tag:theconversation.com,2011:/fr/topics/future-of-music-7445/articlesFuture of music – The Conversation2013-12-17T06:42:57Ztag:theconversation.com,2011:article/205082013-12-17T06:42:57Z2013-12-17T06:42:57ZEurope’s music fans sing in harmony, so why can’t industry?<figure><img src="https://images.theconversation.com/files/37874/original/2cr8pytc-1387191237.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Sing it loud in Brussels, listen to it all over Europe.</span> <span class="attribution"><span class="source">Lievan SOETE</span></span></figcaption></figure><p>Digital technology has transformed the music industry in Europe, making both distribution and piracy easier than ever. But regulators are yet to catch up with the pace of change, leaving them unable to benefit from the former or tackle the latter. </p>
<p>Policymakers in the EU have several good reasons to target inconsistencies across member states in the digital music industry. The increased circulation of music has cultural and commercial benefits. Listeners have new ways to access songs, merchandise and albums and labels can reach customers directly or through streaming services. What’s more, cultural benefits from the consumption of music in diverse languages accrue when citizens of different nations listen to music and learn about one another’s languages, heritage and perspectives.</p>
<p>There are technological, structural and logistical inconsistencies in the way music is regulated that create more barriers to consumption than the fact that the music itself is recorded in different languages. Appreciation of music does not depend on the shared cultural references in the same way as film or television. It is not exclusively interesting to the market in which it is produced and is one subtle way in which we become familiar with second and third languages and improve our regional understanding.</p>
<p>In many ways, the digital circulation of music reflects the economic and cultural values that prompted the establishment of the EU in the first place. It might even be that resolving inconsistencies in the single music market could contribute to cohesion and unity as well as making good economic sense. There are a number of issues that need to be addressed to make this happen.</p>
<h2>Pirates without borders</h2>
<p>Piracy is a big problem and one which is much more prevalent in some European countries than others. Some experience an excess of illegal downloading and sharing and are less lucrative markets for publishers and streaming services as a result. Others are striking out boldly into digital music, having recognised that this is where future revenue is to be found.</p>
<p>But what appears to be true across nations is that users switch to legal services to access music when they work well and are affordable. The success of <a href="http://www.apple.com/lu/itunes/">iTunes</a> and <a href="https://www.spotify.com/lu-de/">Spotify</a> and the growth of creative commons archive <a href="http://freemusicarchive.org/">Free Music Archive</a>, is proof of this. European regulators should be mindful of such cross-border success stories when they set the rules in the future. They could, for instance, promote the use of creative commons archives to encourage the legal streaming of music in European countries.</p>
<h2>Regional royalties</h2>
<p>Another way the marketplace for digital music functions for producers is through the collection of royalties. This is ordinarily handled by one of hundreds of collection agencies active throughout the EU, managing revenues of more than €5 billion.</p>
<p>Collecting societies manage the licensing of copyright-protected music tracks for online use on behalf of composers and lyricists and collect and redistribute their corresponding royalties. But some of these agencies struggle to make sense of the different requirements of different states.</p>
<p>In every country in the EU, the royalty agencies that collect funds for their artists have different rules and each pays artists a different rate. Sales are taxed differently in every country so it pays to hunt around to find the best country to base yourself in rather than consider yourself a truly “European” enterprise.</p>
<p>It is currently much more lucrative to base your distribution and sales in Luxembourg than many other countries, for example, as it applies a low VAT to digital sales. Removing the inconsistencies between collecting agencies and how they receive royalties from different countries could enable new organisations to enter the market. A more consistent VAT system would also be a significant step.</p>
<p>Language comes in to play here too. Given that so many different languages are used in Europe, consumers can find the process of buying and shipping music between EU nations to be frustrating, tedious or impossible. To simply access the music they want, they often have to navigate online shops that use technologically variant platforms in unfamiliar languages across uncoordinated national postal systems. While consumers appear to like listening to music from different countries, they remain less keen on buying it in a different language. The reality is that consumers are much more likely to access online music services from a storefront managed in their local tongue. That’s something for vendors to think about as they start to take a more European approach.</p>
<h2>It’s the little things</h2>
