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How long before record labels are irrelevant?

Artists and publishing companies must be looking at that 58% cut the labels are getting and wondering why they don't just go direct to Apple and Spotify to distribute their content.

Not long. They don't do much anymore. If you put your content direct on Apple, you have millions of listeners already - its just a matter of them finding your song. And you can promote your stuff on twitter, facebook, etc for free. And if you are big enough, on TV talk shows.
 
How long before record labels are irrelevant?

Artists and publishing companies must be looking at that 58% cut the labels are getting and wondering why they don't just go direct to Apple and Spotify to distribute their content.
That's why so many indie artists use Bandcamp. They receive 85% and a majority of the fans pay more than the suggested price.
 
Scathing blog post from Bob Lefsetz on Apple Music. Sure doesn't feel like anyone in the business is terribly impressed. You know it's bad when even Jim Dalrymple says Jimmy Iovine was terrible and his and Drake's portions of the keynote were a complete failure.

http://lefsetz.com/wordpress/index.php/archives/2015/06/10/apple-music/


This guys crazy and clearly in his 40's or over. Clearly missing the point.

"Three months free is a good start, but there’s no incentive to keep up your subscription"

tell me where you stream any track of your choice, whenever you want on your mobile phone?
YOU CANT.

Spotify dont offer it unless you pay and I dont believe any one else does. So if you get hooked on this process after 3 months your're going to have to pay someone. Spotify would have to offer a 3 month trial on premium and they dont, so Apple is clearly going to get more customers going foreward than Spotify will.

Secondly, the whole issue is the same as with movies and tv. The content providers are the ones who hold all the power, not Apple and not Spotify. Getting rid of freemium is down to the labels. Apple couldnt care less. The problem is this spotify experiment has proven over the last few years that the in 1 in 4 customer that's meant to pay Taylor Swift isnt worth it to her. If the conversion was 2 in 4 or 3 in 4 I think we would be ok. But to Swift it just means that 3 people out of 4 are not paying alot to hear her music and she's big enough to force them to pay. And that the issue.

Even more so that Apple have control of pretty much everything you consume on your device (torrents are rare etc..) the labels feel more than ever they can have their way. And their doing it their way right now.
 
I haven't seen this mentioned in the discussion thus far, so I thought I'd point it out:

When it comes to streaming royalties I believe there to be a significant payout difference between true on-demand playback (the listener controls what they listen to and when) and "radio" type playback (a DJ or algorithm make the choice of what plays next), as in the former pays roughly an order of magnitude more per playback than the latter. And I believe the specific amount of on-demand streaming royalties are subject to negotiation between streaming service providers and content copyright holders. Major labels tend to be able to command higher royalties per on-demand playback than independents. Not to mention those regional differences depending on what domestic market a listener happens to stream from.

What I find unfortunate in all this is that those comparatively more substantial on-demand streaming royalties add up to little more than a pittance for most anyone other than very successful recording artists with playbacks in the many millions per month. I suppose that's the effect markets have on scalable endeavors dependent on audiences and such is life. I still wish that on-demand streaming royalties provided more supplemental income for less popular recording artists. Of course dedicated music fans may choose to provide such additional income to less popular artists by buying albums outright on Bandcamp, CD Baby, or iTunes or some such. Or attend their shows. Or buy their merchandise.

In any event, I respect this guy's opinion: Steve Albini on the surprisingly sturdy state of the music industry

Maybe you'll get something out of the old man's opinions and reflections as well.
 
its just a matter of them finding your song.

And having a successful business is just a matter of being profitable.

Gnomes_plan.png


FWIW I've been hearing "the labels are dead" since about 1998 yet here we are. "Not long" is a relative term though I guess... Getting your music on iTunes or Spotify or Pandora doesn't mean you have millions of listeners. It means you have millions of POSSIBLE listeners. Big difference. It's you and thousands of other bands no one has ever heard of clawing it out in an increasingly over-saturated market place trying to get the attention of users that are already bombarded with more music, video games, movies/tv shows, etc., than ever before. There is nothing magical that happens once you get distribution. Especially these days where it's so easy to get distribution.
 
I am one of those that almost always listen to the lyrics when I listen to music. Actually to a point where I find it hard to read 'heavier' stuff like books at the same time unless the music is instrumental or something I have heard lots of times before.

I love actually listening, I rarely use music as background noise like a lot of people do.

Used to really enjoy reading the whole CD-booklet (not just lyrics, but also producing credits, backup singers, where it was recorded and all details like that) while listening to an album for the first time back in the 80s and 90s. It is one of the things I miss a lot about the digital age - one tends to not get the same connection with the material as when physical media was the only option.

