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Tag: spotify

The Problem With Social

April 30, 2015

A  caveat: for those more accustomed to, and more interested in, the usually more philosophical, theological or sociological nature of The Diaries, you may want to skip this post. It’s about finance and economics and more technical than usual. Just a heads up. If you do decide to venture in, I will clarify a bit more than usual regarding the economy and investing world to give context — so another caveat, this one for those who are already well versed in all things finance and investing: you may find the first few paragraphs a bit elementary… feel free to skip ahead, but hang on and stay in. This one’s for you and there are worthy takeaways to be had.

The investing world is abuzz with Silicon Valley again and it has been for a number of years now. It feels like 1999 all over again. Both the American and European stock markets have been on a tear — in what is commonly called a “secular bull market” — for almost six straight years. People who are active or even passive investors in “the markets” have been making money hand over fist from doing absolutely nothing but just staying invested. It’s an odd paradoxical dichotomy — and it truly is — that as the American economy continues to drag and sputter, making financial abundance, or even stability, seem increasingly unreachable for the majority of Americans still, the top 1% have been doing incredibly well in “the markets”. This paradox is well known amongst the wealthiest in the country. It’s not a mystery or an unknown. It’s very well known, sad as it is, amongst the people who are making all the money. It’s a given. And there are very specific reasons for it.

One might remember investment guru Warren Buffet commenting a few year ago how ridiculous he thought it was that he pays less tax annually than his secretary does. This surprising statistic is simply due to the fact that the common bread earner in the United States pays a much higher tax on their “income” i.e. the money they earn from their job, than an investor does on the profits he or she makes in any kind of investment. That tax — known as the Capital Gains Tax — is capped at 15%. What this means is that whether you made $100 from your stock market investments last year or $1,000,000, you’re still only required to pay 15% tax on it. With the right kind of finagling — owning a few corporations that make big money — enough to fund even the most lavish lifestyles — but somehow mange to “not make a profit” but instead make a loss (and this is more common than the average person realizes…) and you can even reduce that measly 15% capital gains tax further down and come out paying Uncle Sam next to nothing, as in ZERO. You just have to know the game and how it’s played.

But this post isn’t about that. Perhaps one day we’ll go into further details about this sad but true paradox, because I must admit I do receive a fair share of requests from folks begging me to explain to them how on earth one is capable of making hundreds of thousands of dollars a year and paying next to no tax on it. It’s not as hard as most people think. In fact it’s quite easy. Again, you just have to understand how the system works. So yes… perhaps we will get into it one day… But today is not that day.

Another reason for this strange upside down economy is due to Federal Reserve policy. “The Fed” as it is commonly referred to is a large private cabal of banking cartels who control the monetary policy and the money supply of the United States. The funny thing is that the Federal reserve is NOT “federal”; they are not a branch of the U.S. government. They don’t work for the U.S. government. They answer to no one. But they make all the rules. (This is truly a whole book unto itself, let alone too much for even a series of posts — so one is encouraged to take some time to research this incredibly vexing scam…) In a nutshell this organization that controls all things monetary — think the economy — is the primary entity that loans the United States the money it needs to continue to operate. When you hear terms like the national debt or national deficit, this debt is owed to this company known as The Federal Reserve; they being a private bank who exist solely to make money charges the U.S. interest on the money it lends the country, just as any bank does; thus in a way one could say that the Fed has a vested interest in seeing the United States economy do well — at the moment the U.S. owes a staggering amount of money to this organization, something to the tune of 17 TRILLION dollars.

In exchange for all the money The Fed loans the United States to stay “in business” so to speak, the United States government allows the Fed to do just about anything it wants to — including for example keeping it’s books private and sealed. One might have a recollection of a few years ago when then-presidential candidate Ron Paul (remember him?) tried to pass a Bill in Congress to force The Fed to allow the U.S. government to see it’s books — as in take a look at its accounting records. This would seem to be rather a no-brainer, right? All public companies are obligated to make their accounting records open and available to the public — how much money they have, how much debt they have, how much money they are making in gross revenues and net profits, etc. etc. But The Fed is no regular “public company”. It’s ironic if not downright terrifying that 99% of Americans do not even realize that The Federal Reserve is not only NOT part of the federal government, but they are so private that no one in the United States government is even allowed to look at it’s books. The word shocking comes to mind. But terrifying fits the bill even more appropriately considering how much power this private group of banks has over the health and wealth of the whole country.

So how much power DOES this private group of banks have over the United States? Put it this way: The Fed has the ability to say yes or no to the United States government regarding how much money it loans them or doesn’t — as in any day they can collapse the American economy or continue to allow it to wrack up more debt. It’s all in THEIR hands and truly no one else’s. They also of course have the power to set monetary policy in general — this is why it is a fool-hearty idea to ever blame a good or bad economy on any American president, for they simply don’t have much power in regards to the economy, but that doesn’t stop most people from still doing this. The primary thing the Fed does in regards to “setting monetary policy” is they decide what the lending rate is at any given time in the American economy. At the moment it is set roughly around -0-. This is the rate of interest that banks can charge each other to borrow money from one another. This “prime lending rate” has a great influence on all the other interest rates in a healthy first-world society such as mortgage rates or car loan financing interest rates or the interest one receives from investing bonds or savings accounts or bank CDs.

You might have heard the term QE bandied about over the last few years. QE stands for Quantitative Easing, which was the Fed’s fancy term for lowering the prime lending rate down to a record low AND at the same time temporarily loaning the U.S. billions of dollars by buying various bonds from the United States and various other banks — they did this in order to “stimulate the economy”, as a means to get people spending again and to get banks loaning money to people again. So far it hasn’t worked out as well as many hoped it would. BUT to be fair it did at least according to general agreement amongst most experts save the country from sinking into another Great Depression from our recent Great Recession (the recent economic crisis we experienced in 2007 and 2008).

