely Anglo-American releases. Yes, we know–Bad Bunny. But this year’s exception proves the rule.
And then Emmanuel notes that it is the back room algorithms–the terribly modern version of the $50 handshake–that support various payola schemes:
The use of algorithms, as well as bottleneck represented by the most popular playlists, exacerbates this. Furthermore, long-standing flaws in the operations of music streaming platforms, such as “streaming fraud”, “ghost/fake artists”, “payola schemes”, “royalty free content” and other coercive practices [not to mention YouTube withholding access to Content ID] worsen the impact on many professional creators….
This report suggests solutions to bring greater transparency in the use of algorithms and invites stakeholders to undertake a review of the economic models of streaming services and evaluate how they currently affect cultural diversity which should be promoted in its various forms — music genres, languages, origin of performers and songwriters, in particular through policy actions.
Trichordist readers will recall my extensive dives into the hyperefficient market share distribution of streaming royalties known as the “big pool” compared to my “ethical pool” proposal and the “user centric” alternative. As Emmanuel points out, the big pool royalty model belies a cultural imperative–if you are counting streams on a market share basis that results in the rich getting richer based on “stream share” that same stream share almost guarantees that Anglo American repertoire will dominate in every market the big streamers operate.
Emmanuel uses French-Canadian repertoire as an example (a subject I know a fair amount about since I performed and recorded with many vedettes before Quebecoise was cool).
A lot of research has been made in Canada with regards to discoverability, in particular in the context of French-Canadian music, which is subject to quotas for over the air broadcasters which however do not apply to music streaming services. The research shows that while the lists of new releases from Québec studied are present in a large proportion on streaming platforms, they are “not very visible and very little recommended.”
It further shows that the situation is even worse when it is not about new releases, including hit music, when the presence of titles “drops radically.” It is not very difficult to imagine that if we were to swap Québec in the above sentence with the name of any country from the European Union [or any non-Anglo American country], and even with music from the European Union as a whole, we could find similar results.
In other words, there may be aggregators with repertoire in languages other than English that deliver tracks to streamers in their countries, but–absent localized airplay rules–a Spotify user might never know the tracks were there unless the user already knew about the recording, artist or songwriter. (Speaking of Canada, check the MAPL system.)
This is a prime example of why Professor Feijoo and I proposed streaming remuneration in our WIPO study to allow performers to capture the uncompensated capital markets value to the enterprise driven by these performers. Because of the market share royalty system, revenues and royalties do not compensate all performers, particularly regional or non-featured performers (i.e., session players and singers) who essentially get zero compensation for streaming.
Emmanuel also comments on the imbalance in song royalty payments and invites a re-look at how the streaming system biases against songwriters. I would encourage everyone to stop thinking of a pie to be shared or that Johnny has more apples–when the services refuse to raise prices in order to tell a growth story to Wall Street or The City, measuring royalties by a share of some mythical royalty pie is not ever going to get it done. It will just perpetuate a discriminatory system that fails to value the very people on whose backs it was built be they songwriters or session players.
We must think outside the pie.
Getting discovered in the music business has never been easy. Before the pandemic, artists could at least rely on the industry’s historic mainstay to break through — playing as many gigs as possible and hoping to build a following. But with that path closed for now, artists and their label partners are increasingly dependent on Spotify, the undisputed king of music streaming, and its black box algorithms.
That’s why Spotify’s cynical decision to use this moment to launch a new pay-for-play scheme pressuring vulnerable artists and smaller labels to accept lower royalties in exchange for a boost on the company’s algorithms is so exploitative and unfair. Artists must unite to condemn this thinly disguised royalty cut, which apparently has just been released in “beta” mode and is soon expected to enter the market in full force.
