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> The State Of "the Biz"
Todd Simpson
post Mar 18 2014, 10:08 PM
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Read a very interesting article about the state of the music "biz". In short, streaming will (as we knew) take over for downloads and cd's will continue their slow decline to oblivion. Japan still buys 3/4 of it's music on CD believe it or not, but that's changing. Internet penetration is not as pervasive in japan, neither is the ownership of home computers. Helping making japan the last bastion of cd sales. That party is ending as internet penetration increases and tablets/phones leapfrog computers and serve as streaming devices. Here is a breakdown.


Total sales were down 3.9%.

Based on 2012 numbers the trend suggested that 2013 revenues should have registered a 2% growth, so that is a -6% swing in momentum.

Digital grew by 4.3%
which was not enough to offset the impact of declining CD sales, which has been the story every year since 2000 except last.

Download sales declined by 1%. Continued competition from apps and other entertainment, coupled with subscriptions poaching the most valuable download buyers is finally taking its toll.

Subscriptions up by 51%: An impressively strong year for subscriptions but not enough to make the digital increase bigger than the physical decline on a global basis nor in key markets, including the US. This is the big news. The subscription model is moving to replace all other commerce models for music sales bit by bit.

Also interesting, APPLE controls the bulk of ALL DIGITAL MUSIC PURCHASES ON EARTH. So getting your music on iTunes really is key smile.gif

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Todd Simpson
post Mar 19 2014, 12:30 AM
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is this kind of article a bit too abstract or outside of everyone interests? I have noticed that these sorts of posts generate fairly small response numbers. Where my more lighter/sillier posts seem to generate wads of replies.

QUOTE (Todd Simpson @ Mar 18 2014, 05:08 PM) *
Read a very interesting article about the state of the music "biz". In short, streaming will (as we knew) take over for downloads and cd's will continue their slow decline to oblivion. Japan still buys 3/4 of it's music on CD believe it or not, but that's changing. Internet penetration is not as pervasive in japan, neither is the ownership of home computers. Helping making japan the last bastion of cd sales. That party is ending as internet penetration increases and tablets/phones leapfrog computers and serve as streaming devices. Here is a breakdown.


Total sales were down 3.9%.

Based on 2012 numbers the trend suggested that 2013 revenues should have registered a 2% growth, so that is a -6% swing in momentum.

Digital grew by 4.3%
which was not enough to offset the impact of declining CD sales, which has been the story every year since 2000 except last.

Download sales declined by 1%. Continued competition from apps and other entertainment, coupled with subscriptions poaching the most valuable download buyers is finally taking its toll.

Subscriptions up by 51%: An impressively strong year for subscriptions but not enough to make the digital increase bigger than the physical decline on a global basis nor in key markets, including the US. This is the big news. The subscription model is moving to replace all other commerce models for music sales bit by bit.

Also interesting, APPLE controls the bulk of ALL DIGITAL MUSIC PURCHASES ON EARTH. So getting your music on iTunes really is key smile.gif

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Mertay
post Mar 19 2014, 12:43 AM
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Hey Todd,

I'm actually curious how streaming works for the musician? I mean itunes do have a similarity to selling CD's on some perspective business-wise but I'm not sure I understand how stream works.

Also, as we all know a cause of things are changing is strongly related to piracy. itunes simply has a comfort of search and pay structure for the customer but what about streaming? I mean its so simple to find streaming on youtube too, do you thing this streaming graph is a hype or will it continue to grow?


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Todd Simpson
post Mar 19 2014, 01:22 AM
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Sadly it works in favor of everyone BUT the musician in general. You get .0001 cents for each play or thereabouts ( on services like spotify). So it takes a sick number of plays to make any real money. For musicians, streaming is a loss leader, just like CDs, downloads, etc. All of it (below the level of the top 10 percent of bands/artists that make money and the top 1 percent that make the big money) is just loss leader/promo to get your music in front of potential fans.

