Nick Jonas thinks Kanye West, Paul McCartney and Prince make up the “Holy Trinity of music”.
Streaming Music vs. Downloading, 2015
I. Total number of streams versus total number of downloads (2015)
II. Total revenues from streaming versus total revenues from downloads (2015).
Methodology.
Sources: Recording Industry Association of America (RIAA) and Nielsen data for 2015, supplied to Digital Music News. Nielsen data finalized and supplied to DMN in January of 2016; RIAA data furnished earlier this month.
Streaming figures includes audio and video on-demand data from leading platforms like Spotify, YouTube/VEVO, Google Play, SoundCloud, Beats/Apple Music, MediaNet, Rhapsody, Xbox Music, and others. Streaming data is on-demand only, and doesn’t include ‘non-interactive’ internet radio platforms like Pandora, iHeartRadio, or Slacker (though this may be incorporated as a comparison for later).
Total on-demand interactions and total track/album downloads calculated by Nielsen Soundscan, and reflect paid-only downloads (i.e., not pirated, torrented, stream-ripped, etc., downloads). Revenue figures calculated entirely by RIAA, released earlier this month. ‘Streaming vs. Downloading’ comparison is a US-based comparison, with both Nielsen and the RIAA national data monitors.
Projections into 2016 (and beyond).
In terms of overall growth and projections, the disparities between paid downloads and streaming will only intensify. According to RIAA data, ‘Download Single’ sales plunged 14.9 percent last year alone (in terms of total transactions), with ‘Download Album’ sales dropping 7.0 percent (also in terms of total transactions). Those declines are likely to intensify in 2016, while streaming is highly likely to continue surging.
Within streaming, weak revenues could be addressed by an increase in paid subscribers, who drive far greater revenue and free, ad-supported users. Paid subscribers are definitely increasing: just recently, Spotify announced its 30 millionth paying subscriber (worldwide), Apple Music is pushing past 11 million (from nothing last year), and Tidal has just announced its 3 millionth subscriber (from roughly 1 million last year). That said, YouTube remains the fastest-growing streaming platform, and Spotify’s total user base is estimated to have reached 100 million.
Written while listening to Mark Storie on the Toolroom Radio podcast.
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Brandy Files $1 Million Lawsuit Against Her Label
American recording artist and actress Brandy Norwood has filed a lawsuit against her label Chameleon Entertainment and the President Breyon Prescott.
According to Entertainment Weekly, Norwood is claiming that the label ”will not pay for her to record new albums or allow her to otherwise release music to her fans.” The file also states that this is a blatantly ”unlawful attempt to bully Norwood into signing a new recording and distribution agreement containing terms far worse than her current agreement.”
Disagreements reportedly started a while ago, as the initial contract signed by Brandy was a 5 album deal. But after Two Eleven (the first album of the five), production on the second album was allegedly halted, a frustrating development for Brandy. According to the filing, Chameleon was meant to pay $600,000 for recording costs, but due to certain ‘events’ that occurred Chameleon opted to delay Norwood from working on her second album.
Prescott also works at Epic Records (part of Sony Music Entertainment) as Head of A&R, and Brandy is alleging that he is ‘double-dipping’ as the new contract presented to her by Prescott is for Epic Records. This means that Prescott will profit not only from being the owner of Chameleon Entertainment, but also through bonuses he would gain from Epic.
As a result, Brandy has refused to sign the contract and is preparing to battle Prescott and his label in court.
Brandy is seeking $1 million in compensatory damages.
In a statement, Brandy proclaims that she has “every right to terminate, and has now terminated, her recording contract with defendants.”
(Image by Greg Hernandez, Creative Commons, cc by 2.0)
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Is the Streaming Industry Lying About Piracy?
Streaming kills piracy, right? Maybe it’s not that simple.
Over the past ten years, the music industry has profoundly transformed to the point of becoming unrecognizable. The traditional business structure has been replaced by a profound digital disruption, one that has provoked major shifts in the way music fans discover, consume and pay for music.
And throughout that roiling transformation, piracy remains a complicated phenomenon that doesn’t seem to be going away. The question is, why it isn’t completely dead, especially given the ubiquitous, legal listening options now available? That includes streaming platforms like Spotify, SoundCloud, and YouTube, a group gives themselves plenty of credit for eliminating piracy.
One of the biggest changes affecting the music industry isn’t the technology itself, but rather the resulting mindset of music listeners, particularly towards the value of music itself. Starting with the rise of peer-to-peer programs like Napster, consumers started to fundamentally change their attitudes. Fast-forward to 2016, and most fans believe that they should have access to the music they want to listen to, whenever they want to listen to it, for free.
