glass notes
The Spotify Question…

So Spotify launched recently and it and its effects on artists were discussed recently on WNYC's Soundcheck.  There's been other discussions about the "Cloud" and the legality and ethics about all these things.

To sum up the current situation, before iTunes, for over 50 or 60 years people had to go out and buy a record, LP, CD or whatever for some sort of beefy price. I did this for much of my youth.  iTunes relieved the listening public from the obligation of having to buy full albums. We could buy the tracks we want and only those tracks.

From a record label perspective, this was an anattractive prospect.  Not only were the big labels shipping millions of CDs around the world and because the public had no other means of consuming music – they happily bought them. So the labels resisted iTunes.  No one is crying for those big labels, because they were never particularly generous to the artists anyway and their behavior has been pretty deplorable for a long time.

So for the last 10 years it's been interesting. The labels are suffering, both big and small independents, big record stores are almost no more (we don't really cry for them either as they put all the small shops out of business), and recording studios – like the Looking Glass Studio closed. One after another. Big and small disappeared. Laying off all the people who worked there.  

In fact, every turn in this story means less jobs for everyone. It's not because of the collapse of stream of money going into the labels. It's because of the widely held view, our current reality, that one doesn't need to pay for music. I accept that most people view that as a reality. After all, isn't the radio free?  Doesn't it provide promotion which in turn sells tickets to live shows.

So we know now more than ever that if there is any money to be made from recordings, it's in live shows.  That still doesn't solve my problem, and others like me, of how to raise the capital to make new recordings.

My contention is that whether it's iTunes, Google, Spotify, Time Warner – whoever, I think they all think that having to deal with these issues of intellectual property as a big drag.  In their opinion, they are in fact doing artists a favor by getting their names out to the public. Apple wants to sell computers, iPads, and iPods. Its profit margin is large on that type of sale far exceeds its profits from music sales. They barely pay for their own operations with the 30%, or 30 cents they take from a typical 99 cent download.

An interesting this has recently happened.  The iTunes music market has reached a plateau.  As CDs are almost gone, vinyl less than 1% of the market, and downloads on the decline – Amazon MP3 (arguably illegally, jumped the gun and) launched its Cloud Service.  Apple later announced it came to terms with music labels to do that same and Google remains a player.

However, the service newly arriving on the scene is Spoitify which seems to have leapfrogged everyone with its great interface and limitless content. As the old big labels resisted iTunes, iTunes resisted change itself fighting for DRM free downloads.  Make no mistake, they weren't protecting music, they were trying to protect their market share.

The typical return for someone listening to a track on iTunes is less than the 69 per song that one currently gets, and of course it's a long way from the $15.00 labels used to get for a record. 

On Spotify, it's in fact fractions of one cent.  So if someone listens to your song dozens times, the label will get 1 cent.  The artist will get a small share of that. 

There are insidious aspects to this story.  One could ask, "Why allow one's music onto the service."  The wealth of content on this service came from a deal the record labels made with Spotify.  This wasn't discussed on last night's episode of Soundcheck.  The labels received between $100-150 million dollars to turn over their catalogs. I'm almost certain that money will never make it to any specific artist, why would it? On top of that the artists frequently don't control the use of their music.

I am not sanctimoneously blindly screaming that artists "need to get paid for their work."  I'm saying that without income coming to the artists of each generation, they will have no ability to create their work.  The "content providers" will have no means to create content. 

As I said, Apple and Google and everyone corporation views this scenario cynically, thinking that having to deal with this intellectual property and copyright is a big drag. And certainly there's more music than any one person could listen to in a lifetime.Perhaps it's not cynical – maybe there is simply too much content. 

Every Mozart symphony has been recorded hundreds of times over…same with Beethoven, Mahler. The Beatles recording legacy is out there. And on an on.  This is only a problem for those still alive, creating, and hoping to move forward.

Even-handedly I descirbed this scenario to a music-loving 88 year old friend of mine today, being careful to mention the end-user benefits of the service. He grasped the essence of the problem immediately. I said "This Spotify gives you, in your pocket, unlimited access to most every recording in the history of music."  To which he responded, "But it also means you have no future. Who wants to live in a world with no future."

How does this effect listeners of Philip Glass' music?  Well, quite a bit of it remains unrecorded.  Thankfully he is a composer of pencil and paper and all his music is preserved, if not on recording. 



21 thoughts on “The Spotify Question…”

  1. My vinyl copy of Koyaanisqatsi cost me £20 about a dozen years ago. I wouldn’t part with it for £50….but mostly buy cds & vinyl from charity shops now (including many Glass ones). Itunes etc have encouraged people to offload these.

  2. I don’t think that music will die. Certainly, the music industry is undergoing a revolution. Those that can adapt to the new realities of being a professional musician/composer will survive.
    I support artists that have made their music available directly on their sites (for example, Artists need to connect in new ways, like DGM does, to their fans. Lots of ideas to be explored: web concerts; Rock Band Network for promotion; smaller, more intimate venues for core fans; etc.

