Aretha Franklin may have demanded a little "R-E-S-P-E-C-T" in her 1967 smash hit, but without the passage of a Congressional Bill to federally protect recordings released prior to 1972, her signature song may not get the respect it deserves.
The Respecting Senior Performers as Essential Cultural Treasures Act, or RESPECT Act, was a bipartisan bill introduced by Rep. George Holding (R-NC) and Rep. John Conyers (D-MI) last May in response to the fact that songs recorded prior to February 15, 1972, have very limited protections under current U.S. copyright law. The bill died after being sent to languish in a committee until the 113th Congress adjourned, though it has the potential to rear back with the advent of the 114th Congress.
What does this mean for digital streaming service? Well, currently, streaming services - most notably Pandora - can play pre-1972 music with virtually no royalties to their artists. The passage of this bill would cause the expenses of Pandora, Sirius XM Radio, and others to exacerbate - some speculate this could spell an untimely demise for these streaming services in general.
"In order for these artists to receive the respect they deserve, their recordings need to be granted full federal protection. Full federalization would allow these artists to recapture the rights to their songs, many of which are extremely valuable, from their record labels, and exploit the full range of rights given to the owner of a copyrighted work," says a column by Griffin Davis in the Music Business Journal.
Although the rights of these artists are not protected federally, artists have relied on state laws to protect their craft from exploitation. A lawsuit by the members of the Turtles band (known best for the song "Happy Together") filed against Sirius XM resulted in a victory for the band, assuring that its members will be paid for covers of its pre-1972 performances. Though Sirius XM will undoubtedly appeal, if the court's decision is upheld than this can establish a sweeping precedent for other artists.
"As we move forward it is important to remember that these artists deserve more than a stopgap, they deserve respect, and protection that is equitable to that given to those who came after them," writes Berklee College of Music's Music Business Journal.
Before reading about this bill, I never knew that some of my favorite artists - the Beatles, the Beach Boys, and yes, my girl Aretha Franklin - weren't afforded the same rights as contemporary musicians. Though the RESPECT Act means that streaming services will have to shoulder considerably heftier costs, I find that the fact that a loophole renders some music ineligible for federal protection absolutely ludicrous.
These are the artists that paved the way for future musicians, and their work has withstood the test of time even in the digital age. The RESPECT Act ensures that all artists from the golden oldies are afforded with just that: respect. And, just as important, royalties.
Artist Progress, Pre-1972. (n.d.). Retrieved January 8, 2015, from http://www.thembj.org/2014/10/masters-pre-1972/
Friday, January 9, 2015
Wednesday, December 17, 2014
Week Four: Quincy Jones on streaming - 'The genie is not going back in the bottle'
Admittedly, my last few posts have ragged on streaming in the music industry. I've tackled everything from its adverse effect on the environment to its propensity to massively underpay its member artists. So this week its time for a change in tune (pun intended).
Because streaming is not without its defenders. In fact, legendary musician and 27-time Grammy winner Quincy Jones counts himself among them.
Through Facebook, the 81 year-old showed that he can get with the times by releasing a statement supporting streaming's rise in the music industry.
"I'm proud to support my partners at Spotify at this crucial moment in their growth. Spotify is not the enemy; piracy is the enemy. Spotify is paying out 70% of their revenue to musicians and rightsholders," Jones posted, accruing almost 850,000 likes on his status.
Which begs the question - is that 70 percent enough to support artists? I've already found some evidence to the contrary in a previous post, but here's another disconcerting figure: the most streamed song in Spotify history, EDM artist Avicii's "Wake Me Up" (yes, disappointingly enough), was played over 168 million times on the service. It netted a grand total of $4,000 for vocalist and co-writer Aloe Blacc.
"If that’s what’s now considered a streaming ‘success story,’ is it any wonder that so many songwriters are now struggling to make ends meet?" lamented Blacc.
