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Wednesday, December 24, 2014

Is 'Music Like Water' a Fallacy? WATCH & READ this #MusicBusiness News Report


Written by Adam Cruz


I googled 'music like water' and came across a few very interesting articles on the subject, but this one, written by Portland songwriter and producer Gavin Castleton, clearly spells out the opposing arguments than those I believe. 

In my opinion, the music industry needs a complete overhaul in order to better address artists' dwindling income. Thanks to several factors including piracy and free and 'almost free' streaming, artists are receiving less of the royalty income than ever before while the consumption of music continues its upward trajectory.



We are listening to music more than ever before and artists, in dealing with their dwindling dollars, have begun to file lawsuits against streaming media websites. For example, YouTube now faces a $1 billion lawsuit from Pharrell Williams, the Eagles and others over claims that YouTube does not have performance rights to thousands of their songs.

In a recent article, Time Magazine reported that "the threat of a lawsuit against YouTube comes amid a broader debate about the rights of musicians in a freewheeling era of digital access to songs. In December, Consequence of Sound reported that Williams' megahit, "Happy," generated just $2,700 for 43 million plays on Pandora."1

In my view, 2015 will mark the year where artists begin suing streaming music sites in search of their lost income. If industry insiders blame streaming music sites like Spotify and YouTube for killing the music business, than we only have ourselves to blame.2

As history has shown, record companies have transferred their power with respect to pricing and packaging to industries that are not their own. In the case of the digital download, it was Apple who dictated the price, selling the idea to labels with a '99 cent' marketing slogan. Once that price point was agreed upon, the music industry cut itself at the knees, forever positioning itself at the lowest price points.

Today, we see the music business as an imploded version of its former self, forced to convert into a services business, tying merchandising, touring and endorsements in with the music since music can no longer make money, standing on its own.

While the music industry spent an enormous amount of time becoming service oriented (as opposed to music oriented,) it arguably left a space for streaming media companies to be innovative with music technology without opposition. Streaming media companies also knew to give consumers what we know they wanted. It's more obvious than ever before that consumers want their music casually, easily and cheaply. This is simply the reality that the 'Smart Phone' generation lives in.

It is, therefore, time to think about overhauling music and strongly consider alternative business models in order to become sustainable. While labels seem to be jumping on subscription services as the future model, I continue to believe that we ought to consider music as a public utility. Like water, we could pay a fee per month for unlimited access. Unlike Spotify, music like water opens us up to the world's music, not just what Spotify carries. While their database of songs is huge, it still doesn't represent the world's music. Tastemakers tend to dictate what we listen to in terms of top 40 music, using money, power and position to get airplay. With music as a public utility, our 'top 40' songs would be influenced by actual listeners instead of lobbyists with money. At that point, we'll begin to level the playing field by filtering more of the income to independent artists.

In his article, Castleton believes that the argument in favor of 'music like water' is a fallacy. Here are his points:


Written by Gavin Castleton

In 2002 David Bowie said, "Music itself is going to become like running water or electricity." In early 2005, Berklee VP David Kusek and "futurist" Gerd Leonhard based their book The Future of Music on the concept of "Music Like Water," i.e. the transformation of the music industry into one in which music is ubiquitous and subscription-based, paid for and delivered like any other utility service.

In 2010 Spotify founder Daniel Ek co-opted the analogy and has brandished it in every interview since. Aside from a few askance sentences buried in various article comment threads, I was hard pressed to find anyone else that found the concept distressing. To date, the only formal counter-argument I've seen published was by Andrew Dubber in 2007 (who has been fighting the good fight ever since). I would like to present another.

Here are some observations regarding our relationship with water in the US:
  1. We need it to live
  2. We use it often
  3. We perceive it as free (at least, the youth and non-homeowners often do)
  4. We get it on demand
  5. We take its abundance for granted
  6. We take its purity for granted
As a consumer, all six sound great to me, because my only objective is to get as much as I can, as soon as I can, for the least amount of money and effort. I don't care if slaves made it, I don't care if it is spiritually toxic or will lead our culture to a place where music is peripheral; I love a bargain.

As an artist, I like the first two because they raise my value. But numbers 3-5 threaten my value, and number 6 seems invalid.

Let's look closer at those last four points:

1) We perceive it as free

I could assert that a .001-.004/stream royalty rate (that gets split between at least two parties) will never result in sustainable income for a solo artist, let alone a band. I could show you some statistics that suggest no matter how much they dangle the carrot of future adoption and ad revenue in our artist faces, streaming services like Spotify will never pay a workable rate (anyone telling you otherwise is getting paid on a backend deal that will screw their artists like never before). But if enough artists walk, Spotify would most likely arrange an alternate revenue stream to pay the artist a bit more. So I'm not really concerned about the problem of getting artists paid, I'm concerned about consumer perception. When the listener loses her notion of sunk cost in my album, she will value it less. She will make less of an effort to understand it, and subsequently she will most likely enjoy it less. It is not a coincidence that the average shelf-life of an album is tanking, and artists are adopting single-based micro releases in shorter release cycles.

