Spotify Boosts Music Sales, But Only for Classical?

The popular technology and startup blog TechCrunch posted an article today that claimed “Plays Can Increase iTunes Sales. Here’s Proof!” The beginning of the article reads as follows:

“Despite fears that streaming access cannibalizes sales, classical music record label X5 tells me when it launched an app within Spotify and saw streams of one album increase 412% in a month, that album’s iTunes sales shot up 50%. The Swedish label’s “The 50 Greatest Pieces of Classical Music” soon reached #1 on the iTunes Classical charts, and broke into the iTunes Top 200 album charts for the first time, hitting #152.”

This example is clearly just one of many potential case studies, both pro- and anti-Spotify. Paul McCartney and The Black Keys both publically pulled their music from Spotify and other streaming services due to lackluster results from their point of view. In the comments of the article, many TechCrunch readers were quick to note that classical music is a very different kind of genre than the rest on Spotify and caters to a different kind of listener. So while Spotify might be great as a discovery tool of classical and other forms of music, people who already know a genre or artist in-and-out might be more reluctant to buy albums off of iTunes if they know they can stream it off of Spotify for a fraction of the price (or for free).

Another tech blog AllThingsD, had a realistic (although a bit more sobering) outlook on the Spotify effect compared to TechCrunch: 

“Some people who weren’t buying any music at all start shelling out a monthly fee for subscription services, turning pirates into profit centers. That still won’t be enough to replace the dollars the industry has lost since its pre-Napster party days. But it is much, much better than nothing.”

Clearly the pre-Napster days are a dream far gone, but artists want to know whether Spotify helps or hurts their bottom line (compared to the current status quo). Spotify CEO Daniel Ek obviously has been open about defending Spotify and their business model, which he says does not cannibalize music sales. Regardless of the cause of album sale decline, Ek told in February:

“You're talking 10 million active users, 2.5 million subscribers - most of them paying $120 a year, which is double the amount of your average iTunes user. Do you really want to hold back your album from people who are finally paying for music again?” 

To be fair, most aren’t paying for Spotify’s premium service, but their absolute user number is increasing by millions as the months go on and their integration with Facebook’s Open Graph deepens. The question now becomes which audience is more affected by Spotify: an audience willing to go out and buy albums but is currently not doing so because of streaming services or an audience that is now paying a monthly subscription cost when they would otherwise being paying nothing or close to nothing for music. What do you think’s more likely?

It’s Not Time to Shop for a Label (Shop for Fans)

Digital Music News
wrote a story about further signs of record label erosion:

Thursday was an extremely crappy day for the crew at Roadrunner Records. That's because parent Warner Music Group chose Thursday to slash substantial parts of the sub-label, with complete shutdowns happening in several offices outside of the US.”

The hard rock and metal label under Warner Music Group is feeling the pain, with Billboard saying 36 were let go. While not every label is downsizing to such a dramatic extent, it’s definitely a time when record labels need to be lean and prioritize their biggest leads for cash returns. This means not only adapting to the changing economics of the music industry, but also not taking risks on artists who they don’t think can make them money under this new model.

Other than digital piracy, social media has changed the game for up-and-coming artists trying to get that once coveted record label deal. For many, a record label deal won’t make sense – even big name artists can get screwed when it comes down to the nitty gritty of a record label contract – but for those who are deadset on getting signed, social media has created the landscape to prove yourself as an artist.

A huge marketing push by a label is no longer the end-all-be-all of album release and touring promotion. Record labels now want to see social media traction as an indicator of independent success. Social media, although not foolproof, is easier to track than old school marketing campaigns. At the same time, labels want to see significant social media traction BEFORE they sign you. The way labels see it, if you don’t already have a big social media following, somebody’s going to have to build one from scratch. Quite possibly, there might not be enough fans who like you. Unless you’re already on terrestrial radio, which is more so the case for major label artists, you’ll want to start online.

Record labels are like investors. The more indicators of success they can see, the more likely they are to fund you. If you have great music, that’s like a company having a good idea for a product. Until an idea, or in this case music, is turned into a business, then it’s still just an idea.

So as labels continue to cut staff and costs, don’t think which labels will still sign you. It’s not time to shop for a record contract, it’s time to shop for fans. 

Reddit Is Crowdsourcing a Generic Hit Single

The ever-growing, but seemingly tight-knit, Reddit community is at it in full force again—this time trying to take over the music world (and the Billboard charts). Previously, the community rallied around stopping the SOPA and PIPA bills from passing through Congress. At other times a mere cat picture would suffice on a slow news day. Now, the new Reddit challenge poses the question: “Can we write and record our own generic pop song and get it in the charts?

