The latest contribution to the streaming/downloads cannibalisation debate comes from Beggars Group chairman Martin Mills. “Some of our catalogue artists earn more from streams than downloads of individual tracks [or] any other format,” he tells the Telegraph.
“If we didn’t have digital we wouldn’t have a business. Physical is still important to us but the lesson we learned over last few years is that you have to strike a balance between giving people what they want on the one hand and actually being a business.”
Mills’ comments won’t be a surprise for many labels, whether major or indie. The fact that some artists – stress the ‘some’ – are making more money from streams than downloads has been known for a while now.
Music Ally has seen research from other labels suggesting that the bigger and more established the artist, the sooner the tipping point comes in that streaming/downloads ratio. However, Mills’ comments are also a reminder of another aspect to this debate: an artist’s payouts from streaming are defined by their contract with their label, not just by how much the streaming services are paying out.
This “what makes more money – downloads or streaming” discussion can never be “won” by either side. First of all the underlying label/artist deals – as mentioned – are now known. However, and more importantly, the whole discussion is a classic example of comparing apples and pears.
“The apple”: the consumer pays for the actual album/track when downloading – a very specific transaction
“The pear”: the consumer pays for the availability of any track/album – a very generic transaction
“The apple”: since the price is relatively high for downloads, consumption (purchasing) is based on weighing of pros and cons; e.g. movie and a drink or an album. Casual consumption is thus minimal.
“The pear”: since I do not have to pay anything extra, I am as a consumer more apt to listen to a suggested track/album – indeed one could say that this is exactly the streaming service’s “raison d’etre”. If the exploration experience of the streaming service is not perceived by the consumer as being relevant, the value proposition is greatly diminished.
So the apples are sold “in season” and then the business comes to a hold (save for the occasional sale) so we can fairly surely evaluate how many barrels have been sold. The pears, however, are converted to a juice that keeps in trickling, so once a barrel is full, a new is put under the tap, the trickle potentially filling endless barrels!
The conclusion being that since we do not know when to stop measuring the pears, we will never know when we can compare them to the apples.
RT @MusicAlly: Beggars chairman: streaming out-earns downloads for some artists: http://t.co/PmYWCF4C
RT @MusicAlly: Beggars chairman: streaming out-earns downloads for some artists: http://t.co/PmYWCF4C
RT @MusicAlly: Beggars chairman: streaming out-earns downloads for some artists: http://t.co/PmYWCF4C