Open the Music Industry’s Black Box
nytimes.com
nytimes.com
I coded up an MVP and we got a few customers that agreed it was something they would pay for, as long as they had a decent chance to make even a small profit on song requests.
Once it looked like a viable product idea, the financial numbers guy did his magic and researched more details about how royalties worked.
We got conflicting information from different lawyers and royalty aggregators. After a couple months of research we determined it was completely impossible to make a profit, until we hit maybe 5 million in revenue and could start to negotiate better rates with copyright holders.
This assumed extremely cheap tech and bandwidth, and almost no salaries for us three founders.
We killed the project because it became clear how sadly broken the music industry has become. They wanted about 50% of our revenue, no matter how we sliced the business model. We are totally miffed at how pandora or spotify survive.
Aren't Spotify running at a huge loss?
I don't see how this means the music industry is broken. They are trying to get as much money for the content they own as possible. If they don't think your service is worth much to them they probably don't want to bother licensing you the content. Seems like simple business strategy. The problem is with your business - you need to find a way to make money. If a business can't make enough money to afford the thing it can't survive without then you have a problem, you can't just blame the problem on someone else. I get where you're coming from (they make it too expensive) but they have no need to license you content. In fact it just fragments the market more making marketing more difficult for them. I think ideally they would want one store where everyone goes for everything.
99% of consumers would be happy if there were only 10,000 employed musicians in the entire market.
Imagine you write a song. I take that song and I turn it in to a bunch of holes punched in a big long reel of paper. Now I put that reel in to a specially designed piano that will read the sequence of holes and use it to trigger notes. Now I sell that roll of punched holes. Do I need to give you any money?
Imagine you write a song. I take that song and I record it on to thin plastic disc. I sell these plastic discs. Do I need to give you any money?
Imagine you write a song. Someone else records it and I play that recording over a radio broadcast. I sell spots in the broadcast to advertisers and make a profit. Do I need to give you any money?
Imagine you write a song. Someone else records it and puts that song on a website I run. I sell spots on the website to advertisers and make a profit. Do I need to give you any money?
Imagine you write a song. Someone else records it and uploads it to their own website. They don't have ads. However, I have a website that indexes every other website on the Internet. I sell ads around the content that is returned in these search results, including your song. Do I need to give you any money?
This has nothing to do with supply and demand. It has everything to do with people like me making money off of things that people like you made and if that is or isn't how we expect a lawful and just society to work.
Your entire comment is completely nonsensical and frankly insulting. Being a musician was an unprofitable pursuit long before digitalization.
I made you the "songwriter character" in order to try and get you to empathize with their position.
As for the examples, the first three scenarios are based on the actual history of intellectual property as it pertains to music in the United States.
The invention of player pianos led to the foundation of what is known as "mechanical royalties" in the music industry. That is, you can't say that you're just selling a roll of paper with holes in it and that you have the rights to all the profits, rather you have to license that song from the rights-holders.
While my rhetorical approach might not have been the best choice, the points I'm making are not at all nonsensical and were not intended to be insulting.
This comment breaks the HN guidelines, which say:
When disagreeing, please reply to the argument instead of calling names. E.g. "That is idiotic; 1 + 1 is 2, not 3" can be shortened to "1 + 1 is 2, not 3."
Similarly, this comment could be shortened (and considerably improved) by deleting the above sentence.
(This is not a criticism. I'm just reflecting.)
Secondarily, I'm just reiterating how much more helpful it is to the musician to take the extra effort to buy from them directly. The penalty in ones convenience is greatly outweighed by the benefit to the indie/DIY artist.
Being a musician has never been a very good career path.
Why should I buy music from you at a much higher price than paying Spotify $10/m? I have no ethical obligation to ensure that you can make a living off your music, especially considering that I'm pretty ambivalent about whether you make music at all.
The flip side of the coin is that it's pretty annoying to see every musician think of themselves as some sort of unique snowflake, when their music is 95% identical to everything else in the genre.
I know that writing, recording and marketing songs is difficult, but just because something is difficult doesn't mean it is worth a lot.
It's not just about the artists. There's a huge support industry of recording engineers, studio owners, mix engineers, producers, tour managers, festivals, session musicians, electronic designers, software developers, web developers, app developers, and old-style physical instrument makers - among others.
