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Penny Fractions: Spotify Won't Kill Your Job, Part 802

Hello, I received nice feedback about last week’s newsletter, so I’ll certainly do a follow-up in the
Penny Fractions
Penny Fractions: Spotify Won't Kill Your Job, Part 802
By David Turner • Issue #50 • View online
Hello, I received nice feedback about last week’s newsletter, so I’ll certainly do a follow-up in the coming weeks. But, today is on Spotify’s announcement of allowing artists to upload music directly to the platform. If you want my immediate thoughts on SiriusXM buying Pandora please do check out the premium newsletter. Last, I am moving this week and a bit sick, which shouldn’t affect when newsletters come out but if you sense any residual grumpiness that’s why!

Last week, Spotify announced a limited number of artists would be able to upload their music to the platform directly through the Spotify For Artist. Quickly this news was put in context of Spotify’s perpetual conflict with major labels. The logic is fairly reasonable that if direct deals cause so much industry ire then artists just being able to go straight to the platform would shift this flow of music releases. Yet if one looks at the industry ecosystem it’d becomes much clearer this is a minor, not major, story.
False Artist Empowerment
I’m often surprised by how much press coverage of streaming services understates the role of artists especially if it’s a feature that requires artist buy in to be successful. Music Business Worldwide, which disclosure I’ve written for a number of times, I think got to the core of this at the end of their monetary assessment of how this direct uploads compare to a major label or a Spotify direct deal:
Ultimately, it all comes down to another huge question: how can an emerging act grow their fan base to the point that they’re generating $10k a month on Spotify in the first place? This is where labels make their strongest case: without us and our global marketing might, they say, you might get a higher percentage of the payout from Spotify… but that payout wouldn’t be anywhere near the size that it could have been.
Few artists are at a size where they could reasonably even juggle between those options. My hunch, certainly not scientific, is that most artists who use this service are a mix between wannabe rappers who upload songs on SoundCloud with anime screenshots and bands with YouTube music videos that receive 1737 plays after endless months of Facebook promotion. That isn’t to dismiss those acts but the conversation about these types of products shouldn’t talk about the 1% of act that use it but rather those who don’t have the resources or teams to be in the initial wave of acts being given this option. Most artists aren’t generating a $100 on any service a month so what does opening another door do for them?
A Chance the Rapper level artist could potentially opt into this and I’m sure Spotify is sending out emails to make that and not a direct deal happen. The reason is that while direct deals might scare labels, the marketing value of a random artist putting a song on Spotify and getting a hit is the classic lottery winning bullshit the music industry’s sold for nearly a century. Yet, we already lived through that moment on YouTube last decade; SoundCloud with artists like Drake and so I’m not exactly sure what new could happen that we haven’t already seen. Most artists won’t see a benefit of uploading to a single service with no promise of promotion or unique way to find an audience. A better contextualization of this issue is to see how this news changes, or doesn’t, the job of distributors.
Sorry Musicians, You Still Need a Distributor
Lee Parsons, CEO of Ditto Music, on Music Business Worldwide, offered a positive take on the news
Striking a deal with any label or ‘aggregator’ worth its salt today should mean one thing to an artist above all else: when your career trajectory starts to rise, there are multiple layers of support and promotion behind you.
Spotify isn’t the only game in town. Hits Daily Double reported last month how the duopoly of Spotify and Apple Music shrunk from 90% to 75%, and there is increasing competition from Amazon, Google, and now Pandora owned by SiriusXM. This puts distributors like Tunecore, STEM, CDBaby, etc. in an interesting position. Music streaming is maturing in the west beyond a single couple of services and artists eventually will want their music on each platform. Directly uploading to Spotify might be nice for some but won’t shift in one’s overall distribution strategy.
Artists already can upload to SoundCloud and YouTube without much concern for their potential audience in other markets that might not use those services as much and Spotify will certain gain from that factor. Once the door is open just being able to upload one’s music to the service will be a boon some acts and I’m sure Spotify already pre-wrote those press release. Still if it were 2013 then potentially this could’ve reshaped music streaming but Spotify is losing, not gaining ground in this space within the overall market. Each move they make will cause ripples in the industry but each one is shrinking as other platforms command more space.
(Side Note: SoundCloud, if you’re listening, that your platform doesn’t offer a Twitch-like way to directly pay artists in 2018 makes me want to pull out my hair. I don’t think this Spotify news spells doom since SoundCloud offers too many community/artist first features Spotify lacks, but their value is ever slipping.)
Spotify’s announcement shows how much further all these platforms need to go in catering towards and helping the artists who use them. Instead product homogenization is the broad trend of 2018 music streaming. What helps artists and in turn make each of these services more compelling to users is further splintering apart, but most of these companies are content appealing to a mythical company in the sky that need of a music streaming service and are making sure they’re hitting potential investor check boxes. (I’m sure investors are stocked.) Music platforms are catering more towards spreadsheets and a drive for interesting ideas is getting left behind.
6 Links 2 Read
The AI future of music isn’t going to replace pop stars with lines of code. This piece explains how much of what is being done in AI within music is to augment how artists approach music, rather than replace them. Musicians lose jobs when distribution technology changes (records, radio, internet, etc.) not from how music is created.
I wrote a little bit about Spotify testing personalized playlists outside of Discover Weekly but rather in their official playlists. Just gonna bookmark for the future.
That Tim Cook was personally upset that Apple’s Dr. Dre show was too violent is fucking hilarious. Hopefully Tim Cook doesn’t ever you know visit a factory where an iPhone is made. Though if you’re wondering if Apple will become a music label add Cook’s squishiness around violent content to the reasons to bet against.
Spotify’s Tencent Risk - Midia Research
There is something so odd about Mark Mulligan devoted this blog towards Tencent and Spotify, as if they are the only two music streaming services…but he does point to real concern of these entertainment giants fighting for increasingly limited territories.
Rare are the days I get to include April Glaser’s work so I’m happy to include her piece about SiriusXM’s buying of Pandora. Though I’ll get into it more on Friday, I appreciated her asking what this means for artists and how further consolidation will trickle down the music streaming pipeline.
This week really as brought to you by Music Business Worldwide, tell Hits Daily Double to start getting more gossip. Anyway, Glenn Peoples says we should look at growth rate of subscribers not simply growth and that right now streaming is looking strong but he wonders about the long term future, which you know same.
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David Turner

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