Is the Spotify Model Really the Answer?

Brian Brandt

Brian Brandt

There seems to be a great misconception about record labels and execs—perhaps almost a myth. I have owned and operated Mode Records, a NYC based label specializing in contemporary classical music (Cage, Feldman, Xenakis, etc) and jazz, for 26 years. We now have over 250 releases. This genre has always been a niche market, sales have always been modest (6,000 units is considered a real hit record), but yet one has managed to survive from the cash flow generated by the catalog and new releases. New streaming services like Spotify, that journalists like The New York Times‘s David Pogue praise so highly, however, have the promise to squeeze smaller labels out of the picture.

On a typical CD sold through a distributor (yes, still the bulk of our sales are wholesale), we may make a profit of $3-4 a unit. Already that is not much considering the total sales of a typical niche CD. Sales through iTunes or similar service can yield a similar profit. But this all gets turned on its head with the Spotify model. For example, in June 2011, Mode had a total of 11,335 streams through Spotify; our income was a whopping $36.98! A big individual seller that month, by composer Luciano Berio, was streamed 1,326 times through Spotify; our income $4.18. So, we earn about 1/3 of a penny per stream. And these meager amounts should be split with the artists and composers.

While the major labels and pop music may be able to reap a real income stream from Spotify simply due to the sheer volume of streams, the Spotify model is not financially sustainable for any indie niche label. As the industry moves more in this direction (competitor Napster, for example, only yields slightly more, about 1 cent per stream), it will simply choke the indie labels out of business.

I should also note that physical sales are down, and digital sales have basically been level for the past 6 months or more; I believe this to be industry wide. There is no growth. Promoting ways to move more music for even less money may sound good for society, but for the indie labels and their artists it is not a viable answer. I’ll leave the majors to defend themselves.

The music business is reaching a tipping point. If one cares about music, then you should support the artists and labels you like: buy a real CD, or buy the album or track from someone like iTunes. The indies and artists need your support. If the business tilts more toward the Spotifys, Napsters and the ever prevalent illegal free downloads, then the indies will start to disappear and the artists may be waiting tables for the rest of their lives. It’s OK to suffer for art, but everyone deserves to make a living.

Times are tough, expendable income is down, I understand. But there are real ramifications to the notion of getting more for less. Nothing is for free.

59 thoughts on “Is the Spotify Model Really the Answer?

  1. greg

    Society,for whatever reason, believes that music is a free commodity. The hours practicing or composing should be gifted to society. I have had University music majors beg to burn my Complete Mahler CD set. I didn’t allow it. We are at a tipping point but I am not sure what it will be. As a composer in the niche market that you talk about, labels like yours are the only option. As these labels fall, distribution becomes harder and harder. I commend your commitment to this music and hope that we can all survive the idea “that music is free.”

    Reply
  2. Paul Muller

    Thank you for your dedication to new music and to keeping the lights on at Mode despite the tremendous changes in the music industry. Thanks also for giving us some idea of the economics of the new music CD – very enlightening.

    Reply
  3. Tim Riisher

    Excellent article on the idea that music is “free”. I run a micro-label, and not only are we struggling with the micro-payments from these companies, but even against composers themselves that believe this notion of “I am giving my art to society, because music should be available to all” and etc. Yes, music should be available to all, but I worked just as hard for my degree as any other field, and I would like to make a living at it, just like performers and doctors and everybody else.

    Reply
  4. phil fried

    I believe that the statistics are this: 96 percent of Americans say that the Arts are important, but only 26 percent think that artists are important. This disconnect leads to the belief and the process that artists don’t need to be paid. Recently I was offered the chance to have my music used by MPR, but they wanted my music with out any restrictions and for no money — forever. When I asked for a shorter commitment on the advise of ASCAP they passed (well they suggested that this project wasn’t for me).

    Reply
  5. Andrew Sigler

    @Phil – The 96% of Americans who say that the Arts are important are likely the same people who will argue the benefits of broccoli while regularly knocking back bags of Doritos. I mean, who in a general (and likely anonymous)survey is going to say that they don’t like the Arts? Mmmmmm…Arts. I could imagine a negative response in the context of a political discussion, but clearly those don’t exist anymore…the ‘discussion’ part at least.

    Those sort of stats (well, most stats right?) are a bit sus simply because they don’t really seem to bear out in the world. If those stats meant all that much then we wouldn’t be having this discussion, we’d all be cashing huge checks! As to the 26% figure, I really wonder if most respondents understanding of the question is less about ‘caring; in the way that one cares for a child, spouse, or friend and more about ‘being interested’ in the life and times of celebrities, be they Amy Winehouse or Yo-Yo Ma. Finally, the MPR thing is not surprising. Any for-profit would have been happy to agree to a one-year license, but my experience with Public Radio/TV has been that they want to make sure everything is in the clear for as little as possible, forever. I went through that with PBS and it was just nuts. It’s probably better to look at it as free advertising!
    (Full Disclosure: I type this while listening to Morning Edition)

    @Brian – Ultimately, this is about a dying industry. Not the recording industry, not the new music industry, not niche labels, but the CD manufacture and distribution industry. I want you and your label to continue to prosper and share music with the world, but it seems that the sale of physical media recordings of new music is a niche within a niche. I notice that you don’t have any download options on your site (perhaps you do and I couldn’t find it, you mentioned that digital sales were down…), is that a possibility? What about a monthly option to stream some or all of the catalog Netflix style? Of course, we’ve now reached the part of my response where I’m making the mistake of advising someone who has been in his field since I was in 6th grade, but the method of delivery seems (to me)to be the issue even more than the fact that other options are available. People who want to stream music in your catalog via Spotify et al are not random listeners, they are looking for very specific music and I imagine they would part with more than 1/3 of a penny to hear it. Would cutting Spotify/Napster out of your catalog and taking the streaming on yourself increase the label income?