But Jones finds that artists should embrace what he considers the irreversible tide of digital streaming. He said he would have definitely distributed his work through the service, which includes "Thriller," the most sold album of all time with 65 million copies sold worldwide.
"If I had to release Thriller today, you can be sure I'd want it on Spotify. The genie is not going back in the bottle friends; let's work together to find solutions to the music industry's problems," he continued in his post.
Convinced? I'm not entirely sure I am. Okay, okay - I know I promised this blog entry wouldn't rag on streaming this time around, though inevitably it has reached that point. But hear me out.
Spotify has an abysmal pay scale for its artists, paying $.006 to $.0084 for each play ($600 and $840 per 100,000 plays). Just to make minimum wage, an artist would need 4,053,110 plays per month.
To put it into perspective, here is a very helpful graph courtesy of The Atlantic.
La Rosa, D. (n.d.). Quincy Jones: “Spotify is not the enemy”. Retrieved December 17, 2014, from http://thejazzline.com/news/2014/11/quincy-jones-defends-Spotify/
Because streaming is not without its defenders. In fact, legendary musician and 27-time Grammy winner Quincy Jones counts himself among them.
Through Facebook, the 81 year-old showed that he can get with the times by releasing a statement supporting streaming's rise in the music industry.
"I'm proud to support my partners at Spotify at this crucial moment in their growth. Spotify is not the enemy; piracy is the enemy. Spotify is paying out 70% of their revenue to musicians and rightsholders," Jones posted, accruing almost 850,000 likes on his status.
Which begs the question - is that 70 percent enough to support artists? I've already found some evidence to the contrary in a previous post, but here's another disconcerting figure: the most streamed song in Spotify history, EDM artist Avicii's "Wake Me Up" (yes, disappointingly enough), was played over 168 million times on the service. It netted a grand total of $4,000 for vocalist and co-writer Aloe Blacc.
"If that’s what’s now considered a streaming ‘success story,’ is it any wonder that so many songwriters are now struggling to make ends meet?" lamented Blacc.
But Jones finds that artists should embrace what he considers the irreversible tide of digital streaming. He said he would have definitely distributed his work through the service, which includes "Thriller," the most sold album of all time with 65 million copies sold worldwide.
"If I had to release Thriller today, you can be sure I'd want it on Spotify. The genie is not going back in the bottle friends; let's work together to find solutions to the music industry's problems," he continued in his post.
Convinced? I'm not entirely sure I am. Okay, okay - I know I promised this blog entry wouldn't rag on streaming this time around, though inevitably it has reached that point. But hear me out.
Spotify has an abysmal pay scale for its artists, paying $.006 to $.0084 for each play ($600 and $840 per 100,000 plays). Just to make minimum wage, an artist would need 4,053,110 plays per month.
To put it into perspective, here is a very helpful graph courtesy of The Atlantic.
Yikes. That is tremendously daunting, even for the most intrepid musician. And it's also enough for me to heartily disagree with Quincy Jones, despite my full-fledged appreciation for his production of Michael Jackson's albums.
Before artists fully embrace Spotify and other streaming services, as Jones is advocating, they need to consider further negotiations regarding their pay. Their cut does not represent the efforts they put into their craft, and until something changes, musicians have every right to eye streaming services with suspicion.
La Rosa, D. (n.d.). Quincy Jones: “Spotify is not the enemy”. Retrieved December 17, 2014, from http://thejazzline.com/news/2014/11/quincy-jones-defends-Spotify/
Friday, December 12, 2014
Week Three: Another unintended victim of streaming services - Mother Nature
Mother Nature has never dropped any albums, produced any singles or dominated any Billboard charts. But she, too, is not exempt from the repercussions of online streaming in the music industry.
Few people consider just how environmentally damaging online streaming is, especially since the digital transfers take place exclusively online. A report by Norwegian engineer Dagfinn Bach, however, found that streaming an album required 27 times the energy of producing and distributing a CD to a consumer.