If you are doing it for the sake of music, then your fine. If you are trying for money, the music is a gateway drug to the real profit center. MERCH!!! That's right, Tshirts. Touring and T Shirts. Touring only works for bigger acts as smaller tours lose money. So for us indie folks, think of streaming as a way to sell tshirts smile.gif

Streaming is not a "fad" or "hype". You can quote me on this, IT"S THE FUTURE OF THE BIZ. We are heading to a streaming focused world where having individual mp3 files will be a thing of the past. As our devices are now always on/always connected, local storage becomes moot. Sure folks will probably keep their old collections, just like some folks still have their cds, but it's slowly going away.

QUOTE (Mertay @ Mar 18 2014, 07:43 PM) *
Hey Todd,

I'm actually curious how streaming works for the musician? I mean itunes do have a similarity to selling CD's on some perspective business-wise but I'm not sure I understand how stream works.

Also, as we all know a cause of things are changing is strongly related to piracy. itunes simply has a comfort of search and pay structure for the customer but what about streaming? I mean its so simple to find streaming on youtube too, do you thing this streaming graph is a hype or will it continue to grow?


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Mertay
post Mar 19 2014, 01:49 AM
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QUOTE (Todd Simpson @ Mar 19 2014, 12:22 AM) *
Sadly it works in favor of everyone BUT the musician in general. You get .0001 cents for each play or thereabouts ( on services like spotify). So it takes a sick number of plays to make any real money. For musicians, streaming is a loss leader, just like CDs, downloads, etc. All of it (below the level of the top 10 percent of bands/artists that make money and the top 1 percent that make the big money) is just loss leader/promo to get your music in front of potential fans.

If you are doing it for the sake of music, then your fine. If you are trying for money, the music is a gateway drug to the real profit center. MERCH!!! That's right, Tshirts. Touring and T Shirts. Touring only works for bigger acts as smaller tours lose money. So for us indie folks, think of streaming as a way to sell tshirts smile.gif

Streaming is not a "fad" or "hype". You can quote me on this, IT"S THE FUTURE OF THE BIZ. We are heading to a streaming focused world where having individual mp3 files will be a thing of the past. As our devices are now always on/always connected, local storage becomes moot. Sure folks will probably keep their old collections, just like some folks still have their cds, but it's slowly going away.



Well...that sux biggrin.gif

I think these business models will affect music as an art sooner or later. I believe there is a certain "respect" aspect to art for the followers and finding+consuming in such a nature will have its disadvantages (the more it reflects to the musician).

If I were to compose and form a band today I'd throw my influences to a corner and focus on musical individuality as much as I can.

Emphasizing to the classical music discipline (and reflecting such to the audience) makes more sense to me than modern no matter what type of music is composed or performed.

This post has been edited by Mertay: Mar 19 2014, 02:17 AM


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Saoirse O'Shea
post Mar 19 2014, 10:52 AM
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QUOTE (Todd Simpson @ Mar 19 2014, 12:30 AM) *
is this kind of article a bit too abstract or outside of everyone interests? I have noticed that these sorts of posts generate fairly small response numbers. Where my more lighter/sillier posts seem to generate wads of replies.


I'm interested Todd but I agree abstract, complicated and difficult posts don't get much response. People here don't tend to respond to much to that I say either for what ever reason.

I was sent an article yesterday about the fall off in sales of physical CDs in Japan that mirror your post. It also does a bit more breakdown of streaming vs dgital download by some countries. I'll try and dig it out if anyone is interested.


QUOTE (Todd Simpson @ Mar 19 2014, 01:22 AM) *
Sadly it works in favor of everyone BUT the musician in general. You get .0001 cents for each play or thereabouts ( on services like spotify). So it takes a sick number of plays to make any real money. ...


100%. To back this up and repeat something I said elsewhere - Daft Punk had a massive global hit last year. It was streamed well over 200 Million times and geneated a little under $18,000 income from streaming - that's about 0.00009 cents per stream.


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Saoirse O'Shea
post Mar 19 2014, 02:50 PM
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Here's a more indepth analysis:

http://musicbusinessresearch.wordpress.com...arket-analysis/


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klasaine
post Mar 19 2014, 04:15 PM
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I think most folks just don't know what to say about it. At this point it is what it is.

