Improving Streaming Services: an update on the music industry

Technology and more specifically, streaming, has presented problems for artists financially. People are still enjoying their work, but they stopped paying for it simply because they don’t need to due to the availability on the web. Streaming sources do pay artist, but in 2014 the average payment per stream was $0.0075, which is virtually nothing and wouldn’t sustain a working musician.

Due to the low payment of artists, these streaming companies have received backlash, to the point where artists have even taken their music off to boycott these services. They have been making strides to improve however, and I can say that there are changes being made that won’t cheat musicians out of their hard earned money.

Pandora, a company that pioneered the online radio service, has been quietly working on a tool that would give artists more information on how their songs perform on its Internet radio service. It’s essentially a dashboard that tells artists things like the spin counts of each of their songs, how many thumbs up or down their songs have received and their audience reach by age, gender and geography, among other things. This provides valuable information that can have a positive effect on the Artist’s career if they use it correctly. Ben Arthur, a New York singer and songwriter, said he imagines using the information to select which songs he should push more heavily.”They showed me which of my songs were getting lots of thumbs up, and they were not the songs I would have guessed,” Arthur said. “I can imagine a time when I would upload tracks before they’re released to test which songs would be more popular, which songs to make videos for and which songs would get a label’s attention.” The data, I can imagine, will also provide information for the artist to know where to tour, where to develop their brand more, where to promote and who to promote to. Learn more about it here!

Streaming services are also trying to drive ticket sales and promote Artist’s music. The Billboard Touring Conference explored this topic with a panel called “A River Runs Through It — How Streaming Influences Touring.” The main example that the panel used was electronic duo Odesza, who have 300 million plays via Pandora versus 7 million from terrestrial radio, according to Lars Murray, svp of the company’s Music Makers Group. “Pandora really became Odesza’s radio station and we wanted to help them bring that revenue home.” To do that, on top of the regular streaming royalties, fans who created Odesza stations were given localized audio and digital ads, as well as pre-sale tickets via Ticketfly, which Pandora acquired in October. Pandora was responsible for selling 25,000 of 85,000 total tickets on Odesza’s last tour (read more about how these streaming services drive ticket sales). Spotify is also hopping on this train with it’s new concert service designed to drive sales (see here).

Pandora also has recently signed a multi year direct licensing  agreement with Sony/ATV. In a letter addressed to Song Writers, Martin Bandier, CEO and chairman of the Sony/ATV’s publishing company, said they should expect a significant increase in royalties (read the letter here).

These changes don’t solve all the problems, but they definitely are a step in the right direction. Stay tuned for more industry updates!