Spotify and the discrete charm of inevitability

Music streaming company Spotify is going public on the New York Stock Exchange on April 3rd 2018. It’s all about fresh money from a broader set of investors for a company in need. Technology analyst Ben Thompson looks critically at the business model:

Spotify is in one sense an aggregator, in that it increasingly controls access to music listeners, and to the company’s credit, it has demonstrated the ability to exercise power via its control of music discovery and popular playlists.

Being a true aggregator, though, means gaining power over supply; Spotify doesn’t have that — the company doesn’t even have control over its marginal costs — and it’s hard to see where the profits come from.

There is one more possibility: Spotify could one day cut out the labels altogether — the idea certainly makes sense on a conceptual level.

The marginal costs Thompson is referring to are the royalties it pays the music industry (not just record labels but also songwriters and publishers).

For Thompson, the promising inevitability to make “Everything as a service” is based on the idea of a new service-based economy that deprioritizes ownership in favor of renting what you need when you need it. He cites sharing services in industries like software, cars, homes and music as examples. As long as consumers frictionless discover these services, access them in a low-threshold way and start using them as ubiquitous commodities it should all be fine and dandy. Spotify as a music streaming service does meet all these consumer friendly criteria on the surface. Below that it is a bloody mess of fake charts, major labels as stakeholders infight, black market for playlists and lawsuits for not paying fair royalties.

Let’s recap: Lower marginal costs can only be achieved by cutting out the labels. Cultural decontextualisation of music is not a problem but a requirement for Spotify to overcome the missing profit potential. Cutting out labels means getting rid of a huge part of marginal costs but also of the cultural bottle neck so everybody can upload music. This inevitably creates a bubble where music and music making gets devaluated even more.

By the way, have you heard of YouTube?

The return of the social network without ads and algorithms

You may try out Vero today, the app made by a billionaire because he was frustrated with the privacy policies of ad-based social networks. I recommend you consider micro.blog as well, a social network and publishing platform for independent microblogs, created by Manton Reece – plus it is designed for the open web:

Today, most writing instead goes into a small number of popular social networking sites. These sites became popular because they made it so easy to connect with friends and start publishing, and because they provided a timeline user experience that made everything easy and fast. But this simplicity comes at a cost: it’s impossible to move content between these platform silos, ads are everywhere, and if a company goes out of business, all the writing hosted there vanishes from the internet.

Oldschool blogs and their RSS ability are another social network without ads and algorithms, although the combination of writing and reading is not as fancy as Vero. Yet.

The unrivaled success story of Bandcamp

Bandcamp has a vision and a strategy about a fair, sustainable music economy and music makers and listeners are appreciating it with undamped force. With Bandcamp it is very possible to be a responsible fan in the age of streaming. Pairing an “pay upfront, stream forever” business with relevant cultural context in a mobile world and to be profitable since 2012 seems not only possible but rather interdependent.

The annually Bandcamp review is a manifest of self-confidence to do the right thing with the right attitude against the backdrop of mainstream-algorithm-dispair.

The recent 2017 Review is very worth reading and comes in three parts:

Bandcamp factors of success

2017 was another stellar year for Bandcamp, with double digit growth in every aspect of the business. Digital album sales were up 16%, tracks 33%, and merch 36%. Growth in physical sales was led by vinyl (up 54%), CDs (up 18%), and cassettes (up 41%). Revenue from the 3,500 independent labels on Bandcamp grew 73%, and more than 600,000 artists have now sold something through the site. Our publication, Bandcamp Daily, grew its audience by 84%, and all-time payments to artists through Bandcamp reached $270 million. We launched a new app for artists and labels, added gift cards, improved fan collections, held successful fundraisers for the ACLU and TLC, and we’ll soon mark six straight years as a profitable company that only makes money when artists make a lot more money.

