As an independent recording artist, do you think of your music as a service or as a product?

When the phonograph debuted in 1877, the traditional service of music (live performance) was transformed into a product (recordings). This product was stored on physical media — wax cylinders that eventually evolved into vinyl records, 8-tracks, cassettes, CDs, digital downloads, and other formats. This single innovation, through its ability to reproduce recorded sound, forever changed the way we experience music.

It wasn’t long before people started thinking of music as something to own and collect as much as experience. When someone bought an album containing the music of Louis Armstrong or Benny Goodman or Les Paul, they owned it. They could keep it or they could sell it. It was theirs. And they could enjoy and appreciate that music without ever seeing the artist perform it live.

Virtually no one alive today remembers a time before vast, personal record collections, a day when music could be experienced only in the moment in which it was performed. But that is exactly how it was experienced for thousands of years before Edison.

Something surprising is happening in the 21st century. Recorded music is becoming less of a product every day.

Recorded Music Becomes A Service

In 2000, when digital downloading was gaining steam through Napster and other file-sharing platforms, sales of CDs started a precipitous decline. And they declined throughout the decade, losing more ground each year to iTunes and Amazon and other digital retailers. As the digital snowball grew, consumers learned to think of their music as a non-physical commodity — as digital files on iPods and computers rather than as pieces of molded plastic stacked on shelves. With the advent of music streaming via Rhapsody, Pandora, and Spotify, the transition of recorded music from product back to service was underway.

Suddenly you didn’t need to “own” a collection of non-biodegradable products that inefficiently held your favorite music recordings. You could simply pay for a service that granted you access to virtually all of the commercially available recordings in the world.

You could just summon the music whenever you wanted to hear it — in much the same way you might have asked a performer to play your favorite song in a public square in 1840. Or in 1540.

And the physical recordings you owned? Well, they sure did take up a lot of space.

So what does all this mean for you as an independent recording artist?

Performing A Creative Service Through Your Recordings

An interesting thing happens when people switch from buying CDs to paying for music-streaming services: the secondary market disappears. There is no equivalent to horse-trading in the streaming world. Your recordings on streaming services are always yours, no matter how many times people enjoy them, no matter how old they get. When someone listens to one of them, you’re paid. Every time.

No question, CDs still make great takeaways along with the merch at your live shows. But if you follow music commerce in 2013, you’re probably not spending too much time selling shiny, little plastic widgets with copies of your recordings on them. Instead, you are allowing your recordings to perform for your audience. When someone spins one of your songs on Rhapsody, you receive a payment of a little under a penny. On Spotify, you get about half a cent. And sure, that will probably never pay the light bill. But the transparent tracking of plays isn’t just about revenue. It’s about knowing how frequently your recording is being played, and understanding the nature and quality of the interactions between you and your audience.

It’s about building that essential relationship.

Streaming is changing the way we experience music. The recordings you’ve released into the world are now standing up and being counted every time they’re played. And their intrinsic value as a creative service performed — original to you — is here to stay.

Source: Music Think Tank (by Mark Doyon)

Apple had no shortage of new things to announce at WWDC 2013 yesterday, and iTunes Radio is one of the highlights. The company’s new music service has been long-rumored, but now the curtains are drawn and we can see what the Pandora-like streaming radio offering actually looks like.

iTunes Radio is essentially what we’ve been hearing it would be: a streaming music service that takes your tastes into account in order to play tracks that are likely to be in line with your tastes. Apple really has essentially taken its Genius jukebox-style feature, which combs your library and builds genre-based playlists, or suggests recommended artists and tracks based on what you’re currently listening to. The difference with the new service is that it can access the entire iTunes catalog, which, at this point, is well over 26 million tracks. Sony, Universal and Warner are all on board.

The service will be free for U.S. users, and will use both text and audio ads to support the free streaming. iTunes Match subscribers won’t receive ads, making the subscription service a bit more compelling. Track skipping is supported, which was something that was reported to be a sticking point in negotiations with music label partners leading up to this product launch.