This, as Bach said, runs contrary to the popular misconception that digitalization will curb the environmental footprint. "An expected by-product of digital growth has always been a decrease in the perceived heavy environmental cost associated with physical products," he said in a report commissioned by MusicTank. "Depending on how you listen, CDs may be the environmentally sensitive choice."
So what's to blame for this massive use of energy?
Well, streaming services are housed in data centers, enormous storehouses of storage systems which look to my untrained eye like dozens of giant black refrigerators with poking wire jutting out from their maws.
These data centers, according to a New York Times report, always run at maximum output, regardless of consumer demand. This means that 90 percent of the electricity sourced from the power grid is wasted - and that doesn't take into account the "diesel-guzzling backup generators to guard against power failure... [which] are frequently cited for violating clean air regulations."
And these data centers constitute no small part of energy emissions - information centers such as the ones which house streaming data account for 10 percent of the world's electricity, most of which is generated by burning coal, a devastatingly harmful pollutant.
What's most disconcerting to me is that I, much like the majority of the public, assumed that streaming was a far more ecologically sustainable method of music consumption. But I unwittingly have been an accomplice in the environmental degradation of the planet as a result of my penchant for streaming music.
The key, of course, is to educate consumers about the environmental consequences of streaming, though I'm sure that at first these revelation will at first be met with a tidal wave of apathy. However, I think that if activists launch an effective enough campaign, streaming services will cave into pressure and start lowering their electrical output to match demand.
Though access to music should be a fundamental experience for everyone, I don't believe it should come at the expense of the planet. Streaming services have known to skimp artists on their earnings, but the buck stops at swindling Mother Nature of her keep.
Barnes, T. (n.d.). The One Thing Everyone Is Missing About Streaming Music. Retrieved December 11, 2014, from http://mic.com/articles/104716/the-one-thing-everyone-is-missing-about-streaming-music
Few people consider just how environmentally damaging online streaming is, especially since the digital transfers take place exclusively online. A report by Norwegian engineer Dagfinn Bach, however, found that streaming an album required 27 times the energy of producing and distributing a CD to a consumer.
This, as Bach said, runs contrary to the popular misconception that digitalization will curb the environmental footprint. "An expected by-product of digital growth has always been a decrease in the perceived heavy environmental cost associated with physical products," he said in a report commissioned by MusicTank. "Depending on how you listen, CDs may be the environmentally sensitive choice."
So what's to blame for this massive use of energy?
Well, streaming services are housed in data centers, enormous storehouses of storage systems which look to my untrained eye like dozens of giant black refrigerators with poking wire jutting out from their maws.
These data centers, according to a New York Times report, always run at maximum output, regardless of consumer demand. This means that 90 percent of the electricity sourced from the power grid is wasted - and that doesn't take into account the "diesel-guzzling backup generators to guard against power failure... [which] are frequently cited for violating clean air regulations."
And these data centers constitute no small part of energy emissions - information centers such as the ones which house streaming data account for 10 percent of the world's electricity, most of which is generated by burning coal, a devastatingly harmful pollutant.
What's most disconcerting to me is that I, much like the majority of the public, assumed that streaming was a far more ecologically sustainable method of music consumption. But I unwittingly have been an accomplice in the environmental degradation of the planet as a result of my penchant for streaming music.
The key, of course, is to educate consumers about the environmental consequences of streaming, though I'm sure that at first these revelation will at first be met with a tidal wave of apathy. However, I think that if activists launch an effective enough campaign, streaming services will cave into pressure and start lowering their electrical output to match demand.
Though access to music should be a fundamental experience for everyone, I don't believe it should come at the expense of the planet. Streaming services have known to skimp artists on their earnings, but the buck stops at swindling Mother Nature of her keep.
