Is there any value left in music?

The widening availability of streaming services is creating an expectation that music is free, and giving many writers and performers a tough time

busking copy

Whether the rot set in with the arrival of iTunes, or the earlier availability of music through illegal file-sharing sites, isn’t clear, but it seems that a whole generation now has the belief that music is essentially a free commodity, rather than something for which one should pay.

Part of the problem is that the very forces held up to be the saviours of the music industry sometimes do themselves no favours, for example by treating music as nothing more than a promotional tool.

For so long we have been told that iTunes, Apple’s massive music-distribution system, has the best interests of artists at its heart, and is encouraging so many to pay for their downloaded music rather than resorting to the illegal file-sharing sites still thriving despite the attention-grabbing, but less than effective, attempts to block them.

And then the massive consumer electronics company goes and does something stupid like giving away a brand-new recording for free, as part of the launch of its latest mobile phones.

u2iphone

Millions of iTunes users – it’s suggested as many as 500m – woke up the morning after the much-hyped iPhone 6 launch to find they’d been gifted the new album by Irish supergroup U2, which was bad enough, given that the general opinion seems to be that the new material isn’t actually that good.

That it proved so difficult to rid your iTunes account of this unwanted intrusion of musical spam that Apple was forced to release an online removal tool – a bit like the device on a pen-knife for removing firmly embedded stones from a horse’s hoof – was even worse.

Yes, worse even than that fad we had a while back of CDs from big-name artists being given away with the Sunday tabloids. Most striking was the message sent out that music – and in particular music from a group so successful that it indulges in a variety of financial strategies to keep its massive earnings as tax-efficient as possible – is now a free commodity, to be given away on such a scale that an expectation is created that others should do the same thing.

It’s all rather at odds with the outbursts of some of the more outspoken recording artists, who see a wide range of creative content being devalued by online distribution. After all – and as a number of commentators have noted – just a few years ago U2’s own manager complained that  ‘We are living in an era when ‘free’ is decimating the music industry and is starting to do the same to film, TV and books. What has gone so wrong?’

‘As damaging as piracy’
The Entertainment Retailers Association was unequivocal in its reaction to the stunt, chairman Paul Quirk saying that ‘This promotion is a failure on so many levels. It devalues music, it alienates the majority of people who don’t use iTunes and it disappoints those who prefer to shop in physical stores since few shops had U2 stock available.

‘Giving away music like this is as damaging to the value of music as piracy, and those who will suffer most are the artists of tomorrow. U2 have had their career, but if one of the biggest rock bands in the world are prepared to give away their new album for free, how can we really expect the public to spend £10 on an album by a newcomer?

‘Dumping an album in hundreds of millions of iTunes libraries whether people want it or not, reduces music to the level of a software update or a bug-fix or just plain spam.’

Streaming isn’t the answer to music’s salvation
At the same time, recording artists are seeing that streaming services, while a bargain for consumers – especially those who use the free versions rather than paying a subscription – are no substitute for the income they would receive through conventional distribution methods, and will do little to recompense new artists, however many times their music is played.

Those performers well-heeled enough to be able to use these new media as a promotional tool may have no problem with streaming or giveaways – although the ERA statement revealed that U2 sold just over 6000 back-catalogue albums in the week after the Apple giveaway, albeit up from just under 700 the week before, it’s been suggested that that U2 made $100m from Apple for this stunt.

However, for newcomers, the rewards of online music are sufficiently small to encourage everyone from singer-songwriters to symphony orchestras to take charge of their own music distribution, in order to make the most of the often paltry returns available.

I’m reminded of past experience in magazine publishing, and the call from readers for online digital editions of titles to much less expensive than the print versions, due to the removal of the need to cut down trees, print and post subscription copies, or pay newsagents or supermarkets their cut of the cover price. It was pointed out to me some years ago that the price one pays to have one’s publication available through the iTunes store, for example, is at least on a par with the overheads involved in print distribution, with the fact that ‘digital print’ attracts VAT, whereas ‘physical print’ doesn’t, adding to the problem.

