‘Piracy’ not streaming real enemy of artistes

Music from clouds

ABy Cezary Owerkowicz

lot of young people think if they don’t get free lunch, maybe they can have some free music. However, these days everything costs money and music is no exception, because everyone wants to make money. I think this belief is justified beyond doubt. For example, last year was the year of the cosmic battle — cosmic because of the size of the business in the music arena from two points of view — demand and money and because of the music stars shining on the horizon.

‘Following last week events decided to release my album ‘1989’ on Apple Music ... and with real pleasure,’ Taylor Swift, the American pop star wrote to her 55 million fans on Twitter in June. Someone would have not even dreamt of promoting new music on Apple which kicked off in June 2015.

However it was not the first streaming service (listening music on line). It followed in the footsteps of the Swedish Spotify which has 75 million followers. Taylor Swift just warmed the atmosphere of the starting competition. On Tumbler service she wrote to the Apple management: ‘We don’t ask you for free iPhones then don’t expect that we will give you our music for free’. She announced that Apple Music was not going to have her new album ‘1989’ which has beaten all sales records.

Owerkowicz

Probation

As the singer protested, the probation time began and the Apple users continued to listen to 40 million songs for free for three months. Taylor Swift is not some starting celebrity starlet: she is the first in the history of music to sell over one million pieces of that album (1989) in just one week after its release. Not just this, for her every concert has been a full house, be it at a sports hall or an open air stadium, because of this even the biggest establishment in the world was able to neglect her protest.

Two days later Apple apologized: ‘Taylor’s opinion convinced us that we have to make some changes’. Apple’s second in command, Eddy Cue on Twitter said: ‘Apple has to pay the artistes for releasing their music in streaming also during the probation period’. Taylor commented: ‘I am relaxed and proud’. She explained that she is not concerned about her income but money for the young, debuting musicians. ‘The question is about young artistes and ensembles, when they are just releasing their first single, tasting success, are deprived of money for this success.

It is a fact that Taylor is not in need of money. The Forbes Magazine has published that her income last year alone from concerts, records sale and advertisement contracts was worth $64 million. It is a little less than Justin Bieber’s income. There was storm in the glass of water but it favored Apple. Such a huge entity wouldn’t stand out to lose business but accepted Taylor’s proposal to save its face. People in the streaming business say they will use it in competition. In November also Taylor attacked Spotify but without coming to an amicable agreement.

When the Pop Star attacked Spotify because some streaming artistes earned almost nothing and the sale of their records dropped down, Taylor finally withdrew from Spotify all her records including the last record - ‘1989’ and the Swedish company begged her to change her decision.

Records

ITaylor did not budge from her decision because they protect their service rules which were established in 2006 which said the users decide if they listen to records free even if they are broken by adds or prefer Premium Account — without adds, with higher sound quality and possibility to record favorite music. The monthly cost of this service was $9.99, which cost less than one CD.

The Chairman of Spotify, Daniel Ek says he created the service because of his love for music and he doesn’t even consider depriving listeners from free listening. However, the service earns only on advertisements and it is much less than from clients paying subscription fee. It makes Spotify not a profitable business. Even the number of users is growing like an avalanche (during one year from 40 to 75 million) as well as income (more than a billion dollars last year), still it makes deficit c-a 160 million a year. Also other streaming services as Deezer, Pandora or WiMP are living on a shoestring.

However Spotify sends 70 cents of every dollar to records companies, artistes’ rights associations and certain musicians. It has made around $3 billion from its beginning up to now. Ek convinces us that the most popular artistes earn that way even a few million every year. He assures that Spotify protects the rights of artistes as well: ‘If such services didn’t exist, artistes wouldn’t even see such money; it would go into the pockets of ‘pirates’, he says.

The legendary trumpet player and music producer Quincy Jones supported his view: ‘Piracy not Spotify is a real enemy of artistes. If I release ‘Thriller’ with Michael Jackson today, I would like to have that album on Spotify’.

More artistes, especially the young and debuting have a different opinion. Geoff Barrow from Portishead group received $2,500 for 34 million entries on Spotify. Service Pandora is even stingy: Author of popular songs as I Need a Dollar or Wake Me Up, Aloe Blacc says that he got $4,000 for 168 million entries. Some musicians switched to private services. Famous rapper and Croesus of show business, privately husband of Beyonce, Jay-Z bought for $56 million two known streaming services, WiMP and Tridal and presents on them records of such stars as Beyonce, Coldplay, Madonna, Rihanna, Kanye West and Alicia Keys. It is clear that they earned much more than on other services, and also Taylor Swift except ‘1989’ for which she opted Tidal service. It seems that Jay-Z entered the war against Spotify and other competitors.

Not so long ago also Google established the pay service Music Key based on YouTube music library. It means the coalition in this battle is growing. However Apple Music has a chance to be the leader. After the three months probation period they charge as much as Spotify charges for premium service. Concerned Cupertino lost the first part of streaming period but now is trying to speed up. It is no wonder that the music market from on the Internet Cloud has at last grown to more than 40 percent.

Save

The Chairmen of Apple, Tim Cook and Eddy Cue know already that the fans turn to streaming services irreversibly. They wouldn’t save money to make up for lost time and distance in this run. Two years ago they paid $3 million for the Beats Co established by the famous rapper, Dr Dre company known for the cult headphones but also experience in streaming.

The Apple bosses also rely on clients of iTunes and even if every fifth of them accepted the streaming offer, Spotify would trail Apple far behind. Only they have to accept to turn their backs on the free Spotify service.

The pressure on Swedish service would weigh heavily on record companies such as Sony Music, Warner Music or Universal Music, which share between them 90 percent of the music market: ‘Music services have to induce a majority of users to pay subscription’, says Stephen Cooper of the Warner and Kevin Kelleher. ‘Financing from adverts listening to the music wouldn’t carry the whole ‘ecosystem’ of authors and investors of services’.

Money from Spotify and other streaming services flow mainly to those huge record companies and these giant companies then share them with the artistes from their ‘barns’. Maybe the artistes would complain more to their companies that they get ‘tips’ instead of fee?

Maybe since music was recognized as something unreal, something falling from the sky, there is doubt that the future belongs to the ‘music from clouds’, the Internet Cloud.

The Americans pay for such services more than for buying CDs. It is something worthwhile to fight for. Does it mean listening music free means the end of ‘music from clouds and sky’? Depends on Spotify and Daniel Ek who doesn’t want to force anybody to pay? I do not know if these remarks were about music or more about ... accountancy. However the reality is behind everything. There are no free lunches anymore.

Editor’s Note: Cezary Owerkowicz is the chairman of the Kuwait Chamber of Philharmonia and talented pianist. He regularly organises concerts by well-known musicians for the benefit of music lovers and to widen the knowledge of music in Kuwait. His e-mail address is: cowerkowicz @ yahoo.com and cowerkowicz@ hotmail.com