What this policy did do though was stimulate the hell out of the American stock markets. By lowering interest rates down to near -0-, people with money had no other choice but to invest their money in the stock markets — simply because they couldn’t make any money with their money from investing in anything else. Savings accounts, bonds and CDs offered zero to almost zero return, i.e. interest. If you add in even a small amount of inflation — the price of goods increasing compared to the value of the Dollar, and one would actually LOSE money if they had invested their money in a savings account, bond or bank CD due to how low the interest received was. So people with money jumped into the stock market.

This is what has created one of the strongest and longest running bull markets in American history. More and more money has poured into the markets and as long as this mysterious organization called The Fed continues to keep interest rates LOW, then people assume that the stock market will continue to go up. From the outside, from the view of the average American who doesn’t bother to pay attention to monthly and quarterly economic data, things still seem rather bleak to be sure. Unemployment has supposedly declined, though many doubt this claim. Jobs still seem few and far between and raise and promotions seem a fantasy of days long gone by for most.

Except in the world of finance that is. You see, every time we have economic data — the investing world holds its breath: if the data is GOOD, the markets tank, as an improving economy would compel the Fed to start raising rates again which could signal the end of the bull market. So instead people who are heavily invested hope that the data is BAD. In the world of investing this is known as the “bad news is good news” paradigm and without fail every time any economic data comes in that is “bad” for the average American, you can hear and see high fives flying around Wall Street like wild fire. It’s an upside down situation to be sure. Instead of the stock markets flying high due to a healthy economy, it continues to fly high due to hopes that the economy stays bad. This will keep rates low and insure that more and more money will continue to flow into the markets. Again this may sound shocking to the average person, but it’s not exactly “news” to those who invest their money for a living rather than work a regular salaried job. Frankly yes it’s easy to see why anyone first learning of this closely guarded bit of data would claim that it’s fucked up. It is.

In a nutshell there’s your lesson in finance and econ for the day. Now on to the main point of this post.

Today we are going to focus our attention on the Social Media sector of the investment world. [Again just for those who may not know this: the investment world is divided into sectors FYI. There are many of them and savvy investors are familiar with them all. For example there’s the Semi-Conductor sector (what we refer to as “the Semis”), the Consumer Discretionary sector (Tiffany, Coach, Whirlpool — basically anything that is not essential to the consumer but is purchased when the consumer has discretionary money laying around…), there’s the Oil sector — which is further split between the Refiners and the Oil Services companies, and on and on it goes. Believe it or not, once you enter this world — as with any — it becomes very easy to memorize all the various data points, statistics and acronyms.]

Two sectors that have been red-hot over the last few years have been the Technology sector (usually referred to as “Tech”) and the Social Media sector (often just referred to as simply “Social”). Companies like Facebook (FB), Google (GOOG), Twitter (TWTR) and Yelp (YELP) are all part of the Social Media sector and even the most distanced individuals have surely heard the stories over the years about the ridiculous amount of cash people have been making from investing in these “hot companies”. Silicon Valley is on fire at the moment, with venture capital spending reaching all time highs once more pouring money into the latest start-ups hoping that they can eventually turn them into the next Facebook or YouTube.

The word on the street for these companies is Unicorn. You may have even heard the word bouncing around lately as it is one of the many newest trending in the social media world. A Unicorn is any super hot start up company that is raising a ton of investment capital — usually to the tune of one billion or more — in the Valley with the intention of eventually going “public” — all long before the company starts actually making money. The companies just have to show growth in their user base and their “potential” to make money and people will throw millions upon millions of dollars at them. A few of the hottest Unicorns at the moment are Uber, AirBNB, and Pinterest. Yes from the inside it all appears just as blatantly stupid as it does from the outside. But this is just how the markets work. They are completely irrational, as they always have been.

At this very moment analysts and traders on CNBC’s midday show Halftime Report are all discussing the Social Media sector. Primarily because during this latest earnings season social media companies have been getting clobbered. After running up to more than $85 a share Facebook is now trading below $79. Twitter dropped from $55 a share to $38 in one day — you have to imagine having say a million dollars of your clients’ money invested TWTR and having that figure lose almost half of it in less than 24 hours to really understand the ramifications of such a dramatic drop. YELP not to be left behind performed the worst out of all of them so far, dropping from a high of $85 earlier this year to a measly $39 as of today’s trading session — losing 22% of it’s value in just one day and more than 50% from its highs of the year. When you contemplate the insane amount of money invested in these companies by hedge funds, money managers and investment banks — in the case of YELP, a smaller player, we’re talking billions of dollars invested, you begin to fathom just how much money that is to lose in such a short period of time. LinkedIn was the latest social player to kick the bucket: In one day their stock fell from $250 to $203, a 20% loss in less than an hour.

But why? WHY are social media companies taking such a beating? All the talking puppets on CNBC, Bloomberg and FOX Business News continue to talk about these companies with big smiles on their faces as if they are viable investment vehicles — no one ever saying what would be clearly obvious to even the least educated in business and finance: the American consumer is sick and tired of being advertised to, and social media companies make their money, or at least they’re supposed to, from collecting advertising revenue. You see, once upon a time Facebook made mention that it might start charging for it’s services — charging the everyday user to have a Facebook profile and communicate with their friends and family on a regular basis. The backlash could be heard in places as remote as the Himalayas! The week they made this announcement, as ironic as it may seem, the FB newsfeed was filled with posts advertising that the BAN FACEBOOK DAY was soon upon us as everyone and their brother announced that they would not stand to pay a single penny to use Facebook and they would immediately jump ship if such a fee was ever initiated. And that was the end of that idea. Facebook learned a valuable lesson from that stunt — people may love you if you’re free, but that doesn’t mean they have any intention of giving you any of their hard earned money. They don’t love you like THAT.

