Streaming Analysis (Reposted w/ permission from Bob Lefsetz)

  • FYI How many of us think about the musicians actually getting paid....this is a fascinating read from Bob Lefsetz

"My friend Ralph sends me a cornucopia of newspaper clippings from the U.K. on a regular basis. To a great degree they’re obituaries, or a spotlight on a minor figure who had impact in the world of music, but this week’s package had even more, which I’m going to tell you about now.

There were multiple articles on the success of U.K. music around the world. One in ten songs streamed globally is British. As a result of streaming, U.K. artists now have reach into Asia, Africa and South America that they did not have previously. U.K. artists’ impact is four times greater than the country’s GDP.

But it gets even better.

U.K. labels now have 640 signed acts, a whopping 68% jump from 2010!

As for all that hysteria about the drop in streaming consumption back in March and April...streaming ultimately went up more than 20%! Ain’t that music business reporting, all short term, all hit and run, with no perspective. And streaming is the champion, it represents 80% of music consumption in the U.K.

But this is where it truly gets interesting... Almost 200 artists were streamed in excess of 100 million times. The value of a stream varies, despite all the penny nonsense thrown around. I’d explain it, but either you know how the ecosystem works or you don’t. But I’ll point you to this article: which calculates that a million streams earn $4,370. Well, that means if you get a hundred million streams, you make...$437,000!

Let’s not get into the penumbra, the minor details, whether it was a paid stream or one that came with advertising and...

Let’s not assume you’ve got a lousy deal.

What we’re saying here is 200 artists made nearly half a million bucks from streaming last year. You keep nearly all the money if you’re your own label, but the new standard is closer to a fifty/fifty split of net if you’re signed to a label and if this is the case, this means that over 200 acts made in excess of $215,000 from streaming last year. Of course, we can get into costs, what defines the net, but if you go back to the old days, which people wax rhapsodic about, most acts didn’t even go into royalties, they survived on the advances, what was left after recording costs, if anything.

And now you’re saying that all the money is going to the classic acts, but that is not true. Ed Sheeran, Harry Styles, Adele, Sam Smith, Lewis Capaldi and Dua Lipa were some of the most streamed, along with the Beatles and Queen.

And let’s not forget old acts are still getting paid from streaming, wherein the old days their recorded music revenue ultimately faded to zero, or close to it, because their albums weren’t even available in stores, there was a space issue. If you can’t find it, you can’t buy it...but now with streaming, everything is available at your fingertips, everything is findable.

Meanwhile, over 8,000 acts eclipse one million streams annually. That’s $4,370. Not bad considering back before the internet the major labels only had a few thousand acts on their rosters.

So, what does this MEAN?

Well, the complaints are out of proportion with the reality. Turns out a lot of people bitching were propped up by the labels of yore. They had deals when deals were rare. They were the beneficiaries of advances and marketing and tour support, but most of them never earned royalties. And now, it turns out that most people don’t want to listen to their music, it has not survived, it has been eclipsed by that of youngsters and stars. Or else the oldsters have bad deals.

Once again, a million streams is no longer that high a threshold. 8,000 acts a year reach that total! So if you’re bitching that you’re not getting paid much on 10,000 or even 100,000 streams...turns out you’re really not that popular. And if you think you have a devoted fanbase, you can always go on the road, which acts have done for eons after losing their label deals. The label built their rep, they’re surviving on it, they’re getting few recording royalties, if at all.

As for new acts... Yes, it’s harder to get noticed. Then again, you’ve got the tools to get noticed at your fingertips! In the days of yore, you were hamstrung. It cost a fortune to record and distribute, you could not get your story out, you were dead in the water, maybe you could play the local club. Now, many acts tour the world, or at least their home country, without having a major record label deal at all!

As for those old and new acts still complaining, they can still sell overpriced vinyl at the show, as well as CDs and other merch. Merch can be made cheaply and easily and sold via the web, what a world!

What we’re seeing is evolution. There are tons of new successful acts. Did the acts of the thirties complain that the Beatles were stealing all their money, that they weren’t getting paid recording royalties in the seventies, in the heyday of Queen? OF COURSE NOT!

As for the music being made...

I point you to this "Daily Mail" story:

"Pop songs will get SHORTER in future because the attention span of young people has dropped by 33% since 2000, experts predict":

In other words, you’ve got eight seconds to hook the listener, as opposed to twelve twenty years ago. And you only get paid on Spotify if a song is listened to for thirty seconds.

So, you’ve got to get to the hook sooner, to grab people, to make sure they continue to listen.

And streaming pays by the play, so it behooves you to not extend the song, to increase repeatability, which pays you more.

In other words, the medium is affecting the message.

So, if you need time to stretch may be working against you. Don’t shoot the messenger! This does not mean longer songs with delayed hooks won’t dominate in the future, but the populace must be driven to these songs, they must be superior, just like the eight minute "Stairway to Heaven" eclipsed under two minute ditties like the Beatles’ "From Me to You" or the Box Tops’ "The Letter."

So yes, it’s tragic that touring has been killed by Covid, but the truth is the future is here and it’s so bright you’ve got to wear shades and it’s getting better all the time. As for the quality of the music? I’ll let you decide, but the more money available/earned, the more you draw higher quality people to the enterprise, looking to score."
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