    I’m not suggesting getting rid of the CDs altogether, but perhaps looking at them as art pieces in and of themselves which are not integral to the listening experience. My sister teaches theater in Boston and wanted to get a recording for a graduating student. She bought and gave the disc to the student who promptly burned it to her iPod and the disc went in a drawer, likely never to be seen again!

    I recently went through all my discs, keeping only the disc and the liner notes because while I didn’t want all that bulk around anymore, I did want to keep the discs. I wonder if I’m showing my age? The fact is that even I (who can be somewhat sentimental about these platters that I’ve carried around for decades) really look at those as backup discs, like my software. Of course, all of it is burned on my hard drive, and that is largely where I access it. I just looked to my left where those discs are boxed up (and taking up an entire shelf…) and can’t help but think that all that info would fit on a flash drive…

    @Greg – I knew that was you!

    Reply
    1. Frank J. Oteri

      @Andrew

      I recently went through all my discs, keeping only the disc and the liner notes because while I didn’t want all that bulk around anymore, I did want to keep the discs. I wonder if I’m showing my age? The fact is that even I (who can be somewhat sentimental about these platters that I’ve carried around for decades) really look at those as backup discs, like my software. Of course, all of it is burned on my hard drive, and that is largely where I access it. I just looked to my left where those discs are boxed up (and taking up an entire shelf…) and can’t help but think that all that info would fit on a flash drive…

      Let me know if and when you plan to part with your physical collection of recordings; there might be something in there I don’t already have in my 20,000+ collection of physical recordings. Folks on today’s purge brigade might find me a throwback or a lunatic (possibly both – guilty as charged), but at least I never have to panic about losing rare audio treasures I’ve amassed for over 30 years when my computer crashes (which everyone’s inevitably does every couple of years otherwise the industry wouldn’t be able to make a fortune over people replacing their “outdated” equipment). ;)

      Reply
      1. Andrew Sigler

        Never!! :) I’m happy to have them hanging out in their new digs.

        But your post made me think again of the distinction between how we used to consume this media and how we consume it now. For instance, I have used Sibelius since S2, but I don’t think I’ve gotten a physical disc for at least an update or two? Same thing with Sonar, except that Sonar does offer the physical disc and box…at a $30 premium!

        From the Cakewalk site: “…for those who prefer to install the DVDs and have the physical user guide, we have made this SONAR X1 Producer Box available as an accessory.

        This Box Includes:
        •4 software DVDs
        •Keyboard Shortcuts Guide
        •Single language User Guide
        •Full retail packaging
        •No serial numbers (included with download only)”

        AS AN ACCESSORY! And even with that, it has no serial number, so the only way to upgrade is online. The distinction (at least in my mind) is that since I’ve purchased and received this and other software via the internet I can simply go and re-download if something goes wrong. However, in a disaster all my physical discs are toast. BUT if I’d purchased them via an online outlet (?) then in most cases I can just go re-download.

        Brave New World and all that…

        Reply
    2. Brian Brandt

      Hi Andrew

      99% of the Mode catalog is available online as downloads and, unfortunately, streams from all of the usual suspects: iTunes, Amazon, etc. This is all handled through our distributor, Eone (formerly Koch) – they have the mechanism to get the titles up quickly. Mode also doesn’t have the staff or infrastructure to do this from our site.

      The problem, as I said, is that the download/streaming sales are no longer growing. They have plateaued for at least 6 months. If they were still growing, the situation would not be as dire.

      Perhaps Mode webpages should have direct links to, say, iTunes?

      Treating CD releases as art objects is a nice idea. But, the more deluxe the packaging, the more it costs to make and the (even) less the profits – unless you raise the price of the CD. BTW, did you know that even going Digipak (cardboard) over a jewel box adds over $1 per unit to the production costs? So what should we do, charge $25 for a CD instead of $15?

      I used to think Spotify/Napster, while piddling in terms of income, could serve as advertisement. If someone streams it and likes it, maybe they’ll buy it as a CD or a download. Now I believe that is not the case. they stream it and forget about it (or rip it), it’s not translating into sales. A lot of our catalog can now be sampled on Youtube direct from Mode, so it may be time to cut Spotify/Napster out.

      Reply
      1. Andrew Sigler

        Hi Brian – It was my thought that perhaps only selling directly from the Mode website (digitally or otherwise) and cutting out the middle man (itunes/napster) might have a positive economic impact, but I really don’t know how the numbers play out so I’m just guessing. I also don’t know how many people are downloading your catalog -vs- buying cd’s, so even exploring this option might be pointless.

        I wonder if you were to make digital downloads only available from your site you could (should?)perhaps charge a premium, say $20-$25 for the c.d. and less for the download? If you believe that the future (or the present for that matter) is digital, and that streaming by volume is not a model that is economically feasible for Mode, then directly controlling all sales and encouraging your customers to move to digital might be an attractive option.

        This of course does not speak to the stagnation of digital sales. I don’t know how to address that…

        Reply
      2. Ulysses

        Mr. Brandt, thanks for your great work. I have a few questions:

        Why do you think people who “stream it and forget about it” for at most a $10 monthly fee, will start to buy $15 CDs, if you pull out Mode from Spotify? Do you have stats to prove that streaming services directly cut off physical/digital sales? So far only about one third of your catalog is on Spotify, do the other 2/3 sell better?

        I don’t know since when you made Mode available on Spotify, but it seems that they’ve being there for a while. Less than two years ago Spotify only has 250k paying subs, now it’s nearly 2 million. If their paying model hasn’t changed, the payment to labels should also increased significantly in the past two years. And it’s obvious that after the US launch, the subs number could easily be doubled or tripled within one year. My question is why do you chose to join Spotify when they made much less money, and are now considering leave Spotify after a great expanding of their service?

