Spotify + UMG, Streaming Exclusives and Trying to “Sell the Music”

Sup,

My name’s Omar and I’m the owner of Deviant Noise — a website for independent rappers, singers, songwriters and music producers.

Why am I here?

Because Hustlenomics PhD Gary Vaynerchuk is dope as fuck and I want to actually execute on the shit he says — like to post on Medium.

I’m literally no one special, but I’m in the music business as a fan, an artist, a producer and an entrepreneur. I try to look at things from different angles and want to use Medium as a way to share my thoughts on everything music.

If you think I’m wrong about something — call me out.. If you think I’m right, let me know too.

So…

Here’s My Two Cents on the New Spotify/UMG Deal + Music Streaming Exclusives

The big news in the business today is how Spotify and Universal Music Group signed a new deal that is supposed to benefit both companies and the industry as a whole.

Some people think it’s great, and other people think it’s stupid and that it won’t work.

I think the idea of PREMIUM MEMBERSHIP exclusives aren’t that bad. PLATFORM SPECIFIC exclusives, though, are just stupid.

Here’s why…

What’s the Big Deal?

Well, it was reported that recorded music revenue was up 11% in 2016 — double digit growth that hasn’t been seen in a couple decades. Everyone’s giddy as fuck, I’m sure.

But the problem, for some, lies in the fundamental paradigm that the giddiness is rooted in — “selling” recorded music still being so important to the industry.

As far as the new Spotify/UMG deal — some people don’t like that it involves new Album exclusives. Spotify agreed that it will make certain albums exclusive content for PAID users only (not singles, just albums — but the whole “album” thing is another long talk we could have…).

How does it all tie in? Here’s my take:

With streaming exclusives, the old school is still trying to “sell the music” by offering exclusive content to only paid members or only members of a certain streaming platform (i.e Spotify, Tidal, AppleMusic, etc.).

The new school thinks this whole idea of “selling music” is an outdated business model that needs to hurry up and die. Music itself should be ubiquitous and revenues can come from elsewhere.

I’m somewhere more in the middle… I think.

Free Music

As a capitalist, I think artists deserve to be paid for their art. As a consumer and a music fan.. If you want my money you have to give me better value than other options already out there.

Regardless, one thing’s for sure. No one wants to buy music anymore… Period.

(I say that also hoping all the DIY musicians out there will stop pressing CDs — seriously who the fuck even has a CD player anymore. No one wants your mixtape if it’s gonna take travelling to 2005 to listen to it).

I come from the era of entertainment piracy — me and my homies weren’t trying to steal music. But the convenience, the selection and the customization possible with digital music (i.e. the VALUE) was TOO good to pass up.

And let’s be real... the money you saved was pretty dope too.

Most people that love music, LOVE music. They want to consume it all, as TRUE fans of the art. But if you had to buy every single 10-track, $20 album to consume and find music you liked… well…

Anyways…

Piracy made sense for music fans. It’s not like we didn’t spend money on “music.” We still went to shows, bought merch and even bought the albums of the artists we really liked. Our attention on certain songs drove licensing deals and more. But downloading MP3s was just convenient.

That’s why with the rise of Streaming services like Spotify, digital piracy in music has gone down. It’s more convenient to stream a song online than download an MP3, hook up your phone and transfer files.

Everyone I knew used to download shit. Now everyone (including my cheapest friends that wouldn’t buy water if their cheap ass was literally on fire) is on Spotify or similar.

Convenience and value always win.

And that’s probably why this new Exclusives agreement with Spotify and UMG won’t work. Even though I don’t think the basic idea is all that bad.

The Problem With Exclusives

Real talk… the idea of a particular piece of major musical content only being available on a certain platform pisses me off.

I tried to watch Travi$ Scott’s new video for “Goosebumps” but couldn’t because I don’t use Apple Music... I’m only on Spotify.

I love Travi$ Scott — super dope artist that makes amazing music AND videos. So I was kinda choked.

