You may or may not be aware of the CMA announcement yesterday.

The bottom line, streaming works fine.

Needless to say, the songwriters, the indies, are up in arms.

So, what is the CMA? It’s the U.K. Competition and Markets Authority. You remember, they held hearings. And now they say there’s not going to be a market investigation. The study that was initiated six months ago will be completed, but as for the heinous streaming payouts small labels and players themselves have been complaining about:

“There has been a huge increase in the number of artists sharing their music and a vast back catalogue made available via streaming. This, coupled with the fact that there is only a finite amount of music a consumer can listen to and a relatively fixed pot of revenue from streaming, inevitably reduces the amount that most artists can earn, even with increased royalty rates”

 

But it gets even worse for the naysayers:

“While the majors’ profits have been increasing since the lows of piracy, the current evidence does not suggest that market concentration is allowing the majors to make sustained and substantial excess profits.”

And, it puts a stake in the heart of the publishing complaint, saying revenues have gone from 8% in 2007 to 15% today, although there was a slight dip between 2017 and 2021, but this was as a result of the increase of the DSPs’ share, not that of a rights holder.

 It’s a sad, strange business out there. The U.K. government held hearings, and ultimately found…there were no major problems. Sure, the study might ultimately recommend adjustments, but a wholesale investigation into abuses by the DSPs and the major labels…the CMA believes it’s unnecessary.

This is vastly different from a hearing in the U.S. Where elected officials grandstand with no knowledge of the underlying business and nothing changes anyway.

But if you pay attention to the business, you know all of the above. It’s just like politics, you can live in a bubble, you can avoid hearing the truth, if the facts don’t align with your feelings, they must be untrue!

So, the above is mostly a footnote to insiders, but buried in the CMA statement is a chart on streaming services, now THIS is interesting:

https://bit.ly/3J8PDoK

You can see the table with surrounding analysis from MusicAlly here: https://bit.ly/3J8PIbW

If you study the table, and you should, you should click through, you’ll learn…

THE POWER OF PLAYLISTS IS WAY OVERSTATED!

Yes, all the bitching is how you can’t get on playlists.

The bottom line, on Spotify, the biggest streaming service with the most active customers, meaning they stream the most music, 50-60% of listening is done via USER CURATED PLAYLISTS! What that means…well, you know what it means, you build your own playlist and listen to it, as opposed to the ones proffered by Spotify.

And 10-20% of listening on Spotify is NON-PLAYLIST!

In other words, listening on Spotify is between 60 and 80% user-driven, user choice, user selected.

How do they find out what to listen to?

Well, it ain’t algorithm driven radio. That accounts for 0 to 5% on Spotify, YouTube Music and Apple. It’s higher on Amazon, 5-10%, but that’s mostly about calling out to Alexa and…

What about the vaunted company generated playlists. On Spotify, the most active service, with the youngest customers, it’s 5-10%. And it’s the same on YouTube Music. Apple and Amazon are both 10-20%, but are those services actually breaking acts, or is this mostly passive listening by older generations wanting background music?

Then there’s “Algotorial.”

The devil is in the details. But basically, it’s a blend of company picks with tracks delivered algorithmically based on an individual’s listening preferences.

You can read Spotify’s explanation of algotorial here:

https://bit.ly/3vkZZMC

But better to read this page:

https://bit.ly/3PWS7c2

Bottom line? Spotify does pick priorities and places them high in algatorial playlists, but the share of algatorial on Spotify is 10-20%. On YouTube Music it’s 30-40%. But on Apple and Amazon, the other two biggies, it’s only 5-10%. So compared to user-picked listening…IT’S DE MINIMIS!

But let’s dig deeper into YouTube Music, Apple and Amazon.

A much lower percentage of listens on those services is via user curated playlists. On YouTube Music it’s 10-20%, as it is on Amazon. On Apple, it’s 20-30%. What this tells us is the listeners on all three of these services are not only lower in number, but lower in effort, activity, picking and choosing their own songs. These are the people who cotton to your act LAST!