As Mashable pointed out, the user Indubitable_Smoo came up with the idea for Reddit to crowdsource a  hit song after “listening to an urban music station, which plays generic music that all sounds the same.” The effort now has its own subreddit called REDDITTOTP. Musicians who frequent Reddit started posting submissions, beginning with the background instrumental track that would provide the ground floor for the generic poppy sound they are striving for.

So far, the voting has narrowed down the instrumental track to one by Random Insight, who posted his generic pop idea on SoundCloud. The reactions in the comments? Everything from “I can literally hear a Pitbull verse here. This is brilliant.” to “It seems as generic as can be.” But that’s the point! With such a strong community, it wouldn’t be surprising that almost anything the Reddit puts out as a single could somehow make its way onto the charts. In this kind of record industry environment, it really doesn’t take much to chart anyway. Although Reddit’s strategy of piecing together tracks might not yield the most cohesive or polished of pop hits, it has the potential to be infectious nonetheless.

On the UPDATED PLAN OF ATTACK: page you can see a continuation of the original mission, with links to all the areas that need help for finishing the song. Other than having a decent amount of time on their hands, the Reddit community shows that they can actively get things done once again. Many people are idea-makers or stand behind an issue, but it takes an active person or group to actually pursue something rather than passively letting it slip by the wayside (a problem often seen among political dissenters and people trying to start projects from scratch). Although the song is not completed yet, Reddit shows the power of crowdsourcing behind something as simple as an idea.

What is the Shelf-Life of Cool?

Funny or Die wrote a hilarious, and quite accurate, article entitled 7 Types of People at Coachella. From Hopeless Drug Addicts to Bro’s to Industry Assholes, you’ll find a variety of folks at an increasingly mainstream music festival like Coachella. You’ll see similar types at other festivals. At Electric Zoo Festival you’ll see more of the Kids on Ecstasy but you’ll get fewer of the Dirty Hippies and People With Babies. Every festival has it’s own signature groups, and as festivals invite a greater variety of artists, you’ll get more distinguishable sects of festival-goers that tend to pop up out of the woodwork and make themselves known. At some point, you reach a tipping point where a music culture no longer belongs to one type of music fan (and most certainly doesn’t comprise solely of Music Lovers, the last remaining of the “7 Types”). 

So what is the shelf-life of cool? When do the early adopters give up on a scene that’s no longer their own? I already see cries on the Internet about how EDM (Electronic Dance Music) is not the same. Bro’s in their yellow wifebeaters and scantily-clad young women in tutus are the norm now. Perhaps drug culture is now the mainstream, as more reports of Ecstasy use are alluded to (even by Madonna), and a scene becomes more focused on its excesses than its music. That doesn’t necessarily mean the music is any better or worse, it just means some fans don’t feel the same connection to the movement as they did before.

When a genre of music is not known typically as “mainstream” but then quickly rises in popularity, you’ll get a greater diversity of fans and concert attendees. At Coachella, a festival that invites all kinds of music from electronica to rock to hip-hop, the disparity in the crowd is widens every year. This can be interesting for some and off-putting for those who feel like they enjoyed the music before everyone else and don’t want to taint their scene with non-Music Lovers. Growing pains!

It’s an amusement park where some are there for the rides, some are there for the games, and some are just there. When a theme park  has too many themes, some people might not even know where to begin (or whether at some point, they should ever be there at all). This is in no way a knock on diversity. But when things are no longer about the music, how long do they stay cool?

A Grim Look into Licensing Streaming Music

Hefty licensing costs continue to hurt Pandora,  the popular radio streaming service that went public in the middle of June 2011. Despite growth, the cost of doing business seems to rise along with the service’s popularity, which has much to do with SoundExchange’s royalty structures and Pandora’s reliance on advertising revenue. Pandora released their annual SEC filing with the harsh news about the factors working against them and their strides toward profitability. Here’s an excerpt: 

"Since our inception in 2000, we have incurred significant net operating losses and, as of January 31st, 2012, we had an accumulated deficit of $101.4 million.  A key element of our strategy is to increase the number of listeners and listener hours to increase our market penetration. However, as our number of listener hours increases, the royalties we pay for content acquisition also increase. We have not in the past generated, and may not in the future generate, sufficient revenue from the sale of advertising and subscriptions to offset such royalty expenses.