<p>There are obvious cultural, commercial and even political benefits to bringing greater consistency to the way music is distributed in the EU. Just as member states have sought to harmonise all kinds of other industries as part of their attempts to make the most out of a common market, so too should they look to making music a shared enterprise. These efforts would help strengthen the single market for music in the EU. But perhaps more importantly they could facilitate the process of harmonising cultural relations between EU member states by contributing to language acquisition and understanding. The listeners have caught on and so have the pirates. The industry too, in its own way is making progress. Now it’s time for the lawmakers to hit the right note.</p><img src="https://counter.theconversation.com/content/20508/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Philippa Nicole Barr does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Digital technology has transformed the music industry in Europe, making both distribution and piracy easier than ever. But regulators are yet to catch up with the pace of change, leaving them unable to…Philippa Nicole Barr, PhD Candidate, social sciences, Macquarie UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/191002013-10-12T03:44:29Z2013-10-12T03:44:29ZRage against the machine: music TV still important for the Australian industry<figure><img src="https://images.theconversation.com/files/32865/original/vphf4qwx-1381461319.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Music TV programs, like rage, have provided exposure for artists who would have otherwise been drowned out by the vast amount of music available online</span> <span class="attribution"><span class="source">shutterstock.com</span></span></figcaption></figure><p>Digital production and distribution has made it easier to access music than at any other time in human history. </p>
<p>But no one starts at “A” in iTunes or on YouTube’s homepage and listens to everything. There are not enough hours in the year for that - and besides, that’s not how internet music works. Unlike the passive pleasure of experiencing music on radio or television broadcasts, online delivery requires active swimming through a sea of content. </p>
<p>In order to find what you want online, you usually have to already know something about it.</p>
<p>Broadcast is still a place to find (new, old and quirky) music in Australia in 2013. And we’re somewhat unusual in this regard. In the US, MTV has moved its focus away from music videos and towards the Jersey Shore, while YouTube recently announced it will <a href="http://blogs.wsj.com/speakeasy/2013/10/01/will-new-youtube-music-awards-challenge-mtv/">host its own music video awards</a> to rival the Twerk-promoting former super giant. </p>
<p>The UK lost its long running music broadcast success, Top Of the Pops, in the mid 2000s. And while there were some rivals for charity and Christmas specials, the recent unearthing of Jimmy Saville’s past may have permanently changed the way music, television and youth is considered in that country.</p>
<p>Back home, however, broadcast music television like the ABC’s <a href="http://www.abc.net.au/rage">rage</a> remains an important cultural touchstone. Since April 1987 rage has been on air on Friday and Saturday nights (and into the following morning). </p>
<p>It’s often the first place that local artists get to show themselves to the broader Australian public. Sure, this first airing might be at 2 am, but it’s still an opportunity to be found by a concentrated audience above all the other noise. The problem with the internet is finding quality within the quantity. </p>
<p>rage’s commitment to providing a space for good music (as well as music that may be not so good, or still in development) is crucial to its inclusion on the national public service broadcaster. </p>
<p>But it is also something that the program has been criticised for. As part of his <a href="http://aso.gov.au/titles/tv/john-safrans-music-jamboree/notes/">Musical Jamboree series</a> for SBS in 2002, John Safran claimed ‘even a dog can get a clip on rage’, going on to prove it by submitting a <a href="https://www.youtube.com/watch?v=790CydS7kP4">clip and song</a> that had been made in an afternoon. His point was to challenge rage’s apparently vague quality control, and while the program did broadcast his shaky image (literally created by Safran strapping a camera to his dog’s head), it was a choice the show’s producers stood by. </p>
<p>Speaking in 2010 as part of a talk at the Australian Centre for Moving Image, producers/programmers basically argued that Safran <a href="http://www.acmi.net.au/explore_podcasts.htm">helped pay for rage with his income tax</a>, just like all Australians. He and his dog were entitled to their 2 minutes of fame.</p>
<figure class="align-right ">
<img alt="" src="https://images.theconversation.com/files/32864/original/rvq96xqr-1381461021.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/32864/original/rvq96xqr-1381461021.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=600&fit=crop&dpr=1 600w, https://images.theconversation.com/files/32864/original/rvq96xqr-1381461021.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=600&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/32864/original/rvq96xqr-1381461021.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=600&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/32864/original/rvq96xqr-1381461021.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=754&fit=crop&dpr=1 754w, https://images.theconversation.com/files/32864/original/rvq96xqr-1381461021.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=754&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/32864/original/rvq96xqr-1381461021.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=754&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">rage has been an important player in the development of Australian talent since its.
