The last week articles like this were showing up on my Facebook feed. While it's great we can look at some numbers and see vinyl sales (revenue) are apparently doing better than streaming sales (revenue), what are we really looking at here?
Revenue... not actual consumption.
... what's more important if you're an artist?
... here's a few things I take into consideration when looking at articles like this.
Vinyl (stamp) collections are cool.
Growing up as a 90's kid, CD collections were cool. You bought CDs not just for the music but also for the social aspect of it, to grow your collection... then when people came to your house, they saw your cd collection and how great your taste in music was... and factor that into how cool you were.
(... plus you could offer to lend and trade albums.)
Now I'm not saying I was cool, but I was aware of how my music collection reflected my own "coolness" and my taste in music was either going to add or subtract from my cool factor... and I did my best to buy 2-4 pre-owned CDs a month.
(... mind you, this all went out the window once we could download music and burn CDs... then it was more about being good with computers... and having internet.)
Living downtown Toronto, this is super apparent and an great conversation piece, especially between collectors and fans of vinyl.
I'm blown though how much some people spend on records, and once they have whatever album they were excited about, they move onto to wanting the next... often announcing they're holding themselves back from buying more!
(... just wait until you move out of your 2nd floor apartment with all that vinyl! That's how I felt about my books last move... I've since got a library card.)
It's a collectors thing though. You name the medium, the enthusiasts share a common thread and tone when they talk about their collections. Most people have their "thing" and vinyl can most definitely one of them.
The gaming industry went through something similar a couple years ago. Xbox One (Microsoft) decided against physical copies, not only encouraging downloads but making it mandatory (which is great for the game developers and publishers getting paid!), but a chunk of the gaming community wasn't too happy about it. On this, Playstation 4 (Sony... ironically) announced they'd absolutely continue with physical copies, and sorta threw Microsoft into the fire over their decision.
... and then Microsoft caved.
The main arguments for physical copies: ability to share/trade game copies with friends, take their copy over to a friends to play, re-sell later, buy pre-owned copies for a lesser price.
The main arguments for digital downloads: instant access to new games on release date or whenever (no need to wait for stores to open), instant access to new or extra content (patches), all users are assumed to have access to the internet for online play, developers and publishers can track sales easier and get paid.
Think about that for a minute...
... 58, 59, 60!
Revenue doesn't always reflect how people are actually consuming (music).
There's a reason record players were traded in for cassette decks... and it wasn't sonic quality.
We want music on the go!
Think about how awesome it would've been to have a record player in your car???
(... or public transit!!?)
Wait... I'm sure people just continued listening to the radio because it just wasn't really sensical to have a record player in your car... but with the creation of the cassette tape, it was now possible to take your purchased music in the car! Then the walkman... then the CD player came along... but that would probably skip in the car... then anti-skip! Then we had 5+ CD changers in the car... then MP3 cds... then the iPod...
You see where I'm going with this?
Imagine you can play your own radio stations on demand. That's streaming.
Imagine your entire record collection on demand. That's streaming.
Imagine everything on demand... that's streaming.
Right now I'm listening to a playlist on Songza, an app/service I pay $0/month for, so there's no revenue coming from me but they still have (although low) payouts for the content (music)... and I safely listen to Songza about 3-4 hours a day.
(... also this is streaming on my iPhone via WiFi.)
These playlists are where I discover new bands and where I can also give "thumbs up" or "thumbs down" (analytics people!)... and some bands I'll check into on Facebook and some I just have to see when they come play Toronto.
Even amongst my vinyl loving friends, I can't think of any that listen to records 3+ hours a day... but I know they download, and I know they stream... and they don't listen to vinyl in the car... or on public transit... but they're typically always listening to something somewhere.
...this: The porn industry either grossed or netted (does it even matter once you see the number??) $10-$12 billion in the US last year... alone.
... billion... for those of you who are not great at math, there's 1,000 millions in 1 billion.