As a result of these factors, we expect to continue to incur operating losses on an annual basis through at least fiscal 2013 [ie, January, 2013]."

And it’s not just Pandora that gets the brunt of difficult licensing structures and demanding major labels. With only around a 20% conversion rate from free to paid subscriber, Spotify is facing an uphill battle to justify their massive funding rounds totaling $189 million. Michael Robertson, always the contrarian in the music industry, went as far as to say Spotify can never be profitable. Factors including deal structure, labels demanding equity of companies, and up front payments all the way to more technical issues such as non-disclosure, data normalization, and reporting needs all work against massive scale streaming apps like Spotify (where content is licensed, rather than artists uploading music to the service on their own profiles). 

How do services get out of this mess? Well it’s difficult since it comes down to supply and demand. As Robertson continues:

“The sale of EMI to other music companies means there will shortly be only three major labels. If a music service rejects terms offered by a label, then that service’s offering will have an enormous hole in their catalog of 25 percent or more of popular songs.” 

Unlike Spotify, Pandora abides by U.S. laws based around terrestrial radio, and does not face some of the same problems Robertson lists as business obstacles for Spotify. Clearly, both are going to have a tough time hitting that coveted goal of profitability as record labels don’t always feel like budging and consumers don’t always feel like paying. 

It's Closing Time..

More Best Buy stores are closing their doors. A store that used CDs as a loss leader to get you in the door to buy more expensive items is now losing the battle on the big ticket items as well. People go into the store to browse, but ultimately people are buying off Amazon and other online retailers. Best Buy can’t compete.

The CD store hasn’t been able to compete for years. Walmart’s music section has shrunk. Apples iTunes takes a 30% cut of your sales and expects you to sell singles one at a time rather than the more lucrative deal of selling your whole album to a consumer who only wanted to own one or two songs.

Is there an answer to this. David Lowery, founder of Cracker and Camper von Beethoven, said no at this year’s SF MusicTech Summit. As Digital Music News summarized: 

“Record labels and artists don’t need to reinvent their business model to match the new reality. THEY ALREADY DID. That’s what we’ve all been doing for the last ten years. AND WE NOW KNOW IT’S ACTUALLY WORSE FOR THE ARTIST.”

Lowery argues that artists used to use touring to boost sales, rather than using touring as the end-all-be-all of revenue generation. However, there is more than one possible revenue stream that bands are trying these days. While many will struggle to make a middle-class income, many are embracing new models to make the industry work for them. Gabe McDonough, vice president, music director at Leo Burnett in Chicago said:

"It used to be pretty rare to hear an indie band on an ad. It's not that rare anymore. Somebody's got to pay the bills.…In 2012, brands are one of the few entities in human culture that are willing to pony up." 

In many cases, the corporation has replaced the individual as the source of income. For some bands, this might equate to selling out. When your band’s song is playing on a Lowe’s commercial, are you still hip and trendy? Facing the reality of the music industry, it’s probably time to stop worrying about selling out and start worrying about whether you can devote 24/7 to your music.

Finding That Allure as an Artist

No one can argue with a good song, a good beat, or a hook that you remember for days. But those who reach superstardom know there’s more to it than that. What do Lady Gaga, Eminem, Kanye West, Nicki Minaj, and 50 Cent all have in common? They all have backstories, personas, and a barrage of media attention-seeking gestures that propel them into the spotlight. Add to that an eye for fashion and a keen business sense and you have yourself the ideal mixture for celebrity.

Would Lady Gaga be popular even without her award show entrances where she’s covered in meat or hatched from a giant egg? Probably. Would 50 Cent be famous if he didn’t get shot nine times? Most likely. Regardless, it’s all the little things, whether it be a unique upbringing or controversy hitting the headlines, that add up to celebrity. Constantly being front and center is what helps you gain share of mind.

I don’t think anyone denies that Deadmau5, the popular DJ, has serious musical chops—but  his mouse hat and costume and his onstage persona help add to the allure of his music. The performance and the visuals surrounding the artist fill in all the gaps for listeners when they’re listening or not listening to the music itself.

This doesn’t mean that artists should fake controversy or create a ridiculous image for themselves that doesn’t fit their music, but it does mean that artists need something more to latch onto than just music if they want to reach an iconic status or help spread a certain message. Kurt Cobain did this exact thing by trying to be the anti-image. The plaid and jeans were a statement against 80’s glam rock, but that in itself was an image. It was radically different and people could relate to it. 