Flak for the mainstream streaming companies

As we said last year, allowing the distribution of an entire art form to be controlled by so few has troubling implications, and those continued to play out in 2017. The streaming giants exert tremendous influence over what music gets heard, and must primarily serve their most important supplier, the major labels. The result is that independent labels, and especially independent artists, are far less likely to be discovered on those platforms. 99% of all streaming is of the top 10% most-streamed tracks, and given the majors’ control over the music that is promoted on streaming services (documented in the must-read piece “The Secret Lives of Playlists”), listening hours are likely to become even more concentrated at the top.

Commitment to stay the course

We want a music platform to exist where the playing field is level, where artists are compensated fairly and transparently, and where fans can both stream and own their music collections. The fact that this simple concept continues to resonate with so many talented artists and hard core fans inspires us every single day, and in 2018 we’ll be working hard to bring it to an even bigger audience.

For everyone involved in this success story, be it artists, labels and fans it is their duty to spread the word, to make this thriving ecosystem even better. Sign up for free today and explore the independent music world.

Get the Bandcamp apps for fans:

Bandcamp apps for artists:

 

Can’t play stereo but “audiophiles love it”

homepod

Apple’s Homepod can’t play stereo but John Gruber pointed to an audiophile review nevertheless. The importance of stereo field seems nowadays a matter of hairsplitting. Forbes writes:

It does pay attention to the distinct left and right channels of a stereo track and uses them as part of the sound it creates. I suspect Apple doesn’t refer to it as stereo partly because audiophiles have strong opinions about what qualifies as stereo in terms of separation of speakers, whether they’re two independent speakers and so on. And perhaps because it feels that it’s irrelevant to most listeners, that when they hear HomePod they’ll feel such distinctions are academic.

I wonder how “Yesterday” from The Beatles (Apple Records, 1971) will sound on one of the voice recognition speakers that are about to change the music industry.

The last laugh on the matter comes from Mac indie software developer Rogue Amoeba:

You also may have heard about the new AirPlay 2 protocol Apple announced last June. It’s currently delayed, and we’re awaiting more details from Apple. It is worth noting that one of AirPlay 2’s announced features, the ability to play audio to multiple devices in sync, is already possible today using Airfoil.

That is right, you need 3rd party software to listen to your favourite music in stereo on the Homepod on product introduction. Hashtag #applelovesmusic.

∞ Lefsetz on the Quincy Jones Interview

Furthermore, actors are vessels. Musicians are truth. That’s why hip-hop triumphs, eviscerates other forms, there’s more truth and honesty there. Whether it be the actual words spoken or the emotion behind it, which is oftentimes I’ve been screwed my whole life and now I’ve got the mic and I’m not gonna let it go!

Do yourself a favour and subscribe to Bob Lefsetz’ blog or newsletter.

Link: http://lefsetz.com/wordpress/2018/02/08/the-quincy-jones-interview/

∞ Voice recognition is changing the music industry

We’re seeing search terms for music change beyond anything we saw five years ago – context is now a big part of music interaction. We have music to work to, eat to, dance to, relax to, fuck to and, of course, let’s not forget the ever-popular music to sleep to; who would have thought our industry could make so much money from sleep playlists?!

Speaking of context, this is the perfect example of how the major music industry is effectively widening the gap between music making and music consumption: the devaluation of music as a merely fitting commodity means the complete cultural decontextualization from where it originates.

Link: https://www.musicbusinessworldwide.com/lets-talk-voice-command-smart-speakers-changing-music-industry-know/

∞ Quincy Jones on the Secret Michael Jackson and the Problem With Modern Pop

We’re the worst we’ve ever been, but that’s why we’re seeing people try and fix it. Feminism: Women are saying they’re not going to take it anymore. Racism: People are fighting it. God is pushing the bad in our face to make people fight back.

Nobody talked about this paragraph in the Quincy Jones interview.

Link: http://www.vulture.com/2018/02/quincy-jones-in-conversation.html