One of the reasons that streaming services, and new music gurus, give to justify low payments, are that the labels and artists, due to piracy, now have to complete with free. And we are talking payments below 1/3 of a penny or lower with streaming services.
It is interesting to note that the labels in question couldn’t be farther apart in musical style.
The first one to to pull out was a collection of labels owned by Century Media, a “heavy metal and hardcore” group that includes at least six labels. The company issued a statement saying, "Spotify in its present shape and form isn't the way forward"... "Physical sales are dropping drastically in all countries where Spotify is active."
They went on to say, "The income streams to the artists are affected massively and therefore that accelerates the downward spiral, which eventually will lead to artists not being able to record music the way it should be recorded..." and “Ultimately, in some cases, it will completely kill a lot of smaller bands that are already struggling to make ends meet.”
Echoing what this blog has been saying all along, “This is about survival, nothing less and it is time that fans and consumers realize that for artists it is essential to sell music to keep their heads above water." Similar to our last post, "There needs to be awareness...that how you will consume your music has direct consequences for the artists, who we are all trying to support." 1
The other label was an Indie classical and jazz label. Yeah, they still exist! Who knew?
The label is called Mode Records and their owner and operator, Brian Brandt issued a statement saying, "New streaming services like Spotify… have the promise to squeeze smaller labels out of the picture.” Brandt cited “low payments again as an issue.”
He goes on to state, "On a typical CD sold through a distributor (yes, still the bulk of our sales are wholesale), we may make a profit of $3-4 a unit. Already that is not much considering the total sales of a typical niche CD. Sales through iTunes or similar service can yield a similar profit. But this all gets turned on its head with the Spotify model. For example, in June 2011, Mode had a total of 11,335 streams through Spotify; our income was a whopping $36.98! A big individual seller that month, by composer Luciano Berio, was streamed 1,326 times through Spotify; our income $4.18. So, we earn about 1/3 of a penny per stream. And these meager amounts should be split with the artists and composers." 2
As long as we are talking about Spotify we should include Rhapsody, Last.fm, Napster and all the other streaming services in this discussion. All their payments to artists directly, or through an artist’s label, are all so small as to be ludicrous and downright insulting. As always, they justify these low rates as the music industry needs to compete with piracy, e.g. free.
Let’s take a moment here to talk about the drum beat in the music world today, by everyone except the artists who are trying to make a living off their music, which is that we need to compete with free.
This is just crazy. What other industry is being told to complete with free? Auto manufacturers? Food companies? Big oil? Big pharmaceutical companies? Taxi companies? Airline companies? Shipping companies? Computer and other electronic companies?
Just because something can be stolen it should priced to compete with free? Cars are stolen everyday, so I should get a new car for next to nothing? I’m sure there is a large black market for drugs, so Walgreens, CVS and the others should practically give away my medicine? While we are at it, we can get medical advice from Webmd.com, so shouldn’t visits to the doctor be just a few dollars? And of course siphoning gas is as old as the oil business itself, so Exxon, Shell and Chevron and all the other oil companies siphoning us at the pump everyday should sell a gallon of gas for less than a penny? Or books by a certain NY Times tech columnist who is hip to streaming? I’m sure his books get shoplifted. So said columnist will just need to start competing with all those free books.
During the recent riots in London, looters carried off all sorts of stuff, so all of the people and companies that make, distribute and sell all that stuff better wake up and realize that they are competing with free from now on. Clothing, Plasma TVs and other electronics, food, toiletries, basically everything that is sold can be stolen, so that’s now the new competition for everything made in the world, free.
Crazy, right? But that’s what the music industry, and its artists, are being told. This is a load of crap and if you don’t understand that you don’t understand how society works.
When someone steals something, say a car, or robs a store, or breaks into a house, or smashes a window during a looting spree we expect the police and other law enforcement agencies to catch, prosecute and, if convicted, throw them in jail. If the police don’t do their job and protect people’s and companies property, as in the case of the recent London riots, people get, understandably, upset. 3
So who does a musician or label call when their product, the music they have worked so hard to make, is stolen? The police? The FBI? The DOJ? Not so much.
When someone posts my music illegally on a website somewhere, when I call my congress person, all I hear crickets from their end of the phone call. The silence is deafening.
Congress has enacted laws to deal with piracy. One of them, the DMCA, forces right holders to be our own police surveillance team. Other laws allow for the prosecution of the pirates, but when someone, e.g. the RIAA, actually brings lawsuits against these thieves, the RIAA becomes the bad guy. They didn’t write The Copyright Act (which allows for penalties ranging from $750 to $150,000 per infringement, all at the jury’s discretion), which are crazy IMHO, but those are the laws on the books. 4
So I guess in London the shopkeepers and other retailers who lost merchandise will be the heavies if they prosecute the punks that robbed them?
But I’ve gone off track here. The point is having to price your goods and services against free, illegal copies. How would that all look in a free country.
- For one thing that $40,000 Lexus you want, now that it’s priced like a streaming payment, will finally be affordable for a mere $126.00.
- And the $4.00 gallon of gas? That will be very user friendly at $0.0126 per gallon.
- And you’ll want a new iPod, those are now only $ 0.789
- While driving that nice new car, why pay $0.0031185 for a drive-thru fast food burger when you can get a lobster dinner for $0.19?
- And that new plasma TV, that will only set you back $2.20185.
- Don’t forget to buy a Kindle, and why not spring for the 3G version, it is only $0.50. Then you can download that Missing Manual you need for only $0.0787185
- And $ 2.20185 for a top of the line iPad? What a steal! (Pun intended...)
- Dairy farmers will be fine when their milk is competing with the price shoplifters pay, or $0.011025 for a half gallon. I’m sure they’ll be able to feed their cows and their families. (As long as someone starts stealing dairy feed.)
- Do you have homeless and squatters in your city? Most urban areas do. So now your $300,000 home is only worth $945.00. Hmmm, that’s not good is it?
Oh, that reminds me.
- We keep hearing about how other countries are stealing US jobs. The median income for a single US household is about $50,221.00,5 but since jobs are stolen, your $50K a year job, when priced like a streaming payment to compete with free, is now only paying $158.19615.
Maybe you cannot afford to buy that Lexus after all...