Tag Archives: spotify

Jump Point

I woke up this morning to find an email in my inbox informing me I had just been paid $12.71 for digital downloads through various services, both sales and streaming.  Spotify was included, over which there has been a lot of talk of lack of compensation to the artist at  $.0025 per track played. Contrary to my own expectations, $.79 of that grand total was actually attributed to Spotify, a total of about 317 plays!  In Starbucks coffee terms, that covers about 40% of costs of a cup of coffee if I ran out to spend my earnings.  I had been expecting nothing from Spotify, so that was a surprise to the upside, though a very minute one to say the least.  Nonetheless, I’m still happy various people heard those 317 tracks.

This was the perfect incentive for me to begin penning a series of reflections on digital media and its transformation of the music industry and business.  It’s easy to grumble about a changing industry, but the world is not going back to vinyl and record players en masse.   And besides that, the globalization of digital information also has pros as well as cons.  Services like Spotify are game changers for the industry and music sales, but I have plenty of musician friends and students who love the service and get a lot out of it; they wouldn’t have heard a tenth of the same music if they had to actually buy physical media.

We all know the media industry has been changing rapidly, so let’s start with some random points:

1)   physical disc sales are declining, regardless of genre.

From 1999-2009, total revenue earned from music sales and licensing declined from $14.6 billion to $6.3 billion. The trend is projected to continue, reaching $5.5 billion in 2014.   Figures are provided by Forrester Research, which also offers some great articles on these trends and future projections. (ironically, I am unable to afford access to any of those articles at the price of $499 each. I find it interesting that a business article about the music industry garners a $499 access value while a track on Spotify garners a $.0025 access value.)

2)   the future of digital music and content may very well be “the cloud”, which also means a future decline in digital sales and move towards “digital rental/licensing” (which I am already seeing in my own miniscule income stream). The old model of personal and public libraries is being transformed, whether we are talking about music or books.  Future music revenues could be entirely in the form of “licensing fees” as opposed to “sales”.

3)   On the positive side, while revenue earned from music sales decline overall, the internet and digital age gives the artist global access to niche markets (where people like myself operate). At the same time, the costs of recording and producing an album, though not “cheap”, have also declined, so we do have greater access to the market in producing an independent project as independent artists without the need of major label backing/distribution.

4)   The “Bubble Generation” in general does not value copyright law and in general views information as being “free” by right.  Unfortunately, once music became digitized, it was lumped into this category.  I think the downfall here came with Napster and the lack of proper copyright management…once the tidal wave began, a whole generation grew up with a sense of “digital entitlement”.

I can go on and on with other notes about the consequences of the digitization of media, but I think if you’re really interested in topics like these, there are a few books worth reading which give you an overview of how the internet and global networking is transforming older business models.  We all know this is occurring, but these books really get inside different perspectives and start to ask questions about the future. And as musicians, this is a future we have to be thinking about if we want to remain professionally viable and relevant.

Jump Point

First off, I highly recommend Jump Point by Tom Hayes as a great overview of online global networking/marketing and how it is changing business models.

Quick Summary with some thoughts: In the next couple of years, over 50% of the global population (roughly the whole global workforce) will have internet access, which Hayes terms “the jump point”. Much like public clocks and the steam engine, the internet has had and will have a transforming effect on our day to day lives and how we function.  Our sense of time changes (the world now has 24 hr access to media, consumer markets, and information/communication), as the way this technology impacts us is not simply linear, but accelerating in a “non-linear growth surge”.  And with this paradigm change from the Industrial Revolution to an era of information exchange and online commerce, the ways we do business have already changed radically (honestly, I already buy most of my music, books, and household items online).  In addition, social networking communities take a greater role in our lives for recommendations, information, and advertising rather than traditional television and magazine media. Views on copyright are also changing as information becomes more accessible and operates in an economy of abundance vs scarcity (material goods have production costs, material costs, and more and are generally scarce. Digital material and information is absolute free to duplicate and abundant.  Of course, the advocates of “free music” often miss the fact that there are recording costs and the need to pay musicians to even create an abundant product in the first place. Incidentally, the terms economy of abundace/scarcity are not used by Hayes, but I find them very relevant in relation to my musical points).

