Apple Music launches on June 30, 2015

Apple is diving into the deep end of music streaming with Ale Music This new interactive music service will go head-to-head with competitors like Spotify, Google Play, and Rhapsody.

The iTunes download store will still continue on as normal. Fans will still be able to purchase direct downloads of your music. Apple Music is an additional streaming service companion to the iTunes store.

If you’ve included streaming services in your distribution through your aggregator (eg CD Baby), your music will already be at Apple Music when it launches. If you have not opted in for streaming, or if you have new music you’d like to see on Apple Music when it goes live, now is the time to adjust settings!

The Apple Music service at a glance

  • Launches June 30, 2015 for iOS and desktop, with Android support coming this fall (spring in Australasia).
  • Subscriptions cost $9.99 per month for an individual user; $14.99 per month for a family plan, allowing up to 6 users.
  • Free 3-month trial period available with a credit card on file.
  • Heavy focus on human curation of playlists and music recommendations.
  • Beats 1 Radio available 24/7 to Apple Music subscribers, ad-free and hosted by notable DJs.

One additional feature
You can customize your Apple Music artist profile One of the features is Connect, a social bridge between artists and fans on Apple Music. Connect gives you the ability to customize your artist profile and share backstage photos, concert videos, demos, lyrics, and more.

How can you, the artist, make money from your music on Apple Music?
Here are 4 ways you can earn revenue from Apple Music:

1. The interactive streaming royalty for your sound recording, paid to you through your aggregator

This is the money you are paid (through your label or distributor) whenever someone streams your music on Apple Music.

2. Mechanical royalties for interactive streaming, paid to you through your publisher or publishing administrator (may be your aggregator as well if set up appropriately)

Interactive streaming means that the listener chose exactly what they wanted to hear (as opposed to non-interactive streaming radio, where the listener cannot control the playlist).

Whenever someone dials up one of your songs, Apple Music is essentially creating a virtual mechanical reproduction of that composition. If you are the songwriter or publisher, you are owed a mechanical royalty for each interactive stream.

3. Performance royalties for internet radio plays, paid to you via APRA, ASCAP, BMI, SESAC, and your publishing rights administrator (also Sound Exchange etc)

The launch of Apple Music focused a lot on curation. One of the pillars of the new service is Beats 1 — a 24/7 radio station streaming worldwide. In addition to Beats 1, iTunes Radio stations will play a big role in Apple Music’s music discovery efforts.

Every time your composition is performed on internet radio, you (as the songwriter or publisher) are owed a public performance royalty.

4. Digital performance royalties for streams of sound recordings on Beats 1 and iTunes Radio, paid to you through your label or aggregator

As mentioned above, non-interactive streaming occurs when a listener cannot choose precisely what they want to hear (think Internet radio, Pandora, etc.).

These plays generate a digital performance royalty for the usage of the sound recording. This is NOT a publishing royalty. It pertains to the recorded track, not the underlying composition.

For streams on Beats 1 and iTunes Radio, these royalties for performances of your sound recordings are paid directly to your CD Baby account.

Conclusions
With the launch of Apple Music, an enormous amount of music fans will be checking out the new service. You need to decide NOW if you want your music there for them to discover.
HOWEVER – like all streaming – don’t expect buckets of money from this – and maybe think about the comments in my last article (check it out) about even mentally positioning this new service as a new, expansive ‘paid marketing’ facility rather than a revenue stream …………… but

personally……….. whichever way you position it, see it, feel about it – I do think you have to be in it somewhere, somehow

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You aren’t going to change it – so analyse and adapt

The other night at the MPMN Music Summit I made some statements and comments re positioning and the industry trends.  I have put this in a blog before – but on receiving this article (below) today  – I thought was worth adding/developing again.

A couple of thoughts to start – While music sales are reducing and streaming is going up – its good to remember

  • People are still listening to music and will continue to listen to music – its just how they are listening – and how we respond to that
  • Not every sector of the industry and every genre is experiencing the same trends in the same way – you need to understand your sector of the industry so as to make relevant choices.
  • There has always been changes in the music industry as long as I have been in it (37 years).
    Some good (the removal of POP licenses in NSW, ability to collaborate around the world with technology changes etc) and some not so good (remember the effect of FBT, CGT etc )
  • 98% of artists sell 98% of product at or as a result of gigs (if you are not gigging do you do hard product at all?)
  • Technology changes, consumer trends etc – are going to get increasingly faster. So we need to adapt because a lot pf it we cannot control or change (mainly because the changes are mostly not ‘music’ based but general industry/society developments that happen to affect us as well)

So following is the article from Aaron Davidson in the US that prompted the blog.
After his article are a couple of comments from me re positioning  – changing the mind set and thoughts of actions that you might consider.

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Aaron writes-
“In the old days, if you heard a song you really liked on the radio, you either had to wait until your favourite radio station played it again, or you had to go to your local record store and buy the album, tape, eight track, CD, etc. There weren’t many other options. Sure, you could have your friend make you a bootleg copy, but it wasn’t nearly as easy to listen to music you liked on demand without someone actually paying for it. It was either you or your friend, but someone was buying the record.   These days a kid in Iowa can download a CD to his hard drive and upload it to the internet in a few seconds, where millions of people around the world can listen to it for free. Or, if they’re real music fanatics they can do what my friend Greg, who considers himself a die-hard music fan just did, and buy a membership to Spotify. For 99 cents for the first three months and $9.99 thereafter Greg now has access to millions of songs. For less than the price of what it used to cost to buy a single CD, my friend can now access Spotify’s entire library of like a gazillion songs. Let that sink in.

Here’s a graph showing the decline in CD sales over the last twenty years in the US and how it correlates to the advent of the internet and internet related technologies.

