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Streaming Music Services Seek to Empower Artists

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By Brenna Ehrlich (@BrennaEhrlich) for sidewinder.fm, a music and tech think tank.

When it comes to artists and digital music services, the common lament among performers nowadays could be equated to Chicago's unofficial motto: “Ubi Est Mea?" Or, if you don't speak Latin, “Where's mine?" In the midst of contention over royalty fees and streaming music's questionable payouts, however, the cadre of companies behind these digital services are looking for new ways to put money and power in the hands of artists.

Since their inception, subscription and streaming services have been, at their core, tailored for the music listener — from the granddaddy of all-you-can-eat services Rhapsody (founded in 2001) to recent upstarts like Rdio (founded in 2010). The artist side of the equation took place behind the scenes and their involvement with the services in question was usually limited to a business transaction - i.e. we play your music, we pay you for streams. That was the end of the story. Until recently.

That state of affairs - wherein services have been wholly consumer-facing - has been undergoing a shift over the past year, due in part to the fact that artists have begun questioning whether putting their music on such services is worth it.

The issue became more widespread — at least in the public eye — when Spotify found its way to U.S. shores in the summer of 2011, amassing one million paying subscribers in the states to date and bringing millions of tunes to the masses. The company, in total, boasts six million paying subscribers worldwide and 25 million active users total when counting those who use the free service. With the introduction of the Swedish service, suddenly everyone had instant access to a myriad of bands — from stadium acts to the garage band next door.

The joy that listeners felt over having access to more than 20 million songs, however, was not matched by all artists. Musicians like Damon Krukowski of Galaxie 500 and Damon & Naomi and Uniform Motion came out and reported low earnings paid out by subscription music service streams, and acts like Black Keys declined ( quite forcibly) to put their new music up on the service. Add to the pre-existing queasiness the widespread negative reaction to Pandora's Internet Radio Fairness Act — which proposed to lower royalties that Internet radio pays to artists — and you had a lot of musically inclined folks looking askance at the online music space.

Granted, the argument over whether subscription music services are fair, royalty-wise, to artists has yet to be won by one side or the other — only time and hindsight will tell if such services can be profitable and if artists can reap the benefits — but those services have, it seems, been listening to artist derision in some respects. Over the last few months, everyone from on-demand services like Spotify to online radio platforms like Pandora has been rolling out or teasing new, artist-facing features and services that aim to bring the artist into the subscription service fold. We break it down below:

PANDORA

While Pandora and artists were battling over the service's proposed Internet Radio Fairness Act at the end of 2012 - which would have reduced the royalty rates that online radio services pay to artists - cellist Zoë Keating came forward with an interesting request, one that cut through the chorus of contention issuing from a sea of miffed musicians:
I want my data and in 2012 I see absolutely no reason why I shouldn't own it. It seems like everyone has it, and exploits it... everyone but the creators providing the content that services are built on. I wish I could make this demand: stream my music, but in exchange give me my listener data. But the law doesn't give me that power. The law only demands I be paid in money, which at this point in my career is not as valuable as information. I'd rather be paid in data.
Keating's request, it seems, did not fall on deaf ears; in fact, Pandora itself is aiming to make more of that data available to artists.

In December of 2011, Pandora started taking its service past the bounds of streaming music with the launch of Pandora Presents, a live concert series that determines what band to book in what city based on listener data (likes, channels created, etc.). Pandora then invites fans that have shown a dedication to that band (those who created the channels, etc.) to a small show — free of charge. The whole thing is filmed and posted on a dedicated, sponsored hub. Pandora is doing for specific artists - like Dawes, Portugal, The Man and Theophilus London — what Keating is asking for in some respects; they don't get to “own" their data, but they get to realize its potential.

According to Pandora founder Tim Westergren, these select concerts have been a kind of test for a functionality that the service is cooking up for all artists: a way to give artists all the listener info they need in order to plan tours, sell records, etc.