By Chris Castle
If screwups were Easter eggs, Daniel Ek would be the Easter bunny. Right in the middle of Spotify’s crashing stock price, billion-dollar stock buy backs, shenanigans at the Copyright Royalty Board (which grows more chaotic by the day), the Joe Rogan controversy, and an investigation by the UK competition authorities after an investigation by the Digital Culture Media and Sport Committee of the UK House of Commons, here’s another Easter egg that Little Danny missed.
According to Marca, the sport site based in Spain, Ek is soothing his (so far) failed bid to buy the UK football club Arsenal by acquiring the naming rights to Barcelona FC’s super-stadium, Camp Nou, the largest football stadium in Europe. According to Marca:
Sponsorship seems to be the way in which Laporta hopes to get the Blaugrana out of the red and into the black.
An agreement with music streaming platform Spotify, which is expected to be confirmed imminently, will see the club receive 225 million euros.
In turn, Spotify will sponsor the men and women’s shirts as well as their training wear. Furthermore, Spotify will have the rights to the stadium for the next three seasons- which has received mixed reviews from fans of the club.
Barcelona expect annual income of 20 million euros from Spotify to sponsor the Camp Nou, which is estimated to be more than Manchester City‘s deal with Etihad – who sponsor their stadium for 15 million euros per season.
That’s right–not one red cent for artists (or songwriters) but millions for tribute. And how did this deal come about do you think? Well, realize that Barcelona is also shopping for a rather large loan to renovate the Camp Nou stadium and they turned to…Goldman Sachs, which happens to be one of Spotify’s investment bankers. So which came first?
Does Goldman think there’s anything unethical about a company that screws creators all the livelong day but spends hundreds of millions on naming a soccer stadium after itself? (OK, I got that out with a straight face, but you can laugh now.) Evidently not, because in the catechism of Goldman, you stop at the fees novena.
And speaking of fees, what is the source of funds for Daniel Ek’s latest self-aggrandizement or whatever you call it? Perhaps a loan from Goldman before interest rates spike this year if the Federal Reserve really does say goodbye to the easy money era that has bubbled up assets around the world?
[This post first appeared on MusicTechPolicy]
You may have received an email from something called “Sessions” like this one above received by our friend Blake Morgan, and Blake wanted us to alert MTP readers. Here’s Blake’s reply:
Who can forget the epic confrontation between Blake and “Million a Month” Tim Westergren during what Billboard called “World War P”, which shows what can happen when artist relations are grossly mismanaged.
Why do we say “Million a Month” Tim? Because that’s what he made from selling Pandora stock while poor mouthing about paying royalties from Pandora’s loss-making revenues. It may not seem logical, but in Silicon Valley, they care far less about profit than they do about valuation because valuation is, as bank robber Willie Sutton said, where the money is. So “Million a Month” Tim was engaged in the gaslighting of all time.
I guess Blake hasn’t forgotten.
Of course in fairness, Daniel Ek and Spotify are running the same play on a much grander scale of international gaslighting as demonstrated by the COVID Misery Index. Big thanks to Blake for calling out another one and speaking truth to power.
There’s absolutely nothing wrong with music streaming, except the economics. In the chart above from the RIAA it’s painfully clear the record industry is still down by over 50% of the revenues achieved at the peak of the business in 1999. So despite what people might like to say about the value of streaming, the actual facts beg to differ.
We recognize that at it’s worse the industry was down by almost two thirds of the peak, and gains are being made. However, it’s important to have clear perspective in these conversations if we are to address some of the challenges with the current economic model.
The fundamental problem with streaming is that revenue does not grow with consumption. Revenue only grows with subscriptions or advertising revenue. Once that revenue is capped, everyone from Taylor Swift to indie garage bands are splitting that same revenue which is divided by the total number of plays for that specific revenue period. This also means hit records don’t add overall revenue for anyone, they just get a larger piece of the revenue that is available.
When a major artist has a release (like Taylor Swift for example) everyone’s streams are worth less. This is because Taylor generates so many plays/streams that the pie is now cut into much smaller slices. Of course, Taylor gets the majority of those slices so she gets the most money from the pool of revenue that is available.