(To be clear, I’m not blaming the artists for the decision).

So I decided to cuss out Apple Music and go about my day. Once it’s available to us peons outside of Apple’s ecosystem, I’ll probably have forgotten about it and be on to something new. That’s the way of the digital revolution.

And that’s fucked because if the Visuals were as good as everyone said they were, I would’ve shared the shit out of that video. And I’m sure others are the same

And that’s where the loss associated with Exclusives occurs — reducing potential exposure and attention. And attention is where the money is (or can be).

Contrasting Story: Kendrick Lamar’s video for “HUMBLE.” Available everywhere — including YouTube.

So I saw it, loved it to death and shared the shit out of it everywhere like a fan-boy.

The convenience and ease of access led to increased exposure and attention.

In terms of attention and moving on to something new in a week or two, Bob Lefsetz said something in his latest newsletter that rings true.

“…the problem today isn’t making money, but being forgotten. You can put out music and it can be over in a day. Truly. That’s what skip rates tell streaming providers, you can’t force anything down anybody’s throat.”

But the good stuff always shines. And you don’t have to force it down throats, you just have to make it available.

In a world where attention is short (but key) and new choice is limitless YOU HAVE TO MOVE FAST AND GO WIDE. Exclusives are slow and narrow.

If it’s not convenient to listen to music (or watch video) in 2017 — a time when everyone has been trained to expect immediate gratification, convenience and unbelievable value — it’s only going to hurt the business (and the artist) in the long run.

And that’s why Platform Exclusives, in my opinion, just won’t work.

They’re still trying to “sell the music” and in turn are making it more difficult and inconvenient for the end user.

Can Exclusives Ever Work?

The idea of PREMIUM Exclusives as opposed to PLATFORM Exclusives, however, I can wrap my head around a bit more.

I still think they’re a tough sell in today’s market, but having to pay a premium to get full access to an album is more akin to Spotify’s Freemium vs. Paid account structures — which is extremely common in digital businesses.

Sure you can try this for free, but if you want the added convenience and value we can offer you gotta pay a little.

That to me makes more sense than forcing people who can still download music if they choose, to be on Apple, Tidal, Spotify and Pandora just to make sure they can listen to all their favorite music.

But, in my opinion, in order for Premium Exclusives to work, the ubiquity of the music still has to be there.

There needs to be uniform selection and access across all major platforms.

It needs to be AVAILABLE.

Seriously… Just make it easy for the end-user and you’ll probably win. Isn’t that the idea behind everything in this new millenium?

Final Thoughts on Music, Streaming + Revenue

I don’t think there’s anything wrong with trying to make money from recorded music. I just tend to think that trying to sell it is a losing battle.

Ownership and sound quality don’t matter to the general music fan anymore.

Convenience does.

That’s why streaming services like Spotify have been so successful, literally CARRYING recorded music business growth as of late (despite how many people say streaming revenue sucks).

If you didn’t know, despite recorded music revenue growing 11% last year, sales of CDs were at an all time low (lowest since 1986) and digital downloads slid another 22% in 2016. And the “Vinyl Resurgence” only grew 3.5%, meaning it’s probably peaked.

Stop trying to SELL the music to the End User. There’s a hell of a lot more you can sell all the way up and down the food chain.

But that takes letting go. Put the music out there. Let it be the main driver of ATTENTION, not revenue. That part can come later, if you do good business.

P.S.

Bottom Line: Exclusives usually suck. Music Doesn’t Really “Sell,” But it Does Garner Attention, Which CAN Be Effectively Monetized.

And I know i don’t really offer any solutions to the revenue problem music people always complain about. But that’s for another time. This shit is long enough already…

P.P.S

Oh and by the way, I’m not some super successful, ballin-outta-control music entrepreneur/artist/producer that you should listen to about making money in music. I’m relatively broke… (relative as in, in Pakistan I’m probably a 1%er)

This is just what I think.

Thanks for reading!

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