“What we bring to this path is an immense amount of knowledge about the preferences of listeners connected with the location and the ability to communicate with them directly," he says.

Still, Westergren doesn't have much to say in terms of timing or specifics when it comes to a product. “It's unusual for us to talk about things or preview things in any way, but I think it was important that we be part of this broader discussion that's going on right now especially around royalties and legislation and the relationship between artist and these services," he says. “We still have a grand vision at Pandora for a set of capabilities that would take what we've be doing — the kind of one-offs with these shows — and weave in a more manual base and turn it into a real product."

So, it seems, Keating's dream of gaining greater access to data could become a reality — someday. At least where Pandora is concerned. Some services have already taken such steps...

DEEZER

Spotify arch-rival Deezer — a French, on-demand subscription service present in 128 countries, excluding the U.S. — recently unveiled a full-service suite of artist tools called “Deezer For Artists" (a.k.a. D4A), complete with those aforementioned analytics.

The service, which has been really hitting the group running this past year — having scored $130 million in funding this past fall — announced the new features in December of 2012. They include:

1) Analytics, allowing artists and labels to see who is listening to tunes and where. All Deezer users will also be able to use the feature — in a more stripped-down manner, that is. The consumer-facing version will be more like a “What's Trending" section than anything else; 2) Certified accounts for artists, which will let fans follow bands and check out their playlists and tunes; 3) Artist pages, which will allow bands to customize their presence and share their social feeds; 4) The ability to upload tunes directly, which will help bands to showcase interviews, samples, etc.; and 5) A new app development platform, which bands and labels can use to create their own apps within Deezer.

On the horizon, Deezer is also planning to release an affiliate system that will award bands cash for bringing in new subscribers and a promotional program for Deezer-selected artists.

The new features are just part of the service's mission, which is to get fans more engaged with the music they're listening to. “The question for subscription services is not only the fact of using the artist and so on, it's much more than that," says CEO Axel Dauchez. “I do believe that since the digitalization of music, people are listening to more music, but they are definitely less engaged with music... We need rebuild the perceived value of music — not only the volume of listening."

On the whole, this suite of features sounds extremely beneficial. However, we can't help but wonder what effect Deezer's lack of U.S. presence will have on how many artists will make use of it. Naturally, artists hail from around the world, have global fanbases, and tour internationally, but it seems that excluding the U.S. severally limits the usefulness of the product to bands on the whole.

RDIO

Rdio also recently started rolling out its own artists' program, kicking off the festivities by offering bands cash in exchange for garnering new Rdio users.

How does it work? So let's say that Indie Band X enrolls in the program. After doing so, the band will be able to share its music via affiliate links on Facebook and Twitter, and will score $10 for every new user that Rdio gains through those links. An unlimited Rdio subscription costs around $10, so, basically, Rdio pays artists a pretty hefty commission for attracting new fans.

Of the existing roster of online music services, Rdio has always been one of the most social, allowing users and bands to follow each other. Therefore, we could easily see a band becoming a tastemaker on the service and thereby garnering tons of users for Rdio - and cash for itself.

The commission program launched in October of 2012, and we have yet to see any new features joining its ranks. However, Rdio's Global Head of Marketing Marisol Segal tells us, “As the first streaming service to launch any sort of program to support artists, we look at our initial Artist Program offering as just the start of things to come. As with Rdio, we are constantly innovating and we'll continue doing the same with the Artist Program. You'll see more developments from us in this area soon."

RHAPSODY

Rhapsody, like Pandora, is still in the planning stages when it comes to rolling out new features for artists. “The only way that makes sense going forward is that we make sure we're building the streaming services with the artist in mind and they're really an integral part of the equation around subscription music," says Rhapsody President Jon Irwin.

According to Irwin, these new features will be introduced via a series of steps, the first of which is already underway: Making sure that all Rhapsody-spun original content is readily available on artist pages so as to create a more deep-dive experience for listeners.

