# Sorry to add to the "dreary" mantra but...



## JohnG (Jun 6, 2014)

http://www.thedailybeast.com/articles/2 ... l-age.html


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## Lemmonz (Jun 6, 2014)

Well, that's not exactly new info to most people. The way people consume music has certainly changed over the last decade or so and the music business has yet to find a good way to capitalize on it. Maybe I'm too much of an optimist but, I think at some point that will change, and it'll probably be a different system to the way things are currently. 

People everywhere love music and it's never been easier to consume. It's only a matter of time before someone comes along with a way to really capitalize on that.


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## Ned Bouhalassa (Jun 6, 2014)

Thanks for sharing that excellent, open-heart text. What a sorry state we're in.


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## JohnG (Jun 6, 2014)

Lemmonz @ 6th June 2014 said:


> People everywhere love music and it's never been easier to consume. It's only a matter of time before someone comes along with a way to really capitalize on that.



"Someone" has. It's not us.


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## Ned Bouhalassa (Jun 6, 2014)

1 million listens = 6.50$
No wonder it's cheap.


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## Lemmonz (Jun 6, 2014)

JohnG @ Fri Jun 06 said:


> Lemmonz @ 6th June 2014 said:
> 
> 
> > People everywhere love music and it's never been easier to consume. It's only a matter of time before someone comes along with a way to really capitalize on that.
> ...



Who is this 'someone'? I get the impression that streaming services aren't exactly profitable at the moment.

http://www.businessweek.com/articles/20 ... make-money 

Maybe that 'someone' you mention isn't related to streaming services, though? I'm under the impression that there isn't as much money in the music business as a whole today compared to 20 years ago, so everyone apart of that industry doesn't do as well -with composers/songwriters/artists faring the worst.


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## Madrigal (Jun 6, 2014)

Ned Bouhalassa @ Fri Jun 06 said:


> 1 million listens = 6.50$
> No wonder it's cheap.



It's actually 650$ but yes, it doesn't make any sense! :roll:


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## RiffWraith (Jun 6, 2014)

Madrigal @ Sat Jun 07 said:


> Ned Bouhalassa @ Fri Jun 06 said:
> 
> 
> > 1 million listens = 6.50$
> ...



It does if you are the CEO raking in millions per year.


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## MichaelL (Jun 6, 2014)

I don't listent to streaming services. Is it commercial free? Do the customers pay for the service? In other words how does a streaming service, e.g. Pandora, make money?


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## MichaelL (Jun 6, 2014)

OK. I did a little research. Some services are subscription and some offer limited free listening.

Why I ask, is because there a vast difference between radio and streaming. In a large market, say a city of 4 million people, if you assume the 25% of the population listens to radio that's 1 million potential listeners. Now assume that a given station / format has an 8% market share. That's 80,000 potential listeners. 

So, when a song plays once on that station it has 80,000 potential listeners. If I understand streaming correctly, in the streaming world that would be the equivalent of 80,000 plays. 

To simplify, in radio your talking about the number of listeners per play, but in streaming it's the number of plays per listener...a vast difference.

On radio , if the same song gets played 12 times during a 24 hr period it could potentially be heard by almost 1 million listeners. Now, multiple that by the top 20 radio markets and you got 20 million potential listeners in one day. Imagine if that paid $650 per million. That's $13,000. 

So, what's my point? Spotify may actually be paying close to the equivalent of what radio pays *per listener*, per play, which in the universe of streaming is the same thing.


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## Hannes_F (Jun 6, 2014)

Lemmonz @ Fri Jun 06 said:


> Who is this 'someone'? I get the impression that streaming services aren't exactly profitable at the moment.



So they are ruining the music market ... for nothing? All they can produce is financial failure at every edge?

Says the article:



> Andrew Sheehy, the main author of the report, concluded: “Our analysis is that no current music subscription service—including marquee brands like Pandora, Spotify, and Rhapsody—can ever be profitable, even if they execute perfectly.”


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## MichaelL (Jun 6, 2014)

Hannes_F @ Fri Jun 06 said:


> [
> 
> So they are ruining the music market ... for nothing? All they can produce is financial failure at every edge?
> 
> ...


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## rgames (Jun 6, 2014)

JohnG @ Fri Jun 06 said:


> http://www.thedailybeast.com/articles/2014/06/04/van-dyke-parks-on-how-songwriters-are-getting-screwed-in-the-digital-age.html


I read that a couple days ago and, alas, I think he gets a few things completely wrong. Specifically, his praise of iTunes.