What’s striking is that it looks a lot like Pandora. On iOS, you create your custom stations, you can give a thumb up if you like a song. In the corner of every song, iOS shows a “Buy” button to make to funnel song purchases in the iTunes Store. It was probably one of the requirements to sign the deals with major music companies and could become a good revenue generator for the iTunes Store.

As a reminder, Google has just introduced its own streaming music service, All Access for Google Play, which will cost users $9.99 per month after June 30 and provides complete access to 18 million songs available on Play. This service competes more with Spotify and Rdio than with Pandora. Google is also releasing an app for iOS devices to provide access to the service. Pandora, which has around 20 million tracks, offers its basic product for free, but also has a premium tier called Pandora One for $3.99 per month that drops ads, provides access to a desktop app and ups the number of skips a user is allowed per day.

Apple’s iTunes Radio will arrive sometime in the fall for U.S. users initially. The release should coincide with iOS 7. In Addition to iOS devices, the Apple TV will get iTunes Radio.

Source: Techcrunch (by Darrell Etherington)

We’ll know more about Apple’s iRadio after the likely announcement on today. But, a according to an advance survey by GroupM’s Next’s Consumer Insights group, consumers are ready to switch to iRadio. The survey of 1,000 Internet radio users showed 49% interested in Apple’s radio service based just on the brand name.  34% said they would switch just based on the Apple brand.  But some streaming services would lose more listenrs than others.

Source: Hypebot (by Bruce Houghton)

Slacker’s solution is to assign a number from 1 to 100, a Slacker EQ (Entertainment Quotient) score that measures hundreds of millions of weekly data points that show how deeply users are engaging with a song on Slacker. Uniquely, the Slacker algorithm is based on both on positive and negative actions, including:

7digital, the London-based company that offers digital music store services to some of the world’s leading consumer electronics companies, including Samsung and Blackberry, as well as to smaller companies and startups like doubleTwist and Turntable.fm, is announcing the wide release of its streaming music platform for DMCA radio partners in the U.S.

The new-and-improved streaming radio API from 7digital is designed to help anyone launch their own streaming radio service, one which is fully compliant with DMCA restrictions in the U.S, and which also includes all of 7digital’s extensive catalog of licensed music – a library of more than 25 million tracks and growing as of this writing.

Already, 7digital offers streaming music licensing for some DMCA radio providers in the U.S., including NYC-based Turntable.fm, which also used the 7digital API to launch its new Piki service, the music-based social network it debuted late last year. Piki, along with any other app that complies to U.S. DMCA streaming radio regulations, must fit very specific conditions to offer its service, in terms of being able to skip tracks or not, how users can search for songs and artists and more. It all sounds a bit constricting, but 7digital President of North America Vickie Nauman says that in fact, they’re finding the DMCA-style radio experience is exactly what users are looking for to replicate the ease and convenience of terrestrial radio.

“In the old days you drive your car and you push a button and you listen to a program that’s been streamed for you,” she said. “It’s easy, you find someone that can curate, and something that’s to your liking, and it’s such a great lean-back experience and we’ve been watching the marketplace and we feel that the partners that we have that are doing really well, combined with the need people have for a really easy way to listen to their music have led us to decide that this year we’re really going to focus on radio.”

7digital’s radio push comes at a time when streaming radio seems to be the order of the day. Google has just launched its own All Access streaming music and radio service, while Apple is said to be preparing its own iRadio service, which could potentially launch as soon as next week at WWDC. But while the space is heating up in terms of competition, Nauman believes it’s heating up in terms of interest among potential 7digital partners as well, and that represents a big opportunity.