        If 6,000 sales is a hit, then why not consider to try: streaming to a millions potential fans (who would never listen to, let alone buy a Xenakis record, if it’s not available for streaming) + selling a few collectable copies (packaged and priced like the Radioehead newspaper LP) + maintain a CD club for regular CD buyers (if there’s still demand) + others (LiveNation model for classical artists? Why not? Arditti played to much more than 6,000 people don’t they?) There’s more to the picture than the bleak payment on the table now, but please, don’t just quit:)

        Personally I would donate to your label if you stay on Spotify, but I don’t want to buy MP3s (so Apple get a cut) or CDs (I don’t have enough space in my apartment for more CDs, and I don’t want to spend time to rip CDs then sync the digital files between computer/tablet/mobile phones). Please consider the fact that the new generation will stop buying CDs/MP3s all together, in a few years. Some of them also deserve a chance to hear Cage and Xenakis. Thanks.

        Reply
  6. Phil Fried

    “… If those stats meant all that much then we wouldn’t be having this discussion, we’d all be cashing huge checks!..”

    You miss the point Andrew the general acceptance of art rather than the artist themselves is why we don’t cash huge checks.

    Reply
    1. Andrew Sigler

      Hi Phil – Ugghh…you’ve got a good point there. Mea culpa. After re-reading your comment I realize that I didn’t think my response through thoroughly enough. I guess my thought was that the percentages you cite reinforce an “artists must suffer for their work/starving artist” idea that has been around for a long time, and I wasn’t able to see how they spoke to Brian’s issue of how the new digital infrastructure has done such a number on brick and mortar shops in general, to say nothing of boutique establishments.

      Reply
  7. Dan

    Given the absurdly low return from Spotify, why has Mode Records, and so many other labels made their catalog available to this service?

    Reply
  8. Rick Robinson

    My understanding of the New Reality is that concerts that USED TO drive record/CD sales are now where the artist should leverage a living. Thus we must go for as many PLAYS as possible to get our names out there to generate performances and hopefully royalties.

    Reply
  9. Phil Fried

    Thanks Andrew. You misread me. For me it seems that everyone wants something for nothing. Artists are gifted people. Art can be given as a gift. If we don’t pay the artist for their gifts art dies. So does the artist.

    Reply
  10. Bruce Hamilton

    Good article (and comments). The other part of the equation, though, is the sheer volume of worthy art/music that’s available (free or not). So it’s easier than ever to jump in the game but harder than ever to find any traction. Every day I am presented with dozens of really interesting music links to check out but I only have time to look at maybe one or two. Having labels/bloggers/mags/etc. sort this out for us is not really a viable answer anymore. I think most artists will have to settle for being part of communities (online and in the flesh) in which they can interact and be recognized…and possibly remunerated. The idea that we’re all hard working artists (and labels) deserving of financial support sounds good on paper but current supply/demand ratios are making that a bit of a pipe dream independently of Spotify, and even freebie culture, IMO.

    Reply
    1. brian brandt

      But Bruce, why do labels/bloggers/mags/etc have no use any longer to sort things out for “us”? Not unlike why you don’t need to read a real newspaper (or their website – see, I am trying!) to parse the world for you because you respect the quality of their reporting and have a preference to their take on the world?

      And why, is it that working artists (and labels) are not deserving of financial support – basically all of a sudden? Yes, there were hints on the horizon, but I find the pace has accelerated of late.

      Are we moving to a free for all, with no centers? Who is dictating these “current supply/demand ratios”?

      Reply
  11. Ulysses

    I think one of the reasons that classical labels get so little from Spotify, is because Spotify pays according to the number of streams, not total time.

    Personally I think this is ridiculous, if I spend 80 minutes listening to a 4-track Mahler symphony, then 20 minutes listening to a 5-track pop EP, the pop label gets more money!

    ) costs £1.

    I am a huge fan of both Spotify and classical music, and I wrote about this issue when ECM threatened to quit Spotify.

    http://www.spotifyclassical.com/2010/12/my-guesswork-on-whats-going-on-between.html

    http://getsatisfaction.com/spotify/topics/is_spotifys_paying_mode_making_classical_labels_unhappy

    I still believe the Spotify model is the future, because technology never goes backward. I wish the labels can work out a better way with Spotify.

    Reply
    1. Brian Brandt

      Some very good points, but I do not sense that there is a door open for negotiation in this regard. For example, with downloads I have been able to make an agreement with Mode’s distributor (Eone, which handles our North American physical sales and international digital sales) that any track over 10 minutes can only be sold digitally as an album.

      To be honest, I have to check what Spotify offers from the Mode catalog, but it may be just the under 10 minute tracks. I’ll have to do some research.

      And what did ECM decide to do about Spotify?

      Reply
  12. phil fried

    “…The idea that we’re all hard working artists (and labels) deserving of financial support…a pipe dream …”

    Um I’m not talking about financial support I’m talking about artists being paid for their work. Not quite the same thing is it? That is unfortunate vision that most folks have: artists don’t need to be paid they only need support!
    hmmmmmm.

    Though it is perhaps true that some composers may never be paid for their work, they can certainly try to have the opportunity. True there are over 10,000 composers in NYC alone yet that does not absolve those folks (gatekeepers)who would never think of doing their own job for free, for asking artists to work for nothing.