In that context, streaming services like Pandora, YouTube, Spotify and most recently Apple Music and Tidal have entered, with different approaches to that psychology. But despite aggressive efforts to get music fans to pay for music, the vast majority of people are still discovering and consuming music for free.
That said, free platforms like YouTube and Spotify’s ad-supported tiers are now legal, which has driven considerable traffic away from illegal platforms like BitTorrent. Some question what the difference is, and strangely, BitTorrent and piracy platforms are still going strong, along with a myriad of other free sources. In fact, a recent study showed that piracy is actually increasing, not decreasing.
So if streaming music is actually killing piracy, why is it taking so long to die?
Logically, it makes sense that free streaming would replace free piracy (which typically involves the more cumbersome download). And given the fact that music fans can get virtually all the music they want on YouTube, Spotify, or SoundCloud, there seems to be no need for them to go searching for music on illegal sites.
And there’s some research to support this: just recently, a European Commission study offered evidence that Spotify displaces piracy (while also killing paid downloads). But there’s also research offering directly conflicting information. For example, a recent study by Cisco Visual Networking found that illegal file-sharing in North America grew 44% from 2008 to 2014. And just recently, a MusicWatch study found that 57 million Americans frequently use pirate sites for music, which is approximately 20% of the American population.
That study also unearthed something interesting: the mix of piracy methods is also diversifying, with YouTube ‘stream-ripping’ among several active acquisition methods. YouTube’s growth means more YouTube piracy, all of which suggests that streaming services are not killing piracy at all, merely shifting the mix of players a bit.
Meanwhile, the biggest proponents of the ‘streaming kills piracy’ narrative are streaming services themselves. Spotify’s Daniel Ek, for example, has routinely pointed to the specter of free torrenting, and the role that streaming has played in reducing this threat. SoundCloud’s Eric Wahlfross has done the same, even claiming that piracy ‘is not something anyone talks about anymore,’ and that ‘the new generation doesn’t pirate music.’
Then, there’s the piracy impact created by the intense competition between rival streaming services. In the ruthless one-upping, these services have started streaming exclusives as a strategy to increase subscriber numbers and crush competition. In the process, narrowed availability can translate into greater piracy. Kanye West’s The Life Of Pablo, for example, was illegally downloaded over half a million times as a direct result of making it a Tidal exclusive. That exlcusive patchwork is dangerous, especially with piracy alive, well, and welcoming to the disaffected.
In all of this, there’s one sophisticated group that doesn’t think piracy has been so decimated: major consumer brands. On illegal download and torrent sites, it’s fairly common to see placements from the likes of American Express, Ford, United Airlines, and even Netflix (among many, many others). These are companies struggling to reach coveted demographics, which includes ‘this generation’ of 18-34s that seem perfectly prevalent on piracy channels.
(Image by Creative Commons, Attribution-Share Alike 3.0 Unported, cc by-sa 3.0)
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Kim Kardashian and Lil’ Kim do their own carpool karaoke
The two Kims have engaged in an unusual collaboration.
Justin Bieber’s manager takes on Kanye West – report
Scooter Braun working alongside Kanye as a consultant.
Gwen Stefani is ‘in love’ with Blake Shelton
The singer credits Blake with helping her write more positive songs following her marriage breakdown.
New Legislation Would Streamline US Touring for Canadian Artists
Obtaining the necessary visas for touring in the US has long been a frustrating and arduous procedure for Canadian musicians, but the newly proposed BEATS legislation would expedite this process, as well as give artists more freedom with how they conduct themselves once across the border.
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Guest Post by Nicole Daley on the Future Of Music Coalition
Canadian musicians have long expressed their frustration with the process of obtaining visas to cross the border and legally tour in the United States. But that may soon change, thanks to the introduction of new bipartisan legislation intended to streamline the process.
The proposed “Bringing Entertainment Artists to the States” (BEATS) Act, introduced by representatives Dave Trott (R-MI), Chris Collins (D-NY) and Peter Welch (D-VT) would speed up the process of obtaining a P-2 visa for Canadian musicians. Right now ,a touring musician typically must acquire a petition from a United States organization to obtain a visa. The petitioner is usually a venue, presenting organization, booking agent, management company, etc, and the petition includes a list of dates and venues of performances. These petitions are processed in advance by mail, and can involve unexpected delays.
But under the BEATS act, musicians would be able to file an application for admission into the United States with an immigration officer at any Class A port of entry located on the border of the United States and Canada, or at any pre-clearance station at a Canadian airport, right on their way into the US. They’d just need to have the paperwork with the signature of the petitioner and the appropriate supporting documentation ready.