Most everybody was blindsided by the admitted ease of use as well as the novelty of downloading and streaming and now that the dust has settled it's like, "oh, you mean nobody actually makes any money for selling the music now". What acts as the record co./distributor these days - Apple, Youtube, Pandora, Spotify, etc. - well, they basically let us all cut our own throats (via our own egos - the need for recognition) by thinking that giving away our art (and potential livelihood) was a noble and good business move. The big boys let the naive kids dig their own graves - as usual. Cest la vie.

I make my living by offering a service - playing 'live', contracting gigs and doing sessions. Fee for service. Occasionally I get some re-use/royalty money. For now that's the way it is.

This post has been edited by klasaine: Mar 19 2014, 05:02 PM


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Ben Higgins
post Mar 19 2014, 06:09 PM
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QUOTE (Todd Simpson @ Mar 18 2014, 11:30 PM) *
I have noticed that these sorts of posts generate fairly small response numbers. Where my more lighter/sillier posts seem to generate wads of replies.


I have accepted that this is the way things roll.. on anywhere.. FB, any forum.. you name it smile.gif

On FB.. if I've posted a new song I'll get a bit of action but if I post about donuts all of a sudden people you haven't spoken to in years will pop up and go crazy ! laugh.gif


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VilleFIN
post Mar 19 2014, 06:31 PM
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He had some good points.

Robb Flynn: “Music Isn’t Important Anymore”

http://www.metalhammer.co.uk/news/robb-fly...ortant-anymore/


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Mertay
post Mar 19 2014, 08:52 PM
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QUOTE (Ben Higgins @ Mar 19 2014, 05:09 PM) *
On FB.. if I've posted a new song I'll get a bit of action but if I post about donuts all of a sudden people you haven't spoken to in years will pop up and go crazy ! laugh.gif


This is exactly my point from my previous post, I strongly believe its the entertainment part of music (together with this "evolved" industry mechanism) which actually creates such image of artist that the viewers can make such illogical responses smile.gif

Online distance for many people is still something that could not be personally understood yet. For example Yngwie was always a jerk on media but he was also the most respected, no one would ever think about mentioning donuts when he got fat! Now thats what I call a proper distance biggrin.gif


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Josh Adams
post Mar 19 2014, 10:52 PM
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That's mind blowing considering that we always see Japan as the most technologically advanced (or if not that, the country most enthusiastic about technology)

I'd love to know what it is about Japan that keeps them buying CDs. Something similar to why people in the West are buying vinyl again? Only they never left CDs? I don't know.

Strange though.
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Todd Simpson
post Mar 19 2014, 11:32 PM
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Thanks for the link smile.gif Japan was one of the last bastions of CD sales. Now it's down to Norway and a couple of other Nordic properties. They still buy physical music and 70 percent of the population are in to rock/metal. I think I really need to move to Europe smile.gif

QUOTE (tonymiro @ Mar 19 2014, 09:50 AM) *


DID YOU SAY DONUTS!!!! smile.gif I've noticed that as well on your posts about donuts vs music. I laughed my head off reading your post here wink.gif "if I make a post about donuts, people I haven't heard from in YEARS......"

We will hence call this "THE DONUT EFFECT"

smile.gif

QUOTE (Ben Higgins @ Mar 19 2014, 01:09 PM) *
I have accepted that this is the way things roll.. on anywhere.. FB, any forum.. you name it smile.gif

On FB.. if I've posted a new song I'll get a bit of action but if I post about donuts all of a sudden people you haven't spoken to in years will pop up and go crazy ! laugh.gif


JAPAN (as I mentioned during the first post) doesn't have great PC penetration which just means most folks in JAPAN DON"T HAVE A COMPUTER IN THE HOME. Shocking as that may sound smile.gif Personal space is at a premium in japan so folks often go out for everything, even computing. There are some computer cafes but mostly Japanese use their phones for everything. Only fairly recently has music streaming become a popular phone service in japan.