In other words, the pie doesn’t grow with consumption, it can only be cut into smaller pieces. The more overall plays there are, the smaller the slices get for everyone. This isn’t the fault of the superstar artist, but rather it’s a fundamental flaw in the design of the business model.
The only way for streams to generate more revenue for all artists is to create solutions that generate more revenue for the streamers as well. The easiest and most common sense solution is an actual per stream rate which would allow consumption to drive revenue. It’s hard to believe such a win/win would be controversial, but here we are.
By Chris Castle
The walls appear to be closing in on TikTok (or as it’s becoming known, TikSoft). This is probably particularly galling to the founder of Bytedance (TikTok’s parent company). Zhang Yiming worked at Microsoft but left in 2008.
Mr. Zhang is launching a Google-style reaction and deflection campaign against the U.S. Government’s standard Committee on Foreign Investment in the United States (“CFIUS”) review of Bytedance’s 2017 acquisition of Musical.ly that started on November 1, 2019. Bear in mind–Zhang must be well aware that pre-acquisition review by CFIUS is a standard procedure which Bytedance chose not to pursue. Had Bytedance submitted the Musical.ly transaction to a pre-acquisition review, TikTok might still have the current problem, but it would have to come from a less legally solid ground.
The key issue in the CFIUS review is the one that Mr. Zhang is not discussing–China’s National Intelligence Law. The reason for the U.S. concern about TikTok is that the National Intelligence Law has broadly drafted and poorly defined provisions that create gaping exposure for U.S. and other foreigners doing business or even studying in China, as well as their Chinese business partners, employees and colleagues.
Two parts of the Intelligence Law are particularly concerning, Article 7 and Article 14. Article 7 mandates that “any organization or citizen shall support, assist, and cooperate with state intelligence work according to law” and Article 14 empowers State Security officials to demand this cooperation, stating that “state intelligence work organs, when legally carrying forth intelligence work, may demand that concerned organs, organizations, or citizens provide needed support, assistance, and cooperation.”
Other clauses are equally alarming. Article 16 authorizes State Security to interrogate any individual and to search their reference materials and files. Article 17 authorizes police to seize and take over the operation of communications equipment [aka TikTok], transportation, buildings, and other facilities of both individuals and organizations.
It is this law that is at the bottom of U.S. concerns about TikTok’s data scraping–it is, after all, spyware with a soundtrack. There’s a strong case to be made that U.S. artists, songwriters, creators and fans are all dupes of TikTok as a data collection tool in a country that requires its companies to hand over to the Ministry of State Security all it needs to support the intelligence mission (MSS is like the FBI and CIA in one agency with a heavy ration of FSB).
Mr. Zhang does not discuss this part. It should come as no surprise–according to his Wikipedia page, Mr. Zhang understands what happens when you don’t toe the Party line:
ByteDance’s first app, Neihan Duanzi, was shut down in 2018 by the National Radio and Television Administration. In response, Zhang issued an apology stating that the app was “incommensurate with socialist core values“, that it had a “weak” implementation of Xi Jinping Thought, and promised that ByteDance would “further deepen cooperation” with the ruling Chinese Communist Party to better promote its policies.
I would find it very, very hard to believe that Mr. Zhang is not a member of the Chinese Communist Party, but in any event he understands very clearly what his role is under the National Intelligence Law. Do you think that standing up to the MSS to protect the data privacy of American teenagers is consistent with “Xi Jinping Thought”? (Xi Jinping is the Chairman for Life of the Chinese Communist Party.)
Kind of like this recent police banner from Hong Kong:
It’s not that I don’t believe a word he says, it’s just that I’m still waiting to hear how operating the company in the U.S. in line with the public protestations of TikTok executives is consistent with “Xi Jinping Thought” and being “commensurate with socialist core values.”
But hope springs eternal.
The Trichordist 
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