Spotify is a frequent focal point for Lowery’s complaints of royalty amounts, and his general advocacy for the livelihood of musicians. This latest OpEd is startlingly regressive, seemingly hoping to recapture an irretrievable past era.
In trying to “fix” streaming, Lowery is confused about who owns the problem. “Your bad business model is not our problem,” he preaches to Spotify. But he, along with aligned musicians, are exactly the ones expressing a problem. Certainly, Spotify doesn’t think its model is flawed, and is not asking for a fix.
Looking Backward
Lowery models his thoughts on businesses that are unlike music in important ways, and likely facing severe disruptions similar to challenges that music has been navigating for years. He admires distribution bottlenecks put in place by the movie and cable TV industries:
- One is windowing, a staggered release technique that limits a movie’s presence to one platform at a time — e.g. theaters, on-demand cable viewing, hotel viewing systems, Netflix, etc.. In music this is sometimes called platformism, (e.g. broadcast, webcast, Internet radio, on-demand subscriptions) and goes against a key consumer value of freeing media content from restrictive silos.
- Another Lowery recommendation for music is transactional streaming, which means special prices for special levels of access. It is tied to the windowing concept. For example, a new album release could be available in online streaming services for one month at a special mini-subscription rate.
- Lowery also recommends more elaborate tiered pricing of music subscription services. He is not the first to think this way, but while most pundits advise lowering fees to increase uptake (which might and might not work for various stakeholders), Lowery thinks the universal music catalog should be carved into curated packages and sold separately. In his model the complete catalog, which is currently priced at a standard rate of $10/month in the U.S. for on-demand access, would cost $50/month.
Consumer Reality
In all of this extraordinary rear-view modeling, Lowery is attempting to impose artificial marketplace friction on a media category which has been liquified. His consumer-hostile recommendations would encourage piracy. Media piracy might never be stamped out entirely. But in music, with its small, easily-copied file sizes, restricting access to an established universal catalog and pricing it astronomically higher, without adding other consumer values, could drive another mass-market wave to illicit music sharing.
On the topic of piracy and pricing, Lowery denies the idea that music would be purchased more if it were less expensive, and cites inflation-valued costs of Beatles albums. (They would cost over $40 today, adjusted for inflation.) But the liquification of music is not primarily about price, despite Lowery’s unhappiness with the low cost of music access. The liquification of music is about choice.
The digital asteroids which have hit the music industry — P2P Napster, iTunes Music Store, and streaming — have mainly pulverized the album. Lowery’s mistake is not in his price calculations of music albums. He fails to realize the album is no longer viable — or, if that is premature, the album is at least a fading product category. It is not primarily that consumers want cheap music. They want playlisted music, whether the playlists are hand-built by music subscribers, or curated by free online radio services.
Missing Piece
Lowery’s disregard of that point is illustrated by his condemnation of Spotify’s free-listening service: “An unlimited, non-graduated free tier is a really, really, really bad idea.” Lowery misses a reality — that ad-supported, royalty-paying, non-interactive streaming solves a problem for musicians, while disrupting a portion of the music distribution ecosystem that Lowery ignores: Radio. [NOTE: A reader points out that Spotify’s free service is not non-interactive in the same way as, for example, Pandora. That is true. Spotify does place restrictions on Spotify Free, which might be called semi-interactive.]
Radio’s one-to-many platform easily makes millions of song impressions in days, when it might take streaming’s one-to-one platform months or years. The mismatch is called out when musicians like Bette Midler and Rosanne Cash complain about royalties earned over many months for stream totals that radio can accomplish in a day for a popular artist — and radio does not pay artist royalties (except through occasional direct negotiation).
It is baffling that David Lowery, as a celebrity advocate for musicians, does not focus his lens more on broadcast radio. Here at RAIN we don’t have a dog in the fight over whether radio’s royalty exemption should be changed, but it does seem like Lowery should. Perhaps in David Lowery’s thinking, streaming does not replace radio’s traditional assumed role in selling CDs. But the problem there is not with streaming, it is with CDs in a mobile playlisting market.
Who’s in Control
The music market is not shaped by its content providers. It is driven by consumers and the services they choose. Audiences have reshaped music listening dramatically by choosing technology platforms that leaped ahead of any product R&D produced by music institutions. It is a genie-out-of-the-bottle situation, but not magical. Neither is it criminal (Lowery admires Rosanne Cash’s accusation that streaming is piracy). It is a marketplace at work.