CMU Weekly Editor's Letter

Editor’s Letter – Friday 23 Sep 2011

By | Published on Friday 23 September 2011

Andy Malt

So, after months, nay years of speculation, yesterday Facebook announced its new music offering. It wasn’t, as many had once thought, an in-house music service, nor did it bring Spotify streaming in-browser, as was also suggested. It was, basically, a polished up version of

Actually, Facebook’s announcement yesterday does mean some pretty drastic changes to the biggest social network, changes that may over time alter the way we interact with content online. If you allow it to, Facebook will now not only log every song you ever listen to via Spotify et al (just like, it’ll also log pretty much everything else you’ll ever do online. All automatically. And it will inform all of your friends as you do so, while mapping it all out on a handy timeline of your entire life. Scared?

Mark Zuckerberg’s explanation of all these changes was pretty long and tedious (as much as he tried, he’s no Steve Jobs) but he pretty much summed it up when he said:

“This year, we’re adding verbs”.

He said it as if the concept of verbs was something people might not have heard of yet. As if Facebook was in the process of inventing language. But what he meant was that you’ll no long have to click the ‘Like’ button to share things on Facebook, the sharing will just happen as you listen to, watch or read anything online. And if you cook something too. He talked a lot about cooking. Though I’m not sure how that could be automated, unless he knows something about net connected ovens that I don’t. He also said “express” more times that I thought possible in an hour.

Anyway, bringing this back to music, the big deal here is that music services will be able to log your listening data in your Facebook profile (or ‘timeline’ as it is to become known). Your friends will be able to see what you’re listening to, and if they’re interested they’ll be able to listen to the same track at the click of a button. You can even share a track directly with someone and both listen to it together at the same time while discussing it on Facebook’s instant messenger.

Now, these are all things you could, to an extent, already do, but in theory the new look Facebook makes everything a lot easier. Zuckerberg also talked a lot about “frictionless experiences”, and that’s relevant here. As I said, a lot of this new functionality can already be achieved with and other social media apps and tools. But Facebook is, for most people, the de facto online service for sharing comments and content. And while people may be interested in music discovery, many have not been interested enough to sign up to bespoke services. This will bring the music discovery to the place where they are already sharing online.

And it won’t really matter which music service you are using to discover new artists and tracks, because pretty much all of them will be hooked up to new look Facebook. Though yesterday everyone’s focus seemed to be on Spotify’s involvement. It must have been something of a disheartening moment for some of the bigger US streaming services to see the new kid (in their market), Spotify CEO Daniel Ek, wander on stage at Facebook’s big event to explain how his service will integrate with the new look social network.

And while Zuckerberg said he wanted to “rethink the music industry”, Ek said the hook up would boost engagement and draw more people to a system that “fairly compensates artists”.

Interestingly, that last claim was at the heart of the other big digital music story this week: Is Spotify giving artists a good deal? Spotify proudly announced this week that it now has over two million paying subscribers, news that won’t please the co-founder of metal label Prosthetic Records EJ Johantgen, who told LA Weekly that “there [does] not appear to be an upside” to having your music on Spotify as he pulled the label’s catalogue from the service.

Prosthetic is the third US metal label to pull its catalogue off Spotify since it launched in the States in July, following Century Media and Metal Blade. Johantgen argued that the “fractions of pennies” Spotify pays per stream do not compare well with the revenues to be made from downloads and physical releases. And in his view, having your music on Spotify will drive down CD and download sales as time goes on (although download subscription service eMusic published research this week that suggested ‘ownership’ of music remained important to many consumers, despite the rise of ‘access’ based services, with many users of Spotify-like platforms still buying MP3s).

As well as Prosthetic, self-releasing indie band Uniform Motion also announced they were pulling their music off the streaming service, and in an attempt to explain why published an entire breakdown of how much money they earn from every possible avenue, including retail, pay-what-you-want downloads, publishing and more. Spotify, they said, just doesn’t come up with the goods.

Spotify responded to all this by pointing out that it’s unfair to compare its payouts to download sales, because it doesn’t “sell streams”, rather, it sells access to a whole catalogue of music. Spotify would rather, I imagine, you think of its service in terms of radio, and the fact that seven million streams through its software will earn an artist far more in royalties than if a song is heard by seven million listeners all at once by having their song played on the Radio 1 Breakfast Show.

