I just read a great article in "Bloomberg Businessweek" on Adobe. It used to sell its Creative Suite, which includes Photoshop and Illustrator, for $1300-$1600. But then it switched to a subscription model and its user base went INSANE! They started a Change.org petition, 50,000 people signed it. And in the following year, 2013, Adobe's revenue shrank 8% and was flat the year thereafter. But last year, revenue was $5.9 billion, up from $4 billion in 2013, and 80% of that came from subscriptions.
You see Adobe was sick of reinventing the wheel. Having to come up with whiz-bang products every year or so to convince people to fork over that $1300-$1600. But if they could get them to pay $50 every month… Voila! Revenue increase! Just like the music business.
Now if someone buys a CD or a file, they can play it to their heart's content and the purveyors, the label, act and writers, never get another penny… FOREVER! Sure, you get a lump sum immediately, but Uncle Sam takes a tax bite and you think the gravy train is gonna last forever and you end up broke. But what if you could get paid every time your track was listened to for the rest of your life, and beyond. Wouldn't that be great? They call that streaming. And the key to streaming is the more people who subscribe, the more revenue goes up. So if we could just force people to sign up for streaming services…
There's no reason to sell CDs, other than to generate revenue and placate rearguard consumers. And in business, when done right, consumers are always behind the curve. If you're following your consumers, you're screwed. You've got to get ahead of them, confound them, that's what great business leaders do. First consumers are confused and angry, then they embrace that which they did not know they wanted and you become RICH!
You can't even find a CD drive in a car. My two computers?? No CD drive. But some jerk boomer manager insisted on sending me his act's CD, he refused to put the music on SoundCloud or Spotify, he needed to feel good about sending me physical product, got angry when I said no, BUT WHERE WAS I SUPPOSED TO PLAY IT?
Oh, I've got a CD player at home, but I'm rarely there, you've got to make it convenient for me. And I tell you this story not to denigrate this jerk, although his hubris pissed me off, but to tell you you've got to get out of the hole you're in, embrace the new paradigms, it's where the revenue comes from.
So we stop making CDs in three months. Give it six. OF COURSE WE'RE GONNA LOSE REVENUE! But where are those people gonna go? Do you really think they're gonna stop listening?
And same deal on files. You can't even buy an iPod anymore. MP3 stopped supporting the technology. They take up too much space. Don't tell me you need them in case you're out of cell signal range, that just demonstrates your ignorance, you can synch thousands of tracks to your mobile device, as long as it has juice you can listen in the Sahara or at the top of Everest.
Once again, we're fighting ignorance, we're fighting history, we're moving our entire audience en masse into the future, where is here NOW!
Believe me, when they can't buy CDs or files, people will check out streaming services. I don't care which one, Apple, Spotify, Tidal… They'll want in on the action, the same way everybody signed up for AOL in the nineties, the same way oldsters embraced Facebook. And with a larger subscriber base, more money comes in! As for Spotify's free tier, the only reason it exists at all is conversion. Do you think rights holders like free tiers? Of course not, but Daniel Ek demonstrates they cause conversion to paid subscription. And, the free tier on mobile, the platform of choice, is crippled, so it incentivizes conversion. And once you're hooked…churn is low. You get addicted to hearing all the music.
That's another thing that gets Adobe customers hooked. They don't have to wait a year for new features, the software company rolls them out on a regular basis. The same way music is released on a regular basis. When it's all available you get exposed to new stuff, and embrace it. And want to listen more and go to the show and buy merch and…
This is not a new paradigm in the music business. It's killed old formats on a regular basis. Played your cassettes recently? And please don't bore me with vinyl, that's a fetishistic sideshow. Keep making it, I don't care, it doesn't affect the business. As for sound quality, it keeps improving, you can listen in CD quality on Tidal and Deezer Elite, assuming you're willing to pay for it, but expect prices to come down and for more outlets to offer it. So if you're complaining about sound, you're either cheap or ignorant.
You want revenue to go up, don't you?
This is basic economics, this is Digital Disruption 101. You forgo profits today to reap rewards tomorrow. Getting that ten bucks from more people every month, whew! Think of all the cash!
I implore everybody in the rights business to take this seriously. To kill files and CDs. When did this business become so rearguard, so fearful, so safe? Used to be music was the bleeding edge, now you find that in television, which takes much longer to make. When you lead, people pay attention, and they PAY!
"How Adobe Got Its Customers Hooked On Subscriptions – The switch to the cloud was risky, but revenue is way up": bloom.bg/2sMfJq7.
You nailed it, Bob. Just why I've been raving about streaming for years.
If you believe in the music you're creating or the artists you're working with, bet on the upside. Streaming royalties will, ahem, stream in for decades. For as long as people love and listen to your recordings.
Song copyrights have trumped recorded music copyrights in value for ages. Now, perhaps, investors will value recorded music closer to how songs are valued. This is good for everyone who creates, works with, or just loves music.
Glade Park, Colorado
As a freelance music journalist for a raft of print and online outlets, I generally receive 10-20 album promos a day. 99% of these are digital. The most convenient servicing platform is Haulix, but occasionally I get a SoundCloud link or a WeTransfer download. Any of those are fine with me, but the reality is that I don't have time to listen to even half of those promos. So the publicists who make the process easy on me with digital album servicing and informative, well-written artist bios are the ones whose clients get my attention. A great way to insure that I'll never listen to your band is to send me their new album on CD – it won't survive the journey from my mailbox back into the house.
