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Question for Record Producers:
Spotify is a terrific service and I consider it absolutely the best $10 I spend a month.
I'm curious about the economics of bringing back Out of Print discs and / or making Limited Editions available to the new forms of electronic distribution like Spotify.
As there is now absolutely no physical consideration keeping music from people ears, are the rights to these new forms of electronic distribution being negotiated?
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Question for Record Producers:
Spotify is a terrific service and I consider it absolutely the best $10 I spend a month.
I'm curious about the economics of bringing back Out of Print discs and / or making Limited Editions available to the new forms of electronic distribution like Spotify.
As there is now absolutely no physical consideration keeping music from people ears, are the rights to these new forms of electronic distribution being negotiated?
From my world, yes. I see Spotify in a way others do not. Think of it this way. You have catalog titles that sit and are not selling or downloading like they once did. Spotify can generate revenue on that "asset" due to it's low, but steady, payments for plays. A newer title may get so many plays that it adds a nice chunk of revenue to the sales that downloads and physical already contribute.
The key to Spotify for a label is having a catalog that is rather large, though. I don't recommend it to any label that has a few titles. Spotify is never going to keep a label's doors open as a sole means of revenue BUT it is a good way for further monetization of a label or studio's assets. I always tell others to not be afraid of it.
It's also great for discovery. If a title is the longest of long tails, it's possible an artist finds new fans thanks to the service. New fans tend to want to own their favorite artist's music.
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Posted: |
Jul 9, 2014 - 9:45 PM
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By: |
Smaug
(Member)
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I run two labels for major artists. Spotify and all the streaming services are a temporary phenomenon. Not only are the rates that are currently establish from an era before streaming was understood, all the major labels offered over their catalogues for about $150 million per major label. This is considered "miscellaneous income" not attributable to any specific artist. So they hand it over and keep all the money. Each of the three majors did this.
The majors not only kept all the money but in the other end they invest in the streaming services. They are stream lining it so they don't have to do anything and keep all the revenue that comes in. They were always inconvenienced by this silly business of making, distributing, and selling plastic discs. They didn't care what was on them only that they sold plastic discs for $18 a pop.
It's inevitable that once the minuscule pay for play rates expire (since Spotify isn't exactly internet radio) that either subscription prices will go sky high to make up for the next $150 million payment that they'll have to fork over, but also they won't be handing over all the artists who will be filing a class action lawsuit. This was all just a way for the majors to stave off extinction for a couple more years.
In the meantime, since there's really no money in it at all (8,000 streams/$1.38), if you're a known artist it's not worth it for you to have your music on any streaming service. If you are unknown, it can't hurt but I still don't recommend it. Hit the road and if you sell five CDs at your show then you'll make more than a month of streaming.
As for limited edition and out of print, those are properties they keep a tight leash on. No digital at all, download or streaming.
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You can say gouge or you can say serve. All they are doing is catering to a market that wants and pays for what they offer.
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