Former Grooveshark employee here so my opinion might be highly biased but I believe that the genie of free music is out of the bottle and there is no putting it back in, whether that is fair or not, it's just reality. I don't pretend that Grooveshark had anything to do with that change, we recognized that it had already happened and tried to find a way forward for the industry.
Older people, especially those with money, will certainly pay for music either by buying the music or paying for subscription services or both, and I don't see that changing but kids, the ones who I know at least, won't pay for music they can get for free, and they all know how to get it for free. Streaming services try to bring that behavior into the light and at least try to monetize it, but eliminating free streaming is only going to drive them back to the shadows. I really think that efforts to stop people from listening to music for free will be about as effective as prohibition or the war on drugs.
They used to say the same thing about PC games until Valve came along with Steam and made it easier and more convenient to buy games legally and install/keep them updated and enjoy the network experience than it was to download them illegally and steal them.
The music industry needs something they can really get behind that's good for both the consumer AND the publisher, and I don't think any of the services right now have really come out enough on top to say that's the one. I would say the big contenders right now are Apple Music, Spotify, and Amazon Music. We'll have to see what happens.
A few weeks ago I discovered the Analog Africa label[0], which is all about old school afrobeats. The label lets me listen to any album for free on their bandcamp page, puts in effort to track down the original artists, write great liner notes and blog entries on the process[1], etc.
I don't think I've spent as much money on music as I have on this label in ages.
So yes, I'm very much agreeing with Gabe Newell's claim that piracy is a service problem.
PC gamers are tech savvy. They understand the real danger of running random crack.exe files and pirated software from the internet.
You're not going to get a virus from playing an audio or video file.
The value of services such as Spotify or SiriusXM is really dependent on listening habits. I drive very little, so no matter how cheap SiriusXM offers their service to me, it's still not worth it. And I love their service, too. It's a fantastic service. But it's not something I'm going to pay for.
PC gamers are not universally tech savvy, and cracking games (especially newer ones) usually involves a lot more than just running a cracked exe. Games that are licensed through Steam are exceptionally difficult to pirate. Not impossible, just difficult, and most gamers once they reach an age with disposable income would just as soon pay the $60 bucks and enjoy the multiplayer/ranking/etc.
I agree on the second point, I have a 7 minute commute so a streaming service just isn't a huge thing for me. I'm a collector and my music tastes are admittedly fickle, so I stick to managing a library in an ownCloud instance that I control. It's just easier for me.
I'm not actually sure that Valve has solved that problem. I don't follow the video game industry very closely but a little googling turned up some articles claiming that game piracy is on the rise and represents a real threat to the industry...whether those are remotely accurate or not, I can't judge. It certainly wouldn't be the first time an industry made a lot of noise about how terrible everything is while actually thriving, so let's assume for the sake of argument that Valve has largely solved game piracy.
I don't think the two are directly comparable, given that playing a game necessarily requires running code and games can easily require an Internet connection these days, in fact it seems like more and more popular games are online multi-player types. It is significantly easier to make it too hard to be worth pirating a game, so I would argue that Valve offers some nice carrots but the sticks are sufficiently pointy. Meanwhile, with music, all you need are the bits or the sounds which you can then turn back into slightly lower quality bits, I don't think there is a reasonable means to make pirating music more difficult.
The problem there is that what has been in the best interests of both the consumer AND the artist has been the death of the old, crooked, music /distribution/ industry.
That used to be just because they were crooked and cooking the books (how else do you explain millions in sales again and again without any substantive profit to the artist to show for it); which is still true.
What's true now is that they simply aren't necessary. Digital distribution offers a far more efficient and direct distribution method.
Bringing this back to Valve; publishing physical copies of games/etc is now far more something to do for collectors as a bonus. Access to the games themselves are handled via Valve, GoG, humble 'indie' bundle, etc.
> The problem there is that what has been in the best interests of both the consumer AND the artist has been the death of the old, crooked, music /distribution/ industry.
I don't suspect music distributors have much longer to go really.
I'm in my thirties, when I was younger I was certainly more willing to put in the effort to find the music I wanted for free. At the time it seemed much easier to find, for me. Now I pay 10 month for spotify and my effort is much less, but so is my interest.