Just two things:
1. I'm still advising my students and anyone else to make CDs, if only to sell at gigs. Impulse buying still happens. You don't have to press up very many, just 500 to 1000; it's not that expensive – less than a buck apiece. Make sure the cover is cool and maybe include a bonus track they can't get anywhere else. Also include a booklet with photos, extra info, etc. There are still fans out there who want to have something tangible. There's no reason to leave their money on the table.
2. In the software business, it's obvious that the subscription model has its advantages. Even Pro Tools offers it as an option. A lot of the people that I know wish Adobe would still offer both a subscription and a buyout. My students sign up for just the Photoshop version for $9.95/month (Academic price), but when the year is up and the price goes up, most of them drop it and go to Paint Shop Pro or Affinity. I'm trying to encourage people to pressure Adobe into offering more options for the subscription, for example, a lower price if you only want Photoshop, Illustrator, and Dreamweaver. Or Photoshop, InDesign and Lightroom, or any combo that fits your needs. I have the whole package and I resent having to pay for a lot of software I don't ever use.
And BTW, I also urge my students to record their products in Hi-res digital and post them on HDTracks.com and/or Prostudiomasters.com
Microsoft has done this with Office too. My beef, as someone who does actually like Office, is that I don't feel like the features/upgrades are happening enough to justify what amounts to an annual increase over the standalone purchase of Office. If you want to charge me more than I was paying before, fine, but you better make it worth my while. Microsoft to this point has not.
Spotify seems to be doing better on this front. They seem to be adding features and functionality regularly enough and the monthly price is reasonable too.
Go back to vinyl for albums!
Take the record company greed out and the price is actually pretty good.
Funny, I was just asked by a manager that knew I knew you, he asked me if he should send you a cd. I told him it was his funeral….. lol
P.S. Do people forget that they stopped making cassettes and vinyl, and then everyone bought cds. Do people not remember Blockbuster Video? Netflix got out of their own business, remember, they used to send you DVDs in the mail. Imagine if Blockbuster had followed suit. No, they held on to bricks and mortar's. And we know how that worked out. I guess I'm just a 59 yr old millennial. Funny though, I saw a post on IG today of a young person posing with their cassettes. Apparently they're cool now. Break out those Sony Walkmans!!
Further to your point, these major labels own almost ALL of the content people desire. Just like Adobe, they own all the software – the music – people want in their lives. Those consumers are fans, not of the companies themselves, but of the creators. Get out of the way and create the easiest path for listeners to find their music. That's why radio and the Internet have been the greatest medium in terms of music discovery.
So true…..the only exception to this is at the merch table, and it has nothing to do with a music delivery medium. People will line up to buy vinyl that will never see a turntable in most cases…..it's like buying a souvenir program at a big sporting event. It's a momento of an experience….the music is just a cover story. That's why smart artist create their vinyl packages with that in mind….colored vinyl, cool packaging, lyric books, etc. At smaller shows it also functions as a ticket to say hello to the artist for a few seconds…
Adobe's been killing it since they switched to their subscription model. Frequent updates, and every time it's something I can take advantage of right away. Sometimes they're small updates but it adds up FAST. And Adobe jumped in all the way, which shows. They also gained customers because it's easier to dip your toes in – 30 day trial, then a cheap $50 for ALL their apps. It lowers the barrier of entry so we get more voices able to jump in. It's great.
For audio production there's another company doing the subscription model right – Steven Slate or Slate Digital. (He's got some branding issues to work on). But every couple of months you get new plugins. Cheap monthly rate vs hundreds of dollars for a one off. It's interesting to see people fight the tide, but everything is moving that direction because it's working.
Youtube and Spotify yank tracks you might want to hear all the time. I'll continue to hoard sound files because I own them and no one can take them away.
Don’t know if you have commented on this already, but just watched this and thought it was great. http://www.towerrecordsmovie.com/?utm_source=phplist5901&utm_medium=email&utm_content=text&utm_campaign=Re-Stop+Selling+Files+And+CDs
They made a great point about how the record companies decision to stop selling singles (to make people buy an $18 CD) actually opened the door to Napster.
And yes, I streamed it on a subscription platform. Didn’t pop it in the BluRay player I no longer have 😉
Life is Beautiful
No additional work is needed to sell downloads when the same music is being made available for streaming services. To not sell downloads simultaneously isn't disruptive, it's foolish. CD margins are still high and it is easy to make as little as 500 or 1000 if that's what the project called for. Vinyl – it's been a a huge boon for our business. Should we stop making records too? Streaming is not being neglected in the interim and the day likely comes when that is all that matters. When it does, these same people who are buying downloads and CD's and Vinyl will pay to listen to the same songs on streaming services. Just like you bought your favorites on every new format, they will too.
Varese Sarabande Records
Let the people have it in whatever format they want, Bob.
I am a geezer. I have one foot in the grave. I might last a decade. I might last two.
I have trouble recollecting the music I want to hear.
But fortunately I have a great CD collection on the wall. Old vinyl too. I browse it. Oh, here's a recording I forgot all about! Haven't heard it in years, let's give that a spin…
Ah, now I remember…
Label's would also save time & money not having to print en masse CD's / CD booklets / CD packaging / etc.
I think some artists love the idea that their music will be on a physical format forever but it's just waxing nostalgia really… and nostalgia only is not a good reason to keep things around.
One small bone to pick: You wrote: "…You can't even buy an iPod anymore." Not a really good one, true, but if you visit Apple's web site, they are still selling the Nano for $149. And the Touch for $199.
They are just housed under the Music tab now, one level down.
