Issues related Music Streaming Services
The Black Keys are a huge band.
Huge bands lose a lot of money on Spotify.
Which is why, once again, the Black Keys are withholding their latest album release from Spotify.
READ THE COMPLETE POST AT DIGITAL MUSIC NEWS:
http://www.digitalmusicnews.com/permalink/2014/03/24/blackkeysspotify
Just watch this totally awesome video. Genius idea.
We don’t know how well this is gonna work out, but we love the intention behind it.
Is this the future of music? We continue to explore artist revenue streams.
Here’s what 1 million streams looks like from different revenue perspectives on the two largest and mainstream streaming services.
| Service | Units | Per Unit | Total | Notes |
| Spotify | 1,000,000 | $0.00521 | $5,210.00 | Gross Payable to Master Rights Holder Only |
| Spotify | same million units as above | $0.00052 | $521.00 | Gross Payable to Songwriter/s & Publisher/s (est) |
| YouTube | 1,000,000 | $0.00175 | $1,750.00 | Gross Payable for All Rights Video, Master & Publishing |
| YouTube CMS Master Recording (Audiam / AdRev) | 1,000,000 | $0.00032 | $321.00 | Gross Payable to Master Rights Holder Only |
| STREAMING TOTALS | 3,000,000 | $7,802.00 | TOTAL REVENUE EARNED FOR 3 MILLION PLAYS ON SPOTIFY AND YOUTUBE | |
| Itunes Album Downloads | 1,125 | $7.00000 | $7,875.00 | Gross payable including Publishing |
Here are some compelling stats on the break down of what percentage of videos on YouTube actually achieve breaking the 1 million play threshold, only 0.33%
CHART OF THE DAY: Half Of YouTube Videos Get Fewer Than 500 Views | Business Insider
Some 53% of YouTube’s videos have fewer than 500 views, says TubeMogul. About 30% have less than 100 views. Meanwhile, just 0.33% have more than 1 million views.
That’s not a huge surprise. But it highlights some of the struggles Google could have selling ads around all those unpopular videos, despite the money it has to spend to store them.
An artist needs to generate THREE MILLION PLAYS on the two largest and most popular streaming platforms to equal just 1,125 album downloads from Itunes. This is an important metric to put in context. In 2013 only 4.8% of new album releases sold 2,000 units or more. So if only 4.8% of artists can sell 2,000 units or more, how many artists can realistically generate over four million streams from the same album of material?
in 2013 there were 66,565 new releases, only 3,237 sold more than 2,000 units = 4.8% of new releases sold over 2,000 units
in 2013 there were 915,482 total releases in print, only 14,856 sold more than 2,000 units = 1.6% of ALL RELEASES in print sold more than 2,000 units.
This is even more important when you start to consider that many artists feel that growing a fan base of just 10,000 fans is enough to sustain a professional career. Note we said solo artists because these economics probably need to be multiplied by each band member added for the revenue distribution to remain sustainable. So a band of four people probably need a sales base of 40,000 fans to sustain a professional career for each member of the band.
Each 10,000 albums sold on iTunes (or 100,000 song downloads) generates $70,000 in revenue for the solo artist or band. To achieve the same revenue per 10,000 fans in streams, the band has to generate 30 million streaming plays (as detailed above) if they are distributing their music across the most common streaming services including Spotify and YouTube.
In 2013 the top 1% of new releases (which happen to be those 620 titles selling 20k units or more) totaled over 77% of the new release market share leaving the remaining 99% of new releases to divide up the remaining 23% of sales.
This appears to confirm our suspicion that the internet has not created a new middle class of empowered, independent and DIY artists but sadly has sentenced them to be hobbyists and non-professionals.
Meanwhile the major artists with substantial label backing dominate greater market share as they are the few who can sustain the attrition of a marketplace where illegally free and consequence free access to music remains the primary source of consumption.
What’s worse is that it is Silicon Valley corporate interests and Fortune 500 companies that are exploiting artists and musicians worse than labels ever did. New boss, worse than the old boss, indeed.
So whose feeling empowered?
Is this the future of music? We continue to look at artist revenue streams.
Now that we’ve been blessed with a few data sets we’re going to be digging deeper into cross referencing them in the hopes of building a much better overall view of the marketplace for independent musicians. This is especially true in the area of music streaming rates and royalties.
We hoping to provide as much open and transparent information as we can get on artists revenue streams. Through the release of these posts offering per play rates, relative market share of these companies, and the distribution tiers at different unit thresholds we hope artists will use these tools to model a better understanding of their revenue potential on digital platforms.
| Service | Market Share Streams | Market Share $$$ |
| Spotify | 61% | 69% |
| YouTube* | 32% | 12% |
| Deezer | 2% | 4% |
| Amazon Cloud | 2% | 0% |
| Rhapsody | 1% | 3% |
| Muve Music | 1% | 1% |
| Rdio | 0% | 1% |
| Xbox Music | 0% | 2% |
| MediaNet | 0% | 1% |
| Google Play | 0% | 2% |
| Nokia | 0% | 0% |
| simfy | 0% | 0% |
| MySpace Music | 0% | 0% |
| Amazon MP3 | 0% | 5% |
| eMusic | 0% | 1% |
| VerveLife | 0% | 0% |
| TOTAL | 100% | 100% |
* These YouTube numbers are not directly comparable to the rest of the numbers as the information comes from a different data set of considerably less titles than the larger data set.
