Independent NDM case study: Media Magazine research

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• In the last decade the music industry has faced the most complex set of changes in its history. The conventional industry models have been challenged, largely due to the emergence of new technologies and new ways for music lovers to listen to, and own, the music they love. The industry is still struggling to deal with how these changes have affected their balance sheets, and the pace of change doesn’t look like slowing yet, but for those who wish to pursue a career in music, it’s important to see how many of these new developments can be used to your advantage. 

• With the emergence of Napster and other file-sharing sites more than ten years ago, it became obvious that the internet offers a perfect way for artists to distribute music. While Napster made it easy for users to share other people’s music, it wasn’t a massive leap to imagine that artists could use the same technology to promote and distribute their own music, thus cutting out two of the important functions of a record company. In this new world, there would be no place for physical records; instead music would live as data on people’s computers. The advent of the iPod and its followers cemented this new paradigm. If, in the future, the distribution of music no longer requires anything to have a physical form at all, then its distribution could be virtually free. And, in fact, that has come true: the music rights organisation PRS for Music reported this year that CD and DVD revenues fell by £8.7 million in 2009, but digital revenues grew by £12.8 million.

• Sites has famously launched careers, including that of Lily Allen. Allen was actually signed to a record label at the time her massive popularity on MySpace broke. However, as the first high-profile artist successfully to promote themselves via the site, she highlighted the importance of the medium. Allen’s story is a good example of how early-adopters can use the free technology available at their fingertips.

• By combining elements ofsocial networking with music downloads, the site is maximising the impact of a variety of Web 2.0 technologies, and this combined model of ad-funded distribution and networking might be one to watch as it develops.Of course the corporate model is catching up; the iTunes music store and similar models now do business in the modern environment but in a more traditional fashion, involving traditional record labels in exploiting their back catalogue and new releases for profit. Sites like Spotify satiate music lovers who want to listen to, then purchase, music – their 4 million song database is available to any listener who doesn’t mind putting up with occasional adverts, and it’s this advertising revenue that funds the venture. However, it doesn’t necessarily offer an avenue for new music to be heard.

• Only the democratic nature of the internet has made that possible on such a grand scale.All things considered, unsigned artists have a lot more going for them than ever before. No longer do you need labels to provide recording, promotion, production or distribution, and there are even new ways to raise money towards your recordings and other activities. All of this has been made possible by technical innovations in the last decade, so artists have no excuse not to embrace the change and take ownership of their

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• In the early 20th Century music was distributed by the burgeoning mass production of record discs, first on hard yet brittle shellac, and then on the more resilient vinyl. Once this method of hearing music by favourite artists had caught on, the day of the record companies soon dawned.

• To earn success, you needed to play live, build up an audience and sell masses of records. To fund the touring and the recording, you needed cash. The record companies provided that cash. Lots of it, in some cases.

• Getting a record deal with a major record company was the Holy Grail in those days.

• Such new recording methods were echoed by the substitution of CDs for vinyl, new gleaming products for a brave new world.

• Without fail, all parties agree that downloads have had a game-changing effect on the industry, although there are many different opinions on what sort of state they’ve left it in.

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• The fallout from technological change has left the music business here akin to a vaguely connected patchwork of cottage industries.
• Everyone agrees it is essential to secure live bookings in influential venues in order to succeed.
• Sam Bell from The Targets says: the music industry has turned 180 degrees, and gone back to how it was in the 70’s. Live music is key to a band’s success, with the records becoming less important. This can only be a good thing for bands like us that thrive on playing live.
• Conrad Ellis also from The Targets states: we feel musicians should be better protected. If a band puts material online for people to download then that’s fair enough. However if people want to share music without the band’s permission then that flies in the face of copyright, something the industry is based on.

• Downloads are not coping with the slack that lost CD sales have left. They were overpriced and the market has evaporated.

• Apple has devoured the open space with its digital offering, iTunes. Most majors have rushed to own shares in the digital provisions, such as Spotify. There is no development of artists from record companies, and independents are quite as guilty as the majors in this regard.

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• In today’s digital mediaage, pop music’s commodification has been at the centre of debates around copyright, ownership and distribution. Music industry profits from recorded music had been falling before audiences moved from CDs to MP3s; but the issue of illegal downloads and file sharing highlights the fact that music is seen as a product to be sold. It is argued that this act of commodification results in the devaluing of the product itself as its cost creates the product’s perceived value. In today’s context of cheap (and often free) downloading, the monetary value of pop as product is very small.
• Traditionally most of the income generated by an artist would have come from single and/or album sales. Today the sale of the music itself is not necessarily the best way to generate income: live shows, licensing music for public performance, cross media tie-ins and corporate sponsorship are all successful revenue streams for record companies and musicians.
• Facebook and YouTube offer technologies that allow voices from outside the mainstream access to audiences bypassing the traditional music industry gatekeepers.

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• Independent music is flourishing in the digital age, with the democratisation of production and distribution brought about by the internet. Independent radio has also found its home on-line, helping guide and shape the non-mainstream audience towards ever changing, ever weirder musical styles. 