Every CEO in the music business should circulate this email internally. But the good thing is many movers and shakers already embrace this future. Kind of like Trump derailing the Climate Change accord, most future-thinking business people will ignore it and embrace the future and do what needs to be done. Using the same analogy, one can say that insisting on CDs is like believing digging for coal is the way to go. (I bet Trump still uses CDs)
As an artist manager I deal with the Majors on a daily basis and we don’t talk about CDs any more. The whole strategy is towards streaming, with Spotify at the centre and of course a healthy dose of Radio (if you can get it) and Live strategy to give the campaign body and soul. CD piracy killed music markets such as Brasil, which is now transforming again into one of the world music superpowers. Thanks to streaming.
Edo Van Duyn
I signed up for Spotify the instant it was available, because it is so much CHEAPER than buying CDs or files.
The problem with Adobe's model is that I was perfectly happy with my 5 years-old versions of Photoshop and Illustrator but now they're gouging me at $600/year to get a version that will work on the latest Mac OS.
It's only a matter of months before a competitor eats their lunch here. If Adobe is smart, they'll use that 47% profit boost to cut the price in half and keep their user base stoked.
Photoshop is no longer a rarefied product for pros — it's a basic toy for every kid that wants to crank out instagram memes and profile pics. If the kids can't afford it, Clayton Christensen taught us that the scrappy little programmers will build simple tools that do the job better eventually and cost way less.
Yeah Adobe has the market cornered this year, but they're writing their own obituary. And the writing on the wall is their atrocious customer service and draconian cancellation policies.
So yeah, subscription is the future, but Adobe is not. They have a lot to learn from Spotify.
Cheers, and thanks for the great thoughts as always.
Of COURSE revenue went up – they took away CHOICE! And America is founded on choice – the choice to not be told what we could or couldn’t do. By removing CHOICE from the equation, Adobe left users with no option. And having no option is just….Unamerican.
Join the revolution Bob, we have great Tea Parties.
Director of News & Programming
Talk Radio 1170
Been telling bands for years to stop pressing CDs… mainly because most end up unsold in their closet anyway… but I still consider them a premium product, especially at our merch table. The dance to unwrap, sign, and take a pic with fans at shows… it's worth it… since we sell them for $20.
… that being said, many buy it on iTunes and have some music streaming subscription as well.
Producer | Mixer | Engineer
Bob I can't agree with you more. I am a 53 year old music junkie who loves vinyl but my go to is streaming. Yes I was converted from the free model on Spotify as I did not want limits. The convenience of listening to whatever I want whenever I want it is the key and I don't mind paying $120 a year for this. I have discovered more acts through streaming than ever before and I can listen to all of the classic acts that I love. We oldsters need to get with the program…and yes I am talking to you Bob Seger!
""As a business move for them, I get it," he says. "But you can’t get off. It’s like they’ve hooked everybody on digital heroin, and you’re gonna be on it for the rest of your life.""
That's a brilliant analogy – heroin is fucking amazing then it ruins your life and kills you.
Creative Cloud has been 'embraced by users' in the same way Office365 has – you basically give people no choice and then pretend as though they like it. It's an abismal deal for consumers and everyone knows it.
You are comparing a service that has opened people up to millions of new artists for $10 a month to one of the worst deals for consumers of the 21st Century.
tell it to Adele
Yup – streaming kills CDs & Files dead! And we want em dead.
I was just about to make more CDs for
my band's upcoming shows too…. but you've convinced me not to.
What a load of crap. There's plenty of people who want to own physical media. Streaming is for disposable rap and pop for the unwashed masses and plebs. In one ear and out the other. I have a CD player in house, in my car, in my laptop and plenty of other people do.
You are, as usual with this stuff, spot on. I became a paying customer with Spotify a few months ago. I still cant get over the fact that every time an artist releases a new recording, I can have it immediately on Spotify. Sgt. Pepper’s 50th Anniversary release, no problem. The new TajMo release from Ken Mo and Taj Majal, no problem. BTW, you should check that out – very good.
Point is, if I hadn’t read your harping for months about Spotify, I wouldn’t have tried it. So thank you.
one word: patreon
We hear what you're sayingbut what is your answer for Indie artists who offer their music on their own sites or blogs?
This is why I subscribe to you Bob. Spot on. It's scary but we, artists, have to think forward.
Please consider one critical thing that might add to the discussion.
Relentless subscriptions auto-renew and become more like a escalating toothache than an experience one can cherish. Adobe and Microsoft’s brand-hatred at street level is off the charts for this very reason. Ask around.
Subscriptions–––part of the future indeed–––ultimately create this very thing; brand hatred. The opposite of the intended effect.
I know vinyl drives us all crazy, but consider this: one and done. You buy it and the purchasing experience is joy manifest. Then, you listen to it when you want….or never. But you have, in your hands, a physical object that memorializes the shit you love.
Streaming is like pornhub versus of the gal you/we all love on the couch watching netflix; titillating, but never satisfying….pass the popcorn honey. What’s better?
Alas you are right about these trends, but an old expression comes to mind: watch your head, we’re lowering our standards.
I agree with CDs but not files.
First, the "rights" people deal with files, all day long. Pitching, placements, and especially for post.
It's efficient, some replacements for TV or ads happen in hours, shareable across any user (no matter their preferred streamer- if any), and of course, cheap.
It's also how we do music today. At every step, different files (wav, aif, and yes mp3) are used to demo, write, produce, collaborate, mix, master, and (oh yeah) eventually upload to those myriad of sites – with different file standards for many.
