By Andrew McMillenJune 19, 2012
What are you listening to? Chances are you accessed it from a streaming music-subscription service. Who wins and loses from the surging popularity of such sites as Rdio or Spotify?
Little-known fact: among David Bowie's many talents — singer, guitarist, hit songwriter, actor, multi-million record-seller, one-time androgynous alien — he's also a soothsayer. The English pop star told The New York Times a decade ago, "The absolute transformation of everything that we ever thought about music will take place within 10 years, and nothing is going to be able to stop it. I see absolutely no point in pretending that it's not going to happen."
Bowie continued: ''Music itself is going to become like running water or electricity. So it's like, just take advantage of these last few years because none of this is ever going to happen again. You'd better be prepared for doing a lot of touring because that's really the only unique situation that's going to be left. It's terribly exciting. But on the other hand it doesn't matter if you think it's exciting or not; it's what's going to happen.''
That New York Times article was published in June 2002. Ten years later, Australian music consumers find Bowie's out-there predictions have become reality. Music sales have taken a severe dive worldwide; according to the most recent Recording Industry in Numbers report, 2011 delivered the "least negative result in global recorded music sales since 2004"; overall revenue fell by just three per cent, continuing the year-on-year decline.Today only a handful of the biggest artists can successfully earn a living from recording and releasing music alone; the vast majority of singers and players must tour regularly to top up their bank accounts, while simultaneously promoting their latest release.
And, perhaps most significantly, technological innovation and begrudging record-label cooperation have combined to offer music fans the chance to shun the concept of traditional ownership entirely, in favour of streaming millions of songs wherever they want, as often as they want, in exchange for a regular fee. It's Mr Bowie's music-as-utility forecast come true. Streaming music is here, and likely here to stay. For music fans, the benefits are clear. Subscribe to an online service like Rdio or Spotify — the two most popular players in an increasingly-crowded Australian market — for $12.90 or $12.99 per month, respectively, and you'll have access to almost any song you've ever loved, plus a whole galaxy of tunes you don't yet know. You'll also be able to hear new music on the day it's released at the record store and on Apple's iTunes Store. (Since April 2003 the iTunes Store has sold more than 16 billion songs.)
Streaming offers an all-you-can-eat buffet of music, on your computer and your smartphone, and no matter how much you 'eat', the monthly fee remains the same. (Spotify also offers a free subscription, which automatically inserts audio advertisements into your playlist every 10 minutes or so.) Streaming is the most cost-effective and convenient means to music discovery ever mass-marketed; indeed, the initial enormity of the music library on offer — both Rdio and Spotify host 15 million-odd songs each — will overwhelm even the biggest fan.
That record labels succumbed to streaming service providers by licencing their artists' music was no doubt driven by a desperate need to regain some control over their ailing profit margins. Peer-to-peer file-sharing technology like Napster, Kazaa and — more recently — BitTorrent are widely acknowledged to have decimated overall music sales from 1999 onwards. The record industry learned a hard lesson: if the option is available, the tech-savvy will choose not to pay for music.
Exactly how much this lesson cost the industry in lost sales revenue is impossible to measure, but it's safe to say that the number in question is a whole number containing many, many zeroes. The labels' great big hope is that the sheer convenience and relatively low cost of streaming will function as a finger in the proverbial dyke. A month's unlimited subscription to Rdio or Spotify costs less than the average album does in-store, or on iTunes. Better that people pay a little money to hear their artists' music, the labels figure, than nothing at all. The recording artists generally can't choose whether or not their music is streamed, as their record labels usually hold the rights over how and where their music can be sold. Only the biggest fish can swim against the tide: bands such as The Beatles, Coldplay, Metallica and AC/DC all have opted out of including their respective catalogues on streaming services. Spotify won't be drawn on the amount of revenue that gradually filters down to individual artists; spokespeople have only ever stated publicly that 70 per cent of the company's revenue from subscriptions and ad sales goes to record labels, which then pass on a small percentage of the per-stream revenue to the artists.
Perhaps it's always been true that only the foolhardy would pursue a career in music with the primary goal of wealth in mind. But now it seems that the money-laden scales are tipping further away from the songwriters and performers in favour of those who build and maintain the tech services which enable the sale, distribution and consumption of music.(Just ask Apple's shareholders.) So, is streaming going to kill the rock star?
The Price of Raising Your Profile
Subtract the thorny issue of per-stream income for artists and there are few arguments to be made against the value of your music appearing on these services. "I think anything that makes it easy for people to find and listen to music is a good thing," says 30-year-old Brisbane-based pop singer-songwriter Kate Miller-Heidke, whose third album, Nightflight, debuted at Number 2 on the Australian Recording Industry Association (ARIA) chart, and at Number 1 on the iTunes chart when it was released in April.
Miller-Heidke refuses to view streaming as an additional source of income: "Perhaps some people will be making revenue from it, but not me," she says. "I suppose my label [Sony] will make some, and they pay for me to make albums."
