Magical Streams from Bullshit Mountain

I just wanted to add some actual mathematics, courtesy of The Trichordist, to an aside I made in What Makes Hereit Different?:

The digital types sure love to talk about streams–music streams, revenue streams–that will somehow, some way, someday benefit artists. In the meantime, these magical streams just trickle off majestic Bullshit Mountain and form limpid pools of money in scenic Silicon Valley.

This is what that spitball from the back of the class looks like with numbers attached, courtesy of a post from last March titled “The Internet Empowered Artist? What 1 Million Streams Means to You!” (It is well worth reading in its entirety, so click through to it.)

Keep in mind that 1 million plays in a year equals 2,740 plays every single day; 114 plays every hour; two full plays every minute.

If you and your band manage to pull that off, here is the financial windfall you can anticipate. Don’t spend it all in one place.

From information in that Trichordist post:

Spotify pays $0.00521 per stream, payable to the master rights holder only. (Whoever owns the actual sound recordings. Many times, when bands sign with a label they are expected to relinquish the rights to the masters to the label. It is easy to see why it is smart to hold onto them. More on that here.)

That comes out to $5,210 for 1 million streams.

Spotify pays $0.00052 per stream (notice there is an extra zero after the decimal point in this one) to the song’s writer or writers, which they then split, and also each split 50/50 with their publisher, if they have one.

That is $521 for 1 million streams. (So if you and a friend manage to write a song that gets streamed a million times on Spotify, and you each have a modest publishing deal, you are going to make $130.25.)

For 1 million streams on Spotify, the royalty payments–total–are $5,731.

That is what a solo artist will make with no bandmates, no other songwriters, no label, no publisher, and no management. As soon as you have even one of those additional factors, what the artist earns drops to a mere fraction of the total.

And just how realistic is 1 million Spotify streams in the first place?

According to Spotify, there are 20 million songs on the service, of which, 80 percent have been streamed at least once. (Perhaps that one play was by the guy who paid TuneCore or ReverbNation 50 bucks to put it there. Just 999,999 more plays and he will earn the equivalent of a few months of pre-tax minimum-wage paychecks.)

But if 80 percent of 20 million songs have been played at least once, that means 4 million songs on Spotify have not been played at all. Ever. What percentage of songs on Spotify actually manage to rack up 1 million streams? Who knows.

On to YouTube.

YouTube pays $0.00175 per view, total, for all rights–video, master and publishing combined. That comes out to $1,750 for 1 million views. Which, again, will be split at least between whoever owns the masters, whoever wrote the song, any publishers involved, and the synchronization license holder and service.

YouTube pays $0.00032 to the master rights holder only for videos with ads, tracked by a company like Audiam (“Get Paid When Your Music Is Used on YouTube”), for a 25 percent commission, or AdRev (“Our white glove services allow you to focus on what you do best – making amazing music”), for a 20 percent commission.

That equals $321 for 1 million views. (Minus the 25 percent commission, it is $240.)

But how many videos on YouTube manage to get 1 million views? Just .33 percent. About 53 percent of YouTube videos have fewer than 500 views and about 30 percent have less than 100 views.

So the grand total for all these streams on these leading platforms for artists in the new digital economy?

$7,802. For 3 million streams on Spotify and YouTube.

Now, the argument leveled by the digital defenders is that these streaming platforms are tools for music discovery, not revenue. They help people find out about you so that they can come to your live shows because–as every musician knows–there are tons of great paying, seven-day weekend gigs being handed out left and right by totally ethical promoters and bar owners who would never dream of ripping you off on the door, if you even get anything from the door after the sound guy and everybody else is paid out of it, or any supposed guarantee just because you are alone and a hundred miles from home and there are a couple of bouncers hanging around waiting to see if you complain, you little ingrate, when you should be too tired from counting all the sweat-drenched 20s from the throngs of ecstatic new super fans who got all your music for free on Spotify but mobbed the merch table to buy a CD or a t-shirt anyway. So leave poor YouTube and Spotify alone–they are just trying to help you innovate. Get with the now, Luddite!

