Can Music Streaming Survive Coronavirus?
Hello, welcome back to Penny Fractions, a nearly weekly newsletter on music streaming! I’m excited to be back after a few weeks off. I tweeted this last week but I’m going to host a Penny Fraction Reader Call on April 22nd at 7:30pm EST around the music industry and the coronavirus. To join, please fill out this form here and I’ll send out the video link prior to the meeting. If it goes well, maybe I’ll do more in the future. Also, myself along with my friends Charlie and OK Fox of the Art and Labor podcast wrote a fun zine late last year, so check it out! Anyway, let’s get to looking at the impact of coronavirus on music streaming.
Is Streaming Recession-Proof?
Not long after lockdowns started coming into effect across the western world, speculation arose. There was a thought that Netflix would do well and other streaming platforms would see the benefit of the forced call to stay indoors. Then, Quartz reported: Music Streaming May Actually Be Falling Because of Coronavirus. The story explained that in Italy there was a decrease in streams and set up a narrative that streaming also was going down, along with the live music industry. Luckily for the recording industry, this didn’t quite appear to be the case. Overall streaming did go down but in other countries that appears to have leveled off and wasn’t simply a continuous fall. However, the immediate concern showed just how important streaming is to the health of the entire record business right now.
The downturn trend in streaming might’ve been called prematurely, but the status of sales is similarly complicated. Last week, Billboard reported that digital album sales increased while physical sales decreased. Now, the precipitous fall of CDs is not new, but reducing the options for artists to make money right now is disconcerting as there is a mass closure of retail stores. (The status of said retail shops was already precarious pre-pandemic and this only further amplifies that fact.) A slight uptick in digital music sales was seen, and Bandcamp made a charitable show of this, as the company raised where $4.3 million in a day when they waived fees so that these musicians could see 100% of the money coming in from fans. The increase in digital sales suggests that fans are receptive and open to finding ways of supporting artists. Still, as stores (which can function as venues and community spaces) struggle, there is high uncertainty about what will survive out of this situation.
Next week I’ll dive deeper into live music but I did want to make a quick note: live music remains fully on pause. AEG and Live Nation put a halt on major events about a month ago and there’s been little word from the companies about if/when events will return. On Monday, Live Nation announced that Michael Rapino, the CEO of Live Nation, would forgo his $3 million base salary as the company seeks to find $500 million in savings. Last month, the company put together a $10 million fund to help those in the live music space who are out of work, but that feels paltry when remembering that Rapini made over $70 million in 2017 alone. (As The New Republic notes, that figure is nearly 3,000 times more than the average employee of Live Nation makes) Also, speaking of Live Nation, Ticketmaster, which a decade ago merged with Live Nation, is now refusing to offer refunds on postponed shows after sneakily changing its ticketing agreements. This happened all while Gavin Newsom, California’s governor, said yesterday not to expect gatherings of 100+ people or more in the state until there is a vaccine. In other words, Ticketmaster may want to reconsider their new policy.
A peek into other industries might give a hint as to when the music industry might start again. Over the last month, Hollywood films continue to push into the fall with a lot of reporting winking towards the fact that studios are effectively writing off the entire summer. Professional sports, whose commissioners met with Donald Trump a couple of weeks back, appear to be wanting to figure out a way of keeping the money flowing. However, this might offer little solace for concerts because while sequestering off athletes to perform in an empty stadium might sustain TV deals, it isn’t a solution for a country-wide arena tour that sells thousands of tickets. So, while live music remains on pause, streaming is going to be carrying the industry for a while.
Streaming Is Everything Now
Glenn Peoples, in Billboard, reported on how subscriptions might protect the music industry from a full economic collapse. The argument is that without relying so heavily on physical sales (which would be halted with the closure of stores) and having the constant streaming revenue, there is a cushion for the industry that wouldn’t have been there prior. Fair enough, it’s hard to imagine that shutting down live events and the stores where people buy music wouldn’t just flatten the industry. Yet, that doesn’t inspire confidence in how it really benefits from streaming.
Streaming appears isolated because so far there’s been no sign of decreasing subscription numbers due to economic strain. I’ve written about this for years but the advantage of mass bundling of streaming platforms (think: telco deals) is that suddenly it’s a fee that isn’t easy to cut. This is even seen with the rise of family and shared plans, which record executives loathe but which makes it more difficult to just sever that relatively cheap entertainment expense. Yet, what may be good for streaming platforms and record label's bottom lines may not be immediately reflected in artists’ bank accounts. Last week, Music Business Worldwide wrote (emphasis mine):
And in further good news for record labels and artists, MBW’s sources suggest that Apple Music’s global subscriber numbers continued to grow month-on-month in March, despite streaming volumes on all audio services dipping amid stay-at-home directions from international governments.
There is a flattening of interests in what’ best for record labels must be good for artists, even if that isn’t always the case. This conflict can be seen in the fact that even though YouTube is seeing increased viewership, there is a decrease in advertising spend, which ripples across all creators. Coronavirus shows that a career in making music, even independently where one might consciously avoid such obvious branded events, could see a decrease in payouts on the only platforms that are seeing growth due to declines in entirely unrelated industries. This only magnifies the gap for artists on these corporate platforms.
Prior to the coronavirus, there was already much concern about how little streaming services provide to artists in the form of payments. Insert comments from the likes of Thom Yorke, Taylor Swift, and anyone who only wishes for their own level of financial security. This crisis prompted a call for Spotify to triple the amount of money that it pays out to artists. I hesitated to endorse such an ask, not because artists don’t deserve such money, but simply because Spotify is barely a sustainable company and provides most of what it makes back to labels and rights holders. There is also the fact Spotify, along with nearly every other major streaming platform (Apple excluded), is still fighting against increasing payments for songwriters. Thus, it’s hard to know what such demands mean when these same firms are fighting for more meager increases. Coronavirus, in a way, shows just how alienated musicians are from how they make money from their labor. If the future of music must rely solely on the number of subscribers staying up while artists need to achieve six or seven-digit volumes of streams just to get by, then it’s time to admit once again that the system simply isn’t built for artists.
