Friday, September 21, 2018

Spotify to offer artists direct-upload tools | UNLIMITED | CMU


So, Spotify allowing artists to upload music directly into their platform then. That’s certainly got people talking. And while a move in this direction has seemed likely for some time, it is certainly a significant moment. Its impact on record companies and music distributors will likely be nominal at first, but it’s the latest in a number of developments that are forcing labels and distributors to think harder about how and where they add value.

Spotify announced the new direct upload feature within its Spotify For Artists platform in a blog post yesterday. It said the new feature was being launched in response to feedback from the artist community. “You’ve told us time and time again that sharing your work with the world should be easier”, the company wrote in its post.

The digital firm has already been testing the new feature with a very small number of acts, and yesterday’s post was inviting other artists to apply to participate in further beta testing. It added that feedback from the artists who have used the direct upload tool already “was instrumental in shaping the feature”.

Although invite-only for now, the tool will presumably be available to all at some point. Which means all and any artists will be able to upload their music and tweak their metadata on the fly. They will then get reporting back from the service, which will pay any royalties due directly into their bank account. Participating artists will only be licensing their recording rights through the service, with any song royalties still being paid via the publishers and collecting societies.

As an aside, as the music is uploaded, Spotify will seemingly do some sort of check that it’s not a copy of someone else’s music already on the platform, to stop opportunists from pumping a Taylor Swift or Cardi B track into the system and claiming the royalties they generate. Although if those checks were to fail, presumably Spotify would have to resort to using that ‘safe harbour’ that the music industry loves so much to avoid any copyright liabilities.

Spotify is by no means the first digital service to allow artists to directly pump their content into their system. Both SoundCloud and YouTube offered this functionality from the start and, indeed, were all about the user-upload long before they’d even really started to think about themselves as being streaming services in the conventional sense.

However, to date, anyone wanting their music on a platform like Spotify needed a label or distributor to facilitate the process. That label or distributor negotiates a licensing deal with the streaming firm and then builds the technology to actually deliver the music. They then charge the artist an upfront fee or take a cut of subsequent royalties for their trouble.

By the time Spotify came along, there were already companies like CD Baby and TuneCore that would offer that kind of service to any artist for a nominal fee or commission, with those firms already working with DIY acts that wanted to sell downloads via iTunes.

The number of companies offering this kind of service has grown over the years. Universal Music has also been active in this space for some time via its Spinnup business and Warner Music quietly put a similar set-up into beta earlier this year called Level Music.

It’s DIY distribution services of this kind that could potentially be impacted by Spotify allowing artists to directly push their music into the system without paying any fees or commission, especially if Apple and Amazon were to follow their rival in offering this option down the line. Why pay a distributor fees or a commission when you can have a direct relationship with each service and not have to share income with any third parties?

Of course, artists really need their music to be on every streaming platform with an audience, and don’t really want to have to upload new tracks to every service separately. Especially if there are lots and lots of services.

If we end up with a global streaming market totally dominated by three players – say Spotify, Apple and Amazon – then it might be realistic for artists to maintain direct relationships with all of them. But if we end up with a global streaming market with five or more key players, then the convenience of being able to use one distributor to get music into all of them would definitely be worth the relatively low fees distribution outfits of this kind charge.

Most DIY distributors also offer other services to artists, not least data tools that crunch and interpret data from multiple places. Of course, Spotify also offers other services via the Spotify For Artists platform – including the recent tool for pitching new tracks to playlist editors – though again those are limited to just one service.

As for bigger music distributors and the record companies, which take a (sometimes much) bigger cut of any income, because of the rise of the DIY distribution platforms in recent years, for sometime now they have not been able to boast about any sort of gatekeeper status when courting artists. So they already rely on the other services they can provide when seeking to demonstrate the value they deliver for the artists they work with.

That includes cash investments of course. Which actually makes the news earlier this year that Spotify had directly licensed some recordings off a small number of more established artists – and paid those acts advances – a much bigger deal for the other distributors and labels. Though there again, good distributors and labels should still have USPs that set them apart, whether that be the other services they offer, and/or a willingness to make riskier cash investments in newer talent where recoupment of that investment is less assured.

Still, all distributors and labels need to regularly review their range of services and consider new ways that they can support the artists they work with. What may seem like really valuable services today may become free-to-access run-of-the-mill tools tomorrow. Especially if it’s a service that can ultimately be automated. Therefore distributors and labels need to constantly identify new ways that they can add value in order to futureproof their business.

The other company Spotify’s direct upload tool could ultimately impact on is SoundCloud. As the latter has tried to reinvent itself as a subscription streaming service, it has often bragged about how its catalogue of recordings is so much bigger, because it is so easy for any artist to upload their content into its system. And artists have been doing that for years.

SoundCloud still has an edge as a marketing channel for artists, because it is so easy to embed its player, though Spotify is treading further onto its rival’s territory. It’s true that the majority of those extra tracks uploaded into SoundCloud and, possibly in the near future, Spotify, are tracks that most people don’t particularly want to listen to. But in terms of being able to brag about your community of DIY creators, Spotify’s brags could start to mirror SoundCloud’s.

So all in all, quite what impact Spotify’s announcement yesterday will have remains to be seen. But as lines continue to blur between labels, distributors and services, any company that inserts itself between artist and fan will have to continue to think about and demonstrate how it provides actual value in that relationship.


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