I posted a few days ago about Streaming and some comments from Daniel Ek about what artists should be doing based on the data provided to him.
For example, releasing an album every 2 to 4 years is not a viable solution these days based on the data, and the data tells Spotify that a continuous engagement with fans with frequent releases is more viable.
Spotify thrives if content is delivered, so you need understand that Ek is also playing the role of a sales person in his quarter earnings speech.
And I’ve been following the reactions of artists on Twitter since Spotify quarter results, just to see what their view is, because the reason why we have Spotify accounts is that we like music and we want to listen to music.
Spotify grants access to music, along with the other streaming providers.
Dee Snider as usual is at his best.
Before streaming providers, consumers had, iTunes, pirate sites, cyber lockers and physical purchases. Artists got paid on a transaction once the label recouped.
But does that one sale equal a true fan.
Most of my record collection is from second hand record shops and market fairs of used records. So the person who purchased the record from a shop is listed as a fan via Soundscan metrics, but in reality, they are not a fan as they sold their record to a second hand shop who then resold it to me. And this sale is not captured as a Soundscan metric. So artists didn’t have any idea who their fans were.
Then came YouTube.
An uproar started there, when music became available on the service. YouTube got traction and to this day it is still the number 1 streaming service. The labels eventually negotiated a license deal and artists got rorted again. And pirate sites never went away.
Then came Spotify. The labels took ages to license the service as they wanted a stake in the company and a profit share arrangement with the service and so many other wonderful ways for the label to make money from the service.
First the labels and the publishing houses get a fee for allowing the service to license the music they hold the copyrights for. And this fee goes straight to the labels/publishers without any distribution to the artists.
And everyone is trying to do the math of how much does an artist get paid per stream?
But it’s the wrong train of thought to have.
Whoever holds the rights, the monies are getting sent there. But, the labels and publishing companies also have a profit share arrangement with the streaming service (and it’s not just Spotify, all streaming services have this arrangement, especially Tidal who have a lot of artists involved with it as investors) where they split the monies between each other.
And are the people at Tidal complaining?
Eventually the streaming market will fragment like the movie and TV streaming market and the streaming companies will start to make their own content and will become labels themselves.
Then we’ll have a different conversation.