Tag Archives: streaming

Music Matters in the UK

“The man that hath no music in himself,
Nor is not moved with concord of sweet sounds,
Is fit for treasons, stratagems and spoils;
The motions of his spirit are dull as night
And his affections dark as Erebus:
Let no such man be trusted. Mark the music.” The Merchant of Venice

To say that music is important in the United Kingdom is to understate things immensely.

Consider this:

“Prior to the Covid-19 pandemic, the creative industries added between £110 and £130 billion to the UK economy, supported over two million jobs and, since 2010, grew at nearly twice the rate of the economy as a whole. . . . The UK music industry contributes an estimated £5.2 billion in gross value added (GVA) to the UK economy per year, of which recorded music generates approximately £1.5 billion in retail revenues: a figure that is also growing year-on-year. The industry employs over 200,000 people, ranging from music creators (including over 50,000 UK artists) and their ecosystems, music venue and touring staff and employees of record labels, music publishers, music streaming services and collecting societies. . . . [I have no idea what a collecting society is, but I like the concept] Annually, the sector generates £2.7 billion in exports, and recorded music specifically generates £500 million in export revenues.”

All of that comes from a report conducted by Parliament, “Economics of Music Streaming.”

Think about that.

In the UK there is a recognition that there is a non-trivial number of citizens who make their livelihoods from music. In research conducted last year they discovered that 90% of UK festivals had been cancelled due to COVID and 93% of grassroots music venues were on the edge of shuttering. What’s more, they found that a quarter of people in the music industry didn’t qualify for Self Employed Income Support Scheme (a supplemental income program from the government, sort of like unemployment compensation in the US). And producers and sound engineers had lost an average of 70% of their income as a result of the socio-cultural-economic impact of COVID on the UK.

In the US the was the passage in December 2020 of the “Save Our Stages Act,” which provides $15-billion administered through the Small Business Administration, setup to provide six months’ of financial support to venues to keep their employees solvent. A good thing (although reportedly bolloxed in its administration at the start), but it is notable that the Brits take music so seriously that they have economic analysts looking into the impact on the finances of the country overall, as well as individual workers in the industry. Strange to think that Boris Johnson is a member of the Conservative Party. When he had an alleged conservative in charge of our government it resulted in little more than embarrassment, which continues today.

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Cars, Turntables & Physical Objects

Last week I had the opportunity to drive a 2022 Honda Civic. It was the top-of-the-line Touring trim. It is an all-new, 11th generation Civic. It has leather seats, Bose audio with 12-speakers, Apple CarPlay and Android Auto, an array of sensors for safety, moonroof, 180-hp turbocharged engine. . . and a lot more stuff.

It is really an impressive vehicle, and being a Honda Civic, I would imagine that whoever buys one is likely to have it for some years in reliable operation. A value play.

This morning I read piece by Jacob Heilbrunn in The Absolute Sound about his quest for getting a custom reference stand for his turntable. He contacted the chief engineer at a Buffalo, New York-based company, Harmonic Resolution Systems, about getting the company’s VXR stand. As things went, Heilbrunn obtained a custom VXR Zero stand.

It cost $52,000.

The Civic has an MSRP of $28,300.

I suspected that I was missing something.

So I looked at the turntable that Heilbrunn needed this very specific stand to accommodate.

A TechDAS Air Force Zero turntable.

According to Hideaki Nishikawa, who designed the reference turntable, “The goal of the project was to develop a truly groundbreaking product, building on our expertise and knowledge and incorporating new ideas and insights. To achieve this goal, the project had to be cost-no-object. And it had to have whatever technologies would be best suited for sonic performance, no matter how much it would cost.”

The result is a unit that weighs 727.5 pounds and measures 35.5 x 26.6 x 13.2 inches.

According to a recent review in Stereophile, the TechDAS Air Force Zero has a base price (i.e., there are models above it in the TechDAS lineup) of $450,000.

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The Black Widow Effect

This is not about music. At least not directly.

It is about performance, pay and distribution. All things that are absolutely germane to those who make a living via musical performances.