It turned out that Facebook was not as essential as it thought it might have been and thus they had to go back to the drawing board to figure out just how they were going to actually generate MONEY. See, Facebook WAS hugely successful in terms of it’s popularity amongst users. At one point it reached one BILLION users globally. That’s a phenomenal figure when you consider it for a moment: it translates to almost 20% of every single person on planet earth having a Facebook account of some kind. But the company didn’t make any money. The average person on the street, struggling to just pay their monthly bills always has a tough time understanding concepts like this: how can a company be as big as Facebook (or Amazon or Yelp or Twitter for that matter…) but not actually make any money?!? It seems illogical. And in reality it is. The truth is that these companies BORROW the money they have from what you commonly hear referred to as “angel investors” or venture capitalists. They then use that money to grow their business with the hope that one day they WILL make money… Some do. Many never make it. Amazon — one of the largest companies in the free world still operates at a loss every year. Yep. It’s true. They bring in billions of dollars a year in revenue. But every year they report not a profit but a LOSS, meaning that they spent more than they made. How is this even possible? Simple. They borrow more money and go further into debt based on the idea that one day they actually will make a profit. It’s a funny business. One that just about any average American would love to be able to take advantage of in their own personal finances to be sure. Problem is, banks and venture capitalists aren’t interested in you or me and our ability to pay our bills or even have enough money to eat for that matter. Instead they are interested in future profit potential. That’s life in a nutshell. As unfair as it is, that’s just how it is. You’d have a better chance at borrowing money from a bank — millions even — if you presented them with some dumb idea that showed that you could have half a million “users” by year end 2016 than you would just asking them for money to put food on the table or pay your mortgage. It’s capitalism.

So where were we? Ah yes, Facebook. So here’s Facebook, a simple idea, a dumb idea, at best a rip off of MySpace (remember them?) who was a rip off of Friendster (remember THEM?) showing tremendous growth in “users” but no way to make money from these users. So how to monetize all these users? That was the question….  This was back in the days when Facebook had swept Wall Street by storm by going public and seeing it’s stock price go from $16 to $45 in one day and then having it quickly fall back to $17 where it stayed for a few years, leaving many investors sorry they ever heard of the name. Imagine that kind of a loss in your retirement portfolio. Eventually Facebook got smart and created a very simple advertising vehicle for any and every one to use — a way for users to advertise to each other. “Here’s my Page. Like it!” It didn’t cost that much, you could set the amount you wanted to spend each day, and you could actually see your little ads pop up on the side bar of your Facebook screen now and then. It felt good. And it seemed to generate actual results. It was similar to buying an ad from Google to get more traffic to your website. And we all know how well Google had done… Facebook is presently worth about $178 BILLION dollars. Google is worth roughly TWICE that.

So began the great social media company frenzy. It was 1999 all over again. All a company had to do was show that it could grow its user base, forget about making money or generating a profit, and the investment dollars poured in. Twitter soon leaped onto the scene and ran up to $55 on it’s first day going public from a starting price of around $16. This valued Twitter at about 35 billion dollars overnight. For a company that wasn’t even making a billion dollars a year, nor anything close to it. But it was all about the user growth. Twitter still operates at a loss — meaning that it loses money every year rather than makes it. How would you like that kind of job? TO get paid for losing money? But the pundits had valid points: Twitter WAS popular. People did seem to have a valid interest in and excitement about it. The problem was and still is that that excitement is fleeting. Today’s Twitter is tomorrow’s Snapchat or Tumblr. Remember them? Yahoo purchased Tumblr — and what exactly was Tumblr in the first place? a blog for kids? — for some FIVE BILLION dollars. There’s money they’ll never get back. And Tomorrow’s Snapchat or Tumblr is next week’s Meercat or Periscope. The landscape is constantly changing in the hands of the ever-fickle American consumer. The truth is that they really just don’t CARE.

And that’s the big disconnect between Wall Street and Main Street. The average person on Main Street has a life. Family problems, car problems, job worries, relationship woes… They could care less about Facebook or Twitter or Snapchat or Tumblr in the grand scheme of things. When’s the last time you heard anyone even mention Tumblr? But the folks on Wall Street don’t recognize this simple fact of life. These are minor trivialities in the hearts and minds of the average consumer, these “fancy websites” they call social media. They don’t put food on the table. They don’t even offer anything relatively substantial or of value that cannot be had elsewhere. NEW is much more exciting to the consumer than been there done that. It doesn’t mean that mom still won’t keep trying to Message you on Facebook this year. She probably will. But are you really even paying attention anymore?

Environments like Facebook and Twitter have continued to remain semi-entertaining and even useful at times when one has nothing better to do or when there’s big news we want instant access to… But when we’re in the mood for big news, we are NOT interested in ads clogging up our newsfeed. Nor are we interested in ads when we have nothing better to do than scroll through old friends’ attempts at wit or their latest selfie or cat photograph. Let’s face it, social media is fraught with meaningless drivel. Hence the shift back towards more meaningful content platforms like blogs or even texting.