Files will be with us.
Files, paradoxically, are indeed the very cogs that drive streaming.
I hope you heard a great song today,
Michael St. James
I just moved and I rounded up eight of those big CD books that hold 120 CDs each. I don't know what to do with them! I listen to everything on Spotify.
So I really want to stop buying CDs, but that's the only way you can get the liner notes! Yes, I'm one of those people who reads the liner notes backwards and forwards. That's how I discover other musicians and songwriters, learn who wrote my favorite songs and played the instruments. What was that weird sound on track #5? Lo and behold, it's a glockenspiel. The backup singer on track #3 sounds like Patty Griffin. Yep! That's who it is.
I wish the artists would post their liner notes on their website. It would generate more traffic and who knows, I might buy a t-shirt while I'm on there.
Spotify takes in hundreds of millions of dollars each month and pays artists half of a penny per stream. Half.
You've solved it Bob. Congrats.
Stream everything. Pay nobody. You solved it bro.
I just hope musicians can afford to scrape by long enough while getting fucked over by streaming services in order to make more content.
Solve that riddle Bob.
I'm fine with everything your saying. The issue I would take is if I need to hear a specific song at a specific time for whatever reason that's NOT on a streaming service. Or as a DJ I need to play songs, at the ready, at an event. Or I want to make a short video of my kids with a song in the background. Or need a clip of a song for a project. I can't do any of that, and things I'm not even thinking of right now, with streaming.
Don't get me wrong, streaming def has its place (road trips, at the beach, bike rides and such – casual listening for the casual user) but for that I'm fine with my lifetime Sirius subscription. For the other stuff I still need files. Until there's a solution I can't fully jump in.
So right. Know what the largest record label is in terms of revenue? Tunecore.
– B. Bremer
Remember when Netflix used to mail DVD's w return envelope?
Bob, I agree with your big picture assessment of who now owns the music business—at least from the popularity/grand scale perspective.
However, I’d rather have the kind of connection I have with tens of thousands of “alternative” Millennials like the one below, who really inhabits the same space today I did in the 1970s….when “our music” was NOT consumed by the majority of young people…
These young people who don’t consume music based on popularity are the ones I’d rather reach….
Subject: A Thank You and some photos of my "Fremer Records"
I was going through my collection just last night, and was thinking about how I got introduced to all this music, your radio show, and just how much music you personally introduced me to over just the past 2 years (either through the site or the radio show – rest in peace!). I'm in my early 30's and inherited my grandfather's Linn Sondek LP12 from the early 80's. Just 3 years ago, I only had maybe 10 records to my name. Since then my library has exploded, almost entirely due to your recommendations and your radio show.
My absolute favorites are the numbered Ferit Odman (never would have even known about that or what AAA meant without your guidance), Joan Armatrading (introduced a lot of people to her), the signed Sophia Pfister (again, so obscure, but once I saw your youtube video, I knew I had to have it), and rescuing the Vanguard folk song box set from a trash pile. I never would have pictured myself a Clapton fan, but Slowhand and I Still Do are in my constant rotation.
I just wanted to say thank you for everything you do, it has had a profound impact on my music, my awareness, and my life. I know putting together the radio show took a ton of time and may not have had an immediate payoff. So I just wanted to reach out and show you that the videos, the mentions, the reviews – all of it has a far reaching impact on someone like me. So thank you very much.
I've owned a CD/DVD Manufacturing business for over 20 years. The writing was on the wall in 1999 when Napster came on the scene. The nails were in the coffin when Spotify became a household name. I've embraced file sharing and streaming immediately but have kept the business open and have watched business dwindle year after year. The only substantial business that comes through these days are from touring artists and churches. There's just enough business for me to keep the lights on but, out of necessity, I took on a career in real estate 4 years ago and have branched out in my new field (investment properties and assisted living facilities). No regrets. It turns out I love what I do now…but I miss the days when our replication machines were literally running 24/7. Having a small role in helping thousands of artists in the creation of a tangible product has been a thrilling and rewarding ride. Alas, I can't even remember the last time I've purchased a CD…
Not a bad theory at all. That being said getting everyone to agree to stop making CD's, Vinyl Records and selling files? It's going to take a mighty, mighty long time. A hell of a lot longer than the 3 – 6 months you are proposing.
Add to that, that all the manufacturers of CD Players and Turntables that would be calling for your lynching and that of everyone working for labels who agreed to your theory and I think you are pushing shit uphill. It's an interesting theory and I think you may just be onto something there, but unfortunately I think it would take way too long for everyone to agree to it by which point the ship may have sailed.
So here's the catch 22. Publishers, sync agents and music supervisors request UNRELEASED and UNPUBLISHED tracks. But if no one can play CDs and only want to listen on Spotify (which counts as a release) how the hell are you supposed to get new music out there?
Totally agree with the fact that moving listeners to streaming services will lead to higher revenues for us musicians in the future. But perhaps a lot of cd buyers are already listening to streaming services AND buying CDs and vinyl on top of it because they are buying them for a totally different reason… one you cannot get from an electronic file. It's what I've found with the people purchasing CDs of my own music – they don't buy to listen – they buy them to hold something tangible in their hands, something physical, something else created by the artist that contextualises the music…Something that looks good that they can decorate their living room with, put on their coffee table. It's something else that's cheaper to buy than a t-shirt that you don't have to worry about fitting (at least cds are). It's just another form of merchandise and feels way more authentic for us to make than a coffee mug or branded USB stick.