The first goes to the lawsuit filed by Scarlett Johansson (or precisely, Periwinkle Entertainment, Inc., F/S/O [which means “for services of”] Scarlett Johansson) against the Walt Disney Company.

Quick: Where is the Walt Disney Company as a legal entity located?

1. California
2. Florida
3. Delaware

Yes, Delaware. Let’s not lose sight of the fact that the entertainment business is big business so Disney, like a majority of Fortune 500 companies, incorporate in Delaware, largely because Delaware legislatively keeps its corporation statutes up-to-date regarding the world as it exists today, not at some hoary point in the past; it also operates a special court, the Court of Chancery, that rules on corporate law disputes sans juries.

(That said, the suit was filed in L.A.)

The opening line of the suit is worth pondering: “Over the past decade, Scarlett Johansson’s work has generated billions of dollars for Marvel Studios, and, by extension, its parent company, Disney.”

Billions of dollars over the past decade.

The lawsuit contends that her latest, Black Widow, would provide Johansson with money that would be based, in part, on box office receipts but the amount of those receipts was reduced because Disney didn’t just make Black Widow a “theatrical release” (i.e., in move theaters), but, on the day that it opened in theaters, made it available to subscribers of Disney+ (for $30).

Back in 2017 Johansson and Marvel Studios entered into an agreement in which “that guaranteed her a share of ‘box office receipts’” and “To protect her financial interests in these box office receipts, Ms. Johansson obtained from Marvel a valuable contractual promise that the release of the Picture would be a ‘wide theatrical release.’” The idea–remember, this is 2017–is that Black Widow would play in a whole bunch of cineplexes for what was an industry standard of 90 to 120 days, after which there could be other outlets.

In other words, she would make bank primarily during the time it was in theaters.

But because it was released on Disney+ as well, the number of people who would pay at the box office was reduced.

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In My Room: On the Sound of Music

Anyone can record a song from their living room and put it out. That over-saturation of music, it’s a good thing.—Zak Bia, Cool Hunting

Forget the big budget records, more and more music is being made by individuals in bedrooms, home studios, on a budget.—Bob Lefsetz, The Lefsetz Letter

The first quote is from a guy who has started his own recording company, Field Trip Records. The context isn’t so much about recording per se as it is about breaking artists. Obviously, last year was pretty much a wash in terms of what he calls one of “the best ways to break artists”: “through live shows and showcases.” So it was a matter of recording (“I signed this kid when he was 15, and he was doing all this on his own from his bedroom”) and getting the music out into the environment at large.

Presumably that is now much easier, although it is probable that given the number of people who were recording in their homes because there was little else to do after March 2020 there is going to be a tremendous glut of music to choose from. Which will either lead to people (1) accepting things that are less than first-rate because they are interested in anything new and different or (2) ignoring much of the available output, wanting only the best audio fidelity.

Which leads me to the point being made by Lefsetz. In his case he was writing about Spatial Audio on Apple Music. His beef is that existing recordings are being remixed via Dolby Atmos. According to the Dolby website, Atmos “It starts with the artist. Dolby Atmos technology lets them place each voice, instrument, or sound in its own space. Wherever you hear it, you’re in the center.”

The question at hand is whether the “artist” is involved—or even the engineer—in reformatting the music from its original format—probably stereo—to Atmos.

And these audio changes are something that Lefsetz decidedly does not like: “Actually, the more I listen to these Spatial Audio cuts, the more offensive they become. . . . . These are not the original records, they’ve been messed with, they’re not even facsimiles, they’re bastardizations.”

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It’s All About the Ecosystem [Money]

Because once you get in, it is ever so hard to escape

Apple Music recently released a statement about how it pays artists for streams, which positions the company as being more, um, generous than, say Spotify.

There’s this: “While other services pay some independent labels a substantially lower rate than they pay major labels, we pay the same headline rate to all labels.” Let’s face it, there are plenty of artists whose music you’re interested in that aren’t on the majors (a statement I can make with some confidence given that you’re on this site), so why should they get any less attention because of the company that their music happens to be distributed by?