Partly I think because of general japanese / otaku fan culture, they really like having the "artifact" cd etc. That's changing as the numbers show and now they are happy to have the mp3 with a special digital cover created only for fans in the "mobile club". smile.gif

Todd



QUOTE (Josh Adams @ Mar 19 2014, 05:52 PM) *
That's mind blowing considering that we always see Japan as the most technologically advanced (or if not that, the country most enthusiastic about technology)

I'd love to know what it is about Japan that keeps them buying CDs. Something similar to why people in the West are buying vinyl again? Only they never left CDs? I don't know.

Strange though.


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Palacios
post Mar 20 2014, 12:57 AM
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QUOTE (Mertay @ Mar 18 2014, 05:49 PM) *
Emphasizing to the classical music discipline (and reflecting such to the audience) makes more sense to me than modern no matter what type of music is composed or performed.

I agree; but classical guitar is so much harder to make money at. While I personally love, and prefer classical guitar; theres a lot of classical guitarists out there that are really, really good; but don't make nothing. It seems like popular music has a much bigger audience.
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Mertay
post Mar 20 2014, 01:55 AM
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QUOTE (Palacios @ Mar 19 2014, 11:57 PM) *
I agree; but classical guitar is so much harder to make money at. While I personally love, and prefer classical guitar; theres a lot of classical guitarists out there that are really, really good; but don't make nothing. It seems like popular music has a much bigger audience.


Actually I ment the aspect of it can be translated to (for example) rock music. As with the problems in present, who wouldn't prefer the more loyal audience?

Best example I remember was the early days of Dream Theater. Years ago the first concert I went to I noticed the crowd was somehow very different, age variance was huge and during the concert (like me) they were there to listen rather than entertained.

Years later (like, 10 or more I guess), as they became more "pop" I could barely stay in the crowd as everyone was pushing each other. Worst part was the only one who could headbang to time signatures like 7/8, 10/8 etc. was me biggrin.gif


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Todd Simpson
post Mar 20 2014, 06:30 AM
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Keep in mind guys that what MERTAY is saying is really important. Finding what is most important to you about music, and infusing that in to your music is really what it's about. If possible, forget about money. Focus on the music. If the music is good, really good, and you share it, it can grow in to something bigger. TESSERACT is a good example. Started by just sharing songs made the way we make them here ( ez drummer/amp sims) and getting RIPPED TO SHREDS by a VERY hostile audience. Eventually, his stuff got much better. The rest, as they, is history smile.gif

So find what makes music special to you. Find a way to get that in to the music you make. Share freely. Hope for the best, but don't expect anything. Music doesn't owe any of us anything at all.

I can't tell you how many demos I've heard with bands saying "we made it more commercial" eg. sound like EMURE or some crap, just to try to get further. Sadly, mostly it just sounds uninspired. So make what connects with you smile.gif


Todd




QUOTE (Mertay @ Mar 19 2014, 08:55 PM) *
Actually I ment the aspect of it can be translated to (for example) rock music. As with the problems in present, who wouldn't prefer the more loyal audience?

Best example I remember was the early days of Dream Theater. Years ago the first concert I went to I noticed the crowd was somehow very different, age variance was huge and during the concert (like me) they were there to listen rather than entertained.

Years later (like, 10 or more I guess), as they became more "pop" I could barely stay in the crowd as everyone was pushing each other. Worst part was the only one who could headbang to time signatures like 7/8, 10/8 etc. was me biggrin.gif



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wrk
post Mar 20 2014, 10:05 AM
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Who is actually adding all the music on these streaming services like Spotify, Deezer, etc ? Can these services freely list everything they want as long they pay “royalties”? Are the royalty values per play self-defined by these services? To be considered as a legal service there must be some laws somehow?

I have no knowledge how the regulations are, but i find this a bit weird that successful musicians/bands, like in Tony’s “Daft Punk” example, does not seem to have any power to list or unlist their music or negotiate a more realistic royalty value.

Does anybody have some insights how this works?


