New York Times On Streaming

As Music Streaming Grows, Royalties Slow to a Trickle

No one ever reads to the end. Wherein it is stated, by both Cliff Burnstein and Don Passman, paragons of the old model, that the future’s so bright they gotta wear shades.

Isn’t it funny that the artists are bitching about Spotify. You didn’t hear them bitching and moaning about Napster, except for Metallica, which is now on the Spotify bandwagon. A. Because many of the artists were ignorant. B. Because they saw it as a way to get their music into the hands of potential fans. Artists are still ignorant, but a little knowledge goes a long way. Having been ripped off by record labels forever, having seen their incomes go down, they’re fearful of the future. Want to know what’s coming down the pike? Don’t ask an artist. He’ll go on about the glory days of vinyl and recording to tape…and if you think either of these are the future, you’re unaware that vinyl, despite the hoopla of its supposed comeback, still makes up less than 1% of total sales. To champion vinyl as the future is to make your arguments about Spotify irrelevant, because Spotify pays so much better. And the Internet is still the best way to expose your music to fans. You used to have to buy it to hear it, or listen endlessly to the radio to hear one track.

But now everything is available on YouTube!

YouTube! It snuck in the back door. Because the labels wouldn’t license Spotify. Time truly is money. As well as opportunity. And credit the labels for now knowing this. They all got a piece of Spotify, and they’re gearing up for streaming… Hell, Jimmy Iovine, the label titan, is about to blow up MOG/Daisy. If CD and track sales were the future do you think he’d be investing all this time and money? OF COURSE NOT!

What we’re seeing is the labels getting smart. Being in front of the customer for the very first time. Credit them. This is how you play. By developing what people don’t even know they want. People didn’t know they wanted smartphones, but now smartphones own the market. People don’t know they want to subscribe to streaming services, but they’re gonna sign up in droves.

For portability.

You’ve got to pay to get the tracks on your handset. And thousands sync like you own them, there’s no costly bandwidth involved. But nobody seems to know this. The streaming services can’t penetrate the public’s perception. But once the acts start to testify, people will get it and spread the word. Yup, expect MOG/Daisy to employ a scorched earth “I Want My MTV” campaign. Spotify? MOG/Daisy is poised to wipe it out. As for big bad Apple… That’s the gang that can’t shoot straight, right? Selling tracks is like selling CDs. Do you see any Tower Records stores? Do you see ANY record stores?

But you keep complaining you can’t get paid.

I’ve got one word for you…SCALE!

Once everybody has a subscription, there’s TONS of money involved.

As for who’s gonna get it…

The lion’s share of revenue for streaming services is paid to rights holders.

Assuming you own your rights, that will be a lot.

But don’t expect the wannabes or the middle class to profit handsomely. Because we live in winner-take-all world. PSY made $8 million from YouTube on “Gangnam Style.” You put your video up…and not only did no one see it, you didn’t get paid.

Sucks, doesn’t it?

Either you’re a superstar or you’re nothing.

But that’s got nothing to do with music.

There’s one Amazon. One Google. There’s Android and Apple in smartphones. If you think BlackBerry and Microsoft have a chance, you own stock.

Furthermore, you now get paid over the life of the copyright. Talk to any aged musician, the money’s all in the PUBLISHING! You get paid forever. The upfront advance was never the size it was with your record deal, but now that you’re sixty, you still get paid. Make a record that sticks, you’ll get paid by streaming services for the rest of your life.

Which one?

Could be Spotify, MOG/Daisy or Deezer…Rdio’s already history. Will only be one. But there  will be a ton of bread.

As for getting someone to pay you to create… Mmm…major labels only want hit acts now anyway. They’ll always want hit acts. They’ll always pay for hit acts. So wannabes can use Kickstarter, which may fade in power now that people are getting burned, paying and getting nothing. But one thing’s for sure.  You’re now in business with your fanbase. Know who each fan is, and sell sell sell and ask ask ask. They’ll support you, always have. That’s what going on the road is all about, a fan relationship.

Ignore the hysteria about streaming payments. Just concentrate on making great music and building a fanbase. There’s plenty of money to be made.

You just don’t know it yet.

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