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.
Remixes and mashups will not be subject to compulsory licenses anytime soon according to recommendations presented in a white paper released last month by the Department of Commerce (DoC). The white paper is the result of a 2-year study published by the Internet Task Force created to deal with our “Remix Culture.” The remix culture, as Lawrence Lessig states in his book Remix: Making Art and Commerce Thrive in the Hybrid Economy, utilizes multimedia as its language to communicate. It allows the consumer to quote content from various sources to create something from existing content that can be considered “new.” For example, sampling, taking short snippets from different songs to create a new song that can sound completely different from its original sources — a practice widely used in hip hop and electronic music. Remixing and sampling have become vital techniques and art forms in a new-look media landscape.
Spotify has been known since its launch in 2006 as a music streaming service, but with a move into video content, the streaming giant looks to be broadening its entertainment offerings.
In a new partnership with Disney, ABCNews, NBC, Viacom, TED, and Vice, and others, Spotify has added video content to its library. Daniel Ek, Spotify CEO, originally made the announcement back on May 20th, but the update went live on iOS and Android in recent weeks. Continue reading “Spotify Adds In-App Video Content”→
Since 2006, Doritos and APM Music, the largest production music platform in the US, have run the Super Bowl ad contest, “Crash The Super Bowl.” The partnership engages online followers by offering fans and budding ad-writers the chance to create a Doritos ad spot — using APM music — and have their spot aired during football’s biggest game. Contestants choose from 21 APM tracks to feature in their commercial. The top three finalists, selected by online voters with input from advertising executives, have a chance to win $1,000,000 if their ad charts at number one in the USA Today polls.
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.
It’s Monday again, and that means another batch of important information to catch up on. On this week’s Monday Reading List, Billboard.biz explains new changes to webcasting rates, Spotify considers allowing artists to withhold music from the free platform, Tesco starts selling vinyl in the UK, Paul Pacifico tells Music Business Worldwide why artists must be at the center of a new music business, and rumors swirl that the Beatles catalogue may finally be available on streaming services very soon. Continue reading “Monday Reading List”→