{"id":2955,"date":"2018-11-09T06:44:24","date_gmt":"2018-11-09T06:44:24","guid":{"rendered":"https:\/\/www.appservgrid.com\/paw92\/?p=2955"},"modified":"2018-11-12T01:13:29","modified_gmt":"2018-11-12T01:13:29","slug":"an-immodest-proposal-for-the-music-industry","status":"publish","type":"post","link":"https:\/\/www.appservgrid.com\/paw92\/index.php\/2018\/11\/09\/an-immodest-proposal-for-the-music-industry\/","title":{"rendered":"An Immodest Proposal for the Music Industry"},"content":{"rendered":"

How music listeners can fill the industry’s “value gap”.<\/em><\/p>\n

From the 1940s to the 1960s, countless millions of people would put a dime
\nin a jukebox<\/a> to have a single piece of music played for them, one time. If
\nthey wanted to hear it again, or to play another song, they’d put in
\nanother dime.<\/p>\n

In today’s music business, companies such as Spotify, Apple and Pandora pay
\nfractions of a penny to stream songs to listeners. While this is a big
\nbusiness that continues to become bigger, it fails to cover what the music
\nindustry calls a “value gap”.<\/p>\n

They have an idea for filling that gap. So do I. The difference is that
\nmine can make them more money, with a strong hint from the old jukebox
\nbusiness.<\/p>\n

For background, let’s start with this graph from the IFPI’s Global Music
\nReport 2018<\/a>:<\/p>\n

\"""\"<\/p>\n

Figure 1. Global Music Report 2018<\/em><\/p>\n

You can see why IFPI<\/a> no longer gives its full name:
\nInternational Federation of the Phonographic Industry<\/em>. That phonographic
\nstuff is what they now call “physical”. And you see where that’s going (or
\nmostly gone). You also can see that what once threatened the
\nindustry\u2014”digital”\u2014now accounts for most of its rebound (Figure
\n2).<\/p>\n

\"""\"<\/p>\n

Figure 2. Global Recorded Music Revenues by Segment (2016)<\/em><\/p>\n

The graphic shown in Figure 2 is also a call-out from the first. Beside it is this
\ntext: “Before seeing a return to growth in 2015, the global recording
\nindustry lost nearly 40% in revenues from 1999 to 2014.”<\/p>\n

Later, the report says:<\/p>\n

However, significant challenges need to be
\novercome if the industry is going to move to sustainable growth. The whole
\nmusic sector has united in its effort to fix the fundamental flaw in
\ntoday’s music market, known as the “value gap”, where fair
\nrevenues are not being returned to those who are creating and investing in
\nmusic.<\/p><\/blockquote>\n

They want to solve this by lobbying: “The value gap is now the
\nindustry’s single highest legislative priority as it seeks to create a
\nlevel playing field for the digital market and secure the future of the
\nindustry.” This has worked before. Revenues from streaming and performance
\nrights owe a lot to royalty and copyright rates and regulations guided by
\nthe industry. (In the early 2000s, I covered this like a rug in Linux
\nJournal<\/em>. See here<\/a>.)<\/p>\n

But, there’s another way to fill that gap: on the listening<\/em> side. You can
\nsee a hint in that direction from growth in live performance revenues.
\nAccording to Statista<\/a>,
\nlive music industry revenue:<\/p>\n

…will grow from 9.28
\nbillion U.S. dollars in 2015 to 11.99 billion in 2021. Of the revenue
\ngenerated in 2016, over two billion U.S. dollars was generated in
\nsponsorship, and a further 7.4 billion U.S. dollars came in ticket sales.
\nThe industry is expected to grow further in the coming years as the
\ncompound annual growth rate for live music ticket sales is estimated at
\n5.23 percent between 2015 and 2020.<\/p><\/blockquote>\n

According
\nto a July 16, 2018, post in Pollstar<\/em><\/a>:<\/p>\n

There is perhaps no better
\nindicator of a robust 2018 live market than Pollstar<\/em>‘s Mid-Year Top 50
\nWorldwide Tours chart. This year’s survey saw a 12% jump in total gross
\nfrom last year’s $1.97 billion to a record-setting $2.21 billion\u2014a
\n$240 million increase. It’s the chart’s biggest rise since
\n2015\u201316…<\/p><\/blockquote>\n

Concert promoters also are raising prices. Says a July 9, 2018,
\nreport<\/a> by ABC
\nNews:<\/p>\n

The average price of a concert ticket during the first six months of
\nthe year was $46.69\u20144.2 percent higher than the average cost of a
\nticket for the same period last year, according to the latest figures from
\nmusic industry magazine Pollstar<\/em>. That price is almost 7 percent higher
\nthan the average for all of 2000, and an even more startling 43 percent
\nincrease over what concert tickets cost just three years ago, according to
\nPollstar<\/em>.<\/p><\/blockquote>\n

That same report says sales are going down: a market signal that
\nthe prices are too high. But hey, people are clearly willing to pay a lot
\nfor live music and a participatory experience. This is an important clue.<\/p>\n

