"...the ways in which musicians are screwed have changed qualitatively, from individualized swindles to systemic ones."

November 15, 2012 1:42 PM

"The "Tugboat" 7" single, Galaxie 500's very first release, cost us $980.22 for 1,000 copies-- including shipping! (Naomi kept the receipts)-- or 98 cents each. I no longer remember what we sold them for, but obviously it was easy to turn at least a couple bucks' profit on each. Which means we earned more from every one of those 7"s we sold than from the song's recent 13,760 plays on Pandora and Spotify. Here's yet another way to look at it: Pressing 1,000 singles in 1988 gave us the earning potential of more than 13 million streams in 2012."

Making Cents: Damon Krukowski of Galaxie 500 and Damon & Naomi breaks down the meager royalties currently being paid out to bands by streaming services and explains what the music business' headlong quest for capital means for artists today.

When I started making records, the model of economic exchange was exceedingly simple: make something, price it for more than it costs to manufacture, and sell it if you can. It was industrial capitalism, on a 7" scale. The model now seems closer to financial speculation. Pandora and Spotify are not selling goods; they are selling access, a piece of the action. Sign on, and we'll all benefit. (I'm struck by the way that even crowd-sourcing mimics this "investment" model of contemporary capitalism: You buy in to what doesn't yet exist.)

But here's the rub: Pandora and Spotify are not earning any income from their services, either.

[...]

Why are they in business at all? The answer is capital, which is what Pandora and Spotify have and what they generate. These aren't record companies-- they don't make records, or anything else; apparently not even income. They exist to attract speculative capital. And for those who have a claim to ownership of that capital, they are earning millions.

posted by anazgnos (85 comments total)

This is one of the better argued version of the obvious case that the artists get screwed even worse under streaming than under the bad label boss world, then takes the argument that NO ONE is making money doing this but some hope to cash out dot com boom style
posted by C.A.S. at 1:48 PM on November 15, 2012 [4 favorites]

See also: How much do music artists earn online? (from 2010) and the 2012 edition
posted by adamrice at 1:51 PM on November 15, 2012 [1 favorite]

As a lifelong musician who's never managed to make a dime, ever, doing anything, these sorts of articles tend to make me shrug. But Damon K is pretty damn awesome and this seems well-thought-out.
posted by Erroneous at 1:52 PM on November 15, 2012

I see it everywhere these days. No one really wants to make a product. They want to make a round of financing. The whole incubator rhetoric is intrinsically toxic. And up here in KW it is everywhere. Everyone froths about the next big thing while yesterday's projects hang on like leftovers in the fridge. Which of these projects will be alive in ten years? Does anyone who is working on them actually care? I don't think so, at least, they're not run that way.

Hell of a thing.
posted by seanmpuckett at 1:53 PM on November 15, 2012 [15 favorites]

Dramatically reduced barriers to entry. Greatly reduced up-front and operating costs. Completely saturated marketplace.

Gosh, I can't figure out why profits would be slim in this business.
posted by mullingitover at 1:53 PM on November 15, 2012 [23 favorites]

I saw this yesterday and thought it was a good read. At the end of the day Pandora and Spotify have to make money or they'll go away, but until they make money, its sort of hard to pull blood from a stone. You are basically asking the VCs to write you a check, and frankly they won't. Either they'll figure it out or all that capital will go away, recycled into everyone Pandora and Spotify was buying things from.

But make no mistake, the distribution system Pandora and Spotify replace - physical albums - was no less about the money and the return on capital then streaming services and the VCs who fund them are. The difference was that before the days of turning a song into a string of 1s and 0s there was a barrier that made it harder for music to be traded around outside of official channels., and that meant the music distributors and the capital that loved them made lots of money, and that let them do things less inherently profitable businesses could never do.

This isn't a sustainable model for anyone, and it'll probably end in tears for all the VC funds invested in the space, and few lucky (or maybe smart?) entrepreneurs who sell out while they still can will get stupid rich. The old calculus is gone but the nature of path dependency is such that parts of the system don't reflect that yet. Until that adjusts everyone is in trouble. This also applies to newspapers.

I mean I have no idea what the answer is. For journalism I guess it is higher prices for quality, and everything else goes away. Maybe for music it'll be the same thing. In reality the new model for music should be "cheaper than the old way, more expensive than we have it today, content creators making about the same." But who knows how that works out in the end.
posted by JPD at 1:54 PM on November 15, 2012 [2 favorites]

*torrents maniacally*
posted by quonsar II: smock fishpants and the temple of foon at 1:54 PM on November 15, 2012 [3 favorites]

OK... so I don't deny the possibility that they're getting screwed. But there are economic factors here that are being elided.

Their $980.22 is $1,916.67 in today's dollars.

And here's the thing: In 1988 they had to put that money up up front. The profit they got back wasn't just for writing songs, it was also for risking their $2k with no guarantee that they'd get it back. They got their money back with additional profit. But lots of people bought those $2k worth of records and sold three, or 50, or 100, and lost money on the deal.

Pandora and Spotify are not selling goods; they are selling access, a piece of the action. Sign on, and we'll all benefit.

No, for Pandora at least (I'm not familiar with Spotify's business model) they're selling ads, not music.

These aren't record companies-- they don't make records, or anything else; apparently not even income. They exist to attract speculative capital.

This is only sort of true because they've picked out this small sample. A lot of record companies didn't make money either... but there are profitable web sites.
posted by Jahaza at 1:56 PM on November 15, 2012 [3 favorites]

Yeah, there've been a couple versions of this basic story in the past few years, like from Lowery or the Too Much Joy guy, but this one seems to really nail the point in a very direct way.
posted by anazgnos at 1:57 PM on November 15, 2012

Why are they in business at all?

I have met Tim Westergren, founder of Pandora, and I can tell you very specifically why he's in business, because he told me. It's because Tim himself was a touring musician in the 1990s and could not get his music heard because he wasn't signed to a major label. He had a vision for a custom radio service that would be explicitly agnostic about whether the music delivered to the listener was from a major label or not. By using an algorithm wherein you "seed" a stream with a particular style, you are fed more of music with those particular qualities. Use the thumbs up/thumbs down feature to hone that seed. It would not be beholden to major label interests, but interestingly would also not be beholden to indie label interests.

