RA: The changing economics of electronic music – Resident Advisor

You’ve written as well about how Spotify is eroding existing music industry structures, like how they appear to be trying to replace music labels, for instance. Could you talk a little bit about what they’re doing there?

Liz Pelly: Oh yeah. I think you are talking about this article that I wrote last year comparing Spotify and Uber. I think it’s important that we talk about music platforms in the same conversations that we’re criticising other tech companies. But I was referring mostly to Spotify’s turn towards doing contracts with independent artists and advances and in some ways signing artists directly to the platform. And Spotify has said that it’s not trying to be a record label, but there has been talk of advances and deals directly with independent artists. And I think that any major tech company or platform that is trying to replace independent record labels in that way needs to come under criticism.

There’s so much more that independent record labels provide to independent music communities beyond just the technology to distribute music. Independent record labels are a huge part of the social fabric of what makes up independent music culture, and I think that’s something that is really important to keep in mind. Independent record labels help connect dots between communities, and often are locally focused. There’s just this whole other element of what it means to support and create culture that a tech company such as Spotify I don’t think could ever be part of.

Do you think this fits in with a wider trend of these big digital platforms reshaping local communities? I read this article you wrote recently about how Facebook is makings things difficult for DIY spaces for instance. So there’s a general trend of the local being invaded by these generalised platforms.

Liz Pelly: I think that the erosion of local music communities at the hands of enormous tech platforms isn’t something that is solely the fault of Spotify, but it’s definitely a big piece of the puzzle. It’s important to think about the way platforms like Facebook and Instagram and other major platforms have also become tools that local music communities are increasingly beholden to for organising events and communicating and booking tours. And I think that the extent to which those tools have become an integral part of what it means to form community around music today also is worthy of immense criticism. And thinking about the types of interactions that those platforms incentivize, and the ways that we’re allowing communication at the whim of platforms like Facebook, Instagram, and also Twitter to become part of how we form community around music I think is also something to be critical of.

It’s time to hear from an artist with a radical approach to these big tech platforms.

Xin: I released an EP last year on Subtext, and then I’ve contributed to a couple compilations on net labels like ANBA, Genome 6.66 Mbp, and Intruder Alert.

And your release on Subtext that you mentioned was distributed in a particular way. Could you explain that?

Xin: Yeah. So we chose to make it available solely through independent platforms and not available to stream on Spotify or Tidal or whatever. That was a bit tricky to navigate, I guess, during the promo period. So we had to make a few things available, like on SoundCloud for streams.

Why did you decide to do it that way?

Xin: I have a number of qualms about streaming, I guess, as most people do nowadays. And I guess I was feeling a bit frustrated with how homogenous the landscape generally seems and just wanted to try to do something different. So I was thinking about—why release music in the first place? What I might want from doing that. And I guess it wasn’t so much a question of reach, necessarily. Just thinking about questions like, how do I want people to engage with my music?

You said you have some qualms with streaming. I guess there’s the financial aspect that people discuss, but there are also other perhaps harder to quantify aspects to streaming that musicians aren’t so happy with.

Xin: Yeah. Spotify’s pro rata method of splitting royalties just fucks over a lot of smaller artists.

Pro rata refers to the way that Spotify divides up the money owed to artists. In a given month, Spotify gathers together all of the money to be distributed, and then splits it between the songs in its catalogue based on how much they were listened to. So if an Ed Sheeran song gets one percent of all plays in July, then one percent of the money from July goes to Ed Sheeran. All the major streaming platforms use this model. And while it might seem pretty fair, it tends to favour mainstream artists who attract high numbers of listens. Some argue that streaming platforms should instead adopt a user-centric distribution model. This would mean that if I spent my July listening exclusively to the noise musician Merzbow, then all of my subscription fee, at least the bit of it which goes to artists, would be paid to Merzbow. With the current model, no matter how niche my listening habits, a chunk of my subscription money goes to big stars, like Ed Sheeran.

Xin: I think generally, I’d like to see people being a bit more critical about the platforms through which they share their music and promote themselves, because I think that kind of question extends to the whole ecosystem, to publishing, etc. I guess a lot of the risks that come about when you use a platform like Spotify are well documented by people like Liz Pelly or whatever, how they exacerbate the gender bias, how they encourage passive listening over active listening. There’s just a whole slew of things that just really don’t sit well with me. I don’t like that method of engaging with music for myself either.

Did you find that avoiding those big streaming platforms made things harder? Or in what ways did that make things harder?

Xin: I can’t really separate that from not being on Facebook or Instagram, so obviously that means substantially less reach. Broadly speaking, with everybody I know, there’s this sense that you have to be on these platforms to quote-unquote get anywhere or whatever. But I guess I’ve been somewhat surprised by the fact that some people at least have listened to the EP, have booked me for shows. So perhaps it slows things down, but when I made those decisions, I acknowledged that even if it slows my career down a bit, that’s something I’m willing to do, because, to me at least, those things are important.

