There was an unprecedented furore early July surrounding the removal of Atoms For Peace and Thom Yorke’s solo work from Spotify. Atoms For Peace band member and renowned producer Nigel Godrich shot down the streaming service in this scathing tweet:
“We’re off of Spotify. Can’t do that no more man. Someone gotta say something. It’s bad for new music. The reason is that new artists get paid fuck all with this model. It’s an equation that just doesn’t work”.
The basis of Godrich’s argument was that the relationship between the number of streams and royalties that are paid to new and emerging artists did not tally, especially for artists looking to make money from their music being streamed. Jumping in on the argument, to support the decision, Yorke stated that the removal was taking a stance to support fellow musicians, in particular new artists:
“Make no mistake, new artists you discover on Spotify will not get paid; meanwhile shareholders will shortly being rolling in it.”
Following this uproar, I was involved with a discussion on Twitter which threw up many different opinions about the subject matter; you can read the whole discussion via Storify. But I feel that Kieron Donoghue, founder of playlists.net, summed up the my feelings on the discussion succinctly by saying: “If I can’t find a new artist on Spotify, I don’t look elsewhere. I just don’t hear their music.”
My two cents is that it’s not about the technicalities of how much artists get paid per stream. The fact remains that streaming services provide an opportunity for new artist’s music to be heard. The bottom line in the discussion of streaming is that convenience is key. All artists need their music available to be ‘found’. Streaming services provide the perfect way for this to happen, for sharing and upsell to then take place.
Donoghue’s tweet confirmed the fact that I know I’m not the only person who sees bands being talked about or referred to on Twitter and then defaults over to a streaming service to give them a listen (due to Spotify’s reach, this is essentially the default service which is used for this).
If I like the band, this process will then usually result in the following process: I will go back listen again, possibly then purchase an album or two (either digital or physical) which will then likely then result in me going on to buy a gig ticket so I can check them out live. I will then probably go full circle and probably end up tweeting about them a lot more myself!
In reply to the Atoms For Peace take-down, Duncan Geere wrote a brilliant piece for Tech Radar stating the basic points as to why artists should be on Spotify, highlighting, amongst many other things: ease, the low cost of making music available on the service and the reach of the available audience that is out there. Greer also brought to the front of his argument the fact that ‘sharing is caring’. Supporting the fact that in the case of Spotify, “sharing and hyperlinking functionality makes it absolutely trivial to recommend music to friends”. What better way to get music out there than via sharing, either by a band themselves, friends and fans?
The opportunity for upsell is also something that has potential within Spotify. As mentioned in my previous post here, X5’s Spotify app ‘Classify’ saw their iTunes revenue go on to dramatically increase.
Aside from apps on the service, the ‘Discovery’ page could potentially look to really support upsell. This can already be seen with the inclusion of services such as Songkick on the page, which shows up-coming gigs from artists that users are following, with click-through’s to Songkick’s website where tickets can be purchased. There’s a lot of work that needs to be done to the page to support discovery, but there is very strong potential there.
The importance of running additional revenue outlets though services is something that Stuart Dredge has also recently explored for Music Ally. Dredge questioned the potential of streaming if these services could act as ‘funnels’ towards all the other ways bands can make money, whilst they are also getting paid for individual streams.
Following on from this, Dredge discussed the prospect of Beats’ Daisy music streaming service will have once launched, as it will be fully integrated with Topspin as announced back in January. At the time of the announcement, SVP of product & marketing, Bob Moczydlowsky, stated that Beats and Topspin had “a shared belief that streaming services should do a better job helping fans discover artists and connect with them directly to buy merch, tickets and other products.” It’s going to be really exciting to see this new service launch, and I’m pretty hopeful that with the mechanics that Topspin already have within their service, they will be able to take full advantage of the two platforms and take what streaming services should be to a whole new level.
As a means of artists making more money on Rdio, the service has an Artist Programme which lets artists connect directly with their fans and drive additional revenue through streaming. Once signed up artists receive $10 for each new subscriber that signs up through an artist’s trackable Rdio links, a complimentary Rdio subscription, plus other benefits including support and affiliate tracking. Drew Larner, Rdio’s CEO, said in the launch press release at launch that “the programme offers artists a way to supplement their existing revenue streams by doing what they do naturally – connecting with fans. We’re aligning our focus on social music discovery with our fundamental belief that artists deserve to get paid for their work.”
Joe Armenia, Rdio’s director of artist & influencer relations, gave me further insight into the programme. “By investing in the artists that create music, we are investing in our future as a music streaming service,” he said. “We want to work together with artists, record labels and fans to create a sustainable and engaging model that benefits everyone involved”.
Armenia highlighted the following profile from Australian indie pop band Alpine, who released their debut album in May. “As a band who happens to use Rdio as their music source, we were able to highlight them as a featured user (or influencer) to other Rdio users. That drove interest in their music, which generated a 200% increase in plays of their music over a month and as a result their number of followers grew 15x in 10 days”. Although this profile was featured, the potential reach and discovery of the band to new fans was very impressive.
The basis of the programme is obviously to boost Rdio’s own ecosystem via sharing, but it’s a great way for artists to earn a little bit more money on the side. It’s a very interesting initiative. Rdio seems quite the sleeping giant at the moment; it’s going to be interesting to keep an eye on this as the service continues to grow. The recent announcement that Rdio is now Live Nation’s official streaming partner on livenation.com has great potential. Hopefully the partnership will go on to work from Rdio’s side too, as a way for users to click out and purchase tickets.
Interestingly, following Atoms for Peace’s removal of their content from Spotify, it is still possible to stream their music on YouTube, via XL’s official channel and other users who have uploaded their content to the service. Bloom.fm’s recent study into piracy, amongst other things, looked at how people consume and discover music. The study said 70% of people surveyed use YouTube to search for and also consume music. The platform has incredible power, reach, and means for discovery and upsell through advertising monetisation. It’s interesting how it regularly gets overlooked in streaming discussions, but obviously it is seen as more rewarding all in all to artists.
As more and more services emerge such as Bloom.fm, with their very competitive tiered subscription model, and services such as SoundCloud really come into prominence, it’s a very exciting time for streaming, particularly in the ways in which artists are going to be able to use services to aid the discovery and legal sharing of their music, whilst also taking full advantage of upselling.
To quote Bob Lefsetz: “Streaming won. Kids watch music on YouTube”. We just all need to get on with it.