Some latch onto trends. That can work for a little while. Being different is what lasts.

What Makes a Music Video Go Viral?

Five Seconds

Bam! Have you grabbed your audience’s attention in the first few seconds of your video? You have to. If you didn’t, edit your video until those first precious seconds are the most compelling few seconds of any viewer’s day.


The most viral videos are short. Yes, even 30 seconds short. If you top out at a minute, that’s fine too. Music videos for full-length songs tend to be longer than a minute, so you’ll have to keep the attention of the viewer through storylines (think Lady Gaga) or through visual mastery (think OK GO). Without plot or a visually compelling piece of work, you’ll just be relying on the music. Music is great, but it doesn’t necessarily mean you’ll go “viral” unless you’re a famous artist or just really lucky.


As Kevin Allocca mentions in his video “Why videos go viral,” tastemakers can help start the snowball effect that creates a viral video.  A tweet from Jimmy Kimmel or a mention on Tosh.O can all help start the ripple effect. But once a tastemaker gives a video an initial push, it’s up to social media sites and the blogosphere to keep spreading a video. Even if the tastemaker is just a prominent player in your industry (or your music genre), there is some beginning step to getting your video into the community you want or even to the masses.


Does your video lend itself to parody? Can others respond to it on YouTube with commentary or potentially interesting follow-ups? Another option is for others to make a mashup version or their own cover of the song. The more people that can spread your video through their own videos, the better chance your video has of going viral.


What helped make Kony 2012 the most viral video of all time? Not only was it well edited and helped show an emotional story, but it created controversy. Did the creators of the video put too much emphasis on awareness over action? That’s a subjective matter, which created a firestorm of debate that helped make a viral video gain even more heat.

No matter what you do, you won’t be able to dictate whether your video goes viral. However, if you follow the previous patterns of viral videos – in terms of optimal techniques, not predictability – you’ll have a much better shot.


See how Adam Dadowsky engineered OK Go’s virality in “This Too Shall Pass”:

10 Things NOT To Do When Promoting Your Music Online

1) Do NOT update your status with your music profile links every day, it’s gets old and people will start ignoring you. 

2) Do NOT go searching for a record deal before you’ve established a large following and have many shows under your belt. Even then, a record deal might still not be the right move for your career. 

3) Do NOT expect a fanbase to come find you. You need to find them.

4) Do NOT skimp on producing your music—a well-produced track is the first step between you and a potential fan.

5) Do NOT think you are above engaging with your listeners.

6) Do NOT delay playing your music live in front of as many audiences as possible, even if your set isn’t perfect yet.

7) Do NOT say ‘no’ to opportunities early on in your career, no matter how small they are. 

8) Do NOT promote too many songs at once. Focus on your best couple songs and market those to a new audience first. 

9) DO NOT be afraid to reinvent yourself.

10) Do NOT charge people upfront as a new artist. Embrace the power of free.

The Myth of the Traditional Music Industry

Much has been said about the supposedly dying music industry. What many people don’t distinguish between is the music industry and the record industry. While the record industry is dying in many ways, the music industry is as alive as ever. Tunecore founder Jeff Price said at the Digital Music Forum East in New York (via Digital Music News):

“This was not a fucking golden age. Artists did not swim in money in the traditional music industry… This concept that the music industry was so fucking great is just wrong! It was great for like, one band!”

And the Price is right (pun intended)! In the past, the industry relied on the hits, while artists who couldn’t come up with a successful first or second album were quickly forgotten. As Price notes, these days artists can fail on one album and go straight into making their next album because the price of recording and releasing music to the world has dropped immensely.

Without gatekeepers, it’s anyone’s game. Now you don’t need to ask anyone’s permission, you can just make your art. Whether your art will later be accepted and will help you launch a career is another question, but you don’t need a label’s check to tell you if you can or cannot at least attempt to have a career.

Hypebot does a good job of showing how MC Lars gave away his music for free so he could jumpstart his merchandise and ticket sales. As you can see in the chart above, 87% of his music income arose from merch and tickets (not CD sales). And instead of getting a label to fund the recording process, he used Kickstarter to help raise the money. MC Lars commented on the changes in the music industry:

“Being a musician no longer means simply being a songwriter and performer. One must also know a little about business, branding, t-shirt design, social networking, production, publicity, accounting and tour managing."

The music industry is now one of long-tail economics. There might be smaller riches in it for the anointed few, but there are certainly many more who have a shot at a piece of the pie.