A strange business idea

So, streaming music is all the rage these days.

The major costs of a streaming service are the royalties that must be paid. Both songwriting royalties and also the sound recording royalties. These make up more than 50% of revenues at each such streaming service.

So, why not have a streaming service that plays only oldies? Those things that are so far out of date that they attract no royalty payments? One might even arbitrage between the two sets of royalties. Be happy to pay one set of rights on a particular piece, but not the other set. Say, a cover of an old song. Mike Oldfield’s “In Dulce Jubilo” would still attract sound recording rights but not songwriting.

Would be pretty much a minority taste, to be sure, but I would imagine that you could build a pretty good classical and jazz station at least from such.

So, watchcoo think?

16 thoughts on “A strange business idea”

  1. Oldies don’t stream? At least not in big enough taste chunks. Meanwhile you have radio stations (net as well).

    Apart from that, I suggest that it’s the variety of a streaming service that keeps the punters onboard – thus spotify is always encouraging you to explore different music based on your listening history. You’d probably fail to meet this need.

  2. It’s not the variety that gets me using Spotify; it’s needing to hear something I’ve probably got on a CD, but it’s downstairs, and the tune’s not on Youtube either. US copyright laws are so ridiculous, thanks to Sonny Bono, that you’d be limiting yourself to classical (might be viable) and really old oldies (not a big enough demographic.)

  3. Mechanical recording copyright lasts too long.

    Sure, Mozart is out of copyright, but all the good quality orchestral recordings are still copyright to the orchestras that made them.

    What you’d want to do is to set up your own orchestra and get them to record the classical canon on a salaried work-for-hire basis, so you then own the copyright in the recordings yourself.

    There are a few composers (Shostakovich, Prokoviev) who are still in copyright, but the major part of the classical canon is out.

    Not that many jazz composers died 70 years ago. Glenn Miller will drop out of copyright next year, but Louis Armstrong’s copyrights run to 2031, for instance.

  4. Naxos Web Radio. $20/annum, streams what is generally modern recordings of out-of-copyright works (but also remastering old out-of-copyright recordings).

    It’s part of the bigger thing of Naxos records which does what Richard Gadsden is talking about – they hire cheaper (but frankly, still very good) orchestras in places like Bournemouth or eastern europe without star conductors and gets them to make new recordings.

  5. oddly no one has mentioned that internet streaming gives you a horrible sound-experience – all the frequences cut off, a very dead-sounding (albeit “bright”) performance compared with those old lps or high-quality SACD.

  6. I believe there are a number of these royalty free channels that are in operation, most are direct to large retail businesses via Satellite.

    If you flick through the radio channels on SES Astra or Eurobird 1 you will find numerous encrypted radio channels, these are piped directly to stores, some of which have their own DJ.

    Most solutions have moved to IP-based broadcasts using a dedicated channel with higher bandwidth, giving much better audio quality than consumer streamed media.

    Commercial solutions are also available through companies such as Jamendo who do a Royalty Free service starting at 48 € per year depending on the size of the premises being targetted.

    http://pro.jamendo.com/music-for-public-spaces

    This far cheaper than the MCPS / PPL / PRS, which is really just a legalised extortion racket.

    I accept that artists should get paid for their intellectual property, but the way that the MCPS / PPL / PRS goons go about it, especially harassing small shopkeepers is despicable. It makes the TV Licensing goons seem well behaved.

  7. Speaking as someone probably not part of the target demographic (bit too young, mostly listen to 70s – 90s stuff), for me streaming services are all about the libraries. At the moment Spotify is clear market leader for a reason – they have easily the best library. Give Google time to develop play music, and we may get a proper competitive market.

    I don’t think there is a large enough library of out of copyright material for a dedicated service to survive.

    Of course, the whole problem in all of this is that recorded music is a monopoly industry – there can be no competition (apart from piracy) for any given recorded work. If I want to hear Springsteen sing “Born in the USA”, or the Beatles sing “Back in the USSR” (IMHO only one of those is actually worth listening to!), the only way I can do that is by paying their respective labels for the privilege.

    If there were two or three “produces” of Beatles albums, prices would soon fall to little over the production costs.

    Sadly, I can’t think of any easy solution for this one (10 yearly auctions for music rights, with the top three bidders all getting the rights?)

  8. >These make up more than 50% of revenues at each such streaming service.

    This makes it sound like a lot of money. But it isn’t. Streaming services pay absolutely bugger all to artists. Spotify’s payments are so small they’re practically pirates. The only reason those payments take up 50% of revenues (or whatever the real percentage is) is because the other costs are so low. There’s really not much to running your own streaming service other than paying copyright, and paying for the server, and any DJs you use (and at the bottom the DJs work for free, or are paid peanuts too). And there are plenty of stations that stream copyright-free music.

    But most of these services aren’t making any money, and the reason is that for most of them their listening numbers are miniscule. That’s why there’s no pot of gold for most of them, other than Spotify, etc. Not enough listeners spread around too many stations/streaming sites.

  9. Surely with Spotify, there are only a couple of possibilities.

    1) Payments to artist’s/labels are 50% of revenues. I.e. from my £10 a month subscription, £5 goes in royalties. Sounds like a win all round to me – before Spotify, I never used to spend much on music (certainly less than a £10 CD worth every couple of months).
    If so everyone wins – I get unlimited tunes for a month, the artists get £5 they otherwise wouldn’t have seen.

    Or, 2)
    50% of Spotify’s tiny costs are royalty payments, and they are currently making out like bandits as a result. If so, then don’t worry, it won’t last. Other steaming services will arise, and either bring subscriptions down or royalty payments up (depending how well the record companies play their hand).

    Either way, from the point of view of the artists and record companies, it should be a good situation – yes they get buttons per play, but in many cases it’s more than they would get otherwise (not least because of bittorrent). I stopped torrenting music when Spotify came along – it was simply too much hassle, and too slow compared to just bunging Spotify £10 a month for the full version (so I could have the Android app)

  10. The royalty rate per stream that Spotify pays out to artists who aren’t on big labels is unbelieavably, jaw-droppingly small, which is why a lot of indie artists don’t bother with Spotify.

    The major labels however, get much better royalty rates per stream because they have the clout to do so, although they have been accused of keeping a lot of this themselves rather than pass it on to the artists. (This is somewhat similar to the iTunes situation, except that iTunes doesn’t stiff smaller artists — iTunes does actually pay out a decent amount per sale to the artist or label, but when there’s a label involved they only pass a small amount onto the artist — with iTunes you’re actually better off not being on a label as far as revenue per sale goes).

  11. I don’t know a word for this … but music is like porn, in that, there is always a demand for new stuff even though the old stuff hasn’t depreciated in any significant way.

    What you’re saying, is that because music hasn’t depreciated, there should be demand for streaming old stuff. Perhaps.

    But, if it isn’t really music, per se, but rather new music that has the demand … then your business model won’t work.

Leave a Reply

Your email address will not be published. Required fields are marked *