Barnes, T. (n.d.). The One Thing Everyone Is Missing About Streaming Music. Retrieved December 11, 2014, from http://mic.com/articles/104716/the-one-thing-everyone-is-missing-about-streaming-music
Friday, December 5, 2014
Week Two: Jazz, indie genres may be unexpected casulaties of streaming
With musicians' album sales cut close enough to kiss this year ( in fact, only one artist hit the coveted one million sales needed to go platinum ), its little wonder many in the "biz" lament the impending doom of the music industry. But according to one musician, indie artists in particular have cause for concern: the advent of web streaming may just render them extinct.
The transition of Marc Ribot's self-described "free/punk/funk/experimental/psychedelic/post electronica" band, Ceramic Dog, into web streaming service Spotify netted a grand total of 112.80 euros in Europe and $47.12 in the US. Their album, "Your Turn," took a whopping $15,000 to produce.
You don't need to be a financial consultant to realize that this is over 14 grand shy of turning a profit. Now the question begs: did Ribot just catch a bad break, or does he represent the fate that will befall other indie artists?
Well, according to Ribot, it just might be both. "Now, maybe the market knows best, and the world is in fact better off without artists like me. I make no claims for my own work, but people need to understand what that means for the culture... If the type of music I make is no longer sustainable, you can kiss most jazz, classical, folk, experimental, and a whole lot of indie bands goodbye."
According to Ribot, while indie artists constitute 90 percent of working musicians, they represent only 38 percent of the total market share. Already representing an embattled economic front, their line of work is "just not sustainable" in the new digitized realm of streaming services.
My interest was originally piqued by this article because it proposed an unexpected consequence of the music streaming industry that I had never really stopped to contemplate. But upon further reflection, I can't say that I harbor the same doomsday sentiments as Ribot.
For one thing, the vast majority of musicians realize they cannot make a living based on their art alone. That still doesn't prevent many from doggedly pursuing their dreams, or even producing music as a fulfilling hobby. There will always be appreciative pockets of people who, irked by the homogeneity of the mainstream music selection, will seek refuge in jazz, folk, and indie genres.
In fact, Spotify, while probably not financially lucrative for musicians, provides another essential service - exposure. For many indie artists, this will be an opportunity to get their name out there and snag audiences across the world.
While it's no way to make a living, Spotify sure won't strike the indie genre dead. Rather than reduce musical subcultures to extinction, it might actually help to boost the exposure of little-know indie artists and revitalize the selection of music available to listeners.
Ribot, M. (2014, November 6). Is Streaming Good for Musicians? Retrieved December 4, 2014, from http://www.nytimes.com/roomfordebate/2014/11/06/is-streaming-good-for-musicians
The transition of Marc Ribot's self-described "free/punk/funk/experimental/psychedelic/post electronica" band, Ceramic Dog, into web streaming service Spotify netted a grand total of 112.80 euros in Europe and $47.12 in the US. Their album, "Your Turn," took a whopping $15,000 to produce.
You don't need to be a financial consultant to realize that this is over 14 grand shy of turning a profit. Now the question begs: did Ribot just catch a bad break, or does he represent the fate that will befall other indie artists?
Well, according to Ribot, it just might be both. "Now, maybe the market knows best, and the world is in fact better off without artists like me. I make no claims for my own work, but people need to understand what that means for the culture... If the type of music I make is no longer sustainable, you can kiss most jazz, classical, folk, experimental, and a whole lot of indie bands goodbye."
According to Ribot, while indie artists constitute 90 percent of working musicians, they represent only 38 percent of the total market share. Already representing an embattled economic front, their line of work is "just not sustainable" in the new digitized realm of streaming services.
My interest was originally piqued by this article because it proposed an unexpected consequence of the music streaming industry that I had never really stopped to contemplate. But upon further reflection, I can't say that I harbor the same doomsday sentiments as Ribot.
For one thing, the vast majority of musicians realize they cannot make a living based on their art alone. That still doesn't prevent many from doggedly pursuing their dreams, or even producing music as a fulfilling hobby. There will always be appreciative pockets of people who, irked by the homogeneity of the mainstream music selection, will seek refuge in jazz, folk, and indie genres.