Where is that money even coming from... since nobody knows anybody who's actually paying for it...??!
Concert Revenue > Everything Else
... this: "Billboard conservatively estimates that the global touring industry is approaching $20 billion annually -- its highest level ever." - BillBoard.com
If you're in a band and you want to make money? Get good and get out there and play.
It's going to be a grind for a while but performing live is where you build your career and eventually where you get paid
The bottom has fallen out of making money off recorded music that's sold on plastic... remember, the value (revenue) wasn't from the music or content on the plastic, but from the price the record companies (or "we" in an independent market) could charge for whatever piece of plastic it was on... that's why The Beatles and William Hung get signed and you might not.
You're still going to need some great recordings (of your best songs), videos, and merch (possibly including vinyl!) to help satisfy your fanbase and advertise the music, but with the idea it all needs to put pressure on the garden hose of playing live that will hopefully fill the bucket. Everything else should eventually be drops in comparison.
If you read the article, they're saying One Direction and Justin Timberlake grossed (not net) almost $500 million in 2014... one year!
... and their fans will have to buy another ticket if they want to see the show next (this) year.
(Even if they took home half of that, that's a decent return.)
... unlike recorded music... where in the next 10 years (for sure), we'll all be paying $9.99/month or less to listen to anything we want... from Michael Jackson to your neighbours amazing Grindcore band. It'll all be available through streaming... and with innovations like blockchain technology, the plays/spins will be recorded and any and all revenue will be easily and directly distributed.
Those are the numbers I want (and can't wait) to see.
- Mike :-)
... I meant to post this a couple days ago.
There's something a little funny about the whole Taylor Swift calling out Apple Music and their initial "3 months not paying artists for using their music to promote Apple's new Apple Music free for the first 3 months" thing.
It's the timing of it... since not long ago many were applauding Taylor for calling out Spotify on low royalty payments... resulting in Taylor pulling her new album from Spotify.
... to be honest though, I don't feel it was actually Taylor Swift calling out Spotify, but her handlers. I imagine they all have handlers since there's too much to stay on top of, especially if you're at the top of your game in the pop world.
So back to Apple Music, considering the Apple we know was basically founded on decimating the music industry (the iPod -> good bye physical sales) and they have an estimated $165+ billion in cash (<-- $$$... as in money under their mattress), it seems odd they'd backpedal on their decision to not pay artists during the initial (3 months free) offering of Apple Music to the public.
Not because they're cheap... but because they can do what they want... and because they could justify it. Income splitting is easy when income is $0.
(... since hey... Apple Music isn't getting paid so to be fair, I guess the artists shouldn't either!)
Corporations (for the most part) do what they want... unless public backlash is so great, they absolutely have to go into damage control. Apple acquired Beats Music just over a year ago, so this plan (of Apple Music in general) has been forming for probably over a year now... at least.
Big companies rarely stray from their plan... and the Apple Steve Jobs built thinks ahead of the curve and does what it wants, right?
The response Apple Music initially experienced revealing it's "3-months free and not paying artists" wasn't great, but we all would've forgotten about it soon after we start using it... and potentially loving it.
Think about it... it's pretty obvious the general public (aka average consumer) doesn't care too much what happens upstream or downstream if at the end of the day, they feel like they get more and pay less. It's been pretty obvious since the iPod came out physical/album sales have gone down, it's pretty obvious why, and it's pretty obvious most people turned a blind eye to what was happening. The industry has been forced to adapt and struggled along the way. I believe there's light at the end of the tunnel... but it's been rough for many mid-level artists.
... and lower-level artists... if only you could exchange Facebook likes and YouTube views for groceries and gas!
... back to Apple Music though, it's in a position where it can do what it wants. Taylor Swift is finally on record (it's really hard to not make puns btw) that she doesn't make her money from album sales but from live performances... so what does she care?
Well... it raises her profile and apparent power in the music industry even more if she can snap her fingers calling out a huge company like Apple (again, with $165+ Billion in their wallet) and they obey.
