Newsletter #84 December 2011
To add our tuppenceworth on the Spotify debate… a lot has been written already – so rather than recreate the wheel, I should first of all direct you to just two of the many posts on the subject. Kudos Distribution’s MD Danny Ryan puts a well-structured argument forward for better understanding the dynamics of and supporting emerging streaming services. Meanwhile, Paid Content’s Editor Robert Andrews sums up some of the questions asked.
Where to begin? Let’s start with the lack of transparency; services and labels remaining tight lipped about the royalty rates they pay or receive for streams…These are difficult times for a sector trying to reinvent itself in digital while curating a declining physical business, and a lack of transparency will lead to rumour and misreporting, creating a knowledge vacuum for many, with ignorance creating fear.
The 2010 reporting of ‘meagre Lady Gaga royalties on Spotify’ – arguably the first turn of the Spotify rumour mill, was wrong, and unfortunately when rates are kept secret, it makes it difficult to report accurately and hard to prevent false reports from spreading.
Unfortunately for journalists keen on shining an accurate light on these areas, that’s probably not going to change; and actually, why should it? It’s a competitive business and there’s no reason for either labels or services to be transparent about closely guarded commercial secrets. It wouldn’t be expected in any other industry – and possible comparisons with public domain digital rates for music publishing are flawed – it’s the labels that are taking the risk and they need to cut the best deals they can. Sharing this sort of information is considered anti-competitive by the authorities too – the record business was being pilloried at home and abroad for price fixingless than ten years ago.
The streaming services also need to keep their commercial terms secret – there’s a book to be written about the number of digital music services that have come and gone in the last decade. There are apparently nearly 80 digital services in the UK today, yet how many people working outside digital distribution could even name ten?
The point remains though, that an information vacuum is not helpful to labels or artists making difficult decisions about how to develop their digital business. It’s a complicated area that requires an in-depth understanding of how the streaming business differs from digital downloads and perhaps even more importantly, the many different ways that music fans consume via these different services.
Danny Ryan’s blog sets out the rationale for labels supporting streaming services well, with key points being that the income from streaming continues over the lifetime of the music fan as opposed to the one-off fee for a download, so that quarterly royalty comparisons between the two are meaningless. Also that “It takes time for consumers to discover your music, add it to playlists, favourite it, and share it with friends. The longer a label is on a streaming platform, the more established they become, and the more time users will have had to discover their music”
Beggars Group chief Martin Mills takes the first point further, candidly stating “With Spotify, every play is a pay – and 200 plays will earn you more than a sale”
Most importantly, how are these services being used by fans? Recent research by the BPI’s Innovation Panel (see Keith Jopling’s blog post below) makes interesting reading. First of all, streaming services are very much still niche, though growing with a younger demographic – free streaming services make up 11% of music listening for over 35s, but 22% of under 24s.
Spotify is regularly used in just 10% of households, and even among the most obsessive consumers, makes up just 14% of useage. Importantly, some 65% of UK music consumers still want to own their own music files and collections. While these stats hardly illuminate what the future digital strategy for artists and labels should be, they do help paint a far more nuanced tapestry of consumption, evolving with social media and app innovations, than you might think given some of the tweets and articles that have been circulating.
So if everything’s cosy with Spotify, “if only you’d understand how this business works” then why are one or two very big albums – namely Adele’s 21 and Coldplay’s Mylo Xyloto – not available? That’s for XL and EMI to know, but it’s worth noting that both artists’ previous body of work is available – it’s just their latest releases. Writing in the new issue of The Word magazine, Eamonn Forde suggests the answer might be chart position. Xylo Myloto hit the no.1 spot in 17 countries, and became the UK’s fastest selling digital album selling over 80,000 digital copies in its first week. Whether they could have done that if the album was available on Spotify we will never know – but a decision to trade a few months/years streaming income to consolidate chart position is not a bad tactic. With Adele’s 21 we might speculate the label might be going for every worldwide record there is left to be broken…!
While there’s no point speculating too much, this raises the most interesting point – and impending headache – that streams are not chart eligible. Well of course not, they’re not a ‘sale’ and that’s what this business – and indeed the charts – was built on. But the charts are about popularity, and as streaming income becomes a bigger slice of the music listening pie, the charts will need to reflect that. Once that’s done, it will be interesting to see if there’s a change in tack with some of these high profile releases.
There’s much more to say and understand here, and it’s so important for labels and artists alike to get the best grasp they can of how these emerging streaming services will evolve their business – keep an eye out for our forthcoming think tank on the subject in February.
Editorial by Sam Shemtob
OUT & ABOUT: MusicTank events
Remember all MusicTank events and courses MUST be booked and paid for in advance! of MusicTank at an annual cost of just £45 individuals/ £22.50 students and enjoy privileged discounts on all MusicTank events…
FEB 27-MAR 26 2012 – GET PLUGGED IN: LIVE MUSIC, PROMOTION AND VENUE MANAGEMENT
Building on the success of its popular and over subscribed debut in 2011, MusicTank is again partnering with AndyInglis, the hugely respected co-creator and manager of north London venue The Luminaire to create a unique 5-part live industry course.
