I went to the Rethink Music Conference last week. It was great to catch up with people and to meet some new ones. Overall there was much hope for the future but still a lot of grousing about the current state of the music business.
The biggest complaint was that performers were not getting paid enough by Spotify. One tweet said, “I don’t know how any artist can be psyched on #spotify after that presentation #rethinkmusic no real signs of how this ser…“. This perception by artists is a dramatic shift in the music industry from traditional music promotion.
As Seth Godin, the Keynote speaker, noted the first day of the conference, the music industry is not in trouble, the record industry is. In this YouTube video with Ariel Hyatt he notes, “there has never, ever, ever, ever been a better time to be an independent artist”.
he continues to actually answer the question about how the artist should be psyched. “The internet is radio without having to pay the programmer”.
The trouble is many do not perceive plays by Spotify, Pandora, Rdio or other music and Internet radio services are promotional. This changed with the belief that performers should be compensated for non-interactive streams and enshrined in the rates charged by SoundExchange.
Where terrestrial radio pays $0 for performance royalties those that broadcast via satellite or the Internet must pay much more. Pandora, while generating lots of revenue, is running at a loss due to the burden or their royalty payments. With the SoundExchange rates going up in the future some believe that you can not create a music service with non-interactive streams that is profitable.
Yet if you examine what happens with new artists that get played on Pandora their music sales often go up. Pandora, Spotify, College Radio and many other broadcast media are inexpensive promotional platforms unlike anything the music industry has ever seen. If you look at the results of the Hackathon associated with the Rethink Music conference you see that there is still a lot of creativity being applied to the music industy. If the music industry would just embrace the new broadcast medium with old eyes about how promtion works we could create an even more vibrant music industry without the middlemen between an artist and their fans.