I was struck by the courage of Xin’s approach, and wondered if other artists have considered a boycott of the streaming giants.

Telefon Tel Aviv: I see other artists doing it, and I think it’s really brave of them. Skee Mask, for instance, was like, “You know what? My new thing, I’m not putting it on Spotify.” And a lot of people are like, “Well fuck, man. How am I supposed to listen to it?” And he’s like, “Cool, you can go to Bandcamp. It’s $5.99. It’s not expensive. I spent half a year working on this fucking thing. Throw me a bone here.” I think that’s really brave, and I also think you could justify spending $20 on a Skee Mask record. It’s going to be a fucking ripper.

There was a great tweet about this five years ago. A guy was like, “You know, I have a hard time. I go back and forth on whether I’m going to spend 99 cents on a song, but believe me, I’ll never bat an eyelash about spending 99 cents for more guacamole at Chipotle.” I was like oh, OK. What streaming has done more than anything is, in the court of public opinion, whether people realise it or not, it’s completely devalued physical music. So people don’t buy it.

And I guess that’s a much harder trend to reverse or to work against.

Telefon Tel Aviv: Yeah. I mean, I don’t know how you can tell people like, “Oh well, you were paying nine bucks a month for all the music that you could ever want, but now that’s over, and now you have to start paying nine dollars for every record that you want.” The pitchforks will come out. And somehow the artists will be the bad guys.

Do you think musicians should be boycotting Spotify and the like?

Mat Dryhurst: No. And the reason for that is nothing is lost at this particular point in time through having your music hosted on Spotify or Apple Music or whatnot. Particularly if you are not in an advantageous financial position or whatever, maybe in the short term, you stand to lose more from not participating in those networks than from participating in them. So I never try and be judgy about people, just generally. And boycotts tend to encourage judgement. I might be in a better position, or at least the people I work with might be in a better position, to make that call. I don’t want to put that on an 18-year-old.

What I would say, though, is that I think metering your expectations, or basically lowering your expectations heavily about what those streaming services might do for you is advantageous, and also looking into alternatives with all of the free time, free head space or brain space that you have freed up by not putting any faith into the streaming services, thinking about alternative measures to actually benefit the health of your local community or your friends or whoever it might be is a good idea.

Let’s talk about alternatives to the streaming giants. Are there any in your view? Or could there be any?

Mat Dryhurst: In the short term, there’s a few good things. I say short term, because I actually don’t think these things are longterm competitive. There’s a Berlin-based organisation called Resonate that has actually put a lot of time and effort into trying to produce a better deal for people with streaming. And my suggestion with Resonate is why not just put your music on there too? I think that there’s nothing lost in that process. In the short term, Bandcamp is great. I have no ill will toward Bandcamp. I think Bandcamp is basically the closest approximation you could have to a record store. If people don’t live in a place where they could physically acquire records, Bandcamp is an incredible way for them to compensate you for the work that you’ve done. So I think Bandcamp is awesome, and people should support it.

Similarly, Avalon Emerson and Louis [Center] put together this Buy Music Club, for example. Ideas like that, of attributing people and using whatever platform you might have to point people towards purchasing something is a really good idea.

Avalon Emerson: I make music and I DJ. And together with Louis, we started Buy Music Club.

Louis Center: I’m a software developer based in Berlin. I’m a music enthusiast and regular music downloader, but predominately I work as a software developer.

And what is Buy Music Club?

Louis Center: The basic concept is that Buy Music Club is a website where you create lists of your favourite Bandcamp releases or maybe lists around a certain topic of Bandcamp releases—collections of things. And then you publish them to the website, and you share them with people.

Towards the end of last year, we had been looking at and discussing this marketing campaign that Spotify had been doing. It’s like their end-of-year marketing campaigns, where they basically let their artists and labels crunch stats, and allow people to publish those numbers and stats.

It’s Spotify Wrapped, right?

Louis Center: Yeah. We’d seen that, and I mean we have a lot of different opinions and thoughts on big streaming platforms. And there’s been a lot of discussion recently about how equitable and how fair these streaming platforms are for independent artists. And I guess within the dance music space, there’s a lot independent creators doing their thing. So we’d been looking at that and talking about it, and thinking about how much that marketing campaign didn’t really stick with us, or didn’t really feel particularly great. Avalon said it would be really cool—I think she wanted to do a Google Doc or something, of her favourite Bandcamp releases of last year, and then put that out there, and just encourage people to go through it and listen, find the things they wanted to buy, and support the artists on that list, just to start a conversation around that.

And then through that, the idea of OK, let’s publish that list, but let’s also create something on top of it, where everyone who’s interested in creating a list can do the same thing, and then share it through the platform as well. And that’s what the platform is.

