Music streaming, monopolies, interopability & the chaos monkey

“The reality is a single stream only amounts to 0.003p, which means I would need millions of streams to earn at least the minimum wage”
Ayanna Witter-Johnson, singer-songwriter

Last weekend The Guardian published some great insights from 25 figures across the music world around the state of subscription-streaming, as Spotify passes 155 million Premium subscribers and ahead of a uk.gov report into Music streaming. While many called on Spotify to pay more, some were complimentary – and the bulk of frustrations were royalty splits with record labels and publishers, as well as a general lack of transparency. I've pulled out some of the highlights:

“Many artists have recording contracts that reflect physical rather than digital distribution. Before the internet came along, artists were willing to give record labels the lion’s share of the royalties because they did all the heavy lifting: pressing the records, distributing them to shops, collecting royalties. Standard contracts divided profits 85% to 15% in favour of the labels… [but today] most releases are made available by the click of a mouse.”
Billy Bragg

Crispin Hunt, director of the Ivor Novello awards agreed: “the reality is that the major labels are still controlling it as if it were still a manufacturing industry and it isn’t anymore, they’re a marketing industry”. Bragg calls for an industry-wide 50-50 digital royalty split between artist and label, while Gomez’s Tom Gray says “we need a limit of 25 years on recording contracts” so people can get out of deals made in the physical era.

But no other industry would give 50%, let alone 85%, royalty to a marketing agency. This opens up the broader question of what’s a modern label? Is it providing debt finance to record and market an album? Or is it more like an equity investor in an artists’ future copyrights? That analogy fails as what kind of VC invest in a business that depended on the CEO working minimum wage.

Given how much new revenue the major labels can make from the back catalogues through Spotify/etc (“It has drastically increased our royalty payments to artists for releases years ago” said Giles Peterson), it’s hard to see how they can justify continuing to take such large fees from current signed artists who are struggling. But if artists with large back catalogues benefit, then majors with many artists with back catologues are making record profits after years of decline, Labels “making so much money at the moment that they think this is going to last forever, but the problem they’re going to have is that a career as a musician is not going to be viable any more” said Steve Mason of the Beta Band.

Songwriters left out

There’s a further question around splits between publishers (representing copyright for the songwriters) and labels (representing the performers in the recording). “The contractual relationships between the major record companies and artists/songwriters need to be reviewed… the revenue taken by a master holder/record label is 58.5p out of every pound, whereas the writer/publisher gets only 11.5p.” said Merck Mercuriadis, CEO and founder of Hipgnosis Songs Fund.

“If a singer releases a cover of a hit song, they’ll earn up to 10 times more from it than the writer will. Record labels get about 55% of streaming platform income because they historically had large overheads for their physical products, while publishers only get about 15%. Songwriters are still trapped in this archaic model, ending up with a tiny percentage of the publishers’ 15% by the time everyone else has taken their cut along the way.”
Fiona Bevan, songwriter

Jazz musician Orphy Robinson proposed a new four-way split:

“I think there has to be an even four-way split – between the labels, the artists, the publisher and the streaming company. In the last year we’ve heard about how the majors have made these amazing profits but some of the songwriters – the people who provide the product – are starving… We hear horror stories about people with hundreds of thousands of streams, but when the revenue from that is all broken down between a band and their management they make nothing”

Not-so-open data

"We don’t even know what a stream is worth and there’s no way you could even find out what a stream is worth, and that’s not the basis for a satisfactory relationship.”
Nile Rodgers

What was most of suprise to me in the interviews was that, according to songwriter Imogen Williams, “while remuneration is the obvious argument, the lack of transparency is of equal concern”. There are no legal obligations on Spotify or the labels to not only publish data but even to know who to pay when they put a track online.

“When I look at the way streaming works, I feel like I’ve opened the bonnet of a car and there’s no engine in there. There are all of these cables hanging out, and the key missing part would be a system for the streaming platforms to accumulate and to get simple information such as who wrote what song, because at the moment there’s no requirement for the label. They can put up a song without knowing who should get paid for it. There needs to be a minimum data requirement for submitting a song to Spotify. Or simply, Spotify should not publish or feature any song that doesn’t have all the information needed.”
Helienne Lindvall, songwriter

This seems like low-hanging fruit to fix in the short term. "The government needs to regulate the data" said Crispin Hunt, musician and chair of the Ivors Academy. "They need to make sure that you can’t put anything up on a streaming platform without knowing who to pay for it. There’s no way that the record label should be able to put a track on the streaming platform without knowing who the songwriters are.”

It's worth looking at the interviews in full, over at The G, they even highlighted the threat of Spotify to the Jazz solo and long instrumental. In Orpjy Robinson's words:

"People are saying because of the nature of what we do, and the art that we create, we’re going to have to change it to fit into Spotify playlists, which value songs that are shorter and don’t have long intros. Some jazz musicians I know are saying: ‘Should we make something that is two-and-a-half minutes long?’