And perhaps rather than reducing streaming numbers, CDs maybe enhance them (especially for smaller emerging artists) – an affordable, physical memoir (at $5 or $10) people can buy when they see a new band street performing or at a venue, that they don't throw away when they get home – they tweet and instagram a picture of it if it looks good … and then follow them on Spotify.
Even more reason for artists to put time into their artwork and merchandise!
Adobe was not the first, nor will they be the last to embrace the subscription model of revenue generation. Seems like every company under the sun online – Amazon, Microsoft, Blue Apron, et. al. – have embraced this business idea. We have become a nation of renters now – of services, utilities and the like. Ownership of anything is now a bad business idea. It's all about the cash flow! Experiences are the only things (can an experience be a "thing"?) worth owning these days. Very surprised more people haven't figured this out by now…be well!
We've got a p/t employee that uses the Spotify free tier and it drives us crazy. I'm constantly offering him my phone to make it stop. He doesn't know it yet but the next paycheck comes with
a Spotify premium 'monthly extra' and it will be worth every penny.
Bob, I know you meant it as an example, but even seeing Adobe mentioned in this context makes me INSANE. I am one of the people who depend on these programs for my (freelance) livelihood. We freelancers have uncertain income. And when I am not booked/working, I still have to fork over $50 every month. That's $50 for programs I am not making use of because I AM NOT WORKING. I should send you a selfie of me opening my credit card statement every month to see that charge. It's not pretty.
You make good points, but I still like CD's. I have the nice audiofile system, appreciate the non-compressed music and the dynamic range. Even though I have the ears of a Fifty-something, I still hear the sonic difference between CD's and compressed music. I realize I'm the dinosaur, but not so dinosaur-like that I'm jumping back to vinyl like the new-Gen seems to like. I'm sorry, I was so happy the day that clicking, popping and degradation associated with vinyl went away. CD's at the time were a godsend.
hi Bob – long time no talk! 3 years ago I started my 2 songs a month club (which is subscription-based model), and while I have only about 200 members, I make more a month now than from monthly sales in the past because several people choose to subscribe at higher amount (to help support my music, which is lovely, generous and incredible).
It has brought me closer to my core fans and it's been amazing.
Big Russian hug,
I can't get My music to play from my library even downloaded without wifi or cell on Apple so Everest will not work
Thanks for the inspiration Bob. I just finished Kickstarting a cd and decided to make it available digital only after the initial Kickstarter release. It worries me a bit. But I agree with your conclusion.
Regarding your last letter…
The problem w/ hard drives and memory cards is that they may always at any given moment be corrupt and stop functioning—all information may be lost! The data may be recovered or not.
Yes, one can make backups (on storage websites or in email boxes, for instance), but physical backups (on CD or DVD) may always be useful.
I'm referring to blank CDs/DVDs, but also music albums and singles, concerts, movies, etc. sold in those formats. Some people (especially in Japan and South Korea) still appreciate physical albums and singles, booklets, artwork, limited/deluxe editions.
And yes, the CD and vinyl sound quality is much better.
Listeners may use streaming services more and more, but to completely and totally stop sales of files, CDs (and perhaps even vinyl) seems more impractical than not. Why not give music consumers the choice?
And w/ streaming, there may always be interruptions (even w/ a fast connection). Playing the CD, vinyl or the downloaded file may, depending on the circumstances, be more practical.
Yes, concerts earn money, streaming too, but I still see nothing wrong w/ CD/vinyl/file sale. Once again, giving people all of these options is the best route to go. The simple fact vinyl is back proves this point.
I agree 100% in the long run, but there's still a strong argument to be made for CD's on the tour circuit…..high margin souvenirs. And they count towards chart placement.
Revenue is up because there are more amateurs playing GarageBand Photoshop.
No pro I know uses the rental. I own it.
Ephemeral usage is passe. I want the object. I trust nothing less.
"Can Spotify crack CD-loving Japan?" Huge fan of your newsletter, reading out here in Japan. I’d be curious to hear your take on the market here when it comes to this…!
SMASH Corporation, Tokyo
I manage a young band from Memphis called Southern Avenue. We just released their debut in Feb on Stax (Concord), the first Memphis band signed to Stax in 40 years…but I digress.
I agree with you 1000% on streaming. I'm all in on Spotify with a family plan…plus use Prime Music. Do I wish my band got paid more from their streams? Sure…however I'm way more pumped that people are listening to their music. A few short months ago they had nothing on the streaming platforms. Now nearly 30k people are listening to us every single month on Spotify! How could that have ever happened before????
RE: Physical…we still need it. While I hate "stuff" and I've purged my own collection of thousands of discs in the last seven years, fans still want a souvenir at the show. The band signs CDs and LPs at every gig and makes personal connections with everyone at the Merch table.
Are physical products a thing of the past? Maybe…but they cover the cost of our hotels and gas every night making the grind of 24/7 touring feasible.
Hope you are doing well. Keep on keeping on!
Some of us like owning what we pay for. Some of us love opening a fresh, new album and reading the liner notes. I'm not a boomer, and I make records even when it's not profitable for me to do so because I treasure art over commerce. At what point in your life did you lose your appreciation for that? Walk into Waterloo Records in Austin any day of the week and you'll see people checking out with piles upon piles of CDs. Love your articles, but I'm tired of these constant tirades against physical media. I'm glad you like Spotify… I like it too, mostly… but it will never be as fulfilling as the joy you feel when tracking down an out-of-print album that you've always wanted (and I own scads of those that aren't on Spotify). You're yelling "fire" into an empty theater on this one, Bob.