    Oh, Besides TPT something else.

    http://artists-bill-of-rights.org/news/campaign-news/canon-advocates-and-supports-artists-and-artists%E2%80%99-rights?/

    Reply
  13. Kirk

    It’s interesting to stumble on this. I write CD reviews for a large classical review site, and I e-mailed Mode in early June asking if there was a way we could get review copies of some of their CDs. I did this because I appreciate what the label does, and felt that a bit more exposure would be a good thing. But I never heard an answer. So, if you really want to promote your records, read and reply to your e-mail.

    Reply
    1. Brian Brandt

      We always reply to direct reviewer requests. Perhaps we didn’t receive your’s or it may have gotten lost in the shuffle. Why not resend it direct to us if you’re still interested.
      Brian

      Reply
  14. fakebook

    Mode is a boutique label, a great source for avant-garde music, that is, “fringe” music. Brian Brandt, the owner of Mode, easily cites industry-wide numbers and laments the paltry income that a revenue stream such as Spotify accrues for his label. It’s a sad number. But here’s the question for Mr. Brandt: Do you think that these streaming services such as Spotify actually cut into your business revenue? Or in other words: Isn’t Spotify precisely for the large, homogenous, possibly tasteless mass that doesn’t think twice about the relationship of art to artists, to commerce, to the world, and these folks, in turn, would hardly be receptive to Cage, or Zorn or even Sufjan? So nothing has changed: The world, unfortunately, and especially in America, is largely unreceptive of non-packaged, “pop” music. Most mom n’ pops boutique labels face the same economic challenges it did before the onslaught of digital sales, file sharing, and now digital streaming. It’s a rough world when you’re not popular.

    Yet, this piece and Brandt’s remarks, should serve as a reminder to those of us who have cultivated a specific taste, interest, and relationship to music, to keep doing what we do: that is, to support the small networks that provide great music and the artists who continue to thrive despite the noise about industry-wide collapse. But let’s not conflate the “music industry,” namely, the big 4 (or is it down to 3 or 2 now?) and their auxiliaries with the scattered constellations of small boutique, “indie” labels that have little bearing on how the “industry” conducts its basis. We would never confuse what’s being served at McDonald’s with the care and service from café that we love on the corner, and, just the same, we shouldn’t confuse what is written about the “music industry” with the small, unassuming, stuff of quality that we love in our music.

    Reply
    1. Ulysses

      “Isn’t Spotify precisely for the large, homogenous, possibly tasteless mass that doesn’t think twice about the relationship of art to artists”

      Spotify has been invented because technology now enables us to access high quality streaming anywhere anytime, if Spotify didn’t do it, someone else would. And Rhapsody has being doing exactly the same in the US for years now, so do a few other on-demand streaming services like Rido, MOG and the good old Napster.

      And since Spotify has all kinds of music, all kinds of music fans use it.

      Business model aside, cloud service is definitely the future. It is not necessarily “better” than the CD model, but I’m afraid there’s no going back (can we go back to art patrons so we can have a new Beethoven?). Personally I’d rather donate to labels like Mode, or attend concerts of their artists if they visit where I live, instead of buying MP3s or even CDs.

      Reply
    2. Brian Brandt

      All well put. I am not sure what impact (damage?) Spotify and it’s like have had on sales. But to be certain, sales are down. And digital sales (downloads that actually pay) have no growth. So why is this? Can it be the impact of inexpensive Spotifys? Illegal download availability? Lack of interest? I haven’t figured it out yet.

      Reply
      1. Ulysses

        Thanks for the reply. I sent a long email to Mode regarding the Spotify issue on Saturday, please take a look. Seems that I can’t subscribe to comments of this post by RSS or email subscription so it’s a bit frustrating to discuss here…

        My opinion is cloud services do reduce some people’s budget on recorded music, especially those who buy more than 100 CDs a year. On the other hand, it monetized a large number of people who never spent little to no money on recorded music before, and Spotify offers a chance to many people who would never buy a Xenakis CD, to hear Xenakis for themselves. Yes they could do that before with Youtube, but Spotify makes it much easier, if an electric music fan reads that Autechre was influenced by Xenakis, he can start to listen to it within seconds. And labels get money from these people who’d never pay to hear Xenakis without the cloud (though the payment is low at this moment, because the service is still young). It’s a challenge to niche labels who could rely on a small group of loyal fans before, but it also offers a great opportunity. You are able to reach out beyond your fan base and spread the music (because now everyone on cloud services can access it). I’m not saying it’s definitely the future, but in my opinion it’s worth trying.

        Re: Mode catalog on Spotify, 11 out of 12 Xenakis Editions are there, but some Feldman and many Cage are not. About 100 titles are available, in full albums, not just short tracks.

        Reply
  15. Todd Morman

    Kudos for all the great work you do with the label, Brian. I’m curious about a key bit of information: How much does Mode get per unit from iTunes and Amazon?

    Reply
  16. James Hirschfeld

    Bravo Brian,

    When all my friends started raving about Spotify, I scratched my head a little bit. All my music was on there and I assume I am only earning a couple cents per month. But I make $15 when someone buys my disc from my site. Is this a massive correction in valuation? People were paying $15 for 20 years. With iTunes, the price went to $10. With Rhapsody, the price went to $.10. And with Spotify, the price is basically $.01 (free to the listener).

    With what is known as the “internet”, people have greater access to almost limitless music. In a sense, the supply has gone up. Not only has it gone up, it is easier to access. That alone should bring the price down. But I also find that demand has gone up. People seem to be listening to a lot more music. I listen to a ton of music and I can’t keep up with all my friends who ask me if I’ve heard “so and so” and I’ve never even heard of it. I mean, what is a Bjork? Right? No? Anyway.