Granted, Spotify is not any musician's friend, but it's more of a friend than iTunes because Spotify is its own business. iTunes has always been (and always will be) a loss-leader for Apple's gadgets. Apple doesn't care if iTunes makes money - it's there to sell phones. Apple would love to give away music for free because it would increase sales of phones and music is such a small portion of their revenues.

Because Spotify is not a loss-leader for something else, they have more incentive to pay the artists. If they don't, artists will leave to another service and Spotify will cease to exist. Apple, however, doesn't care - if they control huge portions of the access to listeners (which they do), then you can't go anywhere else and they can pay you as little as they like. Such market manipulation is illegal under antitrust laws in the US and I have never understood why such behavior is allowed to continue. I can only explain it as the fabulous success of the Apple brand image...

Here's the real kicker: Apple just bought Beats. That's the deal to fear - now Apple will apply their loss-leader mentality to the streaming world.

And yes, Spotify loses money, but that's the way those businesses work. The rule is to first build a huge user base THEN figure out how to monetize it. That's what Amazon did. And Facebook. And Google. And... They might have no idea how they'll eventually make money but it doesn't matter - all that matters is that they generate enough revenue to keep growing the user base and developing a brand image. Then, at some point later in time, they figure out how to cash in on it.

Will musicians benefit from it? Probably not much. But it definitely will be worse if music streaming becomes another loss-leader. So, yeah, Spotify is not great. But an Apple-owned streaming service is even worse because Apple has no incentive to make money from music.

And when your product is someone else's loss leader, you lose.

rgames


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## ThomasL (Jun 6, 2014)

Spotify is owned by the major record companies. In other words, even if Spotify shows red numbers who knows what the record companies are getting?


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## marclawsonmusic (Jun 6, 2014)

My kids stream all their music from YouTube or Grooveshark or whatever. They have never bought a CD (or Tape) and never will.

They are growing up in a world where they expect music for free.

How does anyone get the next generation to pay for music? I'm sure a lot of people are thinking about it... but it's not a paid subscription service or a physical product. 

Something else has to come along. I'm not sure it exists yet...


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## rpaillot (Jun 7, 2014)

TV and Radio's performances rights ( or royalties, dont know the english term ) will be the last way to earn money from music. Prepare for battle


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## Daryl (Jun 7, 2014)

rpaillot @ Sat Jun 07 said:


> TV and Radio's performances rights ( or royalties, dont know the english term ) will be the last way to earn money from music. Prepare for battle


That's not really too much of a problem. As long as the PROs stick together.

However, the real danger is that I don't think that TV and Radio broadcasts will exist in the long term. Everything will be streaming. Once we get to that scenario we will be in the two tier market that I have been predicting for a long time. You will have the creators at the top earning a good wage. No middle ground, and then lots of amateurs working for nothing at the bottom. This will also apply to production companies, BTW, so everyone will be affected. Of course it means that quality programs will be few and far between, but unless the general public cares (or even notices), nothing will happen.

D


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## Ned Bouhalassa (Jun 7, 2014)

One million x .00065 is 650, but we're talking cents, not dollars. So 650 cents = 6 bucks and a half.



Madrigal @ 6/6/2014 said:


> Ned Bouhalassa @ Fri Jun 06 said:
> 
> 
> > 1 million listens = 6.50$
> ...


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## Ned Bouhalassa (Jun 7, 2014)

MichaelL, you're also using the wrong figure of 650. We're talking cents, not dollars. So that 13,000 becomes 130. Big difference. :shock:


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## Daryl (Jun 7, 2014)

Ned Bouhalassa @ Sat Jun 07 said:


> MichaelL, you're also using the wrong figure of 650. We're talking cents, not dollars. So that 13,000 becomes 130. Big difference. :shock:


But are those figures correct? In other articles it is said that per play is somewhere between $0.007 and $0.0084, so it is dollars, not cents. However, what is also not clear is how that money is split. The money is paid to the record company, so only the individual artists know how the splits work. So in this individual case it could be cents. I can tell you what my split from my record company is, and how I managed to make £0.47 from Spotify last year, but it is very difficult to find out the real figures for any other artists, unless we get the splits right.

Having said that, there is no doubt in my mind that the only people who will be getting rich from Spotify is the owners o the company.