Same story. And I was at it a couple of years before Napster showed up and made it easy. Searching through ratio-ed FTP sites for the "Flavahood Sexual Healing Remix" of Keith Sweat's "Twisted" (cause that's the one they played on the radio and it was impossible to find anywhere) all while on dial-up, was a badge of honor! But I did buy a ton of music as well... which I promptly would pop into the CD-ROM drive on my linux box, and CDRip and LAME-encode for later usage. But, just like you, somewhere along the way, I didn't feel like it was worth the effort once services like Last.FM/Rdio/Spotify started showing up. $10 a month is little to ask. Sure there are times when I can't find a track or even an artist... but a few minutes later, I'm cruising along listening to something else.
im broke so i don't pay, currently using 3mo apple music subscription. that said even when i get a mediocre salary i would pay 9.99 for apple music (or spotify). at most states minimum wage this is ~1 hour a month. since the movie/media companies either have shit teir stresming (hulu, hbo go) i still watch on primewire, but i could imagine with a halfway decent salary for $100 i could have internet, netflix, hbo go, anytging on itunes, prime, and some money left over for an online rental or 2, that strikes me as a good deal.
sure i could torrent, see if the seed health is decent, check if commenters gave positive feedback, and then store a 500mb - 2gb file. but a la carte streaming is actually much better. cable just needs to die but it wont when the internet & media companies enjoy 2 monopolies & gov subsidies
I'd happily pay more for spotify if they raised the price, but yeah, buying music is pretty much a no go at this point. I've tried to support artists by buying music in the past, but the UX is just so far inferior to spotify that I won't do it anymore.
Sure, but it took a lot longer and required a great deal more effort--though significantly less so once CDs came on the scene. Also, if just about everyone I knew at the time is any indication, we also bought quite a few albums.
I don't disagree with your basic point but Napster did change the equation. (I also tend to agree about what will happen if free streaming goes away--although the other dynamic in play is the many people who now expect instant access to a huge music catalog rather than owning MP3s. For them, having to go back to assembling a music catalog would be a big step backward even if they could do so for "free.")
There are actually two big questions here that seem fairly tied together, but practically speaking are totally separate when it comes music online.
1. How much money should consumers/advertisers
be charged for access or proximity to music?
2. How much money should artists, publishing companies,
record labels and other rightsholders be paid for
that access?
Those two definitely seem related. As a theoretical floor on #2 the rightsholders have lots of leverage and so should be able to negotiate for fair (or better than fair) payouts from #1. As a theoretical ceiling on #2 you shouldn't be able to pay out more money than you make from #1.
In reality, the actual floor on how much rightsholders get paid is only up for negotiation if the music comes as a result of interactive streaming from music provided by the rightsholders (read: Spotify). If it's internet radio, where the user doesn't choose what they hear (non-interactive, read: Pandora) the rate is set by Congress regardless of the business income or rightsholder desires. And if it's user-generated content subject to the DMCA (read: YouTube) there's no clear need to pay anything to the rightsholders (see Grooveshark). So, there are tons of arguments about #2.
As far as #1 goes, there's never been a music company that got to million-user scale and was long-term profitable, so clearly companies (and their investors) are willing to send more money out the door than they make. Fixed-rate subscriptions have a perverse property that your best users by engagement metrics are your worst users financially--they cost you the most with all that listening. Advertisement-based monetization matches consumption to revenue, which is nice, but as Pandora and Spotify will both attest, the revenue from ads thus far is way short of what they or the rightsholders would like.
So what to do? Talk about it in the press and see if you can get public outcry to force someone to pay your company more?
In fact, we already do a little bit of that through the National Endowment for the Arts, National Endowment for the Humanities, and various programs run by the Library of Congress and the Smithsonian (among others).
In the 1930s, The Works Progress Administration did a lot of interesting things with the arts. Some of it involved prettying up overpasses and federal buildings, and some of it was much more ambitious, like the Federal Music Project ( https://en.wikipedia.org/wiki/Federal_Music_Project ), which did everything from holding free concerts to recording and studying various types of traditional american music.
All Western countries do this already. But most of the subsidy money goes to non-popular "high" art - usually classical and/or academic.
But... back in the 1960s and 70s, and to a lesser extent in the 80s, access to unemployment payments in the UK were much easier than they are now. And so a lot of people used "the dole" as basic income while working on a music career.
As an informal system, it worked pretty well. The UK got a lot of tax money from of the most successful musicians, and the entire sector brought in significant international revenue.
