Ethan Rudin is the CFO at Napster. Leeor Brown runs the excellent indie label Friends of Friends, which features an eclectic roster of emerging to mid-career artists. Tom Vek is a UK-based recording artist who, like myself, has also been a bit critical of streaming in years past. His app Sleevenote serves to fix some of the problems he sees with online music consumption.
The following conversation took place over email and has been edited for length and clarity.
VEK: Cheers Jonny, and hi everyone. I should probably jump straight in with what my criticism has been with streaming. It’s actually all digital music really, the lack of control over the presentation. My background in design was inspired by music artwork, and it depressed me that there wasn’t a consideration to keep presentation or “packaging” intact with the move to digital. It’s what led me to build Sleevenote.
I feel like the brand of digital music services are too upfront in the experience. It would be much better being creatively driven by the artists, visually, to help albums/artists stand apart from each other more.
COLEMAN: I definitely agree that something about the presentation of the music in major streaming platforms leaves a lot to be desired. I have a lot of reservations about SoundCloud (though I’m happy to see they recently ended their war on DJ mixes), but its interface feels the most comfortable and clean and where graphics/art can still have somewhat of an impact. I am by no means a design snob, but is it me or does anyone else feel like the whole presentation on, say, Spotify feels really chintzy and cheap?
When I use Spotify, I almost feel like I’m using a pirate site. Does anyone relate to that?
VEK: I agree that Spotify feels cheap. I just discovered that even for premium users the prompt is still to “shuffle play” an album, which is just so disrespectful to artists’ programming decisions. Soundcloud is just so orange, and what if I don’t want someone to see the structure of my song? Apple Music rounds off the corners of album covers.
I think music services are scared to push a format. I have this theory that the last great digital music format was actually the MySpace page. Each page looked crazy and sometimes chaotic, but you knew there were four curated tracks to listen to on the page. Great formats allow for personality within limitations that help the user know how to fundamentally use it.
BROWN: I used to be very against Spotify because it was essentially eating up our downloads, which had already eaten up our physical sales. I have since turned around because our catalog income has picked up after hitting a few choice playlists. More importantly, markets that were once completely unobtainable for us (i.e. South America, Australia, parts of Asia) are starting to use these services and stream our music. Music has always been hard to make money from on the fringes, so I’m not sure this is any worse than trying to distribute vinyl all around the world.
I agree ultimately that on the design and package side, we are certainly losing something with these services, but we’re also gaining a very easy point of entry. I’m more likely to take a chance on developing a young artist, because we can get something to market very cheaply and see how they perform. If we have to invest on every single release with vinyl (we do for most, especially artists who have released on the label already), the risk is considerably higher and we’d likely just stop releasing new material. Once there’s a demand we’re able to design really inspiring packaging that can sell, but it’s kind of a chicken and egg scenario.
We have also experienced some long tail benefits, like records picking up two or more years after release because of a good placement or a viral YouTube link, etc. There is way more out these days, so of course the saturation hurts and forces people to sift through a lot, but there’s also this weird possibility of projects becoming relevant long after “the big release week.”
COLEMAN: Interesting. [Further reading: RAC and Plastic Plates discuss the power of Spotify playlists]
BROWN: One thing I forgot to mention is that streaming has a very different impact on songwriters. I’m just speaking as a master-side guy. I think writers are getting hosed via streaming.
COLEMAN: Can anyone speak to what the average difference is between the master and publishing average/median splits?
RUDIN: In rough approximation, for every dollar of revenue Napster generates, 70 cents goes to a rights-holder. Of the 70 cents, 60 cents goes to a record label or aggregator, 10 cents goes to a publisher.
What happens to that whole 70 cents is between the artist and their labels/publishers. There is a lot of variability. But you are correct, Leeor, songwriters get the short end of the stick.
BROWN: Back to Vek’s design focus, I agree giving artists the ability to provide a more interesting digital presentation is valuable, but it’s hard to streamline. Most retailers, whether streaming or not, want to homogenize what they’re selling. We went through this when we tried to sell T-shirt albums (shirts with download cards) back in 2009. Everyone liked the idea, but stores didn’t know where they belonged. Vinyl section didn’t work and T-shirt section didn’t show people they were actually getting the album. I feel digital sales are in a similar situation. Where can you sell or stream a “deluxe digital package,” except in an artist’s own channels?
COLEMAN: Are there any other thoughts you have, either about the experience of streaming as a consumer (good, bad, indifferent) or how it could be improved moving forward?
