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Spotiwhy? : Are Subscription Music Services a Sustainable Business Model?

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Re: Spotiwhy? : Are Subscription Music Services a Sustainable Business Model?

#11

Post by justincormack »

adambyrtek wrote: post #9
glenngillen wrote: post #3

So the author says they are, up to a point, and assuming they get significant penetration. But it's based on an average listening rate of 2.5 hours a day, which is apparently what an average american teenager listens to. I'd have thought the average american teenager probably has the highest music listening rate of any demographic. I know my own usage would be closer to an hour on the days I queue up music, but that…

Not necessarily. I'm a programmer (not a teenager anymore), and I listen to music almost all the time while working, which is definitely more than 2.5h per day. Of course I might be an outlier, but as streaming gets more popular and easier to use, more people would listen to it in the background, like radio.

Thats what I thought of, but then I looked up average radio listening hours, and they seemed to be about 0.2 hours per person (UK figures). So I think you may still be an outlier.

Re: Spotiwhy? : Are Subscription Music Services a Sustainable Business Model?

#12

Post by mseebach »

I've seen a few discussions of Spotify revenue models, but they all miss the most obvious (to me, at least) comparison: That with radio, which seems to be the closest match. What's the revenue per play per listener there? I'd expect Spotify to compare rather favourably with those.

Re: Spotiwhy? : Are Subscription Music Services a Sustainable Business Model?

#13

Post by mattdeboard »

Subscription music services are my preferred way of consuming music. I had a Zune subscription for over two years (eventually cancelled when I lost my Zune and just started using my iPhone... Zune's big weakness was its hardware exclusivity), and I signed up for Spotify premium as soon as I could. I like sub models because I am paying for music, I can get whatever music I want (almost... bands like Arcade FIre don't license their music to these services I've found) whenever I want, and the actual data is well-manicured in terms of metadata.

Re: Spotiwhy? : Are Subscription Music Services a Sustainable Business Model?

#15

Post by tatsuke95 »

Subscription music services are as sustainable as the content owners want them to be. Just look at Netflix. The content owners take advantage of the tech and foothold providers have, then eventually squeeze the providers until their own distribution system comes online.

If you don't consider it that way yet, it's coming. The bright side is that eventually "content owners" stop being the major labels and become the actual musicians. This industry is ripe for a wide open distribution market.

Re: Spotiwhy? : Are Subscription Music Services a Sustainable Business Model?

#16

Post by untog »

tatsuke95 wrote: post #15

Subscription music services are as sustainable as the content owners want them to be. Just look at Netflix. The content owners take advantage of the tech and foothold providers have, then eventually squeeze the providers until their own distribution system comes online. If you don't consider it that way yet, it's coming. The bright side is that eventually "content owners" stop being the major labels and become the ac…

"The bright side is that eventually "content owners" stop being the major labels and become the actual musicians."

I keep hearing this, but I still don't buy it. Record labels do actually provide a service to artists- generating publicity, scheduling live performances, etc. Don't get me wrong, a lot of them are evil, but an artist is still at a distinct disadvantage if they are labelless. There's a reason why only bands like Radiohead made a splash when they went without.

Re: Spotiwhy? : Are Subscription Music Services a Sustainable Business Model?

#17

Post by cletus »

The author makes three errors, one of which he stipulates (the he doesn't know the revenue split). The other two are:

1. Streaming is basically a perpetual source of revenue. If 1 download is equivalent to 200 streams then ask yourself how many times on average does someone listen to a purchased song?

2. The comparison you should be making isn't to digital music purchasing but to radio royalties. The formulae for this are complicated (flat fees to BMI, ASCAP, etc and then a complex formula after that for distribution to writers but currently not performers, except for Internet "radio").

Of course streaming (renting) earns you less than a purchase.

The recording industry likes to paint this as the artists are getting screwed. And they are getting screwed but not by streaming services. They're getting screwed by the recording industry [1].

Fact is, very few artists can survive on CD sales and digital downloads alone. Most artists survive by performing and even that's being eroded by the recording industry who uses fall guys like Ticketmaster to charge "fees" that fall outside of the revenue split with the artist on ticket sales. The public hates Ticketmaster. Artists hate Ticketmaster. The industry loves Ticketmaster.

[1]: http://www.techdirt.com/articles/20100712/23482610186.shtml

Re: Spotiwhy? : Are Subscription Music Services a Sustainable Business Model?

#18

Post by dextorious »

cletus wrote: post #17

The author makes three errors, one of which he stipulates (the he doesn't know the revenue split). The other two are: 1. Streaming is basically a perpetual source of revenue. If 1 download is equivalent to 200 streams then ask yourself how many times on average does someone listen to a purchased song? 2. The comparison you should be making isn't to digital music purchasing but to radio royalties. The formulae for thi…

> If 1 download is equivalent to 200 streams then ask yourself how many times on average does someone listen to a purchased song?

For most downloaded songs, a couple of times.

Most people just amass mp3 collections they rarely listen to in their entirety.

Re: Spotiwhy? : Are Subscription Music Services a Sustainable Business Model?

#19

Post by morrow »

untog wrote: post #16
tatsuke95 wrote: post #15

Subscription music services are as sustainable as the content owners want them to be. Just look at Netflix. The content owners take advantage of the tech and foothold providers have, then eventually squeeze the providers until their own distribution system comes online. If you don't consider it that way yet, it's coming. The bright side is that eventually "content owners" stop being the major labels and become the ac…

"The bright side is that eventually "content owners" stop being the major labels and become the actual musicians." I keep hearing this, but I still don't buy it. Record labels do actually provide a service to artists- generating publicity, scheduling live performances, etc. Don't get me wrong, a lot of them are evil, but an artist is still at a distinct disadvantage if they are labelless. There's a reason why only ba…

I don't think the argument lies with whether or not record labels provide a valuable service to their artists, they do, but more if the value of their services will remain above their cost. When they were the only distribution game in town, it was a no-brainer as you either distributed through them or you didn't distribute on any meaningful level at all. Now that there are more and more tools and services available to artists that replace some, and possibly soon all of the labels' functionality, the question becomes at what point does their cost outweigh their value?

Re: Spotiwhy? : Are Subscription Music Services a Sustainable Business Model?

#20

Post by AJ007 »

untog wrote: post #16
tatsuke95 wrote: post #15

Subscription music services are as sustainable as the content owners want them to be. Just look at Netflix. The content owners take advantage of the tech and foothold providers have, then eventually squeeze the providers until their own distribution system comes online. If you don't consider it that way yet, it's coming. The bright side is that eventually "content owners" stop being the major labels and become the ac…

"The bright side is that eventually "content owners" stop being the major labels and become the actual musicians." I keep hearing this, but I still don't buy it. Record labels do actually provide a service to artists- generating publicity, scheduling live performances, etc. Don't get me wrong, a lot of them are evil, but an artist is still at a distinct disadvantage if they are labelless. There's a reason why only ba…

With distribution through itunes & amazon I wonder just how long the record labels' business model will be sustainable.

90%+ of the music I purchase is self published. (and incidentally, from searches I've asked friends to make, it appears most of what I listen to is missing from spotify.)

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