Three Key Streaming Questions for Independent Labels and Artists

Streaming is now the main way of making money in the sale of music and this will probably continue to be the trend in the near future. Because of this, it is important that those who are wanting to enter into the marketplace are aware of the main talking points around streaming, in order to be aware of what could negatively affect them but also, how to make the most of the opportunity. Here are three of the key topics discussed in streaming:

What is the YouTube Value Gap?

Are all streams equal? YouTube has roughly ten times (or more) the users than Spotify but Spotify pays ten times the amount of money. This is what the industry is struggling to deal with. However, this needs to be discussed carefully as the industry wouldn’t want Spotify and Apple Music to try to drop down to YouTube’s lower royalty rates. Rather, we need to understand the value that each platform offers apart from just their royalties. Artists and labels should also be able to find out what they are making on every stream, on every platform, in order to allow them to pick where their music is distributed.

It’s a good idea to look at the difference between YouTube and other streaming platforms as YouTube = promotion, and Spotify, Apple Music etc. = consumption (e.g. where the money is made). Giving away your music for free for promotional purposes doesn’t always work. For example, if you release a track to be streamed for free on YouTube there is no guarantee that people will listen to it and then seek out and listen to your track/s on a paid platform (e.g. Spotify) because you’ve already given it away for free. But sometimes, this is exactly what YouTube is great for. It’s important not to force the industry into one model. Every artist is different and all consumers listen differently so it’s important to analyse what is best for your music and your audience.

If you’re worried that putting your music on YouTube won’t generate consumption on other platforms then it can be used to release trailers for upcoming releases instead. This generates interest in your music and ensures that if they want to listen to your music then the only place they can get it is on the platforms that pay higher royalty rates. Focus reach over reward e.g. using YouTube/VEVO to up-sell to other higher-paying platforms, tickets to live gigs or sites selling your merch.

Is Windowing a Good Thing?

Spotify have recently renewed their deals with labels to allow them to ‘window’ releases on the premium tier of their platform. This is something that is already done by the likes of Apple Music. This means that some releases may only being available to premium-tier users for the first 2-weeks after release. It’s interesting to have the option, but every album and artist should be looked at through different lenses meaning that windowing isn’t always the way forward but relevant in some cases.

The main concern was that this “punishes” users of free-tier streaming. However, so many streams are now coming from premium users (up to 80% for some artists) so therefore this is less of a problem than it used to be. Artists and labels need to get the balance right to encourage listens rather than stifle the opportunity of getting new listeners.

Do Indies and Majors Get the Same Opportunities?

Independent artists and labels do extremely well on streaming platforms. When looking at how major and indie repertoire is represented on streaming platforms, Apple Music favours heavily onto indies.

However, independent music is perhaps more niche so it can be harder to get into certain playlists. It’s about relationships and these are getting stronger for the indies. Thanks to good relationships between distributors and streaming platforms you no longer need to be signed to a major label to get the same deals. There aren’t any shut doors for independents, you just need to speak the right language to whoever can open that door for you e.g. why does your track benefit them? Where does it fit on the platform? Who can help you get your music onto that platform?
When it comes to releasing music it is now hard to ignore the option of having your music available to be streamed if you want to maximise your revenue. However, the constant criticism of these platforms paying famously low royalty rates can sometimes make artists and labels feel like they are being ripped off. As with any other decisions in your career, it is important to analyse what is best for you individually – what characteristics your audience has (would they use streaming platforms?) and then decide where is best to place your music.

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