The RIAA record label industry body a few weeks made an announcement about how are losing billions of dollars because of streaming and that Vinyl sales generate more revenue. The announcement then led to headlines across all of the news outlets.
The New York Post had the headline “Artists make more off vinyl sales than streaming services”.
Billboard had the headline “Vinyl Sales Made More Than YouTube, Spotify and Soundcloud Ads Combined”.
The Australian Financial Review had the headline “Some artists blame music streamers for shrinking the business”.
Fortune magazine had the headline “Record Industry Continues its War on Free Music”.
Mashable had the headline “Music streaming is getting bigger and bigger, but artist revenue isn’t keeping up”.
It’s safe to say that the RIAA got what they wanted with their report.
“This is why we, and so many of our music community brethren, feel that some technology giants have been enriching themselves at the expense of the people who actually create the music.”
Cary Sherman, Chairman & CEO of the RIAA.
“Last year, 17 million vinyl albums, a legacy format enjoying a bit of a resurgence, generated more revenues than billions and billions of on-demand free streams: $416 million compared to $385 million for on-demand free streams.”
Cary Sherman, Chairman & CEO of the RIAA.
This is the RIAA being as dishonest as you can get.
They are basically comparing gross retail vinyl sales against the net streaming revenue amount earned. In truth the net vinyl revenue is a lot lower than the gross $416 million quoted. And the $385 streaming revenue was $0 before 2011 due to copyright infringement/piracy.
As an article at Fortune.com states;
“Sherman is saying that because ad-supported services—or in fact, any alternative music-distribution method—don’t pay as much as some other music services, they must be flawed and/or stealing from musicians and record labels. In other words, the music industry’s largest negotiating body assumes that any new distribution method or infrastructure for delivering music to consumers must by default generate as much revenue as the industry used to get from records or CDs. And if it doesn’t, that means there is a structural error in the business that the RIAA needs to fix.”
And streaming companies like Spotify have a battle being profitable.
Remember that the streaming services pay the record labels a licence fee to have the music the record labels hold copyrights too on the service. These monies are never passed onto the artist. Hell, Spotify doesn’t even have long-term license contracts with Universal and Warner Music. These labels are cashing in on licensing deals on a month to month basis.
Then based on listens, the streaming services pay 70% of their streaming revenue to the record labels and publishers and based on the contracts the artists and songwriters have with their labels/publisher, these monies are paid back to the creators in cents. Meanwhile, the record labels are rolling in billions of dollars from streaming.
Maybe that’s why Spotify needed to get a billion dollars from investors.
The money will be needed for further expansions, acquisitions of tech companies and other investments. In my opinion, for Spotify to survive long-term they need to get into the record label business themselves sort of like how Netflix is creating its own content and using that content to sell their service. That is why HBO went from licensing movies from the studios (which wasn’t profitable) to creating their own content. And now look at the company.
There is no way around it for Spotify. They are under increasing pressure to remove their free tier and the latest research from the RIAA (mentioned above) is being used as evidence to build a case against ad-supported free music.
And poor old Google is always the punching bag when it comes to the RIAA.
If Google isn’t taking flak for not censoring the internet based on what the RIAA or the MPAA see as wrong, then their YouTube service is attacked for not paying enough.
So what we have is a coalition of artists and music groups asking for the lawmakers to write new laws to support their business models. Just think of it as another Lars Ulrich/RIAA vs Napster battle. And how did that turn out.
As the article at Techtimes states every law is open to abuse and while the DMCA was never intended for censorship, it is being used exactly as that:
“Over the past few years, however, the DMCA has been a cause of controversy. On one end, holders of rights to content are saying that the law does not do enough to protect content creators, while on the other end, there are warnings of abuse and censorship if the law is further tightened.”
And speaking of Lars Ulrich, in case you have lived under a rock, “Master of Puppets” from Metallica has been added to the National Recording Registry in the US as a cultural, artistic or historical significant recording.
Basically anyone can nominate a recording to be considered via sending an email to firstname.lastname@example.org.
Once the nomination is sent, the lobbying starts.
Don’t get me wrong, “Master of Puppets” is a great album (although I do prefer “Ride The Lightning”), but is it really a defining cultural, artistic or historical significant recording. Although Metallica is seen as leaders of the thrash metal movement, the truth of the matter is that the movement is much bigger than one band.
I would even say that the “Metal Massacre” compilation that featured Metallica (spelt incorrectly as Mettallica mind you) is more culturally significant than “Master of Puppets”. But hey, Brian Slagel, founder of Metal Blade Records, is nowhere near as important as the biggest band. Because all history is written by the winners, the ones that have the most money.
And for Metallica albums, you cannot escape the “Black” album.
That one album killed off glam rock/metal, introduced a new heaviness to the mainstream that opened the door for bands like Korn, NIN, Disturbed, Godsmack and many others to exploit in the Nineties to great success.