No music startup has generated an operating profit in 20 years. Not Pandora, not Spotify.
The largest cost and greatest obstacle for music-streaming services like these is the the cost of the music they play, while prioritizing growth over profitability. Spotify pays out 70-80% of its revenue to rights holders for its on-demand service, and Pandora about 50% of its revenue for the radio-like service it currently offers.
But music startups all across the board are struggling. More than half of 2013’s most promising music startups no longer exist.
Why are music startups struggling to thrive, or even simply survive?
In this episode, we examine several perspectives to understand why the space for music startups is so
unforgiving, and what music startups can do to be successful.
Cortney Harding, a digital music consultant, discusses the recent slowdown in the music startup space. Edward Ginis and Brady Brim-DeForest, share of the bootstrapping approach that’s worked for OpenPlay. David Pakman of Venrock explains why his firm has never invested in a digital media company, while Jon Vanhala, formerly of Universal Music and now at Crossfade Partners, offers insight into who can be blamed for the fact that music startups are finding it so hard to make money. But it’s not all bad news. Music isn’t going away, it’s an essential aspect of the human experience. Our episode concludes with Michael Dorf, who tapped into the value of the live music experience and his own love of wine. Michael is generating more profit than he ever did in the digital music business while operating and growing his City Winery locations across the country.
Hot on the tail of this year’s Record Store Day, we’re taking a fresh look at an old medium — vinyl records. About this time last year, we did our first show on the state of physical music retailing, and we concentrated on vinyl. We took a look at how Record Store Day helped revive a segment of the music industry and saved local record stores — but there’s more to the vinyl story than the retail effect.
In this episode of Musonomics, we look further up the vinyl production line to see how the format is maturing, and what’s still holding it back. Josh Friedlander, the RIAA’s data guy, talks about the continued growth of vinyl records. Billy Fields, the vinyl guy at Warner Music Group, chats with us about whether vinyl might be heading for a plateau. And Eric Astor of Furnace takes us into the factory and through the vinyl manufacturing process, from finished audio to a pristine, pressed record.
Songwriters struggle to get paid while the copyright system designed to protect their rights is partially to blame, but why? In this episode of Musonomics, Larry Miller takes a look at how the copyright and royalty payment system is failing a new generation of songwriters.
From Adele to the streaming wars to a call for revision of arcane music licensing laws from the U.S. Copyright Office — in our final episode of the year Larry Miller talks with Neil Shah of the Wall Street Journal about the three most important music industry stories of 2015.
Season 2 of The Musonomics podcast kicks off today with the release of episode 8, “YouTube’s Big Red Elephant is Loose in the Music Industry’s Room.” We’ve talked a lot on previous shows about the streaming wars; Spotify vs Tidal vs Apple Music vs Deezer vs an ever-growing list of new faces — but there’s one streaming service whose user numbers dwarf the competition, and that streaming service is YouTube. In just 10 years, YouTube has become the biggest streaming service in the world.