Followups: Spotify and Ek’s Parlay
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Spotify and Ek’s Parlay (Part II): Spotify’s experiment with direct licenses is a glass half-empty
by Adventures in Consumer Technology 2018.06.14
Spotify and podcasts: Stuck in the middle without you
by Adventures in Consumer Technology 2019.02.11
Apple is bucking its competition in a campaign to revolutionize how streaming pays artists
by Rolling Stone 2019.09.06
Spotify and Amazon are battling the Copyright Royalty Board [CRB] over streaming royalty rates…
Whether or not instruments of the U.S. government should be setting the royalty rate for songwriters on streaming services is, at this point, a moot argument. The fact is, they do, via the Copyright Royalty Board, whose three judges ruled last year that composers and their publishers would, by 2022, be paid via the higher outcome of two formulas: either (i) as 15.1% of a streaming service’s total revenues; or (ii) as 26.2% of a streaming service’s “Total Content Costs” — i.e. the total amount of money a platform like Spotify pays to record labels and artists, plus songwriters and publishers…
Spotify, Amazon, Google, and SiriusXM/Pandora are now appealing this ruling because, to cut a long story short, they argue it could unfairly advantage Universal Music Group, Sony Music Group, and Warner Music Group — who all own both major record companies and major music publishers. The digital services are demanding a cap is placed on the maximum amount of money they would have to pay publishers each month…
Apple proposed a much simpler way of rewarding songwriters during the CRB’s decision-making process: a $0.00091 payout for writers and/or their publishers for every single stream…
In the end, the CRB categorically rejected Apple’s proposal. Its judges ruled that Apple’s suggested rate — based on the historical amount it paid to songwriters from iTunes downloads — wasn’t a fair calculation, adding that: “Apple’s proposal fails to reflect the variable WTP [Willingness to Pay] in the market, rendering it a less efficient upstream royalty rate.”
[But, this has driven] a wedge between Spotify and a key creative community in the modern music business.
Apple invests $50M into music distributor UnitedMasters’ Series B, alongside A16z and Alphabet
by TechCrunch 2021.03.31
The focus of UnitedMasters is to provide artists with a direct pipeline to data around the way that fans are interacting with their content and community, allowing them to connect more directly to offer tickets, merchandise and other commercial efforts. UnitedMasters also generally allows artists to retain control of their own masters.
Neither of these conditions are at all typical in the music industry. In a typical artist deal, recording companies retain all audience and targeting data as well as masters. This limits an artist’s ability to be agile, taking advantage of new technologies to foster a community…
UnitedMasters has deals with the NBA, ESPN, TikTok, Twitch and others that allow artists to tap big brand deals that would normally be brokered by a label and manager. It also has a direct distribution app that allows publishing to all of the major streaming services. Most importantly, they can check stream, fan and earnings data at a glance…
Offering a direct pipeline to audiences without the attendant vulture-ism of the recording industry apparatus is really well-aligned with [all of these platforms], which encourages and enables “viral sounds” with collaborative performances. Traditional deal structures are not well-suited to capturing viral hype, which can rise and fall within weeks without additional fuel.
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