Streaming services (Spotify, Apple Music, Deezer, etc.) are currently the dominant media providing a way to music and spoken word to their subscribers, and don’t seem like deviating from the growing trend in the coming years. No wonder; who would refuse immediate access to content that counts 50-60 million items, doesn’t take up any disk space, or even any physical space, and costs about 7€ a month? We have tried it once and there is no coming back. The joy of saving disk and room space is bolstered by the 100% legality of the process and the user-friendliness of the mobile and desktop app. Pirating music which saves about one meal worth of money is hardly worth anyone’s effort. The operators of these comfortable services have started one of the biggest revolutions in the history of music consumerism.

Unfortunately, the enthusiasm isn’t mutual. During 12 years of the services’ operation, a considerable number of musicians and publishers have stood up, criticizing the financial income offered to creators. It’s funny that their statistics, which are considered to be the added value of streaming, actually highlight the pathetic disproportion between the number of plays and the generated profit. There are, however, dozens of articles on this topic, so let’s focus on the meaning of these services for small independent electronic artists and labels, rather than on the offended giants.

For a more tangible idea I decided to bring up numbers of one humble label, the one I’m a part of – Harmony Rec. The distribution company which distributes our records to stores around the world also offers a digital distribution as a part of its services. Songs uploaded to the web application of the aggregator’s company (middlemen) are further distributed to various streaming platforms – Spotify, Deezer, Youtube Music, Apple Music, Amazon Music, Qobuz, Tidal, Google Play and Fuga. For its work, the aggregator charges either a one-time fee or a percentage from each play – that’s our case (7%). My guess was that there is only a small income flowing from the streaming and I’ve decided to examine that after receiving the December statistics. So let’s move to the hard data.

Primarily, the income depends on the country from which the music is being streamed. While the premium Spotify account from Finland sends us € 0.004 per play, from Egypt it’s only € 0,001. Our label received most of the payments from premium accounts in Czech Republic, where the figure settled at € 0,003 per play (333 plays to reach €1). An amusing one is the revenue of € 0.0001 received from a free (unpaid) account in Mexico.

Not much, right? Moreover, this pricing doesn’t apply to everyone. The proportional system favours the most played artists and sends them more of the revenue. The biggest portion of your subscription goes to artists who are played the most. Even if you never listened to them yourself. A fairer system exists though. It’s called User Centric Payment System (UCPS) and long story short, it sends the money from listeners directly to the artists they listen to (after deducting the admin fee). Deezer promised to use this algorithm a while ago, but hasn’t started yet. The revenue from Deezer in Harmony Rec.’s case is (despite the higher price of subscription) a little lower than from Spotify. The UCPS will be implemented from April 1st by Soundcloud, which announced the news recently and supported their intentions with a promising revenue calculation. No one will be shocked by the fact that Apple Music, the service operated by the largest company in the world, pays the most. In some cases, twice as much per play than Spotify or Deezer.

On Youtube, on the other hand, anyone can upload anything. Instead of building a robot which would remove the content, YT’s developers have come up with a Content ID which identifies a track and sends the money to its rights’ holder. Tracks can be promoted through various channels to subscribed listeners (my favourite ones are Acidalia or DubTechnoTV for example). If the rights holder isn’t happy with his tracks being uploaded to a channel, it’s very easy to get those removed. The communication between Content ID and the label is handled by an aggregator company. Despite the fact that Harmony’s uploads are predominantly streamed via YouTube, the revenue flows only from ads and several YouTube Music premium accounts. For thousands of plays on YouTube in 2020 we have received only 12-19 euro monthly.

Are these services too cheap? Or is the ad placement cheap? The idea of a global antitrust authority which would set ‘fair’ prices, seems surreal. It should be noted that statistics of such scale provided by the service are what you pay for. In addition to the listeners’ location, the service also displays their age, gender, and even the way they found the song – whether by clicking a link on a 3rd party website or if the song was included in a playlist, algorithmic or compiled. 

One could say that today, many successful careers or tours owe their success to the right targeting of music. No objections to that, but the small independent scene players aren’t likely to use advanced marketing methods unless they’ve decided to reach for the stars. For the former, these datasets are redundant. 

So what kind of motivation for using the streaming services is there for small labels and their followers in genres like techno, house, electro and ambient?