“Rhapsody has been in business for over 11 years and one thing that we have always done at Rhapsody — and it's similar to MTV's legacy as well — is created a lot of really cool and unique, engaging content around the artists, musicians, and their music," Irwin says. Right now, this content is only visible via the web app, but Irwin says that it will soon roll out to mobile, too.

The next step, Irwin says, is integrating third-party services into Rhapsody's ecosystem — so, that might include working with platforms like Topspin to allow artists to sell merch and tickets via their pages, or other editorial outlets to furnish even more content around bands. This would be a huge boon to artists, as features such as this are not common in the subscription music sphere.

Finally, Rhapsody hopes to furnish what Pandora is plotting and Deezer already provides: artist access to data. “We know who is listening to a specific artist's music, we know how often they listen, we know similar artists that they listen to, we know where they're listening geographically," Irwin says. “That can be very valuable information to the artist. We'll be working on how we open that up in a way that preserves everyone's privacy." Like Pandora, Rhapsody has no public timelines for when these changes will roll out.

SPOTIFY

Although Spotify is certainly one of the buzziest music services, its offerings when it comes to the artist side of the equation are rather scant - at least where visibility is concerned. At the end of last year, Spotify released one such new feature via its web app (currently in the roll-out phase across platforms): the ability to follow artists and other users and be notified when new music hits the scene.

“When fans follow artists they'll be able to know when the artist releases new music or creates a playlist or otherwise does something that would be interesting to them," says Spotify's Artist In Residence, musician D.A. Wallach of Chester French. “Whereas prior to that, they would have to go and seek out that information."

Although useful, the follow feature appears to be the only artist-facing tool on Spotify's docket — we have yet to hear anything about a tool that lives within the app that would allow bands to check out listening data or sell merch.

With Spotify, rather, there are a cadre of fiddly tricks and tips that bands can use to draw extra value from the service. Wallach tells us that artists are, indeed, privy to that much-lauded listener data — providing they ask for it. All they need to do is contact the Artist Service's team.

“We do a lot of stuff behind the scenes to help artists understand the service and use it better and tailor their engagement to maximize their impact," Wallach says. “One of the things that we're excited about is continuing to open up more analytics to artists... We have some tools right now that allow us to share with artists some interesting insights into what's happening with their work."

Spotify also recently partnered with music analytics platform MusicMetric to integrate their data into its service, so artists can glean info via that route - albeit after paying a fee.

Spotify's apps platform - launched in 2011 - also affords some opportunities for enterprising artists, provided they know that it exists and how to use it. Artists can develop apps for the platform, or use the SDK (software developer kit) of services like social listening tool Soundrop to create their own offerings within Spotify. However, the process of making a Spotify app isn't the easiest of tasks for your average artist - the only ones who have one at present are bigger acts like Steve Aoki, Tiesto and Blur - so that opportunity if likely relegated to those musicians with influence and cash.   

DAISY

While all of the above online music services were tasked with integrating artist features after the fact, a new service is primed to launch in 2013 with said tools already tow: a project currently codenamed Daisy. Daisy will become the newest incarnation of MOG, a subscription music service that was sold to HTC through its Beats Electronics subsidy for a mere $14 million this past summer — the low price due likely in part to MOG's low user numbers.

The service, which recently scored $60 million in funding, has found a CEO in Ian Rogers, the former CEO of the direct-to-fan company Topspin Media, and Chief Creative Officer in Trent Reznor, the Nine Inch Nails frontman who helped make the pay-what-you-want model cool. Both have the unique ability to understand the needs of the consumer while simultaneously taking care of the artist, and they aim to bring that sensibility to the table when building Daisy from the ground up.

There aren't a lot of details on the scene yet about what Daisy will entail, but we do know from the initial announcement that Topspin's Go-Direct platform will provide the service with photos, videos, and products from artists — like merchandise and concert tickets — without leaving Daisy's ecosystem. Artists will also be able to see where their fans reside and where their music is most popular - again, here's that data you asked for, Keating.

