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When Paid Downloads Don’t Pay

ipadMusic on demand services are great and are here to stay. Still they offer several challenges for artists and labels. How can artists promote their streaming music titles when they compete against over 20 million tracks on at least 50 different services? And how does streaming music on Youtube fit into all of this?

The music services like Spotify, Rhapsody, Napster and similar are the ultimate music discovery tool. They are simply fantastic. It has never been better to be a music fan. Still they represent a change in the music business that are hard for artists and labels to adapt to. The CD format has been an incredible loss for the business as a whole. But life goes on and artists have to find new ways to make a living.

Not everyone is a subscriber
Today we have the following channels of music selling and consumption;

1.) Music on Demand services, as stated above
2.) Paid digital downloads – like iTunes, Amazon and similar, plus artist’s homepages.
3.) Free streaming on YouTube, Vimeo etc.
4.) CD, Vinyl and similar.
5.) Others: Satelite, web and traditional radio.

To start with 3.). Many people still buy CDs and vinyl – but the numbers are falling each year. In this context we will not deal any more with hard formats. They are not the future. 4.) is a world of its own, where royalties still are paid as usual – but it is hard for a minor artist to get a lot of airplay.

But what about 2.)? To me it seems like many artists only focus their marketing efforts on paid downloads via iTunes or homepage – and don’t mention their presence on streaming services with a word.

The reason is simple of course; when one of your loyal fans buy your album on iTunes for 10-15 $, you get your 10-60 % (depending on the label or if your are an independent artist) or 98 % on your homepage (after the credit card/Paypal fee) – which gives you somewhere between 3-13 $. But if she listen to the album back to back 3 times on a streaming service, you get about 10-50 Cent (and that is on a premium service, depending on the agreement; see an article in the Guardinan about this here). She will have to listen to the complete album at least 15-30 times (or more) before streaming services can compete with paid downloads.

But remember; these days many people only buy the most popular songs from an album. If she buys one song, instead of streaming the whole album 2-3 times, you will earn more by streaming than by paid downloads (depenting on how much the actual service pays per song).

We must not forget that not everybody subscribe to a music on demand service. Still most people have a smartphone capable of playing MP3-files. This is why paid downloads will not be replaced totally by music on demand services.

This is all old news.

The new problem is that artists are falling behind because they are not promoting the fact that their music is available for streaming on demand in fear of loosing paid downloads. This is not a good strategy. The result;

Your fan, the music subscriber (who stopped paying for downloadable music years ago), will most likely not stream your music.

Why?

Because of the many distractions on music on demand services. It is so easy to get sidetracked (literally). There might be millions of tracks there, but what people actually stream is heavily influenced by the front pages and hit lists. It is a paradox that people stream so much mainstream music, when they have access to so much material.

What about Youtube? All I know is that artists that for a few years ago never would consider free listening as a marketing tool now are giving away free music like there is no tomorrow. Is Youtube that important? Perhaps. It seems like all artists have to be prepared to give a lot of free music away these days. Here there are no definitive answers. YouTube might or might not hurt your sales. But the question is: when you promote your music, are you really promoting a YouTube video instead of your album? In terms of royalties, artists in our genre is lucky to earn a few dollars a year via YouTube.

So what should artists and labels do? I think the best strategy is to market paid downloads only for a very limited time (not more than 1-2 months after the release. When I say market I think of posts on social media, email lists, homepage updates ect.). The main focus should be on building a strong catalogue (or homepage if you will), linking to all relevant streaming services. In this way the fan will always find a link to her usual method of music consumption.

Another good idea is to contact streaming music providers directly and ask to be added to official playlists containing relaxing music. These playlists are often popular, and will give you lots of playbacks. But don’t get sad if you don’t get an answer from the music service. It is not like they are sitting around and waiting for you to contact them (although they should).

In conclusion; At the moment many artists, especially in a niche genre like ours, are getting little or no playbacks on streaming services because the audience don’t know (or don’t think) that their music is available for streaming. Make sure to promote the fact that your music is streaming a place where you actually get paid.

Above picture by Cherezoff – BigStockPhoto.com