However, while Spotify is not a download store (assuming we ignore the fact that it has a sideline selling MP3s too), it’s not a radio station either. It may sell access to music, but users can still access that music on demand, like they would a download in iTunes.

But anyway, that, said Uniform Motion, was not even the issue. The problem, they said, is that Spotify is so secretive about its business model. It’s entirely possible the band were getting a fair cut of advertising revenue and subscription fees, but because Spotify doesn’t explain how it divvies up the money between the various people due a payment, no one actually knows.

Now this isn’t entirely Spotify’s fault. The reason we know how much money an artist gets from a play on Radio 1 is because radio is licensed by collecting societies PPL and PRS via a transparent blanket licence. But digital services can’t do that, they have to do deals with individual rights owners or their representatives (such as the indie sector’s Merlin). Even when rights owners decide to use their collecting societies for digital deals, the arrangements are often clouded in secrecy. In the case of the major labels, it’s assumed that they insisted on a larger cut of Spotify’s revenues in order to play ball. And Spotify’s founders, who needed all of that major label music in their system to be able to get enough traction with the public, had to roll over. And also had to sign the non-disclosure agreements barring them from saying what those cuts were.

So, Spotify may be stuck between a rock and a hard place when it comes to transparency, but that doesn’t alter the fact that a lot of smaller artists and indie labels therefore assume they’re getting ripped off.

One solution to this would be to apply the methods used to license radio to streaming services. Stop lumping streaming music with downloads – Spotify is right when it says the two services are not the same – and instead think of streaming platforms as interactive radio services, and license them like radio, through transparent blanket licences, probably administered by collecting societies or some similar organisation. This would add transparency to the whole system and ensure that everyone was getting their fair share.

It would also mean that online services unwilling or, more likely, unable to meet the demands of the big rights owners would be able to get their services off the ground. Having more digital services has to be a good thing. Sure, Mark Zuckerberg and Daniel Ek might be clever, but their success has, in part, been down to their skill and luck in securing big money investment. There are other clever but less cash-rich people who – if the industry would just help them get the licences they need in an easier fairer way – could also help build a more diverse and engaging digital music marketplace. Which is almost certainly the best solution to that tedious piracy problem.

Anyway, talking of piracy, what else happened this week? Well, the long-awaited appeal hearing of Pirate Bay co-founder Gottfrid Svartholm went ahead without him, as no one (including his lawyer) seems to know where he is, and convicted file-sharer Joel Tenenbaum saw the damages he has to pay the US record industry bumped back up to $675,000, after they were dropped to $67,500 in July 2010.

Elsewhere, Live Nation and Universal announced a new joint venture that will see them providing fan engagement services to artists, Interscope responded to claims that its offices had been used to traffic drugs, and the Conrad Murray trial began to get going with talk of what arguments and evidence the defence might put forward.

Meanwhile, in more artist-focussed news, REM finally split, Queen’s Roger Taylor announced plans to ensure that the band would go on forever, Bloc Party’s Kele Okereke seemed unsure of whether or not he can still be referred to as Bloc Party’s Kele Okereke, Bow Wow threatened to blow up XXL’s offices if he wasn’t put on the magazine’s cover, and Kings Of Leon bassist Jared Followill drove through the door of his neighbour’s garage for reasons he wasn’t entirely clear on (he wasn’t drunk though, right?)

Also on this week, we interviewed Richard Fearless from Death In Vegas, Polyvinyl’s Mark Jiggsaw put together a playlist to celebrate the label’s fifteenth birthday, and Eddy Temple-Morris used his Eddy Says column to announce a new weekly residency in Brixton.

And, as ever, we brought you lots and lots of new music. In our CMU Approved column this week we tipped Japanese electronic duo Trippple Nippples, London-based indie bands Zulu Winter and Grass House, and Brooklyn quartet Friends. Plus, there was the amazing new video from Three Trapped Tigers, a full stream with visuals of Mastodon‘s new album, an entire six hour song from The Flaming Lips, and the Foo Fighters serenading the infamous Westboro Baptist Church.

One final thing, assuming you’ve made it this far (and well done if you have), if you want more chatter about the week in music, there’s a new edition of the CMU podcast now available for you to stream or download. This week, Chris and I can be found discussing Facebook, Spotify, Live Nation and Universal’s joint venture, REM’s split, Queen’s never-ending tour, and Bloc Party’s possible streamlining.

Until next Friday,

Andy Malt
Editor, CMU