This one is the kicker: “While royalties from streaming services are calculated on a stream share basis, a play still has a value. This value varies by subscription plan and country but averaged $0.01 for Apple Music individual paid plans in 2020. This includes label and publisher royalties.” Admittedly, you have to have one ginormous number of streams in order to have enough money to order a beer at your local bar.

But when there are other companies that are paying money at rates that are so complicated to work out that you might as well spend your time calculating a variant proof for Fermat’s Theorem, a penny is something that can be readily understood.

This gets into the tricky category: “Apple Music paid out royalties for more than 5 million recording artists around the world in 2020, over 1 million more than in 2019. The number of recording artists whose catalogs generated recording and publishing royalties over $1 million per year increased over 120% since 2017, while the number of recording artists whose catalogs generated over $50,000 per year has more than doubled.”

If we break it down it says there were four million artists on Apple Music in 2019, and now there are 20% more. But the part that is a bit obfuscatorial is the fact that while there is a large percentage increase in the number of musicians who have earned over a million dollars since 2017, not knowing how many made a million in 2017 makes that increase a mystery. That is, if there were 100 in 2017, the 120% increase isn’t a whole lot, which is the same case for the doubling of the $50,000 earners.

Continue reading It’s All About the Ecosystem [Money]

The Disturbingly Small Numbers

The $15 minimum wage is a contentious issue. The current federal minimum wage is $7.25 per hour. It was established in 2009. 2009 was Windows 7.

Yes, you’d think it would be time for a change.

According to the Economic Policy Institute (EPI), a minimum wage increase would impact the following:

• More than half (51%) of workers who would benefit are adults between the ages of 25 and 54; only one in 10 is a teenager.
• Nearly six in 10 (59%) are women.
• More than half (54%) work full time.
• More than four in 10 (43%) have some college experience.
• More than a quarter (28%) have children.

The issue here is one of people earning a living.

If we’ve seen anything in the past year it is that people who are working at grocery stores and doing food delivery services were putting themselves at considerable health risk. Odds are they didn’t want to. But it was their job and they had to do it. $7.25.

If someone works 40 hours per week, that is 2,080 hours per year. So at $7.25, the annual wage is $15,080.

And according to the EPI, were a raise to $15 per hour occur (it is worth noting that this wouldn’t necessarily be an instantaneous increase but that there would be a stepped approach, going to $9.50 in 2021 and reaching $15 in 2025) a full-time worker employed year-round would earn $31,200.

To put that into some perspective, know that the average price of a used car—remember, these people need to get to work in order to earn anything—is over $23,000. And that, of course, would mean the need for car insurance, on top of rent, utilities, food, clothing, etc., etc.

At this point—or far earlier—you may be wondering if you’ve accidentally stumbled onto a website dedicated to economics, not music.

Hang on. We’re getting there.

Continue reading The Disturbingly Small Numbers

Ain’t We Got Fun?

Edvard Munch, a Norwegian artist, painted The Scream in 1893. Fast forward 128 years and there could be the sound of a wail heard from the fjords: Jack Dorsey purchased “a significant portion” of streaming service Tidal from Shawn Carter for $297-million. One assumes that when you’re dealing with that kind of money “Jay-Z” isn’t on the paperwork. Carter bought what was to become Tidal from its Norwegian founders for $56 million in 2015. Lock, stock and smoking barrel for $56 million; a “portion” for $241-million more.

As you may recall, the plan that Jay-Z had when establishing Tidal was to get a group of musicians—including Madonna, Kanye, Daft Punk, Jack White, Beyoncé—and give them a piece of the action (~3%) in order for them to create Tidal-specific music. That way there would be a solid reason for fans to go to that outlet rather than other venues.

In terms of the subscriber base, however, Spotify is doing exceedingly well and Tidal, music catalog notwithstanding, is not sweeping away the competition for dollars and ears. Spotify, Apple Music and Amazon Music account for about 70% of the market, leaving the rest to others—and the rest isn’t just Tidal.