Every social media company is reporting user growth increasing but revenues and profits shrinking. And the simple reason for it is because nobody likes being advertised to. The television world and Wall Street already recognizes this fact as more and more people shift away from traditional TV towards digital alternatives like Netflix or Hulu or flat out stealing online. This is the time of the great peregrination of the consumer away from advertising — why? Because we can. And in an environment like this, you better not have advertising revenue as your main means of generating cashflow or you’re going to be screwed. YELP is the perfect example. Yelp is actually a great tool. Nearly everyone has it loaded on their phone and loves it. The problem is that no one is willing to pay for it. (The music industry is going through a similar shift…) Yelp wants to generate revenue from selling advertising. But the users who use Yelp the most absolutely REFUSE to use Yelp if they believe that any of the data they are reading such as reviews are being influenced in any way by advertising dollars — in other words, people want to believe what they read on Yelp. They want to read ALL the reviews, not just the ones that some company has paid to place there, and they certainly don’t want to find out that companies are able to pay to have negative reviews removed from Yelp. What’s the point of the app then? See the problem? Yelp is basically fucked. A valuable tool with no viable way to make money.

Twitter god love it is in a similar position. I personally use Twitter all day as a means to receive notifications about subjects I am interested in ON MY PHONE. In other words, I set up notifications to come directly to my phone from Twitter about various different subjects or different individuals or even tweets that may mention me — the president of Iran will shoot out an interesting tweet now and then, and where else can one access such data but Twitter? But that doesn’t mean I ever scroll through the Twitter newsfeed or what they call their “Timeline”. The truth is I never do. The notifications come to my phone. I scroll through them. Get the basic gist of what was said. And I move on. All on Twitter’s dime. Or better put on the billions of dollars invested in Twitter by their investors. All without ever paying for Twitter and all without ever seeing an ad. Hell, like most people I’m downright annoyed and pissed off when I see an ad on Twitter. How dare they?!? And yet THIS is precisely how they intend on making their money! From advertising. It’s farcical when you really start thinking about it.

We have to begin to realize and acknowledge that we’ve reached a crossroads in the global economy. We’ve raised a whole generation on free usage based on the idea that we’d make our money from advertising — while at the same time weening them off of advertising on every other platform. There are hundreds of apps now on the market that REMOVE ads from Twitter and Facebook. And one would be right to believe that very soon there will be apps to somehow remove the ads from Pandora and Spotify as well — which is how those companies make the majority of their money as well since they’ve programmed whole generations to believe that music should be free — just about the dumbest thing one could think to do if MUSIC was the one and only product that you wanted to sell in your business. Again, we’re at this major crossroads where at some point soon, something has to give. Investors are going to learn sooner than later — just as they did in the dot com crash of 2000 — that they can’t keep pouring money into businesses who don’t actually make money. And businesses are going to eventually learn that you can’t run a business offering the main product you sell for zero dollars. It’s an illogical business model. And all it’s done is destroy more than one industry, the music business just being one of them. TV is next. Social media never really was in reality. And people are just starting to see that now as these once high flying stocks crash and burn.

As a sidenote with a potential solution, look at the companies who actually DO have a chance at making money. Out of the three Unicorns mentioned above, Pinterest is another Yelp waiting to happen. They’ll garner billions of dollars in investment capital and blow through it all in the hopes of turning all those bored moms and housewives into advertising clicking robots, only to realize that those bored moms and housewives aren’t any more interested in clicking on ads as the rest of us, and they’ll go belly up a year or two after going public IF Wall Street is dumb enough to take them there. But Uber and AIRBnB are different. Both of them actually SELL something besides advertising. Sure there’s a social aspect to both companies. That’s just the new normal — there has to be a social aspect to EVERYthing now. Eventually we’ll have apps where people post their latest and greatest bowel movements for others to see and rate. (If those already don’t exist, which I can’t with certainty…).

But the key is that the social aspect to both Uber and Air BnB is NOT the product itself. It’s a byproduct of the actual product. And that really is the key to this new environment. Social is key. But it can’t be THE key. There has to be an underlying product to be sold. And “to be sold” means to CHARGE MONEY FOR IT. Just as PayPal charges a few pennies on the dollar for every transaction, they’re offering a very valuable product — the ability to exchange money with freinds, family and business associates without ever leaving your home or office, or even your couch for that matter. All from the comfort and ease of your smart phone. That’s smart. Uber and Air BnB are doing the same thing. Small fees. Nothing fancy. But they’re actually making money. And isn’t that the reason to start and run a business in the first place? What companies like Yelp and Twitter are going to do is a mystery. They’ve screwed themselves from the outset with a faulty business model. As have companies like Spotify. The next few months and years are going to be ugly as this grand experiment fails and falls to pieces in rubble all around the feet of Wall Street and Main Street investors. People are already asking “are we in a bubble” everyday now… and truth be told, in the bigger picture of the investing world, no, not quite yet. But in the social media sector we’re beyond bubble territory. We’re in the sloppy frothy messy slime and sludge of a bubble already burst. Most just don’t see it yet. If you’re into shorting, now would be the time…



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Uncategorized advertising, air bnb, angel investors, capital gains tax, facebook, Federal Reserve, investing, online music, paypal, silicon valley, social media, spotify, stocks, The Fed, Twitter, uber, upside down economy, Wall Street, Warren Buffet, yelp

Artists Are Getting Screwed in the New Music Business

November 17, 2014

“The music industry is dwindling, but only for the artists. Something’s not right here. Artists can’t make a living anymore. They’re having to go get second jobs to pay the bills. But look at the profits of music companies like YouTube, iTunes, Spotify and the evil publicly-traded Pandora (who recently sued artists and record labels to be allowed to pay even less per stream — they won btw and are now only obligated to pay a royalty rate of .0007 per stream. Yes, as incomprehensible as that is to fathom, that’s 7/1000th of one penny –that’s all we as artists get paid every time someone listens to a song of ours on Pandora. They’re revenue is in the billions. It’s hard to believe, I get it. It is just as hard for us, the content creators/product suppliers, to believe as well. The problem is the labels. I know and like these guys. And I’ve told them this to their face. They’ll sell their own mother for $25. They’ve got to change and start helping the artists more.” — Garth Brooks to CNN November 17, 2014