The business model has always been suspect, even given Pandora's crazy popularity. The specter of higher royalties has always been looming over it like the grim reaper. Raise the royalty rate, you completely doom Pandora and others. And then where will you be, musicians wanting to get heard?

Now musicians are upset that services like Pandora pay out really lousy for their copyrighted material. I get that. But hasn't the whole concept of making money from recordings been long long dead for about 99.9% of artists anyway?

The entire business model of making music needs to be about making money from performance (a view which I support, with $$). In my mind, it's no different than the argument for open-source software. Pay for software? no thank you. For services rendered? absolutely.
posted by mcstayinskool at 1:57 PM on November 15, 2012 [9 favorites]

Lower Dens' Jana Hunter recently also had something to say on the topic.

She gives some numbers a little below.
posted by mahershalal at 2:00 PM on November 15, 2012 [2 favorites]

Basically, Spotify and Pandora are what we want. Buying a CD is what we don't want.

Spotify and Pandora -- and the laws that govern them -- will evolve over time, because streaming is not merely what we want -- it's what we expect. If Spotify and Pandora fail, they'll be replaced by similar services that do what they did, only better.

The "buy a CD or download it illegally" dichotomy is gone for good. Once you've opened Pandora's box...
posted by Afroblanco at 2:08 PM on November 15, 2012

Question: How much do the labels make off of Spotify and Pandora? If they went away would the artists economics look much better?
posted by JPD at 2:13 PM on November 15, 2012 [1 favorite]

Benji Rogers of PledgeMusic summed it up rather nicely a while ago

And followed it up with this


If you as a musician think streaming is gonna get you the rent money (or even enough for a couple of beers) you haven't done the sums.
posted by jannw at 2:14 PM on November 15, 2012

Basically, Spotify and Pandora are what we want. Buying a CD is what we don't want.

For some definition of we, anyway. iTunes and the like still sell a lot of music, and I still get all my music that way (Google Play / Amazon for me).

I have never used Spotify, but Pandora is pretty useless to me because I want to make my own playlists, not have one generated for me. Also, all of my music is DRM-free mp3, and therefore something I can listen to more or less forever, rather than depending on an external service. I do use cloud storage as one way of accessing it, but I wouldn't want to rely on that.
posted by wildcrdj at 2:14 PM on November 15, 2012 [1 favorite]

mullingitover: Dramatically reduced barriers to entry. Greatly reduced up-front and operating costs. Completely saturated marketplace.

Exactly. Making a copy of some bits for someone has almost no value. Everyone in the world that can listen to the music also has a specialized machine that can duplicate the bits for free. If you want to make money by selling bits to people with bit factories, then you'd better price them hellaciously cheap. You are, almost literally, trying to sell ice to Eskimos.

Everyone needs to realize that the days of selling plastic disks are done. No more disks. Trying to preserve that business model is extraordinarily stupid. You need to provide actual value to people for them to give you money, and making a copy of something for them has almost no value at all.

It doesn't matter whether you like this or not. This is the hard physical reality of the post-Internet world. Copies are worthless. Adapt, or die.
posted by Malor at 2:18 PM on November 15, 2012 [4 favorites]

I'm a little confused by this. Pandora seems to be a broadcast radio replacement. I'd be more interested in hearing how much money the band made off of radio play. Selling MP3s on Bandcamp and Amazon, or selling copies of singles/albums via the iTunes store, seems like it would be a bit more apples-to-apples.
posted by verb at 2:19 PM on November 15, 2012 [8 favorites]

The problem is that Pandora is targeted enough that it is a viable replacement for playing an album. In the US at least performers never got paid for radio play, although publishers do.
posted by JPD at 2:23 PM on November 15, 2012

I have never used Spotify, but Pandora is pretty useless to me because I want to make my own playlists, not have one generated for me.

Spotify is good for listening to that one song you remember from the 80's and don't really want to buy. Except that it's worse than just using YouTube, because you have to install something and it will play ads for bands you've never heard of in genres that you despise.

I'm with you though: I buy music. In fact I buy albums, not singles. eMusic if they have it, Amazon if they don't (or I want it NOW and not whenever the next time my subscription renews), and CD otherwise. My car's old enough to have a CD player without an aux input.
posted by Foosnark at 2:25 PM on November 15, 2012

Foosnark: “Spotify is good for listening to that one song you remember from the 80's and don't really want to buy. Except that it's worse than just using YouTube, because you have to install something and it will play ads for bands you've never heard of in genres that you despise. I'm with you though: I buy music. In fact I buy albums, not singles. eMusic if they have it, Amazon if they don't (or I want it NOW and not whenever the next time my subscription renews), and CD otherwise. My car's old enough to have a CD player without an aux input.”

Unless you pay for a subscription, shelling out boatloads less money per month than I used to for music, and never have to do the whole download > put on iPhone or whatever > move files around etc thing ever again. Which is... exceedingly convenient.

I feel shitty about it every once in a while. This is one of those times. But it is a huge bonus not having to shuffle files around.

I'm going to read these articles and have a good think, I guess.
posted by koeselitz at 2:31 PM on November 15, 2012 [5 favorites]

(And, yeah. I have always despised 'internet radio.' I don't want an algorithm telling me what music to listen to. They never work, anyway - nor would I want them to. I want to be able to play an album. Spotify lets me do that. I am thinking hard about going back to analog, though.)
posted by koeselitz at 2:33 PM on November 15, 2012

Spotify is good for listening to that one song you remember from the 80's and don't really want to buy. Except that it's worse than just using YouTube, because you have to install something and it will play ads for bands you've never heard of in genres that you despise.

FWIW, my time spent listening to new music has gone up radically since I started using Spotify. If I hear a song I like, I bookmark it and can then easily sample the rest of the artist's music, without having to shell out a bunch of money for stuff I might or might not like. And I'm so very happy to never have to manage mp3s ever again; at this point I probably have 30GB of duplicates, with no way to reconcile them or reclaim that disk space. (I also gladly shell out the $10/month for a) no ads and b) mobile/downloadable access.)
posted by asterix at 2:34 PM on November 15, 2012 [3 favorites]

Re: Jana Hunter's blog post.

