For those of you who read the Lefsetz Letter, you may have seen a rant he went on a few days ago about the recent trend of musicians/artists launching new albums without a streaming option, like Spotify or Rdio. Most notably, the Black Keys and Adele have announced that,
“[Streaming services] are becoming more popular, but it still isn’t at a point where you’re able to replace royalties from record sales with the royalties from streams,”
When you look at the the numbers currently (take a look at this handy infographic that has made the rounds), it is definitely true; artists make significantly less money from streaming services than they do from selling CDs or even iTunes downloads. But isn’t that the point? Isn’t that why people sign up for Spotify, or Mog, or Rdio? Because its cheaper? Isn’t the point to make music so easy to get, to listen to, to get in front of people that dont know you, that they become fans and spend money on you in other ways? I thought we already figured out that bands dont make money selling records in ANY format? From what I know about where artists’ money comes from, a disproportionately small amount comes from record sales, a bunch of it is from butts in seats at shows. So why wouldn’t you want to put your music in a place where the most people can listen to it, love you, and buy concert tickets? Plus, didn’t the Keys have all those songs in commercials? That’s not a bad payday.
I love The Black Keys. In the interest of full disclosure, they are clients of the company I work for at my day job. I also pay 10 bucks a month for the Rdio service. Have I listened to the new record? Nope. I have my setup for how I consume my media and they aren’t there. Sure, hardcore fans will purchase the record if its only on iTunes, and they will make more money from that sale. But the “undecideds” like me arent going to put forth the effort, albeit a small one, to seek out the record.
I’d love to see some numbers, if it was even possible, between selling fewer records for more money on iTunes and Best Buy versus putting your music on Spotify, selling fewer records (which is probably money you wont see anyways), but getting a bump from being “out there”.
Either way, when you are selling any product, it seems odd to not be where your customers are.
