A Model For Streaming?

Fair StreamingAnil Prasad of Innerviews has written a follow-up to his earlier “Self-Destruct Button” piece and concludes that A Fair Music Streaming Model is Possible.

He makes the point that the 10-quid-a-month streaming model is only viable for those who can take advantage of scale. It can work for the Taylor Swifts, Kanye Wests and Muses of the world because of their vast audiences. It can work for the major record labels because of the vast back catalogues of music they’re sitting on, music that has long since earned back its production and promotion costs, much of it from pre-internet years. In both cases, all those tiny fractions of pence per stream add up.

But for new music in niche genres it doesn’t work and cannot replace paid downloads or physical product as a source of revenue. But there is another way, and involves artists and labels outside the major label system opting out of Big Music’s streaming and setting up their own alternative.

Mendelson has come up with the following model for a fair streaming service, involving 90% of all revenue going to either the artist or indie label:

The first listen to all tracks is always free of charge. The second listen, and any listen thereafter, is paid for in one of the following ways, with the listener choosing to:

Rent the track for one play for 10 cents, much like putting a dime in a jukebox.

Buy the track for $1, which then makes it possible to both download it, as well as stream it forever at no additional cost.

Stream the entire service’s catalog for a subscription fee, but at a much higher price point than Big Music — potentially $40–60 a month. Remember, the goal is to ensure the artists and labels get adequately paid. The $10 per-month charged by Apple Music and Spotify will never, ever lead to meaningful compensation for musicians.

I’m sceptical that there are that many hardcore music fans willing to pay fifty quid a month for streaming alone, especially if things become balkanised with multiple competing services each offtering overlapping but incomplete catalogues. But I’m willing to be proved wrong on this. There also might be space for intermediate teirs; how much per month might people be willing to pay to be able to stream the entire catalogue of a specific label, for example?

As for the number of free streams, the price per stream thereafter or the price per download, perhaps that’s something for the artists or labels to decide rather than a one-size-fits-all model defined by the streaming service? Different genres of music appeal to different age groups with different amounts of spare case and different levels of artist loyalty.

Another issue concerns independent artists who were once signed to major labels. There are bands like Marillion who once saw major success (“And now you’re touring stadium, you let it go too far“), then reinvented themselves once they’d fallen off the mainstream radar and been dropped by the major label. Others released one or two major label albums that flopped my major label standards, but still gathered a big enough fanbase to sustain themselves as independent artists.  Fans of those acts would expect to find their entire works in one place rather than have to go back to Spotiplay for their early albums. But would the majors want to play ball, or would they consider a streaming service geared towards the needs of independent artists a threat to their own business models?

But in the end, something along the lines of Anil Prasad’s proposal needs to happen if we want to continue having a vibrant and diverse music scene.

This entry was posted in Music Opinion and tagged , , . Bookmark the permalink.

3 Responses to A Model For Streaming?

  1. PaulE says:

    Something along these lines with payment transparency must be the way for artists. I would not pay 50 a month either. Not to “rent”. I might sometimes pay at that rate to “buy”. But then I can hold off buying for a time and continue to listen.

  2. Synthetase says:

    Exactly. Plenty of us already spend fifty or more a month on music, but if I don’t buy anything for a few months I can still listen to the CDs I already have.

  3. Tim Hall says:

    Same here. Streaming is fine for discovery (and that ought to be it’s main purpose), but music I love I want to own. And be sure the artist gets the lion’s share of my money.