Is Recorded Music Recession-Proof?
A reason I often cite the essay ‘SoundCloud and Bandcamp as Alternative Music Platforms’ is because it so excellently captures the current status of music streaming platforms. The idea of the consumer-oriented platform (think: Apple/Spotify) vs. the producer-oriented platform (see: Bandcamp/SoundCloud) is even more stark during the coronavirus because of how alienated musicians are from their labor on platforms like the former. These large scale platforms that dominate music streaming are in a way incubated from a downturn in music streaming because they’re often either loss-leaders or in the case of Spotify, barely profitable. Therefore, assessing the health of the “music industry”, or even more narrowly defined as the “record industry”, shouldn’t be based at all on the livelihood of music streaming.
The close of that essay makes this assessment: “Revenues now increasingly derive from advertising and subscriptions, rather than the sales of ownable individual items such as “singles” or “albums” that once sustained the late twentieth-century industry.” When artists over the years complained about the low rate of pay offered by music platforms, they were effectively highlighting that by eliminating purchases and replacing them with a rent-seeking platform entirely outside of the control of artists, they’ve effectively lost control over their labor.
Even if this pandemic is not on the verge of radically altering the status quo, all streaming platforms understand that there is a crisis. The reason that Spotify announced introducing a donation button for artists and an initiative to match up to $10 million in donations (which just to note is different from just ponying up the dollars) is that the company understands this is bad. The goal of these efforts is to pacify real concern about the economic future of the industry, but these are all short-term smoke screens over an industry that, particularly in the United States, is in a real uncertain position.
If digital sales can see some bumps and if there are co-op alternatives to streaming like Resonate or fundraising like Ampled, then there should be some renewed discussion of such platforms. This moment shows us that whether through livestreamed DJ battles or concerts, there are plenty of ways of reorienting digital music consumption. Are those efforts at a sustainable scale? No. But neither is mainstream streaming and its pitfalls are already known. That’s why when iHeartMedia announced $250 million cuts, the company made sure not to forget who their main audience (emphasis mine): “We believe this substantial financial flexibility will prove a further competitive strength for our Company should the current economic slowdown continue for a prolonged period. With our experienced management team and leadership position as the #1 audio media company in America, we are confident in our business and continue our focus on driving shareholder value.”
Musicians? Nah. Shareholders? Never to be out of focus!
The Future of Music Coalition produced an extensive Q&A about the government programs that can help musicians. Unsurprisingly, layoffs are hitting across the music industry, especially in the live sector. A few weeks back, the Rhode Island band Downtown Boys collected hundreds of signatures to the US House and Senate to provide unemployment for gig workers, which was ultimately included in the bill. The last thing I wanted to note is that a lot of venues I enjoy in New York City have Patreons or other ways to support them, so here’s a quick list: Heaven or Las Vegas/Mood Ring, Good Room, Nowadays, Public Records, Public Records staff, and SISTERS’s staff.
6 Links 2 Read
Manufacturing Normalcy - DeForrest Brown, Jr.
A call for music workers to challenge normalcy, observe the gaps created by the coronavirus, and start demanding more.
A Moment to Rethink How We Support Music - The New Yorker
A large reason I put the newsletter on pause was to allow for this kind of deeper reflective considerations, as the entire industry has effectively hit the pause button.
ASCAP Delays Next Royalty Payouts and Warns of Covid-19 Impact - Music Ally
I can be guilty of focusing on the health of record labels to stand in for the entire music industry. Yet, ASCAP’s statement points to the fact that the coronavirus’ impact on the music industry is going to seep into many nooks (see: licensing in a world with delayed new scripted works), beyond just the declines of streaming numbers.
How Slowed + Reverb Remixes Became the Melancholy Heart of Music YouTube - Pitchfork
My favorite music trend in the last year got a nice write-up. The connection between this culture and DJ Screw is oddly funny to me, only because it’s so obvious that it almost feels easy to assume it’s not there.
People Are Paying Real Money to Get Into Virtual Zoom Nightclubs - Bloomberg
A very good deep dive into the world of Zoom raves. Personally, I’m loving this moment of collective live music experimentation, even though I hold little interest in seeing digital bottle service. I appreciate people teasing through the ways to make money, but it could’ve leaned a bit more focusing on community and would love a little more discussion of these kinds of spaces if they start to become semi-permanent spaces for certain music communities.
Angry Fans Say First the Concerts Were Canceled, Then the Refunds - The New York Times
I’m excited to dive a bit deeper into this next week but...it’s very likely that we won’t have large scale entertainment for the next 12 months. How companies and fans will adjust to this new reality will certainly be worth watching. I’d caution that looking at Ticketmaster’s recent choices around refunds tells me this will be likely brought to a courtroom, perhaps virtually, near you.
New link this week! I’m including the newsletter put together by the Art + Museum Transparency group, which covers the art industry with a strong pro-worker lean.
Art + Museum Transparency: The Newsletter
The Penny Fractions newsletter arrives every Wednesday morning (EST). If you’d like to support it, check out the Patreon page or follow it on Twitter. The artwork is done by graphic designer Kurt Woerpel whose work can be found at his website here. The newsletter is copy edited by Mariana Carvalho, with additional support from Taylor Curry. My personal website is davidturner.work. A list of my favorite 2020 albums, books, and mixes can be found here. My current job is Emerging Creator Lead at SoundCloud, so all thoughts here represent me, not my employer. Any comments or concerns can be sent to email@example.com.