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

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

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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by Trichordist Editor

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

by Trichordist Editor

USA Spotify Streaming Rates Reveal 58% of Streams Are Free, Pays Only 16% Of Revenue

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.

StreamingRatesandPercentagesUSA

 

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.

 

FreePaidChart

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.]

RELATED:

Apple Announces Itunes One Dollar Albums and Ten Cent Song Downloads In Time For The Holidays! | Sillycon Daily News

 

Who will be the First Fired Label Execs over Spotify Fiasco & Cannibalization?

 

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

 

 

by Trichordist Editor

Spotify Per Stream Rates Drop as Service Adds More Users…

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.

SpotifyNetMONTHLY_Charted

 

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!

Screen Shot 2014-11-15 at 5.35.14 PM

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…

SpotifyNetRateByMonth

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.
by Trichordist Editor

UN to Airlift Calculators, Behavioral Economics Textbooks to Digital Music Industry

Evstafiev-bosnia-sarajevo-un-holds-head

 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.

 

by Dr. David C Lowery

Copyright Critics Don’t Quite Get Artists | The Illusion Of More

A must read from David Newhoff for all creators with many points, well made.

Further, if it is true that a copyright-free future could shrink the pool of producers to those already financially secure (as predicted above), this suggests that all of the non-remunerative benefits of copyright might be of even greater value to those authors still willing and able to produce. And in the absence of those rights, we could easily see a reduction not only in the number of producers, but also in the number of works produced by that elite few. In a practical example, imagine the trustafarian artist working in the most altruistic manner, producing wonderful works solely to be experienced; he doesn’t care about money, but he does have to accept that McDonald’s can use his work to sell hamburgers, which betrays everything he is expressing. It is not farfetched to imagine the artist in this example will withhold works from public view, even if he continues to produce for his own pleasure.

READ THE WHOLE POST AT:
http://illusionofmore.com/copyright-critics-dont-get-artists/

by Trichordist Editor

Apple Announces Itunes One Dollar Albums and Ten Cent Song Downloads | Sillycon Daily News

Satire – but not by much.

Apple Computer announced today that for it’s Itunes Music Store to remain competitive in the digital distribution marketplace for music they would be changing their retail pricing of album downloads to one dollar and song downloads to 10 cents each. The pricing change will be effective on black Friday for this holiday season. “Since we purchased Beats music and are competing directly with Spotify we recognized the need for more competitive pricing structures based on what consumers may be willing to pay”, an Apple spokesman said. He continued, “Spotify has proven that as long as we’re paying 70% of gross, the retail pricing is irrelevant, irrelevant! We are even contemplating 10 cent albums and one cent songs to further achieve parity with music streaming services!”

Record label executives rejoiced in the move as one source exclaimed,” I don’t know why we didn’t think of reducing the retail price of downloads by 90% years ago. It’s still money, right? It’s so simple that this is really the only way to grow the business to $100b annually while competing with piracy.”

 

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by trichordist