Tidal Streaming

This week a new music streaming service has been promoted. does this offer a solution to music distribution? I have discussed before, the problems of distributing music and adequate renumeration for the musicians in the digital age.

To me it should be very simple. Internet streaming allows a shopfront enabling people to access and listen to a wide range of music, this is akin to radio, indeed services often market themselves as internet radio, more tailored to individual tastes. With radio plays come royalty payments to the artists, on the internet, this comes through subscriptions and advertising, again akin to radio. such promotion services don’t yield much income to artists. It is possible for streaming to provide a larger portion of income though subscription.

Beyond this radio model, it should then be easy to have a system whereby recordings can be downloaded in both low quality (LQ) and high quality(HQ) with related pricing structures. The big fundamental change is that with music available both art home and on the move via streaming services, so there is less need to purchase a recording for personal use.

The tidal service has to compete with existing players, such as Spotify, which are established and built up a substantial repertoire of music and subscribers. The availability of streaming does dent actual sales, due to the continuing availability of the music through subscription. The artists complain that Spotifty doesn’t pay enough.

Furthermore streaming services are much like traditional retail models, that pay a fixed amount per play. This means that income is directly related to popularity. for popular music this has always been a problem. A problem because it poorly fits careers of musicians. World artists, like Jay-Z make lots of money, more than they perhaps need. To achieve that status they may make decisions to produce music that whilst popular lacks interest. On the other hand good artists, that don’t have such a wide appeal don’t make enough money to have a career in music.

I would argue that artist generated promotion, for example such services as Bandcamp, offer a better model that is career related. Imagine a new artist, or even the complete amateur, still in education or working, with an interest in making music, can relatively easily do so with home recording equipment available on a standard PC. They can then upload their music to Bandcamp or a similar service, and provide their music for free. This free music is great, as the artist or potential artist isn’t basing their career on music yet. The material is provided for promotion. The music is provided to see if they are popular or of sufficient quality to generate a following. Many musicians will stop ot this stage as they are doing it as their hobby.

The next stage is that an artist has an established following and knows that there is music is high enough quality that people are prepared to pay for it. So they release a new batch of music, at a low price. If this is successful, they can then charge more, a full market rate, and will perhaps be courted by record companies and become a professional musician. Once global stardom is created, the unit price for their music can be decreased as they then are making money through volume sales, whilst achieving fabulous wealth. Why can’t such a model be the system for music distribution?

The Tidal service doesn’t provide a new solution. It claims to offer more money directly to the artists, great. However competing directly with Spotify, they would have to persuade people to pay more for the same thing appealing to the music lovers desire to support musicians, I can’t see this happening in the numbers they would require. Especially, as they still have to pay the same royalties to record companies that Spotify do. Tidal offer a new service, at double the subscription rate, by providing HQ streaming content (now possible with higher domestic bandwidths). This has appeal, but will harm HQ sales and HQ punters are a minority/specialist music consumers and probably not enough to allow Tidal to succeed over other competing streaming services (we have now got used to quantity over quality). The other offer of exclusive content is actually a bad idea, every service could offer exclusive content, but people are not going to subscribe to many more than one service.

I also read this week that streaming services offer the artist 0.5p per play, whilst paying the record company 3.5p per play (I’ll review this if these figures are wrong). 0.5p per play of not enough for the artist, without substantial sales. The record company getting 7x that of the artist is a throw-back to the retail model, unfair because the streaming provider is shouldering the distribution costs, not the label. It seems the industry, will never learn? I can’t see a streaming service being able to pay >4p per track, as Spotify is fairly established and should be able to pay out more to artists by now, if it were a viable model.

Okay, lets assume, the artist gets 2p per play and everyone listens to music in a similar way to me. This is perhaps viable. Remember, the streaming is a shopfront and promotion. If i like a song, I will flag the artist and remember them, so listen to there tracks 4 or 5 times (earning 10p) I will then want to listen to them properly and listen to a whole album (10 tracks = 20p), if I still like it i will then listen to that album another 4 or 5 times (£1). The artist has now banked £1.30 from the streaming service (which is more than they used to get from a single album sale). I then decide to by an album (HQ) by the artist (£10 and the artist make £1, here the label will make £5). That’s, £2.30 for the artist, enough to make a living on for a year if another 10,00 people feel the same way. of course having liked this artist, i will likely listen to their new material and buy subsequent albums.

Music lovers, often don’t feel the need to support major artists, they are played on the radio etc enough for us to get what we want from their music. I would buy an album only if i was a especial fan of there music. So there is a natural brake on very popular artists, taking more than there share of the music listeners pie.

Of course, I’m a music lover, rather than a casual listener. Record labels have always made more money out of casual listeners than such as myself. My point is that streaming services can be much more innovative than they are currently and cater for both music fans and a more mainstream market. Again, an example of how the producer and the consumer don’t control the market, the middle man/distributor makes the rules. The industry is still more concerned about exploiting the music rather than providing what the producer and consumer want. however in the music industry there are at least elements of the market where this direct relationship of producer and consumer are more prevalent than other industries.

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