"Consumers didn’t dictate this. Technology did. If technology provided loopholes for free food and shelter, that’s what we’d be arguing about. "

At first I was like "wait, but if technology allowed us to replicate and infinitely distribute food like we do mp3s, wouldn't humanity immensely benefit?" But now I'm imagining being able to upload food and have everyone download it. Would starred Michelin restaurants start railing about food piracy? Would this destroy the restaurant business, if now we don't have to ever leave the house to eat the finest meals? Would all the cachet of being a foodie disappear once it is trivial to eat the greatest dishes just by pressing a button?
posted by shoyu at 2:34 PM on November 15, 2012 [3 favorites]

So...Speaking as a dinosaur who has yet to climb onto the Pandora/Spotify train, at what level of quality do these services stream their goods? I ask because, it seems that with each step down the digital music adaptation trail, the actual sound quality tends to suffer.

I mean...are these services going to sound as awesome as records or CDs over my big-ass home stereo? Or are these services for the cheap ear-bud crowd?
posted by Thorzdad at 2:37 PM on November 15, 2012

Would all the cachet of being a foodie disappear once it is trivial to eat the greatest dishes just by pressing a button?

No. Eating at a Michelin-starred restaurant is only partially about the food itself; it's also about the entire experience, from the pacing of the meal to the ambience of the restaurant. Having the same food at your own kitchen table wouldn't be the same thing at all.
posted by asterix at 2:38 PM on November 15, 2012

I mean...are these services going to sound as awesome as records or CDs over my big-ass home stereo? Or are these services for the cheap ear-bud crowd?

I listen to Spotify through a headphone amp and a pair of decent open-back headphones (not the full-on audiophile experience, but not iPod earbuds either) and I've never had any complaints about the quality of the audio. If you pay more, you can get higher-bitrate streams, though, if you're really concerned about it.
posted by asterix at 2:40 PM on November 15, 2012

asterix: "FWIW, my time spent listening to new music has gone up radically since I started using Spotify."

This. I discover at least a few new artists I love every month and I've uncovered entire genres I might have never realized I enjoy. It's just so easy and enjoyable to make Spotify my music listening hub and it's been a real source of joy. I've already seen this resulting in me buying albums I wouldn't otherwise buy (I want to listen to some of this stuff in my car) and searching for shows in my area that I wouldn't normally know I wanted to go to.
posted by Defenestrator at 2:45 PM on November 15, 2012 [1 favorite]

Zoe Keating has also been very into this subject of late, and posted all her 2012 internet royalty numbers in gdocs. She's also working on an interesting manifesto of sorts re: a 'group that represents the interests of new-model artists' in this arena (royalties and pay) and recently threw this out there:

"I want my data .... stream my music, but in exchange give me my listener data .... I want to know: Do these listeners also own my music? How many of these listens are on Zoë Keating stations? What other user stations do I pop up in, and sandwiched between what other artists? How many listeners gave me a “thumbs up”? How do I reach them? Do they know I’m performing nearby next month? How can I tell them I have a new album coming out?"

... which, to me, looks like a better model.
posted by bhance at 2:47 PM on November 15, 2012 [8 favorites]

at what level of quality do these services stream their goods?

If you pay for it, Spotify streams at 320kbps using the Ogg Vorbis codec, pretty much as high quality as you can get without lossless encoding.
posted by zsazsa at 2:49 PM on November 15, 2012 [2 favorites]

Thorzdad: “So...Speaking as a dinosaur who has yet to climb onto the Pandora/Spotify train, at what level of quality do these services stream their goods? I ask because, it seems that with each step down the digital music adaptation trail, the actual sound quality tends to suffer.”

zsazsa is correct. Spotify steams at higher quality than most iTunes downloads.
posted by koeselitz at 2:51 PM on November 15, 2012

I've never used Spotify but I do use Pandora, and for what I use it for it's almost perfect. I create "mood" stations on Pandora, seed them with artists I like that fit a certain mood or historical genre or whatever, and then just let it rip and I thumb up or down tracks it suggests and as time goes by it seems to get better. I don't use Pandora when I want to listen to a specific thing, I use it when I want to not worry about picking the next track or navigating through menus on a laptop in full sun. Music collection in the bedroom, algorithmic streaming on the deck when I'm grilling, for example.
posted by laconic skeuomorph at 2:51 PM on November 15, 2012 [1 favorite]

I exclusively use Spotify and Pandora, and haven't bought an album in years. I am absolutely shameless about it. The industry needs to catch up with what users really want. In this case, "the industry" means the rent-seeking lampreys that own the rights to the music, despite not having created any of it. Something's gotta change, and it ain't gonna be me, or the millions of others who expect access to all of the world's music instantaneously, for a reasonable monthly fee. Once we've had a taste of something like that, you can't take it away. This is the new reality.

I pay $10 a month for Spotify and $36 a year for Pandora. $13 a month would be enough to buy a CD or album a month. But you know what? I'm not going to do that, because it's a shitty deal. And there's no reason I should have to. And if that $13 was divided between the artists and Pandora/Spotify, the artists would be making a hell of a lot more than $.023 a month, and Pandora/Spotify would be making profit instead of looking for another round of funding.

In short, fuck record labels, fuck rights-owners, fuck middlemen, fuck the music industrial complex. Give us what we want. You have no choice. I am sick to shit of every single goddamn industry shill who's made money off the system coming around to complain about how their precious beloved system isn't throwing money at them anymore. Too goddamn bad. That system only ever worked for a precious few, anyway.

Spotify and Pandora are the coolest goddamn things ever invented for music lovers. They make our civilization infinitely more valid, and our lives immeasurably more enjoyable. Anybody who's against them is also against me.
posted by Afroblanco at 2:51 PM on November 15, 2012 [5 favorites]

(That is: the human ear generally can't tell the difference between a Spotify stream and an analog source.)
posted by koeselitz at 2:52 PM on November 15, 2012

God, I love Spotify. It doesn't have everything under the sun (for example, their catalog doesn't seem to have much Gillian Welch), but you absolutely cannot beat 98% of what you want for 3000000000% more convenience.
posted by joyceanmachine at 2:53 PM on November 15, 2012

shoyu: "Would starred Michelin restaurants start railing about food piracy?"