first broadcast in 1987</span>
<span class="attribution"><span class="source">Dia Rui via Flickr</span></span>
</figcaption>
</figure>
<p>Stunts and one hit wonders aside, rage has historically been the first place to feature what are now considered to be incredible international success stories. Gotye really was “Somebody that (rage) Used to Know” <a href="http://www.abc.net.au/news/2013-02-11/gotye-picks-up-three-grammys/4511814">before the Grammys came calling</a>.</p>
<p>rage has also become a place we look to during significant periods of change
for the local industry. </p>
<p>When Chrissy Amphlett of The Divinyls died in April this year, rage broadcast a tribute on ABC TV as well as facilitating a second screen community online <a href="https://twitter.com/rageabc/status/327922753590153217">with the Twitter hashtag, #WatchingRage</a>. A celebration and wake that was both passive and active, it soon proved to be a way for ordinary music lovers to pay their respects as well as recall material that they may not otherwise have remembered or seen before. </p>
<p>Watching rage has become a ritual for many Australian musicians and enthusiasts. It starts with getting caught in the ‘rage Trap’ - what the program’s producers affectionately call the process of staying up much later than expected due to ‘just wanting to see what clip is next’. </p>
<p>The ritual can even extend to forming a band and making new music, <a href="http://www.theage.com.au/news/Music/Bush-babes/2005/04/14/1113251728841.html">as happened with Queensland trio</a>, The Grates. </p>
<p>rage’s regular ‘guest programmer’ segment also provides an internationally unique approach to music broadcasting. With the absence of a regular host, the segment allows the audience to make personal musical connections with the featured artists that might not otherwise come out in an interview. As a result, musical treasure (and trash) is revealed by both local and international artists.</p>
<p>Notably, this year’s rage ‘Election special’ let voters see a different side of pollies Anthony Albanese, Julie Bishop and Adam Bandt, as they (or at least their minders), <a href="http://www.abc.net.au/rage/archive/s3834734.htm">recommended Madonna, The Pixies, The Red Hot Chili Peppers and Nirvana</a>.</p>
<p>Music television like rage may now be supported by online delivery and second screen viewing (including Twitter, Facebook and the rage interactive App), but the primary broadcast allows audiences to simply enjoy passive musical emersion for its own sake. </p>
<p>The program’s strength is its passion and unusual curating, and it remains an important way to deliver audiences and artists to the next medium.</p>
<hr>
<p><em>This is the final piece in our five-part series looking at the
contemporary music industry. Click the links below to read the others:</em></p>
<p><strong><a href="https://theconversation.com/music-sales-are-waning-but-dont-blame-the-pirates-18426">Music sales are waning but don’t blame the pirates</a></strong></p>
<p><strong><a href="https://theconversation.com/music-streaming-revenue-structures-stacked-against-artists-18416">Music streaming revenue structures stacked against artists</a></strong></p>
<p><strong><a href="https://theconversation.com/spotify-merging-music-with-social-media-18401">Spotify: merging music with social media</a></strong></p>
<p><strong><a href="https://theconversation.com/doing-things-with-music-the-newest-arm-of-the-industry-18729">‘Doing things’ with music: the newest arm of the industry</a></strong></p><img src="https://counter.theconversation.com/content/19100/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Liz Giuffre does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Digital production and distribution has made it easier to access music than at any other time in human history. But no one starts at “A” in iTunes or on YouTube’s homepage and listens to everything. There…Liz Giuffre, Lecturer of Media, Music and Cultural Studies, Macquarie UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/187292013-10-11T03:46:33Z2013-10-11T03:46:33Z‘Doing things’ with music: the newest arm of the industry<figure><img src="https://images.theconversation.com/files/32464/original/sscdnm8q-1380860296.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Platforms that allow users to 'do things' with content could represent a new age in music distribution</span> <span class="attribution"><span class="source">Shutterstock.com</span></span></figcaption></figure><p>Even though revenues from recorded music have fallen dramatically over the past fifteen years, people across the world are not listening to less music. Actually, they listen to more recorded music than ever before. Recorded music permeates throughout almost every aspect of our daily lives. </p>
<p>Legal online music services combined with illegal online file-sharing services mean that more or less every song is available everywhere, all the time.</p>
<p>But is the notion of simply listening to music becoming outdated? </p>
<p>Legal, access-based music services such as Spotify, Grooveshark, Rdio, etc. are in their early days and are still actively searching for the optimal service and pricing structure that will allow them to compete and survive. </p>
<p>All these services share a similar structure in that they offer users unlimited access to a music catalogue for a subscription fee. Currently, the competition between these services is largely based on the size of their music catalogues and their availability on different mobile platforms. </p>
<p>However, it is reasonable to assume that eventually all of these services will asymptotically converge towards a similar music offering and will be available on all platforms and include more or less every song that has ever been recorded. </p>
<p>According to basic economic theory, the competition between similar services or products will be based on price. Profit margins will eventually shrink, and a few large players will survive and compete on an oligopolistic market. Access-based music services will, in other words, become a commodity market and behave in a similar way as the markets for sugar and petrol.</p>
<p>When the market has reached this gloomy state and the room for innovation and differentiation based on the pure access model is more or less exhausted, online music service providers will be forced to look for other ways to differentiate their services and keep up their profitability. </p>