0.001p per play?
The amount iTunes charges to host one’s music is widely acknowledged to be in the region of 30%, so on a £9.99 album the artist – or more accurately, the label – gets less than £6 after VAT is taken into account. But the writer or performer only gets a fraction of that: given some of the figures some recording artists have been sharing online, each play of a song – for which read track, movement of a symphony or whatever – on a streaming service is likely to yield an income in the low thousandths of a penny.

Get a million plays of a track, which is rare, and you might see a couple of thousand pounds if you’re lucky. And that’s if your label hasn’t done a blanket deal with the streaming services for its entire catalogue, in which case there may be a clause in the contract saying the artist gets no royalties at all, as was revealed in a leaked document concerning recording star Beyoncé.

No such thing as a free listen
It’s no wonder that in the rock and pop arena more artists are going ‘back on the road’, which is where they make more money from live performances, merchandising and the like. Once they used touring to promote album sales; now the reverse is the case.

As country singer/actor Lyle Lovett, who at the time had sold getting on for 5m albums, told Billboard a few years back, ‘I’ve never made a dime from a record sale in the history of my record deal. I’ve been very happy with my sales, and certainly my audience has been very supportive. I make a living going out and playing shows.’ His last ‘big label’ album was entitled Release Me.

For classical music artists, the ‘stadium tour’ option is largely unavailable as a means of making money by making a recording and taking it on the road, so it’s no surprise that more are turning to ‘own-label’ releases via download services, and will probably follow the path of making use of the likes of Bandcamp to sell direct

Yes, free – or almost free – music services have their appeal, but unfortunately it seems they come at a price.

 

Written by Andrew Everard

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6 comments

  1. One minor correct. That £10 per album includes VAT, so labels actually get about £5.88 per album.

    The big change is that, in the past, “free” music on the radio was promoting record sales. Now, free streaming music is replacing those sales. Ads on streaming services aren’t worth enough to get the streaming companies to pay a valid amount of money for the music, and consumers just don’t care anyway.

    1. Corrected, thanks

  2. It’s an interesting idea that despite potentially putting as much money into the music industry via streaming services as they did in the past buying CDs, the music customer perceives what they are buying as less valuable, simply because they are not directly making the connection between parting with money in exchange for music they have had to carefully choose. In other words, without conscious pain, the experience for the average listener becomes less vivid, and the artist’s standing is diminished.

    The ‘vinyl revival’ is an obvious backlash against this: despite the prospect of pain-free access to all the world’s music in perfect quality via streaming, the hair-shirted listener self-inflicts the pain of paying quite a large sum for a physical totem which must also be cleaned, turned over half way and so on. But the promotion of the cult also reinforces the perceived worthlessness of the vast majority of recorded music and playback equipment by implying that all digital recordings are inferior. Thus, inadvertently, the vinyl revival further helps to kill off the viability of the music recording and hi fi industries!

    1. I think it’s very wrong to think that a faddish, niche product is in any way a “backlash” against the music industry in general. Vinyl represents about 1% of the music market for sales; it’s a fad, and while it’s certainly growing, it will never reach any significant numbers.

      On the other hand, I do agree when you say that people perceive the music as less valuable when it’s a subscription. It’s not enough to have an open faucet; there’s something about music that makes people feel differently when they rent it, unlike, say, Netflix. But that, I think, is party because we listen to music often; we generally only watch a movie once.

  3. The poor artists, finding a career thats not as easy as it once was to make money. But it was technology that gave them the opportunity in the first place last century. Radio tv and recordings were invented. Often it was only the popular artists that made the money, not the real talent, oh and the music industry created to milk the system. So no i dont feel guilty that technology has taken away this livelihood, it happened with farriers, milkmen, high street shops etc thats what happens, music or entertainment is no more or less immune. So i value artists going back to live playing and self distribution. Perhaps we will then have a music industry based on real talent and reward the efforts of true artists and not the three hit wonders. Perhaps we will see more value given to local/world music rather than western stars. I see the disuption caused by the internet technology as positive to the creative world.

    1. Ah, ‘disruptive internet technology’ – one of the modern world’s more amusing concepts…

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