Back here on Earth, though, what those numbers show is that while everybody seems to accept that the streaming sites pay absurdly negligible royalty rates, Spotify and YouTube are actually pretty awful for music discovery too.

The Trichordist blog goes on to show that on iTunes, you would only need to sell 1,125 albums at $10 each to gross the same amount, taking into account the 30 percent cut from iTunes. Again, this is with the no band, no other songwriters, no label, no publisher, no manager scenario.

But there are now 37 million songs on iTunes. Of those 37 millions songs, which ones get bought?

The Trichordist post points out:

“In 2013 only 4.8% of new album releases sold 2,000 units or more. So if only 4.8% of artists can sell 2,000 units or more, how many artists can realistically generate over four million streams from the same album of material?…

Each 10,000 albums sold on iTunes (or 100,000 song downloads) generates $70,000 in revenue for the solo artist or band. To achieve the same revenue per 10,000 fans in streams, the band has to generate 30 million streaming plays (as detailed above) if they are distributing their music across the most common streaming services including Spotify and YouTube.

In 2013 the top 1% of new releases (which happen to be those 620 titles selling 20k units or more) totaled over 77% of the new release market share leaving the remaining 99% of new releases to divide up the remaining 23% of sales.”

Once again: 99 percent of all new releases must compete for just 23 percent of sales. And the discovery process for new music is so bad that only 620 new releases account for 77 percent of the sales.

What does this mean?

It means that the current most popular systems that are in place for finding, hearing and buying music are not working. They aren’t working for listeners. They aren’t even working for most of the biggest artists–the 1 percent, not the .01 percent. And they are especially not working for independent, local, traditional, experimental and eclectic artists.

The rates are too low, the cuts are too big and the platforms are too crowded.

But they must be working for somebody right?

Right.

Because, clearly, streaming is a total racket. It wouldn’t require so much convoluted logic, wishful thinking and corporate public relations digital echo chamber think tank double-talk to make its case if it wasn’t. But who is running the scam?

Oh, you know, the usual suspects.

The music industry tearfully bemoans the insidious harm of piracy:

It’s commonly known as “piracy,” but that’s too benign of a term to adequately describe the toll that music theft takes on the enormous cast of industry players working behind the scenes to bring music to your ears. That cast includes songwriters, recording artists, audio engineers, computer technicians, talent scouts and marketing specialists, producers, publishers and countless others.   

While downloading one song may not feel that serious of a crime, the accumulative impact of millions of songs downloaded illegally – and without any compensation to all the people who helped to create that song and bring it to fans – is devastating.

But since the major labels–including Warner Music Group, Sony Music Entertainment, and Universal Music Group–own 20 percent of Spotify, where they work in partnership with those music loving champions of creativity at Goldman Sachs (you just knew they couldn’t be too far away, didn’t you?), the difference between devastation and innovation is apparently just $0.00052 per stream.

The RIAA sued 12-year-old girls for file sharing, leveling thousands of dollars of fines against them and their grandparents, for crying out loud, in order for them to avoid prosecution. They said they wanted to send a strong message that the “distribution of copyrighted works has consequences.”

It sure does. If you are willing to give the conglomerates their cut, it makes you extremely wealthy.

Forbes claims Spotify has a “quick and dirty” valuation of $8.3 billion. How encouraging that Spotify CEO Daniel Elk, former CEO of uTorrent, owned by BitTorrent, has seen the error of his ways: You have to be a true starry-eyed digital utopian to not realize that you can rip off artists all you want, and treat listeners as mere repositories of personal information and receptacles for crappy targeted advertising, but you have to let the big companies in on the con first. Learning that little lesson has made all the difference. Maybe he can spring for a better prop guitar now.

And what about all those artists that the music industry used as talking points, red herrings and human shields in the piracy debate? Uh… did you read that part about playing live and selling t-shirts?

