HOW DOES STREAMING FIT INTO THE MUSIC MARKETING MANIFESTO MODEL?

 July 17th, 2017  

If you’ve watched the Music Marketing Blueprint then you know that the MMM model is focused on driving traffic, building a fanbase, and selling music, tickets, and merchandise DIRECTLY to those fans.

ONE OF THE COMMON QUESTIONS I GET ASKED IS: HOW DOES STREAMING FIT INTO THIS WHOLE THING?

There is this assumption that even though I am making the argument that you can generate a substantial income by selling music directly to your fans, obviously streaming must fit into this somehow because everyone knows that physical sales are on the decline and for the most part “nobody buys music anymore, right?

…well, errr, not exactly…

While streaming may have its place for some artists, it is not really a part of the MMM strategy because I don’t believe that it serves independent artists well to release their entire catalogues to the streaming platforms. While there is a benefit to having a presence on these platforms, (for purposes of engagement and music discovery), if your goal is to SELL albums then making that album available to your fans for free will certainly hurt your chances.

BECAUSE HERE’S THE REALITY… NO ONE IS GOING TO BUY YOUR MUSIC IF IT’S ALREADY IN THEIR POCKET.

I realize that this flies in the face of so much of what you hear out there, but I think this is yet another example of independent artists copying what major label artists are doing because they simply don’t know what else to do. Streaming has its place, but it’s minimal in the “Direct to Fan” model.

But why is selling albums important? Isn’t the whole point that we no longer need to worry about selling music because streaming has replaced it?

In short, no. As independent recording artists, we absolutely need to stay focused on selling albums (and other items) directly to our fans if we are going to succeed.

Because here’s the thing that a lot of people miss . . .  There is an “all or nothing” dichotomy in the traditional music business.

Record labels are not in the business of developing thousands of artists and making a small amount of money from a large number of sustainable careers. They have shareholders to appease and as such, they are in it for the big wins. In order for that to happen, they need to go where the market is and attempt to dominate that market. That means that they cannot ignore streaming.

But in order for something like streaming to be lucrative, you need to have tens, even hundreds of millions of streams. Multiple articles (like this one and that one) have recently broken down examples of artists getting incredible numbers of streams only to make (give or take) about $5,000 per ONE MILLION streams (this number will vary). So to make even the equivalent of the average American salary, you would need to receive approximately 10,000,000 streams per year.

Insert tumbleweeds here…

10,000,000 streams only happens as a result of a heck of a lot of interest and awareness. There are only two ways that is likely to happen…

1. Do what the major labels do and spend hundreds of thousands of dollars in the hope of creating national awareness for your music and brand.
2. Experience the musical equivalent of being struck by lightning and get really, really

Unfortunately, most independent artists can’t afford to engage in six figure branding strategies, and luck… well, that’s not a strategy.

BUT IF YOU HAVE THE ATTENTION OF YOUR AUDIENCE, THEY WILL SPEND MONEY ON YOUR MUSIC, NO MATTER WHAT THE FORMAT IS.

And here’s the thing…

The average dollar earned per LISTEN is infinitely higher when people PURCHASE our music in album form, rather then if that music is listened to via a streaming platform like Spotify. This is especially true when you are an independent artist who is not benefiting from millions of impulse or curiosity-streams or being added to untold numbers of playlists as most mainstream artists are.

Just to illustrate the point, as most of us are aware Adele chose not to release her album “25” to the streaming services initially. Despite the stated reasons why, this was almost certainly so she (and the label) could maximize profits. Fair enough. Of course, after sales died down the album was released to Spotify and the like.

According to the old interweb, Adele’s album “25” would have needed to be streamed 16 Billion times in order to make the same amount of money she made in initial sales of that album (which was $115 MM dollars).

So I tallied up all of the streams that “25” has received on Spotify over the last 13 months since the album was released on the platform (let’s just call it a year to make the math easy) and it appears that “25 has been streamed 1,468,340,709 times as of this writing. That’s nearly 1.5 BILLION streams. Not bad right?

That would mean… and get ready for this…

It would take 10 YEARS and 10 months for her to make the same amount of money on Spotify as she did in album sales. I’ll give you a moment to get your jaw back into position.

Furthermore, just under half of those streams were generated from a single song (Hello), which she still could have released to Spotify as a single without releasing the album. If you remove “Hello” from the equation this would increase that figure to over 21 YEARS.

So…

If album sales generate more money than streaming… and you have a loyal following of fans that will support you when you ask them to (which you WILL need in order to succeed as an independent artist regardless) . . . Why in the world would you release your entire album to the streaming platforms when doing so would likely kill any incentive to buy that album?