Dorsey, the man behind Twitter, is also the co-founder of Square, the financial services company that offers clever point-of-services devices (portable, pedestal-based) through which people buy things, as well as the backend software to make the transactions complete. Swipe. Tap. Voila!

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The End of Ownership: Material Gives Way to the Ephemeral

Here we are living through social distancing. Living through a period when we interact with people, primarily, unless those people are part of a small group we are confident of, via Zoom or Teams or from behind a mask, ideally six or more feet away. Masks and sweatpants have become increasingly important to people, the former because of the need to go out and the latter because somehow the “office” is something that is only evident from the waist up.

And when we have to encounter surfaces, there is a frantic look around for some means by which the object is sanitized or our hands are. Or both.

If we need stuff—like, say, food—then it isn’t a matter of just going down the street to the local bodega or hopping in the car and buzzing over to the supermarket. It is something that is carefully planned and executed. And while time has dulled the edge of the potential virus, there is still some hesitation regarding whether the objects should be brought in to the kitchen right away or whether those cans, boxes and bags should be permitted to settle for a period of time.

The material has become suspect.

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But it wasn’t COVID-19 that had the effect on the music industry in the U.S. that is unfolding. It seems that people have decided that when it comes to music, most are not particularly interested in any sort of ownership. The transient is sufficient. And when the numbers for 2020 are calculated, odds are that what occurred in 2019 will be nothing if not magnified.

In a report from the Recording Industry Association of America for overall economics of 2019, the trade group found “Total revenues from streaming music grew 19.9% to $8.8 billion in 2019, accounting for 79.5% of all recorded music revenues.”

And more telling: “The streaming market alone in 2019 was larger than the entire U.S. recorded market just 2 years ago in 2017.”

The biggest chunk of the monies in 2019 streaming were for subscription services, accounting for $6.8 billion. That in itself is 61% of total recorded music revenues.

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The Importance of Artifact

The reports of the existence of the “last” Blockbuster store in Bend, Oregon, is treated as though here is something that is completely quaint and old-timey: “Yes, son, way back when we used to go to a store and rent movies on discs. And sometimes we actually bought them!”

And on the subject of buying discs, while Best Buy, which had been the #1 music retailer, had announced that it was going to stop selling CDs, it has modified that. It will continue to but with a greatly minimized selection; there will probably be more selection of Keurig coffees.

In this era of downloading and streaming, the notion of buying physical artifacts like discs is becoming increasingly unthinkable.

While vinyl discs are making something of a comeback, you rarely hear any arguments about the fidelity of the sound as being a reason for this occurrence. Perhaps that has something to do with the fact that many of the purchasers of vinyl probably have some crappy Crosley record player upon which the latest novelty is played. Sure, there are audiophiles who have never given up the grooves, but they’re becoming like philatelists in the age of email, which has then given way to texting.

But a question that seems to go unasked is who benefits from this? And I would argue that it is the purveyors of the digitally based music (or video) products.

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Listening to Gresham’s Law

Back in 1558, Sir Thomas Gresham, who was the financial agent for Queen Elizabeth I, articulated what was to become known as “Gresham’s law.” The law has it that “bad money drives out good.”

He was talking about physical currency.

One way to think about this is to take a quarter out of your pocket (assuming that you’re reading this in the U.S.; if not, it doesn’t make any difference although it will be less physically obvious).

When you look at the coin edge-on you see a sandwich of materials. There is a copper center covered by two shiny layers.

Said quarter is 91.67 percent copper. The shiny stuff is nickel and it makes up the remainder.

Prior to 1964 quarter were made of silver.

So in Gresham’s law, the “bad money”—the metal sandwich—drives out the “good,” the silver, which has a much higher value in terms of the metal alone. Almost as soon as the cupronickel quarters appeared the silver quarters disappeared. Some were saved by coin collectors. Some, no doubt, were melted down (which, by the way, is illegal) and sold as metal.

What does any of this have to do with music?

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