In fact, Spotify, while probably not financially lucrative for musicians, provides another essential service - exposure. For many indie artists, this will be an opportunity to get their name out there and snag audiences across the world.
While it's no way to make a living, Spotify sure won't strike the indie genre dead. Rather than reduce musical subcultures to extinction, it might actually help to boost the exposure of little-know indie artists and revitalize the selection of music available to listeners.
Ribot, M. (2014, November 6). Is Streaming Good for Musicians? Retrieved December 4, 2014, from http://www.nytimes.com/roomfordebate/2014/11/06/is-streaming-good-for-musicians
Friday, November 28, 2014
Week One: Taylor Swift's latest feud is not with an ex-boyfriend
Ah, Taylor Swift. Country darling, pop princess, equal parts avowed feminist and hopeless romantic. Oh, and she may or may not have just single-handedly called into question the future of the music industry.
The 24 year-old singer's decision to pull all her songs from web streaming service Spotify underscores the tensions belying the new direction of digital media. Her argument contended that Spotify does not adequately appreciate the value of music as an art form nor its artists, and that people should be willing to pay for her songs.
Spotify is a web streaming service that allows its listeners to "spot" and "identify" (hence the name) new music and to share it with friends via a partnership with Facebook. Creating an account is completely free of charge, though upgrades cost up to $120 per year. Sounds too good to be true, right?
Well, for many artists, it is. Though Spotify claims 70 percent of its revenue goes to record labels (or roughly $1 billion), record labels receive less than a cent for each play. And most of the money funneled to record labels doesn't go to the artist, either.
Take Taylor Swift, for instance. Though Spotify CEO Daniel Ek claims she was set to garner over $6 million from the service this year, Swift said her total for 2013 clocked shy of $500,000. And that's not even the worst of it - pop singer Lady Gaga earned a measly $167 for one million plays of her song "Poker Face" during a five-month period.
So, who's in the right in the Great Swift vs. Spotify feud of 2014? Well, according to the co-chairmen of Rhapsody, a music-streaming service comparable to Spotify, the answer is Team Taylor.
"We think that Spotify’s apparent demand, that all its content be available in both their premium and free tiers, is overly simplistic and will not break the music industry’s decade-plus-long decline. Instead, we believe in a much more comprehensive approach that (a) differentiates between free services like Spotify and paid services like Rhapsody, and (b) is built on concepts like windowing and other ways to deliver value to both consumers and artists," said Jason Epstein and Rob Glaser in a joint statement.
They argue that the business model exemplified by Spotify is "throwing the baby out along with the bath water:" in other words, undervaluing the artist in an effort to make music more accessible to the masses. The solution, they say, is simple: make 90 percent of all new music available only on premium subscriptions or purchase so that artists don't get bamboozled out of their share.
Though their argument is sound (they liken their proposition to the fact that people will continue to go to the movie theater even though they're available on-demand and on TV at a later date), I tend to take a bit more of a cynical view on human nature. Right now Spotify, in my opinion, appeals to people because its free and less morally reprehensible than file-sharing or other illegal practices. But once listeners start to feel a financial squeeze, they will abandon their moral qualms and revert to aforementioned illegal activities, which will prove detrimental to both artists and online streaming sites.
As for right now, I applaud Taylor Swift for standing up to the duplicitous tactics of Spotify, which is clearly not giving artists their money's worth. Little does Spotify know that it has made a formidable opponent, and that it won't be easy to "Shake It Off."
Citation:
Epstein, J., & Glaser, R. (n.d.). Essay: Why Streaming (Done Right) Will Save the Music Business. Retrieved November 29, 2014, from http://www.billboard.com/biz/articles/news/digital-and-mobile/6327433/essay-why-streaming-done-right-will-save-the-music
The 24 year-old singer's decision to pull all her songs from web streaming service Spotify underscores the tensions belying the new direction of digital media. Her argument contended that Spotify does not adequately appreciate the value of music as an art form nor its artists, and that people should be willing to pay for her songs.
