An interesting article at the New York Times entitled As Music Streaming Grows, Royalties Slow to a Trickle talks about streaming services and their income payments to artists including:

“Late last year, Zoe Keating (pictured) , an independent musician from Northern California, provided an unusually detailed case in point. In voluminous spreadsheets posted to her Tumblr blog, she revealed the royalties she gets from various services, down to the ten-thousandth of a cent.

Even for an under-the-radar artist like Ms. Keating, who describes her style as “avant cello,” the numbers painted a stark picture of what it is like to be a working musician these days. After her songs had been played more than 1.5 million times on Pandora over six months, she earned $1,652.74. On Spotify, 131,000 plays last year netted just $547.71, or an average of 0.42 cent a play.”

The article raises a number of important issues but also seems to speak from a sense of the music companies protecting their turf and musicians being entitled to a living.

One of the constant themes in my conference presentations and my talk to University students on the disruptive effects of web technologies has been the removal of the gatekeeper. I commonly describe this gatekeeper as a bunch of middle aged white men making decisions about what the consumer will get to listen to or get to see.

I see this removal of the gatekeeper as one of the great things of the 21st century and the ability of the any creator of “stuff” being able to connect to anyone in the planet as a fantastic development. There is a lot of hand wringing in the music industry about these issues but I see them as mainly a self protection mechanism rather than any real concern about the musicians.

I think that we are likely to see the following:

• More and more musicians connecting to their fans in a number of ways including streaming services.
• Streaming services beating the ownership model in most cases.
• An increase in the total spend on music as more and more people are connected.
• The average income per musician/band falling because people will be exposed to far more music than the gatekeepers let people listen to. Total number of bands and musicians available will grow faster than total income.
• Breakout bands and hits still commanding good money.
• Innovative approaches and musicians finding ways to make all this work – a la Amanda Palmer on Kickstarter.

I am confident that market mechanisms will sort out the issues and that if streaming services try to pay little in the long term then other services will spring up to take the space.

I would like to end with the Hunter S Thompson quote on the music industry:

“The music business is a cruel and shallow money trench, a long plastic hallway where thieves and pimps run free, and good men die like dogs. There’s also a negative side.”

The new way has to be better than that

Paul Higgins