In star trek they still read books made from dead trees even though they all had ipads, and they still went out to restaurants even though you could get the same exact dish from a slot in the wall. Come to think of it they also had live music even though you'd almost certainly get a more perfect listening experience from a recording.

I don't think this was lazy or unimaginative writing. I think it was the realization that important parts of human experience are entirely agnostic to the technology that mediates it, and that the product itself is often a minor part of that experience.
posted by danny the boy at 2:53 PM on November 15, 2012 [1 favorite]

I'm a little confused by this. Pandora seems to be a broadcast radio replacement. I'd be more interested in hearing how much money the band made off of radio play.

Yes, exactly. A single is not equivalent to an instance of listening to a stream.

When I buy music (and I do - I, personally, buy physical discs, because they have no DRM and I retain the right of first sale), I intend to listen to it more than once. I would guess I listen to much of the music I buy at least ten times - although I also know there are a some tracks I've not yet listened to at all. But I could buy a single and listen to it on repeat for the rest of my life and the publisher would never see another penny - ownership of a copy implies the right to listen as many times as you like without the artist receiving more income.

So how does digital streaming revenue compare to old-fashioned radio revenue?

I tried to do some quick calculations about airplay revenue years ago when I ran a small indie record label (self-link: my very old rough thoughts about radio revenue for musicians). I wrote:

I need to research this further, but I believe ASCAP and BMI pay the songwriter and publisher less than 20 cents when a song is played on the radio. (The recording artists currently get nothing when their songs are played on the radio in the US; in other countries, the recording artists and the publishers both get money for airplay.)

Let's assume they had sold those 7" singles at $1.98. That's $1 profit (they cost $.98 to make), or 50 cents a song (I assume there was a B side). So that's, perhaps, $1000 profit (excluding all the additional costs, like paying someone to staff the merchandise booth at the show, or paying for any of the recording costs, which were not included in the calculation given above).

But it has nothing to do with listens, which is closer to what streaming is.

If the songwriter/publisher (remember, on analog radio the artist got nothing) got 20 cents for a radio play (the equivalent of a stream) going out to 85,000 listeners, that's $0.0000023529 (2.35294117647059E-006) per listen. For 13,760 listens, that comes to $0.0323764706 - about 3 cents.

According to the linked article, they in fact earned 56 cents for those 13,760 listens.

I don't know what ASCAP and BMI pay for a current spin on a major market over-the-air radio station, but I'm guessing artists are actually making a lot more money via Pandora and Galaxie 500 than they do for over-the-air airplay. This actually makes sense, given that - as I recall - the initially proposed rates for streaming music were incredibly high compared to what over-the-air stations had to pay, causing enormous outcry from fans who were doing little home-streaming stations and would have been shut down if the initially proposed fees had stuck. (I haven't kept up with how those rates have changed over the years.)

And if I understand correctly, artists are earning money for Pandora plays even when the listener already owns the track - which is just how it would work in the pre-digital world. I buy an Ani DiFranco album; Ani gets (both performer and publisher) money. I hear a track from that album on the radio: Ani gets additional publisher money. I hear another track from that album on Pandora: Ani gets still more publisher money.

I love music. (I even make music.) I started a little indie record label because I wanted to get money into the pockets of artists making music I loved.

But I don't think conflating listens with sales helps us understand the flow of money in the music business, or how that flow compares with how things used to be.
posted by kristi at 3:04 PM on November 15, 2012 [4 favorites]

Something's gotta change, and it ain't gonna be me, or the millions of others who expect access to all of the world's music instantaneously, for a reasonable monthly fee. Once we've had a taste of something like that, you can't take it away. This is the new reality.

I seem to be seeing this kind of consumerist entitlement more and more recently that totally misreads the power balance in these situations. Your attitude reminds me of everyone who was all like "Why can't I buy episodes of Game of Thrones a la carte? You're forcing me to steal!", in that it's a perfectly reasonable-sounding argument that nevertheless is grounded in a fundamentally wrong assumption about consumerism: that your willingness to pay somehow entitles you to a voice in what (and how, and for how much) you get to buy. You pay for access to spotify but you are not paying for spotify. Your little $10 is nothing to them, and its clearly even less to the artists you're listening to. The real game being played, whether with exclusivity agreements or cable bundling or the gigantic radioactive capital-pit that is Spotify, has nothing to do with you and does not depend on your financial input in any way.
posted by anazgnos at 3:08 PM on November 15, 2012 [5 favorites]

What I'm saying is this : once you've given people something as incredible and awesome as Spotify or Pandora, there's no going back. Having instant access to all the world's music is a fucking crowning achievement of civilization. We will eventually wind up with a fully-legitimate service that provides this. Spotify and Pandora seem pretty close, and I hope they succeed. But if they don't, other services will. This is what people want. Where are all the people out there saying, "please give me less music for more money"? You won't find them, because they don't exist.

Here's something, instead of crying in your beer for has-beens who can no longer profit from the system that served them well in their youth, how about being happy for all the artists who never would have been discovered were it not for streaming services? Nearly every band I listen to now -- whole genres of music -- I was introduced to via Pandora and then explored thoroughly through Grooveshark or Spotify. (although I ceased using Grooveshark once Spotify became available) And these are bands I pay to see in concert. Whenever possible.
posted by Afroblanco at 3:17 PM on November 15, 2012 [1 favorite]

Here's something, instead of crying in your beer for has-beens who can no longer profit from the system that served them well in their youth, how about being happy for all the artists who never would have been discovered were it not for streaming services?

Artists who will have the opportunity to become has-beens more quickly than their forebears could ever have dreamed
posted by anazgnos at 3:19 PM on November 15, 2012 [2 favorites]

We still buy physical CDs occasionally, but I stopped pirating music a few years ago and have deleted nearly all music off of my hard drives (except for some truly rare vinyl rips from my torrenting days). I have a paid subscriptiong to Spotify. It (almost) never fails to deliver for me, and it helps me discover new stuff. Streaming really is the future.
posted by Doleful Creature at 3:24 PM on November 15, 2012

I'll just suggest again what I first suggested 15 years ago. The great majority of listeners to new music listen to a particular genre. Indie musicians could join up in a group to create a genre website "label" completely under their control.

