Taylor Swift: Canary In The Crowd Mind?

“We don’t ask you for free iPhones,” she concluded. “Please don’t ask us to provide you with our music for no compensation.” Taylor Swift to Apple on the introduction of its new music streaming service Apple Music, with a 3-month free trial window in which royalties were to be withheld.

Ms. Swift spoke up and Apple backed down. When Apple Music launches June 30, Swift’s album “1989” will be in the mix.

Or: “Whilst we understand the logic of their proposal and their aim to introduce a subscription-only service, we struggle to see why rights owners and artists should bear this aspect of Apple’s customer acquisition costs,” Beggars Group (representing Adele). (Both quotes above from June 22, 2015, WSJ article, “Apple To Pay Artists After Taylor Swift Protest.”)

Sound familiar? Or prescient? These artists and their representatives are simply asking for, or shall we say, demanding, equitable compensation. Sounds a whole lot like a fundamental challenge in crowdsourcing — if not labor models from as far back as the notion of “work” emerged.

Others have sung the alarm, but Taylor Swift is the one who’s finally been heard. She has leveraged her stature as an artist for the greater good of other artists. Can that make her the voice of creative people in other categories? Mixing metaphors, a bellwether for producers in other business models? In crowdsourcing?

Whatever you think of Taylor Swift or her music, she’s the “canary in the coal mine” for the music industry in the digital age. And perhaps for other digital age platforms, including crowd-based models.

A Little Context

With the digital age, has come digital disruption, and the music industry is not the first to undergo transformation. Try typesetting. Nor is it the only. Try book stores.

Spotify and Pandora — recently joined by Tidal and now by Apple Music — all streaming music services, are essentially crowdsourcing platforms.

Streaming as crowdsourcing? That’s a stretch.

Not really. The parallel is clear: Artists (composers and performers) are the workers. They invest their own resources/talents in creating music. Their songs are is the product. The streaming platform is the host. Royalties are the awards/payments. Every song is competing with every other song. Product favored by users garners more streams, more royalties.

Spotify and Pandora drew favorable reviews at the outset for incorporating a royalty system. However, a number of artists, among them highly successful ones such as Pharrell and now Taylor Swift, have taken issue with the royalty ratios. (We won’t even touch the share artists serve up to agents, managers, labels. That controversy predates digital.)

Now some artists don’t see an issue. Marcus Mumford, of Mumford & Sons has an entirely opposing view, ’We want people to listen to our music in their most comfortable way, and if they’re not up for paying for it, I don’t really care.’ Radiohead were bold enough to release the album “In Rainbows” for free, or for whatever one chose to pay them for it. But not every band or creator is in a position or is willing to take that risk. (As things often go, later, Thom Yorke, Radiohead front man, pulled his music from Spotify.)

In the April 6, 2015, edition of The Wall Street Journal, Ben Yagoda and Gary A. Rosen published an essay that broadens the scope of that challenge. They invoke the legal foundation of royalties (The Copyright Act of 1909) and The Supreme Court: “[artists] were also entitled to payment for the use of their music in restaurants, nightclubs or any other establishment.” Presumably the streaming platform qualifies as an “establishment.” Few question that, but they do question the amount of the royalty.

Why Does This Matter?

The volume of music distributed (sold) through streaming services is growing dramatically. For the first time, music services have indeed eclipsed CD sales. From a WSJ column published 04/15/2015: “If we keep the current trajectory, the industry will inevitably grow,” Sony Music International CEO Edgar Berger said…” and “Subscription services generated $1.57 billion, or 23% of digital revenue; ad-supported services were 9% of digital revenue. Their combined 32% of digital revenue is a sharp increase from 2013, when they represented 23% of digital revenue.” Artists invite the exposure, but at what cost to their own livelihood? Streaming represents both an opportunity and a threat; another way in which streaming parallels crowdsourcing.

Radio vs. CDs/Downloads. Marketing vs. Sales.

There are those who defend the current ratios by comparing streaming to radio airplay. But streaming is not replacing radio (which through exposure serves as marketing for the sale of the song, traditionally on records, then CDs, and then downloads. Streaming is replacing the purchase (download) in a way that resembles marketing (radio). In fact, any comparison to radio confuses the issue.

TIDAL stepped in to re-frame the discussion, as in this tv commercial. Tidal is a streaming service owned by the artists. It remains to be seen if its royalty system will stem the tide and actually be more equitable. Will the artist-founders just fatten their own pocketbooks and take over the role of the technology entrepreneurs who operate the other streaming platforms? Check out this @needledrop video blog at about the 3:40 time mark for reference to the artist-as-owner profits or royalties question.

Even more pointed is this remark from Ben Gibbard of Death Cab for Cutie: “If I had been Jay Z, I would have brought out ten artists that were underground or independent and said, ‘These are the people who are struggling to make a living in today’s music industry. Whereas this competitor streaming site pays this person 15 cents for X amount of streams, that same amount of streams on my site, on Tidal, will pay that artist this much.”

Willingness From All

Part of the equation is in the hands of the user, the “purchaser.” In any crowdsourcing model (like any business) there is a user, a host, and a producer or doer. For the doer’s to be equitably compensated, the user must demonstrate willingness to pay. And that’s where the real challenge rests in this discussion. The creators and the platforms have to decide if they are willing to take a position and hold to a pricing structure that actually covers cost and delivers a fair margin. What are the purchasers willing to pay — when they’ve been getting access to these products at little or no cost?!

Sharing Talent vs Sharing Revenue

To musicians, composers, artists in the early days of digital, “sharing” constituted theft, facilitated by technology. Crowdsourcing platforms are sometimes rolled into the “sharing economy.” But sharing economies run the risk of being one-way transactions, profiting the users, at the expense of the sharer/creator. Cue Taylor Swift’s remark above.

Today, many other forms of labor are being drafted into crowdsourcing models; coding and describing, lodging and transporting, household tasks, funding, technical problem-solving, design, content-creation, advertising…

If we want crowdsourcing to be ethical, every party must be willing to do its part. And the margins or profits that derive from the transactions should be equitably distributed — or shall we say “shared.” Look to the streaming music category — because it affects the most consumers/users — for the earliest indication of the controversy. Some artists are not only rankled by the meager payouts, they’ve succumbed to them. In their wake, the alerts will likely grow around ethical payment ratios for not only music, but other crowdsourced products and services.

NOTE:

Authors, such as Jaron Lanier, in “Who Owns The Future,” offer detailed accounts of how going digital turned the music industry upside down. Peer-to-Peer platforms, (starting with Napster) ushered in “sharing” on an almost incomprehensible scale that decimated traditional distribution channels and nearly collapsed the music industry. Oddly enough, iTunes did as much as any entity to save/restore the pay-for-play model, compromising the compact disc and retailing, which is now being eclipsed by streaming model … with diminishing downloads and even fewer hard copies purchased.

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