Rdio Killed the Video Star

There’s been a lot of talk lately about premium streaming music services, especially now that Dr. Dre, (creator of Beats headphones) has thrown his hat into the ring. It’s a compelling proposition Dre makes, especially considering that he single handedly re-invented and reinvigorated the headphone industry. But as an observer, I find myself exceptionally torn about the idea of a streaming service both as a consumer and creator of media.

As a consumer, much like when buying a car, the concept of lease vs. owning is a hotly debated topic. With leasing you get the satisfaction of all the newness now without the large financial investment. Thousands of songs instantly downloadable to your device, and streaming from the cloud. You can make playlists and listen commercial free. It’s a tempting prospect. The issue comes when one service doesn’t offer all the artists you want to hear. Or when you consider the fact that with most services you can’t use the music you have access to in the streaming service as part of a playlist with the music you own. (So, say you want to hear the Beatles song that you bought mixed in with The Who that’s streaming on Rdio? Too bad.) Also, many third party apps for mobile devices don’t work with streaming services (workout apps that play your music, for example). And, if you cancel the service, access to that music is gone, as is your $9.99 a month.

On the flipside, owning means forever. It’s your music, you can play it when you want and in whatever app you want. (At least now you can with the DRM-free downloads available.) If you invest $9.99 on an album or even purchase 10 tracks from various albums, they’re yours. Of course, to get the sheer volume of music available on a streaming service, at 99 cents a pop, you’d need to pay 20 million dollars. So yeah. There’s that problem.

Now of course, this is all ignoring the other commercial-based free options that services such as Rdio and Spotify have. I hear many people defending the free (and even the subscription) options because they say it gives them an opportunity to hear new artists that they otherwise would not have heard. And yes, I did work in terrestrial radio back in the day, so I admit I am at once both nostalgic for hand picked, curated music (an endangered animal that doesn’t exist much anymore) and jaded by the entire label/radio/media gatekeeping system that has the power to both create and destroy. But I’ve also found that unless there’s a system in place like iTunes Radio, Pandora, or the Beats “The Sentence” option, you really don’t get exposed to anything new unless you truly go hunting. Case in point, my neighbor who is an avid Rdio user, subscriber, and defender has no idea who Macklemore is. Or Fitz and the Tantrums. Both, by the way, he loved when I played their music for him. But it’s an example how one can live in a musical bubble on self-selected streaming services.

And then there’s the artist perspective. Reportedly, Spotify pays artists’ labels $.006 to $.0084 per streamed song. Generally, most artists see about 15%-20% of that. To put that in perspective, to make minimum wage, a new artist needs to have their song streamed 1.3 million times a month. For the record, that’s not going to happen, unless you’re Lady Gaga. Of course, in the cases of bigger artists like Gaga, their labels labels often negotiate up-front bonuses in exchange for allowing their music to be used in an attempt to lure in more subscribers. It’s a system that’s inherently lopsided and unfair to the creation of new musicians and music. It’s why Thom Yorke and Radiohead pulled out of Spotify and Rdio back in July 2013. And even if you are a well meaning soul who then buys that album after streaming it in an effort to support the artist, the artists generally get a mere 94 cents from a $9.99 album or $.09 per individually downloaded song after paying iTunes and their label. (My calculator says that this means they’d need to sell over 13,300 songs a month just to get minimum wage.) It’s why many artists leave their labels after hitting it big. The profit margin sucks big time.

Suffice it to say, the system is not great, and there’s a lot riding on fixing it. While Dr. Dre and Trent Reznor (another face of Beats Music) have said that they hope to create a more fair royalty payout schedule as part of the Beats service, the odds are still stacked against the new, the niche, or the artist who doesn’t want to “sell out” and license their songs. Once people could pirate music for free, monetizing it again has proved nearly impossible. It’s a phenomena that exists only in the land of intellectual property. Somehow, our culture has decided that walking out on the check for a dinner that took an hour to prepare is wrong, but a song that took years to write, record, and mix is okay. It’s a mindset that limits the variety of musicians that can afford to make music. Don’t like the songs you hear at the Grammy’s? Fault the system, yes, but we, as consumers, are equally to blame.