“A very enjoyable course. A great mix of information, frank discussion, humour and profanity. A pint down the pub afterwards was also a great way to network and have a general chat about the course. Monday nights will never be the same again!” – ANDY KNIGHT, RGS Entertainment
“…really good, thought provoking, straight talking course. Andy was great at leading it, and it felt well planned out and thought through.” – METTE JOHNSEN
“A well run course with useful insights into the industry within live music, promotion and venue management.” – WAYNE YARDLEY, Creative Sound
Designed as a much needed best-practice roadmap for live music promotion and venue management, this six part course draws on Inglis’ two decades of experience, sharing lessons learned and highlighting the pitfalls plaguing promoters and venue operators UK wide. The course will update on an extensive range of topics concerning venue owners, promoters, artists and programmers including promotion, ticketing, legislative issues as well as the future concerns facing the UK’s live music industry.
Inglis will be joined by a raft of leading industry figures to give their accounts of the industry focusing on areas of specific expertise. Despite the 100 Club’s recent rescue from the brink there have been some much publicised London closures of late, The Luminaire itself not escaping the recession’s icy clutches. Part of the course will investigate the events that led to its closure, as well as what this award winning venue did to gain such an avid following and a special place in the hearts of Londoners.
Appealing to venue promoters and owners as well as tour managers, booking agents, artists and artist managers, this extensive course promises to guide and encourage those learning their trade as well as identify the risks felling even the industry titans in one of the last sectors of the business still able to generate income for new bands.
Andy Inglis, The Luminaire “I have 21 years experience in the music industry and co-founding and running The Luminaire has been, by turns, a hugely rewarding and massively frustrating experience. If I can’t illuminate the mistakes I made and stop others from making them, then what the hell. At least I got to hang out with Wanda Jackson.“
Confirmed speakers: Steve Tilley (Kilimanjaro), Dave Newton (WeGotTickets) and Jonas Vebner (Music Export Norway); others tbc
Date: Feb 27, Mar 05, 12, 19 & 26 2012 | Time: 18.00 – 21.00 hr | Venue: The Boardroom, University of Westminster, Regent Street, London, W1B 2UW
MEMBERSHIP: Why not buy MusicTank’s annual membership (membership benefits here) for £45 individuals/£22.50 students, reducing the course price to £170, saving £59 on the full price of £229?
Get Plugged In: Live Music, Promotion & Venue Management – our extensive, including links to resources is now available FREE to MusicTank members (join here) – it can also be bought as a standalone download for £99, here. As detailed elsewhere in this newsletter, this course is set for a re-run in London Feb 2012, meanwhile MusicTank is finalising plans to take this course out and about to some regional UK centres throughout 2012, with tutor Andy Inglis. If you’d like us to come to a venue near you, please contact us…
MUSICTANK LOUNGE: Rob Wells; Live Sector; Membership; Report
Topspin’s Ian Rogers talks with Rob Wells, president of Universal Music Group’s global digital business sector. Here Wells argues that music streaming sites like Spotify do not canabalise physical sales as these services have different demographics. He also says the key to fixing global remuneration is “scale” and that services like Spotify over time will increase revenues to artists. In fact, Wells admits to not yet hearing the new Coldplay album “Mylo Xyloto” because it’s not on Spotify. Watch.
The consultation may have closed but it’s not too late to read musician and independent campaigner, John King’s articulate summary of the proposed Licensing act consultation…
“…the Government is about to make life a lot more difficult for the existing live music sector. Venues already licensed for alcohol and live music will not see any reduction in red tape. Current licence conditions will remain in force, while Temporary Event Notices can no longer be used to put on events outside the scope of a premises licence.
“This proposal could leave thousands of premises in licensing limbo, with permission for DJs but where unamplified live music is banned. Premises with conditions on live music restricting “regulated entertainment to no more than 2 performers” will find that while they will be granted permission for the performance of plays, the play itself will also face a two-performer restriction.” Read.
A new tier of reduced-price MusicTank membership and event rates for bona fide UK students has now been launched. Costing just £22.50 per year – saving you 50% – student membership conveys all the benefits of full-price membership, including event discount. We’ll also help smooth your transition into the industry by offering a discount on full-price membership for one year following graduation. Register.
January 2012 will see MusicTank launch its membership upgrade, providing members with access to specific music industry discounts and offers. If you’re interested in exposing your business to MusicTank’s community (for FREE) by becoming a MusicTank Membership Partner, please for further details.
Calling All Music Lecturers And Academics
MusicTank is working on several projects to assist and facilitate engagement between the music industry and the HE and FE sector. If you are an academic, lecturer, course leader or head of department and wish to be informed specifically about opportunities and initiatives as they may arise, please enter your details .
