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The Music Industry's Latest Shortsighted Plan: Killing Freemium Services 244

An anonymous reader notes that there have been rumblings in the music industry of trying to shut down freemium services like Spotify's free tier and YouTube's swath of free music. The record labels have realized that music downloads are gradually giving way to streaming, and they're angling for as a big a slice of that revenue as they can manage. The article argues that they're making the same mistake they always make: that converting freemium site listeners (in the past, music pirates) to subscription services will be a 1:1 transfer, and no listeners will be lost in the process. Of course, that's no more true now than it was a decade ago. But in doing trying to do so, the labels will do harm to the artists they represent, and shoot themselves in the foot for acquiring future customers by getting rid of several major sources of music discovery.
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The Music Industry's Latest Shortsighted Plan: Killing Freemium Services

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  • by Crashmarik ( 635988 ) on Tuesday May 12, 2015 @07:39PM (#49677681)

    You mean more than they already do ?

    From what I have seen the sites pay next to nothing and most of what they do pay goes to the labels, because the artists are still in debt to them.

    • by antiperimetaparalogo ( 4091871 ) on Tuesday May 12, 2015 @08:05PM (#49677841)
      I can't understand this hate from non-artists for the record labels, based on some kind of "love for the artists" - artists use record labels for so many things (of both artistic and non-artistic nature), so i think this idea of "the (ab)used by the record label artist" to be most of the times just a hypocritical justfication of piracy.

      I am an amateur musician - if i wanted i could use a record label to help me in a professional career, or i could self-promote/publish my work.

      • Hate ?

        I just don't buy into the B.S. they are doing this for the artists, or that the artists will ever see anything in their pocket from this.

      • by jedidiah ( 1196 )

        Record labels abuse the talent and then corrupt the law.

    • by Dunbal ( 464142 ) * on Tuesday May 12, 2015 @08:41PM (#49678013)
      Personally I find it amazing that we still need "labels" and "publishers" for anything nowadays. There's a huge global distribution network out there available for almost no money, there are facebook and twitter addicts that will gladly do massive "word of mouth" advertising for you for free. I think some artists need to realize at some point that in a world where pictures of a blue/black or white/gold dress can take the whole world by storm almost overnight, maybe the reason no one wants their music is actually because it sucks.
      • by Jason Levine ( 196982 ) on Tuesday May 12, 2015 @09:10PM (#49678179) Homepage

        I think labels might still have a place, but not with the kind of power that they traditionally had. They still employ people who are good at publicizing albums whereas the bands might not be good at it themselves. (Yes, social media and other tools makes it easier, but it doesn't mean everyone becomes a marketing expert.) I envision the future label to be a glorified ad agency. A singer/band would sign a contract for the label to promote their album for a certain period of time. The label wouldn't own the copyrights and would merely get a cut of the profits. (As opposed to the current "gobble all the profits and generously give a crumb to the artists" model.) If the artist didn't like how the label was doing, they could fire them or wait until the contract expired. Then, they could pack up their albums and go to another label. (No more: "Artist X can't play popular Song Y because they left Label Z who now owns the rights to it.")

        Of course, these new labels will need to trim a lot of fat out so many music executives will lose their jobs. Here's an actual size tear that I will shed over their lost jobs: .

        • Re: (Score:3, Informative)

          by phantomfive ( 622387 )
          The reason is, because in many cases, the skill of the markets is greater than the skill of the musicians. That's why labels make more money, and can abuse the artists. Because if the artist leaves (in many cases), there will always be another one-hit-wonder to replace them.
      • We don't need them, but the people who use them haven't died yet.

        There will always be a need for promoters - musicians will need to fill venues somehow.

      • by AmiMoJo ( 196126 )

        The difference between making a living from music and getting super rich is being promoted by a label that can get your one or two good songs on an advert out TV show, or get someone famous to talk over the first few seconds. That's why do many bands get suckered in.

      • by Trogre ( 513942 )

        They often hook artists with a lucrative recording contract first, because recording with good quality is still expensive, though mixing and mastering less so now with digital workflows.

      • by tsotha ( 720379 )

        Traditionally the labels did a few things for you: Marketing, production, advances, and shelf space. By "shelf space" I mean getting your album in to record stores, which was a bit of rent seeking you really couldn't get around as an artist.

        Today you can do your own marketing, borrow money, and control over shelf space is a commodity of dwindling (if not entirely nonexistent) value. But record labels can still add value by bringing together the facilities and technical expertise you need to make profes

    • Re: (Score:2, Interesting)

      by Anonymous Coward

      I have a friend who is a musician. He also does music production and recording. The bottom line is that the artist makes less than $.05 per track on a CD, almost nothing from music that is streamed from pay services and royalties. Bands that go on tour generally end up in debt because the labels arrange the tours, and charge the band for everything including the air that they breathe. The labels make the lion's share of the money, and mostly end up owning the rights to the music.

