@cheriehu42: Fraud Has Become the Latest Hurdle for Music Streaming

[Editor Charlie sez:  Cherie Hu presents a good argument for why artists and fans should demand the “user centric” royalty, or what Chris Castle calls the “Ethical Pool” approach that he’s working on.]

Fraud is applicable because there’s a tangible price tag involved in the consumption of a song: Labels and other rights owners are paid on a pro-rata basis, according to proportional volumes of on-demand streams. The average per-stream payout may not look like much — $0.004 for Spotify, slightly more for services like Apple Music and Tidal ($0.008 and $0.012, respectively), although exact rates depend on the type of artist or song….

But they can add up. A top hit like Ed Sheeran’s 2017 monster “Shape of You” would distribute millions of dollars in performance royalties to its songwriters and even more to the master-rights owner. Using Goldman Sachs’ projection that the streaming sector will hit $34 billion by 2030, millions of dollars in fraudulently acquired funds could be making their way through the royalty chain. Though unlike Twitter, which wiped out 6% of its users, the number of fake music streamers has not been determined. Says one major label head: “It’s not something we’re currently concerned about, but that’s not to say we won’t be in the future.”

Music streaming payouts are a zero-sum game,” says another industry insider. “It is imperative that services are vigilant and sophisticated in their controls to ensure that streaming fraud doesn’t dilute payments to the artists who have rightfully earned those payments”….

Here’s how “playola” works at playlist-promotion companies like Spotlister: A customer pays the company to secure prominent placement of a song on key playlists, such as those on Spotify. When a track is uploaded, it is analyzed and its metadata is used to send it to the most appropriate playlists.

Read the post on Variety

[Chris Castle says:  Remember that high profile criminal payola cases were prosecuted under state law commercial bribery statutes and not only the federal anti-payola or plugola laws.  Alan Freed pleaded to commercial bribery for actions which are literally nothing compared to what Spotify does every day.  While the federal payola laws apply to FCC licensed radio stations, commercial bribery prohibitions are not restricted to radio–so Internet companies need to take this a lot more seriously.  “Because Internet” is less of a defense every day.]

@robertblevine_ & @cheriehu42: Spotify’s Uncertain Road Ahead: Legal Battles, Profit Pressures Loom As It Moves to Go Public

With an impending IPO finally on the horizon and copyright-infringement lawsuits worth over $1 billion stacking up, the streaming leader has plenty to deal with in the new year.

Spotify has established itself as the leader in on-demand audio, with 70 million paid ­subscribers worldwide. But the company now faces a series of hurdles as it ­barrels into 2018, with a long-awaited initial public offering on the horizon for the first quarter and ­several copyright-infringement lawsuits that could cost the company dearly — and hang a dark cloud of uncertainty over its head.

Read the post on Billboard


@cheriehu42: The YouTube-Music Feud, Part 2: What Artists And Labels Can Learn From Other YouTubers (aka We’re From Google and We’re Here to Help)

More Google propaganda from the very Googlely Forbes.  This one tries to define away how Google commoditizes every thing it touches and never once acknowledges that Google steals from artists–aka the “stalker gap”.  Also doesn’t mention that “Other YouTubers” make a good chunk (if not most) of their YouTube money from brand integration (aka selling your soul to Global Corporatism–which is what Google stands for if Google stands for anything.

If “YouTube was not built for the music industry” then why don’t they stop stalking us and just leave us alone?

The underlying message is clear: YouTube was not built for the music industry per se, and never will be. It is an ally, but not a music service. While there are separate apps like YouTube Music that create a portable, leanback listening experience similar to what other audio streaming platforms provide, the site is fundamentally a video portal, and artists and labels should not misunderstand this role.

In particular, the “value gap” rhetoric that pervades the YouTube-music debate assumes that there is only one universal business model that all music services should follow, which ignores the industry’s long history. Since the advent of sheet music several centuries ago, music revenue has always varied widely with its sources, which also included radio and TV broadcasts and live performances. In the words of Maud Sacquet, “online services have become additional sources of revenue, with different business models and technologies generating different incomes—reflecting the current situation in the offline world.”

Read it on the Forbes blog.