Streaming and Piracy: The Extended Debate

“Music is available to everyone at the touch of a button. Please try and use only those services that actually pay the artists, songwriters and producers, rather than those that don’t.” Queen, speaking to the IFPI for their Digital Music Report 2012.

THE DIGITAL MUSIC LANDSCAPE

Let us pose a question: have you ever downloaded music off the internet? We can practically hear the resounding “yes”, echoing through cyberspace and emerging from earphones worldwide.

Statistically speaking, there is a very strong chance that you have. Already there have been one billion songs downloaded in the US alone this year, according to research company Nielsen. But don’t jump to any hasty conclusions about music piracy - even more interesting than the size of that figure is the fact that was the number of songs legitimately paid for.

Many discussions about the relationship between music consumption and the digital sphere centre upon music piracy, illegal downloads, and the crippling effects that these behaviours have on the music industry.

But is this the reality of the online music environment? Is it true that the combination of music and the internet results in weeping musicians, clinging to their keyboards and staring forlornly into the distance?

No. Of course not. The digital sphere can have, and indeed has produced, many positive consequences for the music industry. Here is what a few of the world’s most successful musicians have had to say on this matter, as reported to the International Federation of the Phonographic Industry this year:

Shakira at Rock in Rio, July 2008.
From Arte & Fotografia.
By Andres Arranz.

• Shakira:
  
  “Each day there are more and better digital services to help us enjoy the wonderful music created throughout the world.” 
•  Natasha Bedingfield:
  
  “I love the way music turns all these techie devices like PCs, mobile phones and iPads into personalized juke boxes, and I love how the internet lets me connect.”
• Lee Ritenour:
  
  “There has been tremendous growth with new digital channels and streaming services. These new business partnerships have the potential to help and turn around our
  business.”

Our music consumption habits have changed markedly in the past decade. And what is the dominant trend that appears to be emerging? Music streaming. Not piracy. Not illegal behaviour. But the growth of legitimate and affordable online services in which music can be distributed and consumed, theoretically offering benefit to artists, producers, record labels and consumers alike.

So just what is music streaming? How does it affect artists? And perhaps the most important question of all is, does it represent the future?

MUSIC STREAMING

“Music subscription is transforming the way people experience and pay for tracks and albums.” IFPI Digital Music Report 2012.

Music streaming services are often referred to as ‘music subscription’ services. Although this is a relatively new industry, it is already commercially (and sonically) booming. The number of consumers subscribing to online music services globally is estimated to have increased by nearly 65% in 2011.

At the forefront of this music revolution is Swedish service Spotify. Sound familiar? With over 20 million users, chances are that many of you reading this are already using it. 

From musicindustryblog.wordpress.com.
Mark Mulligan, May 2012.

Created in 2008, Spotify offers users access to over 18 million songs for a small subscription fee, just like many of its competitors. So although it isn’t without cost, unlike music piracy, it is only a small price to pay for ensuring the future of the music industry, and having its present just a click away.

This all sounds very positive so far, and in many respects it is. But let’s take a deeper look at music subscription services. 

DOES MUSIC STREAMING BENEFIT ARTISTS

The most significant issue related to music streaming services is just how much of the revenue actually makes its way back to the artist. And immediately things start looking suspect.

Spotify pays artists $0.0096 per stream, which seems harsh, but is practically generous compared to cloud based competitors such as iTunes Match, who pay just $0.0033 per song streamed.

On top of this small payment, many streaming services require a $50 distribution fee (or thereabouts) to be paid by artists in order to place their music content with the provider.

In the case of Spotify, this means that an artist needs to have their music streamed 5, 171 times in order to break even. For iTunes Match, an artist needs 15, 127 streams!

Streaming services don’t actually seem to represent very good value for the artist, because the number of plays required is simply unrealistic. Surely the only artists who will ever see any kind of significant return are those who are already commercially popular and therefore successful, such that streaming services only contribute towards an established fortune?

So where does this leave the little guy? Broke? We sure hope not.

There is, fortunately, a flip side to this grim outlook. Not only is a third of a cent better than the zero cents music piracy offers, but also the number of users for subscription services is growing at such a rate that the chances of feasibly making a living through music streaming services no longer seem impossible. So although streaming is not ideal, especially compared to the good old days when people forked out $15 for an album, nor is it quite as diabolical as the scratchy audio quality that is a hallmark of so many pirated songs.

