The New Inquiry
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March 30, 2022 5:05 am
Hi, I’m Jaime. I’m an artist. I have valued music very much since I was quite young. I learned early on that everything that mattered to me could be taken away, except for music. No matter what I was going through, music was there to remind me that there was something worth living for on the other side of it. No matter how bleak and unrelatable I thought my life experiences were, I could still talk to people about music. Later, I would learn to express all of those hidden parts of myself through songs, which connected me to people all over the world who understood exactly what I was singing about. Music had only saved me once or twice when I first resolved to devote myself to it. It has saved me many more times since then.
About 12 years ago, I was in a band on the internet. We started posting zip files full of our music and artwork to Tumblr, for free. There was a very well-developed culture around music on the internet back then. Blogs, torrent trackers, and forums formed a kind of network of interconnected passion projects devoted to the archiving, discussion, and celebration of music. At first, the vast majority of the music being discussed had arrived in the public consciousness in the usual way, via record labels. Eventually, though, participants in online music culture started making our own things. Our own genres, our own scenes, our own aesthetics. I’d go to parties where laptop DJs were playing low-quality MP3s and the room would be absolutely packed with people who, like me, didn’t know anyone there but had read about it online.
I sent some of our music to a blog called “Don’t Die Wondering.” It was maybe the most online music blog I was aware of. Other blogs and communities were focused more on music that would sound good in a club, or bands that might have a great live show. I didn’t feel like I fit into those spaces, or into the existing music industry full stop. I wanted to hear music that could or would not have existed before the internet. I wanted to find a space I felt like I belonged in. The blog responded promptly and posted a song that same day. Another blog called “Yours Truly” picked it up from them, and by the end of the week we were on Pitchfork. Our inbox was flooded with interview requests and inquiries from publicists. I felt like I’d just picked a lock and opened a doorway to a different world.
It was still very difficult to make money from MP3s back then, so I was still feeding myself primarily by donating plasma. I have a lot of memories of sitting there hooked up to a machine and reading all the emails that were coming in while it was sucking goop out of my arm. A blogger from Romania wrote a small novel’s worth of text exulting us to do a gratis remix for his favorite pop star, who we had never heard of. We agreed. A graphic designer from the UK offered to send us some T-Shirts if we did an DJ mix for his website. We agreed. A venue in Brooklyn called Glasslands inquired about adding us to the bill of an upcoming show for very little money. We drove all the way from Minneapolis just for the one show. I had never been east of Eau Claire before. It was just barely sunset when a cop stopped us on the Verrazzano Bridge to snarl at us about how it’s been against the law to take pictures on his bridges since 9/11.
Sitting on a rooftop in Long Island City arguing cheerfully with a bunch of strangers about chillwave, I felt like I had finally completed life’s tutorial mission. I felt like the real world was now opening up to me. I started growing my hair out. I mustered the courage to cross the invisible boundary in my mind that separated the Men’s clothing section at Savers from the Women’s clothing side. I bought a pearl necklace I started wearing everywhere, and then some long skirts. I had no idea what I was doing, but it felt right. The world of music seemed so invested in wanting to know what was next. I thought maybe it could be me.
What I eventually came to understand is that I had showed up at the very end of a particular moment. Over the course of the decade that followed, so much changed that it’s difficult to know where to even begin talking about it. The file-sharing ecosystem was smashed to bits by cops and lawyers so many times that even the most dedicated archivists lost the will to keep rebuilding it. Smartphones brought most of the world online, transforming the internet from a fringe space that only occasionally surfaced into mainstream popular culture into what basically feels like the exact opposite of that. Most people settled on platforms like YouTube where copyright holders had exponentially more power to issue takedowns and generate ad revenue than they ever had in the file-sharing era. The major labels easily assumed control of the vinyl market, sidelining the independent labels that had been driving the resurgence of interest in the format throughout the 2000s decade. No one can get records pressed up quickly enough to sell them on tour anymore because every pressing plant in the world is booked to press up expanded reissues of albums by Toto and Journey.
Of course, the biggest change in music during the 2010s is the one I haven’t mentioned yet. The one that this column is named after, that defines most people’s relationship with recorded music in the world today. I speak, naturally, of the Streaming Services.
On July 25th, 2014, a guy named Dave Goldberg wrote an email about “music strategy” to a guy named Michael Lynton. Dave Goldberg was the CEO of an “experience management” company called SurveyMonkey, Michael Lynton was the CEO of Sony Entertainment Inc, which includes major record labels like Columbia and RCA. Spotify had been available in America for exactly three years then, which was long enough to convince observers like Goldberg that streaming was the future of the music business. We have access this email because it was leaked by North Korean hackers later that year, and it continues to be hosted on WikiLeaks.
“Music is becoming a purely digital product,” Goldberg’s email begins. He goes on to talk a lot about “catalog,” which is the word that the record business uses to describe music that was released more than eighteen months ago. “Catalog provides 50% of the revenue and 200% of the profits of recorded music. This has generally been the case for other recorded music companies when the analysis is correctly done. The correct analysis requires including reissues, live albums, [and] greatest hits releases in catalog.”