  3. >Who wants to live in a world with no future.
    It’s after the end of the world, don’t you know that yet? – Sun Ra, 1970.
    I believe the bulk of my music purchases are from merch tables at the musicians’ live shows.
    I’m surprised more musicians haven’t followed the Pixies lead and burn CDs of their shows and sell them on-site same night.

  4. It’s still the record labels that are the problem. They continue to believe and act as if the existing model should go on. They need a new, much lower cost model for A&R, marketing, administration, etc.; and need to expect much lower profits.
    Right now the record company execs believe they need a lot of pie, and a big piece of the pie. They don’t leave anything for the artists. The new model is a much smaller pie, and a much bigger share of that for the artists. That will only happen when these guys are gone, or when artists create a new model themselves.
    You refer to having capital for new recordings, but that is a fraction of the cost structure of this industry.
    Frankly, what’s going to happen is that the record labels will milk their old catalog and established artists, because that will let them cling to the declining empire they have bcome used to. But new artists will need to find or create a new record label structure.

  5. Pilgrim, All due respect but the image of the recording industry you are thinking of is dead. There is no more A&R, marketing, etc.
    Most young artists function through whatever vehicles for exposure they have: emusic, CDbaby, etc. There may be no money in it, but at least they own it.
    No one makes money from record sales anymore. What small labels like OMM hope to do, is make enough to make the next record.
    The big labels are nominally “alive,” but it’s a matter of time till they declare bankruptcy. The small labels are now in a position where they won’t have any money to make the next record.
    That was my point that all these services don’t care about that. After all, it’s true, there’s more content already there for 200 lifetimes. When is enough enough?
    This only poses a problem for new artists.

  6. Labels got $15 from each record sale? How much did the store get? I thought retail typically takes about 2/3 of the price.
    I’d like to see the accounting and revenue streams better documented. Perhaps the most interesting figure would the percentage of money that the average performer derived from album sales vs. concert performances circa 1980.

  7. What often gets forgotten, is that in the dark old days of small and expensive record collections, many people purchased music quite infrequently because they didn’t have a very efficient way to discover new music.
    In the 1990s I would occasionally buy CDs based on a review, or based on hearing one good track, and then feel like I’d wasted my money because I only listened to it once. This happened so often I almost stopped buying.
    But in the last few years since Spotify and DRM-free music purchasing appeared, my music buying has undergone a complete renaissance! I now spend far more on music now than I have in many years.
    People always underestimate the importance of being able to discover music. iTunes-style 30-second samples turns the process into a chore, but Spotify-style full track plays makes music discovery a pleasure, like listening to the radio. When I really like something I buy it in mp3, and this happens very often now.
    Furthermore, the ability to listen on demand to a huge library of all music ever created is not new: a few people working in radio, TV and other media have always had this privilege as part of their work.
    What has happened is that something that was previously only available to a privileged few is now available to the masses. It is a process of democratization, like when invention of the printing press and subsequent innovations in printing in previous centuries meant that suddenly everyone could have their own bible.
    Technology is doing what it’s always done – sure, it’s disruptive, but for all the jobs it taketh away, there are other jobs it giveth.
    Record shops might close and lay off a few people, but you know what? A lot of those people who worked in record shops were quite snotty and unfriendly to me when they had a monopoly in music distribution.
    The people working for Spotify and similar companies have jobs, too. And they provide a better service, simple as that.
    One final thought: as you know for every musician who makes a living out of music there must be, say 50 “struggling” musicians who do it in their spare time, mostly (but not always) because their music is mediocre.
    What does this tell you?
    What it tells you is the incentive to make music is already very high.
    To those who want to banish Spotify and strengthen copyrights so that musicians get payed more, I ask: just how much to you want to increase the incentive to make music? To the point where for each 1 successful and 50 struggling musicians we have today, we would replace that with 10 successful and 500 struggling? How about 1,000 successful and 50,000 struggling? Do you want to increase the incentive to the point where every person on the planet becomes a struggling musician?
    How much music do you think the human race needs?
    There is already enough good music. Too much in fact. Wouldn’t it be better if some of this energy and time was spent doing something useful like engineering or finding a cure for cancer?

  8. James. You make a couple good points but the fact remains that less people will purchase music.
    And to your last point-struggling or not, with no incentives for young musicians we would not only have a boring world filled with only doctors,lawyers, and hedge fund managers, but we wouldn’t have Philip Glass and other great music by living composers and performers. To deny that opportunity and privilege to future generations is short sighted and borderline criminal.

  9. @Richard – I wonder if there’s any evidence for the idea that the incentive to make music has reduced, or less music is being made? I don’t see any evidence, and I don’t see a shortage of new music.
    I would have thought young musicians are mostly motivated by the same things that they’ve always been motivated by: a love of music, the thrill of playing, the chance to meet interesting people, and the remote possibility of becoming rich and famous – which still exists, and is just as remote now as it ever was.