My listening habits are similar to yours. If I want background music, I prefer instrumentals, including jazz. I predate CD's, I started on vinyl and used to love the artwork, notes, etc. Ditto when CD's arrived. We lost most of that in the current digital age and today most music has a limited dynamic range compared to the past. Most of it is just loud, you don't get the extremes anymore. Now music is "good " enough", not as good as it could be.

I enjoy listening to live recordings, much of it from the Classic Rock era. I love to be able to watch a performance online too if the video and sound are good quality.
 
"During Apple's three-month free trial period that it provides to all subscribers, it is not required to pay any fees to rights holders."

Let's say that I just released my record (at the beginning of this three month period) and most of my listeners happen to be on Apple Music. Does that means that I get $0 from Apple?

This would kill me. Three months of royalties from a new release is a lot of money for an independent artist.
 
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Lets get one thing clear; the true purpose of Apple Music in the long term, as amicable it may be to persist in wanting to be the leader of music services (remember Ping?), is for Apple to have a world-wide radio broadcast system. And in this sense they've already won, easily: Up the date, to the second broadcasting alongside every single other person that has an iOS device.

The music streaming stuff is just a revenue stream for Apple; the channel to communicate with everyone, in real time is the real goal and honestly everyone is already a part of it.

This is the new world. Welcome. :apple:

Do you wear tin foil on your head as well? Oh, and maybe we never actually landed on the moon too!
 
I'm not a Taylor swift fan in the slightest, I actually can't stand her music and her


But she's 100% right about the fact the free tier version of spotify devalues music. Why is that movies aren't free but music should? They both cost time and hundreds of man hours to make


In 2015 no one wants to buy individual songs and albums but Netflix has shown that people don't mind paying monthly for all the content at once

There are plenty of "free" shows over the air on network television, and they cost a lot to produce. That's what ads pay for.
 
I like how Taylor Swift refers to lyrics and music that other people wrote for her to perform as hers. They're the ones that deserve the credit, not her.
I'm no Taylor swift fan, but you'll be surprised to learn (as I was) that she writes all her own music and has several accolades for it.
 
Correct, I just offered up some of my own favorites. I didn't mean to imply that only a Beatles, Stones and Zep-like new artists could reignite the masses desire to buy music. People love Sinatra. Where's the next Sinatra? Queen. Duran Duran. Nat King Cole. Count Basie. Fill in the blank of whichever artists you considered so great that you wanted to buy their music in the past. Where's the modern incarnation of whoever that is?

The point was that I think the problem is that the quality of modern music in general has fallen down and that digital music collection owners are content to just shuffle play collections of their own favorites already owned because there isn't the same compulsion to add much new music to those collections.

Example (and again, this is biased to me): Hop back even 20 years and I'd pretty religiously tune into America's Top 40. Conceptually, that's the best 40 new songs available. I'd listen. I'd hear a few new great ones and then I'd look for CD or CD singles to get those new great songs. The last 10+ years, I still tune into the top 40 from time to time hoping to hear some great new stuff. But now- to my ears (so certainly ear of the beholder)- I rarely hear even one must-have. If today's top 40 is still the best 40 new songs available, I don't tend to hear much in that best available that moves me to want to hear it over and over (purchased or rental).

That said though, occasionally I'll hear something that is a standout song in the modern era. When I do, I may want to own it. So then I'll search for it, often find it on a compilation disc like "Now that's what I call music" and then pick up that CD for a dollar or two via the multitude of used CD channels. I just added more than one new song to my collection but it won't count as new music purchase because I got it by buying a used CD. That doesn't mean I want to rent music; I simply added to my collection in a perfectly legal way.

That compulsion does not hit nearly as often as when I was younger because- IMO- today's music in general has lost something (with rare exception). And since my digital collection never wears out, I don't have to rebuy any of the good (again IMO) owned music over and over like I had to do back in the days before digital. That also doesn't mean I want to rent music. Is everybody me? Of course not, so to each his own. The personally subjective point I was mostly trying to make is that whatever music used to be good enough to motivate us to buy seems to come along less frequently today (IMO). And whether your favorites are- Beatles or Sinatra or Eurythmics or Spice Girls or Duke Ellington or whoever- I think the problem of declining music sales is likely better addressed by working harder to find new generations of similarly-quality artists and bringing their works to market, rather than assuming the masses want to rent.

All that said, I certainly think streaming services can help consumers find a modern generation of fantastic new artists on that level (assuming they are out there). And, if so, I can see renting a while for "new music discovery" working well if new music discovery really works. Else, I suspect it won't take long for the renters to build up an owned library and do what renters do when they don't have to keep renting... become owners.

Well put post. My feelings are the same as yours.

