Last night I went to a seminar by internet music distribution company Tunecore (http://www.tunecore.com/). The seminar was put on to talk about the, yet again, upcoming shakeup to the music industry with music streaming. What is music streaming and what will this mean for artists. It is a huge topic and I will describe it briefly here.
Apple is speculated to be moving from a system where you buy individual songs and albums to a model where you can listen to your entire music library on any device that is apples. This free music from being limited to syncing from your phone to your computer. Here are a few facts that where tossed out last night:
By 2015 there will be 8.5 to 9 BILLION streaming music devices. The big automotive dealers are stopping putting CD players into cars and streaming devices will replace them. There are 2 basic categories of streaming sites: Interactive and, Non interactive. Non-interactive are like updated radio stations (Pandora) and interactive let the consumer pick and choose (Spotify/Youtube).
For the artist a fundamental paradigm shift has now occurred. Traditionally you were paid (in theory at least) when the fan bought the record or CD. It did not matter at all how many times the listener played your music in their house, or who borrowed it etc. Now the new payment system will be based upon how many times someone listens to the song. With each stream the artist will receive a small royalty (again in theory at least).
Behind the scenes of the marketplace it looks like another radical copyright law shift is about to take place. In no particular order the following 6 copyrights drive the entire music business:
The right to Reproduce (Yes jokes were made on this)
The big take away from this is:
In the new model copyright holders are able to receive revenue from each of the six. If you are a performer, only one. So for example if you are a drummer in a band and the guitarist writes a song, the writer will receive six times as much income. (Perhaps a true sign of death of Rock and Roll which was band based). It also encourages for more reproduction since we are now on a pay per play model it means artists will be creating many versions of the same song rather than a master version. See, if each “stream” generates money then the more versions there are the more money that could flow in. Essentially if someone like “Pop Star X” performs a song in concert and 500 people video it at the show and upload to you-tube then each stream created more money for the artist (in theory again)
Hence a new world of digital finger printing (like watermarks) which are going to be placed to track each stream.
All of this makes record labels very nervous, as they potentially miss out on almost all of this. Thus the buzz word right now is 360 degree marketing. They want to be able to create pop stars that they can exploit to maximize each of the 6 revenue streams. It actually gets more complex once we begin talking about copyright issues outside of the US. (For example if someone in Japan watches or streams a US Artist how does money get collected)
Since this blog entry is already very long, in my next post I will be asking What are the implications for artists who are creating music outside of the pop music context. What are going to be obvious exploitations of the new system (My skepticism based on my experience of Music libraries, and the Kindle and of course our “Friend” U-Jam)