    The Bandcamp model seems better. Artists retain complete control. Visitors may stream tracks for free. Then, they can choose to buy them at whatever price the artist sets. Even name-your-own-price a la Radiohead’s In Rainbows. By the way, Radiohead ended up making more profit with the that model than they did with their previous album Hail to the Thief. It also lead to 1.75 million physical records sold (not including paid digital downloads). When people are asked to value music themselves, they value it much higher than the industry does. Personally, on Bandcamp, I generally choose to pay $5 for an entire CD. This doesn’t mean that I don’t think it’s worth $10 (part of my payment is in guilt). Bandcamp also offers uncompressed formats which is, as far as I know, the only site that offers this. That alone sets it apart.

    Brian, have you considered a Mode Records Bandcamp page? While it allows for free digital streaming, it exists in the context of an online store rather than a musical all-you-can-eat buffet such as Spotify. Then you can charge $8-$10, a very reasonable price (Bandcamp takes 10%), offer uncompressed downloads, AND get the email address of anyone who downloads a track or album and spam them until they agree to buy Sirius Respect: The Music of Sun Ra and Karlheinz Stockhausen. How about that??

    If you want to do this Brian, I hereby offer to do all the work setting it up….(wait, did you say 250 albums????) At the very least, it would offer a temporary boost in income but I think it would actually provide a steady stream over time and might even become the primary way that you sell Mode records.

    Reply
  17. Barry Hoggard

    I subscribe to both Naxos Music Library and Spotify. I see Mode isn’t on the former, but many niche labels are. I wonder if they would provide a better deal for Mode? I want to support labels and artists, but I don’t really want to keep finding more space for CDs in my New York apartment.

    Reply
  18. Ken Hatfield

    As a freelance professional musician that has managed to survive solely as a musician, and one who runs my own label which focuses exclusively on my music , I find the most unacceptable part of how our business has changed lies in what some of the treads here have touched upon……… namely that many folks expect to get music for free. Yet like much of our economy these “free-loaders” expect you to pay for availing yourself of their professional expertise …….. be it a plumber or stock broker. I suppose this disconnect between people where there is very little of what used to be called a sense of community is merely a sign of the times in which we live…….. times when (to paraphrase Buckminster Fuller) : the port side of our little ship seems to think they can sink the starboard side with no consequences to themselves……… as witnessed by the recent congressional infighting over extending the debt ceiling. And while that is indeed lamentable, what I find most offensive are those online portals that use content created by others (such as musicians) to drive traffic, which they track, to their sites, so they can use that info to sell advertising, thus generating profits which they grudgingly share a meagre portion of with the copyright owners of the very content that is the life blood of their business. It looks, sounds and smells like the history of the coal companies in West Virginia…….. and we can see where that leads. So for those out there that do more than give lip service to their professed love of art, support what you dig by putting your money where your mouth is. If you want something extraordinary, find it…… it is so much easier to find things now than ever before, and when you find it pay for it. If your favorite online portal “broadcasts”, streams or offers a subscription for a reasonable fee find out what percentage of their subscription fees or advertising revenues go to the content creators. And if it strikes you as an unfair percentage, go elsewhere. They all follow the dollar …….. if we make it clear that we support both the artists we like and those businesses that support them as well, we may not be faced with a future resembling the one Hermann Hesse described in “The Glass Bead Game” where the age of creativity was a bygone era like the biblical age of miracles.

    Reply
  19. younger consumer

    Seriously? I’m in my twenties and amazed that people are shocked that newer generations aren’t buying cds. I listen to all of my music on my phone, so putting a file from a CD or download on there takes up storage space, which I don’t want. I use Spotify (and have the premium paying account) because it’s easy and gives me everything I need, as do all of my friends. We also go out and pay to see artists that we like, and will buy merchandise that we want from them.

    I live in LA and pay 15 bucks every time I go to the movies and $120 bucks a month for my cable/internet, so it’s not like cost is a barrier to me buying a CD, I just don’t use that format. I’m going to use what is easiest for me, and streaming music/video is my easiest option for media consumption. Labels need to innovate and adjust to how their products are being consumed and figure out how to adjust their revenue streams accordingly. If they had created a Spotify-type service before Spotify was around I would have subscribed to that instead. They didn’t, so Spotify has me as a paying customer instead.

    Reply
    1. Brian Brandt

      I must seriously question where the idea of sound quality and reproduction has gone from the equation here. Mode goes to lengths to make the best sounding, most exciting recordings we can. Even I have to admit that some MP3s can sound very good, but doesn’t anyone ever take a breath to listen to something on a quality playback system any longer?

      Reply
  20. Mark

    Interesting article. However, I’m a little bit confused about the entire premise of the argument presented. If Spotify isn’t profitable for your label, then why let Spotify have the rights to your music? If you don’t make your music available on Spotify, then people will be forced to buy the music themselves, or download it illegally and face possible legal consequences. Problem solved?

    Reply
    1. Brian Brandt

      Not as black & white as that. Spotify can serve a purpose. If people can’t find it there, then they may turn to finding it illegally elsewhere on the web. And then Mode looses the 1/3 of a penny! But seriously, there are a lot of ramifications to all of these choices – and frankly I have not figured them out yet.

      Reply
  21. jwcole

    I’m consistently amazed when artists compare themselves to plumbers. It really blows my mind.

    As a graphic designer, I would love to be creating according to my own druthers, but I have to find time on my own dime to do the things that I consider to be truly fulfilling. What pays the bills is working in the advertising industry, doing work for financial institutions and luxury cruise lines, because those are the folks who choose to pay me for my services. And if no one wanted to pay me for my services, I would have to find some other way to make ends meet. And I’m not saying I don’t really enjoy my job (because I do) or that I don’t get any personal gratification out of my job (because I do) or that this is some harsh reality (because it isn’t), it’s simply the way things work. I need to have some hand in inspiring people to hand over their money in order to be able to pay my bills. If people choose to pay me for my personal art, that’s wonderful & I always jump at the chance. But I’m not arrogant enough to think that there is some inherent commercial value in my personal artwork. And I’m quick to judge anyone who makes this argument to be a real jackass.

