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

musicthinktank.com

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

#21

Post by colincsl »

dextorious wrote: post #18
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.

A couple times?? Surely some people do that, but I doubt it's the majority. This is way too broad of a generalization.

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

#22

Post by mikefox »

Cost of goods sold for an artist are fixed whether their song is streamed 100 times or 100 millions times. After that cost is recouped, it shouldn't matter much what the rate paid to the artist per stream is. Why are we still clinging to this expectation that artists must be multimillionaires to be satisfied with their careers?

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

#23

Post by nasmorn »

mseebach wrote: post #12

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.

Radio doesn't kill the necessity of owning music the same way as a subscription service. You can't listen to your favorite 10 love songs over and over after a break up on radio. Or the band that your peer group has elevated to exaltation. Radio can plant a song in your brain and you then want to hear it more often thus making you more likely to buy your favorites.

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

#24

Post by jamesbritt »

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…

How does the music business differ from the book business? Authors do not plan on supporting themselves by touring. Why is this more or less expected for musicians?

Are authors worse off for not having a viable touring option?

I'm mainly curious about assorted business models that work well for musicians for whom live performances are not practical. If one person with a pc and some electronics makes an album, live gigs may be nonstarter.

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

#25

Post by whopa »

mattdeboard wrote: post #13

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…

Rdio has Arcade Fire. Strange that Spotify doesn't....

But yeah, I agree, subscription music services are the future. The holdouts (Beatles, Metallica, AC/DC, etc.) will eventually license their stuff, otherwise their fan base will erode. I already think that their tardiness to the digital download party has hurt them already.

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

#26

Post by omnivore »

I was a Rhapsody user from its inception, maintained an account even when I bought a Zune and got a Zune Pass and now switched the Rdio + Spotify and bought an iPod touch. For me, I consume a lot of music and I want the easiest way to sync my collection to the devices I use -- office, home, portable -- and so, I'll happily pay for that. The alternative before was simply to download it and pay nothing. Physical music is nice but it takes up space, is prone to being lost (I once lost 200+ CDs on a transcontinental flight in my late teens...it sucked. A lot) and I'd prefer the cost of 2 albums a month to hear whatever I want over the cost of buying the media. I'd consume a lot less the other way.

The fact these services have finally hit the mainstream is no accident.

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

#27

Post by earbitscom »

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…

> 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].

This isn't an or proposition. Artists are being screwed by both. Yes, the industry takes the lion's share of revenue from artists. That doesn't mean that on-demand streaming services aren't a joke in terms of compensating artists.

And you're wrong about your #2. The comparison should not be made to radio royalties because radio play has been shown to increase sales, since if you want to hear a specific song you heard on the radio, you still have to buy it or sit around waiting for it to come on. People compare Spotify revenue to purchasing because, if your music is on Spotify, there is no reason for anyone to buy it anymore. If it replaces purchasing for most people, the revenue needs to stack up by comparison.

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

#28

Post by cletus »

earbitscom wrote: post #27
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…

> 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]. This isn't an or proposition. Artists are being screwed by both. Yes, the industry takes the lion's share of revenue from artists. That doesn't mean that on-demand streaming services aren't a joke in terms of compensating ar…

That doesn't invalidate my point because curation, which you can argue radio is, and promotion (radio stations are paid to pay particular songs) is still possible with streaming. Just look at Pandora, last.fm, etc.

Also there are different definitions of streaming. The purest definition is where you have to have an Internet connection to listen. There will be various levels of caching involved here. For example, the service might cache the entire song--possibly several songs--to avoid stuttering and service interruptions.

Another model might better be called "cloud management" of music where you have a cloud-like iTunes interface (or even a non-sucky interface) that would sync that playlist to your device for offline listening, something I think iCloud will either be or quickly become.

Bandwidth and service issues are going to make local storage of music a superior solution for some time to come (IMHO).

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

#29

Post by mitchty »

justincormack wrote: post #11
adambyrtek wrote: post #9

Earlier quoted context omitted.

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.

I do have to admit, if it weren't for work or walks, I really couldn't care about listening to music.

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

#30

Post by ryanklee »

justincormack wrote: post #11
adambyrtek wrote: post #9

Earlier quoted context omitted.

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.

Yes, but, radio listening hours? Probably the under-30 demographic only listens to the radio under duress. My knowledge of this is anecdotal only, but other than w/r/t exceptional cases (NPR, highly curated college stations), there's perceived generally to be near zero incentive to listen to the radio by everyone in my peer group or behind my peer group in generational terms (I'm thirty). On the other hand, those same people seem more or less wedded to other forms of consumption (digital music players, pandora, etc). Listening when exercising, listening in the car, listening when appropriate at work, listening while cooking dinner, listening during coitus, etc. etc.
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