CD sales

It’s important to point out that the sale of digital music is also declining. It’s easy to make the argument that CDs have simply become obsolete and that CD sales are being replaced by digital downloads, but that’s unfortunately not the case. Thats the other chartt I found on The Atlantic.com showing the decline in both CD and digital music sales for 2013 – 2014, along with the rise in streaming music.

Here’s a quote from the same article I found the above graph in, “The Death Of Music Sales” about last year’s music industry sales overall, “Nearly every number in Nielsen’s 2014 annual review of the music industry is preceded by a negative sign, including chain store sales (-20%), total new album sales (-14%), and sales of new songs online (-10.3%). Two things are up: streaming music and vinyl album sales.”

Is it really any surprise that less people are buying music these days

Of course, pinpointing the problem is a lot easier than finding the solution. It’s not that hard to figure out why the recording industry is struggling so much. But the solution?  That’s a little harder to come by. After all, the internet isn’t going away anytime soon and you can’t force consumers to buy something they don’t want or need
Humans are pretty easy to figure out when it comes to what motivates them to buy something. Most people simply want the best product, for the best price. Sure, there are a small percentage of thoughtful, conscientious consumers who think through their purchases and how their buying decision effects the big picture. But I think it’s fair to say that most consumers just want to buy what they want at the best price. Wal-Mart has been successful for the simple fact that they’ve been able to provide things that people want at a very competitive price. Most people aren’t thinking about how buying something from a store like Walmart is affecting small business owners in the same way that most people that are listening to music for free or close to free aren’t thinking about how it’s affecting the livelihood of musicians they love. In both cases, they’re just opting for the best price.

So, what’s the answer? How do we fix the recording industry? Well, if I knew the answer to that question I definitely wouldn’t put it out on some silly blog. After all, there’s a lot of money at stake. The recording industry is less than half of what it was twenty years ago. Anyone with the know how to fix what’s broken in the recording industry stands to make a gigantic fortune. If I knew the answer, I certainly wouldn’t spell it out here. I’m not saying that I do have the answer, but I think I can at least point you in the right direction.

Creating Demand
In order to fix the recording industry, we have to return to a time when there was an incentive to buy music.  I can remember being a kid and listening to Casey Kasem’s top 40 and hearing songs that I liked and then rushing to the record store the next day to buy the 45 or the whole album. It was such a simple sales process. Play song on radio – listener likes song – listener buys album. It worked. Sure, there were problems and there were some unscrupulous record label executives that took advantage of artists.  But it was a real industry that flourished for many years. There were huge advances given to unknown artists, there was money spent on development deals and when artists were successful, a lot of money was made by both the label and the artist. It was always a business for dreamers, but you could sense that if you were determined enough and hustled enough, anything was possible. All you had to do was look at the hundreds of bands that seemed to make it big every year.

These days, the recording industry is a fraction of what it once was. Record sales are less than half of what they used to be. Big advances to most artists are a thing of the past. The whole industry seems confused about what direction to go in and the last few years have given new meaning to the term “struggling artist”. Musicians and artists have no problem struggling and working as hard as imaginable to realize our dreams, but we need to know that there’s an industry there to support us once we’ve paid our dues. By industry I don’t necessarily mean major record labels, but simply that the business of recording and selling music is vibrant and healthy enough to sustain the musicians that are a part of it.

I’ve given this a lot of thought and I won’t spell out my exact ideas here. Who knows, maybe one day I’ll get around to fixing the recording industry, once I’m done solving the world hunger and world poverty issues. But think about this: what if there was a way to create a real demand for people to buy music again? What if when someone heard a song they liked, they had to actually buy the song or the album it was on in order to listen to it on demand, like in the old days, but using current technology. In other words, what if there was a way to create a demand for purchasing music again? What if there was no other choice? Do you think then people would start buying music again?

As I see it, the majority of the problems facing the recording industry boil down to this simple issue of supply and demand. People aren’t buying music right now for the simple reason that they don’t have to. Whoever can fix this fundamental problem, and by no means is it any easy problem to fix, will go a long way towards fixing the current state of the recording industry. We have to incentive paying for music again.  We have to create an environment where it’s easier to pay for music than it is to listen to it for free. If we can do this, I’m convinced people will return to buying music, as the demand for music has never gone away. Consumers simply have way too great a supply of free music.

People are never going to stop loving music and listening to music, and musicians are never going to stop being inspired to create music. But the music industry needs to find a way to get people to buy music again. We can’t keep giving it away.”  _______________________________________________________________________________

So the other night I mentioned at the MPMN Music Summit a couple of thoughts

  1. As NBN rolls out, home systems like Sonos become the norm, data packages on phones become bigger and cheaper – streaming is going to be more widespread than less If it isn’t going to change – then we need to adapt!!
  2. So DON’T THINK OF STREAMING IN TERMS OF REVENUE – THINK OF IT AS PAID MARKETING  – think of it as someone paying to have your music out there
  3. Accordingly – DON’T put your whole catalogue up on the streaming services – just a couple so they hear you and then have to come to your sales sites to get more of you
  4. Orientate to ‘stations’/services that play your music in rotation (eg Pandora) – so you get heard through association rather than people having to search and find you
  5. MARKET YOUR ASS OFF – promote the streamed songs everywhere – but that if want more – have to go to website/sales site
  6. Oh  – and as for gigs
    – consider online venues such as StageIt and do regular internet gigs that people pay to come to
    – stream Youtube performances and monetise of original songs
  7. But in all marketing the goal is (like with facebook)- direct people to the places to buy the rest of your product. get to your gig locally & engage with you on a deeper level

Hope it provides something to think about, happy for any comments/feedback – and if want to discuss this further or get help with your music business future – contact us via the website (pavmusic.com) or PM on facebook.

Cheers

Ian