    I’ve been a musician & designer for years and I do completely agree with the idea that the art is important but the artist is not. I would bet that there is more recorded music in existence today than could ever be listened to if you listened every day, all day, for 75 years (or whatever the lifespan of the average American is). There is no way that any musician is creating something that is addressing a need that hasn’t already been met many times in the past. And so the endeavor is essentially self-serving. But the music is important to the artist, & the artist learns about himself & about the world around him through the art. And we should all sing songs and play instruments, & we will all benefit from the arts & that’s what makes the arts important. But we should also all do something that benefits others, rather than ourselves, in order to make a living.

    So when I say that the artist is not important, I really mean he’s no important than anyone else, not inherently… he doesn’t get a free pass to follow his own muse through life and have his bills payed by the unseen masses. The artist with commercial aspirations is no more important than the artist without commercial aspirations. In the same way, philosophy and religion are important. But there is no inherent commercial value in philosophy or religion. It’s just something we should all value & do. And then be a plumber on the side (or the equivalent).

    With that being said, I’m quick to volunteer my money when I feel like someone else’s art benefits me. And if someone can make a living pursuing their own art in a way that benefits others, I completely support that. But when they can’t make ends meet, I will not stand to hear someone whine about it. But I buy cds (directly from the artist if possible), & I pay for my Spotify subscription, & I buy used records quite a lot (which I wish benefited the original artist). And I think this is the approach we should all take, but ultimately we all spend our money on what we truly value.

    What it comes down to is that we are all subject to the winds of technology and popular opinion and the generosity of the audience. And while I completely support an artist/label presenting their art/product to consumers in any way they choose (even if it means restricting access), when technology meets the demands of the masses, you can’t fight it. And the best you can hope for is that, if something is lost in the transition, people will eventually see that and be inspired to pay a little extra to get it back. But the current reality is that as we lose scarcity, the value of recorded music drops. And paying $15 for an album is quickly becoming a thing of the past. And any music that doesn’t transition to the new platform (either by choice or by financial pressure) will be essentially lost to the generations to come.

    I will also echo the above sentiments about Band Camp, & also suggest that Topspin Media offers very affordable services for artists/labels to distribute their catalog digitally and retain the lion’s share of the profits.

    Reply
    1. jon

      losing out to a generation that does not pay for music, and in reality attends very few shows, is not a loss.

      old people are better.
      and, yes, i am professional musician. make money playing gigs.
      they still understand.

      you are right on many points, though.

      and, yes, the only thing harder than being a musician is being a fine artist, or gasp, a poet.

      Reply
    2. Paul Muller

      Your experience as a graphic designer in advertising brings an interesting perspective on this issue – and it rings too true. I wonder how our 21st century system compares to the 18th and someone like JS bach – he never sold a musical piece and only had one piece, I believe, printed in his lifetime. No copyrights then either. And it would seem that, as a city employee of Leipzig, one could make the case that it was the artist who was valued and not his work, per se.

      I think we lost something when we decided that the value of art was whatever someone was willing to pay for it…

      Reply
    3. livex

      The plumber analogy makes sense to me in cases where people contact me about my work (I’m a musician) and then want me to provide it for free, often with the rationale that I’ll “benefit from the exposure.” This doesn’t happen that often, but it does happen. I think it is a perfectly rational rejoinder to that to ask whether you’d ask a plumber to fix your sink for no money, but that you’ll tell everyone what a good plumber (s)he is.

      Reply
  22. phil fried

    “..But I’m not arrogant enough to think that there is some inherent commercial value in my personal artwork. And I’m quick to judge anyone who makes this argument to be a real jackass.,,,I’m quick to volunteer my money when I feel like someone else’s art benefits me. And if someone can make a living pursuing their own art in a way that benefits others, I completely support that…”

    Thank you JW for putting it all out there. The fact that you make money for working on spec is exciting. It does seems that your thoughts show some inconsistency and a not a little anger (or perhaps larding over as well). You are willing to be paid for your own work yet are not willing to attach a value. Your job does. You are willing to “volunteer” money (not pay for)artists who perform public service. That is; artists who benefit yourself and others.

    Or did you have some other meaning for a benefit?

    Yet you also say that being artistic or commercial makes no difference. You say that one should work in a way that benefits others yet you proudly say that you work for “the man.”
    Don’t we all? You talk about the needs of the masses yet many artists do quite well without them or the need to create public benefit.

    I have to say JW you are not really saying that artists are unimportant rather you are saying you don’t much like them. Not the same thing.

    Reply
    1. jwcole

      What I failed to make clear, evidently, is that my problem is with any artist who feels they are entitled to make a living on their artwork. It’s not at all that I hate artists, it’s just that, as an artist, I’m very aware that pursuing it as a way to make a living is pretty vain. Quite simply, if there is a demand for it, great. If there isn’t (thanks to technology, consumer behavior, or anything else), then the noble choice is to pursue some sort of utility instead. The points that I was trying to make are that art, as is supposedly considered important by 96% of Americans, is very broad & that it’s reasonable to support the arts or the concept of art without necessarily supporting the pursuit of the individual professional artist (this is my interpretation of the statistics). And that artists aren’t the same plumbers because one is pursuing vanity while the other is pursuing utility. That is what I was responding to, moreso than the article. (Perhaps my comment could’ve been better placed.)

      As it relates to Spotify, my point is that music is worth whatever the public is willing to pay for it, assuming the public is willing to pay anything. Advances in manufacturing and distribution have always brought the value of products down over time, music is no different.

