The always entertaining Bob Lefsetz sent out an otherwise illuminating blog post today entitled “NAPSTER WOULD KILL CREATION AND NO ONE WOULD MAKE MUSIC”. “Otherwise” illuminating because in the first sentence he made a glaring error that is going to just further perpetuate the already pervasive and excruciatingly painful myth with the masses that “it’s okay if we only stream music through all those high tech new services like Beats Music because they’re paying the artists now, right?”. WRONG. They’re not. At least not in a manner that anyone with half a brain would consider anything close to a livable wage. I already knew I would come here to The Diaries and post a rebuttal to straighten out the facts of Bob’s post. But I also decided to write Bob a quick note to ask him to also correct the facts himself. Below is both the first few sentences of his post (PS — subscribe to his blog. It’s almost always worth the read) and my correction of the actual facts.
Below that I have also pasted another blog post of his from a few days ago that deals with the same issue and Thom Yorke’s decision to release his new album on bit torrent. It makes some great points. Again, Lefsetz is completely mistaken in his assertion that “YouTube and Spotify are compensating artists 70% just like iTunes does”. That’s not even close to being true, and it makes one wonder from where he is getting his information. Perhaps he just makes it up to prove his enlightening points? Or perhaps he knows of certain artists at certain large companies who have managed to negotiate completely different terms than almost every other artist in the world today. Not sure. But don’t let the erroneous facts of his post minimize the importance of some of his finer points. They’re cutting edge insightful and almost always entertaining if nothing else. He just happens to be very wrong about the current state of artist compensation in the music business.
“On Tue, Sep 23, 2014 at 3:04 PM, Bob Lefsetz <email@example.com> wrote:
NAPSTER WOULD KILL CREATION AND NO ONE WOULD MAKE MUSIC
Just the opposite has happened. With new tools for production and distribution that bring the cost of creating and getting your work out at close to zero it seems like everybody’s got a song in them. More people are making more music than ever before, leaving the audience overwhelmed with productions.
MUSIC IS FREE
It just feels that way.
America’s #1 music service, YouTube, pays rights holders, as does Spotify. Can we stop the mantra that music is free? Sure, piracy exists, but it always did. If you think kids are busy stealing instead of streaming you probably went to the Apple Store to stock up on the discontinued iPod.”
As you know I’m a fan; often even sharing your posts through my own social media profiles occasionally when I find them extraordinarily prescient or insightful. But you can’t be sending out posts that say things like “YouTube and Spotify are now compensating rights holders” — especially not to what I would guess is largely a musician/music biz exec audience — when these statements are almost entirely untrue. Sure guys like me and others who are buried neck deep in the business and understand how it works understand the finer points of what you are saying, but most people take you at your word and then go to hunt down this $$$ that YouTube and Sp and the like are supposed to be paying them because Bob Lefsetz said so and they come up with nothing. Why? Because as those of us in the biz recognize, YT, SP, Beats and P are “trying” to compensate rights holders to a certain degree, but they have systems set up that are so heinous and prohibitive that it basically means that 99% of artists are NOT being compensated in any way from YouTube, Spotify, Beats or Pandora. Take a little thing they like to call “threshholds”; i.e. YouTube doesn’t pay out unless a song reaches over 500,000 to one million views AND that has to be within the quarter. So even if you get to 499,999 views that quarter you get paid ZERO $$$ from YouTube. ZERO. Now THAT is NOT compensating the artist nor the rights holder. Period. Just pick up the phone and call ASCAP, BMI or SESAC to confirm this fact for God’s sake. It’s common knowledge.
Spotify and Pandora pay us approx .005 to .0007 per stream. As in 500 streams to earn ONE CENT or in the other case 7000 streams to earn one cent. (!!!) So saying “Now that YouTube and Spotify are compensating rights holders…” is completely erroneous and misleading. Not only that, but it then renders the rest of your post less credible. Of course this is just IMHO and I will certainly share my thoughts in the Transcendence Diaries. But rather than have me as “the bearer of truth and light corrections in response to Bob Lefsetz’s erroneous claims”, wouldn’t it be easier (certainly on me) if you just fact-checked before posting? All said with the utmost respect of course as always.