<p>One way of doing this is to go beyond the pure access model and create services and features that provide a ‘context’ to the songs in their catalogue. </p>
<p>The context may, for instance, enable music listeners a way to search for and easily find the song they are looking for at any particular moment. It may allow users to share their music experiences with their friends, to organise their favourite music experiences in convenient ways, etc. </p>
<p>Such context-based services operate in a less deterministic and far more expansive innovation space than those services that are based on a pure access model. A provider of a context-based music service has a greater possibility to create a competitive advantage based on unique, innovative features than what is possible within the access model framework.</p>
<p>The number of context-based services grows alongside access-based music services. Today, most music services offer both access to music as well as a range of features that allow users to “do things” with that music. </p>
<figure class="align-right ">
<img alt="" src="https://images.theconversation.com/files/32469/original/rb4s6bcd-1380863146.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/32469/original/rb4s6bcd-1380863146.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=906&fit=crop&dpr=1 600w, https://images.theconversation.com/files/32469/original/rb4s6bcd-1380863146.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=906&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/32469/original/rb4s6bcd-1380863146.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=906&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/32469/original/rb4s6bcd-1380863146.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1139&fit=crop&dpr=1 754w, https://images.theconversation.com/files/32469/original/rb4s6bcd-1380863146.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1139&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/32469/original/rb4s6bcd-1380863146.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1139&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">The future of the music industry depends on finding ways to take fans beyond just listening to a recording.</span>
<span class="attribution"><span class="source">shutterstock.com</span></span>
</figcaption>
</figure>
<p>The primary issue for the customer is not about getting access to music. Rather, the customers’ problem is how to navigate and ‘do things’ with the music they have access to. In essence, customer value is increasingly created by providing the audience with tools that allow them to ‘do things’ with music rather than by providing the audience with basic access to music.</p>
<p>Most online music services - such as the ones mentioned above - provide a set of context-based features. What perhaps is even more interesting is that the context-based logic is appropriated by a number of musical artists and composers that experiment with context-based concepts that go way beyond the traditional song and album structure. They create mobile applications and online services that invite fans into a creative and playful interaction where music is co-created ‘just for fun’ and not in order to create an intellectual property that can be controlled and policed.</p>
<p>These emerging tendencies raise fundamental questions about the definitions of the music industry and music organisations. Will tools and software for playing with music become recognised as a vital part of the music industry? Will it develop into a new core sector of the industry, next to live music, music licensing and recorded music? If so, what will this mean for established music companies, artists and composers? </p>
<p>When live music and music publishing increasingly became important industry sectors in the first years of this millennium, traditional record labels reinvented themselves. They built new capabilities that allowed them to serve as record labels, music publishers, management companies, live music companies, etc. They turned into ‘360-degree music companies’, which had equal emphasis on all three music industry segments.</p>
<p>If context-based services and features that allow users to play <em>with</em> music rather than merely to play music move to the centre stage of the music industry, music companies will need to add yet another new competency to their organisations. Only then will they be able to capture the growing value created by context-based music services.</p>
<hr>
<p><em>This is the fourth of our five-part series looking at the contemporary music industry. Click the links below to read the others:</em></p>
<p><strong><a href="https://theconversation.com/music-sales-are-waning-but-dont-blame-the-pirates-18426">Music sales are waning but don’t blame the pirates</a></strong></p>
<p><strong><a href="https://theconversation.com/music-streaming-revenue-structures-stacked-against-artists-18416">Music streaming revenue structures stacked against artists</a></strong></p>
<p><strong><a href="https://theconversation.com/spotify-merging-music-with-social-media-18401">Spotify: merging music with social media</a></strong></p>
<p><strong><a href="https://theconversation.com/rage-against-the-machine-music-tv-still-important-for-the-australian-industry-19100">Rage against the machine: music TV still important for the Australian industry</a></strong></p><img src="https://counter.theconversation.com/content/18729/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Patrik Wikström does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Even though revenues from recorded music have fallen dramatically over the past fifteen years, people across the world are not listening to less music. Actually, they listen to more recorded music than…Patrik Wikström, Principal Research Fellow: Creative Industries Faculty, Queensland University of TechnologyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/184012013-10-10T03:43:32Z2013-10-10T03:43:32ZSpotify: merging music with social media<figure><img src="https://images.theconversation.com/files/32357/original/7dm6zqcc-1380763736.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The social aspects of streaming services are an opportunity for listeners to promote their tastes.</span> <span class="attribution"><span class="source">Flickr/Joel G Goodman</span></span></figcaption></figure><p>Our relationships with music are deeply personal and intimate. But we shouldn’t forget that music is also an incredibly powerful social tool capable of bringing people together to share in an experience, whether at a gig or an old-fashioned sing along around the campfire. </p>