Hearing Garth say the words above in an interview today sparked me. It’s easy to feel like you’re being an ungrateful whiner when you’ve lived a life like mine — one that many could easily claim has been privileged, and yet you’re going around complaining about “artist royalty compensation” and other such seemingly elitist issues when regular folks are having a tough time making ends meet or even finding a job in the first place. It’s a subject Princess Little Tree and I discuss often: do I stir the flames of protest publicly about what’s happening in the music business to us the artists and tell people how bad it is? Or do I just play it cool? Is it bad for business? Or is it the right thing to do? Will people think I’m being ungrateful? Or greedy? Will I lose my street cred by bringing up the subject of money — which to certain circles of people shouldn’t even hold a place in the same conversation as music or art…?

Earlier this year I started the Fair Pay for Fair Play campaign to address just these issues. Accessing the Facebook page is the easiest way to get informed and involved in this cause and if you care about music and the artists who create it I encourage you to do just that. Visit the page. Like it. Share it with your friends. Because the truth is we are struggling in a way that we have never seen before in modern times. Artists are quite literally starving. Because we are being squeezed out of the very industry that we create the product for.

There are many many reasons for this sad state of affairs and over the last few months I have used these usually more literary Transcendence Diaries to discuss some of the root causes of this issue. No one diary entry is going to address the entire issue in its entirety. That would be impossible. It would take a volume of books to do the cause any real justice. But at the very least we are getting ball rolling in terms of alerting the public not just to the problem itself but to just how serious it is becoming. The easiest way to sum it up is to remind people that over the last ten years we have moved away from consuming music via purchasing it, through CDs or vinyl or through digital downloads ala iTunes, and shifted instead towards consuming music via “streaming it” online using services like Pandora or Spotify or YouTube.

For you and me as music lovers this has been an exciting trend, a revolutionary transition to a world where any and every thing that has ever been recorded by anyone we’ve ever heard of (or not) can be accessed immediately from anywhere in the world. Even on the go right from our phones. In fact most of us now listen to music via our phones more often than home stereos (remember those?) Besides the most obvious abhorrent problem with this shift — the fact that we use extremely expensive state of the art equipment worth millions of dollars to create the most pristine sounding music we possibly can for the audience and it is now being degraded to sound like shit through phone speakers, there’s another problem: as technology companies quickly take control of the distribution of the music — through the aforementioned streaming services, deals have been and are being struck that leave less than pennies for the artist, or worse yet leave them out of the equation entirely. And the sad part is that is most people have no idea that this is what’s going down. They just assume that because it’s all being done above board and publicly that “surely the artists are being paid as they always have.” But the answer is “No. They are not.”

It’s only been a few weeks since U2 shocked (and to some annoyed) the world by giving away their new album for free via Apple due to the realization that it probably wouldn’t sell many copies and thus like Jay Z, Kanye, Coldplay and Thom Yorke before, they’d be better off just giving it away rather than risking low sales figures.

Even more recently Taylor Swift rocked the music world by pulling her albums, including her very successful new one, off of Spotify completely — due to the fact that Spotify only pays us approximately 7/1000th of a penny per play. Consider that for a moment: Spotify doesn’t even pay us one cent per spin. That’s the cold hard truth. No matter how they try to spin it. And trust me, as a music lover I personally LOVE Spotify and it’s potential as a listening device. But as an artist there isn’t anything I can think of off the top of my head that I loath more than Spotify. Piracy, e.g. people who don’t pay for music at all and just go online to download it for free via bit torrent type piracy sites ranks just a bit higher on my hate list. But Spotify Pandora and YouTube come in a close second. Why? Because at least piracy sites are upfront and honest about what they are doing. They’re criminals and often times proud of it. They see “free music” as some sort of cause of rebellion, as if by stealing music they’re somehow sticking it to The Man. But companies like YouTube and Spotify pretend to be “working with the record labels and artists to create a fair playing field for everyone”. But that claim is total bollocks. It’s just completely untrue.

Today it was announced that platinum country rocker Garth Brooks decided to sell his new album via his own website, something called Ghost Tunes, instead of via iTunes. Why? For pretty much the same reasons. He’ll make a much larger profit that way without having to sell even a fifth of the copies he would have to via iTunes.

Caveat: I and my boys in Transcendence are on an independent label, Dying Van Gogh Records, one which we have a large stake of ownership in. And so we make a larger percentage of sales than artists like Brooks and Swift. We make at least 50% of sales. Whereas artists on larger labels like Garth Brooks and Taylor Swift only make 10% of total sales if they’re lucky.

So do the math. If Spotify is only paying out 7/1000th of one penny per spin of any one song and 90% of THAT goes to the label, leaving only 10% to the artist…well how is that artist supposed to make a living? Sales and downloads?

Well therein lies the problem: because streaming has become so popular, people are buying and downloading less and less music. In a nutshell sales and downloads of music — personal ownership of music has nearly come crashing to a halt. It’s a failed business model. (Unfortunately that also means that album artwork and photography is a dying art form as well. A sad often overlooked side effect of this trend.)

But okay let’s look at downloads still because there are some artists who can still sell some serious numbers. Taylor Swift being one of them. iTunes only takes about 28%, leaving the label and artist a full 72% of gross sales. Not bad right? But again if the label is taking 90% of THAT, leaving the artist only 10% of it…there we are again, asking how can the artist make any real money?

It’s no wonder that both Swift and Brooks have tried to create work-arounds to try to make more money from their new music. It’s only natural.