Another major aspect of the proposed amendment is that after admission to the United States, a Canadian performer could alter the dates and venues of performances listed in the original petition. The only stipulation is that the additional performances or engagements cannot be more than one third of the performances or engagements listed on the original petition. For example, if a Canadian group sells out one show and decides after the visa application has already been submitted and accepted they would like to add additional shows, they don’t have to go through the application process again. It creates a degree of flexibility that better reflects the reality of how touring works for independent artists, where events are often put together on short notice in response to opportunity and demand.
The benefits of this proposed change will include local economies. When musicians tour, their fans generate economic activity, and contribute to many small businesses in the area. Local restaurants and bars, local transit, vendors and the venue will receive additional revenue because of this cultural activity. As representative Peter Welch explained,
“Vermont and Canada share much more than a border. Our economies are interwoven and our citizens share a deep appreciation of the arts and culture on both sides of the border. When Canadian artists book performances in Vermont, they provide diverse entertainment for Vermonters as well as a boost to the local economy. “
The BEATS Act mirrors the positive step Canada took toward increased cultural exchange when they dropped expensive new work permit regulations for non-Canadian bands. These fees made it difficult for independent artists to perform in Canada and as a result hurt many smaller music venues that attracted musicians without the backing of major labels. By dropping the work permit fee for touring musicians and creating an exemption from the venue fees for smaller clubs and bars, the Canadian government made the Canadian music market more accessible to American artists. If the BEATS Act is passed it would be a reciprocal step towards a good neighbor policy and allow Canadian artists more access to the American music market while boosting the bordering U.S. economy.
The BEATS Act also enjoys the support of the American Federation of Musicians, The Recording Academy, and the American Assocation of Independent Music (A2IM). According to A2IM CEO Richard Burgess “It’s an issue of special importance to independent record labels, many of which are small businesses that depend on a predictable and reasonable visa approval timeline. The BEATS Act is a bipartisan, common sense proposal that will create jobs in the American music industry.”
Recognizing the importance of creating a more efficient system for cultural exchange through music will have a positive impact on the economies on both sides of the U.S.-Canadian border as well as increased appreciation and exposure to the arts. But perhaps there’s more that we could be learning from the Canadian Government. The recently unveiled budget from Canada’s ruling Liberal party includes nearly $1.9 billion in additional cultural funding, including money for music and other art disciplines. Prime Minister Justin Trudeau stated “Investing in the Canadian cultural sector helps to create jobs, strengthens the economy and ensures that the unique Canadian perspective is shared with the world.” One benefit to the music community as a result of the Canadian arts budget is the creation of a program similar to the past Trade Routes program, which supported the promotion of Canadian artists abroad by providing grants for tours and funding embassy activities to introduce Canadian artists to the world.
For United States arts advocates, it’s hard not to be a little envious, as while we’ve fought hard to win modest budget increases for the National Endowment for the Arts’ recent budgets, these funding levels have been roughly on par with Canada’s Council of the Arts, despite Canada having only a tenth of theUS population. Now that the line item for the Canadian Council of the Arts will actually be doubled by 2020, the per capita arts funding disparity is even more embarrassing. Let’s hope that our nation’s leaders follow the example of our northern neighbors in this way as well.
What A New Pandora CEO Means For Artists, Labels And Investors
As Tim Westergren returns to the helm of Pandora, has has a great deal of work to do to revitalize the company, and repair its relationship with artists and labels, but also an opportunity to change how the streaming service is perceived in the eyes of the public.
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Guest Post by Chris Castle on Music Tech Solutions
Tim Westergren has returned to Pandora as the company’s CEO. He’s got a golden opportunity to change how Pandora is viewed–we all want Pandora to succeed, but there’s little support for the path the company has been on for years now. The 42% decline in Pandora’s stock price over the last 12 months hasn’t been helped by the company’s rocky relationship with the vendors of their main product: music.
With some analysts giving Pandora a fair value stock price of $7, here’s a little unsolicited advice.
Overhead: Pandora’s overhead is out of control. They will blame it on royalties, but a closer look shows that the company has a problem with its operating costs that they would like you to ignore (hence the $7 fair value price target).
Integrity: Westergren arrives at Pandora in a much different point in the zeitgeist than when he founded the company in terms of artist relations. He made a huge misstep by associating himself with a string of attempts to lower Pandora’s royalty payment to artists and songwriters all of which have either outright failed or created more hostility than they ever would be worth. In an atmosphere where artists are increasingly suspecting digital music services of cooking the books or operating without licenses, Pandora needs to be doing it better than the next guy. Westergren doesn’t want to get stuck with Pandora’s “Enron moment”.