I know what you are thinking: This is a bummer, man. It’s a bummer.

In some ways, yeah. But beware the professional problem-havers. There are lots of them out there these days. Some people love a bit of bad news, and you can get a lot of attention from having these problems. Because making the wholesale, wide scale exploitation of artists seem drearily inevitable directly benefits those companies and organizations that are doing the exploiting.

There has been an enormous amount of defeatism injected into this debate, and into the minds of musicians everywhere. I hear it constantly. “It’s just the way it is. There is nothing you can do.” As if this ridiculous, and relatively new, streaming Ponzi scheme is some foregone conclusion. The more people start thinking this way, the closer it gets to really being so.

But it’s like an Irish bar owner I once knew used to always tell me whenever I griped about some romantic double-cross or traumatic temporary setback. “Cheer up. Now you know what you already knew.”

If you play music, or like music enough to even remotely care about where it comes from and who makes it, it is obvious that all the fake innovation and alleged “disruption” created by powerful digital, media and financial industry nation states was going to be totally exploitive–for artists and listeners–and that the phony ruse math of streaming rates is never going to add up to anything meaningful for the vast majority of artists. We can all collectively disavow ourselves of our suspension of disbelief, and stop wasting breath on the elaborate charade that any of these entities really care about working musicians.

And if you don’t really care about any of this stuff–about artists, or music, or, you know, the basic human right to not have your work and effort exploited by powerful organizations (seriously, where’s the taxation is slavery crowd in all of this?), great news for you! You have lots of options for entertainment these days. From Spotify and Pandora, to corporate consolidated radio, to game shows, there is a veritable all-you-can-eat Sizzler buffet of auto tuned, bleached teeth, choreographed, consumerist, market researched, fictionalized and photoshopped corporate music to gorge on. Some of it is kinda catchy.

And if you are an artist who aspires to win the lottery that lets you be the scrapple in that sausage maker, I truly and sincerely wish you the best of luck. Everybody’s dream is their own, and if that’s what you want, go for it. (But oh how great it would be to show up at an American Idol audition with ten thousand copies of the first Ramones record…. “You don’t need to stand in this stupid line! You just need this!”)

On the other hand, if you happen to not be someone who hopes to be either the Twinkee or the Twinkee eater, the solutions are all around you and they could not be easier.

Got a dollar in your pocket? Congratulations. There’s one solution–and a ballot too.

I suspect that one of the reasons why all these digital platforms are trying to convince everybody that music should be “free” is because the way you choose to spend your money is like a vote. And by creating outlets where entertainment should be free, they are able to simultaneously take away your power to vote, while making sure you don’t spend money on anything but their devices, their platforms and their data plans.

It is a two-step process: First they limit your role to that of solely a passive consumer. Then they eliminate the consumer ability to affect any kind of influence or change, by removing basic purchasing power. Or by siphoning off the majority of your purchase’s impact and benefit through fees so that it doesn’t really matter where you spend your money.

In the big digital Vegas, the house always wins.

So stay out of the casinos. It is remarkably easy. And it can drive pretty astounding changes.

In the 1970s, thanks to consolidation and the influence of a small handful of powerful corporations (sound familiar?), two breweries–Anheuser-Busch and Coors–dominated the manufacture of beer in the United States. With large-scale industrial processes and low-cost ingredients like corn and rice, they created a watery, flavorless, uniform product designed for mass consumption and easy distribution (sound familiar? If not, turn on the radio.)

By 1983, the number of breweries in the U.S. had dropped to just 80 and American beer was synonymous with bad beer.

But beginning in California, as part of the California cuisine trend, the craft beer movement began to catch on, emphasizing quality and craftsmanship, and championing local brewers and regional styles.

Relatively quickly, the number of breweries exploded. Today, there are more than 2800 breweries operating in the U.S., providing more than 110,000 jobs and driving $14.3 billion in annual sales–an 11 percent growth in just a decade. And you can still find Coors Light in the supermarket just fine–it’s just right next to Yazoo’s Dos Perros, locally made in Nashville, which only costs a buck or two more. People have a choice.