D


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## MichaelL (Jun 7, 2014)

Ned Bouhalassa @ Sat Jun 07 said:


> MichaelL, you're also using the wrong figure of 650. We're talking cents, not dollars. So that 13,000 becomes 130. Big difference. :shock:




I see your point Ned. Not used to the $ sign on the other side.

However $130 (dollars) was about what I made from ASCAP for a CD that Charted in 95, and would have had potentially millions of listeners.


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## mr (Jun 7, 2014)

Ned Bouhalassa @ Sat Jun 07 said:


> MichaelL, you're also using the wrong figure of 650. We're talking cents, not dollars. So that 13,000 becomes 130. Big difference. :shock:



Spotify pays out *$0,0065 - $0,008 to all right holders *, so 100.000 plays amount to $650 - $800 payout to all right holders. 

What percentage of that goes to the songwriters? Does it depend on individual negotiation power?

Also, I am with MichaelL. One spotify stream cannot be compared to the payout of one play on the radio or one iTunes store purchase.

Times have most certainly changed, today its more about Singles than Albums, so if you want to make a living as a songwriter you shouldn't focus on releasing 14 track albums but rather write a few hits (easier said than done though). 
But if you manage to have a hit and it goes global, different revenue streams can add up I imagine, such as radio royalties, download sales, streams (spotify...), Vevo, youtube etc..., licensing?!


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## Ned Bouhalassa (Jun 7, 2014)

After double-checking elsewhere, it seems that the figure quoted in cents in the article should be in dollars. I'm sorry about having been so categorical about it earlier, and I'm sorry that such a big mistake could appear in the article. It really does make a big difference.


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## Daryl (Jun 7, 2014)

mr @ Sat Jun 07 said:


> Spotify pays out *$0,0065 - $0,008 to all right holders *, so 100.000 plays amount to $650 - $800 payout to all right holders.


This is my point. At the very least you have the songwriter, publisher, record company, producer and finally the performer/artist. As these streaming services are in cahoots with the record companies, I'm pretty sure that the songwriters are well down the list of people to pay.

D


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## JohnG (Jun 7, 2014)

Daryl @ 7th June 2014 said:


> the real danger is that I don't think that TV and Radio broadcasts will exist in the long term. Everything will be streaming.



I agree. 

Four children, from 12-19. None of them watch broadcast or even cable television, or listen to radio (except in the car, and even that last -- at least regarding music, not news -- could become the province of streaming services).

It's already nearly all streaming. At best, this goes through services like Netflix and Spotify, but at least some money changes hands for them. Even worse, nearly any track I can imagine appears to be free on Youtube with often-excellent sound quality.

The royalty rates for streaming are barely enough to buy lunch. Not long ago TV royalties used to be enough to buy houses and cars and schoolbooks.

Moreover, as streaming is consumed substantially through (relatively) feeble ear-buds and on tiny screens, where will the demand be for the large scale orchestral sound? Who cares about whether the brass is real or sampled when it sounds like this [squashed, tinny sound plays]?

The biggest productions still use major orchestral resources and maybe that will continue for that stratosphere. Today, a composer can still make a good living in broadcast TV and, even more importantly, hope to establish a string of royalties that stretches forward in time. 

For how long?


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## marclawsonmusic (Jun 7, 2014)

JohnG @ Sat Jun 07 said:


> Moreover, as streaming is consumed substantially through (relatively) feeble ear-buds and on tiny screens, where will the demand be for the large scale orchestral sound? Who cares about whether the brass is real or sampled when it sounds like this [squashed, tinny sound plays]?



FWIW, my kids still appreciate the orchestral sound. I can't tell you how many times they ask me to "c'mon dad, put on Man of Steel" or "How to Train Your Dragon". And these are teenagers.

Of course, they are also band / orchestra geeks who absolutely love it when there is a low BRAAM... "dad, did you hear that LOW BRASS!??" My trombone player son really wants to try out Bass Trombone cause he hears it alot in film and gamescores.

Speaking of that, don't underestimate the power of the modern videogamescore. My kids are always talking about music from Skyrim or Call of Duty or World of Warcraft or Diablo or even Super Mario / Mario Kart! And it's all orchestral stuff (maybe some hybrid in there).

Just one father's perspective...


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## Daryl (Jun 7, 2014)

marclawsonmusic @ Sat Jun 07 said:


> Speaking of that, don't underestimate the power of the modern videogamescore. My kids are always talking about music from Skyrim or Call of Duty or World of Warcraft or Diablo or even Super Mario / Mario Kart! And it's all orchestral stuff (maybe some hybrid in there).


