Music streaming transformed the industry by ending piracy but also lowered music’s value for artists. New models like Deezer’s artist-centric royalties and YouTube Premium’s listen-time payments offer practical ways to improve fairness and increase artist revenue.
Happy Monday! Shorter email this week because i’ve been a bit busy. However next week (I think) i’ll have a cool surprise for you.
Music streaming certainly has changed the music industry. It saved it by eradicating most music piracy but also destroyed it by making music nearly worthless.
However, in addition to what they’re trying I think there are several ways streaming could be ‘tweaked’ to perform better for artists but still be amazing for consumers.
So lets talk about what should change about music streaming…
Eliminate Fraud
The first thing that needs to improve is fraud detection.
I’ve heard numbers thrown around saying 10% of all streaming volume is fraud. Thats an insane amount of streams. Streaming fraud doesn’t actually steal from the companies though, it just steals from artists.
This week Spotify has claimed ‘less than one percent of all streams on Spotify have been determined to be tampered with’, but in my opinion thats BS.
Spotify and others get their 30% no matter what, but the more fraud streams there are in the pool the less artists get paid per stream.
Eliminating fraud will give every single artist an immediate raise.
On top of fraud there is also a lot of noise music. This includes literal white noise sounds, but also rain sounds and nature noises. This all generates streams and is mostly designed to cash out as much money from the steam as possible. Removing it will help artists make more.
YouTube Premium Model
I think music streaming services should ditch the payment per stream model and switch to a payment per ‘listen time’ model. Additionally, your money should only pay the artists you actually listen to.
This is how YouTube Premium works for paying subscribers. They look at the watch time you spend watching specific channels and divide up your monthly payment to each of them.
Right now on almost every streaming service things are done on a platform level. Meaning if you’ve never listened to Taylor Swift, some of your money is going to Taylor Swift.
Here are some more perks of the YouTube Premium Model:
Stops incentivizing shorter songs
Makes it harder for bots to be profitable
It feels fairer, songs that hold people’s attention for longer make more money
Other Changes
Spotify has made pretty great strides recently by including ticket links, merch store integrations and rolling out video support to enhance artist communication.
However, I think there is much more streaming services could do to further help artists.
Eliminate streaming fraud.
Switch to a listen-time payment model.
Introduce more expensive subscription tiers, maybe bracket customers by how any stream-hours they get per day.
Add a patreon-like subscription element to streaming. Artists can release exclusive content and music for their subscribers, the platform can even take a 15% cut of royalties here.
Allow fans a way to opt-in to receive communication from artists they follow, even to get their email address or phone number.
In general streaming isn’t often something an artist does exclusively to make their living. For most artists its the gateway drug to their music, and the rest of their funnel monetizes their fanbase.
However that doesn’t mean it ‘should’ be that way.
New Content
I took YouGrow Promo’s Spotify playlisting service for a test ride - check it out.
Deezer announced a new 'artist-centric' royalty model that promises up to a 4X increase in royalty payments.
Here are some music industry news highlights from the past week.
Swedish gangs are using Spotify to launder money
Warner Music signed a virtual artist
Goldman Sachs believes Spotify will be dominant music streaming service in 2030.
Spotify tests restricting lyric access to premium subscribers
Apple acquires classical music label BIS Records
Quote of the Week
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Your time is limited, so don’t waste it living someone else’s life.
Steve Jobs
Whenever you’re ready, there are 4 ways I can help you:
My courses. Spotify Growth Machine teaches you how to use Facebook ads to promote your music on Spotify. YouTube Growth Machine teaches you how to grow a YouTube channel organically and how to use YouTube ads. Fan Growth Machine teaches you how to build a website, online store and grow your email list.
My ad agency. Forbid Media specializes in running Facebook conversion ads to promote your music on Spotify.
Website / Store / Funnels.MusicFunnels is the best all-in-one platform for music artists to make a website, online store, sales funnels and build their mailing list.
1-on-1 consulting. You can book 1-hour calls with myself or Alex Bochel here.