Answer: You shouldn’t. At least initially, and/or in its entirety.

Now, none of this is to say that streaming does not have its place. 30 million songs in your pocket (the most recent number posted by Spotify) is fantastic for the consumer and as such, the platform can’t be ignored completely. Moreover, music IS being consumed on the streaming platforms, and money IS being generated. It’s become a necessary part of those “all or nothing” major-label branding campaigns. And there is also value there for independent artists in terms of music discovery, fan engagement, and the chance that you might get lucky and get added to a few big playlists. After all, you don’t want your fans NOT to engage with your music just because it can’t be found on their favourite listening platform.

THE SOLUTION IS TO WITHHOLD YOUR ALBUM FROM THE STREAMING PLATFORMS, INITIALLY…

Instead of releasing the entire album for streaming, my advice would instead be to make just a single track or two available. As such, you can insure that your album will generate maximum profit when sold directly to your fans. And in time – as album sales slowdown – you can consider releasing more (or all) of the album to the streaming platforms.

Note*** This is accomplished with digital music distributors like CD Baby by declining streaming distribution on your album, and then re-submitting a single or EP exclusively to the streaming platforms.

So in short… despite what the recent studies from BuzzAngle and Nielsen revealed about the predicted growth in the music industry in 2017 – which was pinned directly on the 10% growth in streaming that we should see by years end – These statistics have little bearing on the average musicians chances of actually making a living from their music.

SO WHAT SHOULD YOU DO?

Look, here’s the deal. If you are one of those artists who believes that “the cream rises to the top” or “if you build it they will come” and you are just not interested in actively marketing or promoting your music and brand, then honestly… stick with streaming. Get your music up there because you are counting on success to happen of its own accord. I mean it sincerely when I say, “good luck with that”!

But if you are a musician who embraces the value of marketing and is willing to take deliberate action to influence your chances of success… Here, in a nutshell, is a basic approach to generating income from your music that I think will serve you much better . . .

1. Put all of your focus into creating an engaged audience of email and, to a lesser extent, social media subscribers and followers.
2. Be so interesting, entertaining, and exceptional that you effectively EARN the right to ask your followers for a bit of financial support every few months. Ask your fans to show that support by purchasing albums, merchandise, tickets, access to a membership site, or by backing a crowd funding campaign.
3. Release 1 – 3 tracks of each album to the streaming platforms (so that you have a presence there) but withhold the majority of the album until sales have slowed down and you have moved on to promoting the next album.
4. Seek additional revenue streams from touring and licensing when possible.
5. Feed your music business with paid advertising so there is steady growth regardless of touring activity.

If the ideas expressed above resonate with you and you would like me to show you HOW to build the system described above and generate income from direct-to-fan sales instead of relying on streaming revenue (which tends to pale by comparison), then consider joining me on July 26th (just a few days away) for the release of Music Marketing Manifesto 4.0. Everyone who registers on launch day or shortly thereafter will receive a special Early Bird Discount. Click here to learn more.

Thanks for reading and be sure to leave me a comment, with any questions, feedback, or just to say hey.

                       http://www.musicmarketingmanifesto.com/music-marketing-blueprint/

How streaming music is changing the industry

Streaming isn't just a convenient way to get music for those with a high-speed Internet connection, it's poised to change the music industry as we know it — again.

Denys Prykhodov / Shutterstock.com

By Chandra Johnson, Deseret News National Edition

Summary

Streaming isn't just a convenient way to get music for those with a high-speed Internet connection, it's poised to change the music industry as we know it — again.

Every time he picks up a music magazine, Scott LeGere realizes how paramount music streaming is in his life

“I almost hate reading those magazines now because when I read a blurb about a record, I want to push the picture and hear it,” said LeGere, a professor of music at McNally Smith College. “It’s just a reminder that based on streaming’s convenience and immediacy, there’s really no putting the genie back in the bottle.”

As a music business professor and producer, LeGere says this month’s announcement that Apple plans to roll out its own streaming service marries the music industry’s future to streaming.

“It wasn’t that long ago that jumping in your car and going to a store was the most convenient way to find music. Now, it’s a Google search bar,” LeGere said. “That a company like Apple, that has the largest music store in the world, would cannibalize its own music sales tells you where the future is.”

Since Pandora was founded in 2000 and Spotify came to the U.S. in 2011, music streaming has quickly outpaced downloading as the primary way people listen to music.