What is it about Bandcamp that made you want to direct people there, specifically, as opposed to towards some other platform where they could consume music?

Avalon Emerson: I think the kernel of Buy Music Club also came out of not only Spotify Unwrapped, but also this traditional yearly slog that everyone endures of the year-end list thing. I just had the idea that we could translate that into something that generates income for people so that it’s not simply a ratings thing. And the reason Bandcamp was the best platform for it is because as an artist or a label, you get so much more of the income for every dollar spent there. Bandcamp is basically a series of lemonade stands on each of their individual cul-de-sacs. And as a consumer, you go to that store, take out your credit card, buy the $2 song, get on your bike, go to the next cul-de-sac, do the same thing.

There’s all kinds of ways that this can be improved, I think, specifically for our scene. One of them that we saw in December was being able to make lists of all of these things.

And was there a particular audience that you were hoping to reach with this? A particular kind of music listener or fan?

Avalon Emerson: One of the problems with streaming platforms like YouTube and Spotify is that it flattens every listen down to this single resolution, whether that’s someone who’s completely passive and doesn’t even want to choose the kind of music that’s coming out of the speakers—they’ll click on a chill hammock playlist that’s curated by someone at Spotify. But there’s a massive community of people, especially in the dance music world, who want something specific and something that is connected to the scenes and the worlds they’re interested in. And so these are the really engaged people who are the music fans that we wanted to target with Buy Music Club.

And how was the response to that initial launch of the site?

Avalon Emerson: Surprisingly very enthusiastic. We published with a small homepage, and then saw the lists just rolling in. We saw all kinds of DJs, artists, labels, radio shows and then listeners. People who just wanted to take stock of their year.

It interests me that a project like this, it’s not necessarily offering anything radically different. It’s perhaps a value shift, where it’s celebrating purchasing music rather than simply streaming it or whatever. Did you have that in mind, that it was trying to celebrate a different kind of music consumption?

Louis Center: Yeah. I think it’s very obvious to point out that the thing that we’ve built so far, there’s nothing overly radical about it. I mean, it’s essentially a list creator. And so it’s wild to see people getting amped about that, but I agree with what you’re saying, which is that it’s a conversation starter, it’s a value shift. And it’s getting people thinking about something, which I think is what the intention was.

Avalon Emerson: Yeah. These cycles of attention happen every year. And this is what the Spotify campaign at the end of the year was doing, is capturing the energy to take stock of the previous year, and providing artists with this pre-made video that they can share on socials. And so instead of just allowing these large platforms to capitalise the conversation on it, we wanted to make something that was something that tipped the needle in a direction of allowing people to think about what’s actually happening.

It was also interesting to see how people had this exact question that you had. Why is Bandcamp good? Why is Spotify bad? Why is streaming bad? Why does a label or an artist make three times more if they sell an EP on Bandcamp versus if they do on Beatport. A lot of people didn’t know that. So this is also a good positive point to bring up in this discussion instead of just complaining about things. I mean, it’s a valid thing to do, to complain about the current structures. We didn’t build anything that crazy, that radical. Nothing technologically that hadn’t been seen before. We basically created one feature that this old platform, Bandcamp, didn’t have, and it really spoke to people.

Here’s Liz Pelly.

Liz Pelly: When you think about the economics of music and the economics of a platform like Spotify versus the economics of a platform like Bandcamp, obviously Bandcamp is a platform that from an economic perspective is much more friendly to artists, solely based on the fact that it is a platform that encourages buying of music versus streaming, but also the ways that payments are split—most of the money goes directly to artists. And streaming and services like Spotify inherently devalue music, whereas I feel like the encouraging of music to be sold is the huge distinction between the two that makes Bandcamp something you could fairly say is much more friendly to artists.

And also the extent to which control over context plays into the conversation is also really important. The ability to control music being heard in the context that it was intended to be heard as a release, as an album versus as singles that are being made into playlists by curators or by algorithms is a huge distinction as well. But every artist needs to decide for themselves what tools work for them, and every fan needs to decide what tools work for them.

I think that a lot of the weight of these decisions about what tools are the most fair, or what tools should be embraced often falls onto artists and labels, but I also think that as listeners and fans and members of music communities, we also need to do the same sort of reckoning about what digital tools make sense for us, or feel inspiring to us, and which tools we want to be part of our relationship with music. And for some people, that might be Bandcamp. I think there are also some artists who don’t want any platform or medium at all to come in between them and their fans and listeners, and that also is I think something that would be interesting to see more people experiment with.

Here’s Mat again.

Mat Dryhurst: I think that what has happened is barely reversible. I don’t want to be defeatist about it, but I’m not very confident that we can reverse the damaging effects that streaming has had. Not least because in, for example, the venture capital community or the places that might be able to generate sufficient capital to fund an alternative, the consensus there is that the problem of music has been solved, which is a huge defeat.