<p>This is the best way to understand new music streaming services such as Spotify – as a form of social media. Through its integration with platforms like Facebook, Spotify mixes the personal with the social. </p>
<p>The lines between individual and social engagements with music are not clear-cut. We use music to identify and announce particular tastes, values and messages. For example, when we blast music out of our car stereos, we’re announcing what we’re ‘into’ (regardless of whether or not anyone is actually paying attention). </p>
<p>We allow music to speak for us, organising our “<a href="http://books.google.com.au/books?id=hNSjil-mK9UC&lpg=PA59&dq=%22organize%20their%20emotional%20and%20narrative%20lives%20and%20identities%22&pg=PA59#v=onepage&q=%22organize%20their%20emotional%20and%20narrative%20lives%20and%20identities%22&f=false">emotional and narrative lives and identities</a>”. Similarly, when we wear a t-shirt sporting a band logo or tour details we announce our affiliation with, and affection for, that particular band.</p>
<p>The Web allows us to magnify those announcements by ‘liking’ a page on Facebook or tweeting the pictures taken from the front row of a performance. The Web was designed with sharing as a core characteristic, but its contemporary capacity for doing so has outstripped its early remit for sharing scientific research. </p>
<p>Nowadays sharing is an integral part of the Web via social media platforms such as Facebook, Twitter, Tumblr and Pinterest. Facebook’s integration of music streaming services such as Spotify allows users to share what they’re listening to as well as generate playlists that can be embedded into Web pages.</p>
<p>Spotify and other digital music streaming services like MOG and Pandora provide vast catalogues of recorded music to their users. Emerging from the smog of pirate networks, these legitimate services provide music that is convenient, low cost and without legal and storage issues. </p>
<p>They have recently been the subjects of much consternation where royalty payments are concerned, however. Spotify in particular has been heavily criticised for being yet another cog in the big machine that <a href="http://pitchfork.com/features/articles/8993-the-cloud/">screws over artists.</a> </p>
<figure class="align-right ">
<img alt="" src="https://images.theconversation.com/files/32054/original/ftbgrs3k-1380248341.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/32054/original/ftbgrs3k-1380248341.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=800&fit=crop&dpr=1 600w, https://images.theconversation.com/files/32054/original/ftbgrs3k-1380248341.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=800&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/32054/original/ftbgrs3k-1380248341.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=800&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/32054/original/ftbgrs3k-1380248341.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1005&fit=crop&dpr=1 754w, https://images.theconversation.com/files/32054/original/ftbgrs3k-1380248341.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1005&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/32054/original/ftbgrs3k-1380248341.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1005&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Thom Yorke, of Radiohead fame, has been a vocal critic of Spotify’s controversial method of paying artists.</span>
<span class="attribution"><span class="source">Angela N. via Flickr</span></span>
</figcaption>
</figure>
<p>Thom Yorke and Nigel Godrich (co-conspirators in Yorke’s side project, Atoms for Peace) have been <a href="http://www.theguardian.com/technology/2013/jul/15/thom-yorke-spotify-twitter">particularly vocal</a>. Godrich argues that streaming services are fine for back catalogue material but do not adequately support emerging artists. Certainly, the numbers seems to suggest so, but it’s not my intention to delve into the complexities of music royalties here. </p>
<p>Rather, I’m interested in Spotify as a social tool.</p>
<p>The integration of music streaming services into social media platforms typifies a new approach to communication that is announced via Facebook’s ‘ticker’ (the box in the top right that informs you about what your friends are doing) and individual profiles but addressed to no one in particular. </p>
<p>The Spotify app updates blur the lines between personal and social engagements with music. We, the fans, have perhaps always been (at least) a bit evangelical about our musical preferences. But integrating our listening habits and social media platforms enlists our private activities as a form of recommendation. </p>
<p>The social aspect of Spotify is its real contribution to music. In many ways it continues a tradition of identity-building that simultaneously advertises or recommends a particular artist. Of course, promotion and being discovered are difficult for the emerging artist, but we should be careful not to appraise the new digital music ecology through the expectations of the 20th century industry model. </p>
<p>The physics of the media space have changed dramatically and “<a href="http://web.archive.org/web/20120723053526/http://www.topspinmedia.com/2008/11/grammy-northwest-musictech-summit-keynote">we shouldn’t expect the winners or even the definition of winning to stay constant</a>”. The last decade has given artists – both established and emerging – unprecedented methods to release music and engage with fans, which is great, but it also means that <a href="http://www.kk.org/thetechnium/archives/2008/03/1000_true_fans.php">we might have to reconsider what it means to be successful in the digital age</a>. </p>
<p>Spotify’s true strength lies in its capacity for sharing what you’re listening to with your friends, and as annoying as that can be at times, your consumption reflects outward from you as a recommendation. </p>
<p>The technology that integrates Spotify into Facebook makes it easy – and free – for your friends to also check out what you’re listening to. In projecting your identity through music, you’re also helping out the artist by recommending their music to others.</p>