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Saoirse O'Shea
post Mar 20 2014, 10:59 AM
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QUOTE (wrk @ Mar 20 2014, 10:05 AM) *
Who is actually adding all the music on these streaming services like Spotify, Deezer, etc ? Can these services freely list everything they want as long they pay “royalties”? Are the royalty values per play self-defined by these services? To be considered as a legal service there must be some laws somehow?

I have no knowledge how the regulations are, but i find this a bit weird that successful musicians/bands, like in Tony’s “Daft Punk” example, does not seem to have any power to list or unlist their music or negotiate a more realistic royalty value.

Does anybody have some insights how this works?


There are possibly several issues here.

1/ you will only get a royalty if your release has a proper ISRC embedded in to it. Without the ISRC the broadcaster/streamer doesn't know who to send the royalty to. This includes streaming services.

2/ if you are on a label you may well have to pay back any advance made to you before you receive any royalty.

3/ many people use an 'aggregator' or 'digital (re)distribution' company to place their product with in-line stores and streamers. Most/all aggregators say that they can apply an ISRC to your product if there isn't one already there. There is a well known, major aggregator who makes such a claim but for a long time did not embed a proper international code - they used their own instead. So you think you have an ISRC, the aggregator tells you that you have but you haven't got one that will be recognised as such.

4/ with some/most/all aggregators you will receive your royalty if and when it exceeds a given amount. Keep in mind that one single stream is worth 0.0001 cent many will only send you a royalty cheque when it is finacially cost effective to them to do so. If that breakeven point is say 40 c you need to have had 400,000 streams.

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with royalty amounts it's at least partly historic that the royalty rate is low as it tends to be set by the recording label for the sale of a physical or digital product. Any artist can try and negotiate with their label to increase the royalty that they recieve per sale but unless you are a major name the chance of the label listening is zilch.

Broadcast royalties are negotiated between the broadcast agency of a country and a trade body that represents labels etc. With a legal, traditional broadcaster such as a national radio station the station should collect and provide broadcast logs that aggregates what tracks they have played and by whom etc. and send these to the appropriate PRS with the required fee. The PRS then distributes the royalty. Note - broadcasters nowadays need the ISRC to assign this properly.

There are many broadcasters/streamers who do not log their broadcasts and who not surprisingly do not file anything with the appropriate authorty for roaylty payments. Some do this out of ignornace, some because they can't be bothered and some because they are broadcasting unlawfully.

For digital streaming it's a little bit different. The label normally agrees a fixed royalty fee with a streaming service - i.e. they may negotiate a fee of $20,000 for 20 million streams of any of their labels tracks. Major labels are more able to negotiate a relatively larger streaming fee than an individual or small indie label. The label then decides how to allocate that and usually they will give the vast majority of it to their major acts. If you are a tiny unknown on their label you may get zilch even if you have loads of streams becuase the label has allocated the money to the major name first.

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Anyway as no-one will have read that the only thing you need to kow is - DONUTS!


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wrk
post Mar 20 2014, 12:14 PM
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Thanks Tony, that was an interesting answer !

So it’s in the hands of the record label/artist to have their music listed on streaming sites, right? The only income by using these services are the royalty amount … so the record label know they sell the product much cheaper or with 0.0001 cent for nearly free. Wouldn’t it potentially increase the record/digital sell if they wouldn’t use streaming services? I mean, i don't see the sense for successful and established artists to distribute their music via streaming ... am i missing something?












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klasaine
post Mar 20 2014, 03:47 PM
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QUOTE (wrk @ Mar 20 2014, 04:14 AM) *
i don't see the sense for successful and established artists to distribute their music via streaming ... am i missing something?


At this point 'streaming' is advertisement (and ego stroking) for the bands' or musicians' live gigs, tours and merchandise. As well as maybe a movie producer or music supervisor who will want to license a tune for a film, TV show or commercial.

I read these threads.
Just as an aside ... Paul McCartney and Yoko Ono successfully negotiated the highest itunes royalty rates (for Beatle tunes).

This post has been edited by klasaine: Mar 20 2014, 03:48 PM


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