In 2004, catalog accounted for 35% of digital and physical sales in America. The vast majority of music being bought and sold back then was new music. Digital download storefronts like the iTunes store were a fairly recent development, and file-sharing was rampant. It was hard to convince people to pay $40 for a copy of the White Album when superior mixes of the Beatles’ discography created by fans were being shared widely online for free. So, cut off from the most reliable method of extracting revenue from old music, the major labels had little choice but to focus completely on the present moment. You would hear so many people talk about wanting to find the “next Nirvana,” the next young band that would become a huge mainstream cultural moment. This was the prize that the majors wanted to win, the focus of most of their hiring and spending. The recently-announced lineup for “When We Were Young” festival in Las Vegas, which encompasses many of the bands that came out of the majors during this period, kind of feels like a time capsule devoted to that particular moment in time. When it was unearthed and presented to us, it served for some as an unexpectedly potent reminder of how much has changed since then.
Streaming turned out to be a great boon for the catalog business. In the pre-streaming music business, catalog had to compete for shelf space with new releases in record stores. When a new format like cassette tapes or CDs arrived, labels could squeeze dedicated listeners for revenue by encouraging them to re-buy their collections, but streaming was a complete paradigm shift. Streaming platforms have infinite shelf space. Every single recording the majors own the rights to is a potential source of revenue, regardless of whether or not it has recently been remastered, reissued, or featured in a film. On streaming, there’s nothing stopping an artist who has been dead for decades from outperforming working musicians living today. This is the future that Dave Goldberg was predicting in his strategy email. Infinite opportunities to monetize catalog, very little incentive to bother pushing anything else.
“Streaming revenues tend to be more heavily weighted to catalog,” he wrote. “Pandora and Spotify are probably 65% catalog under this definition. Licensing and synch revenue (i.e. licensing songs to be used in advertisements, film, or television) are mostly catalog as well. Therefore, if Sony Recorded Music (ex-Japan) is doing $250MM in EBITDA today, catalog is generating approximately $500MM and the new release business, which is 98% of the headcount, is losing $250MM per year. The catalog is also primarily generating this revenue off the ‘deep’ catalog that is at least 5 years old or older.”
Today, catalog accounts for 75% of sales and streams. Only 25% of the music being bought or streamed today is “new,” potentially even less than that depending on how exactly “catalog” is defined now. In the 2000s, it was relatively common for new artists to break through on the strength of a song being licensed for some sort of high profile advertisement, like an iPod commercial. Now, this basically never happens. Ads are almost universally soundtracked with old songs, cover versions of old songs, or tropey jingles created by full-time jingle writers who probably got started as artists themselves when the industry was looking for that but followed the money out of the business once things started to change.
“With catalog providing the base profits,” Goldberg continued, “new releases need to be cut back dramatically to the point where the new business either breaks even or loses a small amount of money… Most fixed headcount in new releases will need to be eliminated… Artists contracts that have large fixed marketing costs will need to be restructured or sold off as there will no longer be headcount to do the work… In short, the new release business will become like an independent label.”
An independent label, traditionally, is a smaller label that has limited resources to spend on marketing, but offers better deals to artists to make up for that. Usually, all royalties from sales go to paying off the label’s costs and then after that all further royalties are split 50/50 between the artist and the label. A major label is a much larger company with much greater marketing power. They take a significantly bigger share of the royalties, but they employ entire departments of people dedicated entirely to tasks like pitching songs to Spotify’s playlist editors and trying to get singles on the radio. I have been told that it is nearly impossible to crack into America’s hyper-consolidated radio playlist ecosystem without access to major label marketing staff. Macklemore & Ryan Lewis managed it somehow with “Thrift Shop,” and I think I remember hearing that Azealia Banks’ “212” was getting some play on some radio stations in the Northeastern US back when she was still unsigned, but I can’t think of any other examples in recent memory. It just does not seem to be something that happens here.
Independent labels did thrive during the 2000s decade, though. The Arcade Fire, while signed to Durham, NC-based indie Merge Records, sold 156,000 copies of their third album The Suburbs during the week it was released. XL Recordings signees Vampire Weekend moved 134,000 units of their third album Modern Vampires of the City. These are bananas numbers, driven by a surging vinyl market that the indies still had basically to themselves and the popularity of MP3 file-sharing, maybe the first massively popular music platform that wasn’t fundamentally skewed towards the interests of major labels or worse. First-week sales for artists on that same sort of independent label today are so much lower that I don’t want to give any examples because I feel like it would come off as mean to those artists. If you’d like to know more, I would recommend just doing a search for your favorite album of 2021 along with the phrase “first week sales” and see what comes up. If there’s no data, that means the album did not chart, which implies, like, something less than a thousand copies.