      So while this will not ha

  • by TechyImmigrant ( 175943 ) on Tuesday May 12, 2015 @07:41PM (#49677703) Homepage Journal

    The last two records I purchased I paid for and downloaded from the artist pretty directly. I assume they were paying the hosting service a fee.

    This is the way of the future. I'm sure the artist in question got > 50% of the revenue direct into their pockets, compared to the tiny slice a record company would pay them, this is huge.

    • by tepples ( 727027 )

      I've been thinking of doing that: writing some music, recording it, and offering paid downloads of zipped albums. But how would I go about making sure I don't accidentally infringe some other songwriter's copyright like Robin Thicke did?

      • The good news: Independent creation is a complete defense [] to copyright infringement.

        The bad news: You can still be liable for subconscious copying [].

        The upshot: You are statistically unlikely to make enough money to raise the ire of $label_with_a_song_that_sounds_like_yours, but if you do and that song got even modest play in your region, they could come a-knockin.

        The bottom line: If you're going for safety over listenability, maybe try weird chord progressions in odd time signatures. That will help
      • by dbIII ( 701233 )
        Steeleye Span did it for decades by rocking up some out of copyright folk, but the real issue is that "accidental" infringing that makes it as far as a courtroom isn't very accidental. However some stuff where the copyright was never enforced previously (eg. Kookaburra song from the 1930s that was owned by the Australian Girl Guides until recently) has ended up in the hands of music companies using it as a legal blunt instrument.
        • by tepples ( 727027 )

          Steeleye Span did it for decades by rocking up some out of copyright folk

          You appear to agree with this post by mcgrew []. But the stated purpose of copyright, according to the U.S. Constitution, is "To promote the progress of science and useful arts". If copyright causes people to stick to pre-1923 works rather than creating new works out of fear of accidental infringement, it is fulfilling the exact opposite of this purpose.

          but the real issue is that "accidental" infringing that makes it as far as a courtroom isn't very accidental.

          Are you claiming that "My Sweet Lord" was not in fact accidental? In any case, it appears your answer is "prepare to settle out of court". In that case, how ca

          • by dbIII ( 701233 )

            If copyright causes people to stick to pre-1923 works rather than creating new works out of fear of accidental infringement, it is fulfilling the exact opposite of this purpose

            That's right.

    • I'm kind of disappointed sites like bandcamp aren't more popular. Most of the money goes directly to the artist (not sure how much they take) and I get to download the music in FLAC, mp3, or a number of other formats. And the artist can set a minimum price and let the customer pay more if they want. I only found a couple of artists on there I was interested and they each only had 1 album available.
      • Bandcamp is the service I used. The artist I recently found and downloaded was Lily & Madeleine, following comments on First Aid Kit videos on YouTube.

        So without being able to explore music online I wouldn't be able to find it.

    • by gweihir ( 88907 )

      Same here. I actually listened to them on youtube for free and decided I liked them enough to buy. Anybody that does something worthwhile listening to will get enough money that way. And people that just pirate things will never pay for them, regardless the restrictions. You can piss off legitimate customers though that way. Several artists that I kind of liked did that to me by having the first CD I bought from then being unable to play on my PC. Turns out I never listened to them again, because I feel rip

  • Music discovery (Score:5, Interesting)

    by Loopy ( 41728 ) on Tuesday May 12, 2015 @07:48PM (#49677741) Journal

    That's a good phrase. I've purchased perhaps a third of the music I own because I heard a song (or snippet of a song) in a video or just tripped across something I liked while surfing youtube. "This video has been muted due to an audio copyright claim by FuckMeI'mAnIdiot Publishing" would seem to be quite as self-defeating as normal folks claim.

    • Most of the music I've purchased over the past few years I discovered on streaming sites. I've discovered artists I've never heard of in genres that I thought I knew very well. I've even discovered genres I didn't know existed. Of course none of it is top 40 pop, country, R&B or hip hop so the record companies couldn't care less that I'm supporting some obscure band even if it is one they represent.
    • I've literally just ordered over $100 of CD's after listening to some free samples on Pandora.. guess they don't want my business, again. They lost me for 10+ years when I didn't have any way to legally preview music that wasn't awful mass market pop.

      Every time they clamp down on sharing they lose revenue and then blame the sharing.. hilarity ensues.

