I respect musicNot going to write much tonight

[yeah, right…]

but as Blake Morgan gets close to launching IRespectMusic.org and #IRespectMusic, I finally decided to play out the little thought experiment that’s been running in my head for the last few months.

See, as I wrote in Is it time for Tip Jar?, I’m all about looking for solutions in the face of the death throes of the music business. If I really respect music then my challenge today is:

What would it take to make streaming work for those who make the music that’s streamed?

Like any good thought-experiment, we have to limit our scope, and put some variables out of play. So, let’s assume:

  1. Profit isn’t the motivating factor
  2. There are listeners who understand what it means to say #IRespectMusic
  3. The bureaucracy of the music business – rights collection, etc. – are waived (voluntarily)
  4. When I say musicians, I’m including the producers, song-writers, etc. who contribute to making the music

So, ladies and gentlemen, our aim here is to imagine a streaming service that works for the musician AND for those listening

[we should definitely all try to use many, many more YES… AND… statements instead of NO… BUT…]

In broad terms, there are two potential payment methods:

  1. Subscription – pay one amount, listen as much or as little as you want – fixed cost to listener [GOOD], non-scaling revenue for musicians [BAD]
  2. Usage – Per play – variable cost to listener [NOT-SO-GOOD but at least FAIR], scaling revenue for musicians [GOOD]

So, given that this is an AND solution, we’ll go with a Usage model

[one of the few times most musicians will accept a Pay-to-Play approach, methinks]

Because we’re entrepreneurs, let’s give our streaming service a snappy name

[not to be found anywhere in the English language, of course]

MusicFayre!

[see what I did there? Though I do reserve the right not to consider whether listeners and musicians to Music Fayre would be known as MusicFairies…]

There are some  parameters we need to set for the sake of the experiment:

  1. A song unit is 3 minutes long – 20 songs an hour
  2. A monthly billing period is 4 weeks long (28 days, without the fast-moving zombies)
  3. Every stream counts, partial or complete, long or short

[trust me, it gets very complicated very quickly if we try and work an algorithm]

Let’s look at a couple of use cases and see where we end up.

Case 1: Bob

Bob

[actually, his name is Robert Paulson, though I’m categorically NOT talking about that]

… anyway… Bob is a pretty hardcore listener. On average, he listens to MusicFayre  for 5 hours every day of every week:

  • 1 hour = 20 songs
  • 5 hours = 100 songs
  • 28 days @ 100 songs per day = 2800 songs

So, Bob listens to 2800 songs.

Case 2: Tyler

[still NOT talking about it]

Now Tyler, on the other hand, only grabs an hour’s worth of MusicFayre on an average day:

  • 1 hour = 20 songs
  • 28 days @ 20 songs per day = 560 songs.

How much might we charge for a song, then?

Well, let’s say that a permanent download at iTunes is 99c – essentially an unlimited single-user license. That’s our upper ceiling, I guess. Though, according to this page

[which is on the internet, so must be true]

an artist gets 9c per song downloaded.

[that’s less than 10% for those without calculators]

Let’s call that our floor then.

Now, being a business, even if it’s one that has placed it’s profit motive on hold, let’s say that MusicFayre runs very, very efficiently and only has to take 20% margin to cover operating costs.

[it’s a thought experiment, remember!]

If we charge 99c per song:

  • Bob pays $2772 per month, Tyler pays $554 per month

Nope – ain’t happening, even if the musicians do make 79c per song.

So, let’s look at the other end of the scale – 9c per song:

  • Bob pays $252 per month, Tyler pays $50 per month

That’s high, even for Tyler – and remember, of that 9c, nearly 2c is going to operating MusicFayre, so musicians are making LESS than they would for a downloaded song at iTunes. With traditional radio free to listeners, and streaming services willing to go much cheaper, simply by starving musicians, the barrier-to-entry for MusicFayre seems just too high. There’s altruism, but it’s a big ask to believe our listeners are THAT altruistic. Bob, especially, is likely to raise a sardonic, cynical eyebrow at least…

You know what? I’m going to make this a series of posts, because this is already getting long

[warned you at the start, right? RIGHT?]

but let’s summarize where we’ve got to, because even with some pretty ballsy assumptions, the thought experiment tells me:

A streaming service that works for BOTH listener AND musician is unlikely to succeed based upon a listener usage model

See you in the next post…

Vince Sig 131x89