Global music revenue alone is around $15bn. When you include all the support services, that number gets a lot bigger.
So supply/demand is not a very insightful way to look at this. With more investment in better content at every level, there's huge potential for revenue growth.
Nickel and diming the artists kills that for a short term hit of profit that isn't sustainable.
How so? Fundamentally: why do you think we need more music or more professional musicians?
10,000 was chosen as an arbitrary number. I actually suspect the demand for professional musicians is far lower than that.
The fundamental fact is that there are way more people who want to be a musician than people who are willing to pay for random music from indie artists.
This isn't a supply and demand problem. If you could steal at the supermarket and know you'd never get caught or there would be 0 consequences you'd do that. The supply would still be limited.
Piracy is the problem, period. If everybody pirates your awesome and unique commercial software will you still be talking about supply and demand even if your software is the unique on the market? Oh sorry, there are millions of software out there ... supply and demand. Too much supply therefore I should not buy your software but pirate it... /s
There are jukeboxes that do make the business model work, but they are hardware that cost 10s of thousands of up front investment for the bar or coffee house. We found, in market research, that 100% of the surveyed businesses would use this kind of service, but they wouldn't pay more than $25 - $100 per month for it, absolute max.
One of my friends was signed to Barsuk records, and released 2 albums with them. He made about 25k per year including touring. He released 2 more albums independently and licensed a song for a microsoft zune commercial. He was telling me about some of the details of his record deal, and it obviously wasn't a super good deal for him, but he was just taking whatever he could to get on. He maintained a near constant touring schedule which broke up his marriage, and it generally just made his life really hard. This guy still struggles, I havent spoken to him in about a year or so but he may have given up.
Another was signed to hollywood records, got major label promotion as a VH1 artist to watch with heavy rotation. His first album didnt sell very well and he got dropped. He is still a semi full time musician in Austin right now.
I recently stayed at an up and coming country musicians apartment(she is a friend of a friend), she sold 1 million copies of her self penned single. While she is doing way better than I was at that age, she lives very modestly.( I dont know all the specifics of her deal, and she is young and wants to live simply so she could have a million bucks in the bank but I doubt it)
Anyway, I mention this because from what I know of their deals, the record companies still treat them largely like they still spend big bucks at a big studio, and manufacture vinyl, CDs and cassettes for the bulk of the revenue. The music biz is making a killing on streaming because manufacturing is so low these days, and anyone can have a laptop studio capable of professional recording for 5-10k. The situation for artists wont change until record companies are not their main outlet.
Tunecore has a nice model and they were great for a while, then they jacked prices and forced out their founder. Distrokid seems good right now, but what's stopping them from pulling a Tunecore in the future?
The only way to guarantee transparency and stability permanently is for the musicians themselves to control the distributor -- similar to how individual Members of the Apache Software Foundation control it.
Speaking as a former mastering engineer and graphic designer, whatever QC DistroKid and Tunecore are doing can't be too hard to reproduce. I've often thought of writing some open source software for this purpose.
Don't assume there is any way to make selling, or streaming, recorded music pay for more than a few highly promoted musicians, and don't assume that the business of promoting those musicians can stay clean. Compared to performing and teaching music, selling a recorded performance is a relative novelty, and the business of it was always an irrational hits business and always more or less dirty.
Recorded music disrupted performance, and vastly reduced the demand for music performers. Figure out how to reverse-disrupt that and you will do more to put more money in the pockets of more musicians than a novel way of selling recorded performances.
This is totally untrue, on the contrary, recorded music has always been a way to promote music performances. It never disrupted performance. How can anyone say that? Before pop music and the record industry, there were no big concerts with thousands of people attending them. Recorded music boosted the demand for music performances.
Musicians are just musicians. You can't expect them to be developpers, sysadmin, sellsmen, accountants all at the same time while selling their music for pennies in a world fully of youtubes and co and where the audience don't want to pay for music anymore. Being Musician is a tough job at first place.
I asked Apple Music to explain the calculation of
royalties for the trial period. They said they disclosed
that only to copyright owners (that is, the labels). I
have my own label and own the copyright on some of my
albums, but when I turned to my distributor, the
response was, “You can’t see the deal, but you could
have your lawyer call our lawyer and we might answer
some questions.”