“When Trent showed me the vision for Daisy, I said, 'Man, this is really incredible, but it's also a vision built on top of a music subscription service," Ian Roger says. “What Trent has envisioned is really a music experience. I think having a really great music service as a starting point to that is a huge leg up."

Daisy will be available for desktops and mobile devices, working with iOS, Android and Windows 8 operating systems and will launch some time in late 2013.

WHY NOW? WHAT WILL THE IMPACT BE? 

Regardless of all of the buzz that services like Spotify and Daisy kick up on trade and technology publications, when you look at the impact of streaming on the world at large, it's still pretty isolated. While digital sales in the U.S. burgeoned in 2012 for the first time in a decade, globally, physical albums (although declining) are still the dominant form of music consumption - and when we say “digital sales," we mean, mostly, sales from services like iTunes. Subscription services are still a very small piece of the pie. (Think of it this way: Spotify has five million paying subscribers worldwide. Apple has 400 million active accounts in iTunes with credit cards and 300 million total iOS devices.) Still, the market is growing, which is a decade old, too, so it's vital - at present - that its denizens be embraced by consumers and artists alike in order to keep up that forward momentum.

That's where all of these new artist initiatives come in. According to media analyst Mark Mulligan, the addition of tools of this nature is a PR move of sorts: an effort to please artists as well as show consumers, “Hey, we care about bands. We're not the enemy."

And that's a message that's vital to get out at present, when artists are looking at royalty payouts and finding them lacking - see the aforementioned Galaxie 500 and Uniform Motion. The discontent born from this state of affairs - as well as the massive soapbox that social media provides - leads to a lot of artists taking to social networks to express their frustration with/confusion over subscription services to their legions of fans. And those fans - who were once jazzed on the idea of access to tons of tunes - might grow conflicted about their listening habits, which spells trouble for this relatively new market.

Meanwhile, the companies that run these services are unable to disclose any specifics relating to their payment practices in order to ease the concerns raised by artists. Which is why, when they do try to chime in, it's often in vague terms. This lack of transparency can be frustrating for artists, but it's a requirement of the licensing deals. Mulligan says this is because the services have signed very rigorous non-disclosure agreements about how much they can reveal about what they're paying out and when. A representative from Rhapsody confirms: “We have nondisclosures with the labels that preclude us from disclosing our exact rates/payments. And we do not know what the labels pay artists from what we pay them. Those terms are negotiated between the label and the artists."

Cue the influx of artist-facing tools and programs - an olive branch of sorts offered up to the artists who are wondering if services like Spotify and Pandora are really worth it.

Given that subscription and streaming services are “somewhat powerless to do anything meaningful about [questions of payment]," Mulligan says, due to these non-disclosure agreements being in place, “they do the next best thing that they can do: They go on a PR campaign." He continued, “They try to do everything they can to say how much they value artists and try to build the features that they're allowed to build. There's a bucket-load of things they would like to do, but the terms of their deals are that they cannot."

It remains to be seen how tools and programs like this will be/are being greeted by artists - or if they're even using them. Rdio was unable to provide us with any metrics with regard to their commission program, for one, and all attempts (including a HARO request) made by this reporter to find an artist that had made use of it proved fruitless. Programs like this are usually only ever discussed by a niche audience (Hello, niche audience!), so it's unlikely that fans will even know that they're in place - unless, of course, they become widely embraced by artists at large who then champion their success via social media. Who knows, that day may come. These are early times.

Still, questions of motive and success aside, the introduction of all of these initiatives in behalf of artists is a good move on these platforms' parts. As Mulligan says, “Streaming has huge amounts of momentum; it's obviously going to be much more important by the end of 2013 than it was by the end of last year, but at the moment, it's still a relatively small deal. That doesn't mean it's not a good time to get the right practices in place."


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This story appears courtesy of HypeBot.
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