Spotify is a web streaming service that allows its listeners to "spot" and "identify" (hence the name) new music and to share it with friends via a partnership with Facebook. Creating an account is completely free of charge, though upgrades cost up to $120 per year. Sounds too good to be true, right?
Well, for many artists, it is. Though Spotify claims 70 percent of its revenue goes to record labels (or roughly $1 billion), record labels receive less than a cent for each play. And most of the money funneled to record labels doesn't go to the artist, either.
Take Taylor Swift, for instance. Though Spotify CEO Daniel Ek claims she was set to garner over $6 million from the service this year, Swift said her total for 2013 clocked shy of $500,000. And that's not even the worst of it - pop singer Lady Gaga earned a measly $167 for one million plays of her song "Poker Face" during a five-month period.
So, who's in the right in the Great Swift vs. Spotify feud of 2014? Well, according to the co-chairmen of Rhapsody, a music-streaming service comparable to Spotify, the answer is Team Taylor.
"We think that Spotify’s apparent demand, that all its content be available in both their premium and free tiers, is overly simplistic and will not break the music industry’s decade-plus-long decline. Instead, we believe in a much more comprehensive approach that (a) differentiates between free services like Spotify and paid services like Rhapsody, and (b) is built on concepts like windowing and other ways to deliver value to both consumers and artists," said Jason Epstein and Rob Glaser in a joint statement.
They argue that the business model exemplified by Spotify is "throwing the baby out along with the bath water:" in other words, undervaluing the artist in an effort to make music more accessible to the masses. The solution, they say, is simple: make 90 percent of all new music available only on premium subscriptions or purchase so that artists don't get bamboozled out of their share.
Though their argument is sound (they liken their proposition to the fact that people will continue to go to the movie theater even though they're available on-demand and on TV at a later date), I tend to take a bit more of a cynical view on human nature. Right now Spotify, in my opinion, appeals to people because its free and less morally reprehensible than file-sharing or other illegal practices. But once listeners start to feel a financial squeeze, they will abandon their moral qualms and revert to aforementioned illegal activities, which will prove detrimental to both artists and online streaming sites.
As for right now, I applaud Taylor Swift for standing up to the duplicitous tactics of Spotify, which is clearly not giving artists their money's worth. Little does Spotify know that it has made a formidable opponent, and that it won't be easy to "Shake It Off."
Citation:
Epstein, J., & Glaser, R. (n.d.). Essay: Why Streaming (Done Right) Will Save the Music Business. Retrieved November 29, 2014, from http://www.billboard.com/biz/articles/news/digital-and-mobile/6327433/essay-why-streaming-done-right-will-save-the-music
Week One: Don Draper needs to marry Britney Spears in order to save the music industry
Like it or not, the advent of the digital age has transformed the media landscape into a skyline of new possibilities - and the none-too-gradual demise of others. It seems as though every industry is teetering on the brink of apocalyptic change: print is dead, radio is on its last throes, traditional television is heaving its final breaths.
Unsurprisingly, the music industry is not exempt from these grim predictions of doomsday. The sale of CDs and MP3 files has flown swiftly south over the past decade, more than halving from 730 million units sold in 2000 to the 326 million (including digitally downloaded albums) sold in 2010. This year also proved devastating for industrial titan Apple as iTunes downloaded music sales plunged 40 percent. What gives? Well, illegal file-sharing is a viable culprit. But perhaps a more formidable foe for the music industry is the advent of online radio - Pandora, Spotify, and other non-broadcast radio - who are luring listeners to their service at the expense of other music platforms. Just last year almost 150 million people tuned in to internet radio, and another 20 million listeners are expected by the end of next year.