It wouldn't work now because there's too much music being made, and too little income from most of it.
You'll still get a handful of exceptional breakout YouTube stars. But you'll get a much bigger mass of wannabes with no real prospects.
That's not necessarily bad, but it would be a first in history - instead of bread and circuses, it's going to be laptops and social media.
As someone who used to run fan clubs, and merchandise stores on line for artists I have a fairly different take on this.
Music as an item you buy is DEAD. It has been dying since Napster, and no amount of copy right law, or services is going to put that genie back in the bottle. The tools available to artist now, make it even easier to "make" music, you don't need a full studio any more. Artists are even starting to think this way, watch Diplo and & Skrillex on Charley Rose: https://www.youtube.com/watch?v=Eb85hwOotts
How then, does a musiscian make money? Licensing, Concerts, t-shirts and merchandise, an artist is now a brand. Its a brand that has the ability to endorse and enhance other brands. Take a "fan club package", Membership, great seats to a show, meet and greet and photo. All in its going to be between 800-2000 for 3 minutes with a top tier artist, a photo and a hand full of tchotchkes. Heck there are artists that even get paid to show up and have drinks: http://www.gq.com/story/how-celebs-get-paid-for-club-appeara...
Here is the grim irony of all of this, the music industry did it to itself. Long before "digital" was a thing touring and t-shirts was how an artist made real money. A record labels creative accounting practices would likely leave an artist with little to no cash from millions in sales. Now that you don't need a label per-se to get distribution, and it isn't where your going to make money anyway, there is less incentive to go that route at all. How many hip hop acts have become successful off of pushing out mixtape at a steady clip? Google will provide you a rather extensive list from several venues.
"A perpetual free option doesn’t make for a viable music industry"
People have been trained for almost 100 years (since radio) that music is free but ad supported via radio. So thats bunk.
The industry is just pissed people wont buy $20 cds anymore. Suddenly people had another option for on demand music with napster.
Here we are 17 years later and the industry still hasnt gotten over it. I guess why shouldnt they - easiest money ever. But time to put big boy pants back on.
I think ultimately key music services are going to collude or move in lockstep to increase ad frequency. And frankly i think its smart to put the hottest stuff behind a paywall / available only on subscription. Record labels are essentiallly caught in this trap where you can go exclusive and reach a small percent of audience or dont be exclusive and reach everyone. An artist could go exclusive behind everyones paywall, now that would be interesting. Pandora youtube spotify whatever - listen to taylor swift new album now thru subscribing.
One root problem with the ad-funded model is it places an upper limit on the value of the content that you can access. The ads have to be worth more than the content costs.
With freemium and one-time purchases, individuals can choose to pay more for more valuable content than can be funded by ads.
Some content remains too expensive to fund with the ad model, such as major motion pictures. Numerous product placements and the ticket don't pay for the entire movie; even concessions profits are needed.
Market dominance can make you more money. This is why WhatsApp is worth $18 billion. This can often lead to ads but it can also be used to control a market.
No, but the era of exclusive content is ramping up. While it's not exactly the same thing because it isn't free, you see the same behavior happening in the video streaming industry. Sign deals of exclusivity for the most popular music people will pay for, and get them hooked with a couple ad supported freebies up front.
I think we are about to enter a post-recording era relatively soon. Recordings are not native to the medium we use to interact with music anymore. It's no surprise that engagement levels are dropping together with the tolerated prices in the market (selling files/access to files containing recordings). The way to upset and bury the current industry will be to create tools that let us move past this 20th century notion of music consumption - imagine for example hosted song projects with interactivity baked in. The next 10 years will be super interesting.
I do agree with your statement about "hosted song projects with interactivity baked in" but I don't think that will displace recordings.
I don't think we are headed to a post-recoring era. I think we are entering an era of MORE recording than ever. What used to take a studio, and a bunch of musicians, is now something you can do with a macbook, and a solid mic. The combination of social media (Facebook, twitter, instagram) and distribution platforms (youtube and soundcloud) not only lets one directly distribute but promote, and interact. For a lot of people in the US this means that "startup costs" to be a recording artist today are negligible.
On the consumption side, how often do you listen to music while engaged in a visual or physical task? Going for a run, commuting to work, washing the dishes, writing code... all settings where recorded music without interaction is something thats easy to consume.