As for non-playlist listening, on YouTube Music, Apple and Amazon, it’s 40-50%

As for Autoplay… That means the service keeps delivering music after your choice is finished. It makes up 0-5% on YouTube Music, and 5-10% on Spotify, Apple and Amazon. And we all know the songs played automatically are always in the same wheelhouse of what’s been chosen previously, there is an opportunity for music discovery here but it’s very small, the services don’t want to serve up any tune-outs, because then the listener will stop the stream.

So on every service, the vast majority is user picked listening. Apple’s customers are a bit more active than YouTube Music’s and Amazon’s, but not in the league of Spotify’s.

So, to bottom line it, subscribers are not going to DSPs for music discovery, chances are they already know what they want to hear and are picking that exactly!

Because in truth, the streaming services are positively awful for music discovery. You’ve got to wade through so much crap to get to what you want.

So, you find out what you want to listen to elsewhere. And then you go to the streaming service and pick that exact music and listen to it.

Whoa, so all this b.s. about playlists, is just that, B.S!

I’m not saying playlists have no effect on music discovery. And, if you have a relationship with the streaming service you have a much better chance of getting heard by more people as one of the DSP’s priorities, but most people, the active listeners, those on Spotify…want almost nothing to do with playlists unless they’ve created them by themselves!

Have you ever tried to listen to these company or algorithm driven playlists? It’s interminable. You check out a few tracks, then you skip forward, keep skipping forward, and then you give up and go back to what you already know.

So…

Sure, radio and streaming service playlists might be the easiest way to reach the most people, but they mean LITTLE!

Analogize it to network TV. Sure, that’s where advertisers go, pay money to have their product seen, but each ad reaches just a small fraction of the number of people from the era prior to basic and pay cable. And now in the era of streaming, despite all the talk of Netflix adding an ad-supported tier, MOST PEOPLE PAY TO NOT SEE ANY COMMERCIALS!

Happens to me all the time, people say, “You know that commercial…” And I always respond, I DON’T! I’m now watching a ton of TV, but it’s all high quality fare on streaming services with no ads.

So, if a song gets traction on TikTok, fans will go to their streaming service of choice to listen to it. The listening is done on the DSP, but the DISCOVERY IS DONE ON TIKTOK!

Or some other social media platform.

And then there’s a bit of press. Conventional, the big media kahunas, and then the web only outlets.

But in truth, most of the listening is being driven by WORD OF MOUTH!

That’s how you want to get your story started, not by convincing a DSP to playlist you.

But that’s much harder. A listener has no financial investment, and has a limited amount of time. They need to hear a HIT! And a hit doesn’t mean just a three minute pop or hip-hop ditty, but something that they need to hear again and again, that they will ultimately tell their friends about.

And if you’ve got fans, you can play live, and sell merch, there are a ton of ways to monetize.

But many true music fans do not have the ability to listen to music 24/7, or choose not to, with so many other diversions, so the teen driven stuff makes up the Spotify Top 50, giving an even more skewed view of the overall picture.

Let me restate.

The streaming music platforms are terrible at music discovery. Being open to all customers, i.e. labels and individual musicians, they promote so much stuff that little gets traction, and this plethora of stuff turns off customers who don’t even bother to partake in the push of this music upon them.

You want to start small, not big. You want to build a fan base, not convince the middlemen/women. It’s slower than ever, and even if you succeed wildly, your reach is less. These are facts. Ignore the hype.

And know that although you can make bank in the music business, more than you ever could before, it doesn’t compare to what you can make at a straight job in banking or tech.

Think about it. The winners take most of the pot. In EVERY industry. And at the bottom, you have more competition than ever fighting over fewer spoils. Maybe if you can’t make ends meet, it’s not the system’s fault, there is no enemy you can point to, it’s not the DSP, it’s not the major label, it’s REALITY!

It’s harder to make it than ever before, and it’s harder to move up the food chain than ever before, and this is for EVERYBODY!

There are few short cuts and they rarely pay lasting dividends.

Best to own the truth and start there.