Enter And Win! MusicTank Members Survey
Please help us continue to develop MusicTank’s activities and membership benefits by completing this survey. Open to all and taking no more than 5-10minutes to complete, your responses will be invaluable to us in shaping our activity. All responses will be treated in strictest confidence and will not be shared outside MusicTank. As a thank you for your time, all fully-completed surveys will be entered into a free prize draw to win one of three £10 Amazon vouchers. Winners will be notifed in December. Take the survey .
MusicTank Report: Remake, Remodel – The Evolution Of The Record Label
‘This report comes at a dynamic and exciting time for the music industry, with labels having gone through an unprecedented period of change in the last decade. Tony Wadsworth is perfectly placed to undertake a project like this, having been at the forefront of many of these changes throughout this period, both at label and industry level.’ – David Joseph, Chairman and CEO, Universal Music UK.
‘The document is definitely worth reading for anyone in this business…’ – Emmanuel Legrand
This report is FREE to all MusicTank members. Annual Membership is £45. Individuals can sign up then log into this website with their username and password to then download the report. Corporations and Institutions (education and charites) can find out about membership here, meanwhile, the report is on sale to businesses, corporations and institutions at rates starting from £199. Further details are available here.
‘Remake, Remodel…’ is supported by Robertson Taylor.
Other MusicTank reports: Beyond The Soundbytes | Meet The Millennials | Let’s Sell Recorded Music!
Remember – ALL reports are FREE to MusicTank members…join here. Let’s Sell Recorded Music is free to all (regardless).
GUEST EDITORIAL: Keith Jopling
Who’s driving new music industry insights?
A quick re-cap – this is the 2nd of three editorials on music industry innovation for MusicTank. In the first, I mentioned three necessary ‘pillars’ to returning to growth for the commercial music sector:
- Multi-channel innovation, not just digital
- How to facilitate experimentation
- Better customer insights
That was only a month ago – and look what’s happened since! There has been a flurry of activity around point two. EMI Open is now up & running (EMI’s Sandbox facility for developers via API’s) and Spotify announced its plans to – yes once again – go the way of the API – allowing app developers to plug into its streaming catalogue (though controversially the commercials once again look conspicuously absent).
It seems experimentation is really happening – the music industry might actually be exemplifying how to succeed here for other content sectors – if it works. I’ll comment more on how this is coming along after we can observe a ‘bedding-in’ period.
For now it’s worth talking about insights – and that’s timely too, since the BPI Innovation Panel has just released its customer insights work in the form of an ‘Infographic Newspaper’ – Music Consumption In The UK – (see last week’s Music Week)…
Keith Jopling – Chair, BPI Innovations Committee
This BPI members report is FREE to MusicTank members – read here.
INDUSTRY DIARY: Other music industry events
DEC 13 – MUSIC 4.5: THE SOCIAL LIVE MUSIC INDUSTRY – WHERE IS THE MONEY?
The live industry is keen to nail that elusive ‘social’ factor to power their business to the next stage and there are a lot of new services out there to help. But, do they deliver?
Speakers incl. Joe Cohen, CEO (Seatwave); Stuart Dredge (music-tech journalist); Eamonn Forde (music journalist); Joshua Greene (Digital Marketing Consultant); Tom Hopewell (MusicGlue); Don Jenkins (TurboWolf); Laura Kidd (SheMakesWar); DIY artist Rynda Laurel and others. | Booking
JAN 24 – AIM: SYNCH LICENSING & BRANDS EVENT
Tickets are now available for the next AIM ‘Sync Licensing & Working With Brands’ master class. If you want to get your tracks on TV shows, adverts, films and video games, or if you want to work with brands to leverage the profile of your artists and generate revenue, this is the event for you. | Booking
JAN 24 – BASCA: COMPOSER & SONGWRITER PROFESSIONAL DEVELOPMENT PROGRAMME #1
The first of a two-part programme aimed at helping songwriters and composers to exploit their own businesses and assist those attending with career development opportunities. This first event will particularly focus on self-management and provide an overview of the range of business models and potential revenue streams now available to songwriters and composers and give them an understanding of the practical, financial and legal considerations involved. | Booking
MAR 27 – BASCA: COMPOSER & SONGWRITER PROFESSIONAL DEVELOPMENT PROGRAMME #2
Following on from part 1, this session will look at self-publishing to include rights management, administration, protection and exploitation. | Booking
That's all for this issue - 'til next time...
If you have any queries regarding any of our events or activities, please call us on +44 (0) 20 8357 7317, or email: email@example.com
The views and opinions expressed are those of the author and are not necessarily condoned or shared by MusicTank. MusicTank is a non-profit organisation owned and operated by University of Westminster. University of Westminster is a charity and a company limited by guarantee. Reg Number: 977818, England. Registered Office: 309 Regent Street, London, W1. MusicTank is based at University of Westminster, Watford Road, Harrow, Middlesex HA1 3TP
Sections Below:OUT & ABOUT: MusicTank events
MUSICTANK LOUNGE: Rob Wells; Live Sector; Membership; Report
GUEST EDITORIAL: Keith Jopling
INDUSTRY DIARY: Other music industry events
That's all for this issue - 'til next time...
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