Tuesday, April 4, 2017

Spotify Premium Exclusives | Lefsetz Letter

It’s not gonna work.

The music business is a race to the bottom. A scummy cesspool wherein rules are made to be broken and fealty is paid to money but the true currency is fans and attention. He or she who restricts access pays the price. And those who don’t scoop up the proceeds.

We’ve seen this movie before. With independent promotion. Documented quite well in the all time tome “Hit Men.” As soon as one major stopped paying, the others doubled down. Who’s gonna give up all that revenue?

Come on, the stories the past few months have been about records being broken. Ed Sheeran and Drake releasing new music and getting stratospheric streams. Suddenly, they’re gonna take themselves out of the game? Forget Taylor Swift, that’s a sideshow. From a previous era, a transition from files and physical to on demand streams. Everything moves, everything changes, but the truth remains you’ve got to strike when the iron is hot. When the buzz is in the air. When people care.

Come on, the movie studios are trying to decrease the window between theatre and on demand and the record companies are trying to increase it?

This is a giveback to Universal for a signed agreement, for lower stream rates, that’s all. There’s no news here. Hell, we haven’t completely eradicated piracy, the RIAA keeps going on about the YouTube value gap and suddenly labels want to make streaming more restrictive? Good goal, increasing revenue, bad timing.

Especially with the increase in revenue. Come on, does Apple RAISE prices when the going is good? No one in Silicon Valley does that. As for Netflix, they always grandfather in the old subscribers, as does Amazon, you can keep your original rate.

But the incentive here is to subscribe to hear the hits.

The same incentive to sign up for Tidal?

That was a complete bust.

Turns out people don’t care that much, and they don’t like to be threatened, they like to believe they’re in control and make their own choices. The history of the internet is one of products breaking through virality, and looky-loos coming last at cheap prices.

All that hogwash we had to endure, about Spotify being the devil. Then why in the hell did revenue go up double digits?

As for the Apple streaming numbers… I don’t believe them. They keep bandying about Drake streams but there’s no way to verify them. The numbers are easily accessible by all on Spotify’s desktop version but we’re just supposed to trust Jimmy Iovine? The man who was brought up in the house of music business smoke and mirrors?

Sure, it’s another tool in the shed for Universal. But the problem today isn’t making money, but being forgotten. You can put out music and it can be over in a day. Truly. That’s what skip rates tell streaming providers, you can’t force anything down anybody’s throat.

But now in the name of the almighty dollar the labels are gonna re-educate the public just like that?

Not gonna happen.

P.S. Will the free tier eventually expire? Of course. Just like music on YouTube, which is already dying, because it’s a bad experience, oftentimes streams on Spotify exceed those on the visual service. But you don’t close the door too soon. And most of the money is in ancillaries anyway. The road and sponsorship. Sure, it’s great if recorded music revenues rise, but they’re just the starting point. And if your track stiffs, good luck trying to put asses in the seats, get that Fortune 500 company to lay down bucks.

P.P.S. For all the blowhard bloviating the music business is based on fear, that you’ll be forgotten, ignored, that you won’t have hits. Subterfuge, outright lying and falsehood are employed to goose records. Do you think this is gonna stop, do you think someone’s gonna cough up their competitive advantage?

P.P.P.S. Who goes first? This is no different from Tom Petty and the acts of yore being the guinea pigs for higher album prices. Who wants their career to suffer so all boats can rise? Good luck finding that mark.

P.P.P.P.S. It’s for albums only, singles are excluded! The album is an archaic format whose time has passed. You hop from single to single, released on a regular basis, the young acts understand this, the old farts are in denial.

“Spotify Premium users will get some albums two weeks before free users, As part of its new licensing agreement with Universal Music Group”

[from http://ift.tt/2k9aO1A]

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