Legislation: Pandora backed the failed Internet Radio Fairness Act that was designed to lower artist royalties and created a huge backlash from the artist community. Some refer to its spectacular failure as “lobbying malpractice.” One time can be chalked up to bad advice. Don’t make it twice.
Litigation Against Compensating Artists: Pandora became the poster child for refusing to pay royalties on recordings made prior to February 15, 1972 which has come to be known as the “Pandora loophole”. This would mean that if you were to record “Sophisticated Lady” or “Hello Dolly” tomorrow, Pandora would pay you but not the estates of Duke Ellington or Louis Armstrong. In a move reminiscent of Spotify’s settlement with the NMPA, Pandora settled with just the major labels and is continuing to litigate against the class lead by The Turtles. Westergren should settle Pandora’s case and treat all artists fairly. Again, bad advice can get forgiven if the company does the right thing. Avoid having loopholes named after your company on a go forward basis.
Litigation Against Compensating Songwriters: Pandora has lead the way in using the rate courts against songwriters at great expense to ASCAP and BMI. While Pandora is reportedly trying to make direct agreements with publishers, the company is using the rate courts to drag songwriters through the muck. Westergren should stop trying to litigate royalty rates and ask yourself if you really saved that much money compared to your own legal fees and brand damage.
Lobbying With MIC Coalition: Pandora is a member of the MIC Coalition, an alliance of companies against songwriters and artists—companies with a combined market capitalization of over $2 trillion. (I stopped counting at $2 trillion dollars as I get confused by that many zeros to the left of the decimal place like I get confused by zeros to the right of the decimal place on Pandora’s royalty payments.) There’s no good reason for Pandora to be in the MIC Coalition–whose first official act was to file an antitrust complaint against SESAC. That’s right–because Google, Clear Channel (iHeart) and all the rest need protection from songwriters. (The MIC Coalition even had a fake panel at SXSW moderated by their lobbyist who failed to identify her connection to the “McCoalition”.)
Tim Westergren built the better mousetrap, but it’s managed to catch a rat. By pursuing a path of high integrity and fair dealing with creators, Pandora might have a chance to make it. It would be a shame to see it go under. Westergren’s brief should be to do everything he can to get the creative community back on board instead of looking like a stock-rich bubble boy having breakfast at Buck’s.
Jay Z Files ‘Giant Lawsuit’ Against Former Tidal Owners
Today, Breakit — a Swedish news publication — reported that Jay Z is filing a ‘giant lawsuit’ against former Tidal owners.
According to the report, the rapper claims that the worldwide subscriber numbers he was given at point of sale were misleading. Additionally, various statements relating to the condition of the business were allegedly exaggerated. As a result of the deceptive information, Jay Z is taking legal action.
Jay Z started off by writing several letters to the previous shareholders of Tidal and owner of Aspiro (Tidal’s parent company), Schibsted ASA. Those letters expressed dissatisfaction with inflated user numbers when Project Panther Bidco (Jay Z’s finance company) bought the service last year for a reported $57 million.
Anders Rikter, Schibsted Communications Manager, told Dagens Næringsliv that the company was “unsympathetic” to those letters, and explained to BreakIt that transparency in financial reporting was upheld. For starters, this was a requirement of a public traded company.
Why would Jay Z take the legal route now? The suit isn’t a complete surprise and does follow string of written letters, but if the service was doing well and growth was accelerating, there would be little incentive to go down the road of a lengthy court battle. All of which suggests that Tidal may be struggling.
Perhaps the numbers aren’t as solid as they appear. Earlier this week, Tidal announced its three millionth subscriber, a major milestone albeit a self-reported one. Regardless, it falls way behind Spotify’s 30 million and Apple Music’s 11 million.
But a bigger issue could be lurking in the fundamentals. Due diligence is the chore of the buyer, though skeletons sometimes surface after the deal is signed.
Update: Tidal have directly reached out to me with a statement on the matter.
It reads, ”We are excited that one year after TIDAL launched, we have surpassed 3 million subscribers globally. The growth in our subscriber numbers has been even more phenomenal than we’ve previously shared. It became clear after taking control of TIDAL and conducting our own audit that the total number of subscribers was actually well below the 540,000 reported to us by the prior owners. As a result, we have now served legal notice to parties involved in the sale. While we cannot share further comment during active legal proceedings, we’re proud of our success and remain focused on delivering the best experience for artists and fans.”
(Image by Ultra5280, Attribution 2.0 Generic, cc by 2.0)
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