Hello, I hope y’all are doing well this week, cause I want to start off with a little newsletter update. Last week, I agreed to start working on a really big project that if all goes well will eat up the next couple years of my life. It’s for that reason I’m going to stop this newsletter at the end of the month, so if y’all could cancel your subscription that’d be great. (Also if you like a refund I can also provide that for anyone that just subscribed.)
I’ll talk more on the project next year when I can but I wanted to say so thank you so much for the initial support. Another reason is I'd like to focus on making the regular Penny Fractions newsletter the best it can be and I feel I've slipped a little due to moving, being sick, and getting a little over ambitious in this project. The regular Wednesday newsletter isn't going anywhere but for the moment at least I'm going to put this on pause. Again thank y'all so much, I can't say that enough.
Music piracy never died. The opposite is in fact happening, as earlier this year the group MUSO reported that music piracy increased year-over-year. Yet there are stories that say how streaming music and the availability of services like Spotify, YouTube, and Apple Music are killed the need for piracy. Notsomuch. These platforms are indeed successful and are pushing people towards paying for music but they alone are not causing music piracy to decline.
This week I wanted to skirt around the topic of piracy is because I think it offers a glimpse into what will be future concerns about the health of music streaming, once these services start to reach peak users in large markets like the United States. The other reason is that conversations around piracy remain interesting to me, because it re-frames an issue of record label greed against the consumers. That people soured on the record industry in the late 90s and early 2000s in retrospect makes perfect sense as its hard to have a billion dollar industry sue and attempt to take down its customers ever be seen in a positive light.
Yet, what exactly does piracy mean in 2018? That’s kind of the fun part of internet piracy in 2018, where at one point it meant sites like Napster, BitTorrent, or an endless number of file-sharing sites. Right now one of the biggest ways of music piracy builds directly on top of legal streaming services. YouTube and SoundCloud rippers are highly popular ways of getting access to music, because one can just plop a link to get back an MP3 that is now theirs, can’t be tracked, and can proliferate in endless ways. I mention that it can’t be tracked, because of the awkward trade-offs the music industry made in surveillance music streaming is that the value of a listener is either through direct subscription payment or through tracking every song stream and using that contextual data to sell advertisements. This in turn makes an MP3 a direct challenge to this particular model.
Earlier this year the Bronx rapper A Boogie Wit Da Hoodie put out a number of songs on SoundCloud. They weren’t released anywhere else, though obviously one could find them on YouTube, and I decided I didn’t want to chance he just one day pulls them from the service and went to a SoundCloud ripper to make copies. A few of these tracks are my most listened to music of the year but there is no way SoundCloud or Atlantic Records, A Boogie’s label, would know that.
Where in the early 2000s record labels and artists could make an impassioned plea for music fans to not simply avoid putting money in the pockets of their favorite artists by not buying a CD. That doesn’t quite hold up as well in 2018. Artists constantly complain about just how little money they make from music streaming and the fact is a fan the connection between my money and the artist is painfully abstract. Either my subscription payment is going to Spotify, placed into a giant bucket, and then a little bit is given to my favorite act. The other option is that Spotify, YouTube, or whoever is using all of the data they have on me to better target ads that hopefully will appear with my favorite artist’s content and they may receive some small cut of that money. The two options show just how abstracted the fan to artist relationship is in 2018.
Spotify’s Family Plan Stress
In August Billboard reported that music execs were concerned about how much money Spotify was making per user and zeroed in on the proliferation of family plans. The Swedish company not so subtly realized they may need to do some work in this space and started testing out GPS restrictions for family plans. Quartz reported that users of the service were upset and Spotify backed down from the test program for the moment.
This in a way continues from what I wrote earlier this week about Tencent but Spotify’s issue is that there are two primary ways of making money for the company at the moment. They got subscriptions and advertisements. The issue with advertisements is that digital audio ads are still maturing and the money they’re making there isn’t offsetting how much they must pay labels. Then with subscriptions the issue is potentially that there may be a real limit on the number of people who will pay $10 a month for music. Billboard broke out these numbers in their report, as always emphasis mine:
Industry sources tell Billboard that nearly half of global streaming subscribers are on family plans, which Spotify, Apple, Pandora, Amazon and YouTube all offer for $15 per month, for up to six family members. Analysts say the average family plan has three to four subscribers, meaning each participant saves an average of $5-$6 per month, and family plans account for at least 30 percent of total new subscriptions for Spotify.
Not exactly a great sign.
This is why I started this today off looking at contemporary music piracy. Online piracy is just a response to capitalism, the same way that VHS recordings offered an alternative to paying $20 for a couple episodes for a TV show on VHS or a movie. This is also how one should read the issue of family plans. The issue isn’t that too many people are using family plans; the issue is that music streaming is still too expensive and find a way not to pay the monthly music tax. The issue is that Spotify, like major labels two decades ago, is attempting to protect their precarious way of making money instead of taking bigger steps to find new directions.
Two Weekend Reads
I was going include a few news stories that highlighted different sections of this report but instead I’m just going to link to the full thing right here. There is some stuff on piracy, the Chinese and Indian streaming market, and just some good overall data on how deeply streaming is integrated into modern music consumption.
Genius Is Bringing Lyrics to Apple Music But It’s Also Sticking With Spotify - Music Business Worldwide
This isn’t super exciting but I do want to stress again just how much Apple Music is connected to the rap music and culture at the moment. I know RapCaviar did a good job of marketing itself as shifting the culture but that was mostly smoke and mirrors and mainstream rap’s streaming home is Apple.
The Penny Fractions artwork was done by graphic designer Kurt Woerpel, whose work can be found here. Any comments or concerns should be sent to email@example.com.