People won't see (or remember) Apple Music changing their policy, they'll see and remember Taylor Swift standing up for musicians/artist rights and royalties. It's a win/win for both... and it wouldn't surprise me if someone digs up dirt on it being part of the plan between the two.
... which brings up another initial thought I had, and glad to see a few other people have written articles about it.
... anybody remember Lars' lawsuit against Napster?
I'm a firm believer it's not what you say, it's who says it. Sometimes I wonder what state the music industry would be in if it wasn't Lars... no offence Lars.
P.S. Also worth factoring in Apple's botched publicity/PR stunt with U2 recently (Songs Of The Innocence). I think public backlash was pretty crazy considering Bono considered it "a gift". I was shocked more people weren't freaking out about the fact something showed up on their phone/iTunes they didn't approve... and how much other stuff is on their phone running in the background they don't even know about.
With Apple Music, I think we'll have access to everything, at all times, potentially for "free". It'll be stored in the cloud, but accessible at all times. So you'll still have that U2 album in a way.
P.P.S. I like a lot of things about Apple Music in case you were wondering.
Lars Ulrich vs Napster (video/interview): https://www.youtube.com/watch?v=6r6wn47_Vqs
TIDAL... the amount of times I've been asked about TIDAL the last couple weeks...
They obviously screwed up the presentation to the public and I'm not sure how they'll recover ... unless they find a way to monopolize their market... but I think the more important thing to take away from the whole event was... these are major label, A-List, household names who've decided to "get their own streaming service".
It's official... they see the future and no longer care about album sales!
... hate to say it, but I find musicians are usually the last to figure out or maybe accept what's actually going on and where things are going. They insist on treading the same path as their idols... and not surprising... the same kinda musicians typically bitch about contracts they didn't read and accounting they didn't check up on.
So this is a step in the right direction for music delivery... we don't want the medium (CDs, vinyl, cassettes, etc) any more (speaking of the majority at least), we just want to listen to the music... on demand.
... but nobody wants a subscription service you say?
... that's right, we don't want to pay for it... but we will pay for it... they'll just be sneaky about getting us hooked.
So when does streaming officially win?
Once it's in our cars.
We're really close to having the bandwidth/technology to download/stream a lot to our phones... so why not to our vehicles? They're hooked up to a few things already...
Remember when iPhone's launched with that crazy 6GB data plan? I think they launched with it at least... anyhoo, that was an insane amount of data back then... now you're lucky to get 2GB and they charge you $50+/month for it! Meanwhile your household internet is 50-100GB/month for almost the same price.
... so what if you consider streaming music at 128 kbps, that's approx 56.25 MB/hr.
50MB/hr X 8hrs per day = 400MB
400MB/day X 7 days a week = 2,800MB or 2.8GB
2.8GB X 4 weeks = 11.2GB
I think 10GB is around the magic number we're looking for... once we can get 10GB of data, specifically for streaming music in our cars for let's say... $15-$30/month ($0.50-$1/day), I think streaming will officially take off.
I predict new cars will eventually come with this "music streaming" feature and the costs will be rolled into the price... for 1-3 years at least... then it's up to you to renew it if you want... which you will because it's the norm... and music on demand is awesome... anything you want to hear! Don't forget podcasts and normal radio stations too!
... radio stations from around the world.
- Mike :-)
P.S. I realize most people aren't listening to music in their car for 8hrs a day... well, those who aren't driving downtown Toronto. Seriously though, I went a little higher to make a point.
P.P.S If my math is all wrong, please correct me. I used the calculator from this site.
P.P.P.S 128 kbps is on the low end quality wise (in my opinion)... but it'll be fine for most. Keep in mind, every subscription service needs an entry point! If you want more, you pay more. :-)
Mike Langford - Official Blog
Being on both sides of the glass, I get the chance to wear many hats in the music industry. This is a place to share my thoughts, views, predictions, rants, stories and news!