  10. Spotify launched only a couple of weeks ago. I can tell you its a great service for music lovers…and the evidence is that income is about 10% of iTunes monthly income even with the increased volume in listeners.

  11. I’ve been using Spotify for several years here in the UK – and apparently, overall download sales have grown in that time –
    Btw I’m using the free version of Spotify, which only lets you listen to a track 5 times max – and by that time, I’ve usually bought the mp3 already if I like it that much (inside Spotify, if it’s available there).
    The CRAZIEST thing is that some of the tracks you can stream inside Spotify aren’t licensed for purchasing as mp3 inside Spotify, so you can’t buy them even if you wanted to!!! (In that case I go to iTunes or Amazon).
    Anyway, I don’t disagree that overall record sales are down on where they were 20 years ago, but that process has been going on for a long time now. We’ve had a lot more than 2 weeks to judge whether it’s hurting creativity. And from where I’m standing, it’s not.
    Perhaps the period between 1905 (roughly when records were first invented) to say 2000 (roughly when it allegedly stopped being possible to rely on selling recordings as a sole source of income) was an anomaly in the grand scheme of things. Maybe we’ve come full circle?
    Regardless, the bleak future you’re talking about doesn’t seem to be materializing.

  12. James, I dont know what to tell you. Our reality as content creators, and the reality of the other boutique labels is changing, not make believe, actually changing – and its at the projection of huge loss in income. While that income may not represent much in the world of Sony Music or Warner Music group who are part of huge international make-believe financing. For independent labels the effects are very real and already being felt.

  13. I agree with James above. I’m a UK Spotify Premium subscriber and there’s no sign that creativity is on the decline here. People will always write music, no matter what the delivery format.

  14. And a second thought: who needs record labels anyway? I know people who have recorded their own material and are selling their albums on iTunes independently with no record label involved anywhere (unless you count iTunes itself as a record label, which I suppose, arguably, you could).

  15. Who needs labels that are not owned by the artists themselves maybe.
    However, I think they are necessary because I really don’t want people like Philip Glass taking time away from composing and performing to work on contracting performers, photographers,graphic designers,manufacturers, distributors, packing boxes, uploading metadata,accounting,paying royalties and promotion.
    Newsflash: albums don’t make themselves.

  16. …and to think it all began with Philip breaking unsold records in the basement of his father’s shop!
    In New Zealand, as I imagine it is in most countries outside of the U.S. (and possibly some places inside as well?) buying Glass albums has always been something of a treasure hunt. I first discovered his music when I went to see the film ‘Powaqqatsi’ in the late ’80s; I looked through all the local music shops trying to find the soundtrack album, only to uncover an old cassette of ‘Koyaanisqatsi’ which I bought instead. It turned out to be the ideal introduction to his music as it combined the rigorous “minimalism” of his early music with the more harmonically accessible style of his later works (I was particularly enamored with the large scale “evolving”, ‘Bolero’-type, pieces like ‘The Grid’). The first CD I bought of Glass was the soundtrack to ‘Mishima’ which I ordered through a local store. In the intervening years I have been able to order many Glass albums through a great local store which specialised in 2nd hand and hard to find titles; building up most of my 100+ collection, but, sadly, the recent earthquakes have forced the store to close. Before then, however, I had gotten into the practise of purchasing Glass albums through iTunes; simply because it usually took a couple of months for my orders to come through (as crazy as it may sound, I nonetheless bought the same CDs that I had already downloaded; the physical object still being something I value!).
    Perhaps I’m showing my naivete here, but I’m surprised that record labels don’t launch their own iTunes style sites to sell music files directly to the fans; perhaps even allowing “subscribers” to design their own albums from the catalogue of available recordings. Of course all of this must cost money to set up and maintain. One of the things I don’t like about downloading music from iTunes, apart from not having the album as a physical object, is that I have to pay my ISP on a per data basis for my internet use which means a duplication of costs is involved (that I do nonetheless in addition to the duplication of downloading and buying CDs of the same albums!); not just paying for the album, but also for downloading the data (even if the music were free, the ISP would still make money out of the arrangement!). What I’m really paying for, I guess, is my own impatience; all good things come to those who wait…
    …in the documentary ‘Looking Glass’, Glass tells the story of how he once ordered 4 copies of a boxed set of Schoenberg quartets for the store, which his father was skeptical would sell. Finally, six years later, the last copy had sold, from which his father concluded, “I can sell anything if you give me time enough.”

  17. “(as crazy as it may sound, I nonetheless bought the same CDs that I had already downloaded; the physical object still being something I value!).”
    That doesn’t sound crazy at all to me, as I completely understand and appreciate what you are saying. There is nothing quite like the real CD to make you feel like you actually have something.

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