Steve Gadd is obviously one of the most reknown and talented drummers the world has ever heard. I feel very fortunate that I can call him a friend and release his albums on my label, BFM Jazz. Yesterday, there was a great interview posted here: Steve Gadd with The Dishmaster. It's a great read.
The move from ownership to access carries with it one inherent risk: the total loss of your music library. Truth be known, I am a moderate user of streaming services. I use it to discover new music. But I don't use it as my primary music library. I still prefer ownership and I rely on my collection of purchased songs and audio ripped from all of my CDs. I also enjoy quite a lot of music from BFM-distributed artists and labels (we have a lot of great music in our catalog).
But I am not the typical user nor do I represent the future music user. Today's streaming music user assembles their virtual music library using one service or another. They create and share playlists, albums, and tracks. It's all in the cloud now and only a small part of it may reside on your computer or in your phone. In other words, your music library is ephemeral. That makes it vulnerable.
This doesn't just apply to the gym-membership subscription services that kill access to your tracks if you stop paying (aka "tethered downloads"). It applies to practically every music service out there that is not yet profitable and that includes just about all of them.
So the question to ask yourself might be "is Spotify too big to fail (i.e., too many big investors with too much to lose)?" Can Pandora create a self-sustaining business model? Even Sirius and XM couldn't do it alone. Duplicating infrastructure is amazingly wasteful and expensive. Yet, it's being done over and over again with the various streaming and subscription services.
If iTunes shut down tomorrow (quite unlikely), I like the fact that I would still have my entire library intact. However, if my Spotify account disappeared, I would be hard pressed to recreate even the modest amounts of playlists that I made or subscribed to.
No one knows who will win amongst the world of many streaming services and winning merely means self-sufficiency and/or profitability. So which music service would you miss the most if they went away? What would you do?
I am big fan of SiriusXM. There are DJs that I follow on such stations as DeepTracks that feel just like the progressive world of FM radio in NYC during the 70's. (Yes, I'm that old!) This week I heard an ad for a new program on SiriusXM called "Youtube 15" which features the top 15 trending songs on Youtube and it made me think of the multiple layers of streaming at play here.
Obviously, the artists of the top 15 will make much more money from their Youtube views than a weekly spin on the Youtube 15 program. But this new show represents a very interesting interaction between two of the most ubiquitous music services in the world. SiriusXM represents the largest paid subscriber pool and Youtube represents the largest viewership. That's a potentially powerful pairing. Further, I think it is highly significant that the direction of this relationship is from Youtube to SiriusXM and not the reverse.
It is not just a pairing of the largest streaming music services. It also goes one layer deeper to include the download world since Youtube offers links to iTunes, Google, eMusic, Amazon, etc. to purchase the download of the music in these videos (provided that they are being monetized, of course). In the past, I used to tell artists not to expect more than one download per 1000 views. Lately, that seems optimistic and perhaps I should change my advice to 1:10,000.
Either way, three ecosystems are now being connected in a one-way chain. SiriusXM to Youtube to iTunes (or other download sites). I doubt that SiriusXM is making any piece of the Youtube pie. They don't need to. Still, it's very smart of them to recognize that Youtube is the go-to destination for most young listeners.
My main question in all of this is that I wonder if the paying subscribers of Youtube are the right demographic for "Youtube 15". How many of the 25.6 million paying subscribers are either the right age to care about the top 15 trending songs on Youtube or have kids that actually use SiriusXM. I would be very interested to see ratings on the Youtube 15 show and also find out if that show has an effect on the Youtube view count. Seems to me that this show would only be successful in a captive environment like a car. And yet, in my world, my kids don't pay attention to SiriusXM in my car. They are on their phones probably watching Youtube directly.
This morning I watched a concert video of Styx performing "Grand Illusion" and "Pieces of Eight" from 2010. These were two of my favorite albums with "Grand Illusion" possibly being in my desert island list. And even with only two original members, they still sounded great.