The Transcendence Embassy
c/o Dying Van Gogh Records
304 Park Avenue South
New York, NY 10010
In the above letter I only point to a very small number of roadblocks that have been built into the new system of the music business that prevent artists and labels from being able to make a living from music creation. There are a TON of them presently. YES the music being created today is as creative and exciting as it’s ever been. But the artists are not just being paid “less than they ever have”, they ARE NOT BEING PAID almost exclusively. This is WHY Radiohead’s Thom Yorke DID decide to release his latest album for free on a flagrant music piracy site — as a statement, as in “fuck all of you if you’re going to stream our music for free allowing these giant new tech companies like Spotify and Beats to profit in the millions while I don’t make shit, I’ll just give my music directly to the FANS!”
U2 decided to do the same thing, choosing instead to sell their new album to Apple so as not to risk putting it out on the market and not achieving any sales. Coldplay used Target. Jay Z used ATT. Artists are nothing if not creative and in this new age of no money for music we are having to be just as creative outside of the studio as we are inside — in an attempt to try to figure out how to squeeze a few nickels out of the fans who very clearly still love our music. That’s right, we totally get that YOU the music lover still love our music and that you’re not directly involved in what’s happening in our industry. I hear it from fans all the time. “I had no idea you weren’t getting paid!” they exclaim. And some even pay that $10 to Spotify or Beats every month. But when these companies are reporting hundreds of millions of dollars in profits per quarter, that should be a tip off to all of us, artist and consumer alike, that there might be a good chance that the artists aren’t getting paid.
So what CAN we do about it? Well, number one, we can always go back to downloading albums from iTunes. Or songs if you like. Yep, iTunes PAYS US. And they pay us well. No complaints from Apple. And they’re still the largest most profitable company on planet earth. Go figure. So next time you hear anyone try to defend Beats, or Spotify or Pandora, in ANY way, regarding their claim that they would be “unable to fairly compensate the artists in the same manner that iTunes does or we’d go bankrupt” just remind them of how many hundreds of millions of dollars they reported earning last quarter. It’s all s smokescreen. They figure that if the consumer doesn’t mind ripping off the artist then they don’t mind profiting from it. And that’s where WE come in.
If you like music, if you love it, if you enjoy it, then shoot off an email to Spotify and Pandora. Let them know that although you’ve been thinking about starting up an account with them, or currently have a paid account with them, you just cannot justify it any longer as long as they are not compensating the artists whose music they are selling. It’s pretty simple. These companies are in the business of SELLING MUSIC. But the problem is that they aren’t BUYING THE MUSIC. In any other world that would be considered criminal. Stealing. And at its eessence that’s exactly what is happening. Legal stealing. Music piracy is already bad enough, but these new streaming services are killing today’s working artists. Ever wonder why they’re starting to appear on singing competition shows as judges? Or cheesy TV commercials? Yep. There’s a reason. Basically because of music streaming services NOT compensating us for our music that they are selling to you the consumer they are forcing musical artists to do anything and everything to try to bring home the bacon. And we’re no longer talking about striking it rich here. We’re talking about just trying to make enough to make a decent living, to pay the bills. That’s what it’s come down to now. I personally make MORE money from buying and selling Pandora stock in a week than I will make from Pandora paying me for streams in an entire quarter. Why? Because no one can make a living from being paid .007 cents per stream.
People complaining about the need to raise the minimum wage have NO idea how much worse it is for musical artists. I would LOVE to be guaranteed a steady stream of income every week from my hard work. But in this ever changing industry, where any moment some new young upstart can grab your entire recorded catalog and throw it up on the internet and call it a new business — completely forgetting to address how the artist will actually be paid, we artists do not have the luxury of anything close to a guaranteed stream of income. It’s potluck now. But again, there IS something that can be done about it. All we have to do is get YouTube, Spotify, Pandora and the rest of them to start paying the artists a decent living wage. It really is that simple. You the consumer will do the rest, as you always have, by consuming the music we make. And as always we are forever grateful to you for that. This isn’t your fault. You just caught in the middle.
As always, more later…
To read the rest of Bob’s (like i said) otherwise brilliant post, go here: http://lefsetz.com/wordpress/