“Everyone watches what they do, and then they play their cards, and people see the products, and people say ‘Oh, well we can do that better’,” she said. “For Apple, I’m certainly a fan of the devices, and the way they incorporate hardware, software and content, and I used to work at Sonos so I have a real appreciation for the elegance of having all three of those pieces work well, but Apple is going to build things for iOS, and for iOS users, and especially as you go outside of the U.S. you realize there are a lot of other operating systems and devices in different parts of the world.”

In the end, though, 7digital isn’t choosing radio streaming over and above other options. It still plans on offering its digital purchasing and download model, as well as on-demand streaming as a separate option. In fact, Nauman says that 7digital wants to offer solution that highlight how different delivery systems can work seamlessly together. There’s an option to plug its streaming radio API directly into the 7digital store, for instance, which she says should result in such a seamless shopping experience that users would be able to hear a song, purchase it as simply as if they’d liked it or given it a thumbs up, and then have it delivered automatically to their cloud locker.

7digital’s streaming radio API is designed for big companies and startups alike, and Nauman says it should be particularly helpful to startups in terms of simplifying the thorny licensing issues around music and letting companies focus on products. That leads to a dramatic increased capability in terms of go-to-market time, and lowers a huge barrier faced when starting up any media-focused enterprise. But with so many big fish in the pond, it’ll be interesting to see how eager others are to jump in.

Source: TechCrunch (by Darrell Etherington)

It’s coming down to the wire: will Apple have the necessary rights in place by next week in order to launch its planned streaming music service at WWDC? According to various leaks from music publishers over the last couple of days, it appears Apple’s plan is coming together.

The New York Times says that Apple is close to having all the major music labels on board for recorded music rights, but there are two who still have not signed on completely:

Apple has signed a deal with the Universal Music Group for its recorded music rights, but not for music publishing — the part of the business that deals with songwriting. Over the weekend, Apple also signed a deal with the Warner Music Group for both rights. It is still in talks with Sony Music Entertainment and Sony’s separate publishing arm, Sony/ATV.

The WWDC keynote starts at 10 a.m. PT Monday, so Apple has about five days to get all the necessary deals in place so it can announce a full library of streaming music that potential users would expect. Apple has been in these situations before — most notably with ebook publishers right before the launch of the iPad — and Eddy Cue, SVP of Internet Services, has come through.

Details about what Apple is building — a streaming, radio-like service to augment its paid download iTunes service — have been leaking out since late last year. But one of the major aspects is still uncertain: pricing.

Source: Gigaom (by Erica Ogg)

Daft Punk’s ‘Get Lucky’ had been streamed nearly 25.5m times on Spotify by the end of last week, with its weekly streams increasing over the previous four weeks as the song gathered momentum.

How do we know? Late last week, Spotify launched its new weekly charts, the Spotify 50 and Social 50, with the former ranking the 50 most-streamed songs in each of the 28 countries that Spotify is available in.

The chart shows weekly play-counts for each track, and is backdated to the week ending 28 April for every country. In other words, spend a bit of time digging into the Spotify 50 widget (as we have done today) and you can get national and global Spotify streaming counts for popular tracks.

‘Get Lucky’ is a good subject, because it was released on Spotify during that first week – meaning the four weekly charts available through the widget account for all its streams so far on the service. It’s also good, because the song has been such a hit, it appears in the Spotify 50 for every single country for each of those four weeks. There are no holes in the data.

Having typed all the figures in to a spreadsheet (here’s a public version for you to see the raw data), here’s what we’ve found:

‘Get Lucky’ was streamed 25,467,772m times in its first four weeks on Spotify. What’s more, its momentum built over time: 6m streams in week one, 6.3m in week two, 6.5m in week three and 6.7m in week four. Note, if you’re one of the early users who can see play-counts in Spotify’s desktop app, it’s currently showing nearly 29m plays for ‘Get Lucky’, meaning another 3.5m-odd plays so far since the 28 April (the last published chart).