They'd pay someone X percent to design and maintain their - the group's - website. Apart from live performances, the bulk of their music would be available and sold exclusively at that website. As a group they could gain the power to completely control the terms of licenses to aggregators.

Such concentrations are a way that musicians - mammals - can over time, wrest power from the reptilian institutions - the "old boss" - that were created to feed on them until forever. Else they'll have to hope for a mass extinction.
posted by Twang at 3:29 PM on November 15, 2012 [1 favorite]

So, people like me listen to their music, but they don't like it, because they can't raise the rates on us?

Well, screw them. I'll be damned if I give those bastards my 1/22000ths of a penny ever again!
posted by markkraft at 3:32 PM on November 15, 2012

I was in the radio business in the '70s and '80s. The labels gave EVERYTHING away to the radio stations (including extra copies of the vinyl that employees took home or resold) and the artists got ZERO for airplay. It was all about "promoting to sell" - "free advertising". ASCAP and BMI made sure songwriters got something, but it wasn't much (something for John and Paul, not for Ringo). It was and still is a stupid business model.

Let's see... a major Top 40 station had an average 10,000 listeners at any time, played one of the top 10 songs four times an hour, that's each song once every 2 1/2 hours or almost 10 times a day. That's 100,000 "streams" a day. Income: ZILCH.

At least Pandora and Spotify are paying SOMETHING.
posted by oneswellfoop at 3:35 PM on November 15, 2012 [3 favorites]

oneswellfoop, the problem is that for a lot of people, Pandora and Spotify completely replace their use case for buying music. If you can get the exact song/album you want (or in the case of Pandora, a "station" that matches what you want at that moment with much greater success than an FM radio station would) you're probably not going to need to buy as much music. FM radio being the "free samples" to get people hooked on LPs and CDs made sense, but Pandora and Spotify aren't really moving the product the way musicians were hoping they would.
posted by tonycpsu at 3:41 PM on November 15, 2012 [1 favorite]

Criticizing the delivery mechanism is the wrong angle to take here. All of us are probably savvy enough to download an album at FLAC quality for free in under five minutes, if our internet is fast enough.

I think the danger is the false cover that Spotify gives to those who want to use a legitimate service that pays artists, rather than one that gives them next to nothing.

I think a lot of folks don't buy albums nowadays because it's easy, they buy them because they want the artist to get a few bucks.
posted by Vhanudux at 3:43 PM on November 15, 2012 [3 favorites]

The problem with the business model isn't that you're giving something away for free. The people listening to it can steal it if they want, so there's no way of stopping that.

The problem is that you're forced to pay royalties to ASCAP and BMI, and that the owners of the property don't have the right to distribute it in whatever manner they want... or not, if the case may be.

If groups like ASCAP and BMI didn't exist, you would get the creation of radio services, where artists let them play their music, in exchange for a cut of the advertising, for that service linking through to the band's website, to where their music is for sale, etc.
posted by markkraft at 3:46 PM on November 15, 2012

Quoting myself from several years ago:

For people who care to participate in iTunes and Rhapsody and similar services, they are happy to think that what they are doing is financially equivalent to the old model of buying physical product...But it's not; it's far far more financially slanted towards the distributor. It's not just that fewer people are paying for music, it's that the people who are paying for music are paying far less for it, while the people who control the channel are taking a much bigger piece
posted by anazgnos at 3:50 PM on November 15, 2012

Let's see... a major Top 40 station had an average 10,000 listeners at any time, played one of the top 10 songs four times an hour, that's each song once every 2 1/2 hours or almost 10 times a day. That's 100,000 "streams" a day. Income: ZILCH.

At least Pandora and Spotify are paying SOMETHING.

These arguments go back to the beginning of commercial radio. The problem with digital media is that "streaming" replaces the sale of albums, both in the sense that it opens the door to digital copies of the stream and, with the inevitable ubiquity of bandwith in all locations, the difference between streaming and listening becomes moot if you can stream a track on demand. So, the relationship between "Album Oriented Rock" and radio is broken in the digital world.

AOR is an economic model more than a cultural mode. Because we attach so much personal significance to our cultural purchases, I think this that it's tough for people to realize that something like The Beatles are actually an economic phenomena driven by the commoditization of culture. The extreme popularity of The Beatles are to culture what Google stock is to the tech stock bubble: irrational exuberance driven by bubble mentality built on false scarcity. Everyone clings to the subjective experience but the market moves on creating new "hit music."

One of the enduring ironies of the lefty "folk music" revival was that these artists were some of the first mass market radio stars, at the time when radio was first getting national audiences. Yet people like Pete Seeger imagined themselves part of some leftward leading cultural movement based on a return to traditional modes of culture: hence the horror at Bob Dylan electric concert.

The problems with culture on the internet have little to do with technology and everything to do with economics and politics. Music is just like any commodity, like grain or milk, we like to create economies where the producer (the artist or farmer) price is driven down so that the brokers and other elements of the investor class can maximize their profits.
posted by ennui.bz at 3:52 PM on November 15, 2012 [1 favorite]

"the problem is that for a lot of people, Pandora and Spotify completely replace their use case for buying music."

You can also argue that having a lot of good radio stations available to you online does the same thing. In fact, I would argue it does even better.

That's not a bug, though. That's a feature.

You shouldn't kill other people's "features" -- or other people's hobbies, as streaming radio stations often are -- for the sake of your outdated business model. Rather, you should fix the business model, so that it can make money off of other people's features or hobbies.

Really, it's hard to see how Galaxie 500's argument, if followed to its obvious conclusion, wouldn't make things considerably worse for those individuals who just want to create a small online radio station. They're already paying far too much for their rights to do what they, in all honesty, should be able to do for free as it is.
posted by markkraft at 3:54 PM on November 15, 2012

Pressing 1,000 singles in 1988 gave us the earning potential of more than 13 million streams in 2012.

1. If the songs were played by one radio station into 13,000 radios at once, how much would you get for that? Is that number more than two dollars? Somehow I doubt it.

