The purpose of this post is to discuss each social media platform and distribution sites services such as Pandora, Spotify, Google Play Music All Access, Beats Music, YouTube Music Key, SoundCloud and Shazam. A critical analysis on how they differ from each other and why they are important to the independent artist.
The way peoople consume music nowardays has changed dramatically, we all now that. We also now that there are lots of bands and artists out there who are complaining about how online distribution sites are not giving them enough revenue for streaming their work and, mostly, giving away their work for free. We all have read about it or though about it when we realize we have free access to a huge variety of music without expending a single cent.
On the other hand, we also have read stories about independent artists becoming popular or even getting signed by a record label after posting their videos or songs on Social Media platforms. The most well known case is Justin Bieber’s, who became known for covering songs on Youtube in 2007 and then got signed for a major record label and today is one of the biggest music stars worldwide. According to Jan Hoffman of The New York Times, part of Bieber’s appeal stems from his YouTube channel. Long before the November 2009 release of the EP, My World, his YouTube videos attracted millions of views.[i]
There is a huge debate about how music artists get paid from streams as opposed to sales of their music has grown in volume. Let’s analyze both scenarios and she how all these affect the independent artist and whether it’s positive for their careers or not.
- Pandora: is a non interactive service, meaning that it works like tradicional radio where everyone listens to the same music so listeners have no control over the radio content versus the on demand streaming services where users can choose what to listen to. Non interactive digital services do pay royalties to both sonwriters and artists, differing from traditional radio. Internet radio pays either $0.02 per listener per hour or 25 percent of their revenue, whichever is greater (terrestrial radio still pays nothing).[ii]
Pandora reports 200 million subscribers [iii] but is has not yet reached traditional radio numbers, but it is more efficient as it creates a bigger engagement and you can learn more about the artists you are listening to as they have small bios you can access by simply clicking on their links.
- Spotify: Spotify currently boasts 24 million active users [iv] but royalties are the main issue here. Artist get paid 0.4 cents per each song streamed (depending on the deal made with the record label) after digital distributor CDBaby’s 9% cut is factored in.[v] More and more artists are pulling their cathalogues from Spotify and other streaming platforms, the last big one to do it was Taylor Swift joining to the list of superstars such as Beyonce, Coldplay, the Black Keys and Radiohead leader Thom Yorke[vi]. The problem is that as each deal is negotiated between Spotify and the Record Label, so each artist gets a different cut from spotify songs streaming, some artist get less than a half of a cent per play or even nothing.
So it’s pretty obvious that Spotify is not the place to make money but can be a place where you can get unvaluable explosure. It’s definetly a great tool to discover new music so, as an Independent artist is very usefull in terms of getting promotion. Be there but don’t expect to make a living from Spotify revenues. Most profits will come from online music sales such as iTunes sales but not for interactive music streaming services. If people listen to your music and really like it they will show you support, wheather it’s to buy your album or go see you perform live.
Koë Keating, singer and songwritter has a interesting suggestion about how streaming platforms such as Spotify could give listener’s information in exchange os using artist’s music. [vii] I believe this is a great idea as, information is power, if artist have more data about their fans they can create the music they would like to consume, the music they want to pay for.
- Google Play Music All Access: is where musicians can go to create a Google Play store page, set the price on their music and sell direct to users. Artists get 70% of revenue ( they get paid up to $0.045 per play ) and Google gets 30%. You can reach millions of music fans across Google and Android devices.
- Beats Music: is a subscription-based online music streaming service owned by the Beats Electronics division of Apple. It’s an “artist friendly” platform due to the fact that they pay equal to major artist and to indie artist is a big pro for this on demand music streaming service but there is also a negative side of it and that is the fact that they don’t control how those royalties are split between label and artist. Major labels tend to pay the artists about 15% to 20% depending on the individual deals. Many legacy artists get less than half that, while Martin Mills of Beggars Group has confirmed that the label group currently pays its artists 50% of music streaming royalties.[viii] The basic subscription plan allows access to the service on three devices for $9.99 per month, or $99.99 per year.
Another pro is the fact that some tracks appear exclusively in advance in Beats rather than in any other platform.
