Tim Quirk, former singer of the band Too Much Joy and current Head of Global Content Programming with Google, recently delivered a speech at the Future of Music Summit where he claimed:
“[Y]ou canâ€™t devalue music. Itâ€™s impossible. Songs are not worth exactly 99 cents and albums are not worth precisely $9.99,” then went on to defend streaming services with the claim that “Music is priceless… The same song will always be worth different things to different people at different times. The online music revolution hasnâ€™t changed that. Itâ€™s simply made the fact glaringly obvious.”
Tim is absolutely right about the pricelessness of music and art in terms of cultural value, and utterly wrong about the monetary value of music. People in the business of music as “content,” even former professional musicians, far too often forget that recorded, popular music doesn’t just spring up out of the ground to be harvested. Music costs money to make. Even an independent solo singer-songwriter with a beat-up acoustic guitar had to pay for the guitar, the strings, the clothes on their back, the hardware they used to record on, a car to tour in, fuel for the car, hosting fees for their website and audio files and more. They have to make that money somehow if they want to keep producing music, and the very real fact is that streaming services don’t provide the same amount of money as other distribution models. Tim knows this, but doesn’t see it as a problem.
“Whatâ€™s new is that the casual fans no longer have to buy if they donâ€™t want to. And while there is a lot of very real and quite justified angst that thereâ€™s not enough money coming in from everyone else to make up for that loss, those casual listeners are also exhibiting an unprecedented hunger for more and more music. That is not automatically a good thing, but it is a massive opportunity.”
In other words, you’re not making as much (or any) money on Spotify or Google Play, but you can make it up in volume. It’s the promise of future returns: more concert tickets, t-shirts, and possibly little plastic discs sold somewhere further down the line. It’s like when a startup company offers you equity in lieu of real money up front. The difference is that a startup is legally bound to pay you at least minimum wage if you’re actually an employee.
A musician is either independent, or signed to a label that fronted them expenses for producing and touring. If it’s the latter, they’re already starting out in the red, and every cent from your digital music streaming service of choice is going to the label until that advance is paid back. So, the artist probably isn’t seeing any of it. This is nothing new, but it is a problem exacerbated by the pitifully small royalty rates that streaming services pay compared even to terrestrial radio. And who listens to terrestrial radio these days?
Unable to escape the elephant in the room, Tim tries to spin streaming services as a discovery mechanism, likening his role to that of a Park Ranger. “[O]ur job isnâ€™t to tell visitors whatâ€™s great and why. Our job is to get them from any given thing they like to a variety of other things they might.” Upon reading this, I immediately thought of what David Byrne said about Spotify and other streaming services:
“I also don’t understand the claim of discovery that Spotify makes; the actual moment of discovery in most cases happens at the moment when someone else tells you about an artist or you read about them â€“ not when you’re on the streaming service listening to what you have read about… I’d be curious to know whether a significant number of people find new music in this way. I’d be even more curious if the folks who ”discover“ music on these services then go on to purchase it. Why would you click and go elsewhere and pay when the free version is sitting right in front of you? Am I crazy?”
— David Byrne: ‘The internet will suck all creative content out of the world’
I couldn’t find statistics on how many people buy music through streaming discovery mechanisms, either. David is right that in the music world, word of mouth is still the best way to discover what’s new to you.  It would go a long way to calming down people like David Byrne and Thom Yorke if Spotify, Google, or Apple could reveal how much music they’ve sold through their various “discovery” mechanisms, or even just how many people bother to use them. I am sure, however, that when given the choice between free and paid, most people will take the free option. Tim Quirk says that “…free in this context doesnâ€™t have to mean copyright owners arenâ€™t making money, it just means the listeners themselves arenâ€™t paying.”
Wait. Who’s making money? Artists or “copyright owners”?
This is where things in Tim’s speech get sinister. Many record contracts, especially with major labels, force an artist to give up the copyright to their works to the label. A performer and a songwriter gets, in trade, a royalty, but the majority of the money goes to the label. If you still think the major record labels are struggling to make money in the face of online distribution, think again. Major labels and even large independent labels love streaming services. It costs them almost nothing, and they make a mint, sharing pocket change with the artists (if, again, they’ve paid back the advance).
The people who are winning from the online distribution revolution for music are independent artists like Jonathan Coulton, who maintain almost complete ownership of their work. Jonathan Coulton also had the good fortune to be making the right kind of music, at the right time, and found people willing to throw money at him. Some artists are better off joining labels, big or small. Whatever way they get their work out, financial success for an artist is predicated on being able to bring in enough money to both pay the bills, and the label, and support producing more music.
Which is why I worry that losing the “casual listener” to the “free tier” is making it that much harder for super talented artists who deserve better. This goes doubly so for emerging artists who need to get on a solid financial footing now, so they can devote more time to their craft. No flowery, pro-artist terms a former indie rock star turned technology executive chooses to couch streaming in, it’s looking like streaming will prove to be a shit sandwich for anyone who isn’t a record label.