A New Spotify Initiative Makes the Big Record Labels Nervous

This article has been imported from chorus.fm for discussion. All of the forum rules still apply.

Ben Sisario, writing at The New York Times:

Over the last year, the 12-year-old company has quietly struck direct licensing deals with a small number of independent artists. The deals give those artists a way onto the streaming platform and a closer relationship to the company — an advantage when pitching music for its influential playlists — while bypassing the major labels altogether.

Although the deals are modest — with advance payments of tens or hundreds of thousands of dollars, according to several people involved — the big record companies see the Spotify initiative as a potential threat: a small step that, down the line, could reshape the music business as it has existed since the days of the Victrola.
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This feels inevitable. At some point these digital streaming services will have better algorithms for figuring out what music is not only going to be universally popular but also own the distribution method to help make it so. At that point, what’s the point of a record label?

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Record labels are just that: a label. It's "Hey. Look at me. I'm with Warner Bros or whoever. Aren't I hip? LOL!" Most of these labels, both major and indie, do nothing to help their bands. Hell, being on a label like Victory or Eulogy leads to bands getting blacklisted altogether. Bands can always just use a great distributor to get their stuff on streaming services.

 

Record labels will adapt. They will have to change their business models and be more marketing focused, touring focused, recording / producing focused. Maybe they will focus more on scouting. Interesting to think about.

 

wait what????????????????

 

Kind of like Netflix producing its own content for its own platform, but also having rights to a bunch of other studio’s shows and movies available too.

Seems like the industry is going to get stuck needing something (streaming services like Spotify) that is trying to cut them out.

 

spotify is the future! i made 150 bucks from it in one year and i didnt even pay any advertising or anything. they randomly put me on a playlist for a month and it was dope. they really do support new artists and promote new music! plus their platform is so inviting to other curators there are always thousands of people making and sharing playlists. dope! pretty soon labels will be phased out entirely... or develop streaming apps and shit. highly unlikely

 

Damn, did you have like 200k plays?

 

To fund, promote, press, and distribute the album (my interpretation as a complete outsider)? I'm still surprised at the relatively low percentage of "album sales" are counted from streaming when looking at Billboard's numbers. Especially as someone who almost exclusively streams music.

 

Streaming makes up the vast majority of listens and “sales.” I’m not sure what you mean. Spotify and Apple can do the first three better than a label right now, and within 5 years it won’t be close. They’ll be able to tell what bands to fund better than any A&R.

 

nah homie actually the payout is good! idk if its good for everyone but considering its just my hobby and i do it more out of my own personal need to always release music- it pays well! .005 for every stream from a paid user. and .0015 for every free user.

my most streamed song has like 5k i think.

 

Really? I thought it was less than that. Either way, $150 basically pays to get your album onto streaming platforms hahah.

 

20 bucks a year with distrokid

 

Perhaps I'm misinterpreting articles like this one:

Doesn't that indicate that 83.9% of album "sales" were through physical outlets rather than digital?

EDIT: I know there's not a 1:1 ratio of one stream = one sale, but I'm assuming Billboard's formula has been updated in a fair manor.

I can't contest that. I've found quite a bit of music from Spotify's "new releases radar" where they recommend new music based on your listening habits.

 

That's release week, when you'll have the highest physical sales in most album's entire cycles. Look at SPS charts vs pure sales charts to see the how much more streaming factors in. You factor in streaming and albums that would be on the charts with just pure sales fall off completely.

On-demand streaming now accounts for the majority of audio consumption, says Nielsen

 

Very interesting. That's much more in-line with what I was expecting in 2018. Thanks for clarifying.