And they increased that choice by making it with their dollars, by buying from local, non-corporate, independently owned and operated businesses. It wasn’t a big deal. It didn’t have to be endlessly debated. Some people just made a simple easy choice because they wanted something different and they wanted something better. So every time you buy a six-pack of craft beer, you are proving there is hope for independent music.

You can find more examples in the local food movement, in the rise of community supported agriculture programs and farmer’s markets–all sorts of systems that have been set up at the local level to directly benefit the independent producers and consumers of goods equally.

Equally. Imagine that.

There is no reason at all why the production and consumption of music should be any different–in fact, there are lots of reasons why it is even more possible with local music. It just comes down to a decision, made by artists and listeners alike, that there is a better way.

And if some people don’t want to make that choice or love the big streaming sites, that’s fine. If they think that everything should be free and they want to be foot soldiers in the wealth transfers of income from people making less than $18,000 per year to executives making $30 million dollars per year, hey, that’s on them. You still have a choice, and you can easily choose not to experience music that way and to support independent music instead.

That’s the decision that Hereit has been designed to encourage and support and, hopefully, make possible. Organizing songs and artists by locations and genres brings not only coherence, but relevance, to music discovery. It puts artists in front of the audiences that are actively looking for them–and hopefully, looking to support them.

That’s why it is so important that Hereit doesn’t take cuts from song sales. There are lots of services for independent musicians that take 20, 30, 40 percent cuts or more from the artists’ sales. They are like indie rock payday lenders.

But if a listener wants to support an artist, they should be empowered and allowed to actually buy music without having just half of their money or less go to the musician, and the other half or more go to some website.

This isn’t some anti-digital rant. Hereit is a website, after all. It just uses these amazing and powerful digital tools, technologies and principles–streaming, downloads, e-commerce, faceted classification–and tries to harness them to give artists and listeners basic tools for self-determination. And at least advance the possibility of the once-championed promise of the Internet, and digital distribution, to actually empower creativity and strengthen an artistic middle class.

Will it catch on? We shall see. Hereit is very small, independent and totally grassroots. But at least it exists.

If a band wants a pay as you go e-commerce tool that’s cheap and easy to use that doesn’t take any cuts from their song sales, it’s there. And if a listener wants to find music local to them, or find the particular type of independent music they like from other parts of the world, it’s there.

But most importantly, when those two people find each other–the independent artist and the person who wants to buy music–they are able to equitably exchange songs and payment without any predatory disintermediation. No cuts to the sales, no seizure of personal data. It is just a balanced, consensual and equitable transaction, a fair deal between two parties, who are able to buy and sell songs to each other if they happen to want to.

So there you have it. If you are a musician and you want to be a part of that, go to www.hereit.org and sign up. It costs $3.40 per month to have three songs on the site, and if you are one of those artists making less than $18,000 per year, like in the Sweet Home New Orleans report linked above (and again here)–especially if you are from New Orleans–write to info@hereit.org and I’ll see what I can do to help out.

And if you care about music, and you want to be a part of the solution that Hereit is hoping to offer, go buy some songs from the independent, local musicians who are joining Hereit. Or go buy some records from your local independent record store. The people who work there love music. Go talk to them. Ask them what independent artists and labels they like and buy some stuff you’ve never heard before. Go see a local band, hang around, buy a CD if they have one. If you liked them, let them know. Sometimes all it takes is a compliment to help someone keep going.

But whatever you do, don’t start thinking that the exploitation of musicians, and all artists, is some foregone conclusion, or prerequisite to innovation. Because the companies and entities promoting that line of thinking really aren’t all that innovative and they really aren’t all that powerful. All it takes is people deciding they want to be a part of something different, and a better, stronger and fairer alternative for artists and listeners will continue to grow.

So cheer up. Now you know what you already knew. And now there’s something you can do about it.

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