Tuesday, July 16, 2013

Thom Yorke Is Wrong, and 3 free solutions

3 Free Solutions

I'll start off with some answers...

For my colleagues in the digital music business, here are 3 totally free product solutions to the problems Thom Yorke and Nigel Godrich are complaining about. I may implement some of these myself. Each of these ideas does have its own challenges and problems, of course.

1. Editorial Programming
2. Tip Jar
3. Make it easy to add content

Editorial Programming

The simplest approach to pushing more new music is to promote it. Have the music service editorial staff take a proactive role in seeking out new and cool stuff, and feature it (on the home page, or playlists, or radio channels). Even just badge new stuff.

Today's reality, however, is the services are generally pushed to feature what the labels want them to feature, and are discouraged from picking favorites.

Additionally, despite what Pitchfork et. al. say, most of the "tastemakers" today write about the same few dozen albums every year. For better or worse, there's a lot of overlap between those few and what the industry is pushing. I suppose there's a blog post to be written about it.

But the easiest way to help out new artists is to promote new music aggressively. And it doesn't really cost a thing!

Tip Jar

This is not a new (or even particularly good) idea. But services could include a button to "donate" more money directly to artists they like.

One problem is "who is the artist?" In a few small cases, it's very clear who the artist is. But what if they're dead? What if they can't be found? What if the band has broken up, or is arguing with each other about money?

Where do you send the money? Even assuming you can resolve that issue, generally services only have contact with the label and publisher, not the "artist". Building that database would be difficult and contentious.

The bigger problem is just that most listeners won't even bother donating. They'll say "well, I am already paying for the service, so..." Most of these fans will go to the artist's site and buy stuff there.

(You could also include URLs to the artist's web site, but many of the above problems still apply).

Make it easy to add content

Each service could/should have prominent links "for artists" that give them instructions for how to get their music in the service fastest and cheapest. Consider adding support for direct deals (these days, most services require use of TuneCore or a similar aggregator).

Some stuff that doesn't help:

  • Live shows. Not all bands play live, and those that do have finite capacity for it, and fairly large overhead. This will not solve the problem at all.
  • Buying downloads instead. Same (or worse) contractual and accounting problems. Artists don't get that much cash from these, either. Plus you're supporting one of two giant companies that combined represent almost 90% of the music retail business. Apple makes more money on downloads than the artist does, by a huge, huge margin. How does that help? 
  • Raising the price of services. Most people think music services are already too expensive, and cost is the #1 cited reason for users cancelling. 

Thom Yorke Is Wrong (and so is Nigel Godrich)

Once again, it is time to clear up some misconceptions about the streaming music business.

Super-cool Thom Yorke of Radiohead and Atoms For Peace took to Twitter, (as did his friend and music partner Nigel Godrich), broadcasting that he is pulling his solo album and his new band's albums from Spotify. 

It's not entirely clear why. Some of their tweets:

...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 numbers don’t even add up for spotify yet.. But it’s not about that.. It’s about establishing the model which will be extremely valuable.  
Meanwhile small labels and new artists can't even keep their lights on. It's just not right.
Millions of streams gets them a few thousand dollars.. Not like radio at all.. 
Plus people are scared to speak up or not take part as they are told they will lose invaluable exposure if they don't play ball. 
If people had been listening to spotify instead of buying records in 1973... I doubt very much if [Pink Floyd's Dark Side of the Moon] would have been made.. It would just be too expensive.

Ok. Let's address these things.

First, it's hard to see exactly why music services (Spotify, Rhapsody, Google Play Music All Access, RDIO, MOG, Music Unlimited, etc.) are "bad for new music". Music services offer access to everyone, and most of them will automatically include "unknown" artists in recommendations and radio channel experiences. If you know what you're looking for, they make it easy to find.

As for payments, in general, all content is treated the same by these services. I've written extensively here and elsewhere about how those payments actually work. I will reiterate some key points:
Services pay the content owners: the labels and the publishers. For small artists, frequently both of these things are the artist themselves. For "new" artists on labels, how much the artist gets paid has little to do with the deal the service has with the content owner, and everything to do with the deal the artist has with the label and publisher.

This album, by a "new" artist, sold 2.2 million copies when
released in 2012. At least one new artist is doing fine. 
"New" artists having bad or unfavorable deals has been the status quo since the beginning of the record industry. Music services have actually provided an alternative - direct deals - which did not exist before.

It is entirely possible that labels (and publishers) are paying out money to the artists in ways that favor them rather than the artist. That's what they do. As an example, most music services have to pay a minimum to labels and publishers, even if users play nothing in a given month. Do the labels divide that up among all of the artists on their roster and give them a cut? Or do they pocket the whole thing. I'm pretty sure I know the answer, and I bet you can guess what it is yourself.

My takeaway? The point Godrich and Yorke are making here is simply invalid.