That being said there are still a few important take-a-ways in looking at this data even on a percentage of market share basis. If we doubled the amount of YouTube Streams to match the amount of Spotify streams (48% YouTube Streams and 47% Spotify Streams) the revenue disparity still places Spotify 3x’s higher at 62% of overall revenue market share versus YouTube’s only 21% of market share revenue. Simply said, you have to stream at least 3x’s more on YouTube to equal the same amount of revenue generated from YouTube.
| Service | Market Share Streams | Market Share $$$ |
| YouTube (x’s2) | 48% | 21% |
| Spotify | 47% | 62% |
| Deezer | 2% | 3% |
| Amazon Cloud | 1% | 0% |
| Rhapsody | 1% | 2% |
| Muve Music | 0% | 1% |
| Rdio | 0% | 1% |
| Xbox Music | 0% | 2% |
| MediaNet | 0% | 1% |
| Google Play | 0% | 2% |
| Nokia | 0% | 0% |
| simfy | 0% | 0% |
| MySpace Music | 0% | 0% |
| Amazon MP3 | 0% | 4% |
| eMusic | 0% | 1% |
| VerveLife | 0% | 0% |
| TOTAL | 100% | 100% |
Our conclusion is that this is a very compelling reason to remove as much of your music from YouTube as you possibly can and redirect streaming music consumers to Spotify where you will earn at least 3x’s more for the same amount of streams.
Of course, creators and musicians are not given this type of consent over the use of their music on YouTube and the new CMS Services like Audiam exist only to monetize illegal and unlicensed user generated content (UGC) uploads to YouTube, and at significantly lower per play rates than the ones we’ve been tracking that pay 100% of earned revenue.
This just confirms what we’ve known all along. Google not only profits greatly from the illegal and unlicensed uploads of an artists work to YouTube, but artists are more and more powerless over having their work exploited against their will.
Here are some compelling stats on the break down of what percentage of videos on YouTube actually achieve breaking the 1 million play threshold, only 0.33%
CHART OF THE DAY: Half Of YouTube Videos Get Fewer Than 500 Views | Business Insider
Some 53% of YouTube’s videos have fewer than 500 views, says TubeMogul. About 30% have less than 100 views. Meanwhile, just 0.33% have more than 1 million views.
That’s not a huge surprise. But it highlights some of the struggles Google could have selling ads around all those unpopular videos, despite the money it has to spend to store them.
Why does this just feel like just so much more extortion and exploitation?
Is this the future of music? We continue to look at artist revenue streams.
If you’re heading out to any panels at SXSW this week, you might want to keep this handy when you’re being told how much money you can make… And if the services at the top of the list like Nokia, Google Play and Xbox Music can pay more per play, why can’t the services at the bottom of the list like Spotify and YouTube?
We’ll give you a hint, the less streams/plays there are the more each play pays. The more plays there are the less each stream/play pays. Tell us again about how these services will scale. Looking at this data it seems pretty clear that the larger the service get’s, the less artists are paid per stream.
So do you think streaming royalty rates are really going to increase as these services “scale”? No, we didn’t either.
* YouTube payment includes gross payable to single party uploader claiming 100% of rights including video, master and publishers. There should also be additional PRO money earned however we haven’t been able to get any reporting to date.Our YouTube pay rate calculations can be found here:What YouTube Really Pays… Makes Spotify Look Good!
Is this the future of music? We continue to look at more artist revenue streams.
We’ve been waiting for someone to send us this kind of data. This info was provided anonymously by an indie label (we were provided screenshots but anonymized this info to a spreadsheet). Through the cooperative and collaborative efforts of artists such as Zoe Keating and The Cynical Musician we hope to build more data sets for musicians to compare real world numbers.
In our on going quest for openness and transparency on what artists are actually getting paid we’d love to hear from our readers if their numbers and experience are consistent with these numbers below. At the very least, these numbers should be the starting point of larger conversations for artists to share their information with each other.
Remember, no music = no business.
For whatever reason there appear to be a lot of unmonetized views in the aggregate. So let’s just focus on the plays earning 100% of the revenue pool in the blue set. These are videos where the uploader retains 100% of the rights in the video including the music, the publishing and the video content itself.
| Plays | Earnings | Per Play |
| 2,023,295 | $3,611.84 | $0.00179 |
| 1,140,384 | $2,155.69 | $0.00189 |
| 415,341 | $624.54 | $0.00150 |
| 240,499 | $371.47 | $0.00154 |
| 221,078 | $313.47 | $0.00142 |
| TOTALS | TOTALS | AVERAGE |
| 4,040,597 | $7,077.01 | $0.00175 |
So it appears that YouTube is currently paying $1,750 per million plays gross.
