Category: Streaming

STREAMING LIKE CRAZY.

Just some quick stats for your Monday.  According to Nielsen’s US Music Mid-Year report, the United States is consuming more music via streaming platforms than ever before.

Key stats from the report are:

“On-demand song streaming activity is reaching new milestones, with volume surpassing 400 billion, which is offsetting declines in album and track sales. On-demand audio streaming volume is up 45%, having already exceeded 268 billion so far in 2018, and on-demand video streaming volume is up 35% year-over-year.”

Some of us have noticed that the introduction of new record labels popping up all over the place.  A few years back reading that a new record label was opening up was on par with an announcement of a new Blockbuster Video opening its doors; it just wasn’t going to happen.  Not surprisingly, a lot of the labels that are popping up are actually old shuttered labels that closed their doors a decade or so ago when they were unequipped to handle the digital music revolution.  Now, with their parent companies (read the opening of a new label announcements with some skepticism, as they are often funded by a pre-existing major) finally reaping the benefit of deals struck with streaming platforms and the overall ease for consumers to stream music, revenue for labels is catching up.  With a better formula in place to collect revenue from the streaming platforms and with the number of consumers steadily rising, it is not surprising to see a renaissance of sorts  for record labels.

Let’s just hope that they have learned from the past and that the structure of deals for artists that are clamoring to sign are fair (or at least close to it).

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What’$ in a Stream?

There have been a ton of articles written about how the current revenue models created by streaming platforms are grossly unjust and woefully inadequate as far as compensating artists.   Great sources like Digital Music News have compiled hundreds of pages of Spotify reports in an effort to truly understand how much money an artist can make per stream.  Forbes via Quora has probably the best breakdown of how Spotify, Apple, et. al. work with musicians, labels, publishers and “back office services” when calculating the true revenue per stream.

Unfortunately for artists, the result of all of the calculations results in the following analysis:  The revenue per stream is really really really low.  Like $0.004891 per stream low.  Easier math to contemplate is to figure that for every 1,000,000 streams on Spotify, your band will make $5,000.

More crappy financial news for musicians.  The fact that music industry is on a never-ending downward spiral is as newsworthy as another allegation that Trump has ties with the Russians.  Everyone knows.  Yet, a funny thing keeps happening with all of the artists that we work with here at L4M and The Propelr.  They all turn to their numbers on Spotify before literally everything else.  The success of a project, in their minds, is almost exclusively dependent on the number of streams on Spotify.

So if your music isn’t on New Releases Friday or doesn’t make it onto Rap Caviar, how does an independent artist get significant spins on Spotify?

Not surprisingly “streaming promotion” companies are popping up.  Promises are being made that for approximately $5,000 you can be assured of, wait for it…1,000,000 streams on Spotify (no risk offer!).  I’m not saying that these companies cannot achieve this benchmark but it leads to a greater question of what is the value in having millions of streams, especially if you have to pay for them.

Paying for spins is not a new idea.  Payola ruled the industry for decades.  Payments to program managers and dj’s of radio stations were as common as paying for studio time. While Payola was officially made illegal by Congress in 1960 some form of pay for play remained commonplace in the industry for the next fifty years.  Rather than straight up paying for radio rotation, promotional payments were made as marketing expenditures and not-so-cleverly identified as artist or record promotion.  In 2005 the State of New York settled with the majors to try to put a stop to this practice and loop hole in the law. There was a chilling effect after that out-of-court settlement but those who have tried to get their music on the radio still know you have to pay someone to get there.  It’s just the way it is.  Want a number one album, plan on spending $200,000 (according to an anonymous label source).

With the advent of streaming officially taking over the value of physical sales for the major labels, the labels are forced to (finally) face the fact that they are in the streaming business rather than the download or sale of music business.  (Click Here for a great article about it from Music Industry Blog)   That means that there will be far more attention, effort and dollars going into boosting the numbers of spins that a song receives.  Labels will most likely swallow up some of these independent spin maximization services and look to infiltrate the algorithm and fan behavior platforms like Pandora and Spotify.

With the labels spending more time, money and attention on the importance of streams is that 1,000,000 spin number even worth it?  In short, yes but don’t pay someone to get them for you.

First off, there is no guarantee that these promotional streaming companies can achieve authentic spins.  Think of boiler room scenario where computers are set to repeat on your song.  Is that worth it to get to 1,000,000 streams?  Sure it is worth about $5,000, but that is what it cost you.  So did you gain any fans?  Will you be able to point to the analytics that Spotify provides and show promoters that your fanbase is active in a certain city?  Can you spend money on Facebook advertising your merchandise in a specific market based on the analytics you get from those spins?  No to all of the above.

There are ways to get authentic fans and via those fans, authentic spins.  One way is to reach out directly to folks at a platform.  Spotify employees repeatedly tell us they are far more likely to open a personal email versus a canned announcement or press release form a label or management company.  Identify a playlist that you really like and try to find out the editor of that playlist.  No guaranty that you will hear back from them but it is definitely worth a shot.  Also look to distributors for help.  If you have a track record of selling your music independently or getting tens of thousands of streams, you may be able to entice a distributor to put your music out to all outlets.  These companies have teams that are in constant communication with streaming services.  They will pitch your music to playlists and have the relationships to actually get it done.  Finally, when you release your music, make sure you direct everything, your press/social posts/interview answers etc. to the platform on which you want the most spins.  Use embeddable codes from your chosen platform on every post to maximize spins.  All of these and the help of a solid squad will help to maximize spins, revenue and happiness (well maybe not the last one).