Finger on the red button, or the awful truth about Apple, Google, Spotify and the rest of the music streaming universe

It was insanely difficult times for musicians. In fact, without giving their own consent to this, the latter, together with independent labels, were drawn into the “dangerous quagmire” of musical streaming, controlled mainly by technology companies. As for deductions to rightholders for streaming their music, it still remains an unsolved mystery. No one is dedicated to the secrets of how royalties are calculated or assigned to different artists in the streaming ecosystem.

In what other industries will suppliers offer their product to distributors, not knowing for sure how much they will get for it?

Nevertheless, at present, most musicians and independent labels are involved in the streaming world of Apple, Google and Spotify, as if this industry is the only way for them to make money. But it is not.
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Many wonder why Apple shifts priority from iTunes towards Apple Music. Obviously, the company was forced to take this step, discovering the world of streaming, in order to preserve the prestige and dynamics of the market for the ecosystem of its devices. Without streaming music, this ecosystem would not have been sweet. Apple’s success is built on absolute control over distribution channels, and Apple Music is a gaping hole that doesn’t comply with current company policies. But given the fact that most of the content presented in the iTunes catalog was available on competing streaming services, Apple’s position seemed somewhat outdated. The market itself worked against the ecosystem of “apple” devices, when iTunes, with its paid downloads of content, began to sink against the background of musical streaming, which became the dominant model.

However, for Apple, Google, Spotify and all other streaming services, the influence of their activities on the fate of musicians and independent labels has never mattered. While these companies only hint that scale effect will ever be able to bring profit to participants, the harsh truth of life shows the opposite.

“Streaming complicates the lives of cult performers who sell 1000 copies of each album,” famous British guitarist and composer Matt Stevens told me. “If 1,000 people listened to the album through streaming service 10 times, we will probably earn a few kopecks compared to the thousand sales of digital versions of the album, which creates a model that will pay modest expenses for sound recording. Now with downloads it makes sense in the long term, but now it is not profitable. If we move on to streaming music, then this part of the income will completely disappear, and we will have serious problems. ”

In fact, we are in the very "heart" of a perfect storm. After the storm is over, we will witness the death of the commercial music industry.

It all started with the Napster file sharing network and the participation of listeners in the exchange of compositions. The music industry has panicked, and the selfish public has come to the conclusion that music should be free. Musicians and independent labels passively watched Spotify, Rhapsody, MOG and the rest of the streaming companies lining up services with such a low level of payments, deducted to the right holders, that for the latter, the activity of the services differs little from piracy. This, however, does not apply to the main investors of these services, among which well-known major labels stand out. For example, Warner, Sony and Universal are among Spotify's key partners.

There are discussions about "deductions for rightholders". Please note that no one talks about "deductions to musicians." Copyright holders are mostly investors. So the streaming services model largely provides for the return of their own money to investors.

In addition, the musicians were misinformed about the results of such services. Again and again, they heard that in streaming companies someday will increase the authors' payment for using their music. In reality, as proved by the The Trichordist community, which advocates for the protection of musicians, with the growth of services, royalties decrease. Only the profit from the subscription grows, which cannot be said about the deductions for the musicians themselves.

The greatest irony is that streaming services do not generate income. This does not mean that investors do not make incredible amounts of money on them. Due to the amazing complexity of licensing and building these organizations in the image of the Ponzi financial pyramid, money can be said to flow like a river. In the case of Spotify, giant monetization is seen in the form of an IPO or takeover of companies. If any of the above occurs, then all enterprises - including the main investors - will receive a lot of money, and all that remains will be the gnawed skeleton, which will eventually collapse to the ground.

It is obvious that almost all insiders of streaming companies see this model only as an unstable structure with short-term prospects. They all participate in it for the sake of quick money and do not mind pushing the famous “red” self-destruct button .

Those who are not able to leave this business are doomed. You will see the rapid extinction of the remaining companies. Once George Carlin (George Carlin) said the famous phrase: "The game is rigged, but it seems that no one notices."

My advice to musicians and labels is this: you should move away from streaming services and look for other options available to them, such as Bandcamp and PledgeMusic, which, judging from the side, preach relatively fair rules of the game. Another option is to create your own infrastructure. I know at least a couple of teams that are trying to build a business "in fairness". Their concept of streaming is focused on the performer, which eliminates the possibility of any fraud in order to obtain benefits for individual players.

The big question that musicians and independent labels have to ask themselves is: why do they allow these companies to determine the value of their music?

While streaming companies are promoting the myth of mass accessibility, offering great opportunities for mass adoption, the truth is very far from that. It is up to you to create your own audience and associated ecosystem with the help of communities, social media, virtual events. Do not forget about the "non-digital" methods of attracting fans, which are, including concerts, tours and a kind of "creative guerrilla warfare with a tactical bias" with respect to real locations that are somehow connected with music. None of these things is affected by the fact that you have music on any streaming service. You can send people interested in what you are doing, anywhere, to give them access to your music.

Inevitably, musicians and labels will eventually fight alone with streaming services and eventually lose this unequal battle one by one. Now is the time to plan your future, developing your own model today, regardless of the activities of these companies. Return your independence and make sure that your music benefits people who really appreciate it, and not soulless streaming companies seeking to take you to a penny.

About the Author: Anil Prasad is the founder of Innerviews: Music Without Borders, the world's first online music magazine created in 1994.