Streaming is the future of the music industry. Anyone who doesn’t see that either simply doesn’t want to see it, or is living off-the-grid in North Dakota. The problem is, the streaming space is too crowded – we have Deezer, Rdio, Rhapsody, Spotify, Google Play, a forthcoming Apple service, and now Tidal, among others, to choose from – an array of options mostly presenting the same music for roughly the same price.
Tidal, a Swedish company that began as a loss-less (CD-quality) streaming service last year before its purchase in December by Jay-Z, has had a lot of backlash in the past two weeks since Jay-Z’s public relaunch of the service, alongside other notable artists like Madonna and Jack White. Tidal claims that the company better serves the artist community, and pays higher rates than the others. Now with two tiers of pricing, standard at $9.99/month (just like the others) and premium hi-fi at $19.99, Tidal has been dismissed as too expensive and benefitting already wealthy artists.
The problem with these complaints is that detractors aren’t seeing Tidal for what it is – whether or not the owners are already wealthy, they ARE at least artists, and surely have the artistic community more in mind than say, a tech entrepreneur like Daniel Ek, who mostly wants to see his service go public and cash out – money made on the backs of artists. Further, the service is trying to target a community of audiophiles with its hi-fi option, in recognition that not all music listeners are the same, wanting the same services at the same prices.
Tidal may not be for everyone. Detractors have decried its policy of exclusive releases (something for which Netflix and HBO are widely heralded!). But despite the criticism, at least it represents someone doing something different in the space, and that may result in progress for all.
With 2015 upon us, there is widespread optimism about the music industry. Touring continues to grow, and a shift in the recorded music market away from ownership toward the subscription model has many believing that perhaps changing business models can breathe new life into a very disrupted industry over the past 15 years.
Challenges stand in the way. Secondary ticketing continues to pose huge problems in touring, despite highly increased ticket prices. And streaming’s business model is threatened by public reports of very poor artist payouts, leading major artists to pull content from the services.
At Rethink Music, we have a few predictions for 2015:
1. Streaming will gather momentum and become dominant or well on its way to dominance, depending on the market.
2. Consumers will begin to demand better sound quality through streaming. Neil Young’s Pono player and Jay-Z’s recent bid for Tidal, the hifi streaming service, are bringing attention to the fact that we don’t have to listen to poor quality compressed MP3′s anymore.
3. Sadly, major record label power will further increase. With a floodwall of independent material, distributors will be looking to the big players to give them tomorrow’s hits. And in the end, labels are the ones with marketing machines powerful enough to make or break an act.
4. Writers and artists will take a stand on digital payouts, and technology will begin to allow true total transparency to better understand how the money is flowing.
We also have a few promises and resolutions we think the music industry should make this year:
1. Artists and writers should pledge to educate themselves about how money is made in the music industry. Every single artist should understand the basics of copyright and money flows in music.
2. Streaming services, labels, publishers, and PRO’s should promise and deliver complete transparency about their payments process and what deductions are taken, and should pay royalties within a reasonable timeframe in readable formats.
3. Finally, and perhaps the most important, the industry should take a vow to work together to grow music revenues. There is just no point in fighting over a decreasing pie.
We CAN move forward and have a healthy industry. It’s just time to do things differently.
Boston/New York, November 18, 2014 – Berklee College of Music and Kobalt today announced an innovative collaboration for driving growth in the new music industry. Kobalt is providing a two-year grant for Berklee’s Rethink Music initiative to continue its series of global events and fund a study in conjunction with Berklee’s newly formed Institute for Creative Entrepreneurship (BerkleeICE). The student-led project will review the ways technology and transparency can help address global music licensing issues and bring artists, writers, publishers, labels and distributors closer together.
Additionally, in an effort to support up-and-coming songwriters, Kobalt is providing a $10,000 merit-based scholarship annually to songwriting majors at Berklee. The Kobalt Scholarship will be named after various Kobalt songwriters each year.
“We are extremely excited and grateful to be working with Kobalt. Kobalt is well known as a leader and forward-thinking company in the music space, and this partnership will allow us to continue to pursue our goal of fostering the new music industry,” said Allen Bargfrede, executive director of Rethink Music for Berklee College of Music. “Through our project work in the coming months on technology and transparency, and via our entrepreneurship events, we expect outputs which will both alter the space and create opportunities for Berklee students.”
Willard Ahdritz, founder and CEO of Kobalt said, “We are thrilled to be working together with this prestigious school and their outstanding young students. They are our future! The motives and objectives of Berklee’s Rethink initiative align closely with our own at Kobalt, and I’m confident that the work we are doing together will produce direction and solutions that will help shape the music industry of the future.”
Berklee’s Rethink Music began in 2010, and in collaboration with academic partners at Harvard Law School, Babson College and IE Business School, the program fosters dialogue and ideas for the new music industry. Rethink maintains its strong affiliation with Midem, the annual music industry trade conference in Cannes, France, and will continue its search for the next music business entrepreneurs and creators through a series of events in 2014-2015, including its annual Venture Day in Berlin, which has quickly become one of the largest events in Europe focused on music entrepreneurship.
Rethink Music is expanding its reach this year, with the global licensing research project led by BerkleeICE’s research lab which is seeking to work closely with other universities including Harvard’s Berkman Center for Internet and Society and MIT’s School of Engineering. Kobalt is supporting the initiative by providing anonymized publishing data, allowing researchers to better understand revenue sources, royalty matching and licensing terms.
“We’re very appreciative for Kobalt’s support” said Panos Panay, Founding Managing Director of Berklee’s Institute for Creative Entrepreneurship. “Our mission is to foster entrepreneurial thinking, disruptive ideas and innovation through cross-discipline collaboration. Tackling the complexity of music licensing issues – with perspectives from various universities – should prove very insightful and can help inform the future of the music industry.”
We’ll soon be announcing events for 2015. Until then, don’t forget the “music” in “music industry.” See you soon!