DOES MUSIC STREAMING COMBAT MUSIC PIRACY

According to a report released by Columbia University, entitled ‘The Copy Culture Survey: Infringement and Enforcement inthe US’, 46% of American adults have pirated music, TV or film products.

Of that, 70% of respondents in the 18 to 29 year old age bracket have pirated digital content.

Yet in this survey, many also indicated that they now pirate digital music files less because of legally available subscription streaming services.

Isn’t that just a neat little answer to this issue? Yes! Music streaming does combat illegal music piracy! Well it’s about time those Swedes did something good for the music industry - maybe we'll forgive them for ABBA.

MUSIC CONSUMPTION TRENDS

Although services such as iTunes continue to see their sales grow, and streaming sites are becoming a more prominent feature of the online music industry, traditional CD sales are plunging.

Yet hope is not lost. Funnily enough, it is one of music’s oldest friends, the vinyl record, who has seen physical copies of songs come back into hot demand.

The period from 2010 to 2011 saw a 16.3% increase in vinyl sales. What more, between 1993 (but let’s face it, who remembers the nineties anymore?) and this point in 2012, the actual number of vinyl records sold has increased by 4.4 million, from 300,000 to 4.7million!

VINYL RECORD SALES 1993 to 2012.
From Digital Music News.
By Paul Resnikoff, October 2012.

So there you have it. All this talk about the rise of digital music, and then it is vinyl of all things that provides an alternative future. Talk about new age fun with a vintage feel.

CONCLUSION

Let’s get one thing straight: music piracy is bad. Very, very bad. Don’t do it. But music streaming, sourced from legitimate services that provide financial return to artists and record labels, is not bad.

Can we categorically announce to the cyber-world that music streaming is good? No. Only time will tell as to whether that is true.

But what we can tell you is that music-streaming services have helped bridge the gap between the music industry of old and changing consumer behaviors that preference digital music files above the physical product.

So there you go. Run forth, music lovers, and search the Internet far and wide for your favorite music. But just be sure to pay for it. It’s only fair, after all.

Top of the Pack

So now that we have told you all what we will be doing with our feature, we at 'Who's Listening' also know the importance of being unique. Of course, in the vast web of the internet, it is likely that someone may have come up with your idea well before you had. Even South Park had this problem:



Here is one particular existing feature that we came across:

Indie bands talk digital music and life without the labels

But we don't think this is a problem, and even if it was, it is hard to avoid it. Instead, we see it is an incentive to make our feature stand out and be that much better.

In talking about the internet music world, it is easy to get shrouded by emotions about music piracy. It will be our task to provide a more rational, informed and instructive discussion for musicians and listeners alike.

Though what will make our feature most appealing is the diverse range of voices that we will be speaking with, and the multimedia media approach we are adopting. We will be speaking with a range of different artists, music industry bodies, record labels and marketing experts about how to achieve online music success.

 Our innovative approach may not be top secret, but it does match that of the all-pervasive Apple

So what is this multimedia approach? To present these voices, we will be using videos, photos, audio clips, alongside words. Scroll through our feature and you will not be bombarded by a mass of tangled words. We will make use of the possibilities of the digital medium, with screens that have a seemingly, infinite resolution to bring you a colorful, engaging and entertaining feature.

It's not far off now. So please stay tuned and keep listening! 

What we are getting at

It’s almost impossible to get accurate numbers when it comes to music downloads, but we can comfortably say that each year around 4 billion songs are legally downloaded, and between 4 trillionand 10 trillion songs are illegally downloaded. 

So how do musicians make money online? This graph might give you an idea.

Since the introduction of peer to peer (P2P) filesharing, with programs such as edonkey and Napster, music has become an online commodity easily copied and shared, with little thought of the larger effect it has on those who produce it.  Programs such as Limewire and even faster torrent platforms, such as the Pirate Bay, have made it all to easy for a couple of hyperlinks to land you the latest album for free. Not surprisingly, music labels and their artists have condemned such platforms as parasites who are chipping away at the future of music.

Our feature, Who’s Listening, is going to be concerned with how music is consumed online. More importantly, we will be looking at how the online music sphere is constantly changing with new technological developtments. New programs can dramatically change the online music landscape. We saw this with Napster, Limewire, Itunes, The Pirate Bay and now Spotify. We cannot avoid the internet, as much as industry folk would like to live in denial, if anything is to be done about music piracy, it's going to be done online. They need to make it easier to pay for music than it is to get it for free.  