Usually, I avoid watching recent performances of my favorite classic rock acts. Partially because I don't want to lose the mental image that I have of the artists in their youth (most aging rockers are not a pretty sight). But I also generally don't like to see an incarnation that has only 1-2 original members. In my mind, it's just not the same band.
Some people might feel that it's kind of sad to see rockers clinging to their past and forced to survive by playing the same, worn-out, songs year after year. I feel very differently. I'm watching Styx have a great time on stage playing in front of a smaller but incredibly enthousiastic and appreciative audience.
How many people do their jobs every day without any appreciation or positive feedback? Most, I would argue labor in annonymity. Meanwhile Styx continues to do what they love doing - making music - and putting on an awesome show while making a lot of fans happy. Imagine if you received such positive reinforcement for doing the same work 20, 30 or even 40 years in row. Wouldn't that be incredible?
So, I actually admire the legacy bands of any era and think it's great that they can keep their music alive while continuing to manifest their passion.
Today, Getty Images announced a rebranding of their music platform from Pump Audio to Getty Images Music. On the surface, it is not really such big news. However, as I read their email blast, I came upon a very upsetting paragraph nestled (or perhaps buried) in the middle:
Performance Royalty Free - Flexibility and Simplicity for Customers
Why is performance royalty free an important new license model? Music licensing is fairly complex and not all music customers or potential customers fully understand the process. Many will license music only if the process is made simpler--one size does not fit all. There are also certain customers who need a simplified and streamlined licensing process because they routinely use high volumes of tracks, usually at a lower price which will accommodate their volume. Yes, this means individual returns are small or incremental, but these users are growing in number so we expect this sector (as part of the overall market mix) to be increasingly valuable for Getty Images’ contributors. We understand that it is possible that you may not want every track to be available for performance royalty free licensing, so we have added an option that will allow you to flag a track as “not available for performance royalty free” at the time of submission. We want to make clear, however, that excluding a track from performance royalty free limits its sales potential, so keep in mind it may negatively impact the likelihood of acceptance of your track. As usual, we will weigh the value of each track against its limitations.
This may seem innocuous however I feel that it represents a dangerous and growing trend in licensing music for audiovisual use (aka synch licenses.)
Getty Music (formerly Pump Audio) has made a thriving business of representing music libraries and independent artists for synch placements in a variety of audiovisual products. Along the way, they have been quietly amassing a catalog of music that is not only royalty free for the master recording rights, it is also free of any performance income royalties for the composition. While this is not mandatory, Getty is making a hard push to its artists to opt in for waiving their performance royalties. Right now, Getty has nearly 60,000 “performance free” music tracks as compared to 139,000 “rights managed”.
Why does this bother me? In my world of digital music, labels and publishers are in a constant fight to protect their royalty rates (see Pandora’s recent victory against music publishers). There is an unending struggle to maintain the value of music against the economics of the various digital music services.
However, Getty is now on the other side and is guilty of devaluing music by encouraging artists to forego one of the basic grants of copyright law: “…to perform the copyrighted work publicly” and the income derived from this right. Further, Getty is using fear tactics by saying that “…excluding a track form performance royalty free limits its sales potential…” Why is Getty creating a system that benefits from discouraging artists to defend their right to retain their basic rights? In other words, it seems like they managed to create a business model that purportedly will decrease your sales if you choose to protect your performance rights.
Their justification is that they are merely responding to customer demand. It is perfectly understandable that a large company like Getty wants to please its customers. That’s only natural. But Getty Music relies on artists to keep making music (all at their own cost) and licensing it to Getty. It seems counterintuitive to not only deprive the artists of a potentially long-term revenue stream but to actively encourage the artists to do so out of fear of lost opportunities.
Obviously, Getty draws a line in responding to other customer needs. It sets a price on its products and expects the customer to pay it. So why can’t they draw a line with regards to performance rights? It is because they generally don’t participate in such back end revenue streams. Their take is on the upfront license fees. So, it causes them no apparent harm to give the customers what they want in this regard. In fact it even gives them a competitive edge over other music services – all on the backs of the very artists that they purport to support.