If they're complaining that new artists don't generate enough plays, well, that's possibly true for some of them, but not true for all of them. Same as any new artist dealing with sales: most new artists have no sales. In fact, most albums have no sales, period. This isn't news. And any decrease in sales has more to do with the sheer volume of music released.

And this is really what most of the artists involved in this discussion are really bothered about. The old way, including radio and sales of goods, was a "winner take all" model. If the average annual per capita expenditure on music was $35, a user who bought 2 CDs would be giving all of that money to 2 artists.

But in a subscription world, that vastly higher sum - ($10 x 12 months, or $120, less the 10-20% services actually get to keep) is divided amongst all the possible things the user can play. This results in many more artists making a much smaller sum. I'd argue it is more fair. It is just less remunerative for the artist.

This album had one good song. The rest was really bad.
Even the "good" song wasn't that good. 
Looked at from a different angle, prior to music services, users would frequently buy an album because they liked one song on it. And then they'd find they hated the rest of the album. The artist captured the full album amount "unfairly", and the user had no choice in the matter.

Is it hard to "keep the lights on" for small labels and artists? Yes, it is. Again, that's been true for the entire life of the business. And music services offer outlets that are far easier and more transparent than previous physical goods distribution systems.

It's not the same as radio. At all. And that's a good thing. New artists and new music have always been totally screwed by radio, except for the tiniest slice of new stuff designated as the next big thing by the machine. And how you get designated "next big thing" involves a lot of stuff that has nothing to do with how good your music is, and everything to do with how you play the game.

Streaming services put everyone on an equal footing. Yes, it's hard for new bands to rise above the noise and the competition. But at least they have a chance, and people can play the music when they want, and not wait for some DJ to make your music their own personal cause.

Yorke and Godrich seem to imply the services are strong-arming artists into participating. That is straight-up garbage. It is absolutely true that artists lose exposure if they don't participate: if people can't find your music because you've held it back, they can't very well play it, can they? It's the same as withholding your content from record stores because you don't like how little they pay you. You don't have to put your music in their store, but it's not fair or accurate to imply the store is pressuring the artist.

I am particularly irritated about these types of accusations because I have worked on several of these services, and without exception, the entire staff have been musicians and music-lovers dedicated to supporting artists and other music-lovers. I take it personally when people impugn their motivations and intents. We love music, and we love musicians.

If we wanted to make money, we'd have either not gone into music in the first place, or at the very least started some kind of dodgy safe-harbor-using-user-generated-content company that "complied with law" (wink, nudge) instead of burning up millions of dollars in cash advances and contracts.

Finally, there is the assumption that a great work like "Dark Side of the Moon" wouldn't have been made because it would have been too expensive.


Factually, this is problematic. "Dark Side" wasn't a particularly expensive album to make. Yeah, they used Abbey Road, but it was affordable. And it didn't take that long. In many respects, while it was expected to be a "hit", it was not a "big bet" by anyone involved. It was just the next album by a successful band. Nobody knew or expected it to be a huge hit.

When you look at the albums that really were crazy expensive, or had outsized expectations, the resulting product has seldom lived up to those expectations, and most of the money was wasted or spent on marketing.

And nothing is stopping record companies from making similar bets today. Typically, when an album is "expensive", it's because the label is spending a ton on marketing, or paying talented "beatmakers".

But let's set that aside for a more important point: Are you an artist, or are you a businessperson?

I'm pretty sure Pink Floyd's motivation for creating that album wasn't "hey, this will make us a ton of cash". They wanted to make a record. They had been playing most of the songs on tour for months, so they already knew the material, and knew it would go over well for their target audience.

The album had no "hit single", and Pink Floyd didn't really care about such things. They were making art, meaning they were more concerned with "doing what they wanted" than "how it would sell".

If you are businessperson, the reverse is true. You have to care about "what will sell" more than "what you want". And you would do things like minimize your upfront (i.e. recording) costs and not take many risks.

I assume that Godrich and Yorke are basically saying "because there's so little cash coming in, nobody will invest in making expensive albums". Well, not true. People are still spending lots of money on albums.

But spending money has never correlated with success, and in today's world, you don't have to spend a lot of money to make a good record, much less a successful record.

Look at movies or painting or games or any other art form. If you are depending on someone else to give you massive amounts of cash up front on the hopes of massive returns, well, I think you're doing it wrong.

But more importantly, if all of the music fans that had been buying music had been subscribing to Spotify or other music services, the music business would have been drowning in money.

The main problem today, as I have stated several times, is that not enough people care about music to buy or subscribe. Until that changes, whether it is a music service or download store, the industry is in trouble. Where is the fault? With the artists? The labels? The shop owners? The fans? Maybe all of the above.

But the secondary problem is perhaps more intractable - how do you get fans to listen to more new music, and not just the artists and albums they already know?

That's a tough one, and if Godrich and Yorke can fit any ideas into 140 characters or less, I'm all ears. In the interim, I will continue to do what I have always done, and push for a better music business today.

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