Sony music did this is the days of Limewire. They were in the habit of releasing dummy songs with the names of their artists to push listeners, in a spell of frustration, to buy the real thing. A little ingenuity goes a long way. Of course people will never completely stop getting music for free, but you cannot treat every person who has visited the Pirate Bay as a pirate. Most just need a gentle nudge in the right direction.

This brings me to Spotify. Spotify, sparking great outrage and praise at the same time, is a perfect example of this seemingly neevernding debate between the stereotypical over-zealous industry heads, criminal programmers, and listeners who are seen to have an undying sense of entitlement.

There have been some refuseniks to Spotify in the industry. Coldplay, Adelle, The Black Keys and the labels behind them are strongly resisting the Spotify movement because the artists are not earning enough.

The Black Keys 

With millions of listens a day, not everyone is loving spotify, read this Rolling Stones article on The Black Keys vs Spotify

Some argue however, that record companies need to become more comfortable with the digital era, accepting Spotify and similar platforms as a much needed push in the right direction. Whilst it isn’t seeing huge profits, it is seen to be assisting in winning the public over to legal online music consumption. Maybe they can be the tugboat that drives us out of the pirates bay? A new, inventive move towards legitimate downloading. 

We need to understand that streaming could slowly replace piracy and is far more malleable and has greater future possibilities for artists revenue. Cd sales are dropping consistently every year, streaming being one area which is growing, offering new avenues.

To learn more about the spotify debate click here and here.

In other news co-founder of The Pirate Bay, Gottfrid Svartholm Warg, is going to be deported from Cambodia! looks like Spotify might start to get a whole lot more popular.

Gottfrid Svartholm Warg

For more on the Gottfrid read this Sydney Morning Herald Article.

User awareness

Demographic: 14-30

“…young people are beginning to consider free music a right…”

With Shawn Fanning’s internet phenomenon ‘Napter’ being established in 1999, internet users between the ages of 14 and 30 years of age have effectively grown up with or been introduced to, easily downloadable music over the internet.

This demographic is very aware of social media. They interact online via facebook and twitter joining fan pages and following artists. They find new music and monitor artists on youtube and soudcloud.

Online Consumption

Facebook has 845 million active users - 0-34 demographic makes up 32% of facebook users who on average visit the site 40 times a month for an average of 23mins and 20 seconds per visit

Twitter has 127 million active users of which 42% are between 0-34 years of age. Tweeters will spend, on average, 11mins and 50 seconds on the site each visit.

The two perspectives below highlight the changing landscape of the music industry over the past few years;

‘Imagine a world where music companies don’t make their money from CDs. Instead, the big pop stars make money from concerts, T-shirts, merchandising deals and advertising.’ February 2003

‘You're not going to be buying your new house in Malibu any time soon by getting your album up on Spotify, but it's definitely a way to find new ears and new fans that could potentially help you get there one day.’ Duncan Byrne-Sydney Music Manager May 2012

Blogging our Research: Content Development

Early on in this project we decided on the sort of content we would like to include in our feature. Each topic was chosen after a consideration of our anticipated users (musicians, producers and those with an interest in the music industry).

So, without further ado, here is our plan for the web feature’s content:

TOPIC: Is the Internet a Help or a Hindrance?

•  This section is what makes the entire feature newsworthy, particularly in the context of Internet music piracy and file sharing. We will explore both sides of this issue, through interviews and short research posts.
• An example is the interview with ENA.
• Interviews: in this section, we will have video and written interviews with key persons, who have a strong opinion on the issue of online music.
• Presenting interviews in a manner other than simply written is vital. Interviews in a visual form will add colour and humanity to our feature, for the user’s enjoyment. 

TOPIC: One to Watch

• This section will examine artists who have already found success in the music industry through the online sphere.
• This will be particularly appealing to users who identify with human stories.
• The online medium will contribute to the entertainment value of this topic. It is possible to include audio and visual clips of the artist’s work.
• The posts on Azealia Banks and Chief Keef are examples of how this part might look.

TOPIC: How To

• Under this topic area, we will explore how artists and consumers can use specific aspects of the Internet to share music. One example might be a ‘how to’ guide for Napster.
• This will be particularly useful for musicians aiming to gain exposure in the online realm.
• We don’t assume that our users are automatically familiar with all aspects of the Internet. This section will guide the process of learning.