Every so often, I hear a song that like, and I buy it on iTunes for a pound. But most new music I hear, I don't like, at least, not to the extent of wanting to buy it. But back in the 80s and, to a lesser extent, the 90s, I regularly listened to the top 40 on the radio, because there was sufficiently good music to endure the dross. Today, there is too much dross to endure listening to the radio. As I have a reasonably sized library, I'm content to listen to all that and add to it gradually.
 
Maybe. I missed the Beatles on that first run (wasn't born yet). Discovered them in about 1982. Through learning more about them, I found the Stones, Who, etc. In the early 80's I was having my own British Invasion which then opened up with other 60's artists that were great (IMO) but not british, including Motown, a good number of American artists and some from other countries. That then spilled into 1970's music where there were still some classically great (IMO) stuff to be found too.

What I think was so great about all of that classic rock was that so much of it sounded original. It didn't sound synthesized. It wasn't auto-tuned. They didn't have drum machines. Songs seemed to have a lot of variety.

Today's music sounds too similar to me. That classic rock diversity seems replaced by 2 or 3 producers over-producing, too much reliance on auto-tune, too synthesized... maybe even too formulaic. Of course, not every single song today is like that and there was some formulaic rehashing in the classic rock library too but I found plenty to really like back then and I don't find something comparable to that now.

Back then, they had archaic technology and today artists are relatively god-like in terms of technological advancements. Conceptually, given how much progress has been made in music-making technologies since then, I would think a Beatles-caliber artist would be able to make better music today than they could then. I can imagine taking a rMBP with Garage Band back to Pete Townsend or Queen or Lennon & McCartney or similar and they would have flipped out at what even an amateur can do today with free* tools.

So even if I try to buy into better technology breeds lazier creativity, I would think the huge advances of music-making technology should yield at least the same caliber of diversity and quality of great music-making. And I don't even buy the lazier creativity theory myself.

I'll concede that a second coming of a Beatles may be impossible but now many more people are equipped with the ability to create music than back then. So maybe we can't have another Lennon & McCartney or Zep or Stones, etc, but how about some wow, must-have hits from a greater breadth of music makers than existed back then. In other words, instead of one band cranking out 20 #1 hits, how about far more 1 or 2-hit wonders in the present? Where are they? The tools are so much better than any of the classic artists could ever imagine.

The internet provides a relatively free path for a great song from a nobody to get out there. Social media makes it pretty easy for a nobody to get heard and passed along to other sets of ears. If a nobody recorded a "Hey Jude" today, the path to mass distribution is not limited to trying to get a Studio to sign them. Between Youtube and Social media, it can cost nothing to set it loose and even find a following. A few modern hits from nobody have come up exactly that way. It seems there should be so many more.

Excellent post.

One of the great myths of modern-day thinking is that the more people you have doing something, the better the results will be. I don't subscribe to that point of view. The greatest composer, J.S.Bach, lived 300 years ago. All the technology in the world hasn't usurped that.

The greatest art comes from a long time ago, each masterpiece created by one person, in a time when there were far fewer people in the world. In theory, we should have the best music ever created in the past few years, but it's not the case. Music doesn't progress in a linear fashion from the worst at the beginning of time to the best today. It peaked with Bach.

There has been much great music written since, but consider this: there has been no intrinsic change to the building blocks of music since man discovered music. The tonic is still the tonic, the dominant is still the dominant. The natural harmonic series is still intact. The Fibonacci Series and the Golden Section remain the same.

Is there a natural expiry date for the invention of new music? I think there is still much good music to be written in C major, but not replicating what has been written already becomes harder. It's remarkable how much variety of music there is, considering that we have just twelve notes to choose from. That, to me, is a testament to the ingenuity of God's Creation.
 
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Apple should put their energy/focus on the platform/hardware. it is things like the App Store, multi touch and builtin GPS that makes smart phones such wonderful products.

Instead spending time/money on buying up other companies and rebranding their features as their own, with little or no innovation, I much rather see them provide APIs so developers can bring Siri functionality to all their Apps and dedicated hardware, so Siri can activate automatically when it hears me saying "Hey Siri", without draining battery life.

That will revolutionise the product.

If I want to listen to streaming music for 10 dollar/month, I can just install Spotify. No need for Apple there.
 
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Why is the annual amount on that chart 10 times the monthly amount instead of 12 times the monthly amount?

Sweet, Apple must be following Beats Music which offers a $99.99 yearly membership so annual family should be $149.99.
 
Spotify would have to offer a 3 month trial on premium and they dont, so Apple is clearly going to get more customers going foreward than Spotify will.

Actually Spotify has a 99 cent 3-month trial offer for the full service. The 99 cent clearly being just a way to secure the credit card id so that people don't jump from 3-month offer to 3-month offer and never end up as real paying customers.
 