This is satire surely? What about CDs as a gift / memento?
And yet I love playing high res music files in 24bit 96 khz or DSD format.
China produces beautifully sounding high res music players for somewhat over 100 dollars. Probably a fetish too. And indeed I am a baby boomer.
I tried to enthousiasm my children but to no effect 🙂
PS I must admit lossless streaming services do sound great too!
A very apt analogy between Adobe and music streaming. The only difference is that unlike a lot of music, Adobe's products are must-haves.
I was an early adopter of Spotify. And I sing its praises regularly. But there’s a small dirty detail that gets left out– regardless of how many songs and playlists you download to your mobile device, the app is only viable in territories where Spotify has negotiated licenses. Admittedly, this covers the vast majority of the western/modern world (and probably 90% of Spotify users).
But I’ve actually been a few places where the app won’t allow me to hear the songs i’ve downloaded due to territorial licensing issues. It hasn’t killed me so far, and I’ve managed to survive for 2-3 days without my tunes. But it has the same effect as “range anxiety” on the electric car market.
Nonetheless, your point is taken; change is inevitable. Physical are already the realm of oldsters who don’t know how to use a computer-tron…
It's so painfully obvious to this Millenial. I'm 33yrs old and haven't purchased a CD in a decade. Last year I went to at least 40 live gigs. Spending more on music-related entertainment than ever before.
Signing Adobe's praises. Good for them!
Distributors should take the money they spend printing CDs that no one wants and put that capital towards pushing streaming. I used to love buying CDs, until the summer of 2011 when I tried Rdio for free for a month. The number of CDs I've bought since then I can count on one hand. Meanwhile, the diversity of music I love has grown immensely. Because it's all just there waiting for me to press play. And all I have to do is pay Google Play 10 bucks a month? Yes please!
Nick in Guelph, Ontario
I get the reasoning behind saying goodbye to the CD, but some of us will always need files. How is a DJ going to use Serato to mix songs if he doesn't have files to load into the program??? EDM(as y'all like to call it-I fucking hate that term) is HUGE. That genre needs files for the little guy to practice at home and to eventually become the next Tiesto or Skrillex!! Just saying….
Was just thinking about how labels are still managing to force-bundle albums with tickets, often to the detriment of the ticket sale. How is this still a thing?
On point with this one.
Richard S. Faillace
you're clearly right I keep trying to get you to turn this laser vision on the movie biz, though. If the music biz is in th eStone Age, the movie biz is pure protozoa
Real quick … don't people need a credit card to access products on line? (I'm asking because I don't know.)
Is access to music going to be limited to those who use plastic?
Sondra Loucks Wilson
I agree that the music sales model is doomed and as a consumer I can't fathom why anyone would continue collecting music when it flows in streams through the air.
As somebody who has worked in the record business for 45 years I can't wait until we can forget about guaranteed sales and the whole business of returns, reserves, reserve releases, scrapping fees and royalty reports that are always partial and "to be continued".
Labels might continue making CD's for promotional purposes but I have no doubt you are right about the demise of the CD. Ironically it's probable that in future the only places you will be able to buy a new CD will be online.
Digital files will likely continue to be the primary means of demoing music long after the public appetite for downloads fades.
Crystal M+th Management
Remember the library of Alexandria, how everything was kept in one place.
What happens when someone makes the mother of all viruses…
Or worse an EMP
You'll wish you had vinyl, cassettes, or even a CD.
They said the library was safe and nothing would happen to it.
Ah, sure the internet is safe. The internet of things will solve everything. If you haven't read up on that, you should, If you have and it doesn't at least freak you out a bit, have fun with your implant.
Bob,I went to my Dr. with my x-rays on a disc.No way to play it anywhere in the Drs. office.Thanks Bob,Ted Keane
You are converting me. Which is why I read everyday, I want to be converted. But instantly, the wheels turn with me and make me think about endless possibilities that these, as you call, oldsters don't touch. This all can be revision'd and fun for everyone.
I love the sound of cassette, but you're right, a drag to hook all this crap up. Example being I just spent TWO HOURS of our post modern existence trying to hook up "the system" for my 8 track player, (cause I gotta tell ya, hearing SNF soundtrack or ABBA's Greatest Hits on 8 track, is really feeling it, it has a very particular vibe). I'm not a mechanic but it felt like working on a Mercury Monarch. I remember that Gene Simmons 8-track in my Grandma's white Fleetwood at age 5. Sometimes you wanna go back. No different then getting The Beatles or Dylan in Mono. Hear it the way YOU guys did. Throw on a 78 of Bing and it does change time in an instant. But why not different versions available streaming. I'd pay for that IMMEDIATELY. Look it up on Spotify and there is the 8 track bounce or cassette version, vinyl; whatever bounce of the record you love. For me I'd want a valid used copy too. I want the crackles. Hell, I may even have invented a new streaming service here but…. why not? (Have celebrity curated versions ala "hear Johnny Depp's cassette bounce of The Replacements Let It Be", etc. Zawinul's 4 track reel bounce of Sketches of Spain:) Hipster streaming LOL.
