We get an update this week on the total “address unknown” mass NOIs filed with the Copyright Office for the royalty-free windfall loophole. This time we have to thank our our friends at Paperchain in Sydney for doing the work of decompressing the massive numbers of unsearchable compressed files posted on the Copyright Office website. As you can see, there’s been an increase of approximately 70% since January 2017. (For background, see my article.)
As you can see, Amazon is still far and away the leader in this latest loophole designed to stiff songwriters, followed closely by Google. However, Spotify is moving on up. Spotify does get extra points for starting late in March 2017, but they are catching up fast filing over 5,000,000 as of last month.
Well… this is awkward.
Last summer, MBW ran a widely-read story which blew the lid off the fact that Spotify’s platform was being deliberately clogged up with music by ‘fake’ artists.
We were told that Daniel Ek’s company was encouraging and even paying producers to create tracks under untraceable pseudonyms – within specific musical guidelines – which were then being drafted into key first-party playlists.
After some consideration, Spotify declined to comment.
On Friday (July 7), nearly a year after our article appeared, Spotify issued a fierce denial of such accusations.
“We pay royalties -sound and publishing – for all tracks on Spotify, and for everything we playlist.
“We do not own rights, we’re not a label, all our music is licensed from rights-holders and we pay them – we don’t pay ourselves.”
What’s essential to remember here: amongst Spotify’s indignant yet carefully-worded statement, you might have missed the bit where they deny that their service is littered with fake artists.
That’s because they can’t.
Spotify just can’t seem to catch a break in the artist community. A story broke on Vulture evidently based on a Music Business Worldwide post alleging (and I’m paraphrasing) that (1) Spotify commissions artists to cover hits of the day and (2) there’s a lot of sketchy material on Spotify that trades on confusing misspellings, “tributes” and other ways of tricking users into listening to at least 30 seconds of a recording. Which means that Spotify isn’t that different than the rest of the Internet.
Spotify of course has issued a denial that I find to be Nixonian in its parsing….
[Editor Charlie sez: When you read Adam Raymond’s post about Spotify, you’ll probably wonder how these scummy tracks get onto Spotify in the first place. Who thinks of this stuff?
Remember this from Tunecore’s “Music Industry Survival Guide” circa 2009?
TIPS TO SELL MORE MUSIC ONLINE
You’re an artist, composer, performer, you make music: you used TuneCore to distribute your music into iTunes and other stores. Here are some easy ways to get discovered and sell more music.
Cover Popular Songs
Cover versions of songs sell well. Known songs have a built-in audience already. People looking for “Let It Be” or “America the Beautiful” know what they want. If you “cover” (record your own original version) of these songs you create a way to get discovered and make money. And once someone buys a song of yours they are more inclined to listen to and buy other songs you have recorded.
Also, naming your song the same name as a more popular song allows it to surface when people search. With one click to listen to a 30 second stream within the digital stores, you can increase getting heard.Â However, you do want to be careful as to not make a potential fan angry at you for tricking them into listening.
Record Holiday-Themed Music
Music tied into or about a holiday sells well. For example, “spooky” Halloween sound effects or “scary” themed music (i.e. “Tubular Bells”, the theme song to the movie the The Exorcist) sells enormously around Halloween. Christmas music sells really well around the Christmas season. This ties back to covers: a cover of “White Christmas” or “Jingle Bell Rock” can fund you through the rest of the year. Don’t forget other, perhaps neglected holidays throughout the calendar-there is no doubt the world needs a great Groundhog Day or Columbus Day anthem. Be sure to name your songs with easily searchable words.
Stores like eMusic, iTunes and Amazon Music have millions upon millions of songs in their stores. Most customers use the “search” function in the store to find music, so take advantage of it: put words in your album, artist/band and song titles that will help you show up when people search. Are you a mariachi band? Put the word “mariachi” in your name. Is your album a collection of nature sounds? Consider words like “forest” and “natural,” and so on. This is a gray area: if your music sounds like Bob Dylan, don’t necessarily use his name, but you could use words with association, like “folk.” It’s your music, but ask yourself, what words can I use in my band name, album name and/or song name that will cause my music to appear when people search?
Keep this in mind when you read Raymond’s post!]
Excepts from The Streaming Problem: How Spammers, Superstars, and Tech Giants Gamed the Music Industry [and Spotify]
On a website with more than 100 million active daily users, there are plenty of ways to game the system, be it for attention, or, if the streams pile up enough, profit. And the frauds cashing in on the latest hot single are hardly alone. A bevy of unknown artists have found ways to juice their streaming totals, whether it’s covering songs from artists who don’t allow their songs on Spotify, or uploading an album of silent tracks, each precisely long enough to generate a fraction of a cent for the artist.