Let's say that I just released my record (at the beginning of this three month period) and most of my listeners happen to be on Apple Music. Does that means that I get $0 from Apple?

This would kill me. Three months of royalties from a new release is a lot of money for an independent artist.

This could be a major factor for anyone with a new release - especially if customers that already have something like a Spotify or Google music subscription puts it on hold to test out Apple Music for 3 months. A lot of released music usually have massive interest (and physical sales back in the day) the first couple of months if it manages to somehow break through.

Even big artists back in the CD-age probably made most of their sales and direct money from albums during the first 1-2 months after release. It is a curve that tapers of very quickly afther the initial release - at least for established artists where the fans eagerly awaits a new release and will buy (or these days stream) it as soon at it comes out.
 
How long before record labels are irrelevant?

Artists and publishing companies must be looking at that 58% cut the labels are getting and wondering why they don't just go direct to Apple and Spotify to distribute their content.

Yes! This is something happening in the games industry. Once upon a time if you wanted to sell a game you needed a publisher who would front money and pay for manufacturing, shipping, etc. When that barrier was removed thanks to services like Steam and just the internet in general, developers started skipping out the publisher and self-releasing games.

There will always be need for a publisher, for creatives that just want to make things and not worry about the technical aspect of getting it out there. But for the music industry to have so many fingers in the pot and the creatives getting screwed over there has got to be some kind of revolution coming up. I think the iTunes store, Spotify and those kind of services are providing the foundation for this.
 
There are plenty of "free" shows over the air on network television, and they cost a lot to produce. That's what ads pay for.

But how do you charge enough for the ad's in an audio service? That's been spotify's problem. They initially started with ad's on the screen of the desktop version but no one looks at them. No one would look at ad's on mobile either for a audio service. If you put ad's in the actual audio stream people get pissed off after a while as well and it becomes even worse than commercial radio.

TV ads work because the audience is pretty much captive. That's not the same for music.
 
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And having a successful business is just a matter of being profitable.

Gnomes_plan.png


FWIW I've been hearing "the labels are dead" since about 1998 yet here we are. "Not long" is a relative term though I guess... Getting your music on iTunes or Spotify or Pandora doesn't mean you have millions of listeners. It means you have millions of POSSIBLE listeners. Big difference. It's you and thousands of other bands no one has ever heard of clawing it out in an increasingly over-saturated market place trying to get the attention of users that are already bombarded with more music, video games, movies/tv shows, etc., than ever before. There is nothing magical that happens once you get distribution. Especially these days where it's so easy to get distribution.

You have to do a cost analysis. Is the time and money spent marketing yourself or band more or less than going with a music label that will do it for you. Just because you have a label doesn't mean they will put you on the top 10, top 40, or top 100.
 
You have to do a cost analysis. Is the time and money spent marketing yourself or band more or less than going with a music label that will do it for you. Just because you have a label doesn't mean they will put you on the top 10, top 40, or top 100.

There are no guarantees, but 17yrs into viable, low cost self-distribution of music and the majors are still around and still signing new acts, so that has to be at least somewhat telling of the realities of the music business. Musicians need money and labels are one of the few places that are willing to invest in such a high risk venture. But the money is only part of it. If money was the only reason then we'd see successful artists leaving their labels after their initial contract was over. Labels must have other things to offer as well. Trent Reznor, for example, had a major falling out with his old label, went the solo route for years and eventually signed up with Columbia for his new records. Basically, Trent wanted Columbia for its marketing muscle and this is coming from a guy that's been successful for decades, has tons of money and millions of fans around the world. It can be a faustian bargain no doubt, but a deal with the devil can be better than no deal at all.
 
There are no guarantees, but 17yrs into viable, low cost self-distribution of music and the majors are still around and still signing new acts, so that has to be at least somewhat telling of the realities of the music business. Musicians need money and labels are one of the few places that are willing to invest in such a high risk venture. But the money is only part of it. If money was the only reason then we'd see successful artists leaving their labels after their initial contract was over. Labels must have other things to offer as well. Trent Reznor, for example, had a major falling out with his old label, went the solo route for years and eventually signed up with Columbia for his new records. Basically, Trent wanted Columbia for its marketing muscle and this is coming from a guy that's been successful for decades, has tons of money and millions of fans around the world. It can be a faustian bargain no doubt, but a deal with the devil can be better than no deal at all.

The labels do a lot of the work for you - marketing, selling, setting you up with sponsors, etc. It's the cost of business. And the thing is, you can be Madonna, or Elvis, or whoever, but without the label, I wouldn't be surprised if people soon forgot about you.
 
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