But the one that always got me, and Dylan was way out in front of this, is the need for more variation. I'm traditional as above but I like deconstruction to reconstruct too. An example being Kiss. I'm a glam-whore. Ace Frehley was everything to me at age 5 in 1981. They used every trick in the book, still are trying, (those restaurants, and football teams) but why not with the music? Open up all the masters, sell each song, with the stems and let fans go crazy. Remix, remaster, revision. Those originals were just a snapshot. Let people create their own version. Every kid has Garage Band or Pro Tools it seems (or has the ability in seconds to). I've wanted to remix Hotter Than Hell since I was 15. Hell, I want to remix The Man Who Sold The World. Or Bowie's Tonight, and rock it out more. Then I can play on Maggies's Farm finally. They would sell their catalogs tenfold, each song would be as many tracks the song is. Could be 50 bucks a song to get the files. (.99 a track still or whatever). Of course, the pricks would probably charge $999 a song to mix. Anyhow, I would love to hear Jack White's remix of Stairway.
I'm sure someone has already thought this and if so, sorry for being mundane. You got me excited. Could be the Jamaican Blue Mountain.
I’ve followed your advice over the years. I give my shit away for nothing via bandcamp download coupons. Soundcloud. Spotify. Pandora.
I can see that people rarely use the coupons to download the songs.
I’m on all of the streaming services…and I think I’ve made about $.50. Yeah. 50 cents. Leads me to believe I produce crap. You certainly haven’t sung my praises.
I do have CDs I sell at gigs, because it’s something people can hold in their hands. Usually older folks. What you referred to as “rearguard”.
It’s something they can get an autograph on. (Don’t know WHY they would want mine, I’m nobody…forever.)
But, I’m an old fucker and my “shows” are in restaurant and bars.
I have access to the streaming services, but haven’t opened my “free" Spotify account in YEARS. Why subscribe when I don’t use the free one ?
Your job is to listen and sift through the shit. Mine isn’t.
I bought Emitt Rhodes’ latest because he worked with me on my album. Downloaded it. But way before you wrote about it.
It’s rare that I do hear new stuff I really like, I click on the links you provide when you find something you dig. I can rarely get through the whole song, though.
I also have a tendency to save my old tech devices. My album was recorded over years using multiple formats from tape and ADATs and converted to digital, in some cases, one track at a time. So I have a CD player and an iPod and yes, a cassette player. Even multiple reel to reels.
The real bottom line for me is I’m too old to forgo today’s profits, as meager as they may be. There probably aren’t all that many tomorrows for me and you, as we’re about the same age.
Trump is here. My time has passed and I’m gonna need every fucking $10 bill I can get.
So when you write a column like this…preface it with something akin to: “Hey Kids. This is a column for you youngsters”.
I know you do have a pretty aged subscriber base. After all, I’m on it. I could’ve skipped this column.It didn’t apply. It depressed me.
p.s.: When you post your playlists, like the 1970 article last week, I go to iTunes and create you list with what I’ve already converted from CD or vinyl.
Seems to work for me.
Bob, I think what got people "hooked" on Adobe subscriptions wasn't the subscription model, it's that they didn't have a choice. If you didn't keep paying, you couldn't work on older files. If someone said "Hey, can you revise last year's brochure for 2017?" Nope, unless you had the subscription. Furthermore, Adobe's programs are standards and there really wasn't any competition…you weren't going to exchange files with corporate using some public domain program with a user-hostile interface.
This isn't to say the paradigm is flawed at all. For corporations, it's great that everyone using the program is using the same version. When one person gets a new feature, everyone gets a new feature. It can even cost less than buying multiple individual copies. But for individuals who need to use the programs only occasionally, it's a different story.
As to streaming, I've been advocating for what I called "the celestial jukebox" for decades so I'm no stranger to the concept. But artists could sell comparatively few CDs and at least make minimum wage. Sure, if you get a couple billion streams, you'll make money. It's always been true that only a few artists made a ton of money, but it used to be possible to at least survive if you weren't Justin Timberlake or Adele. That's no longer the case.
On one hand, that might help "thin the herd" a bit and filter out the detritus. But long-term, it's like if baseball eliminated farm clubs that would prep players for the majors. You would then either need to join a major league team…or play on the weekend with your friends as a hobby.
I have no desire to go back to "the good old days" where I'm still owed at least five figures in royalties, but when you have 4 million streams on YouTube and make $1,200 or whatever, upcoming artists will not be able to support themselves making music. But I'm not even sure if that's a problem in a world where essentially all music ever created is available. If no more music was ever created by anyone, I still wouldn't be able to hear all the existing music I want to hear before I run out of lifespan.
Yelling isn't gonna wanna make people want to actually listen to streaming. Great to hear a song, terrible to listen to music.
People are going back to vinyl for a reason … granted most of it is due to marketing and DJ industry who pushed the format as it was /is a great form of copy protection.
Biggest loser from streaming will be the artist. One of the reasons people became superfans is because they (we) had a limited amount of music and so it was played over and over again…
So it's not as if the label never gets another penny from that music… there's more money up front and greater chance of making/retaining a fan. Of course the later translates into ticket sales, etc.
Sure, now you can stream just about any song you want, but how long do we really think that will last??? There is a significant market (read: people who actually have money) who value and prefer ownership.
This will always be the case. They know they may be paying more in the long run, but they also know that it will always be there and they will know where to find it, and how to play it. No need to download the latest app update, figure out how it's laid out, re-correct voice recognition for the twenty-second time, or search in vain for something which has been removed.
Kids are even telling me that they record streams so that they can listen at anytime with or without wireless service…AND it helps to save battery life!
Further, sales are more socially conscious than streaming. If one is going to listen to a 50 megabyte song a hundred times – that's 5 terabytes of data 99% of it waste. Now if your song is smaller than that 50 megabytes you are listening to a lower quality than was available 25 years ago!
