Not surprisingly, Google’s move into the music space has brought plenty of controversy. I’ve read all kinds of breathy rants in the week since it’s introduction. Over on MusicPowerNetwork.com Dave Kusek’s freaking out in Google Music and the New Payola – some things never change .
When he attack’s Google’s Marissa Mayer for providing a straight answer, Mr. Kusek exposes his agenda: Advancing the case for subscription-based music services over pay-to-own models. He crows “Haven’t you guys heard about the future of music? The per-track model is not sustainable.” I must respond: Only in Mr. Kusek’s dreams.
Today iTunes has far more customers than all subscription services combined. 100% of music sold there is paid for by fans, per-track. Amazon and WalMart have found this model attractive enough to mimic, and this has led to even more sales. Indeed this model’s gained traction in the video and book spaces, as well as music. So from a commercial perspective, Kusek is at very least “not yet” right.
Speaking as a guy who counts on musicians being able to make a living selling recordings, I find such assertions troubling. Artists deserve and still require payment for their labors. Would The Beatle’s Sgt. Pepper, or the band Gorillaz exist without albums? There are too many compositions to count that exist purely as recordings. To compare music to cell minutes, or worse, clean water, is dumb. There’s no basis for such a comparison. Cell minutes are purely a commodity after a network is up and running, and costs are known and fixed over the life-span of the commodity devices that deliver the service. Music is 100% bespoke, and costs are continuously variable, with only delivery commoditized. And water is a limited natural resource, with very high infrastructural costs that cannot vary by much (delivering water is no easier in the 21st century than it was in the 19th or 1st centuries, in many respects it’s harder and more expensive!). You can’t live without water, or even have a community without it’s presence. Not so music. Hyperbole overtakes reason through such claims and comparisons.
The article contains some valid issues, alongside the hysteria. He sees a problem with Google’s business model, which places sponsored results above organic ones. The concern is that a paying retailer, as opposed to the artist, will almost always own the top spot in these searches. This is a real concern for struggling local and indie artists, who’ve managed to get decent distribution. Rather than getting the lions-share of a $10 retail sale, in Google’s model that reward goes to the sponsor, while the artist gets a smaller wholesale cut. But aside from potentially losing the sale entirely, there are benefits to balance the risk for professional musicians. Pros WANT third parties to do the dirty work of selling. While you make a little less money, retail sales are a much better measure of an artist’s true demand, and market value. You get SoundScan credit for your sales, and credibility with retailers and distributors when you move products through those channels. Time spent stuffing envelopes and hoofing to the post office to fulfill tiny retail orders is usually better spent in the studio or on the stage. If you’re serious about making a living from your music, your job is making more and better music.
Maybe Mr. Kusek is an unpaid blogger, or hobbyist musician. From that perspective, this is a real concern: Most sales and income for indie artists are direct-to-fan, and it will often be easier for the artist to close a sale like this than a faceless retailer. Once at Amazon or Lala Band X faces stiff competition from Radiohead and The Flaming Lips! So the only real risk/concern of listing LaLa instead of Band X is losing the sale entirely. In the case of an organic search that would turn up your song as the result, that risk isn’t very great. Just don’t suck!
I have to wonder if the author has ever used Google AdWords or other services. Truth is Google has been one of the most effective and affordable ad platforms ever conceived. You can bid whatever you like for impressions, but only pay for clicks – in this case, actual sales. So, if you’re an indie band that really DOESN’T want to sell music at retail for whatever reason, you can STILL capture all of those sales by out-bidding competitors. Bids are market-based, so while you may pay a fortune to get the top position to sell The Beatles Number 1, it’s unlikely you’ll have to bid much for Dave and The Kusek‘s self-released opus. So if AdWords are a guide, you might have to pay $0.26 to outbid Amazon. But even if it costs $2.26, you only pay when you get a sale. If that bothers you, take your wholesale cut and move on. For many titles and artist, it might be worth bidding a couple bucks to hang onto that retail margin. It’s all good: you pay no more or no less than Amazon or a major label for the privilege of serving that fan. Here at The All Night Party we bid against bigger companies all the time – it’s quite affordable and when we care, a no-brainer. Put up or shut up, as they say.
All bids are bound by a budget, so the top rank rotates as bidders get clicks/sales up to their daily ad budget. The first 100 might go to Amazon, then LaLa might get the next 100, and so on, if you have a “hit” song. Sure, WalMart might decide to own your hit, and use it as a loss-leader with an artificially high bid. But why would you care? You’ll get paid for those sales, without having to fulfill the order or deal with the customers. WalMarts loss-leader is your gain. Win-win.
After declaring himself prophet and suggesting streaming subscription models were the only way forward, Kusek criticizes Google for streaming previews. Does he considers current micropayment models mature or somehow fair? If the per-track model is “not sustainable”, the streaming model is much less so. No one but the biggest stars generate significant revenue from streaming, nor can they. A stream-based ecosystem would eliminate the nascient “middle class” of artists, able to earn a small but sustainable income making music by replacing significant merch and music revenue with random pocket change! For musicians, streaming payment models are an express train back to the 19th century. That wasn’t a great time in our biz! Let’s assume Kusek is right, and streams are the only way forward. And let’s say Google paid compulsory rates on a per-preview basis. In such a world, artists not on big labels would make less than they do today, as we replace the bad-old per track model with Kusek’s “bucket/all you can eat” model. Preview streams cannot replace per-track revenues.
Lets put a finer point on it. Many well-managed local bands without labels already sell more than $200/year in per-track downloads. The same bands get royalty checks for streams that are less than 1/10 that number. That’s the world we live in. Metering requested streams would make it worse, as artists lose “charity/tip” sales from fans who want to support the band with a small purchase they might never listen to. It’s hard to imagine a scenario that fits Mr. Kusek’s preferences generating more income for indie artists than the status quo. If he gets his way, bad gets worse.
It’s fun to bash big companies like Google. They often deserve it. This initiative may turn out to be as bad for artists as Mr. Kusek suggests, but the implied cure is worse than the disease, and the critique doesn’t hold water for working artists. But really who knows? Not Mr. Kusek (or Mr. Davis for that matter!). The analysis here is too sloppy and not well reasoned (unless the audience is hobbyists), so you can’t really draw conclusions.
