"If we can't learn to live together, we're gonna die alone"

Sunday, November 10, 2013

Streaming Revenue VS Digital Sales...Who's Right? What's Left

It’s an extremely hot topic in the music industry right now, the battle over the power of streaming services and the value of downloadable music stores. Almost daily, high profile artists are releasing statements of their position in this battle. And the topic is not going away because from a technology standpoint streaming represents forward momentum and for end-users streaming solves problems of economy (users are not required to spend as much money on purchasing downloads… or hard copies for that matter) as well as economies of space (streaming and cloud services allow users to access their musical choices from almost anywhere and not physically store anything on a hard drive they can’t always take with them or a mobile device that is often limited in capacity).

Here is the major issue, and the reason high profile artists like Thom Yorke, Billy Bragg, David Lowry (frontman of Cracker) and many, many others are publicly weighing in on the topic. Its goes like this: Yes, streaming services are becoming a large part of how we consume music. Millions of people use Pandora, Spotify, other slightly lesser known services or some combination of these and the numbers are rising everyday. Yes, they are appealing to the user because you don't have to pay up front for music, and you can often learn about amazing new artists that you never would have discovered without the algorithms that power these streaming "channels". From a user standpoint there is practically no downside as few users opt to pay for their streaming services, even if it limits their access, so there is almost NO economic investment.
From an artist standpoint there is a big problem. And ultimately this should concern fans and service users as well because if the artists become embattled, the fans will be the first people to lose out. The problem is; Do streaming services cannibalize downloading revenue, and if so, do streaming services compensate in royalty revenue for this loss?
The answer is a resounding NO. This is Thom Yorke's issue. David Lowry went as far as to post his royalty earning statements from streaming services publicly and the numbers are staggering. Artists are not receiving anything near the amount of compensation for streams from Spotify and Pandora as they receive for downloads from the iTunes store. And the magnitude is exponential as far as loss per song.

The more I look into the actual numbers behind these streaming systems the more I realize the potential of the IDYL Music platform to really bring the digital music industry out of this tailspin. Under the IDYL system users will purchase downloads but in doing so be given the power to share a song in a streaming format and if another user enjoys this stream enough to purchase the song for themselves, they do so via a download. Discovering new music is an integral part of IDYL as well, but we bring the human element back to the act of discovery. After all, an algorithm can help you find something new, but your best friend can help you discover something that you personally are going to love. To encourage this process over standard streaming AND standard download platforms, users will receive a percentage of the revenue from the purchase of downloads. And yes, ultimately that may take something from potential revenue for artists in downloads, but if the download never happens then it really doesn’t matter what percentage of nothing goes to the artists. Because so much revenue can be restored to the artists and rights holders via this format, artists and labels will ultimately embrace and benefit immensely from the use of the IDYL Music platform. Without a format like IDYL, like brick and mortar storefronts in the beginning of the millennium, digital download sales will fade as streaming becomes the most prominent method of consuming music.
            IDYL Music is a work in progress. We are in early stages of fundraising to bring the platform into existence. I can only hope that as we strive to achieve our goals,Thom Yorke, David Lowry and millions of artists that share their concerns will stand up and take notice. We believe we can turn the music industry onto a positive course correction. New streaming services are hitting the market on a daily basis (see YouTube this week). But in order to survive the streaming service gutting of artist revenue, creators and fans alike will have to embrace something new. Something that will change the process of consuming music; something that will ensure artists are compensated at a rate that is truly fair but will also reward their fans for following this new path. The key to this successful course-correction lies in the hands of the artists who are already in jeopardy, but most importantly? It lies in the hands of fans like you.

*IDYL Music is a new company currently in early-stage funding to create a new music distribution platform which rewards fans for sharing new music across their social networks.


Most of the Science Fiction Vehicles in the known multiverse TO RELATIVE SCALE

PANDORA's BOX - Some of what I'm Listening to..

Showing some of my most recent Pandora Station Selections. If you want a serious 90's hip-hop "fire-and-forget" party mix, I always recommend "Black Sheep Radio"