Comment by ruffrey | Hacker News Reader

Comment by ruffrey | Hacker News Reader

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Some fellow entrepreneurs had an awesome idea recently to create a jukebox-like service for businesses, where they could get payed per request and pay a monthly fee for the streaming service.

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.

>> "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.

Startups and labels constantly jockeying for better position to maximize profits, etc etc and so on; the plight of the artist at the bottom of the food chain is generally brushed over, often with the supposed consolation that "it's never been easier to get your music into people's ears". That may be true in a technical sense but it's completely meaningless in reality. I've worked as a full time programmer to subsidize basically every detail of actually getting the music heard (recording, merch, subscriptions to soundcloud and bandcamp and tunecore, gas money for shows). Granted we're exactly striving for mainstream popularity but it's hard to even conceive of how we could possibly make enough money, split three ways, to sustain it without sacrificing most of the remaining hours to working to pay for food and rent; and none of us have children to worry about. Yet we press on, for nearly a decade, primarily because we love it of course but also people seem to think we're not half bad. I suppose all these discussions matter but I guess all I'm saying is if you really care and truly like a band (even a little) go to their website or bandcamp and buy a tshirt and a record. PLEASE. And just cut all this bullshit in the middle right out.

Maybe artists should accept the fact that the supply of music vastly outstrips the demand.

99% of consumers would be happy if there were only 10,000 employed musicians in the entire market.

Of course my point is that as a musician it's annoying at best to hear people talk about musicians like a) as a cog in the broader free-market disruptive strategy blah blah and b) as though they should be grateful that there are all these cool whiz-bang ways to be heard.

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.

First off, I don't think it's actually about some sort of disruption.

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.

If you don't care all that much about music then there's no reason you should and that's fine. I too pay 10/mo for spotify. It's worth noting though that mostly likely the huge majority of that 10$ goes to music you aren't even listening to.

Question: I buy vinyl directly from artists I like because I want to support them w/o the label getting a cut (and bc for me the physical vinyl has more meaning as a representation of their product. Curious to know if I am in fact helping them directly by doing so.

>>as a musician it's annoying at best to hear people talk about musicians like a) as a cog in the broader free-market

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.

I understand that but I don't think you realize how hard it is for even those who are widely accepted (not self proclaimed) unique snowflakes. Also I would hope you find it easier to feel compassion for the struggling artist over the corporation, in this scenario where two sides annoy you.

You're looking at this completely wrong.

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.

Who are people "like me" and people "like you?"

Your entire comment is completely nonsensical and frankly insulting. Being a musician was an unprofitable pursuit long before digitalization.

In case it isn't clear, "people like me" and "people like you" refer to the hypothetical characters in the above paragraphs.

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.

> Your entire comment is completely nonsensical and frankly 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.

I should have redacted the "nonsensical" part, but I did find the comment very insulting. It was quite insulting to say that my work is unfairly yielding some other group profit, thereby implying that I'm some naive dunce. (To be clear, this is the line I object to: "people like me making money off of things that people like you made.")

I hear you, but that's a really specific interpretation. It's easier and less annoying just to look for a different possible meaning in the OP. Most of the time no insult was intended, and even if one was, it's rarely really about you.

(This is not a criticism. I'm just reflecting.)

There's no way the industry would be willing to employ 10,000 musicians full-time. Even on a near-poverty wage of $30k that would be $300m a year just for wages, without counting equipment, recording, and other costs.

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.

> With more investment in better content at every level, there's huge potential for revenue growth.

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.

> Maybe artists should accept the fact that the supply of music vastly outstrips the demand.

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

You're totally right though I should clarify what I meant by broken. There are so many hands in the cookie jar and so much bureaucracy with payouts that it takes millions of investment to get this business off the ground. And it wouldn't be profitable. It's a technically simple concept and we had this (albeit false) feeling that "this should be easy to do." I mean think about it, a DJ charging people for song requests would essentially run into the same problems that we did. We were just adding one layer to the business model and enough to try to cover operating expenses.

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.

The music industry is broken because they wouldn't give you a license to use their product at a price you wanted? And you shut the whole product down because you couldn't get the licensing, so clearly you have no product without those music rights. How is your idea adding so much value to these music catalogs that 50% of revenue isn't a good deal for you?

Pandora has a statutory radio license that requires no negotiation, which is why you have restrictions on what you can play. The cost is less to them which is why they have survived.

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