Speaking about this situation personally, this past weekend it was brought to my attention that the lead singles from my last solo album had huge spikes in their views on YouTube. Granted, they’re nothing close to big platinum selling artists like U2, Taylor Swift or Garth Brooks. But they’re significant. “Scene in San Francisco” somehow managed to hit 225,000 views; “New Orleans Dreams” close to that and “Hello My Dove” still hovers around 20,000. And yes I’m sure if we sat down and did more research we would find that plenty of the other songs we have on YouTube have even higher view counts than these three, because they are older classics and have the advantage of having been around longer, but I am referring to these songs specifically because they are the NEWEST songs from our catalogue. Just those three songs alone have pulled in a healthy half a million views on YouTube since their release. Not bad.

Any normal rational thinking music lover is going to assume that we the artist MUST BE earning something from all this action. After all we are forced to sit through a ten to thirty second commercial before every single song we listen to on YouTube. It only makes sense that if YouTube is profiting from all these commercial spins that at least some of that has to get passed on to the artist and their record label.

Now here’s the deal: we do NOT get paid directly from YouTube. That would be too easy. Too fair. The music business has never been fair or easy. Nope. We the artists get paid by YouTube paying out “public performance royalties” to the PROs (Performing Rights Organizations) like ASCAP, SESAC and BMI on a quarterly basis who are supposed to turn around and pass on ALL that money to us, the artists. Remember, these PROs portend that they are NON-PROFIT, that they are ONLY in business to “serve the needs of the artists”. And yet when we have called our PRO, ASCAP, they have repeatedly told us “hey wow Ed Hale that’s great man. Congratulations! You’re really making good traction with the new songs! But see, with our proprietary system we really don’t even pay out on YouTube views until a song gets at least half a million to a million views. And even then you would have to accumulate those views at a rate of half a million views per month in order for us to calculate them and pay you any for them. So as unfair as it seems we can’t really pay you for any of those views for your new songs sorry to say.”

Needless to say every time I have this conversation with them I hang up that phone angry and discouraged. See, there’s no shortage of new fans for the music what with all these new ways to experience our music… But we the artists are just getting screwed out of the process. And yet it is WE WHO ARE CREATING THE PRODUCT!!! Without us there would be NO product for YouTube to play. Nor Spotify or Pandora or iTunes.

I ran the numbers in my head this morning as I was watching Garth complain about the same thing… Even if YouTube only paid us ONE CENT per spin I would make at least $5,000 just for those three songs alone this year. If they paid us just TWO CENTS per spin or view those songs would generate $10,000. No that’s not enough to support a family. But it’s certainly better than ZERO! And zero is what we are currently being paid from YouTube views.

See, the problem is that just a few short years ago we would make that kind of money in just a few weeks from putting out a new album and selling it. Either via a CD or via iTunes downloads. But with every song we release becoming instantly available online there is really no incentive for a fan to make that purchase. They can just go to YouTube or Spotify. And as a music lover myself I totally get how awesome that is. I do it myself. At least I used to. But if these streaming services are not going to compensate the artists for the streaming because of some “proprietary system” ala YouTube or only pay the artist 7/1000th of a penny per spin…the fans and music lovers are getting just as duped as we the artists are — believing their favorite artists are being compensated for the listening pleasure that their music is providing when in reality no such thing is happening.

If you’ve been wondering lately where your favorite artist is or where they have been and why you haven’t heard from them in a while, and who hasn’t… This is the reason why. They’re still alive. They just cannot afford to make music any longer. And this is by no means an exaggeration. As an artist myself I promise you that it is much worse than I have made it out to be simply because it is just too embarrassing to fully admit publicly — especially regarding other people who may or may not want the world to know how tough things are for them. That decision has to be up to each artist and their respective family. But suffice it to say I personally know many who are big names and plenty of smaller names who simply cannot afford to make music at the present time. And that is a very sad thing for all of us.

Of course there is much more to all of this. But this is a start. We will continue to explore this in future updates. In the meantime YOU can do something by simply publicly letting the above mentioned companies know that you believe they need to start compensating artists fairly. Something needs to change. And as always that change begins and ends with us — we the people can turn this tragic episode around and create for ourselves the miraculous happy ending that we all hope and wish for just as we always do in all world affairs.

– Posted by The Ambassador aka Ed Hale using BlogPress on an iPhone



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Uncategorized ed hale, Garth Brooks, itunes, music streaming killing the music business, Pandora, spotify, Taylor swift, YouTube

Correcting Some Myths Regarding YouTube Spotify & Artist Compensation

September 29, 2014

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 <xxxx@xxxx.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.”

 

Hi Bob.

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.

Sincerely,

The Ambassador

The Transcendence Embassy

c/o Dying Van Gogh Records

304 Park Avenue South

11th Floor

New York, NY 10010
800.827.7763
www.dyingvangogh.com
www.edhale.com
www.transcendence.com
www.transcendencediaries.com

 

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/



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Uncategorized artist compensation, ASCAP, Beats, BMI, Bob Lefsetz, ed hale, royalty rate, SESAC, spotify, Thom Yorke, U2, YouTube

U2 Proves Rock is Dead. And So Is the Album

September 11, 2014

The below is the latest blog entry from music-culture blogger and general curmudgeon, Bob Lefsetz. In it he plainly and clearly argues that the release of the latest U2 album — through giving it away for free via Apple’s iTunes platform — was yet another red flag that rock music AND the album as a viable art-form is utterly entirely and completely dead. He argues a lot of things in the article below. Much of it makes sense and rings true. One of things he emphatically states is that no one has time to dig through 11 songs on a rock music album (or any album for that matter) and therefore U2 wasted years creating their newest magnum opus. They should have just released a 4 song EP instead. You can read it below for yourself. Frankly I don’t have the time to respond to Bob’s ideas — and THIS gives testimony to just how accurate he is in his latest treatise on the rapidly changing cultural world around us.