Now I'm well aware that some folks have testified that they have seen an increase in sales since the adoption of streaming sites like Pandora and Spotify, and that may be true. I myself have benefited from discovery sites (though it's hard to do an actual cost/benefit analysis without a complex tracking system in place). But isn't it possible that those sales are primarily attributed to older users who grew up paying for music? Do we really expect those sales to continue once the market is comprised entirely of kids raised in the age of free streaming? Remember how our parents paid for long distance calling?

2) We get it on demand

Right now, the sentiment that everything in our lives should be "on-demand" is widespread and with few exceptions, undisputed. Over the last few decades the anthem of consumer empowerment has risen to a deafening roar. At this point, we seem incapable of accepting the notion that the customer may not always be right. What's more, despite the housing crisis and the insane rise of credit debt, we still uphold the conviction that we should always get what we want, when we want it. Forget for a moment that artists are actually foolish and desperate enough to answer the call for immediate free labor, (in all other industries you actually pay more for expeditiousness) because, in capitalism, the responsibility to assert one's worth lies upon the laborer. Let's think about it from the perspective of the average citizen: does this "on-demand" mentality foster repeatable fulfilling experiences, or will it only destroy virtues like attentiveness, contemplativeness, and patience? Entitlement is a symptom of immaturity, and we as a society have a lot of growing up to do.

3) We take its abundance for granted

Spotify is one step further in the march to abolish artists' last recourse in an intensely over-saturated market: artificial scarcity. You can pretty much split the debate over music monetization into two camps: those that want to re-instate artificial scarcity, and those that want artists to embrace other revenue streams instead. Some artists are dabbling in both, trying to reinstate artificial scarcity momentarily by limiting the content available on streaming networks for a short while so as not to cannibalize sales. Personally, I think either is valid depending on what kind of music career you're shooting for. But what really bothers me about both Spotify and "piracy" (which are pretty much synonymous) is that both are hell-bent on taking that decision away from the artist. Nothing feels more invasive than having your livelihood reprogrammed by someone you've never met. The collapse of the old music industry and the subsequent confusion and job redundancy we're all dealing with is often dismissed as a simple case of capitalistic evolution, but that is an irresponsible and insensitive synopsis. We mustn't forget the catalyzing variable in this story: massive unchecked intellectual property rights violation. Grievances and shortcomings with the previous model were not handled within the confines of legal capitalism. This injustice is the reason that we consumers and companies like Spotify should be particularly sympathetic and sensitive to the needs of artists and, dare I say it, music industry folk right now. I know it's not very hip for me to say that, but I think we should be clear about the behavior that led us here - whether you think it's an improvement or not.

4) We take its purity for granted

Though I'm sure the proponents of Music Like Water never intended to take the analogy this far, I think this one is important. The reason access to water can be ubiquitous is because of regulation through organizations like the EPA. Without regulation, our irrigation and distribution systems would be nothing more than conduits for disease. In terms of music, what would be the comparable regulating entity? Well, up until a decade ago, the filtering of music was mainly handled by a formal music industry - promoters, labels, distributors, radio, MTV. Now, obviously, the internet has changed that.

When you release the valve without well-tuned filters in place, you get what we have now: muddy waters (not the artist, the metaphor). You have tracks from seasoned artists like Radiohead distributed side by side with garbage (not the band, the metaphor), and you have transferred the burden and blessing of filtering from more official gatekeepers to the consumer. As an artist who has never been favored by the official gatekeepers, I can easily embrace the benefits of that. As a music lover who is interested in progressive works that don’t always have mass appeal, I can also appreciate it. But as a consumer, what at first felt like freedom is beginning to feel arduous and daunting. This is the well documented paradox of choice. Naturally, new aggregators (bloggers, online review sites, app builders, etc.) are rushing in to filter the stream, but now there are so many aggregators, we need aggregators to aggregate the aggregators. I’m not saying I prefer the old top-down filter model (though when almost all new aggregators are adopting the algorithm that sorts results by Most Popular, you tend to end up with the same results), I’m simply pointing out that proponents of the Music Like Water concept have put far more thought into making everything free to the consumer than they have into making sure people can find what they want, and in order for artists and consumers to have a better experience with music, distribution and filtering have to be lockstep.

So, considering these issues, are we sure we want music to be like water?

I'm not. I think both consumers and artists should look more critically at the long-term effects of this model and reconsider. I think artists have to rise to the challenge of asserting their worth, and I think consumers have to rise to the challenge of supporting artists financially even when they don't have to.

1 Barber, Elizabeth (2014, December). YouTube Faces $1 Billion Lawsuit From Pharrell Williams, the Eagles and Others. Time Magazine. Retrieved from http://time.com/3645136/pharrell-williams-eagles-john-lennon-youtube-irving-azoff/

2 Presencer, Lohan. (2014, December). An alternative Christmas message to the music industry from Lohan Presencer. The Gaurdian Retrieved from http://www.theguardian.com/technology/2014/dec/22/lohan-presencer-apple-youtube-spotify-ministry-of-sound