I wouldn't be surprised if we see a series of class-action lawsuits in the near future, probably starting with songwriters.
It is with this paragraph the Steve's ignorance to the societal and legal foundations around intellectual property and exclusive copyright are brought to full attention.
It technically became "no longer possible to maintain control" over intellectual property hundreds of years ago with the invention of the printing press.
The idea that the decreasing marginal cost of making copies is somehow a new concept and unique to the digital world is completely absurd.
The fact that the copyright system has been abused by corporate interests doesn't mean we should blindly throw out one of the cornerstones of the Western world.
First of all, Steve's article refers strictly to music. I would argue maintaining control was no longer possible since the invention of magnetic tape. If you really want to stretch things, you can go as far back as grooved disks (LPs, Vinyls, gramophone records) and claim it was possible to copy them like so: http://www.theguardian.com/music/2015/jan/29/bone-music-sovi... This is at least some hundred of years after the invention of the printing press. As for music scores, see the next paragraph.
Secondly, it was never possible to control information represented as glyphs (text, music scores, etc.). People could easily copy such information as long as they knew how to write and had some sort of writing utensil. In fact a person doesn't even need to know how to read in order to copy written or printed information. The more control is exerted the more determined people will be to copy.
Thirdly, it was very much possible to control what was printed with a printing press by using the might of an authoritarian regime. Printing presses were not things you could easily hide. Sooner or later the source of unwanted printed content could be tracked down. Besides, the very first copyright like laws were made exactly to avoid such an adversarial situation. The British government offered the publishers the power to control distribution (protected by the government) as long as the government gained control over what was being printed.
Also, I don't quite get what you mean by your last sentence.
Again, I hold heartedly agree that "it was never possible to control information represented as glyphs". So did the people who dreamed up copyright. That's the whole point!
What happened was many hundreds of years ago someone wrote something, and then someone else came along with a printing press and made 1000 copies and sold them for a profit, but they didn't give any money to the guy that wrote it. Someone pointed out that this didn't seem fair or just, and after a bunch of arguments and legislation, copyright was born.
The very same arguments about limiting people's freedoms with what they can or can't do with their own printing press have been going on for hundreds of years. It's really boring to keep having to prove the same points.
What you're getting in exchange for surrendering publishing and the masters is the huge network majors are tapped into. Syncs, marketing spend, publicity, festival circuits, key relationships with tastemakers, etc - I found the music industry incredibly nepotistic and benefitted over equally or more talented unsigned artists. There's a Hollywood Accouting hustle to what the majors say they are spending on you, but I believe you're building a better fanbase with a major, which generally means a greater touring revenue.
Another point missed: it's hard to speak globally about "musicians". Artists have very different outcomes and objectives, so it's very easy to project a mainstream mentality on to the indie, as so with the converse.
The biggest problems will occur from artists want a$ per play, but the streaming services only has b$/(month*plays).
2. Spotify has more tracks than subscribers. Essentially, it's the vast oversupply of artists in the modern age.
Transparency is the problem not only with music labels. It is also a problem with services like Uber, and with the App Store. The sad thing is: people think they can make a decent amount of money on these services, but that might just turn out to be an expensive mistake on average (there will always be outliers, and those cases will hit the news, but they are not the norm).
I think the government should step in and demand complete disclosure on these services.
There's no reason that Byrne and other musicians shouldn't earn as much as they can, but let's try to remember that musicians are artists. I seem to remember many of those disliking record labels for imposing onto their art the desires of commerce.
Well according to HN musicians should be artist, developer,sys-admin, graphic designer,sells-man, accountant,lawyer all at the same time because "evil labels". And if they can't do all these things well they shouldn't be paid fairly for their art because they didn't try hard enough ...
MAFIAA et al do suck but you should read what you sign.
I've been baffled by the contracts that artists sign with major labels, but you have to remember that artists are confronted with a difficult choice. If they don't accept these ridiculous deals, how do they achieve the mainstream recognition required to be able to live off their craft?
Society should provide basic resources to people so that they can work less and pursue music as a serious hobby without cutting into their food supply.