For my part, I CAN say this. Everyone knows that I am an avid U2 fan. I own all their albums and buy them as soon as they come out or soon afterwards. I have seen them live in concert more times than I can count. But have I heard this new one yet? Nope. Do I even own it? Nope. And they’re giving it away for FREE!!! Yet I still don’t own it. Yep. This fact proves Bob’s point more than I’d like it to. To further prove the validity of his statements below, he is right in these assertions as well: I didn’t want to go to iTunes to download the album — while at the gym I obviously wasn’t able to do this. What I wanted to do was LISTEN TO the album. As in STREAM IT via Spotify. But U2 made the irreversible error of making the album NOT available on Spotify for at least a month or two. By that time no one will be talking about or interested in the new U2 album. We’ll all be discussing something else entirely. So they lost that shot. The next place I went to try to hear the new album? YouTube. Just like Bob predicted we all would. And as can probably be guessed, the new U2 album is not yet available on YouTube. So they dropped that ball too.

This is why, three days later I still don’t own the new U2 album. And I’m an actual FAN. Forget about the ex-fans or never-have-been-fans or the flat-out haters. They’re all having a field day making fun of and insulting Bono and company. They’ve become the punchline of the hour, the battering ram of the week — right after Ray Rice, ISIS and Ferguson, Missouri.

It’s a damn sad day when one of the greatest musical acts of all time can become so lambasted, negatively perceived and devoured by mainstream society for such a small and simple mistake. It’s even more disturbing that Lefsetz appears to be right not only in his assertion that rock music has lost all credibility and influence in modern Western society AND so too has the album as a viable art-form SIMPLY BECAUSE no one has the time for either of them. Especially for yours truly, who still bathes in the illusion that I make my living from recording and releasing albums of primarily “rock” music. Oh well. Oh well. Oh well. Better luck next time.

What follows below is the article by Bob Lefsetz. Happy reading. Feel free to share your thoughts.

Ambassador

 

NEWS FOR A DAY

No different from a rape or a murder, but with even less legs. In today’s world it’s not about making an impact, but sustaining. Could it be that Bono’s been living too long in the echo chamber, hanging with forty and fiftysomethings who think they rule the world but truly don’t? Yes, older people build the tools, but it’s young people who utilize them. The older bloke will lament the loss of the record shop, the younger person has never been. If you want to make it in today’s marketing culture you must be online 24/7, picking up the nuances. Because it is about cred and it is about cool but if you think the old rules apply, you probably can’t name a YouTube star.

EVANESCENCE

This is an analog of the above. Here today, gone tomorrow. How could the band be so stupid as to believe anybody would actually play their music, especially the 500 million it was pushed to. Where’s the afterplan? Nonexistent.

PUSH

We live in a pull economy. Nothing pisses off the audience more than pushing something they don’t want and didn’t ask for to their devices. Even if you don’t download the album, it’s sitting there in your purchases, pissing you off.

HOW TO

Did you have iCloud turned on in iTunes? Even those who wanted the album weren’t quite sure how to get it.

ALBUM

How many tracks did PSY have? One!

OVERLOAD

No one’s got time to listen to a complete album, especially when it’s pushed upon them, that’s just too much material. Yes, a nascent artist on his way up might have people check out more tracks on his album out of curiosity, but no one’s curious about U2, they already know everything about them. One must factor in that we’re all overloaded with stimuli and you must point us to the paramount item and make it digestible in a matter of moments. If we love it, we’ll want more. If we don’t, we’re never going to get to the rest of your opus that you spent years creating.

ALBUM TWO

Make it an EP. Four tracks. People haven’t finished Piketty’s tome. It would have been better off as a magazine article. People bought it, they just didn’t read it, who’s got the time?

ENGAGEMENT

Now what. Where’s the game, where’s the jaw-dropping viral video? Where’s the element we can all point to and talk about. If anything, we’re talking about the stunt, not the music.

WRONG SERVICE

They’d have been better off releasing it on YouTube, that’s where the digital generation goes for music. iTunes is a backwater. It may be the number one sales outlet, but it’s not the number one music platform, not even close.

UNHIP

Put it on Spotify. Try to look cutting edge. Meanwhile, having the quality of your music trumpeted by Tim Cook is like having Ed Sullivan say your tunes are good.

CLOSED DOORS

This is the problem vexing filmed entertainment/video, there’s not one platform with everything. But in music we’ve solved this problem, Spotify and YouTube have all the tracks and you can access them for free, but putting hype over practicality, U2 failed to see they were playing in a walled garden, to their detriment.

This was a stunt, poorly executed. Everybody forgets that despite all the hoopla about naming your own price, “In Rainbows” was a disaster, with only hard core fans familiar with the material. Yup, Radiohead may be independent, but they’ve done a good job of marginalizing themselves.

And at least Beyonce had the videos, somewhere to click to.

And Weird Al had videos too, but after a week, few cared.

Because at the end of the day we only care about the music. And U2 didn’t cut that one indelible track that stops us in our tracks, that we want to listen to again and again and pass on. Sure, the song they played at the Apple soiree was good, but good is no longer good enough.

Furthermore, when Bono talked he lost all charisma.

This looked like nothing so much as what it was, old farts using their connections to shove material down the throats of those who don’t want it. It’s what we hate so much about today’s environment, rich people who think they know better and our entitled to their behavior.

Don’t listen to the press. Rock writers are antiques who are underpaid who are in it for access and free tickets.

And the business press doesn’t care about the music.