<p>Arguably, the social aspect of Spotify is its key strength, but whether or not it’s a sustainable business model is another question. As the recent history of the music industries has shown, things can change rapidly.</p>
<hr>
<p><em>This is the third of our five-part series looking at the contemporary music industry. Click the links below to read the others:</em></p>
<p><strong><a href="https://theconversation.com/music-sales-are-waning-but-dont-blame-the-pirates-18426">Music sales are waning but don’t blame the pirates</a></strong></p>
<p><strong><a href="https://theconversation.com/music-streaming-revenue-structures-stacked-against-artists-18416">Music streaming revenue structures stacked against artists</a></strong></p>
<p><strong><a href="https://theconversation.com/doing-things-with-music-the-newest-arm-of-the-industry-18729">“Doing things” with music: the newest arm of the industry</a></strong></p>
<p><strong><a href="https://theconversation.com/rage-against-the-machine-music-tv-still-important-for-the-australian-industry-19100">Rage against the machine: music TV still important for the Australian industry</a></strong></p><img src="https://counter.theconversation.com/content/18401/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Steve Collins does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Our relationships with music are deeply personal and intimate. But we shouldn’t forget that music is also an incredibly powerful social tool capable of bringing people together to share in an experience…Steve Collins, Senior Lecturer in Multimedia, Macquarie UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/184162013-10-09T03:42:23Z2013-10-09T03:42:23ZMusic streaming revenue structures stacked against artists<figure><img src="https://images.theconversation.com/files/32048/original/yw6wyh77-1380245996.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Artists see very little of the "millions" of dollars paid to major record labels for the right to stream content</span> <span class="attribution"><span class="source">Blixt A. via Flickr</span></span></figcaption></figure><p>Streaming services like Spotify and Pandora pay many millions of dollars each year for the rights to the music they play. But how much of this ends up back with artists and songwriters? </p>
<p>The answer: not an awful lot.</p>
<p>There are a number of arguments about the fairness of streaming services - for the services themselves, and for major labels, streaming is often hailed as the “saviour” of the music industry. But artists, both independent and signed, often claim that payments made to them by the streaming services are unfairly small. The services routinely respond <a href="http://evolver.fm/2013/02/05/daniel-ek-says-spotify-will-pay-out-500-million-this-year/">by noting</a> that they pay tens of millions of dollars each year to record labels in royalties and licensing fees.</p>
<p>The arguments on both sides tend to suffer from misconceptions about the nature of music “ownership” and about the kinds of licenses underpinning the streaming service business model. By establishing the guise of a commodity market based on physical formats during its heyday (post-WWII to 1999), the recorded music industry created the widespread idea that music could be “bought” by “consumers” as if it were any other commodity.</p>
<p>Of course that was never the case. Consumers only ever acquired a non-transferable license to listen to music under very specific and strict conditions. No title in the music was transferred and no license other than the right to private enjoyment was given.</p>
<p>Music rights are divided into two broad categories: those associated with the musical composition itself (publishing rights) and those associated with any recording of that composition (recording rights). There are separate rights and obligations activated in the licensing of a recording, just as there are in the public performance of both the composition and any individual “recording” of that composition. Similarly, any recording generates a publishing right and, under the Australian Copyright Act, a recording right is automatically created for anyone who participates in its making.</p>
<p>Aside from these specific individual rights, there are more abstract rights systems into which individual rights enter in order to realise value. They include nation-specific “blanket” legislation that regulates the rights and obligations of broadcasters, audiences, labels, publishers, and, by extension, artists. They also include abstract rights around catalogue control, sale, lease, and licensing.</p>
<p>The catalogue level of rights is central to the argument about streaming services and the way they pay (or don’t pay) artists. In the case of a catalogue sale (for example, when Universal recently bought EMI), artists have no clear claim on proceeds – control of their copyrights simply passes to another entity.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/32049/original/6jjqwg5m-1380246236.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/32049/original/6jjqwg5m-1380246236.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=399&fit=crop&dpr=1 600w, https://images.theconversation.com/files/32049/original/6jjqwg5m-1380246236.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=399&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/32049/original/6jjqwg5m-1380246236.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=399&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/32049/original/6jjqwg5m-1380246236.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=502&fit=crop&dpr=1 754w, https://images.theconversation.com/files/32049/original/6jjqwg5m-1380246236.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=502&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/32049/original/6jjqwg5m-1380246236.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=502&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Spotify CEO and co-founder Daniel Ek says his company pays millions to copyright holders.</span>
<span class="attribution"><span class="source">Fortune Live Media via Flickr</span></span>
</figcaption>
</figure>
<p>Streaming services are a post-internet solution to the downturn of physical music sales and the rise of “free” sharing platforms. They require the prestige and reputation of the majors’ back catalogues to operate. Without access to those rights, streaming services are simply not viable on any large scale.</p>