      This, of course, ignores music that is composed with some sort of utility in mind (film scores, jingles, etc).

      Reply
  23. Ulysses

    I emailed Mode last Saturday and haven’t got a reply yet, it’s OK because I just want to share my opinions.

    I also emailed Spotify’s content department and CEO Daniel Ek on Monday, suggesting them to make their paying model more fair to niche labels with long tracks. Got a reply from Daniel Ek immediately, he said they will consider my suggestion and put their head of global content relationships on CC. It seems to me that they are open for negotiation. I hope Mode can discuss with Spotify before taking further actions.

    Reply
  24. Bill

    If I hear something on Spotify that sounds as good as a CD why should I buy a CD? You could leave Spotify – but then I’d listen to something else. Solution – get away from that surf beach and start doing real work – expect a bit of suffering for your art – like touring the industrial blight spots of Europe! I’d pay to hear you as well as listen to you on Spotify. Recording just makes musicians lazy – Mozart *had to* tour to be heard.

    Reply
  25. JH

    I agree more or less with JW.

    . Specifically around 24:30 he discusses the commercial future of the music industry (maybe back up a few minutes for some context). His outlook seems to me the most realistic (recording less as commodity and more as service to musicians; physical audio media as niche market; commerce as existing directly between fan and musician, i.e. more DIY).

    As someone who hit adolescence pretty much right when the original Napster hit, I can attest to my generation’s (and younger generations’) decreased willingness to ‘pay for the privilege of listening to music.’ The reality is that digital audio’s lack of scarcity and ease of transport renders most of the moral arguments absurd. I react, when expected to pay for an MP3 or digital audio file, the way older folks react to the notion of buying bottled water. It’s just ridiculous. When something is no longer scarce, it loses its credibility as a commodity, and those still treating it as a commodity lose credibility for having such a horrible business model, even if it may have worked in the past.

    Say, for instance, I’m chatting with a friend online about a Miles Davis solo and I’m trying to describe it. I could literally type for him the theoretical content of what’s going on, as I would describe it verbally (nothing illegal about talking about a recording right?), or I could just shoot the file across Instant Messenger and have him hearing inside of 60 seconds what it would have taken me a half hour to describe. The thing is that for many people, there is nothing explicitly wrong with this, it’s just another level of communication, an entirely non-scarce mode of sharing information and experience, and for this reason most of those who are deeply familiar with this kind of technology just have a hard time seeing digital audio as a commodity. Whatever your moral take on the situation, this growing sense of decommodification is a reality.

    There are so many angles to this overall topic, but as a practical matter “it’s sort of like arguing with the weather” as Albini says. The reality is that most business models based on the sale of music are in all likelihood destined to fail. If you have no viable business model, you have no business. There are plenty of expert gardeners I’m sure who would love to make a living tending to their beautiful gardens, but who instead have to cut grass and trim hedges for golf courses most days. As JW says, it’s not a hard fact, it’s just life. Even Albini’s got a day job working at his studio.

    What’s interesting is that these are the kinds of technological and cultural shifts that greatly affect the nature of the music produced or define the types of music (or types of musicians) that will attain visibility. It’s all natural selection, and the musicians who satisfy the demands of their age are most likely to thrive. Then again, some of us are content to put dinner on the table and tend to our musical gardens.

    Reply
      1. JH

        Ultimately all I’m saying is that because it’s extraordinarily easy, convenient, and impossible to regulate it in all likelihood WILL be legal.

        I’m not ignorant to or unsympathetic with the moral dimension to this (although I think it’s incredibly gray), and I am not at all arguing for the illegal downloading of music; what I’m talking about is more the cultural role of recorded music. As an analogy, suppose Jerry Seinfeld stipulated in a book of jokes that he personally forbids the retelling of any of these jokes; anyone who wants to hear them must buy the book. On the one hand, you could argue that if one respects Seinfeld’s art and hard work, you ought not to tell any of the jokes to your friends. But such a demand would seem absurd in the first place because culturally this is just not the way humor works; if you’ve got something funny to say, you say it. Speech is just too fluid and ephemeral a medium to expect to control, and moral claims like the above would be undermined by their being out of touch with this essential quality of speech (as a result it comes across a bit presumptuous to even make the demand). My point is that digital media is approaching this point, and future generations I think are increasingly seeing it this way, therefore the moral claims of artists in the face of digital sharing will be undermined for similar reasons.

        In my case, there is such an ocean of freely (and legally) available digital audio to download and stream that an artist’s demand for payment for digital audio is not motivation for me to steal it, but rather leads me to pass over it. I can’t tell you how many composers’ and performers’ websites I’ve perused and simply X’d out and forgotten because there were only 20 second clips to listen to. Yet there are so many wonderful artists who host beautiful music for free that I am never at a loss (and many musicians who have accommodated this have made a fan and potential ticket-buyer of me). This is the crux of my point, that whether people are stealing your music or passing it over, they are increasingly less and less convinced that your demand for payment is reasonable, and those who recognize this and adjust their approach accordingly stand to gain.

        Reply
  26. Ice

    Hmm… As a lay person, I wonder where the money ends up going. I used to, personally, buy only a few albums a year. Now I pay 120€ a year for spotify and buy the albums of bands I really like, which I’d interpret as a net benefit to the music industry. My wife has her own spotify account, adding another 120€/year.

    My spotify playlists contain maybe 200-300 songs, which I’ve gathered there over the last two or three years. Assuming each artist/record label would get an equal share in relation to how often I listen to them, they would get about .50€ a song from me a year. However, I’m still listening to songs released 10 years ago, and will presumably continue to do so for years to come.

