Is streaming killing popular music and can you and Soundcloud help save it ?

Streaming is strangling new music. Soundclouds new payment model will help, but so can you.

I went to lunch today at Angelica’s Café, about a block from my radio studio, to fill up before going on the air.  The cafe is run by restaurateur /music impresario Ray Domenech so of course there was music –today, local folk acoustic singers .   There is nothing like a hot BLT and some cool  tunes to make me feel great about going back into the studio, putting on the headphones, adjusting the mic and playing songs and talking about music and musicians.

But the as the folk duo packed up to leave they remarked that this was their love, not always their job, because they liked to eat and pay bills, which music could not always do for them. That reminded me of a press release I received about 10 days ago from Soundcloud, the music streaming platform that allows you to stream, share and “like music” .  I have a Pro account – necessary if you are in the music business – and I follow its rankings and playlists and announcements of new music I can check out for my Hot half Dozen column every week.

The press release talked about Soundcloud’s new fan-centric royalties system that is directly driven by an artist’s fan base.  In the past, subscription fees and ad revenue were pooled and distributed among all artists.  Under the new system, each fan’s subscription or advertising revenue will be aggregated and delivered to the individual bands they play, less some fees.

The idea is to make it easier for emerging and mid-level bands – the ones I write about and broadcast – find an audience while making at least some money. 

But, before we go any farther, let’s be clear that making money with music, especially for young bands, is really, really hard.  The Streaming  Price Bible points out that a million plays on Spotify will earn a band between $3,300 – $3,500. That means that a hugely successful song by a 5-piece band will earn each band member $700  a year, before taxes. When live music was a thing, the same band could make that much in  two or three gigs over a weekend  in stage fees and merch.

Soundcloud’s system will deliver more money  to young bands, although  within limits because there is a market ceiling on what people will pay for music.  We have been trained to believe that 99 cents is what a song is worth, and less if we can stream it for free.  This is great for fans, but not so much for bands.

In order to survive, bands really have to sell, not stream music.  Pitchfork followed the money with the sale of  75 Dollar Bill s album  Live at Tubbys through the  pay-what-you-want marketplace on the streaming and selling service Bandcamp;  it generated $4,200 from nearly 700 buyers in two days: $600 per band member.   That is not enough to live on, but it is a place to start and if they can grow it, it can be enough to live on.  If they had streamed the album  at Spotify, they may have made 2 cents.

So, will Soundcloud revolutionize music sales and make it easier for young bands and mid-list bands to survive and prosper.  I don’t know about prosper, but survive is more likely because that is the intent:  combined with good marketing efforts by the band, it could be a survival wage

“We are excited to be the ones to bring this to market to better support independent artists,” says Michael Weissman, Chief Executive Officer, SoundCloud, adding that  “as the only direct-to-consumer music streaming platform and next generation artist services company, the launch of fan-powered royalties represents a significant move in SoundCloud’s strategic direction to elevate, grow and create new opportunities directly with independent artists.” In English, that means Soundcloud has changed its business model specifically to pay more money to indie bands.

I hope so , because the current model is deadly for new talent. Streaming accounted for 64% of all music consumption dollars last year (80% by some estimates) and under the present streaming system, the top 30 streamers earned 99.87% of all streaming dollars and  the top 10 streamers account for  for over 93%  of that.  Good for Taylor Swift – and she has earned every penny of it – but not much left for an emerging artist like Soltice Rey or Kirty or even a very strong mid-list artist like Francisca Valenzuela.

A strategy some artists are using is to stagger their releases so their fans have to buy the music on their websites before it streamed, and then stream it first on a fan- to – band marketplace like Soundcloud or Bandcamp, and once they have built a fanbase that will buy enough of their music – or merch and tickets when they can perform – only then release it to the Sportifies and iTunes of the world.  They will make little to no money on the big streaming services but they  use the services to  build more fans who they can cultivate to buy, not stream their next releases.

All this is important because streaming is strangling new bands and new music, especially from women and non-white artists, and that will kill popular music – not as an industry, but as an artform. Like any artform, popular music needs a constant infusion of new ideas, new talent, new forms, new genres to stay fresh and creative.  Imagine what would music be like today if music had been frozen in disco because hip hop, rap, electronic and other new format bands could not make enough money to survive . Actually, I don’t want to imagine it;  I want to help insure that it doesn’t happen. You can  help, buy music before you stream it.

Patrick O’Heffernan, host Music Sin Fronteras