2. When you pressed those singles back then, were you expecting to make more money than what you sold them for, because, you know, THE FUTURE? Or could it be that you were expecting to make two grand, did, thought that was just fine, but now someone cut you a cheque for two bucks out of the blue, but those two dollars you never expected just isn't enough free money?
posted by Sys Rq at 4:03 PM on November 15, 2012

I feel guilty about downloading so I buy t-shirts from bands I like. That is not a perfect solution but assuages enough of my guilt.
posted by josher71 at 4:08 PM on November 15, 2012 [2 favorites]

1. If the songs were played by one radio station into 13,000 radios at once, how much would you get for that? Is that number more than two dollars? Somehow I doubt it.


This is flawed logic - the point of radio play was to drive album sales. The point of Spotify or Pandora is that you don't have to buy the album anymore.
posted by JPD at 4:16 PM on November 15, 2012 [3 favorites]

The problem with digital media is that "streaming" replaces the sale of albums, both in the sense that it opens the door to digital copies of the stream

You mean like home taping?
posted by Sys Rq at 4:17 PM on November 15, 2012

The entire business model of making music needs to be about making money from performance (a view which I support, with $$). In my mind, it's no different than the argument for open-source software. Pay for software? no thank you. For services rendered? absolutely.


The problem I see with this is, there are lots of types of music that aren't purely performance driven - I mean, for a live garage rock act, sure, but what about studio projects that don't translate well to the live performance? I wonder how much of a stylistic winnowing this may inadvertently create over time...
posted by stenseng at 4:19 PM on November 15, 2012 [2 favorites]

You mean like home taping?

If home taping were 1)high quality and 2)trivially easy for everyone.

Home taping was always an option, but the downside of it was enough that not many people viewed it as a viable outcome. The problem is now that the modern day version of home taping is easy and works really well.
posted by JPD at 4:19 PM on November 15, 2012

Malor: "It doesn't matter whether you like this or not. This is the hard physical reality of the post-Internet world. Copies are worthless. Adapt, or die."

1997 WIRED called - it wants it's editorial back.
posted by symbioid at 4:23 PM on November 15, 2012 [11 favorites]

I mean, for a live garage rock act, sure, but what about studio projects that don't translate well to the live performance?

Another parallel is...what about kids who don't have trust funds and live in Williamsburg?
posted by anazgnos at 4:41 PM on November 15, 2012

It seems like, as others have pretty much said, that Pandora and Spotify are really *replacements* for buying albums, tapes, vinyl, downloads, etc (although they may in fact replace that purchase/consumption) but in fact are just REALLY good radio stations. This is a useful way of thinking about it to me. I do buy music, and I do stream from Pandora and Spotify occasionally, and I do download music. I also listen to a lot of other (via internet) radio - podcasts, archived programs, downloaded mixes, mixclouds, soundclouds, etc, and streaming from those and other services seems in line with this activity.
posted by J0 at 5:00 PM on November 15, 2012

If you pay for it, Spotify streams at 320kbps using the Ogg Vorbis codec, pretty much as high quality as you can get without lossless encoding.

Huh. If you don't pay for it, on the other hand, Spotify sounds like a NASA transmission. It turned me off so fast I uninstalled the program immediately without a single thought of ever paying them.
posted by stopgap at 5:38 PM on November 15, 2012

And on the subject I just checked the free version of Pandora too. The sound quality is not terrible like Spotify but it is noticeably bad even on a laptop speaker. Listening to this on headphones would be exhausting, and I'm no audio snob. They also say they stream at higher quality if you pay.
posted by stopgap at 5:45 PM on November 15, 2012

Pandora and Spotify are absolutely NOT equal. Pandora is just a high-tech radio station, I cannot listen to a specific album or even a specific track. I listen to a custom radio station that plays artists similar to the one I have specified. No way could Pandora replace purchasing music, any more than current terrestrial radio could.

And count me as another person really curious to know how earnings from Pandora, which I consider to be radio, compares to earnings from traditional terrestrial radio.
posted by inparticularity at 6:19 PM on November 15, 2012

God, Tugboat is the cutest song.
posted by KokuRyu at 6:23 PM on November 15, 2012 [3 favorites]

Tugboat live 1989.
posted by plastic_animals at 6:45 PM on November 15, 2012 [2 favorites]

stenseng: "The problem I see with this is, there are lots of types of music that aren't purely performance driven - I mean, for a live garage rock act, sure, but what about studio projects that don't translate well to the live performance? I wonder how much of a stylistic winnowing this may inadvertently create over time..."

Interestingly enough, I think that historically it's been the other way round. Recorded music is a fact of industrial civilization. Before the 20th century, music was inexorably a live phenomenon, and had to strain against its ephemeral nature through texts and written scores which only imperfectly capture the experience of music as it is performed and experienced. But suddenly, around 1900, people began to realize that recording technology allowed them to rip performances from their context and play them over and over again. Over several decades, this realization evolved into a contextual framework of music that included whole genres that were based on music being assembled in a room with the intention of having it distributed as objects containing playable recordings, which objects would be listened to in homes, played over broadcasting radio signals, and (to a lesser but significant extent) played for listening crowds at parties and dances.

It's hard to overemphasize how much this changed music as we experience it. It's a theme that came up over and over and over again, from New Orleans trumpeters being scared that recordings would allow people to steal their tricks to live bands in the 1970s being angry that disco was putting them out of work. It's part of the fundamental character of 20th century music. As such, there are a lot of people among us who have loved that experience of music and who have very strong words about the changing of the guard that's happening now - for example, Elvis Costello has had a lot to say about it. They see great value in this system which, to some debatable but real degree, became a sort of automated patronage machine which funded artists who were willing to chase greatness in the form of popular renown. To see that machine finally fall apart after it has flourished for decades would be a tragedy to them, regardless of how many injustices may have accreted around its foundations.

Whatever has happened over the past hundred years, before 1900 music was fundamentally and quite naturally centered around performance in a live setting.

What I think we face now is a change in studio-driven recorded music and the contexts within which it is produced. There was a time when this kind of music was centered around a huge industrial effort to produce the physical object - contracts signed so that labels would put up the money for studio time and then for promotion so that the objects would be purchased once produced. Now, increasingly, this is something anyone can do in a living room, and distribute to millions with no overhead beyond time spent in the effort. I think you're right there - that change in context certainly shifts everything. Those who have a connection, monetary or sentimental, to a world where great bands release huge records designed to vie for the attention of a record-buying public and achieve hit status are naturally very upset by the shift.