    I do occasionally wander out and try to find something new to add to my playlists. From my perspective, the relative playshare of those songs is negligible, though. So, my assumption is that in those cases the band doesn’t really gain or lose anything. However, if I actually get interested in a band and add a few of their songs to my playlists, their record label will get a small, but consistent cut out of the money I pay to spotify.

    So, my question would be, how is this really different from itunes, amazon or anything else out there? Is it the ad-supported accounts, popularity-based revenue share, or spotify’s cut, which shift the equation? I would have assumed that less known bands/artists would also have their dedicated fan base, resulting in a much larger number of streams a year… Would be most interesting to see how the figures from itunes sales compare to spotify and the relative number of people using both services.

    Reply
  27. bradavon

    Whilst I agree the numbers are pitiful. That is not the customers fault, moan at Spotify. I resent the implication the price Spotify pay artists is somehow the customers fault.

    Most customers want an easy, reasonably priced and legal way of getting hold of music. CDs and legal music downloads just don’t compare to the simplicity and price of Spotify.

    For 5 bucks/quid I can get all the music I ever need (provided it’s listed) or 10 bucks/quid if I want to listen to it elsewhere. A single album costs that on CD or 79p for a single track legally downloaded. I’ll quickly spend 5 bucks/quid, let alone 10 bucks/quid.

    Say I’m out and want to listen to a song I’ve not thought “before hand” to buy. If I’ve got a 3G/Wifi signal all I have to do is type in the song name and it plays. Yes this is possible with iTunes on iOS or Amazon MP3 Store on Android but it’s nowhere near as simple and I’ve just bought a song I may only want to listen to once. Spotify is also on pretty much every platform (except Blackberry) too.

    Come up with a business model as good for the customer as “that” and you’ll have my attention. No actual new ideas? Nope didn’t think so.

    Like I said, moan to Spotify. Not the people who pay your wages. I’m not going to feel guilty for legally paying for music at a price Spotify “choose” to charge me.

    Reply
  28. bradavon

    I forgot to add Spotify is an excellent music discovery and sharing service too.

    Every artist/album/song has a link you can post/e-mail anywhere you like. You can do that by copy/pasting the relevant link from legal music download sites but it’s a manual process. It’s built into Spotify.

    The web is now also full of Spotify playlist sharing sites. Again try that with the legal music download model.

    Spotify now even automatically shares music you’re listening to on Facebook. I can even see what playlists my Facebook friends have created, again from within Spotify.

    Reply
  29. Gilles

    I have great sympathy for the situation you describe, Brian. You have clearly done a lot for contemporary classical music and everyone who is in the New Music “Business” in the US owes you tremendously.

    However, I can’t quite understand how you can complain about the realities of selling music when you make it super hard for potential customers to buy the CDs that you so desperately want to sell.

    Have you ever tried to buy a CD from your own website? Check out this random example:

    Say I want to buy this new Scelsi CD. It is a brand new release:
    http://www.moderecords.com/catalog/231scelsi.html

    If you click on “order now” you will arrive on the following page with instructions:
    http://www.moderecords.com/order.html

    There all of your potential customers willing to spend their hard earned dollars on your CDs read that they have to email you in order to order a CD. That email is supposed to contain credit card information including number, expiration date and security code. You allow us to split that information into several emails for security reasons.

    Really? That is all so 1990s technology and so cumbersome. I wonder, does anyone ever send an email with orders? If so, I’d be very suprised and I’d be willing to bet that you could have 100 times more orders with an easier way to buy.

    I think that I have been on your website about 20 times in the past couple of months but I never ever bought a single CD as a result of it. Why? It is simply way to complicated.

    I am sorry if this comment sounds terribly rude, but your business does not suffer from the existence of Spotify or similar services, but from the lack of a good sales and direct marketing infrastructure.

    Reply
    1. Brian Brandt

      Actually many people order in this fashion. NO ONE has ever complained that their credit card info was misappropriated, however I don’t deny this could be a possibility. Perhaps there could be more if it were a shopping cart, I don’t argue that. But what you fail to realize is that instituting a shopping cart which is linked to a database of inventory which is then linked to a database accounting for sales, etc. costs real money to design and initiate. And so we have the proverbial “catch 22″: Mode doesn’t have the cash flow to hire the programmers to build the shopping cart-linked to inventory system, so no shopping cart. Banks no longer want to lend money for small businesses like Mode, so we have to depend on cash flow. Perhaps the shopping cart would increase sales, but really by several thousands of dollars which we would have to lay out to develop the cart – which would mean no new releases for a couple of months at least because not enough cash flow – which means diminished cash flow because you rely on the “bump” of sales of the new release… Perhaps you have the picture now. Everybody wants easy, cheap, etc. BUT developers have to be paid. AND we’re not even talking about music here! AND I counter that Spotify is still the greater problem because they pay virtually NOTHING. And our direct physical sales are down proportionally with the decline in the market of distribution of physical sales – so I counter that it is not soley or even mostly due to Mode’s lack of shopping cart and secure server. IF you know programmers that would be willing to donate/discount their services please let me know. LASTLY, if it is too complicated to buy Mode’s releases direct from us, how many of them have you bought elsewhere through shopping cart vendors like Amazon, etc? If your answer is none, then I think you have no argument here.
      Brian Brandt

      Reply
  30. Pingback: Hip-hop ogłupia (Kiosk 8-10/2011) | Ziemia Niczyja | Mariusz Herma

Leave a Reply

Your email address will not be published. Required fields are marked *

Conversation and respectful debate is vital to the NewMusicBox community. However, please remember to keep comments constructive and on-topic. Avoid personal attacks and defamatory language. We reserve the right to remove any comment that the community reports as abusive or that the staff determines is inappropriate.