• The internet’s convergence of fan blogsites, radio, video, sales outlets and social media have made connecting with and circulating views about independent music much easier, resulting in a more vibrant, democratic, less clique-y scene.

• As well as creating a new infrastructure, the internet has made the distribution and promotion of independent music simpler and more effective than ever before.

• For Dandelion Radio, being an on-line station means that the listeners are able to connect to the artist heard on the station much more quickly. If you hear a tune you like, you can click a link to the artist’s Last.fm page to find out more, follow links from there to official sites or Bandcampor or Soundcloud pages, make friends on Facebook and follow them on Twitter, and often legally download their whole back catalogue for free to your device before the song is over.

• Since the end of the 1990s, the mainstream music industry has struggled to cope with the huge changes to its business model bought by the rise of peer-to-peer sharing, downloading and internet piracy.

• In recent years, companies have shifted away from seeing the recorded musical output of an artist as the primary source of their earnings, towards a range of other more lucrative ventures – through 360° deals – that see artists such as Lady Gaga setting up fashion ranges, promoting perfume, publishing books, etc.

• The most significant change has been the renewed importance placed on live performance, with the emphasis on the experience for the audience (and the premium price of the ticket), rather than the less profitable production and distribution of recorded material.

• If audiences are going to pay little or nothing for your music, you should make your money through playing live. Two artists particularly are great examples of this challenge – Lord Numb and The Chasms.

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• It was announced in early November that Swift would be withholding her new album, 1989, from music streaming service Spotify. Shortly thereafter, she pulled her entire back catalogue from the site. 

• Spotify retaliated quickly by publishing a blogpost declaring their continued love for Swift and their hopes that she’d return. They also presented some astonishing statistics illustrating her popularity on the platform: 16 million of the site’s 40 million users had streamed her songs in the previous 30 days.

• Swift said to Yahoo "I’m not willing to contribute my life’s work to an experiment that I don’t feel fairly compensates the writers, producers, artists, and creators of this music. And I just don’t agree with perpetuating the perception that music has no value and should be free."

• 1989, incidentally, went on to sell almost 1.3 million copies in its first week of release alone, becoming the only Platinum record of 2014 in the US.

• Users can avail themselves of the feature-limited free tier, or pay subscription fees to be rid of ads and in possession of a greater feature set. As of December 2014, 75% of Spotify’s 60 million users worldwide (up 20 million in a month!) were using the free tier, with just 25% paying the subscription of £9.99 per month. Spotify’s user base has doubled since 2013 but the proportion of users on the paid tier – 25% – looks to have stayed roughly the same.

• So if users aren’t paying in droves to access streaming music, that must be bad for the artists, right? Not necessarily so. As Spotify explains, the free tier that 75% of users are experiencing contains adverts, all of which advertisers have paid to place there. This revenue all goes into Spotify’s coffers, as do the subscription fees for the paid tier, and it pays 70% of the overall revenue they collect to rights holders – in other words, to the artists. According to its figures, the amount of royalties that Spotify pays to artists doubled from 2013 to 2014, from half a billion to a cool billion US dollars.

• However, there’s no denying that, after a long period in which the music industry seemed filled with inertia about how to combat piracy, Spotify has finally seized upon a working business model that does return some real money to artists and rights-holders. What Spotify has realised is that audiences in 2015 are less concerned with owning music than having accessto it, and are willing to pay for that privilege. It presents a variety of figures on their website illustrating how all this translates into pay for artists, and it also claims to have turned many downloaders of pirated music into legal users of its free tier – no doubt as partof the shift away from owning, towards simply accessing media.

• It was reported by TechCrunch, however, back in 2009, that the major labels had received an 18% equity share in Spotify, and were receiving more favourable terms than indie labels. In creating its platform, has Spotify simply restored the business model of the pre-digital music industry, where major labels wield all the power and artists get short shrift?

• Neilsen SoundScan’s global figures reveal that 70% of the music consumed in the first half of 2014 was streamed or downloaded – with streaming up a staggering 52% from the previous year. Other players in the streaming field include Pandora, who came early to the internet radio game and has an enormous user base, and Apple’s Beats Music with its unique human-curation element. Even Amazon is trying to carve out a bit of this new territory with Amazon Prime Music.

• If Ms Swift was truly concerned about perpetuating the perception that music has no value and should be free, she should be removing her material from YouTube [...] The de facto biggest streaming service in the world, with all the content available free, YouTube is the greatest threat to any commercially-based streaming service.

• With the news that 50 million songs were streamed in January 2015 (double the previous January’s), and that from February 2015, the UK album chart (as well as the singles chart) now factors in streams, the business models of platforms like Spotify, and indeed YouTube, will be incredibly important – and increasingly under scrutiny – as the landscape changes permanently and streaming becomes the norm. Whether all artists and all labels – majors and indies – get fairly recompensed is a question that lingers.

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• To have your song on an ad can represent the peak of success for many musicians – but it can also be hard work to get it placed.
• Having your music on an ad can mean all the difference between success and struggle.
• If chosen, there’s the possibility of an ‘unknown’ earning £100k for a worldwide ad – but well-known artists can net £2 million for a similar campaign.