We understand that people reading this may report other numbers, and that’s the point. There is no openness or transparency from either Spotify or YouTube on what type of revenue artists can expect to earn and under what specific conditions. So until these services provide openness and transparency to musicians and creators, “sharing” this type of data is going to be the best we’re going to be able to do as East Bay Ray comments in his interview with NPR.
As we’re now in a world where you need you need a million of anything to be meaningful here’s a benchmark of where YouTube ranks against Spotify.
| Service | Plays | Per Play | Total | Notes |
| Spotify To Performers/Master Rights | 1,000,000 | 0.00521 | $5,210.00 | Gross Payable to Master Rights Holder Only |
| Spotify To Songwrtiers / Publishers | This revenue is for the same 1m Plays Above | 0.000521 | $521.00 | Gross Payable to Songwriter/s & Publisher/s (estimated) |
| YouTube Artist Channel | 1,000,000 | 0.00175 | $1,750.00 | Gross Payable for All Rights Video, Master & Publishing |
| YouTube CMS (Adiam / AdRev) ** | 1,000,000 | 0.00032 | $321.00 | Gross Payable to Master Rights Holder Only |
The bottom line here is if we want to see what advertising supported free streaming looks like at scale it’s YouTube. And if these are the numbers artists can hope to earn with a baseline in the millions of plays it speaks volumes to the unsustainability of these models for individual creators and musicians.
Meet the New Boss: YouTube’s Monopoly on Video | MTP
It’s also important to remember that the pie only grows with increased revenue which can only come from advertising revenue (free tier) and subscription fees (paid tier). But once the revenue pool has been set, monthly, than all of the streams are divided by that revenue pool for that month – so the more streams there are, the less each stream is worth.
All adrev, streaming and subscription services work on the same basic models as YouTube (adrev) and Spotify (adrev & subs). If these services are growing plays but not revenue, each play is worth less because the services are paying out a fixed percentage of revenue every month divided by the number of total plays. Adding more subscribers, also adds more plays which means that there is less paid per play as the service scales in size.
This is why building to scale, on the backs of musicians who support these services, is a stab in the back to those very same artists. The service retains it’s margin, while the artists margin is reduced.
RELATED:
Filmmaker, producer and musician Mikael (Count) Eldridge will be speaking at SXSW Monday about new tech, start ups, and the impact on creators.
http://schedule.sxsw.com/2014/events/event_OE02908
Monday, March 10 | 2:00PM – 3:00PM
Austin Convention Center | Next Stage EH 3/4
500 E Cesar Chavez St
From the forthcoming documentary Unsound: Bad Religion guitarist and Epitaph Records founder Brett Gurewitz talks about how large tech corporations make millions of dollars selling advertising- essentially making people the product, without them even realizing. The promise of free or cheap music is often used to draw eyeballs to websites, apps, and social networking platforms, allowing corporations to make large amounts of money from advertising. The public is generally unaware and happy to have free/cheap music, corporations make tons of money from advertising, but how is the musician benefiting from this?
LEARN MORE HERE:
https://www.facebook.com/unsoundthemovie
Unsound uncovers the dramatic collapse of the music industry and its impact on musicians and creators of all kinds trying to survive in the ‘age of free’.
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% |
RELATED:
Songwriters, composers and music publishers earn royalty income through two separate rights: the right to publicly perform their music works, and the right to make reproductions of those works and distribute those reproductions.
However, two outdated portions of the Copyright Act, Section 114(i) and Section 115, prevent songwriters and composers from receiving royalty rates that reflect fair market value for the use of their intellectual property. This has created inequity in the marketplace that harms America’s songwriters, composers and music publishers in the digital age. Now is the time to fix it.
READ THE FULL POST AT ASCAP:
http://www.ascap.com/playback/2014/02/action/songwriter-equity-act.aspx
Streaming music is just like bottled water, right? Not all, actually.
1. People happily pay outrageous premiums for bottled water (a glass of tap water costs about $0.001).
Relatively few people actually pay for streaming music.2. People are convinced that there’s a difference between bottled water and tap water.
Not enough people feel there’s a difference between ad-based (free) streaming and premium (paid) streaming.3. Sometimes, tap water tastes funny.
Free streaming always tastes good! You just have to wait for it a little longer.4. Bottled water is a proven, $100 billion industry that’s been around for decades.
Streaming music isn’t a profitable industry, hasn’t been around for more than a decade, and remains financially speculative.
READ THE REST OF THE 11 POINT LIST AT DIGITAL MUSIC NEWS:
http://www.digitalmusicnews.com/permalink/2014/02/26/bottledwaterstreaming
The Trichordist 
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