Looking at the Photoshop model… you now have a few professionals getting a really good deal, but you mostly have users who are overpaying for something they hardly ever (or portions which they never) use! Sure that's one way to make money, but why breed such animosity? There's a reason folks continually complain about cable television providers.
Curious to see how long the Photoshop model holds up… have been hearing users jumping ship.
Why don't you look at music software and how many folks have said no to ProTools' rental model?
Should the music industry be basing its marketing models on the auto industry's decision to cut corners and remove CD players??
You are absolutely correct, but not for the reasons I think you think are true.
Streaming puts you at a remove from the data substrate. That's what it does, this is a fact.
If you don't own that data substrate, then you are at the mercy of the actors or agents that do.
If you are invested in your Streaming Service (spotify, Amazon, whatevs – we'll call it "Service") then you have contributed unpaid labour to that Service which is what gives that Service its value (labour theory of value is not radical – Locke discussed it in his 2nd treatise on government). Now, in exchange for your labour, you don't get money, you get access and convenience. However, the Service is not in business for the fun of it – it is a profit making entity – and if it can't make money, eventually it dies. And with its disappearance, all your labour and network also disappears.
Napsters strength was only partly the download. The other part was the community and referencing- the networking of users into affinity groups and communities. From there, shared values allowed for trust and expertise. THAT drove the downloading. People didn't just approach napster like a closet full of music, some datalocker – it had networks and trusted groups sharing, rating, and commenting on music. That was unpaid labour and it formed a huge portion of Napsters actual value. When napster failed, all that work disappeared – the servers were reformated and dedicated to some other use at the server farm.
Much the same is occurring in Services today. And when they fail / get bought out / transform, all that labour will disappear, along with access to "your music".
If the Service was run as a free public utility, then it would less able to "go out of business", and your labour would be a form of civic cultural involvement.
Therefore it is in the interests of capital (profit is only made from the differential between scarcity and demand) to completely dominate the music distribution system on a full spectrum basis, and completely remove the private citizen's access to the musical data substrate. That is the interest and the obvious demand of capital and profit. And in the demented neoliberalism of contemporary culture, this is seen as natural and as a good.
Thus, I collect files. Not to listen to them, but as an archive against the future as practiced by the Services who seek to dissolve everything for the sake of profit, where "All that is solid melts into air, all that is holy is profaned, and man is at last compelled to face with sober senses his real conditions of life, and his relations with his kind."
You are right, this is the future.
However, we bought Chrysalis Records last year and have been very active sorting out the catalogue and bringing the business up to date. this of course has meant focusing a lot of energy on testing the wisdom of continuing to make and market CDs.
In the course of this work we have come upon an extraordinary but not unique analogy. The streaming sites curate all the playlists which matter. The ones that contribute to 70% of all streams. These playlists cover every genre, everymood, every era. The panels constantly look to refresh the lists. So where do they get their information to help them choose?
Incredibly, they trawl old media to find out what new albums, what new compilations, what new best ofs are being released – on CD! – this week. because these releases will be marketed, which the streaming companies believe will drive traffic.
Topsy turvy or what? But doesn't it remind you of a very similar anomaly? TV news? Every night they discuss what the pundits are saying about politics. Where do they quote their references? Daily newspapers, whether print or online or both. As you so often quote Bob, old media is for oldies. So the TV debate is nuanced by information gathered from old media read by old, more right wing, readers, so the perceived wisdom is that this is what people actually think. When did you ever see a TV newsperson quote Buzzfeed, or Yahoo news, or Huffington for public opinion? Never.
Until the streaming companies abandon getting their playlist ideas from CD releases reviewed by old media, we as a responsible record business, have no choice but to continue to put out great reissues and new stock – at practically zero return.
Streaming numbers are growing all the time. You are correct, it's exciting times. you are correct it's the only way to go and the market has huge room for growth. Sadly, we can't make the jump yet.
All the best
Love this article and I really agree with it. You might be a couple years too late though. We already moved on from the CD. When Apple took the drive out of their laptops, there was some pushback, but it was just romanticism. Everybody soon realized how little they used it. Streaming has been the go-to for years for consumers, even if the music industry has been fighting it the entire time. It’s all about what the market decides, and what is best (read most convenient – not necessarily highest quality) for the consumer.
However, you’ve led your subscribes astray just a little bit. Streaming, for the artist, is not about more money and better payouts. Streaming is about attention – the primary commodity in today’s over-saturated market. Why do you think Taylor swift is back on Spotify? The key for musician, in our culture of over saturation with media on all of our platforms, is to stay in front of listeners and keep their attention. When you have someone’s attention, and they appreciate your music, they’ll check out your tour schedule, maybe buy some merch. And eventually, they key for artists will be to leverage their attention to make real money is business, whether through entrepreneurship (today’s rock stars), endorsements, or partnerships. That’s where the future is.
Let’s talk less about what happened FIVE YEARS AGO in a quickly evolving industry. Instead let’s try to figure out how to get ahead of the curve and make money tomorrow.
Alright, end of rant.
Finally though, if you’re still reading. This is why I moved from working in the music industry to marketing. I was tired of trying to work in an industry that was constantly trying to fight their consumers and the market to keep old, romanticized ideas of distribution and revenue models that didn’t make sense any more. It was nonsensical. In every other industry, the rockstars are the ones who crack the code first and get ahead of the revolutionary changes. I hope the music industry will make it there soon, and I hope to see more people trying to push the music industry forward.
Thanks for all you do and how much you care, Bob.