The logic that Getty presents is that the loss of any potential performance income will be offset by the increase in license fees an artist may receive. On a macro level, it’s a no-brainer for Getty (read: Getty has nothing to lose). But, generally speaking, it will not work on the individual artist level. For the majority of artists on Getty, getting a synch placement will generate more revenue from performance royalties than from their share of the synch fee. (Certainly all the production music libraries understand this math.) With 1000’s of artists signed up to Getty Music, I find it very hard to conceive that any individual artist will see a substantial increase in the number of licenses issued enough to justify stripping away their performance royalties.
Royalty-free music libraries have been around for decades. Most such companies survive only because they earn performance fees from broadcasters, cable channels, etc. In fact, many have even given away their music for free knowing that they would likely make enough on the back end. But now we are seeing a decline in upfront synch fees (classic supply-demand scenario) AND a coordinated effort to remove all other revenue sources.
So the promise of a Pump Audio/Getty Music has been to give the indie artist a chance at a synch revenue stream that they would not normally have. Definitely a noble endeavor without a doubt. A win-win, you might say especially for large licensing deals where Getty takes only 25% of the upfront fee. So why not leave the performance royalties intact?
Fortunately artists have complete control of the situation (at least, for now). It is not mandatory to waive your performance rights when you submit music to Getty. I would strongly encourage all of Getty’s artists to think very hard of this classic, slippery slope before you tick the wrong box.
Last night, I saw an incredible concert by one of my favorite bands (from my college days): Kraftwerk. They performed at Disney Hall in LA which was a brilliant choice in my opinion. There was really no light show to speak of. But each song had a perfectly crafted and precisely timed music video. The song selection was great. The sound quality was amazing. They even thru in some new sections and elements into their songs so that they were substantially different from the album versions. Two hours of electronica before anyone knew that term (or EDM) from the band that invented "Techno Pop" from probably one of the most influential bands whose inspiration can be heard in 1000's of artists today. I'm sure that even the Daft Punk Robots would acknowledge the influences of Kraftwerk.
The show was intense with a lot to absorb. The audience was mostly enraptured and quiet. In fact there was very little feedback from the audience (e.g., explosive clapping, yelling, hooting, singing, etc.). In some ways, it was a bit like a music lecture in electronic, synth music. However, the band, as usual, never spoke to the audience. In fact, the only acknowledgment of the audience came at the very end when each member bowed and waved to crowd just before they walked off.
So even though I thoroughly enjoyed myself and was absolutely transfixed by the music and video, I was left with two thoughts: "Did the band need to be there?" or "Did we even need to see the band at all?"
I'm sure that I, along with everyone else, would have been very disappointed not to see the band onstage. But it was clear that they were merely props to the concert and that they were secondary to the elaborate 3-D videos on screen. We might have been even more disappointed if all of the music was completely pre-programmed or recorded and didn't need anyone onstage at all.
Would I have enjoyed the music and videos less if the band played off stage or was not there at all? Maybe a little. But I'm really not sure. The event would certainly have had to be marketed more as a multi-media "experience" as opposed to a concert. That could have been done I think but it might not have sold out four nights at the Disney Hall. If there were ever a band that could have just had their famous burgundy-colored robots take their place, it would have been Kraftwerk.
I've been waiting 40 years to see them ever since "Autobahn" was released. So I am glad that I saw real people onstage after all. (or were they replicants?)
Today, I finally updated the design of my blog. It made me realize how quickly style trends change and I have to admit that I haven't been on top of them as much as I would like. However, I am the first one to immediately judge a site. Whenever I go to an artist's webpage, there is an instant assessment that occurs. Usually, it can be expressed as "this artist has it together" or "this site sucks".
But when a site is great, you just know it.
