Choice: The New Democracy of Music
Long before “Netflix & Chill” was synonymous with sloppy Tinder finger-banging on a loveseat gifted from a family friend, Netflix was actually a different frontier altogether. Netflix is a symbol of unified consumer choice for a fee. In fact, Netflix has proven to be the great unity point of movie and TV consumers across the planet; if you’re not paying for Netflix, you’re probably stealing someone else’s password. (*Coughing loudly in the general direction of my younger sister.*)
Consumers want access and convenience, and streaming movie/TV services like Netflix have demonstrated this beautifully. Spotify and Apple Music (and uh, Tidal I guess…? Shut up Kanye. Just stop.) have proven consumers want choices as well, but streaming music has done so in the most inefficient way possible.
Malcolm Gladwell pointlessly boiled down horizontal market segmentation by Howard Moskowitz a few years ago. If you’re incredibly stupid and have a short attention span, you should watch his TED talk. If you’re not some shit-slinging simian, you should read below— because that’s what adults do.
Streaming music has over-represented consumer choice.
I’m an avid music listener. You probably are too. Here’s the rub: You’re not even listening to 0.1% of the total artists on Spotify or Apple Music, and neither am I. As a representation of what you’re paying for, versus what you actually listen to, I present the following graphic.
The way streaming music presents itself is unlike any other business model. Streaming music assumes we’re all the same in our listening habits and tastes, and that every person should pay the same price. It doesn’t allow wiggle room for a key tenet of capitalism.
You support business choices with your dollars.
Imagine if everyone you knew paid $75 per week in order to shop at the grocery store. It sounds like a pretty great idea, until you realize we all eat different foods, and those foods have different costs to produce. A vegetarian buying black beans and brown rice shouldn’t pay the same weekly price as Ron Swanson — filling his cart with filets, bacon and black coffee. (Coffee, also a black bean, but just a little different.)
I don’t eat everything at the grocery store, and some weeks I choose to pick up items from a local market down the street — where I can get fresh okra, green tomatoes to fry, and home-grown squash. My tastes are a little more Southern, and try as Kroger might, they just don’t sell green tomatoes on the regular. I’m Southern, damnit, and I need things that fit my Southern tastes. (This would be a bit like artists who release exclusively on certain platforms. I see why you’re doing it, and I’m willing to go out of my way, but seriously this is inconvenient.)
Two days ago, Kelsey McKinney at Fusion emailed me and asked me for my opinions on streaming music — and I’m not going to scoop her entirely on whatever she’s writing. I’m just going to isolate part of one of her questions, and answer it with a completely different tangent.
“Do you think Tidal has room to grow, or no?” — Kelsey at Fusion
I think Tidal is early enough in its platform that it’s not too late to completely change how an “artist-driven, artist-owned” platform can monetize itself. Spotify is already too set in its business model, and Apple Music won’t change because Apple is a monolith that never budges.
Music and movies are not the same, so their billing systems should operate differently. You go to Netflix and wander around, hoping to find something that you and your significant other can agree upon. Streaming music is much more compartmentalized.
So here it is: The plan that fixes music for artists, and for fans.
Pay-for-what-you-want music, in democratized small label groups, or independent artist billing.
Let’s say I’m a fan of artists on XL Recordings — not a stretch there. Radiohead, Rostam, Kaytranada, Archy Marshall and many others call XL Recordings home. In my imaginary world, I pay them…
$0.45 per month.
You know who else I really love? Drake. Hate me all you want, but damn he just makes me feel some type of way. He turns my ice-cold heart into supple purse leather with every verse he says. Subscribing to OVO Sound would get me Drake, PartyNextDoor, iLoveMakonnen, Dvsn, and a few others. I’m really mostly paying for Drake, and he can pass out the money on OVO how he sees fit for…
$0.35 per month.
I’m admittedly not a big fan of dance music, so it’s hard for me to care or co-sign anything in that regard, but I think we need to understand that independent dance labels operate differently than bigger labels. Small dance labels are more “release by release” than “artist by artist”. That’s where something like Buygore Records would fit. Do I listen to the music? Nope. But I want to support my guy Nappy and keep his snacks paid for at a rate of…
$0.30 per month.
Let’s accelerate this process a bit, shall we? I’m going to spitball some numbers for what I think I’d personally pay for. These projections keep in mind that bigger labels will exist in volume, and niche labels will charge more, mostly because they’ll have fewer subscribers.
Big Beat: $0.10
Warner Brothers: $0.10
Promo Value: Oh wait, G-Eazy is putting out a new album, and he has a special offer for anyone subscribing to RCA? If you subscribe to RCA today, you can get a G-Eazy women’s tank top, the one that shows side boob… for only $14.99. (Pretend it’s on your dashboard right now. Use your imagination, Peter Pan. Side boob is awesome.) Internally, in terms of RCA payouts, if G-Eazy brings more people to RCA as subscribers, his profit share increases.
How about some mid-tier players?
Mom & Pop: $0.30
Sub Pop: $0.50
Dim Mak: $0.10
Fools Gold: $0.20
Rough Trade: $0.20
Cult Records: $0.20
Mad Decent: $0.15
Then, I’m a fan of some independent artists and they aren’t with a label — they set their own subscription fees. I made up some band names below. You can steal them if you like.
Sphincter Boy: $0.03
The Trump Sound: $0.02
Snarkade Fire: $0.03
… etc. Repeat this process 200-500 times for all the little indie artists I want to directly support.
If those bands average somewhere between $0.02 and 0.03 per month, then I’m between $10–15 monthly.
Alright, so what is my personal streaming bill at this point?
Chances are, if you’re a big music fan, you’ll listen to more, and pay for more of those indie artists like I do. Your Aunt Mildred who likes watching Antiques Roadshow and scrapbooking all day might only pay $2.50/month — because that’s what it costs to hear Louis Prima, John Denver, and whatever else you listen to when you’re scrapbooking.
Not only can we fix streaming music to work better for consumers, we can also make it more profitable for artists, and make it easier for them to predict what their monthly streaming income will be. Streaming music doesn’t have to be a wasteland where the vast majority of artists are getting paid pennies per month, getting a small share of what Spotify or Apple Music’s fixed fee gives them. It can be a sustainable (but perhaps small) income for independent artists, backed by the spare change of their fans.
Spotify, Tidal and Apple Music all represent one big pool of music, and every artist has to share that pool. You know why that’s stupid? First of all, it’s basically Communism existing in our free-market, capitalist society. Second of all, it’s because everyone pees in the pool, and I don’t want to swim around in your pee. (Well, I can’t speak for everyone. R. Kelly might be interested in swimming around in that pool filled with pee. But I digress…)
There’s a better way to get paid than swimming around in everyone’s pee. The future of streaming music, (and music data gathering) is horizontal market segmentation. That’s why when you go to the grocery store, you’re given choices from every brand, every food group, and every beer maker. You want choices, because choices are the engine of capitalism.