<p>Spotify and other streaming services loudly <a href="http://www.telegraph.co.uk/technology/7590782/Spotify-rejects-claims-that-it-rips-off-artists.html">proclaim that they pay the major labels</a> “tens of millions” of dollars each year for blanket access to their catalogues. Those transactions have no direct bearing on the use of specific tracks by the customers of Spotify. There is no clear claim for individual artists in respect of such payments because the license is for access to an entire catalogue, rather than the specific usage of any particular part. It therefore becomes what label accountants call “Black Box” revenue.</p>
<p>As songwriter and musician <a href="http://www.theguardian.com/music/musicblog/2008/may/20/anastutebusinesssenseand">Helienne Lindvall explains</a>:</p>
<blockquote>
<p>“Black Box” is the name given to the income labels collect that can’t be directly related to the recordings of any specific artist. As the record industry changes, Black Box revenue is becoming more and more important, and artists and their managers are starting to wonder where this money has gone and why.</p>
</blockquote>
<p>Music industry researcher <a href="http://musicbusinessresearch.wordpress.com/2013/08/29/is-streaming-the-nex-big-thing-the-labels-perspective/">Peter Tschmuck notes</a> that the majors’ streaming model “is not just based on royalties … but also on guarantees and upfront payments by the streaming platforms”. The size of payments is a secret but they are likely in the “double-digit millions” and “need not be shared with the artists”.</p>
<p>In other words, the majority of the revenues currently being generated by streaming services are paid to the majors by entities in which the labels own large shareholdings. Those payments are made for catalogue-wide licenses against which individual artists have no clear claim. </p>
<p>This system is almost certainly going to be short-lived, at least under current arrangements. </p>
<p>The major labels face multiple hurdles relating to artist payments for digital commerce. A <a href="http://mediadecoder.blogs.nytimes.com/2012/10/30/lawsuit-seeking-greater-digital-royalties-for-eminems-music-is-settled/?_r=0">number of successful legal challenges</a> launched by Weird Al Yankovich, Eminem, and others have created a precedent recognising all digital sales as licensing deals, thereby greatly <a href="http://www.spin.com/articles/universal-settles-influential-eminem-digital-revenue-lawsuit/">increasing the artist’s share</a> of revenue (in the case of Eminem, from 12% to 50%). </p>
<p>It seems unlikely that the current relationship between the majors and the streaming services would withstand similar legal challenges from artists, at which point the long-term viability of streaming services will be less than certain. </p>
<p>If so, the current structures of streaming revenues may well be, <a href="http://www.theguardian.com/technology/2013/oct/07/spotify-thom-yorke-dying-corpse">as Thom Yorke put it this week</a>, “the last desperate fart of a dying corpse”.</p>
<hr>
<p><em>This is the second of our five-part series looking at the contemporary music industry. Click the links below to read the others:</em></p>
<p><strong><a href="https://theconversation.com/music-sales-are-waning-but-dont-blame-the-pirates-18426">Music sales are waning but don’t blame the pirates</a></strong></p>
<p><strong><a href="https://theconversation.com/spotify-merging-music-with-social-media-18401">Spotify: merging music with social media</a></strong> </p>
<p><strong><a href="https://theconversation.com/doing-things-with-music-the-newest-arm-of-the-industry-18729">“Doing things” with music: the newest arm of the industry</a></strong></p>
<p><strong><a href="https://theconversation.com/rage-against-the-machine-music-tv-still-important-for-the-australian-industry-19100">Rage against the machine: music TV still important for the Australian industry</a></strong></p><img src="https://counter.theconversation.com/content/18416/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Philip Graham receives funding from ARC and QUT for music industry related research. He leads QUT's Independent Music Project which focuses on strategies for career sustainability in music and allied industries for independent artists.</span></em></p>Streaming services like Spotify and Pandora pay many millions of dollars each year for the rights to the music they play. But how much of this ends up back with artists and songwriters? The answer: not…Philip Graham, Professor and Head of Music and Sound, Queensland University of TechnologyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/184262013-10-07T19:30:36Z2013-10-07T19:30:36ZMusic sales are waning but don’t blame the pirates<figure><img src="https://images.theconversation.com/files/31966/original/73b6nw6p-1380163298.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Music sales have been falling for some time, but this should not attributed to piracy alone.</span> <span class="attribution"><span class="source">Tracey Nearmy/AAP Image</span></span></figcaption></figure><p>Fact: worldwide sales of recorded music have declined significantly over the last decade. Fact: there has also been an increase in the use of P2P file-sharing technologies over the last decade. </p>
<p>While there is an obvious correlation here, the question which should be addressed is whether there is causation as well. One of the first lessons in microeconomics is that correlation does not imply causation, or put simply, just because two variables are observed to move together (positively or negatively), this doesn’t imply one is causing the other to move. </p>
<p>While it is somewhat obvious that illegal downloading could reduce sales, we also need to keep in mind that, with certain assumptions in place, downloading could actually increase sales. Consumers could sample music before proceeding to make legitimate purchases, for example. Or maybe downloading could create a buzz which ultimately generates higher sales than in the absence of this induced demand. Theoretically speaking, the effect downloading has on sales could be in either direction.</p>