Unfortunately video games don't pay Royalties, so ion some ways it's even worse than streaming TV. Unless a composer can get some back end. :wink: 

In the end production companies don't care what happens to the composer. They can always find another one. However, the library companies, who many people here see as the enemy, will be on our side, because if broadcast Royalties go, as well as licence fees (thanks Audio Network) then they are well and truly screwed. Hopefully there will be enough muscle there to draw a line in the sand.

D


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## Guy Rowland (Jun 7, 2014)

This thread bears testimony to the really difficulty in assessing where we were, where we are and where we might be in the future

100,000 plays sounds a lot of people. But is it? Even in a streaming-only world, one constant will be that if someone loves something, they'll play it to death. How many times have you played your favourite tracks? A dozen would be lightweight. 50 more typical perhaps. Into the hundreds for proper obsessive love. 100,000 plays = 2,000 people loving your song. Van Dyke Park is equating apples with oranges - if only 2,000 people in the world ever loved your song, you'd never have been buying a house with a pool with the proceeds.

Although I don't have the specific figures to back it up, the sheer number of available outlets - streaming TV and radio, youtube, subs services - surely mean the numbers will add up - if you create anything genuinely popular. And I've argued for years that all the efforts of the PROs need to go into negotiating those percentages - every $0.00001 change makes a difference in the end.

Right now my iPlayer royalties are pretty hopeless - in my last statement they accounted for 1.79% of the total. If all regular television were switched off tomorrow, one can only presume that the number of online viewings would rise massively. Would they reach the same level as now? Probably not - hence the need for continued negotiation. But the other side of this is that actually I think regular TV has a much longer shelf life than most people seem to predict. According to BARB, UK viewing hours have remained pretty much static for the past 15 years. Good though Netflix is, it's not taking over or anything. We have it and it reflects only a small part of the household viewing here. Similarly, I'm also not sure we'll see the end of downloads / CDs etc. Maybe the offline problem has been well and truly solved and I'm just not aware of it, but I think its going to be a very long time til net coverage is truly universal and good enough to provide uninterrupted coverage. Commuters, flyers, joggers... many many people would seem to be in the market for their own copy of music for a long time to come. Sure we've hit a peak and can expect a slow decline, but I doubt a terminal one for a very long time - there are just too many drawbacks with streaming for too many people.

I'm not suggesting that we're living in a Utopia, but things aren't as bleak as some say.


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## JohnG (Jun 7, 2014)

Guy, I hear you, and also the point about (at the moment) the continued use of orchestras in video games is mildly encouraging.

But not really.

I've had the good luck to have some video game jobs too and they have paid well -- up front. That's it, though. Zero in the back end. One could write the equivalent of the Harry Potter theme and never get another penny. As Daryl says, video games are a kind of siren song, with good pay and access to an orchestra, and absolutely nothing to retire on.

Composers of yore received royalties on those shows Guy's talking about for decades, and very substantial royalties too. It's great that the shows can last, but what do composers expect, looking forward from today, to earn from them?

My Netflix royalties are laughable, or they would be if it weren't so serious. Older composers, the generation ahead of me (and I'm a lot older than many here) were able to retire with meaningful (like pay-your-mortgage meaningful) income from their music that was still playing. The cartoons I worked on in the 1990s are still paying very handsomely. Not so the video games or other mostly online fare I've worked on.

At some point, maybe age 40? 50? few in entertainment think you have a lot to say unless you are a major brand name. If royalties from our youthful days wither, or disappear to a feeble trickle, we lose a LOT of money. It's tens, hundreds of thousands at stake, not pin money.

I know that there are some composers who do get back end from video games, but it's not me and not many, if what I hear is accurate. 

The industry standard that sustained us as we grew old is eroding with blinding speed.


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## Peter Alexander (Jun 8, 2014)

Before I came back to music full time I did lots of radio research and did the groundwork with a company competing with Arbitron for what later became Arbitron Information on Demand, which projected radio ratings down to the zip code levels.

ASCAP and BMI sweeps don't really tell the whole story, even with the complex weighting system they designed for radio. Only a few genre of music achieve broadcast air time (top 40, country, etc), but many including soundtracks, religious, jazz and others do not have the listenership to get picked up or to justify a station to play a specific format.


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