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The Artist Economics Of Streaming

7th April 2014 @ 6:30 pm - 9:00 pm

Venue: Fyvie Hall, University of Westminster

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REGISTRATION: From 6pm. 6.30pm start.

Subscription-based and ad-supported streaming music services will continue to grow significantly in 2014.

For some, streaming is the future of music consumption and thus recorded music revenues; dissent about the current economics of streaming is therefore short-sighted, and dissenters should be patient until the model reaches scale.  For others, including some vocal artists, there is a fundamental problem with the way money passes through the system, eventually trickling through to creators.

This polarisation is only to be expected. Streaming is not just a new format; it heralds a revolution in the way music is consumed, with ownership of creative content being superseded by variations of the ‘access’ model.  It also brings with it a complex new revenue system that many are struggling to understand.

Despite Spotify’s attempt in late 2013 to shine some light on its equations, there is still a palpable sense of confusion and distrust amongst artists both old and new around streaming.

There are serious questions being asked about different parts of the value chain.  AMP (Artists, Managers and Performers), the newly formed alliance between the MU, the MMF and FAC recently released a statement that, as part of a submission to the EU’s copyright consultation, they are calling for streaming royalties to be split equally between the artist and the label, arguing that a stream is not a sale in the traditional sense and does not involve any of the associated costs for the label.

The various debates about the finances of streaming are taking place against a background of industry dissatisfaction with the largest music streaming service ever to have existed – YouTube.  One shouldn’t lose sight of the fact that other streaming services – typified by Spotify, Deezer, Rdio and most recently Beats – do pay several times more royalties per stream than the video-based, ad-funded behemoth.

It is because of this lack of clarity and the depth of feeling on all sides that MusicTank aims to shed some light into the economics of the record business’ next big format shift.

NOTE: A slew of articles covering the issues of streaming income and royalty rates for both artists and labels has saturated the music industry news agenda for several consecutive months.

To help attendees gain further insight into the issues ahead of this event, a selection of articles are featured in the Event Resources link in the middle of this page (above).  Visitors might also like to use the MusicTank search box for more topic related news items, using search terms such as ‘streaming’, ‘artist’ or ‘royalties’. _________________________________________________

One of the most insightful and recent pieces of analysis of an artist’s royalty statement with regards the breakdown of streaming income and its equivalents can be found in a post entitled 04.01.14 – Streaming State-Of-Play 2013, which looks at 7 key platforms – Deezer, YouTube, Spotify, Xbox Music, iTunes Match, Rhapsody and Muve Music, and ranks these services in terms of:

1. the mean royalty value per play 2. the subsitution effect for downloads (how many streams does it take to equal the equivalent royalty income from the sale of one download) 3. their minimum wage equivalance (how man streams are required to derive the same income as the minimum wage 4. the number of fans needed to earn [the artist] a minimum wage 5. best and worst case scenario rankings

…with surprising results, and well worth the full read!

“We’ve paid out over $1bn to rights holders – incredible for a business that’s been around for just 5 yrs.  Between 2009-12, we paid out over £500m, and in 2013, we paid out $500m. 70% of all revenue is paid out to rightsholders – labels and publishers.  It’s split and paid out according to popularity.  Rightsholders then pay out according to the deal they have in place with artists”  Mark Wiliamson – Director of Artist Services, Spotify *

“A sale is a payment up front, it’s a payment in advance of all future listening.  A stream is pay-as-you-go – a payment for each and every subsequent and ongoing  listening.  Musicians are not comparing like with like… A stream is a performance to a single person, a spin is to an audience of many thousands, sometimes millions.  So adjustments need to be made to make these comparable.  In the UK, the performance of a song on broadcast radio – the value to each listener is between 1/50th – 1/40th of 1 pence… The performance [value] of a stream to an individual listener is about one half of 1 pence”  David Touve – Assistant Professor at the University of Virginia, USA **

* ‘In Business’, BBC R4, first broadcast Thu 2nd Jan, 2014 – listen here

DELEGATES INCLUDE: Sound Advice (Legal) LLP; Dramatico Entertainment; Hanway Films; Pitmans SK Sport & Entertainment; Michael Simkins LLP; Ministry of Sound; Domino Recording Co; University of Bristol; University of Cambridge; Nordicity; Audible Magic; Nielsen Music; Absolute Marketing; PPL; New Media Law LLP; the hub; The state51 Conspiracy Ltd; Bray & Krais, Solicitors; TGiT & Songwriters Association of Canada; Peermusic; Association of European Performers’ Organisations; ERABritish Council; Amazon; BPI; i:emusic; Sony Music; UK Music and many more…

You can find resources from this event via the links below.

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