In 2014, digital track and album download sales accounted for 113.2 million out of 227 million total sales, which included physical music like CDs and vinyl.

SEE MORE: How this superstar got Apple to change its streaming policy

To give streaming a comparable sales model (even though songs and albums aren't sold via streaming), the industry created stream equivalent albums — or the number of streams it takes to match the $7.50 wholesale revenue of a CD or a downloaded album. It currently takes 1,500 streams to equal the wholesale value of a downloaded or physical album, and in 2014, stream equivalent albums accounted for 46.9 million in album "sales."

The stream equivalent album figure nearly doubled year over year, a significant detail when overall album sales — including CDs and vinyl — slid by 8 million in one year, from 235 million to 227 million.

When artists have to hope their songs get streamed more than 1,000 times to make the same money they once did on a 10-track album, it's easier to see why high-profile musicians like Taylor Swift and Jay-Z have pushed back against the streaming model. In their efforts, both Swift and Jay-Z aren't fighting against streaming per se, but against a model that pays artists and others in the music industry fractions of pennies per stream.

In March, Jay-Z launched Tidal, an independent streaming service owned by musicians in what the service hoped would "forever change the course of music history." So far, that course has been difficult for Tidal; since its launch, Tidal has lost two CEOs and as a strictly paid, $10-a-month service, it competes with free versions of streaming services and free websites like YouTube.

Swift, on the other hand, has had more success in dealing with the issue of streaming. An outspoken opponent of file sharing and streaming as undervaluing music in general, Swift has held her music from streaming services like Spotify. This summer, she threatened to withhold her mega-hit record "1989" from Apple's proposed streaming service. Apple, to its credit,agreed to pay artists on the new service per stream in response.

While steaming’s future in the music industry seems secure, industry players are wondering what the future will look like, and whether or not the innovation it brings can change the label-driven music industry for the better.

“(Streaming) is not about demand or the Internet being good or bad, it’s more about the value we put into it and how to foster what we get out of it to make sure some of it gets back to the creators," Future of Music Coalition CEO Casey Rae said.

TopcaT@PeachTreeMusicGroup.Com

Music Industry Grows First Time in a Decade on Digital Adele

The worldwide recorded music industry’s revenue grew 0.3 percent to $16.5 billion last year, the first increase in more than decade, as more people downloaded music and used online streaming sites.

Adele’s “21” was the best-selling album and Carly Rae Jepsen’s “Call Me Maybe” was the best-selling single, an industry group representing music labels said in a statement today. Digital sales rose 9 percent to $5.6 billion and now account for about 34 percent of total revenue, according to the International Federation of the Phonographic Industry.

The improvement is welcome for an industry battered by piracy, the shuttering of record shops and declining sales of CDs. Digital sales of music now account for the majority of record companies’ revenue in countries including the U.S., Norway, Sweden and India, the IFPI said.

“These are hard-won successes for an industry that has innovated, battled and transformed itself over a decade,” said Frances Moore, chief executive officer at IFPI. “They show how the music industry has adapted to the Internet world, learned how to meet the needs of consumers and monetized the digital marketplace.”

Streaming Music

Major services for downloading and streaming music have proliferated and are now available in more than 100 markets, while subscribers to online music services increased 44 percent to an estimated 20 million in 2012, the group said. The European digital market grew faster than average at about 20 percent in 2012, the IFPI said.

Still, the industry has a problem with unlicensed music services using tracks without permission. To halt such sites, Internet service providers, search engines and advertisers need to cooperate, the IFPI said.

The number of people using illegal music-file sharing dropped by 17 percent last year as more streaming services became free to use, according to research from New York-based NPD Group. The practice peaked in 2005 when one in five Internet users over the age of 13 accessed illegal file-sharing sites to download music, the group said. The figure is now 11 percent.

“For the music industry, which has been battling digital piracy for over a decade, last year was a year of progress,” said Russ Crupnick, senior vice president of industry analysis at NPD. “Among other factors, the increased use of legal and licensed streaming services has proven to be an alternative for music fans.”

The IFPI also reported today that British songwriter Adele’s “21” was the first album to top the global chart for two consecutive years since the IFPI began reporting worldwide best-sellers in 2001. Taylor Swift’s album “Red” took second place last year, followed by One Direction’s “‘Up All Night.”

One Direction had two of the top 10 albums of the year and Maroon 5 and Flo Rida each had two songs in the top 10 singles.

To contact the reporter on this story: Kristen Schweizer in London atkschweizer1@bloomberg.net.

To contact the editors responsible for this story: Kenneth Wong at kwong11@bloomberg.net.