    • by gweihir ( 88907 )

      Indeed. The publishers are stupid bean-counters that have forgotten that most illegal copying does not equal a sale, but some does and will because people had a chance to try before buying. Now making copying impossible will not get any of those that did not buy before buying now, but you lose the latter group that wanted to try first. There are now some scientific studies that confirm the effect, but it just does not fit the world-view of the bean-counters. Even some artists have forgotten that they life a

  • Artists pay the radio stations play their music and pay the labels to market their albums to convince me to buy your $10 collection of songs and selling the same songs two and three times over as live versions and in greatest hits collections

    • I think you meant this:
      "Labels lend money to artists to pay the labels for recording their music, then the artists pay the labels to pay the radio stations to play their music, pay the labels to market their album to convince you to buy their $10 collection of songs, and pay the labels to pay the royalty services to collect money from the radio stations (who have been paid by the artists out of the money paid to the labels to pay the radio station to play them) to pay the labels.

      The artists then pay the lab

  • by Anonymous Coward on Tuesday May 12, 2015 @07:49PM (#49677745)

    Yeah as I type this I'm listening to pirated music that I just started downloading due to Grooveshark getting shut down.

    On the 30th they shut it down. By the 3rd of May I downloaded 250 gigabytes of pirated music and got back every song I had on my grooveshark playlist.

    Now I will *never* use the internet to stream music. I keep losing my damn playlists which took hard work to properly set up. Then whatever site gets shut down or bought and I'm suddenly lost one morning unable to even get my playlists (lost many great obscure songs I loved and couldn't remember the names/bands to)

    First I was an Imeem user, then that got shutdown and bought by Myspace. (Fool me once)
    Then I went to grooveshark who also years later got shut down. (Fool me twice)

    Now I'm just pirating like a mofo and working on streaming software (which I'll be keeping private and not sharing) to give to people close to me (friends, family, etc) which will just provide a front end to the massive collection of music I've pirated. Basically creating my own streaming service which can't be shut down if no one but my close circle knows about or has access to.

    Here I thought by disabling adblock on streaming sites I was actually being a "good person". Now I regret that decision after they shut it down anyways. If they don't want me watching ads to listen to music I guess I'll just fucking pirate all of it then... They had their chance.

    Now I'm using my prowess as a software developer to stream my pirated collection to everyone I know with a custom program that can't be stopped. Darknets will be built by people like me.

    Anyone remember that one no-name company with source code control tools that tried suing the Linux Kernel Developers? I don't either, they prompted Linus to write Git which is all everyone uses these days..... That crappy product from that crappy company isn't at a single place I've worked. Are they out of business yet for their greed?

    • Check out Subsonic [].

  • music sucks, least on MY lawn.
  • by glsunder ( 241984 ) on Tuesday May 12, 2015 @07:56PM (#49677781)

    Their model for distributing music has only been around a little over 1/2 a century. New technology invalidated their business model. Guess what? That's how it's always worked. They can either adapt, or they can die.

    So a few bands will make less because they won't have the album sales. Most musicians have traditionally made their money by playing live, and that's what'll happen. The difference now is, streaming services will help introduce people to new music, and some of those will go to their live shows. Some of those will buy the $30 t-shirt to further support the band. You might not have as many multi-millionaire musicians, but the internet should benefit the ones who never sold enough to make a profit on an album anyway.

  • the music industry wants people to pirate music.
    • by Jason Levine ( 196982 ) on Tuesday May 12, 2015 @09:17PM (#49678215) Homepage

      If more people pirate music, they can blame bad sales (where bad is defined as "We sold X and we think we should have sold 10,000*X") on piracy. Then, they can use the piracy claim to get some music industry-friendly, consumer-unfriendly laws passed. (E.g. "You need to pay a $5 a month piracy tax whether or not you pirate." or "Three copyright infringement accusations and your ISP must disconnect you.") Best case: An executive blames piracy on a bad album sale instead of on the fact that he signed a band with no talent.

      Even if piracy went away tomorrow, I'm convinced that the music industry would still claim that piracy was increasing more and more.

  • Apple is one the big pushers behind this move as well as they are about to launch their own PAID music series. They want the free tier killed off so they can be more competitive in music streaming market. Now cue Apple fanboyz to defend Apple for this crap.
  • by kheldan ( 1460303 ) on Tuesday May 12, 2015 @07:58PM (#49677795) Journal
    The more stupid crap like this I read or hear, the more and more I'm glad I still listen to nice, free FM radio, and my own collection of CDs.
    • Oh yeah, I love FM radio. 85% commercials with the occasional song thrown in. There's a reason I haven't listened to that shit in years.

      • There's this little thing called 'presets' that allow you to jump around between stations with a simple push of a button, you should try it. I don't listen to commercials. :-)
    • The RIAA loves you too.
  • not sure I see a problem with this. If the users were going to stay on the unpaid model and the ad revenue isn't enough to pay for it why bother hoping they convert? It only works for Candy Crush because a few "whales" buy a tonne of stuff, but with music those folks are buying CDs and vinyl for their collection. Might as well cut off the guys who want freebies...
  • by rmdingler ( 1955220 ) on Tuesday May 12, 2015 @08:01PM (#49677817) Journal
    I remember thinking "this is a freakishly crazy business model" when I could play any song I wished, completely and utterly gratis, whenever I wanted.