Participation requires good signaling from both sides of the marketplace.
\nSo let’s look at the demand side, shown in Figure 3, starting with what the streaming services
\npay to play us a tune.<\/p>\n

\"""\"<\/p>\n

Figure 3. What the Streaming Services Pay to Play a Tune (from Trichordist<\/a><\/em><\/p>\n

To make that clearer, the top three streamers pay between 13.4% (Pandora)
\nand 78.3% of a penny ($.01) to play you a song.<\/p>\n

SiriusXM pays (it says here<\/a>) “19.1% of the price of all audio packages
\nwhich include music channels”. That means the $209.76 I paid last August
\nfor my SiriusXM subscription sent $40.01 to the rights-holders of all the
\nmusic played on all the SiriusXM channels for my account over the following
\nyear, whether I listened to any music or not. (And mostly I listen to
\nnon-music channels.)<\/p>\n

YouTube is another special case. The 2018 IFPI report says, “From publicly
\navailable data, IFPI estimates that Spotify paid record companies US$20 per
\nuser in 2015, the last year of available data. By contrast, it is estimated
\nthat YouTube returned less than US$1 for each music user.” That’s a big part
\nof the “value gap”.<\/p>\n

Some of those rates are negotiated, others are set by regulation, and most
\nare informed\u2014one way or another\u2014by both.<\/p>\n

In no case, however, does the music listener pay for digital music on the
\njukebox model: with cash on a per-listen, per-song basis. (Note that a dime
\nin 1960 was more than 100x what a streamer pays for the right to play a
\nsong for somebody.)<\/p>\n

So that’s my proposal: create an easy way for any of us to pay what we want
\nfor the music we hear<\/em>. This will give music lovers their own way to close
\nthe value gap\u2014and then some.<\/p>\n

As it happens, an easy way to do this was proposed<\/a>
\nby ProjectVRM<\/a> (which I
\nrun at Harvard’s Berkman Klein
\nCenter<\/a>) way back in 2009. It’s called
\nEmanciPay<\/a>, and here is how it is described on the project wiki:<\/p>\n

Simply put, EmanciPay makes it easy for anybody to pay (or offer to
\npay) \u2014<\/p>\n

    \n
  1. \n
      \n
    1. as much as they like<\/li>\n
    2. however they like<\/li>\n<\/ol>\n<\/li>\n<\/ol>\n

      for whatever they like<\/p>\n

        \n
      1. on their own terms<\/li>\n<\/ol>\n

        \u2014 or at least to start with that full set of options, and to work
        \nout differences with sellers easily and with minimal friction.<\/p>\n

        EmanciPay turns consumers (aka users) into customers by giving them a
        \npricing gun (something which in the past only sellers used) and their own
        \nmeans to make offers, to pay outright, and to escrow the intention to pay
        \nwhen price and other requirements are met. Payments themselves can also be
        \nescrowed.<\/p>\n

        In slightly more technical terms, EmanciPay is a payment framework for
        \ncustomers operating with full agency in the open marketplace. It operates
        \non open protocols and standards, so it can be used by any buyer, seller or
        \nintermediary…<\/p>\n

        So, as currently planned, EmanciPay would \u2014<\/p>\n

          \n
        1. Provide a single and easy way that consumers of “content” can
          \nbecome customers of it. In the current system\u2014which isn’t one\u2014every artist, every musical group, every public radio and TV station, has
          \nhis, her or its own way of taking in contributions from those who
          \nappreciate the work. This can be arduous and time-consuming for everybody
          \ninvolved. (Imagine trying to pay separately every musical artist you like,
          \nfor all your enjoyment of each artist’s work.) What EmanciPay proposes,
          \nhowever, is not a replacement for existing systems, but a new system that
          \ncan supplement existing fund-raising systems\u2014one that can soak up
          \nmuch of today’s MLOTT: Money Left On The Table.<\/li>\n
        2. Provide ways for individuals to look back through their media usage
          \nhistories, inform themselves about what they have been enjoying, and to
          \ndetermine how much it is worth to them. The Copyright Arbitration Royalty
          \nPanel (CARP), and later the Copyright Royalty Board (CRB), both came up
          \nwith “rates and terms that would have been negotiated in the marketplace
          \nbetween a willing buyer and a willing seller”\u2014language that first
          \nappeared in the 1995 Digital Performance Royalty Act (DPRA), and was
          \ntweaked in 1998 by the Digital Millennium Copyright Act (DMCA), under which
          \nboth the CARP and the CRB operated. The rates they came up with peaked at
          \n$.0001 per “performance” (a song or recording), per listener. EmanciPay
          \ncreates the “willing buyer” that the DPRA thought wouldn’t exist.<\/li>\n
        3. Stigmatize non-payment for worthwhile media goods. This is where
          \n“social” will finally come to be something more than yet another tech
          \nbuzzmodifier.<\/li>\n<\/ol>\n

