Is the music industry headed for revolution?
by Rhian Jones
This article originally appeared on the website of digital music distributor iMusician. I write two articles for them a month on advice for artists, new trends and the inner goings-on of the music business.
2014 was a loud year for the music industry. Artists, independent labels, publishers, managers and songwriters made plenty of headlines for demanding change. Taylor Swift stood up to Spotify and removed her catalogue and YouTube was publically berated for offering what were said to be highly unfavorable terms for the use of independent music on YouTube Music Key. Then Sony/ATV boss Martin Bandier threatened to withdraw performance rights from US collection societies over concerns that his songwriters were not being paid fairly by digital services.
Swift’s latest album, 1989, along with her entire back catalogue, is no longer available on Spotify. The move was “out of respect for her superfans,” said the singer’s label boss Scott Borchetta. The exec favoured services that offer a premium tier-only like Beats and Rdio. Spotify founder Daniel Ek responded, pointing the finger at the deals acts have with their labels – and how much of a share of this revenue record companies are claiming.
As if in response to the unrest, a wealth of new companies that set out to assist, rather than control musicians are fast making ground. Veteran music manager Irving Azoff’s new company, Global Music Rights, aims to negotiate higher performance royalty rights for songwriters via direct licensing deals with digital services. Names already on board include Pharrell Williams and Ryan Tedder. Meanwhile, Audiam, existing to ensure payments for the use of music on digital services such as Spotify, YouTube and Rdio make their way to the creators (payments which, according to founder Jeff Price, currently often get lost due to ‘bad data’ from collection societies), has secured $2 million in investment.
Elsewhere, label services firms like Kobalt, who help artists and songwriters get open access to why they’ve been paid, what and when, have an impressive roster. The company represents, among others, Björk, Sam Smith, Bruno Mars, Red Hot Chili Peppers, Calvin Harris, Lenny Kravitz and Macklemore & Ryan Lewis. Kobalt is attractive because it offers creators the chance to own their copyrights, while picking from a menu of services that includes online global copyright administration, sync, A&R, digital collections, label services and neighbouring rights management. In short, it’s starting to get really difficult for big companies – whether that be labels, collection societies or digital services – to get away with only serving their own interests (and back pockets).
Music wasn’t always so fraught. There was a time when artists would make music at their leisure, but The Beatles came along and proved there was big money to be made. A few wealthy people started to invest growing sums of cash into record labels and allowed the business to grow. However, those vested interests inevitably wanted to ensure their investment recouped a few times over and it all started getting a bit murky. Contracts that favoured the record labels were unwittingly signed and there were royalty disputes galore.
The internet arrived, Napster launched in 1999 as an online music download platform and sparked over a decade of free file sharing – rendering buying the physical product pointless for those that only cared about listening to a track. But while the internet brought a blow to the music industry’s bank account, it also offered those that don’t run the show a way of taking back ownership of their art – no longer were record labels an essential component of the route to market.
And while it’s no secret that income has been steadily declining since the glory days of the CD, the situation is nowhere near as dire as the news stories might have you believe. Yes, in 2014, the UK saw significant falls in album and single sales, but thanks to a steep rise in streaming, the market remained more or less flat overall. There’s enough to go around, it just needs to be distributed fairly.
The fight between YouTube and the independent label community resulted in “more favorable” terms being agreed than those originally set out. Together with the Taylor Swift vs. Spotify debate, it proves that all it takes is a small group of people to get together and demand change for those in power to realise how worthless they are without the people whose co-operation they rely on to exist. And it looks like there could be more to come.
Speaking at Eurosonic in January, Vevo International EVP Nic Jones tipped 2015 as a year for big change in the music industry. Agreements between labels, publishers and digital service providers are reportedly up for renewal, and Jones predicts a momentous shift when it comes to negotiating new terms. “I think that there are a lot of rights-holders who’ve licensed a lot of platforms over the last three to five years who will now be reviewing that decision when it comes up for renewal on the basis of how well monetised those platforms are,” he explained. “2015 is a vitally important year, we are at the very beginning of a transition, and there’s a lot to happen. There is no way that anybody can say that digital and streaming is the be-all and end-all.”
So how can you help this revolution along in 2015? When country singer Garth Brooks launched his own online retail shop, Ghost Tunes, last year, he said: “It’s going to get a lot better when music starts standing up for itself. Guys, there’s some big friends in music we need to stand up to. I mean, if iTunes is gonna tell you how to sell your stuff and it’s only gonna go this way, don’t forget who’s creating the music.”