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Jan 20 2023

🔵 Remodelling streaming payouts: why SoundCloud is showing the way forward

The latest news from the music and tech industries
Hi there -

I've written a fair bit about streaming remuneration of late. Universal are now saying something needs to change, and the UK's inquiry on streaming revenues appears to say the same thing, with agreement coming from pretty much all recorded music representatives who took part.

Beyond that though, what has been lacking is action on this and especially further insight - with seemingly just one exception.

SoundCloud actioned its own version of user-centric payouts back in March 2021, and since then it has also provided an update on that, which gave arguably the first proper insight into the fan-centric model and how it is faring in a real world setting. The results were very promising too.

At the NY:LON conference, a panel was dedicated to further delving into this whole space, and it's certainly worth a read.

SoundCloud's VP of Strategy, Michael Pelczynski, has further countered arguments that rolling out a fan-centric model could prove costly, which is positive to see. He also raises an excellent point that running both models allows the company to generate hard data and insight so as to compare both and determine which is working best.

Other great points have been raised, with one being that ideally a new approach should be something that works for everyone. I really liked the idea of a "music-centric" model, which would basically separate white noise and rain sounds from songs so as to create a separate tier of remuneration. That said, such a concept is arguably only one step towards a better system; it isn't the solution in itself.

Right now though, finding new models requires exploration, which is why I think SoundCloud deserve some credit here. It would be great to see others leaning in to this as well, exploring it if only in a limited capacity somehow.

Call me a cynic, but I'm sceptical that Spotify for one might do this. Apple? Don't rule it out; historically the company has worked to show its "artist friendly" credentials.

Certainly though we need more companies than SoundCloud getting stuck into the problem. Your move, streaming services.

Have a great weekend,

D.

🎶 written whilst listening to the Skrillex track "Leave Me Like This". I can't say I've kept up with Skrillex since his original dubstep days, but this track is a flat-out club banger that is just HUGE. 4/4 bounce house? From Skrillex?!? Amazing - more please!


Stories from the Music Industry:
Music streaming remuneration: The value is fans, less so scale
He added that running both models has an additional value for SoundCloud: it has hard data to make the comparisons between the two models, turning back to the audience to illustrate his point. We can actually can see the difference between this room operating on a pro-rata market share scale, and this room operating as individuals.

👆🏻Hot take: I think SoundCloud are to be applauded for working to explore alternate models and establish insights and understanding here. Nobody else seems interested (from the DSP side that is). 
The company has confirmed to customers that, like Apple, it is raising its standard individual Amazon Music Unlimited monthly subscription price from $9.99 to $10.99 in the US, and from 9.99 to 10.99 in the UK.

👆🏻Hot take: I am assuming at this point that Spotify are playing the "who blinks first" game here and will wait to raise prices until they absolutely have to, benefitting from that price break on competitors in the meantime. 
The conclusion? At least 1%-3% of music streams in the country are fraudulent. i.e. They are generated, often via paid-for stream farms, by those bad actors in a bid to siphon royalty money away from legitimate artists. The CNM says that its new study considered a vast set of data provided by Spotify, Deezer, and Qobuz, plus data provided by a panel of distributors (including Universal, Sony, Warner, Believe and Wagram).

👆🏻Hot take: as others have noted, the question here is perhaps what volume of piracy is considered acceptable, as numbers don't mean a great deal without a frame of reference. 
Data analytics platform Viberate is looking to turbo-charge its user-base growth in 2023 by cutting the cost of its full service from $129 per month to $9.90. The Slovenia headquartered company described the dramatic move as scary, but the right thing to do, claiming that it would help make the music industry more inclusive and access to game-changing data tools more democratic.

👆🏻Hot take: a very bold move from Viberate here, but if their bet pays off, it could be a game changer. 
Breaking down the source of Bandzoogles $100 million artist sales tally further offers a fascinating insight into what music fans are spending money on today. According to Bandzoogle, merchandise represents 75% (or $75 million), of that total $100 million sales figure.

👆🏻Hot take: Bandzoogle are a company that doesn't pop up much in the Digest, but you have to give them their due. They appear to be doing the hard miles to build their customer base - and it is paying off. 
Stories from the Broader World of Tech:
Spotify, Basecamp, and Deezer ask European regulators to crack down on Apple
The letter, which is also signed by Basecamp, Deezer, and five others, mostly focuses on the App Store. It says Apple places artificial obstacles in their way, charges excessive fees, and makes capricious changes to the rules along the way. [The European Union] must act fast as every day that passes is a loss for innovation and for the welfare of European consumers, the companies write.

👆🏻Hot take: an war on Apple's App Store policies isn't a new story, but sheer breadth of brand names now joining the battle - and to whom they have taken this battle (i.e. the EU, who are definitely not siding with Big Tech of late) should give cause for concern. 
As recently as December, wed heard Google execs were worried that despite investing heavily in AI technology, moving too fast to roll it out could harm the companys reputation. But things are changing quickly. Earlier this morning, Google announced its laying off more than 12,000 employees and focusing on AI as a domain of primary importance.

👆🏻Hot take: for some reason AI is bringing to mind the overnight collapse of Myspace once Facebook's true momentum kicked in. Could AI do the same to Google? 
Now Stability AI is facing legal action on another front, from Getty Images. It is Getty Images position that Stability AI unlawfully copied and processed millions of images protected by copyright and the associated metadata owned or represented by Getty Images absent a license to benefit Stability AIs commercial interests and to the detriment of the content creators,announced Getty.

👆🏻Hot take: entirely expected. As previously commented, I am curious to see which of these cases will complete first and what landmark might be set from it. 
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Carrie Jade Williams said she was sued by Airbnb guests who claimed they were triggered by her disability aids. But the incident wasn’t real, and neither was she. VICE World News delves into one TikTok scammer’s weird web of lies.

👆🏻Hot take: quite the page turner of a piece around what would appear to be a pathological liar and their exploits across social media (among other things).

This post will lay out a couple of stylized stories about how, if transformative AI is developed relatively soon, this could result in global catastrophe. (By “transformative AI,” I mean AI powerful…

👆🏻Hot take: if you would prefer to entertain the more negative takes on AI, then look no further.

Jacob Rees-Mogg isn’t what he seems

👆🏻Hot take: an exquisite takedown of the Tory party's most notorious member by Will Self. Recommended. 
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