"It's a privilege to make music and have people listen to it.
"From a purely fiscal perspective, it's best for me if people buy the album, preferably at a live show. But I'm happy for my music to be 'consumed' in any and every way — I don't recommend eating it, though," she smiles. This might sound overly idealistic until you consider Miller-Heidke's considerable success: she and her husband and co-writer, Keir Nuttall, were awarded the USD25,000 grand prize in the 2008 International Songwriting Competition for their song Caught In The Crowd, the music video of which has been viewed over 268,000 times on YouTube.
Since releasing her first album, Little Eve, in 2007, Miller-Heidke has enjoyed an increase in her public profile — including a couple of appearances on the ABC television show Q&A — and notes that her personal finances have steadily increased in parallel. Five years ago, her income was comprised solely from live performances and her publishing advance from Sony; nowadays, Miller-Heidke gives a rough estimate that 70 per cent of her income comes from live shows, 20 per cent from publishing, and the remaining 10 per cent from merchandise sales and recording royalties.
The singer-songwriter admits it's "impossible to say" whether her current level of income is sustainable. "One of the characteristics of the music industry seems to be its fickleness and volatility," she says. "However, I'm doing well at the moment, and have been making a living from original music for six years now. I'm trying not to take it for granted."
When asked to reflect on how her own music-listening habits have changed in the past five years, Miller-Heidke admits that she used to spend "a lot" of money on CDs. "Now, if I hear something I like, I buy it on iTunes straight away. Sometimes I buy one or two songs instead of a whole album by an artist. I find CDs fussy.
"I like to play vinyl at home," she continues. "The significant change for me is that there's never any anticipation time now. I remember putting in import orders at [Brisbane independent record store] Rocking Horse and waiting excitedly for the phone call. Now, it's almost too easy. But yes, I use Spotify and YouTube, as well as [audio distribution platforms] SoundCloud and Bandcamp. I used Spotify every day while living in London.
"Services like Spotify and Rdio corral people, and they'll make the situation much more controllable than everybody using different torrent sites," she says. "I like the subscription model. It's user-friendly, and will make it easier for people to find new music. I like that it's an alternative to iTunes, too."
Rather than fretting about the many maybes surrounding streaming, Miller-Heidke takes a Bowie-like stance: "In all honesty, I don't expect to make money directly from streaming at any time in the future, but my record label will, and they pay for me to make albums and videos," she says. "I want them to make money from me. This is my situation, as an artist signed directly to a major [label]. I have friends who negotiated independent deals with major label distribution, and I'm sure they will be paid for streaming (though possibly not very much).
"It's happening, so people in the industry can keep being concerned or they can accept it and try to harness it in a smart way," Miller-Heidke says. "It's better than BitTorrent."
Streaming Out Pirates
At last year's ARIA Music Awards, Sydney-based indie folk quintet Boy & Bear won five awards: album of the year (for their debut, Moonfire), best adult alternative release, best group, and two breakthrough-artist awards (one for Moonfire; one for their single Feeding Line). At the heart of their remarkable ascent was co-manager Rowan Brand, who had represented the group alongside Guy Morrow since June 2008, when Boy & Bear was a solo project for singer-guitarist Dave Hosking. Brand sees streaming as something that fosters the discovery of new music while protecting the artists' intellectual property (IP).
"The witch hunt for music pirates seems to me like a fairly unproductive crusade," Brand says. "Thinking of Spotify or Rdio as the solution is misguided and destined to end up in people being disappointed, upset and missing out on the positive potential that new music services can unleash for the industry. The severe prosecution of a torrenting teenager in the US for hundreds of thousands of dollars is indicative that we are probably going about this the wrong way," he says, referring to Boston University student Joel Tenenbaum, who was ordered to pay damages of USD675,000 to five record labels after downloading 30 songs from an unlicenced file-sharing service in 2007.
"The alternative is to beat piracy with superior service offerings and ensure that music is valued, be it by paying through subscriptions, or paying with our attention through the presence of advertising.
"Although the models for these kinds of services are still developing, the growth of accountable, measurable, and monetisable services provides new and exciting pathways to give fans flexibility and choice," he says. "They also give IP holders security. As new models are developed, artists need to be a part of that dialogue, and have their interests represented — not just the interests of the labels they work with. Perhaps there's more room for that."
Like Miller-Heidke, Brand demurs from viewing streaming services as just another revenue source for artists. "I see it similarly to how we currently view radio in Australia; music-discovery tools like Spotify have tremendous capabilities for artists to have their music spread fan-to-fan, like wildfire, as Spotify makes it so easy to engage with your friends, share music and collaborate in influencing each other's taste," he says.
Although Brand remains good friends with Boy & Bear, his co-management tenure ended in January; he now co-manages another Sydney band, indie pop six-piece Tigertown. "I think [streaming] is actually one of the best ways to make the most of fans who 'live online': to give them stories to talk about and music to share with their friends. To stick our heads in the sand, and pretend it's all going to go away, is both ignorant and foolish."