According to Paul Goldstein, an audience development executive, these IP-based radios are "fueling an important growth category for the music industry." This growth derives from the big bucks that is brought in by two main sources: subscriptions to the radio and advertising. However, its become apparent that the latter is so much more lucrative than the former; eighty-eight percent of Pandora's revenue is from advertising.
"If artists and labels go on the offensive, fully embracing streaming services (who help replace diminishing MP3 and CD revenue), and also innovate by developing audiences themselves through their own branded offerings, they will exert far more control over two critical assets that advertisers want: Large audiences and big data," said Goldstein.
The main take-away I get from this digital revolution is that music is not really what's for sale in its future industry: it's the listeners. Rather than depending on CD and MP3 sales in the future, labels will have to start reeling in revenue from another source or risk a future every bit as bleak as the forecasts say. By catering an audience to advertisers, the music industry can save its skin from a sorry fate at the hands of declining CD sales.
I'm very curious to see how the industry will rebrand themselves to monetize off its listeners. It seems like a match made in heaven - both music and advertising heavily rely on attention, and maximizing the overlap within these two industries promises to yield sizeable profits for both. I always thought of the music industry in the glitzy trappings of a pop star and the advertising agencies as a cerebral, calculating Mad Men-esque business exec. Britney Spears, meet Don Draper. Now get married. It's the only thing that'll save the music industry.
Citation:
Goldstein, P. (2014, April 24). The Future of the Music Industry: Selling Audiences to Advertisers. Retrieved November 28, 2014, from http://recode.net/2014/04/24/the-future-of-the-music-industry-selling-audiences-to-advertisers/
Unsurprisingly, the music industry is not exempt from these grim predictions of doomsday. The sale of CDs and MP3 files has flown swiftly south over the past decade, more than halving from 730 million units sold in 2000 to the 326 million (including digitally downloaded albums) sold in 2010. This year also proved devastating for industrial titan Apple as iTunes downloaded music sales plunged 40 percent. What gives? Well, illegal file-sharing is a viable culprit. But perhaps a more formidable foe for the music industry is the advent of online radio - Pandora, Spotify, and other non-broadcast radio - who are luring listeners to their service at the expense of other music platforms. Just last year almost 150 million people tuned in to internet radio, and another 20 million listeners are expected by the end of next year.
According to Paul Goldstein, an audience development executive, these IP-based radios are "fueling an important growth category for the music industry." This growth derives from the big bucks that is brought in by two main sources: subscriptions to the radio and advertising. However, its become apparent that the latter is so much more lucrative than the former; eighty-eight percent of Pandora's revenue is from advertising.
"If artists and labels go on the offensive, fully embracing streaming services (who help replace diminishing MP3 and CD revenue), and also innovate by developing audiences themselves through their own branded offerings, they will exert far more control over two critical assets that advertisers want: Large audiences and big data," said Goldstein.
The main take-away I get from this digital revolution is that music is not really what's for sale in its future industry: it's the listeners. Rather than depending on CD and MP3 sales in the future, labels will have to start reeling in revenue from another source or risk a future every bit as bleak as the forecasts say. By catering an audience to advertisers, the music industry can save its skin from a sorry fate at the hands of declining CD sales.
I'm very curious to see how the industry will rebrand themselves to monetize off its listeners. It seems like a match made in heaven - both music and advertising heavily rely on attention, and maximizing the overlap within these two industries promises to yield sizeable profits for both. I always thought of the music industry in the glitzy trappings of a pop star and the advertising agencies as a cerebral, calculating Mad Men-esque business exec. Britney Spears, meet Don Draper. Now get married. It's the only thing that'll save the music industry.
Citation:
Goldstein, P. (2014, April 24). The Future of the Music Industry: Selling Audiences to Advertisers. Retrieved November 28, 2014, from http://recode.net/2014/04/24/the-future-of-the-music-industry-selling-audiences-to-advertisers/
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