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The Silent September hack, Musician Royalties, and a bit of Querki
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jducoeur
Just came across this interesting article on Medium. It's worth reading through -- it's not horribly long, and it points out that your music-streaming dollars (assuming you use one of the music-streaming services) probably don't support your favorite artists to the extent you expect -- but the tl;dr is that if you're a light user, your subscription money essentially winds up getting hijacked by the heavy users. And potentially, by fraudsters. I'm not sure I'm entirely comfortable with the article's response to this (which is to essentially democratize the same fraud in protest), but it's a good point, and worth knowing about.

I confess, I'm a bit appalled. I had been just sort of assuming that subscription money was allocated according to what the article describes as the "Subscriber Share" method, because that's pretty obviously the *sensible* way to do it. But the services are apparently lazy, so they wind up using the "Big Pool" method instead, which leads to this hijacking by the heavy users. Basically, they've incentivized people to stream music 24/7, which is kind of idiotic but typical of the modern Internet company.

I don't know if "Silent September" is going to get enough peoples' attention, or whether it will change the companies' behavior even if it does happen in a big way, but the article's main point is correct. Companies like Spotify *should* be allocating their funds using the Subscriber Share method. As it stands, a lot of artists are getting badly ripped off by people who are gaming the system.


Why is this relevant to Querki? (Besides the fact that everything relates to Querki in my head nowadays.) Don't take this as gospel -- it's business-plan stuff, and subject to change -- but one of my medium-term goals is that Querki should have revenue-sharing for apps. That is, we'll be adding "apps" -- socially-shareable simple applications within Querki -- later this year. Since Querki is subscription-based, apps aren't going to be individually priced (at least mostly not; we might add that later, but separately-priced apps are tricky to fit into the business), but I do want folks to be able to make some money off of their work. So the current plan is that we'll allocate a portion of each user's subscription fees for apps, pro-rated based on how much that user uses that app. (Using the "Subscriber Share" approach, because like I said, it's the obviously-correct way to do this.)

We'll see if all of this passes a sanity-check: there are all sorts of challenges (a few technical, mostly legal) to deal with here, and it's not going to happen for at least a couple of years. But the hope is that, just as Querki makes it Very Very Easy to create new Spaces, it'll also make it similarly easy to make at least a bit of money off of apps. I don't expect many people to get rich this way, but I figure that if you can build a useful app in a few hours, and get an income stream of a few hundred dollars a month from that, that's not a bad deal...
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I presume your app model will be influenced by the Wordpress model? (If you haven't looked closely at that, you should - I suspect it is very close to what you are hoping for for Querki.)

The "Music Industry" has always screwed the performer, while pretending they were defending them. Always.

I read a curated selection of the opinions of Bob Lefsetz, who works in the music industry, and separately from that I sing a lot of copyrighted music, and hear from arrangers/composers about how their works are treated.

I haven't yet read your cited article, but your summary doesn't surprise me.

I presume your app model will be influenced by the Wordpress model? (If you haven't looked closely at that, you should - I suspect it is very close to what you are hoping for for Querki.)

I haven't, but I'll give it a look -- thanks! This is all very hypothetical yet, but it's good to have examples of companies that are following this model, and have already figured out where the landmines are.

This seems like a better article.

At least, it doesn't confuse "subscriber money" with actual money, and it talks about more than just streaming.

I agree that it's a good article, but basically apples to oranges. The main focus in the one you're linking to is that the money basically is making its way through a swiss cheese field of holes that are silently sucking it up with zero transparency, whereas the one I'm pointing to is simply that, even if you take Spotify *completely at its word*, its system is ludicrously gameable.

And that matters: most people believe, on some level, that at least much of their subscription money is going to the artists they listen to (and arguably care about), but that's even less true than is commonly believed due to the way the system's set up. Everyone knows that the labels are rapacious, but the notion that your subscription dollars are only as meaningful as how much you use the service is really a bit weird and surprising. I understand how Spotify wound up with this model -- if nothing else, it makes the contract negotiations more straightforward -- but it's a pretty bad approach...

Spotify pays relatively few artists directly. It pays, mostly, to labels.

It divides the payouts to labels by streams-played-from-the-label / total-streams-played for a period (says their web site).

So, someone like Taylor Swift or Ed Sheerhan might get paid directly.

Most artists lost 30% to Spotify, then whatever their label takes off the top. The labels ALSO don't pay per stream or play - they pay by a pooled system as well.

I'm not terribly concerned about "what people think", because most people don't tend to look into things - they believe the hype, or whatever they choose.

The music business has the same relationship to artists as lions have to gazelles, basically. Streaming is not different, and there is no reason to think it is. There never was.

Seriously, I think you're missing my point. As a consumer, if I use Spotify and exclusively listen to The Arrogant Worms, I might well expect that lots of companies are going to take their cut along the way, but would still expect that The Arrogant Worms will at least be the artist that is getting what money is left. I would be quite reasonably surprised that most of my remaining money is being directed to Justin Bieber, on a completely different label, instead. (That's a reductio ad absurdam, of course, but basically the point.)

Yes, the labels have always been abusive, but this is a whole extra level of wrongness, and it's worthwhile for consumers to know that it's there. Saying that there are lots of other long-standing abuses doesn't mean it isn't worth pointing out the new ones...

I'm glad you clarified.

Again - it's not new. Spotify is doing no differently than the labels have always done.

What changes is that consumers can PULL their music (somewhat, depending upon the streaming service).

Nothing else is different, and the consumer's actions really aren't all that significant.

Seriously - that article, and your reaction to it, are notable only for the sound of surprise that is being made. It is thus, it has been thus, and it will be thus.

If you want to be surprised, read how the Nielson ratings work for broadcast music... that'll really upset you. (Quiet music has long been technologically undercounted because it is harder to detect...)

This is a problem with the streaming model, yes. It's frustrating. I've taken streaming to be a way to find artists and direct sales as a way to support them. The rates are just too low.

Spot-checking that article raises my eyebrows. F'rex, Pandora pays more like 0.001/play, seven times less than it says. In addition to making fraud less lucrative, it makes being played much less lucrative (frustratingly so, but content is cheap these days).

In any case the payoff from streaming is too sharply peaked (i.e. skewed toward the most popular) for those in the tail to net much; one CD or donation will pay more than any realistic number of plays in a year:

My song was played 168 million times; I received $4000 (ouch)

Million plays, $16 Compare his XM royalties at $181 and terrestrial at $1522--and the "printing money" aspect of streaming becomes obvious.

Subscriber share seems like an interesting direction. I wonder if a new service could get itself off the ground that uses this model, and have all the artists promptly jump over on it. But perhaps not; big companies have big lawyers, and folks likely got signed up into ugly-looking contracts. Still, Netflix was able to do this with video production studios--albeit after out-competing the dinosaurs in their space.

Edited at 2015-08-18 01:48 pm (UTC)

This is a problem with the streaming model, yes. It's frustrating. I've taken streaming to be a way to find artists and direct sales as a way to support them. The rates are just too low.

Yeah, ditto. My Spotify use is mainly for building up a "To Buy" playlist of stuff I seriously like; those get bought on MP3 and imported into iTunes instead.

I wonder if a new service could get itself off the ground that uses this model, and have all the artists promptly jump over on it.

Yeah, I was thinking the same. As you say, the problem is the lawyers -- it would probably have to bootstrap based on unsigned artists, so the bootstrapping problem is pretty serious. Seems like the sort of thing I'd expect something like CDBaby to try, though...

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