So in terms of being pragmatic and thinking about next steps, Bandcamp, projects like Buy Music Club, projects like Resonate I think are really, really wonderful in the short term. In the long term, I think we need to have a really big think about what the new value is of the culture that we create. I have a bunch of things to say about that, that we could be here for a couple hours, and you probably have a bunch of things to say about that, but that’s where I’m at right now, is I’m like, “What do we stand for? What are first principles? What would people pay for?” That’s more interesting to me.

Personally, I’ve been thinking a lot about clubs. And from the basic observation that the cultures that tend to endure tend to own space. And there’s a bunch of different stuff happening around ownership of space, like equity agreements. There’s some changes happening in that universe and I’m like, “Oh, this is interesting.” Looking into the club space, for example, there was this great legacy in the ’70s groups like Superstudio. There’s group of Italian utopian architects and designers who are thinking about club design. A lot of that thinking ended up being put into The Hacienda. The way that they were re-conceiving clubs is common to most people’s clubbing experience now. But for my personal interest, you can go even further back, actually. In the late 1800s in Germany, there were more radical ideas about the future of socialising than are happening currently.

And so that is my provocation. I’m like, hey guys, liberate yourself from these very limited parameters that are being imposed on you by people who don’t care about your culture. If you guys decided tomorrow that the future of your micro-scene was dogs. That’s cool. And I think there’s maybe more promise there than saying, “Well, if only we just changed the size of the artwork on a streaming platform, then people will pay.” And I’m like, I don’t know what to tell you. I don’t think that that’s true. So I think that in a sense, and under the principle that as an artist or as a person who’s deeply participating in culture, it’s part of your job to be a bit visionary. Let a thousand flowers bloom.

I think that’s way more exciting to me than being like, “Yeah, well how do we trick people to buy something that has been buried?” It’s really sad. Just thinking is good.

Here’s Marta Salogni.

Marta Salogni: Well, I think the way that we can approach trying to direct our dissatisfaction with the current state of things is to act as a community. That’s what I believe in. Together we are stronger. And if we can spread information that we have of what’s happening, then more and more people will be able to make a choice, and choose if they want to, like me, withdraw from a paid subscription, or try and consume music with a bit more attention given to where we put our money. And money’s a big form of power that we individually have. As a community, we’ve got the power. We can try and create awareness, and as individual, we’ve got the power of spending money on ethical choices.

For music fans that care and have the time and the possibility to make a choice on how to consume music, I suggest Apple Music, because Apple Music did not oppose the Copyright Royalty Board increase in songwriter’s royalty rates, plus Bandcamp and going directly to the artist after a gig, or to the artist’s website. And generally start trying to be informed on how they spend their money.

I asked Liz Pelly if she thinks that streaming services are here to stay.

Liz Pelly: The most urgent for music communities, from my perspective, is that we really don’t know the long term sustainability of any of these platforms. In and of themselves, obviously, something like Spotify and Apple Music and Amazon Music, these things will never be sustainable for independent artists. We don’t really know how long these platforms will even be around for. I think that is why it is so important to be working on alternatives.

I think that platform dependence is bad for lots of reasons, but one of the reasons why it is so risky to be fully wrapped up in one platform, even something like Bandcamp, which I use and enjoy using, the idea of fully wrapping up all of your music listening or music releasing or distributing into one platform is that you’re giving a lot of power to this one platform to have control over the way that you experience music and the way that you release music or listen to music, and then you’re at the whim of that platform. So if any of these platforms disappear or change, you’re not in control of that interaction. That’s why it’s important to remember all of the things about independent music culture and community building, creating community-driven tools outside of these platforms.

I definitely think we’re in a period of time where artists and fans alike really need to be reckoning with the role that digital tools of all types play in the distribution and promotion of music, but also how much communities function. And I would never tell anyone not to experiment with removing their work from a certain platform if they felt like that platform wasn’t serving them. This is a period where we should be experimenting. Not everything is going to work for all artists. I don’t think that the tools that don’t work for one artist or community or fan aren’t necessarily going to work for another artist or fan or community. Experimenting with different available tools to figure out what works for you, as an artist or someone who runs a label or someone who is a fan of music, I think is a really important thing to be doing right now.

Thanks for listening to the first part of this two-part episode of The Hour on the changing economics of dance music. In this episode, we heard about streaming, how it works, the challenges it poses for artists, and other ways they can sell their music. In next month’s episode, we’ll be looking at other potential income streams for dance music producers with artists Patrice Bäumel and Gunnar Haslam along with Mat Dryhurst again. We’ll explore the inner workings of the royalties distribution system, and discuss the ethics of collaborating with brands.


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