- YouTube Music Key: owned by Google this music service that alouds to listen to music on youtube without having to watch the video, just like any other music player. You can also dowload videos to use them ofline and having the opportunity of listening to your favourite music on youtube without having any ads disturbing, but of course you have to pay for that as a user. The debate comes when talking about how amany power artist’s mantain while signing a deal with them, as some artist had complained that they are asked to be exclusive to Youtube and can’t have deals with any other Streaming Service despite for promotion, for a period of time.
The ad-free Music Key service will cost $7.99 a month during its beta test period, and $9.99 a month thereafter. This is still not a reality, lets see how it goes.
- SoundCloud is the second biggest streaming music service in the world behind YouTube with more than 175 million monthly listeners. Yet it hasn’t paid royalties to the creators and rightsholders of that music for their plays on its site and apps. To change that, they had change the terms so creators will have advertising shown or played alongside their music (or other audio content), and will get most of the money paid to SoundCloud by that advertiser.It seems like a share of revenues rather than a set per stream payment.
Introducing advertising will be followed in the future by the introduction of a subscription option for SoundCloud listeners, who’ll be able to pay a monthly fee not to encounter the ads.
There is the positive and important step of musicians and songwriters getting paid for streams of their work but on the other, major labels are squeezing the company by taking equity stakes, large “advance” payments and per stream payouts on top that SoundCloud’s advertising income may not be able to keep pace with.
Soundcloud has changed from an underground meeting point for producers and musicians to a place where people discover and listen to music. It still has some things that makes this platform more production-oriented such as the fact that you can find different parts of the songs divided (a track for background vocals, a track with the instrumentals…) so they make it easier for mixers.
- Shazam: Shazam is a media discovery app that “listens” to any song and then “tags” it, displaying the track name and artist/album. It also provides options to download directly from iTunes, and displays data outlining where the band is touring, and even a way to add a song to a playlist and stream it on Rdio. Shazam is the best A&R tool.
54% of the users Shazam songs on TV every week. If a band has a song in a TV show, advert, or a movie they will have literally millions of people ‘Shazaming’ those shows, and naturally, the music used in the show will be tagged. Thats a great way to sell music. They get the fans and drive them to a place where they can buy that music through online distribution sites, in the traditional level of digital distribution. This is a great opportunity for indie artist who should take into consideration while negotiating Synch Deals, adding Shazam logos on the ads will help them to get discovered by fans who are potential music buyers.
In fact, a year ago Shazam was reported to have driven the sale of more than 500,000 downloads of music a day. This amount equates to more than 7% of global digital track sales.
Spotify and Pandora have experimented an explosive growth, the sum of the streamers combined account for less than 10% of the industry, according to a recent IFPI report from February 2013.[ix]
Streaming is starting to cannibalise download sales and it’s understandable that music creators are fretting because they are not taking their piece of the pie.
The challenge is finding the right balance for everyone, both artists, record labels and platforms.
I believe musicians are now living in a new Era where it is being hard to adapt to. The rules of the game has changed and not everyone get the same profit from it but the key is not to reject them but to adapt to them and them to the artist. And on the other hand, artists have to understand that it’s no longer about selling records it’s mainly about other things such as touring or merch sales. There is where profit is now and they for that they are in need for the streaming services and social media platforms massive exposure.
[ii] Geoff Duncan, (July 15, 2013). “Why is Tom Yorke pulling his music from Spotify? In a word: Royalties”. Digitaltrends.com
[iii] Geoff Duncan, (July 15, 2013). “Why is Tom Yorke pulling his music from Spotify? In a word: Royalties”. Digitaltrends.com
[iv] Geoff Duncan, (July 15, 2013). “Why is Tom Yorke pulling his music from Spotify? In a word: Royalties”. Digitaltrends.com
[v] Dredge, Stuart (August 19, 2013). “Streaming music payments: how much do artist really receive?”. The Guardian
[vi] Ryan Faughnder & Todd Martens (March 4, 2015). “YouTube brings its huge fan base to music streaming”. Los Angeles Times.
[vii] Dredge, Stuart (August 19, 2013). “Streaming music payments: how much do artist really receive?”. The Guardian