What's a great site? It's one that is easy to navigate, has great content and, most importantly, actually works. The photos load, the videos play, the music streams, the links go to where they need to, etc. I think a good site reflects on the dedication that an artist has to their craft. It doesn't have to be fancy with a ton of amazing graphics. In fact, sometimes, sites can be overly complex.
I often am asked about the necessity of having a website. I still think it is important. It is your brand and it is something completely in your control (as opposed to some corporate giant). I get a little annoyed when I am redirected to a Facebook artist page.
So, today, I realized that it was time for the doctor to heal thyself. Nothng fancy. Just something easier to read. The only thing left is to write something worthwhile to read. Stay tuned...
Do you know who is handling your music? You sign up with a digital distributor like CD Baby. . Perhaps you are an artist that selected all the services and options (e.g., Youtube, streaming, etc.). Hopefully, next thing you know, your content is everywhere. All is good. Right? Not always.
A recent article at Techdirt highlights a growing problem in the digital distribution community: Transparency. The main issue with this story is the trend for digital distributors to outsource a key revenue stream, Youtube’s content matching system. In this case, CD Baby utilized Rumblefish to manage their Youtube monetization process. (This system is a fingerprinting technology that can automatically recognize when a video has a certain sound recording in it. Then the administrator of this content – in this case, it was Rumblefish and not CD Baby - can decided to monetize the video by placing ads or issuing a takedown or do nothing.)
I don’t blame companies for trying to maximize their revenue streams. That is what artists and labels want from their distributors (physical or digital). But the process has become layered and opaque. It needs to be more transparent.
With Rumblefish, CD Baby fostered a typical channel conflict between Youtube and the original artist. The artist received a notice that Rumblefish was claiming rights to the artist’s song and that there would be ads placed on the video. Ordinarily, this would not necessarily be a bad thing. After all, Youtube’s ad revenues are providing significant income for a lot of indie artists.
In this situation, however, the artist had no idea why Rumblefish was making the claim. The band actually held the copyright to the song themselves and had signed on to do business with CD Baby, not Rumblefish. The automatic email notification from Youtube did not even have an email contact for Rumblefish.
The transparency issue gets even cloudier when the artist visited Rumblefish’s home page. At first glance, it looks like all they do is sync placement for film/TV/ads. Only the truly persistent and inquisitive artist would find the FAQ page and the proper email to voice their objections. Unfortunately, a less than sympathetic employee responded to the artist and reasserted Rumblefish’s authority to monetize the artist’s video . Clearly, CD Baby and RumbleFish had not anticipated this conflict. Nor had they developed a plan on how to respectfully deal with the artist’s reasonable complaints.
The problem in this scenario is not related to outsourcing or sub-distribution. Every distributor uses third party resources to one degree or another. There are always situations where it may be better, faster, and/or cheaper to subcontract versus doing it in-house. The challenge for distributers is to allow transparency without giving up their primary responsibility of customer service.
Some distributors might want to hide the man behind the curtain. That can be fine if the distributor takes responsibility for any conflict resolution. Unfortunately, secrecy usually wins and the client (the artist or label) is left wondering who to contact. When a non-transparent situation arises, it is further compounded by the immense size of most distributors. CD Baby handles 10,000's of artists and labels. Youtube claims from this large a catalog can exceed 100,000’s per month. It is no wonder that CD Baby decided to allow a third party to manage their Youtube account and deal with all of the disputed claims. It was a simple calculation of resource allocation versus ROI.
As with most complaints about the digital marketplace, it all falls down to customer service. The digital landscape is rife with channel. This is the nature of the beast and cannot be fully avoided. Outsourced customer service is another inherent flaw that seems to be the result of scalability and cost cutting.
The artist’s music is their single greatest asset. When they choose a company to distribute it, they are placing an immense amount of trust in that company. Transparency is the only way to maintain the trust and confidence to permit distributors to maintain their client relationships. In the case with CD Baby and Rumblefish, a little transparency would have gone a long way to avoid the anger and frustration that that Artist must have felt.