I’ll start with myself. At the time when I became acquainted with general principles of streaming as a listener, and long after that, I was one of the opponents. I had several reasons. The main one was the unfulfilled promise of my friends: “It’s all in there”. What a foolish statement. Libraries of streaming services fail miserably in the territories of independent artists and labels. Those still channel their digital production to Bandcamp or to the newly founded Formaviva.

Fans of live recordings from concerts and DJ mixes are left with nothing. Streaming companies have been trying to deal with this affliction for a long time, but it seems that internal mechanisms of some services cannot cope with the copyrights of used songs.

Many followers of the aforementioned genres don’t stick to streaming because they still have one major reason for storing gigabytes of music on their discs – they DJ, thus purchase and download songs to their collections. Moreover, it is not uncommon for fans to know the artists personally and happily support their work, especially as transparently and directly as Bandcamp and Formaviva allow them. Among the buyers are professional and mainly semi-professional DJs, but one cannot ignore passionate fans who occasionally play at birthday parties, private events, or just casually play with friends in a studio or in their bedrooms. 

Some lack better formats, i.e. better sound quality, provided by lossless codecs. If one of the future generations of CDJs from Pioneer will be compatible with streamed libraries, the situation around buying MP3s, WAVs, AIFFs and FLACs might start changing. Pioneer’s competitor Denon offers this option with its SC5000 model, and has established a cooperation with Tidal, Beatport, Soundcloud and Beatsource.

Absence of the ‘label column’ is a crucial shortcoming of streaming services. Label catalogues are often primary reference points or stepping stones to unexplored territories. There are algorithm-made playlists supposedly serving this purpose, but they paint a false picture of the respective music scenes. They go against the grain of music diggers (individuals who are able to skillfully browse label catalogs and create a mental map) who feel being robbed of their unique capabilities. Playlists like Daily Mix, Explore, Top Hits, Coffee Room Lounge, etc. are not enough for them. Automatically generated playlists have become a characteristic feature of these services and are forced on the users.

For the advanced listener there should be a more appealing categorisation: ‘The least popular artist from your favourite label’ or ‘the artist who performed along an artist you used to listen to’ or ‘A band who shares a member with your favourite band’. This kind of organisation would expand a listener’s scope to a wider spectrum of music, and would finally gain some significance for many of us – it wouldn’t be about endless repetition of superficial ‘hits’ over and over.

In 2017, a few years after my first login to one of the streaming services, I was faced with a decision: whether to use the media provider I am not fond of for the Harmony Rec. releases or not. The verdict was made collectively, and keeping up with the pace of the era won over the economic unprofitability and unsympathetic user structure. Similarly to Michel aka Ntogn (of Hypnus Records) we have concluded that entering the streaming realm is a natural step in the evolution of today’s music industry. By being a part of it we are making our music more accessible to people who use streaming services as the only means, while making it more accessible to everyone else at the same time. And we do so, with a little exaggeration, on our bill.

Endlessly recruiting new listeners may not be the way to paradise. Labels try to build their image and the overall impression they make on the scene, and perhaps on the people beyond their subculture later as well. That image is defined by a community of friends hanging out around art collectives.

Many labels put a lot of work into their communication with fans, which helps them in self presentation, in defining their identity and in making connections with like minded people, whether they are alike in their music taste or, for instance, in their political thinking. Jacopo Severitano, head of Midgar Records, has likened his label’s community-building to having a party at your home – ‘you only want to have the nice people in’.

A trusting connection, in which fans know what to expect from the label and vice versa, can be jeopardized by the label’s catalogue being included in one of those hodgepodge playlists. And who doesn’t care about the fan community might be bothered by songs taken out of their context, such as from the concept of an album. Being part of a giant chaotic vortex of unrelated music definitely isn’t helpful to alternative and experimental releases and it rather reassures the listener what to avoid.

Speaking as a music enthusiast again: let’s support our favourite music labels. Let’s show them to the people around us, and if you can afford it, do more than just streaming their music – at the moment there are only few benefits to it and no brighter future ahead just yet. 

Musicians will appreciate and surely reward you for buying their music, merchandise or tickets to their live performances. Maybe you’ll get to know each other, have a drink together and exchange some information from behind the scenes. It is quite common within the context we are talking about. Labels and artists love feedback and want to know the secret desires of their followers, investing the received energy back. It’s a beautiful symbiosis, maintained by label owners regardless of all the obstacles in the matters of finance and honor. We should thank them for that.