TOPIC: What to Do

• This section will examine the practical aspects of the relationship between the music industry and the online sphere. For example, how does an Internet music artist approach a record label? How can they gain industry representation? These questions are particularly pertinent for musicians and producers.
• The online medium is especially useful in this regard. We can make use of relatively simple tools, such as hyperlinks, to direct people to appropriate sites.
• The post regarding Viral Spiral is an example of the sorts of content featured in this section of our project.

What to Do: Profit from Your Success

This type of post would form part of a feature about how musicians can develop a career based off an online platform. It would be presented under the heading of ‘What to Do’ (the content of the feature will be discussed in a later post).

This meets a key objective of our proposed web-feature: to inform about, and clarify, the relationship between the internet and the music industry today.

Ideally, Damian Collier himself would be contacted and interviewed about the specific nature of online music. A particular challenge for a post such as this is just how text heavy it is.

Viral Spiral

“Never, in the history of show business, have so many become known so fast…If you have access to the internet, then you have the tools you need to go ‘viral’” – Damian Collier, creator of Viral Spiral.

So how can you, an aspiring musician who has hit the jackpot and found internet success, capitalize on this position? Or in less subtle terms: how can you make money?

Enter Damian Collier, former concert producer and now internet entrepreneur. His London based company, Viral Spiral, serves internet music sensations such as yourself, by helping you to (legitimately) demand money every time a TV show or advertising agency uses your content. (Of course, this is assuming you haven’t already been snapped up by a savvy record label).

As an added bonus, Viral Spiral can put you in contact with people who could, say, develop an app for and about you, or even (and this is what really gets me) make a t-shirt…your own personal t-shirt!

Between the use of a popular song in an advertisement, and the profits from t-shirts and associated merchandise, Damian has said that it is possible to make anywhere up to $500,000 for the duration of a viral hit.

Perhaps less exciting, yet certainly no less important, is Viral Spiral’s specialty in copyright – they can help you copyright your song before crude remixes devalue the brand you worked so hard to create.

You can find out more about the services Viral Spiral has to offer by following the link here.

One to Watch (1 2 Watch): Azealia Banks

So here it is, my first blog post. This is absolutely a trial run, and is above all an attempt at trying to find some sort of unique ‘internet voice’ that might resonate with our audience.

I have tried to include some audiovisual elements, given the online medium practically demands them. I have also developed a piece under the ‘One to Watch’ banner, which (as we will explore at a later point in this research blog) is designed to add an element of human interest to our project.

Despite this being the internet, I feel I should probably warn that the following artist does make [extensive] use of expletive-laden language. Read on if you dare...

Azealia Banks.

It’s a problem faced by many young artists: how do you make your break, when your music doesn’t fit into the family friendly brief required by many commercial record labels?

For Azaelia Banks, Harlem’s hoodlum heir to the female hip-hop throne, the answer was simple. Release your debut single and film-clip online, in a space where anything goes.

Hard to believe she is just 21 years old, Banks’ first foray into the online music world came in 2010 with her demo-track“L8R”, released on Youtube. It was through this forum that Banks began to develop a small yet loyal following.

In March of 2011, Banks masterstroke struck, with her debut single “212”. Released as a free download on her personal website, the song was well received by existing followers. A further utilization of the Youtube platform – when Banks released the “212” film clip in September of 2011 – sent the song viral.

                                          

                                              WARNING! Foul language ahead.

When a song’s whose most obviously notable feature is a use of the word c***, it’s difficult to imagine any forum, other than the internet, in which it might have become quite so successful.

For Banks, the internet proved the perfect platform from which to gain serious recognition, whilst staying true to her potty-mouthed ways. Unsurprisingly, her online hype lead to a very real contract with none other than Interscope Records.

So for any of you prospective musicians out there who, like Azealia already has, are aiming to feature on the NME “Cool List” within a few months of your first major debut, give the internet a thought.

And whilst I don’t necessarily condone expletive language, I’m not saying it will hurt, either.

You can find out more about Azealia on her personal website: http://www.azealiabanks.com/
Or follow her on Facebook: https://www.facebook.com/azealiabanksmusic 
Twitter: http://twitter.com/AZEALIABANKS