VEK: [As an artist] you’ll get pressure from labels to embrace streaming for exposure and accessibility, regardless of whether they own the publishing. There’s pressure from fans to make your music available on streaming, too. (People seem happy with a selection on Netflix, but get mad when every single song isn’t on their streaming service.)
For new bands, if you don’t care about getting syncs or earning money at first, which has always been a cool look, you can just release on Bandcamp and it feels a bit more “merch stand.” I’ve noticed some small bands locally doing this. I understand that it keeps the band away from the politics and debates of streaming, i.e., “the value of music.” On the subject of Bandcamp, they differentiate between streaming and subscription music, which is an interesting point. Along these lines, has everyone heard of the new “stream to own” model? Voltra are the most recent, saying they won’t take a cut in a typically disruptive startup move.
COLEMAN: So “stream to own” is a new concept to me. I always wished when I was a kid that if I rented a VHS tape enough times, they would just give it to me. And you’re right, I am forgiving of Netflix for not having many major releases but am harder on streaming music services, even though there are way more songs than features films released on major platforms. Don’t think I’ve seen much comparison between music streaming and TV/film streaming, but yeah, music is different.
Does anyone else have any ideas as to what might be the next evolution after streaming?
BROWN: I honestly can’t tell you where things are going. I’m just trying to stay nimble as a label and keep moving forward!
COLEMAN: How does one stay nimble and not get too tied to any one thing that might sink them?
BROWN: We obviously love the boost in streaming but are by no means only relying on that. Bandcamp, vinyl sales, syncs, events, etc., all contribute to Friends of Friends. Maybe we’ll do a VR game next [laughs], I don’t know. The key is to not get married to any one revenue stream.
COLEMAN: I know you’re joking, of course, but I just did two pieces on VR and have to say that ship is not sailing any time soon.
VEK: I’ve been looking into whether we can turn the Sleevenote database into virtual record sleeves in some kind of mixed reality way, but it’s early stages. For a product like Sleevenote, making our API accessible by other creators is crucial, so there’s one place to go for one type of asset.
COLEMAN: Ethan, how does Napster plan to stand out among the competition?
RUDIN: A few things I would respond with: One, we have no free tier. Artists and people who care about artists making a living selling music should be supporting us. We are not selling phones, ads, Q-tips or diapers. Two, a lot of our strategy is aimed at becoming a platform of choice for anywhere there are a huge number of consumers where we believe they are not paying for music, i.e. iHeartRadio, mobile carriers, etc. Three, we spend a lot of time focusing on our product.
Our latest 5.7 release has a really cool playlist maker and opportunity to add gifs. The goal is to help people discover and share more music. We were the first to integrate with Twitter, so people can listen to full paid tracks. We created Kids Mode, Car Mode, etc. We have top consumer satisfaction ratings from JD Powers. Normally this is not something I’d brag about in a forum like this. However, our competition is massive and frankly could care less about how much music they sell, as it’s a means to something else. [Napster’s edge] is what’s kept us competitive when everyone wants the new-new thing for free, and we are 16 years strong because of it.
COLEMAN: On the note of Napster’s resilience, I’m curious if critics/labels have stopped blaming Napster for a lot of the record industry’s problems or if you still hear versions of “they’re the reason we’re in this mess?”
VEK: Or whether Napster users like that it was the original bad boy disrupter of the industry.
RUDIN: It really depends who you are talking to regarding Napster’s past. In my dealings, I have encountered people that really like what the brand represented and will logically conclude that’s not what we are today. Most people enjoy the fact that we are a pretty cool/iconic music brand. I seldom can avoid comments on my Napster company swag when I wear a T-shirt or beanie in public. I have also encountered people who would prefer I use the Rhapsody brand for partnerships, as they don’t want to be affiliated with the past that Napster represented. However, this has mostly abated by now.
Given what I do for a living, it’s hard not to admit that while we want to be as accommodating [to artists] as possible, we are still trying very hard to run a for-profit entity (a novelty in this business), so that we can continue to have strategic options to do more to connect artists and fans. We don’t just want to be a utility.
One of the struggles I have had in the last four years is that most music consumers don’t behave like me, let alone a casual listener—85 percent of the market—who is content with Pandora’s service, which is riddled with advertising. I generally feel pretty good that Napster is always searching for ways to focus on the under-represented artists, with the goal of making it sensible for them and us.