Which seems a good time to pivot to Web Monetization - which pays content creators in constant stream, rather than a fixed fee per play.

Web Monetization update

As mentioned previously – I've been testing it here for a few months. Checking my Uphold wallet tied to Netribution just now, it stands at £5.03, from 8 visitors with a wallet (not necessarily 8 unique visitors). And elsewhere, fundyourfilm.com generated £0.48, Visuali.st £0.06 and screen.is – the only site where I've hosted video – £10.61. Although over half of this is from the rising value of the cryptocurrency currency (Ripple) that Uphold stores my balance in, it’s far more than I ever imaged for some very quiet and barely public websites.

So while Coil’s payout of $0.36/hour isn’t so much money for a single 4 minute track (2.4c/1.7p) compared to the 99c cost of an old iTunes download, it’s many factors higher than the average payout from a stream from Spotify, and it rewards long-form.

The other key attribute of Web Monetization is it’s interoperable by design: any website can implement it and start earning from Monetization subscribers, which seems a pivot to…

Doctorow on Interoperability…

“Interoperability is the default state of the world. Anyone’s charcoal will burn in your barbecue, just as anyone’s gas will make your car go. Any manufacturer can make a light bulb that fits in your light socket, and any shoes can be worn with any socks.“

Cory Doctorow, who has been on great Twitter form of late (if you indulge the interspersed bursts of retro-futurism, Disneyland history and strange adverts of old) – has updated what he describes as one of his most important pieces of writing in 13 years from last year, following on from the Oracle/Google Supreme Court ruling. In Unfair Use: Anti-Interoperability and Our Dwindling Digital Freedom he presents vividly how Web Monopolies form, and how they undermine the basic principles of good design the rest of our lives take for granted.

“Leaving Facebook in the 21st century is like my grandmother leaving the USSR in the 40s. You can go, but your friends and loved ones are all held hostage behind Zuckerberg’s Iron Curtain, so leaving Facebook means leaving your communities, your relationships."

One one level, he doesn't blame the monopoloies for behaving as their shareholders expect: “the more freedom you have to leave Google, the bigger a risk you pres­ent to Google“ – but he's merciless to them in their self-perception as chief disrupters of vested interests: "where tech is challenging [existing] monopolies, it is doing so in order to create more monopolies“. And these monopolies are protected in ways that previous monopolies could only dream of; "any attempt to interoperate with an existing product service with­out permission from its corporate master is a legal suicide mission, an invitation to almost unlimited civil — and even criminal — litigation"

Interoperability, he explains, is the key concept that regulators, legislators and conscious consumers should focus on to try to build a better web and world.

"Writ large, interoperability encompasses things like democracy. When someone says they like their city but not its bylaws, we don’t tell them that the law is the law and the home comes with these bylaws in a package. Instead, we [in liberal democracies - edit] set out processes for amending or repealing laws that chafe the people they govern. If you fail in your bid to reform your city’s laws, you can also move to another city without having to surrender the possessions in your home or your social relations with your old neighbors. Interoper­ability lets you replace the laws and keep your house, or replace your house and find new laws."

Modern technology that isn't explicitly open source on the other hand not only prevents the users from this freedom, it punishes those who perform helpful and environmentally-important services, like repairing your iPhone. And with this comes the third and final pivot, to a tech company, who with over 200 million paying subscribers and a mostly proprietary system is kind of the opposite of interoperable…

Netflix, microservices and a chaos monkey

But Netflix's use of Microservices, as presented in this really clear, albeit tech-heavy presentation from 2016 by Engineering Leader Josh Evans, struck me as a story about how big and stable software development over the last few years has shifted from huge central 'monopolies' of code to a web of small, autonomous, interoperable 'microservices'. It's like a model of the distributed web. The success of the whole system depends on no single service, and can cope with most of them falling down during production.

https://www.youtube.com/watch?v=CZ3wIuvmHeM

Evans further explained how software reflects the culture that creates it with Conway's law Conway’s Law – “organisations which design systems are constrained to produce designs which are copies of the communication structures of these organisations”. Or simpler put, ‘Any piece of software reflects the organisational structure that produced it’. There's lots in his talk including mention Netflix's chaos monkey – an open source tool they've built to randomly make parts of their system to fail so as to ensure "that engineers implement their services to be resilient to instance failures". It was hard not to think of the virus sized chaos monkey rampaging the planet at present checking and challenging the resilience of everything from information networks, welfare systems and health funding, to supply chains, international cooperation and human behavioural adaptability – or how this has revealed greater vulnerabilities and far worse fatality rates in the UK & US, than Africa or India.

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