<p>Therefore the question about which effect prevails becomes an empirical one. To date, however, statistical analyses have failed to reach a consensus on this question. A seminal Harvard study that appeared in the prestigious Journal of Political Economy <a href="http://www.jstor.org/stable/10.1086/511995">found no evidence</a> of sales displacement effects from music downloading using US data over a 17 week window in late 2002. </p>
<p>Of course the time-frame of analysis of the Harvard study was only 17 weeks and the unit of analysis was specific songs/albums. So while there might be inconclusive evidence of sales displacement at the micro-level (i.e. downloads of song/album vs. sales of song/album), overall levels of downloading might still very well have displaced the overall level of sales. </p>
<p>This is an entirely reasonable proposition but when considering the ‘bigger picture’ there are a number of other important factors which also enter into the (statistical) equation and need to be addressed before definitive statements can be made. </p>
<p>When considering declining sales over the last 10 to 15 years, we need to recognise that much has changed about the way people consume music, mainly due to the internet. Since the arrival of iTunes in 2002, consumers now have the ability to easily purchase individual songs rather than complete albums, which <a href="http://journals.ama.org/doi/abs/10.1509/jmkg.74.3.107?journalCode=jmkg">may have reduced revenues</a> if consumers were only ever interested in one or two songs on an album. </p>
<p>Another reason for the decline in sales might be related to the arrival and adoption of subscription-based streaming services like Spotify and Pandora. Of course, YouTube also offers another means by which to consume music which doesn’t require any payment, per se, and is paid for with advertising revenues. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/31965/original/syyrftv5-1380162782.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/31965/original/syyrftv5-1380162782.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=401&fit=crop&dpr=1 600w, https://images.theconversation.com/files/31965/original/syyrftv5-1380162782.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=401&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/31965/original/syyrftv5-1380162782.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=401&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/31965/original/syyrftv5-1380162782.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=504&fit=crop&dpr=1 754w, https://images.theconversation.com/files/31965/original/syyrftv5-1380162782.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=504&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/31965/original/syyrftv5-1380162782.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=504&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Listeners are spending less on purchasing music, but more on attending concerts and festivals.</span>
<span class="attribution"><span class="source">AndreiC/Shutterstock</span></span>
</figcaption>
</figure>
<p>Beyond simply changing music consumption habits, the internet also provides a myriad of substitute activities for the act of listening to music itself. Social networking and online gaming would be two examples but there are countless other activities which could also substitute music consumption. The point is that there may have been a fundamental shift in “tastes” for how music is consumed and a shift away from purchased music consumption in the more global sense.</p>
<p>Even if people are purchasing less music due to downloading, the effect on artists’ incomes and the incentives for musicians to create music would seem the most fundamental questions to address in this debate. First year economics teaches us that if marginal costs are close to zero (as is arguably the case with the digital distribution of music), price reductions increase overall welfare. </p>
<p>However, the flip side of the argument is that there is now less incentive for artists to create. But has this actually been proven to be the case? There is <a href="http://www.nber.org/chapters/c11764.pdf">emerging evidence that the answer is no</a>. Moreover, live performance incomes appear to be increasing and there is evidence that <a href="http://www.sciencedirect.com/science/article/pii/S016762451200008X">increased downloading has been the driver</a> of this.</p>
<p>Perhaps the most important consideration of the consumer in the debate is the issue of music pricing – particularly in Australia where the so-called “Australia tax” sees consumers <a href="http://www.aph.gov.au/Parliamentary_Business/Committees/House_of_Representatives_Committees?url=ic/itpricing/report.htm">paying an average of 50% more</a> than their US counterparts. </p>
<p>If demand has actually dropped for whatever reason, prices should fall to reflect this. Instead they have been maintained at high levels which are not likely to be profit/revenue maximising. Hence, the music industry’s attempt to hold onto unrealistic pricing points may also have led to the declining sales in many respects.</p>
<hr>
<p><em>This is the first of our five-part series looking at the contemporary music industry. Click the links below to read the others:</em></p>
<p><strong><a href="https://theconversation.com/music-streaming-revenue-structures-stacked-against-artists-18416">Music streaming revenue structures stacked against artists</a></strong> </p>
<p><strong><a href="https://theconversation.com/spotify-merging-music-with-social-media-18401">Spotify: merging music with social media</a></strong></p>
<p><strong><a href="https://theconversation.com/doing-things-with-music-the-newest-arm-of-the-industry-18729">“Doing things” with music: the newest arm of the industry</a></strong></p>
<p><strong><a href="https://theconversation.com/rage-against-the-machine-music-tv-still-important-for-the-australian-industry-19100">Rage against the machine: music TV still important for the Australian industry</a></strong></p><img src="https://counter.theconversation.com/content/18426/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Jordi McKenzie does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Fact: worldwide sales of recorded music have declined significantly over the last decade. Fact: there has also been an increase in the use of P2P file-sharing technologies over the last decade. While there…Jordi McKenzie, Senior Lecturer in the School of Economics, University of SydneyLicensed as Creative Commons – attribution, no derivatives.