Another way to put it? "Adapt or die," says Blake Rayner, co-manager of Sydney-based indie pop quintet Jinja Safari, whose debut album is due later this year. "Three things to remember," he continues. "Diversify your income; release fantastic music; and work hard. It's not as easy as it 'used to be', but artists need to be smart, release good music and work with managers and labels who can tap into the ever-shifting delivery method of music." (Rayner also works for the record label Dew Process as A&R (artists & repertoire)/international licencing manager, but he makes it clear during our interview that he's speaking as a band manager, not a label representative.)
"Diversity of income is the way forward for artists," he continues. "I never experienced the 'golden age' of the music industry — lobsters, private jets and the like. It did exist, and does still in small parts, but being under the age of 30 I think I missed the boat by at least a decade," he laughs. "Don't get me wrong: I'll still shoot for the stars, even if I land on the moon."
Rayner acknowledges that the concept of music ownership is foreign to an entire generation that has grown up using digital-music-distribution platforms such as iTunes and its less legal alternatives. That trend is set to continue as more listeners tune in to streaming services. "The whole idea of 'owning' a music file is going to become less and less relevant," he says. "When you have instant access to every piece of your favourite music and more, whether streaming on your computer or smartphone, as well as the ability to create your own playlists and libraries — why are you going to bother hunting down mp3s on torrent sites? Monetising playback in these new streaming models is just another tool for future-proofing the business."
Rayner calls Jinja Safari "one of the 'new generation' of bands; a group of musicians who create everything internally. From recording their own music to graphic design (CD artwork, website design), film clips and overall creative direction — it all happens within the band. My co-managers and I can make changes to marketing plans and use the pacing of the band's profile to change gears and meet the demands of the fanbase very easily."
The band's second EP, Mermaids & Other Sirens, was released for free online: one song each month, over five months. "We created new artwork for each track, and used the band's close creative friends to produce, shoot and edit videos for three songs," Rayner says. "That would've taken thousands of dollars and multiple creative teams in a traditional setup. On paper it's overboard; ludicrous. For a fan, it's a goldmine of content to view as an opportunity to get closer to the band." In return, Rayner believes that the fanbase has a deeper investment in the band, which translates into strong audiences at their live shows. "This is the reason the band were able to play their first show in May 2010, and then sell 1,000 tickets in Sydney 18 months later," he says.
Rayner views partnerships with streaming services for exclusive releases as just another way of exposing Jinja Safari to a wider audience.
"There's always a need for exclusive content," he says. "CDs and vinyl will be still be around for years; iTunes and Spotify aren't going anywhere soon, and who knows what will be the next iteration? It's not the platform, it's the fan connection: every true fan loves bonus songs, b-sides, behind-the-scenes and personalised content," he says. "It's important to remember that the thrill of listening to new music and connecting with an artist isn't going away, ever. The method of delivery will constantly evolve, and smart artists, managers and labels will be on top to ensure its viability."
An Artist's Lament
For all the talk surrounding Rdio and Spotify et al, the only certainty is that nothing's clear. Labels, streaming service providers, artists, managers, and the fans themselves are waiting with bated breath to see whether these radical innovations in music consumption are here for a good time or a long time, or both. With so many parties to satisfy — all of them with their palms outstretched, expecting adequate payment and/or reward — streaming music remains a tricky tightrope act, and one that may need many revisions before it truly sticks.
With this uncertainty in mind, it seems appropriate to end on a series of thought-provoking questions, rather than more Bowie-esque predictions. When The Global Mail approached Quan Yeomans, singer-guitarist of platinum-selling Australian rock band Regurgitator, for comment, he declined an interview but provided the following. (It's worth noting that all but one of Regurgitator's eight albums are available on Spotify, and their five Warner Music Group albums can be found on Rdio.)
"Is it just me being paranoid, or is it starting to seem as though people are more genuinely excited by and engaged with technological shifts in the delivery of 'content' than with the content itself?" Yeomans begins.
"Is technology now evolving too fast for individual content creation to actually keep up with an 'artificial' demand imposed by technology's ever-increasing efficiency of organisation and dissemination? Does this artificial demand merely result in artists being pressured into becoming 'content producers', enslaved to an art-for-content's sake directive?
"Are audiences subsequently pushed into a position of information overload, often finding themselves skimming through terabytes of data simply for the sake of engagement, eventually unplugging only after their attention has been atrophied by the sheer task of having to select?
"Is technology design and evolution becoming the most relevant mass-consumed 'art form' being created by the largest 'creative' community in existence today? If so, will older art forms simply become engulfed?" he wondered. "Will they become nothing more than the wallpaper of the ever-replicating and expanding choice-labyrinth of technology-based culture that we all wander through every day?"