But it clearly doesn't mean that this particular variety of music - music assembled in a room and intended not as a recreation of a performance but as a recording to be listened to - will simply cease to exist. It will become smaller and more commonplace, and its forms may evolve a bit more in other directions, but it won't go away. I think we already see something like this in dance music, where individuals release music they created independently, at minimal cost, via small labels - and that music becomes a medium for live performance of DJs.
posted by koeselitz at 6:49 PM on November 15, 2012 [3 favorites]

Huh. If you don't pay for it, on the other hand, Spotify sounds like a NASA transmission. It turned me off so fast I uninstalled the program immediately without a single thought of ever paying them.
posted by stopgap at 2:38 PM on November 15 [+] [!]


And on the subject I just checked the free version of Pandora too. The sound quality is not terrible like Spotify but it is noticeably bad even on a laptop speaker. Listening to this on headphones would be exhausting, and I'm no audio snob. They also say they stream at higher quality if you pay.
posted by stopgap at 2:45 PM on November 15 [+] [!]

Bolded unconvincing bit.
posted by Sebmojo at 7:09 PM on November 15, 2012

The LP profit calculation is wrong. The only costs factored in are the manufacturing costs. We don't know the total number sold, or the the marketing, selling and administrative expenses were not included, nor was average sales price. I bet if we actually had these numbers we would have found that the actual profit form the LP was nil or possibly even a slight loss. If you sell the album at your gig, someone has to work the register. Was it a paid gig and who much did you make after gas and travel. If you sell through retailers then they will take their markup and you have the potential for unsold stock, returns and shipping costs. Don't forget some of the albums will be damaged, some will be given away for promotional purposes or to friends. Once one looks at the variables, it becomes clear that the profits from the LP are illusionary at the scale of a 1000 records.

The other thing to consider would be iTunes or other mp3 sell through from these music services, the increased artist visibility and the marketing and production costs of obtaining plays on these streaming services. Those are all potential profit drivers which would impact artist income, beyond the old model.
posted by humanfont at 7:28 PM on November 15, 2012

1000 singles are (or at least were) easily sold off at gigs for a band with any kind of popularity. Whoever works the door can sell the discs. Potential retailers can buy their own copies, so there are no unsold stock returns. You can give some away to radio for promos if you like. Petrol costs, etc., have nothing to do with it — you are doing the goddam gig anyway.

I don't think you have the first idea about how this market works.
posted by Wolof at 7:54 PM on November 15, 2012 [1 favorite]

Damon Krukowski was interviewed on Marketplace today about the article.

It seems to me that being on Spotify and Pandora is probably good for big-name artists at the head of the power law distribution (who probably get enough plays that the royalties are significant) and no-name artists at the end of the tail (who should be happy about the free distribution and publicity) but for artists somewhere in between (I'd put Galaxie 500 in that category) they're not really going to get the benefits from the publicity or the meager earnings from a few thousand plays a month.
posted by tonycpsu at 8:17 PM on November 15, 2012 [1 favorite]

for artists somewhere in between (I'd put Galaxie 500 in that category) they're not really going to get the benefits from the publicity

Ironically, I just realized that I have only ever heard Galaxie 500 because of Spotify; I remember hearing about them when they were still a going concern, but never had any way to try out their music without buying an album I might well hate or going to a show by myself. I decided a couple of months ago, though, that I should see if I'd been missing anything. Turns out I really like them! And now if Damon & Naomi tours again, I'll make sure to go see them.
posted by asterix at 8:37 PM on November 15, 2012 [1 favorite]

tonycpsu, I think the relative size (and success) of the artist is a pretty big factor. I also think the real issue (other than the fact that services like Spotify and Pandora are just really about money the way Damon Krukowski outlined) is the role of the label. Record labels, particularly the majors, have made their money from streaming, but the artists are getting left out. Now, thanks to technology and the internet, bands don't really need labels like they did 20 years ago. The problem is, it's damn near impossible for most bands to negotiate with the services directly, so they need a middle man who will gouge them. I would love for way the money is divided to be more transparent, but I'm not holding my breath because I can't imagine that would look good for anybody.

What does it mean for the casual listener/consumer? The services won't have everything and the costs are low, and it's convenient. I get it, I really do.

But I also get why artists might be steamed that people are getting rich packaging their work, yet they receive a very little money. The democratization of music online is sort of a Pandora's box. (Pun intended.) More people are listening to their music, which is awesome! But they need to get paid to be able to afford to make more and tour and keep it going.

I say this as somebody who uses their MOG subscription daily. (I can't stand Pandora, but that's because they didn't pass my Hi-Fives test when I tried it our years ago.) I feel guilty as hell about it though, and assuage that guilt by buying lots of records and going to shows and buying merch. The good thing is though, that often I can listen to albums I bought on vinyl but am too lazy to use the download codes to get the mp3s. The bad thing is that I do discover lots of bands that I become infatuated with, and then buy their records.
posted by kendrak at 8:52 PM on November 15, 2012

I still have my Luna "Bewitched" CD from all those years ago. So sublime.
posted by KokuRyu at 9:22 PM on November 15, 2012

Without Spotify, I don't think I could have learned to appreciate technical death metal, and I my life would be poorer, quieter, and dumber for that.
posted by palmcorder_yajna at 12:11 AM on November 16, 2012 [1 favorite]

I seem to be seeing this kind of consumerist entitlement more and more recently that totally misreads the power balance in these situations. Your attitude reminds me of everyone who was all like "Why can't I buy episodes of Game of Thrones a la carte? You're forcing me to steal!", in that it's a perfectly reasonable-sounding argument that nevertheless is grounded in a fundamentally wrong assumption about consumerism: that your willingness to pay somehow entitles you to a voice in what (and how, and for how much) you get to buy.

On the other hand, you don't get to bitch as a seller that nobody is buying your product if all your customers are telling you they want it a different way.

Just because your business model relies on customers coughing up money for a particular product in a particular way, places no obligation on those customers to oblige, especially when you have competitors who are giving them what they want. In short, you have no right to make money, only a right to attempt to do so.

Customers equally have the right to tell you 'you're doing it wrong, you're not getting my money', and if you ignore them, the onus is not on them to change to oblige you.

