More on the Spotify move into direct upload
OK - so, last week I talked about the Spotify move into direct upload for artists and I had reservations about how much value this would have for artists. Well, now we have a bit more visibility on the numbers and again, on the face of it, it looks pretty good but let's think about what this actually means................
First of all, we have to keep in mind that traditonally Spotify has paid 52% of the calculated value of a stream to the majors who then split that 52% with the artist based on the deal that they have in place (a 50/50 split in the case of most established artists, 80/20 in the labels favour in the case of new signings etc.). The same 52% payment is also made to Indie labels and distributors, so, at first glance, the 50/50 split Spotify now offers on direct upload gives independent artists 2% less than they were getting in the past, BUT............... this does not take into account the +/- 15% commission that distributors charge or the yearly fees otherwise charged by aggregators.
The bottom line, therefore, is that independent artists are going to be better off with direct upload and the majors are going to have to rethink there deal structure in the face of direct competition from Spotify itself.
And, in case you are wondering, how come Spotify gets to keep 50% of the calculated value? Well, let's not forget that Spotify has deals with the major PROs to make royalty payments to the rights owners (composers / publishers) and those payments come out of Spotifys 50%. In the past, Spotify was paying percentages out of their remaining 48% share, now they are paying it out of their 50% share. The royalties they pay will not increase but their profit margin has just gone up by 2%.
All in all, a very positive outlook for independent artists on Spotify, so why am I still sceptical? Well, how does an emerging artist, with no label support, no marketing or promotional support and no other resources to fall back on but themselves grow a big enough fanbase to make a 50/50 deal with Spotify worthwhile? Well, as I have said in the past, getting on Spotify (or iTunes or Amazon or anywhere else online) is relatively easy and straightfoward but that's not the trick - letting people know that you are there is the real issue and this is where the majors still have the upper hand.
Spotify moves into direct upload for artists
Spotify have just announced plans to allow artists to upload music directly to the platform, bypassing the aggregators such as Tunecore, CDBaby, Distrokid etc.
And, in addition, it is going to be a free service!
So, in other words, whereas before, in order to access Spotify you had to pay one-off fees or yearly subscriptions to the aggregators, now you can go direct via the Spotify for Artists platform. Sounds great, right?
I can think of a few downsides to all of this.......
Firstly, how long do we think Spotify will support a free user-upload platform? My guess is..........not long but once you are hooked in, you'll probably pay to stay.
Secondly, this is pretty much a direct challenge to SoundCloud and anyone with their Pro Unlimited account and that's not healthy.
Personally, my biggest concern here is that unless artists abandon SoundCloud and the aggregators as alternative routes to market, there is a danger of creating an administrative nightmare for the very people who should be focussed on making great music, not managing multiple digital distribution platforms and if they choose to only use Spotify, where will that leave them in the wider world?
EU Copyright Directive gets a review
Seems like this one is not going to go away! Much to the dismay of both artists and composers as well as the technology giants. Although many of us in the music industry are very concerned about the impact of Article 13 of this legislation, we should also be concerned about Article 11 which proposes a 'tax' on shared news items - and as music often forms a part of a news item this 'tax' would seem to contravene internationally recognised fair use policy agreements.
And as for Article 13, well, yes as the owner of any copyright material used on YouTube, this could be a good thing but not if it 'forces' YouTube to reassess their usage policies and that could be very bad news indeed for YouTube influencers and the game and music projects they promote.
The directive comes up for a new vote in January 2019 - Watch this space
Will Apple kill off iTunes?
Despite plenty of rumours over the last year or so, and also despite the fact that Apple Music executive Jimmy Iovine has stated for the record that iTunes download sales "can't last forever" Apple are categorically denying any plans to shut down the iTunes store at the end of March 2019. Iovine has also been quoted in a recent interview that Apple would stop offering music "If I'm honest, it's when people stop buying, it's that simple".
With Apple Music set to overtake Spotify as the streaming service of choice in the U.S. this year, maybe there will be a rethink and maybe the rumours will turn out to be true - who knows?