This is wishful thinking that the genie can be put back in the bottle, that copying will become harder and that the good times will return to the major record industry.
One possibility: maybe having a streaming account would become luxury, a status symbol ? teens "love" that shit. Especially now with music discovery services, which greatly increase exposure to variety of music and make it harder to piracy alternatives to compete.
Or does anybody see a piracy based service that compete with spotify on selection, and easy of use ? how would such service look, technically ?
> Before Napster, to hear whatever you wanted, whenever you wanted, you had to pay for it
Huh? "Home Taping is Killing Music" Was the slogan on every LP and tape, and played before every film, in the late 70s and 80s. It wasn't and it didn't. We had crappy ghetto blasters with 2x speed twin tape decks from every Japanese manufacturer designed for tape copying (not that anyone in their right mind copied anything at fast speed). We'd record tracks off the Rock Show on the radio and trade tapes in the playground. We'd borrow LPs to tape, regularly. 95% of my music was on copied tape. None of us could afford to buy all the vinyl we wanted.
Then CD burners came along and copying was so much easier - long before Napster. Just don't let the screensaver or print job kick in if you were on a Windows PC as it'd wreck the burn.
2 generations have been used to having free music, despite what the streamers may wish I doubt YT Red etc will make much of a dent. I'd imagine most will go back to torrents, or step up from CD copying and trade libraries with friends. Those likely to pay are those with Sonos or other home streaming hifi. If streaming becomes difficult to access there'll be a YIFY/Popcorn Time type site along any moment.
TL;DR Does the headline end with a question? The answer is no.
> Those likely to pay are those with Sonos or other home streaming hifi.
To be more specific, geriatric and upper middle class.
edit: I actually think that music torrenting is dying because habitual torrenters all have all of the music that they want. The next logical step is to spend $20 on a hard drive and give that entire collection to a friend. Or $80 if you're a fiend for flacs.
I'm not in the acquire a lot of new music demographic any longer, but I guess I assume that people must trade their music collections around. I sure would have in college with today's technology. I get that a lot of people use streaming these days but when you can trade around a few thousand songs basically for free..
But you still paid for it, at least a little bit. Blank media was taxed against piracy with the 'Private copying levy'[1]. It wasn't perfect (and could never be) since they simply tied payouts to chart position, but at least the artists still got _something_ when copies were made.
Not in the US for the most part. It was never enacted for tape and "only applies to CDs which are labeled and sold for music use" (which I'm not sure I've ever actually seen one of).
The whole things was a technical example of moral hazard, and, if you believe moral hazard is wrong, an actual cultural failure.
Using a business model that wasn't self-sufficient - whether VC money, or loss-leader money, or similar - meant that easy streaming stoked a demand and a sense of entitlement in the consumer. Then later, that sense of demand was used as justification to say "Welp, I guess the genie is out of the bottle" and then ask for songwriting organizations to agree to shit fees.
Moral hazard - a risky action was took, when the actual risk was borne by those (the songwriters) other than the people taking the action (Spotify etc).
It's unethical. Saying so is not a failure to accept reality, of course it happened, but it doesn't make it any more ethical. It was a cultural failure and there's a huge counterfactual that is out there that people cannot easily accept - the large amounts of quality, life-changing music that went unwritten.
The end of pay streaming music may be coming to an end. The commercial music streaming industry generates less US revenue than vinyl.
What would kill streaming music? A court decision against Google that made them take down all pirated music, or pay vast amounts to the music industry. As long as most music is on Youtube, not much else matters.
Even in the UK where you need to pay to watch over the air TV, FM radio is free and has music. Choices are limited, and advertisements are invasive, but it provides a baseline experience.
Betteridge's law of headlines: "Any headline that ends in a question mark can be answered by the word no"
I think he is missing the key point of advertised streaming too. It's just plain old price discrimination. If there was no outlet for free advertised streaming, than most people would simply just pirate it. This way, they are at least making some money off of those people.
Older people, especially those with money, will certainly pay for music either by buying the music or paying for subscription services or both, and I don't see that changing but kids, the ones who I know at least, won't pay for music they can get for free, and they all know how to get it for free. Streaming services try to bring that behavior into the light and at least try to monetize it, but eliminating free streaming is only going to drive them back to the shadows. I really think that efforts to stop people from listening to music for free will be about as effective as prohibition or the war on drugs.