I heard a lot of major label people speak very affectionately about independent labels like Merge and XL back then. I would often hear them described as “boutique” labels. A premium product for a more discerning consumer. The type of thing big successful record guys are always saying they’d much rather be doing if they didn’t happen to be so good at shoveling lukewarm McBangers into the waiting mouths of hungry teenagers. Despite this, I don’t think the majors ever really gave much consideration to the impact that the destruction of the file-sharing ecosystem would have on the boutique indies’ business. I don’t think they cared to dwell much on what kind of blowback there might be for callously wiping out countless hours of work by the internet’s most prolific enthusiasts and archivists with DMCA complaints. I am still astonished to this day how little they seem to care about the way that YouTube and Twitch creators live in mortal fear of being hit with copyright strikes because a tiny snippet of major label audio accidentally made it into a stream. All of this is done in the name of “struggling musicians,” a group of people that labels today have never cared less about.
Throughout the 2010s, Sony labels did seem to follow Goldberg’s advice insofar as they invested in artists who seemed like they might be able to create “new deep catalog.” Evergreen earners in the form of classic singles and albums that complement the legacy of all the existing catalog releases that the post-streaming record business is now primarily focused on. They scooped up crown jewels of the boutique indie ecosystem like The Arcade Fire, Vampire Weekend, and Grizzly Bear. I’ve known indie artists who aspired to sign to major labels, even some who eventually did. I think their hope was that the famous major label marketing muscle, all of those well-staffed marketing departments that justify the larger share of royalties that majors demand, would take their career to the next level. That is rarely what happened, because that is no longer what the major labels exist to do.
Today, people accept incredible levels of surveillance when it comes to our relationship with music. Everyone can see the numbers when an unsigned artist sees a major spike in their plays on Spotify, or when viral enthusiasm starts to form around a song on TikTok. The modern music industry exists only to extract value from things that are already popular. There is a seemingly endless supply of child stars with built-in existing audiences and media training that can be bundled with potential hit singles from legacy hitmakers that has been dominating pop music for as long as I can remember. A fairly startling number of young rap artists who signed to majors off the back of viral success already in progress were killed or incarcerated shortly afterwards. Pop Smoke, Lil Peep, XXXTentacion, Juce WRLD, Bobby Shmurda. Posthumous releases by some of these artists were marketed more heavily by the label than anything the artist released while they were alive, which makes sense. In an industry that revolves around catalog, dying young is like graduating early to the part of the business that actually matters to the people running it.
I would like to encourage listeners to see the catalog and new release businesses as separate things, the way the labels themselves do. The streaming services are an excellent resource when it comes to engaging with old music. In my perfect world, most of what constitutes “deep catalog” today would either be in the public domain or on the way there soon. Spotify maybe doesn’t look so different from the free online archive of public domain music I imagine would exist in such a world. It’s an unbeatable value for the money and in a way, all of us who participated in the file-sharing ecosystem forced the majors’ hand by creating such a compelling alternative to what they were offering. It doesn’t bother me as an artist to know that most people who love music are going to be subscribing to services like Spotify for as long as they’re available. I would just ask that you try to see Spotify for what it really is––a way to generate royalties from old music. The streaming services are not designed to sustain a new release industry.
Furthermore, the qualities you like about streaming services––the convenience, the selection–– were only offered to you in the first place because the record business was forced to compete with piracy. They had to offer you a better user experience than piracy. We collectively negotiated those benefits by threatening to leave their entire business model, as listeners, en masse. You had leverage then. You have none now. It is only a matter of time until “deep catalog” music and prestige-y new releases by festival headliners start getting pulled off streaming as a way of encouraging you to add them to your permanent digital collection, or until streamers start charging a per-song rate for access to higher-quality audio until you’re spending just as much on streaming as people used to spend on CDs.
I feel so bored and tired just thinking about it. I want to see something else. I want to see every automated Jack FM format radio station in America converted into ad-free public-owned stations like they have in the UK and Australia. Stations that don’t share American corporate radio’s bizarre and dismaying aversion to hip-hop or other languages besides English. I want to see major label “deep catalog” forcibly expropriated into the public domain, forcing record companies to, at the bare minimum, start caring whether or not their most promising new signings live or die. I want people to have the opportunity to learn to love music and play music with other people at school. I want more people to understand and experience all the things I love about it that have nothing to do with making money or going to parties or becoming famous. Music can just be about learning to be more comfortable with your body, or about having a way to make new friends as you get older, or about finding ways to connect with our predecessors when they’re no longer around to guide us themselves. A song can be like a storage container for memory that begs you with its very essence to find something truly spectacular to fill it with. We can do these things for each other. That is so wonderful to me.
I invite you to think of music in these terms with me. It’s worth asking if the streaming services are good for artists, sure. I’m an artist. I appreciate the thought. What I spend a lot of time wondering about is whether or not the streaming services are good for everyone else. What kind of world are they building with our money, and with all the data they are collecting about us whenever we engage with their platform? Could we imagine something better? I hope so.