          All these require micro-accounting, not micro-payments. In fact
          \nmicro-accounting can inform ordinary payments that can be made in clever
          \nnew ways that should satisfy everybody with an interest in seeing artists
          \ncompensated fairly for their work. An individual listener, for example, can
          \nsay “I want to pay one cent for every song I hear on the radio”, and “I’ll send
          \nSoundExchange<\/a> a lump sum of all the pennies I wish to pay for songs I hear
          \nover the course of a year, along with an accounting of what artists and
          \nsongs I’ve listened to”\u2014and leave dispersal of those totaled pennies
          \nup to the kind of agency that likes, and can be trusted, to do that kind of
          \nthing.<\/p>\n

          Similar systems can also be put in place for readers of newspapers,
          \nblogs and other journals. What’s important is that the control is in the
          \nhands of the individual, and that the accounting and dispersal systems work
          \nthe same way for everybody.<\/p><\/blockquote>\n

          I also proposed this earlier in “EmanciPay: A Content Monetization Plan for
          \nNewspapers”<\/a>, and later in           “An Easy Way to Pay for Journalism, Music and
          \nEverything Else We Like”<\/a>. In the first of those, I wrote:<\/p>\n

          Think of EmanciPay
          \nas a way to unburden sellers of the need to keep trying to control markets
          \nthat are beyond their control anyway. Think of it as a way that “free
          \nmarket” can mean more than “your choice of captor”. Think of it as a way
          \nthat “customer relationships” can be worthy of the label because both sides
          \nare carrying their ends of the relationship burden\u2014rather than the
          \nsellers’ side carrying the whole thing.<\/p><\/blockquote>\n

          It’ll be fun to start doing that in the music industry.<\/p>\n

          A number of developments make the opportunity ripe now:<\/p>\n

            \n
          1. The music industry is far less scattered and conflicted about its
            \nnature (digital now) and future (gotta make up that value gap) than it ever
            \nwas in the past.<\/li>\n
          2. Former enemies can be friends. For example, open source and the music
            \nindustry have both won, and many aligned incentives can be found between
            \nthem.<\/li>\n
          3. Music listeners are clearly willing to pay value for value. We just
            \nneed to create the ways. And it shouldn’t be hard. (Especially for Linux
            \nJournal<\/em> readers.)<\/li>\n
          4. The jukebox and live performance examples both suggest that people
            \nshouldn’t have a problem saying “I’ll be glad to set up a way to pay one
            \ncent every time I hear music I like.”<\/li>\n
          5. Apple just bought Shazam, which is a way to identify music people hear.
            \nThat kind of functionality can be brought into standard ways people can pay
            \nfor music they passively hear (for example, in a restaurant or at parties) and
            \nlike.<\/li>\n
          6. We’ve long needed a standards-based approach to tipping artists\u2014or
            \nanybody\u2014with maximal ease and minimal friction. One can be crafted out
            \nof work on EmanciPay.<\/li>\n<\/ol>\n

            While most of my usual appeals in Linux Journal<\/em> are to the hackers among
            \nus, this appeal is mostly to my friends (old and new) in the music
            \nindustry. They have the connections, the talent, the legal smarts, the
            \nmoney and the motivation required to make this thing work.<\/p>\n

            So let’s bring the people who love music into the marketplace as
            \nwilling buyers. And let’s do it by standardizing simple ways people can, by
            \nroutine or impulse, be real customers of music and not just passive
            \nconsumers (or worse, what the industry used to call pirates). Let’s also
            \ncreate new ways, beyond payments alone, that artists and music lovers can
            \nsignal each other, and have all kinds of creative fun.<\/p>\n

            The time is right. Let’s not let the opportunity pass.<\/p>\n

            Source<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

            How music listeners can fill the industry’s “value gap”. From the 1940s to the 1960s, countless millions of people would put a dime in a jukebox to have a single piece of music played for them, one time. If they wanted to hear it again, or to play another song, they’d put in another dime. … <\/p>\n

            Continue reading “An Immodest Proposal for the Music Industry”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-2955","post","type-post","status-publish","format-standard","hentry","category-linux"],"_links":{"self":[{"href":"https:\/\/www.appservgrid.com\/paw92\/index.php\/wp-json\/wp\/v2\/posts\/2955","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.appservgrid.com\/paw92\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.appservgrid.com\/paw92\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.appservgrid.com\/paw92\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.appservgrid.com\/paw92\/index.php\/wp-json\/wp\/v2\/comments?post=2955"}],"version-history":[{"count":1,"href":"https:\/\/www.appservgrid.com\/paw92\/index.php\/wp-json\/wp\/v2\/posts\/2955\/revisions"}],"predecessor-version":[{"id":3168,"href":"https:\/\/www.appservgrid.com\/paw92\/index.php\/wp-json\/wp\/v2\/posts\/2955\/revisions\/3168"}],"wp:attachment":[{"href":"https:\/\/www.appservgrid.com\/paw92\/index.php\/wp-json\/wp\/v2\/media?parent=2955"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.appservgrid.com\/paw92\/index.php\/wp-json\/wp\/v2\/categories?post=2955"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.appservgrid.com\/paw92\/index.php\/wp-json\/wp\/v2\/tags?post=2955"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}