    Suddenly, I own a focking paid for library of signature party mix.

    Best con of all? I'm not even sure how they got me, so I think they can do it again.

  • Offer tiers of service ranging from free (ad-supported) to dirt cheap (fewer/no ads) to cheap (mobile/offline support) to still reasonable (higher quality, international content, user uploads).

    Allow artists to choose whether to make their content available at the 'free' tier.

    Write the contracts such that paying users will always be able to access music they've added to their library, even if the artist/label throws a fit and leaves.

    • by Amouth ( 879122 )

      try []

      i personally love it, and a few years ago bought a life time membership (even after buying several albums from them).

      Only thing i wish was that their phone app was better (and had random across favorites) and that they had a desktop player like PandoraOne so that i don't have to leave a web browser always running to listen (and the player would work with media keys for play/pause/stop)

  • Good. The music industry is like a puss filled infection on the ass of humanity that needs to be lanced and drained so something better can take its place.

  • The more you tighten your grip, Tarkin, the more star systems will slip through your fingers.

    It's too bad Lucas wasn't a better filmmaker/storyteller.

  • by jd2112 ( 1535857 ) on Tuesday May 12, 2015 @09:33PM (#49678293)
    ...make the best foie gras.
  • by BevanFindlay ( 1636473 ) on Tuesday May 12, 2015 @10:18PM (#49678435)

    Yep, real smart. "Oh no, people are discovering new music for free, let's stop them."

    Users: "Oh, my free streaming service went away. You suck! How do I get music now?" Googles for 'free music download', or asks friends, eventually ends up at the Pirate Bay or something. "Cool, all this stuff is free and I can even keep it without some service disappearing from underneath me!"

    When will these people realise that they cannot support their old business model because technology has made it redundant. The longer they try and abuse their customer base, the more of their customer base they are going to lose. Eventually technology will steamroll them into obsolescence, but it's mainly because they never thought to give people want they want soon enough (if, back in the Napster days, they had provided an easy way to purchase any MP3 online, DRM-free, for a low price, everyone would have done that instead of finding more and more ways to avoid paying at all. Now, it's too late and the market has left them behind).

    It's the horse-feed sellers complaining that everyone is using jet aircraft - and then trying to force them not to by suing? I have for quite some time been saying that they need to wake up and adapt to the technology, but I honestly think it's too late for that. The recording agencies have dug their own grave by being so backward. P2P tech and other options have left them irrelevant, and their trying to beat people up with legislation changes just makes the rational people who don't mind paying a fair price angry.

    Sorry, but if I'm looking for new music, I'm still going to look at places like YouTube. If the big businesses are too stupid to put their stuff there, then it won't be their content I'm seeing - it'll be indy artists, and I'm more than happy to pay an artist directly if I think their stuff is good enough, and if I can get it without DRM (or other vendor lock-in like iTunes).

    Of course, most of the big-label stuff is rubbish anyway, so I guess I'm not losing much. Perhaps YouTube will stop suggesting crap pop songs now - yay!

  • anymore, I find a lot of the music I like is self published by the band. It is getting to where you don't need the labels and that is a good thing.
  • Seriously, there are plenty of ways a band can publish their music now with no need for a distribution contract. Here's a few off the top of my head:

    Magnatune (Haven't checked if they still exist - they made a big deal about not being "evil")
    Google Play
    Hell there's YouTube if you're desperate :)

  • by tsotha ( 720379 )

    But in doing trying to do so, the labels will do harm to the artists they represent, and shoot themselves in the foot for acquiring future customers by getting rid of several major sources of music discovery.

    I'm pretty sure the labels only worry about the artists when their own interests aren't involved. You're right about the music discovery, but from a label's perspective discovery is only worthwhile if it leads to a sale. If people just listen to youtube whenever they have the itch to hear a song witho

    • What the industry has to accept is that just because they had a monopoly for 50 years of human history doesn't mean they deserve that for all eternity. There's no law of nature that says musicians should be millionaires, even a popular one.
      I can't see any issue where artists publish their recordings on streaming services and only earn a token income, while music enthusiasts (DJs and critics etc) vie for attention by recommending and publishing playlists, to which consumers listen then pay to see their fav
  • ... the foot-shooting, that is, for what? Ten years? For as long as i can remember on /. , that's what we always say. Yet they are still here...

    Anyone got any hard data to determine whether they are gaining or losing from all the foot-shooting?

"I will make no bargains with terrorist hardware." -- Peter da Silva