I can't buy Game of Thrones in the UK except by waiting a year for drastically overpriced DVDs - which also have unskippable ads at the front, including the one telling me not to steal a policeman's helmet DVD - on the DVD that I just paid for. I can alternatively pay an extortionate amount of money to the Murdoch empire and watch them live on satellite with a bucket load of ads, or pay an even more extortionate sum and be able to record them to watch them later plus ads.

Neither of those business models is attractive to me. I have plenty of alternative things to watch for free (on the BBC, thank you), or indeed read. No matter what, the producers aren't getting my money, because they don't care enough to offer a method that a) doesn't suck, and b) isn't hilariously overpriced.

Whether I pirate them or not, or get copies from a friend who recorded them, or watch them at a friends, or any of the other ways I could get them in a way more to my choosing or not even watch them at all is immaterial to this argument.

You'll say I'm acting in an unjustly entitled manner for wanting it my way or not at all. Well, fine. But as a business, they're acting entitled to my money, and they can stick that entitlement up their fundamental market-based transaction if they don't like it.
posted by ArkhanJG at 12:17 AM on November 16, 2012

What's ironic is I just got back from seeing Tame Impala -- a band I first heard on Pandora and got to know on Spotify. I can't imagine they've gotten much play on any radio station anywhere. And yet, tonight they sold out the Fillmore, and over the summer, they played the main stage at Outside Lands.

(mentally adding up the money I spend annually on concert tickets)

Pretty sure the streaming services work out as a net win for the musicians -- in my case, anyways.
posted by Afroblanco at 1:22 AM on November 16, 2012

(the show, btw, was blisteringly, mind-meltingly incredible. holy shit!)
posted by Afroblanco at 1:23 AM on November 16, 2012 [1 favorite]

So would it be possible to have a viable "artist owned" equivalent to Spotify?
- The service charges listeners $10 a month to subscribe.
- To cover overheads it also charges musicians $10 a month to host their music
- Subscribers get to hear a wide range of music - whether made by subscribing musicians or not.
- If a subscribing musician's music gets played then they get a royalty.
- Non subscribing musicians get paid a lesser royalty.

I am not sure that anybody would get rich - but at least there would not be a balloon of speculative capital being inflated in the middle.
posted by rongorongo at 2:28 AM on November 16, 2012

This is less about music in particular and more about streaming in general, but why is everyone assuming that widely accessible streaming is the future, rather than an aberration that the forces who control production are desperately trying to shut down?

Won't strict usage based billing kill streaming in all its forms pretty much instantly, when it is widely implemented? I guess I'm just pessimistic and assume that it's widespread adoption is inevitable and imminent.
posted by hughbot at 5:16 AM on November 16, 2012

Customers equally have the right to tell you 'you're doing it wrong, you're not getting my money', and if you ignore them, the onus is not on them to change to oblige you.
...
You'll say I'm acting in an unjustly entitled manner for wanting it my way or not at all. Well, fine. But as a business, they're acting entitled to my money, and they can stick that entitlement up their fundamental market-based transaction if they don't like it.

Right but again you're thinking there's somehow a 1:1 relationship between "you" (or the body of people who think like you) and "the company", that there is a dialogue merely by dint of your willingness to pay for "something". The big money HBO makes comes from tightly controlling access to their content so they can leverage when they package it to other systems or channels or distribution streams and that would seem to dwarf the part where they merely "sell content to consumers". All you're saying to them is "I am not your customer and do not wish to be your customer, do not listen to me".

You're assuming that there is a level of popular outrage that would somehow make HBO rethink their entire system and just "compete fairly in the marketplace", rather than controlling it to such a degree that they dictate the terms. I don't know that this is true. I guess it's not impossible but I wouldn't count on it.
posted by anazgnos at 7:07 AM on November 16, 2012

What's ironic is I just got back from seeing Tame Impala -- a band I first heard on Pandora and got to know on Spotify. I can't imagine they've gotten much play on any radio station anywhere.

I first heard them a few years ago on KCRW. Over the air!

Are you familiar with Dungen, Afroblanco? Tame Impala is alright, but they swiped a lot of their deal from those guys.
posted by anazgnos at 7:11 AM on November 16, 2012 [1 favorite]

Afroblanco: “What's ironic is I just got back from seeing Tame Impala -- a band I first heard on Pandora and got to know on Spotify. I can't imagine they've gotten much play on any radio station anywhere. And yet, tonight they sold out the Fillmore, and over the summer, they played the main stage at Outside Lands.”

As I recall, Tame Impala was excoriated here on Metafilter some years ago for an admittedly piss-poor rendition of Marlena Shaw's "Woman Of The Ghetto" (which is, er, not exactly the kind of song you expect a group of white Aussie guys to do.) I think maybe they were covering a techno remix, actually. Anyway – that is everything I know about Tame Impala.
posted by koeselitz at 7:50 AM on November 16, 2012

Yep. Link is dead, sadly. I would've taken it down if I were them, too. I imagine they've done much better work; some nights a band is just off, is the thing.
posted by koeselitz at 7:54 AM on November 16, 2012

The entire business model of making music needs to be about making money from performance (a view which I support, with $$). In my mind, it's no different than the argument for open-source software. Pay for software? no thank you. For services rendered? absolutely.

So nothing for song writers? You're gonna end up with Nickelback performing.
posted by mrgrimm at 8:31 AM on November 16, 2012

As I recall, Tame Impala was excoriated here on Metafilter some years ago for an admittedly piss-poor rendition of Marlena Shaw's "Woman Of The Ghetto"

Wait.... are you telling me that, according to Metafilter, my favorite band sucks?

Truly, I shall never recover from this.

;)
posted by Afroblanco at 10:50 AM on November 16, 2012 [1 favorite]

I would pay $20 or even $30 a month for spotify gladly, especially if more money was going to the artists. Being able to drift from artist to artist and genre to genre and sharing playlists and their damn sight better than pandora radio feature has been transformative to me. Somebody figure out how to make it fair for the artists, take my money, you stupids!
posted by Divine_Wino at 5:34 PM on November 16, 2012 [2 favorites]

Word, Divine Rhino. Spotify's my lifeblood at this point. I'd pay up to $50.00 per month without blinking.
posted by palmcorder_yajna at 6:06 PM on November 18, 2012