Gaming Spotify does not rely strictly on deception. Some artists, a term used very loosely here, are providing people exactly what they want. It just so happens that what they want is ephemeral nonsense. Take, for example, the artist Happy Birthday Library, whose Spotify catalogue consists of hundreds of personalized versions of “Happy Birthday” streamed more than a million times.
The success of this gimmick — obvious by the sheer number of “Happy Birthday” artists — provides a handy illustration of how much on-demand streaming has changed the way we use music. Twenty years ago, finding a personalized version of “Happy Birthday” for your towheaded son Grover required a trip to the novelty-music kiosk at your local mega mall. Now, you just have to ask Alexa and seconds later the song’s blasting throughout the playroom. The seamless integration of streaming music into our daily lives has encouraged the creation of disposable songs that, years ago, no one would have imagined listening to through speakers. But now that a jazz version of the Gilligan’s Island theme is easily available, why not?….
A cynic might look at all of this and shrug his shoulders. Craven opportunism has been a part of the music industry since the first concert ticket was sold. But even if the money-grubbing isn’t new, the manner in which it’s grubbed is. And no matter who’s doing it, the effect is the same: Music is devalued.
Never before has a song title or artist name been more important than the actual songs themselves. There are no consequences for deception, either. Every day there’s a new mark searching for “Lucky for You That’s What I Like,” and listening to a song by Franz Horrman before realizing his error. Never before have so many songs existed just so an album can have a 20th, 30th, or 40th track. Now, major artists hoping for quick success on the charts can perfect ten songs, or they can just churn out three dozen. The streaming numbers could be the same either way.
One of the internet’s core strengths is its ability to create communities on a scale that were never possible before. People from around the world can loosely group together around a topic remarkably easily. What used to be a niche interest can suddenly be shared with millions of other people.
This has obviously had something of an impact on the music industry….
These “fake hits” are fascinating because they are hits. They have millions upon millions of streams, coming from a huge global audience. And those streams equal a very significant revenue stream. For example, if you get on “Today’s Top Hits”, the biggest playlist on Spotify, you can expect to get at least a couple of hundred thousand streams a day – more if you’re near the top of the playlist – and that adds up to a decent amount of money if you do the math. From one playlist, on one platform.
But they’re still fake. Outside of the bubble, there seems to be very little resonance or connection. You can’t sell out shows based on big streaming numbers alone. These numbers represent attention and revenue, which is great, but the engagement is transitory, at least to the scale that the numbers would suggest. They’re the start of a fan’s journey with an artist rather then the end. The fans listening to tracks on Today’s Top Hits are listening to exactly that – they’re listening to the playlist, not the tracks. There’s nothing inherently wrong with this – in fact, quite the opposite, it’s an amazingly powerful new mode of music discovery. Where things come unstuck is where this new pattern of engagement – curation bubbles and echo chambers – slams into the traditional record industry.
Is streaming music a good business?
Streaming has taken over as the dominant music format and is attributed with revitalizing the moribund business of record labels big and small. But for streaming companies, the answer is not as clear-cut.
[Editor Charlie sez: This day has been coming since we first ran this spoof picture of Daniel Ek–but not everyone was laughing after they got their Spotify royalty statement. Mark Mulligan has parsed Spotify’s recently release financial statements and has some interesting admissions by Spotify–starting with a more accurate total of paid subscribers.
This tweet was widely reported as “50 million paid subscribers” by Spotify’s boosters in the press:
But Mark Mulligan points out–as did many privately–that the correct number was much less than 50 million, although Mulligan’s analysis results in an even more generous number than the whisper number (assuming “paid user” means the same as “paid subscriber” which it might not given Spotify’s premium deals like its partnership with the New York Times):
That would be the New York Times that did not cover Spotify’s $44.3 million class action settlement with Melissa Ferrick. Here’s an excerpt from Mr. Mulligan’s excellent post]
As Spotify nears a public listing or an acquisition by Alibaba or Tencent, it remains the benchmark for the health of the streaming economy. With the underlying fundamentals remaining largely unchanged in 2016 despite stellar growth, here are a few thoughts on how the economics of streaming might change:
An often repeated argument from record labels is that streaming services will hit profitability when they reach scale. So, when does that happen? 48 million subscribers can lay a good claim to being ‘scale’, but it isn’t driving profit. While the market establishes itself, streaming services have to overspend on product innovation and marketing (and then, later, on user retention). So, these costs will likely rise in relative terms. Meanwhile, rights are always going to remain largely in line with revenue (though the UMG and Merlin deals reward growth with some discounting, which is a welcome innovation). But even these deals will not change the fact that rights will be large enough to challenge margins and will largely scale with growth. Which means no truly meaningful scale benefits. So here are a few alternative ways in which streaming margins might be improved….