And the old fart fortysomethings who talk about this music should be ignored. It’s no different from a Jason Isbell fan testifying about his tracks. No offense, but it’s a tiny world. Sure, U2’s is bigger, but until U2 cuts a track that makes the rest of us care, we don’t.

Meanwhile, Jason Isbell had a hit today, he tweeted: “U2 PHONES IT IN.”

Yup, that’s Internet culture, where someone who raises their head above is fodder for criticism.

But it gets worse.

Cultofmac said:

“But trotting out aging Irish rockers after you’ve wowed the world with the first glimpse of the glorious Apple Watch? That’s not thinking different. That’s a pity-f__k for a band that’s lost its edge, and an unfortunate bum note for a company that’s rarely perceived as tone-deaf.”

http://www.cultofmac.com/295084/u2-apple-event/

Whew!

All over the web people are criticizing U2. And that’s where music now lives, online.

So, so long Bono and crew. You’ll continue to sell tickets, but you’re no longer au courant.

So long rock that does not break through on Top Forty. U2 would have been better off cutting a country track, that would have been a better fit with a fighting chance of airplay.

So long albums. If you’ve got an hour to listen to once that which must be listened to ten times to get you’ve got no life, but everyone does, and they’re the center of it, glued to their devices, and to distract them you’ve got to be pretty damn good and the talk of the town for an extended period of time, U2’s new music is not.

So long stunts with no aftermath. If you’re not in the news every damn day, you’re getting it wrong. The biggest pop stars are the Kardashians. Ever notice not a day goes by without them in the news? Bono, et al, would be better off hanging with the sisters than heads of state, at least if they want to have a hit.

And so long the fiction that Guy Oseary would do a better job than Paul McGuinness. There might be a patina of new school, but this album release is positively old school.

Here’s how it goes:

Make everyone aware.

Put tickets on sale.

Make it an event, a la the Stones, i.e. if you don’t come now, you may never be able to experience it again.

Trump up traditional press so wankers believe there’s something happening.

But there’s not.

Because “I Will Follow” was inspired. It sounded like nothing else. It had urgency. It had attitude. You needed to hear it again. It was so good you wanted to hear what else the band was up to.

The new album is paint-by-numbers disposable.

Today we have to pull you into our world. And we only hold you in our bosom if we believe your music is repeatable and deserves our time.

Bono’s on top of the world, he’ll reject everything I say.

Rapino and Oseary will keep shoveling, hoping to keep this alive.

And you and me?

WE’RE ALREADY OVER IT!



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Uncategorized Ambassador, Apple, Bob Lefsetz, ed hale, ferguson, isis, itunes, new album, ray rice, rock music is dead, spotify, the album is dead, Tim cook, U2, YouTube

THE PROBLEM WITH MUSIC STREAMING FROM A BUSINESS STANDPOINT

May 23, 2014

Regarding Spotify and Pandora and the like, we have been spending a LOT of time discussing and debating this issue. Just not here. I apologize for that. Unlike the “old days” where everything I did was memorialized here for the ages, social media has now taken over and the majority of my communications, thoughts, feelings ideas are now floating out there somewhere, be it Facebook or Twitter or Tumblr or even Pinterest. I encourage you, friend fan or foe, to search for me on those above cited platforms and connect so as to be more readily informed of what’s going on. With that said, I started a simple non-profit to inform and promote a fairer living wage compensation for the musical artist called FAIR PAY FOR FAIR PLAY. Feel free to connect with it on Facebook if it’s a cause you believe in. There you will be able to read more about this subject than you’re even aware exists at this time. but that’s a good thing. We need YOU to. We need everyone to.

Needless to say, pardon that you’ll be joining the conversation mid-stream. But as of today, here is the latest thought about this subject:

Granted we are in the initial phase of this new trend… (streaming taking over purchases…) BUT i do believe that as with all “new things” that it’s important for us to set the rules up fairly and equitably from the start, or else it’s much harder for us to change them later. Be it anything. The problem is that the whole thing is a sham. This idea that tech companies are perpetrating on regular people, that “music can be free”… the business model itself is severely flawed… THEY happen to exist in an industry where everything is “free”. Free apps, free games, etc, because it is funded by venture capitalists. So they are now trying to pass that on to an entirely different industry — the music business — and with other people’s products, i.e. other people’s intellectual property. And therein lay the problem.

It’s FINE if tech companies want to and can afford to give away their product for free for a year or more or forever because they see a bigger picture down the road (advertising revenue, an IPO); but it’s NOT fine to demand that of other people who they don’t even know, i.e. musical artists. The ONLY way they can offer “free music” to people — their prospective clientele — is by either offsetting their expenses — what they should be paying for their inventory, in this case the music — through other revenue sources like advertising OR by funding their business through venture capitalists. Which is fine. IF they are paying for their inventory. Which in this case, they are not. They’re just stealing it.

And by doing so they are programming an entire generation to believe that “music is free”, when in fact it’s not. Music actually costs a LOT to create. Financially. Besides all the other things that go into it. Like talent. What they’re going to end up with is a world where only really crappy music is popular because really good music will not be available for streaming if these practices continue for much longer. Just something to think about..

If you want to find out more about this issue and the problems we all face as music lovers if it continues in this direction, read this excellent article about Radiohead’s Thom Yorke and why he pulled his music off of Spotify: http://www.theguardian.com/technology/2013/jul/15/thom-yorke-spotify-twitter



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Uncategorized fair compensation for musicians, music streaming is stealing, Pandora, Radiohead, spotify, tech companies taking over music business, Thom Yorke

A private little world for me… a private little world for you. The online journals and musings of singer-songwriter author and activist Ed Hale. The Transcendence Diaries have been posting regularly online since 2001. Comments are always welcomed. And so are YOU.

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