The US, UK and Sweden were the three biggest countries for the track. The US accounted for 6.4m of ‘Get Lucky’ streams on Spotify for the four-week period as a whole – 25.3% of the total. That’s ahead of the UK’s 3.8m (15%) and Sweden’s 3m (11.9%). That means that together, these three countries accounted for 52.1% of ‘Get Lucky’s Spotify streams.

Other notable markets: Denmark, France, Germany, Netherlands, Norway and Spain. This probably shouldn’t come as a surprise: key European countries where Spotify has been available for a while. Norway accounted for 1.7m streams over the four weeks, just ahead of the Netherlands (also 1.7m rounded up), Germany (1.6m), Denmark (1.4m), France (1.2m) and Spain (1m).

It’s very early days for Spotify in the Baltics. Last week, ‘Get Lucky’ was only streamed 5,657 times in Lithuania, but was still top of the Spotify 50 chart there. Streams are also counted in the thousands in Estonia and Latvia.

Using very rough calculations, all these streams may have generated $127k in payouts. We’re always wary of simple per-stream = X thus artist makes Y calculations, not least because we have no idea what the deal is between Daft Punk and label Colombia Records when it comes to streaming revenues. But if you take the $0.005-per-stream average that’s often cited (for example here) about Spotify, 25.5m plays generates around $127k of payouts.

We can see the negative headlines now: 25.5m plays for the biggest song in the world right now only makes $127k? Streaming sucks!

Maybe not.

One, because as a single-track, ‘Get Lucky’ has sold like the clappers. In the same four-week period in the UK alone, it sold 606k units according to the Official Charts Company, alongside those 3.8m Spotify streams.

Two, because the ‘Random Access Memories’ album appears to have been pre-selling extremely strongly too. In the US alone, it’s expected to sell more than 250k copies in its first week – again, despite the album being available to stream on Spotify and other services.

Three, because the figures above are only for Spotify. They don’t include payouts from Rhapsody, Deezer, Rdio and other streaming services, nor do they include YouTube (34m plays so far for the official audio there).

Four, because people are going to keep playing ‘Get Lucky’ for the rest of 2013 and  beyond. It has ‘summer hit’ written all over it. If summer ever deigns to arrive, that is. Spotify and its peers will keep paying out as long as people keep playing the song.

We’re not blinkered evangelists for streaming music – there is still too much murk around how streaming payouts make their way to artists, and reasons for concern about whether streaming services can find a sustainable business model for the long term.

What’s more, all the data in this blog post relates to one of the biggest hits of 2013 so far from a well-established artist: it doesn’t say much about what Spotify and streaming in general means for emerging artists, which is another point of contention within the industry.

But the really vital thing when talking about streaming music and how it’s paying off or not paying off for artists and music rightsholders is to look for accurate data, and start to draw conclusions based on that, rather than prejudice for or against the streaming model.

In short: here are some hard numbers….

Source: Musically (by Stuart Dredge)

Spotify leads the world’s on-demand subscriptions with six million paying subscribers, but it’s facing stiff competition from a company that isn’t even available in the biggest music market on the planet: Deezer, which tells us it now has over four million paying subscribers to its “premium plus” subscription.

Though you cannot access it from the United States, Deezer is available in more territories than any other on-demand service, according to this data. And like Spotify, MOG, and other subscriptions, it has seen usage increase follow its integration with Facebook, so that people can see what their friends are listening to on there.

At the Music Matters Asia conference on Wednesday, Deezer CEO Axel Dauchez dropped the following new numbers about his service:

• Deezer has over four million paying subscribers.
  
  
• It also has 25 million tracks, which is five million more than Spotify says it has (not all of these are likely available in all territories, in the case of both services).
  
  
• Deezer has 10 million monthly active users. Spotify, on the other hand, says it has 24 million.

If we are to take these numbers at face value, it means that Deezer’s conversion ratio from free to paying is about 40 percent, while Spotify’s is about 25 percent.

Source: Evolver (Eliot Van Buskirk)