Sidenote: Imagine the painstaking labor a composer spent in copying a score by hand in the 18th century or a monk spent copying the Bible?  Now I have a folder on my desktop in which resides 1,000 pages of PDF scores including the complete piano works of Bach, Mozart, and Schubert.  I’ve probably actually played through 50 of those pages.  The world has markedly changed and we have more information at our fingertips than we can ever possibly sift through.  This is a boon in terms of accessibility, but perhaps it also leads many of us to not fully appreciate former monuments of intellectual and artistic thought.  How many times did Beethoven himself hear his own symphonies actually played?

     The most striking aspect of Jump Point for me is thinking about the Bubble Generation (Hayes’ term for the Millennial Generation or Generation Y), which I just missed being a part of, having grown up without internet.  A generation he cites as having with such differences as 1) the avoidance of traditional news media sources (I’m all for that, never having had television as an adult until this year), 2) viewing access to information as a “right” or even “free by right”, and 3) a generation of consumers in which social networking and social communities garner a higher value as advertising than traditional media advertising.   Now though I welcome a change in the paradigm of getting information from non mass media sources and a world that enables more choice for the individual, having the ability to choose good sources of media is another matter.  I also find the intellectual reduction of works of art into merely information to be disturbing.  Reproducing a piece of digital information is free (take mp3’s), but there has to be a recognition of the value of a work of art’s creation and the fact that economic support and incentive will provide a means to an artist producing more and similar works of art.  And there has to be a differentiation between “entertainment” and “art”.  Art can function as entertainment, but all entertainment is not “art”.  At its core, I think the heart of the matter is a relativistic view that all 1’s and 0’s are created equal, rather than being the painstaking ouput of an individual.

Inarguably, I think we can all agree that traditional media will continue to evolve.  Someday television networks, record companies, video stores, movie theaters and more will become a thing of the past, or at least be radically transformed from what we grew up with.  And there’s really no fighting that tide.

Ironically enough, since Hayes published the book in 2008, I believe in some ways the world has been transforming much faster than he anticipated, particularly with the birth of cloud computing and a whole new projection of media access as a result across multiple device platforms, not to mention the book industry with the Ipad and Kindle.  And of course, that change might not seem all that rapid here in the US right now, but imagine in Asia and emerging markets as the internet continue to open up access to global markets and information (and even political movements: Arab Spring, etc).

My synopsis is surely simplified and by no means comprehensive, but I think it gives you an idea of the scope of the book and how easy it is to relate to our musical world in terms of artistic output (scores, recordings, and “advertising”/networking).  As the means of producing an album becomes cheaper and digital, it becomes easier for us to afford marketing an independent album; it also becomes that much more difficult to earn any proceeds and recoup our recording costs.  Recording studios have been closing for years with the proliferation of home studios and greater competition, not to mention our declining wages, and inability to maintain copyright protection on our product (interestingly enough, the movie industry exercised a whole lot more restraint in terms of copyright restrictions, but DVD sales are now falling off a cliff as well with Netflix and Hulu).  So it’s a tricky area to navigate with both pros and cons and we’re pretty much on our own now as independent artists to find a path. And I suspect as technology continues to advance rapidly, we are going to be changing our direction more than a few times in the next few decades.  Thankfully, the core of what we do remains fundamental; the medium in which it is distributed is of much less concern to me, as long as we have an viable means of distribution!

Our grandchildren may very well look at mass marketed books as antiquated, our CDs and vinyl as leftovers from an ancient era. And on an environmental scale, it certainly makes sense for us to not be printing millions of books, magazines, and more when the same information can be transmitted and accessed digitally at a lower cost, with a much lesser expense to the environment.   As I see it, we must flow with the inevitability of this digital transformation and hopefully find ways to maintain relevant as artists without sacrificing the integrity of what we do.