SoundCloud's New Subscription Service

Will artist stick it out with  SoundCloud once a fee is established to upload content?. Recently it has been reported by  Hannah Karp, publisher at www.online.wsj.com    that “ SoundCloud plans to launch the subscription  in the first half of next year, said SoundCloud chief executive Alexander Ljung.” Accordingly, this strategy will not only impact the business to customer model, this will also  impact the business-to-business model. In other words, music content providers will also become impacted by  this decision. It is stated “ musicians and djs who want to upload songs, mixes, and mashups onto SoundCloud in significant volume pay a monthly fee.”(WallStreetJournal, 2014)  Granted SoundCloud has always offered content producers  payment plan, now they are pushing it more. Prior to their  licensing deal with Warner Music Group,  SoundCloud offered publishers  the option to  upload free, utilize the “On SoundCloud Pro Unlimited” service, or the “On SoundCloud Pro” service” (SoundCloud, 2014). On Sound Cloud Pro provides content publishers extend upload time,  additional stats including plays by country, and pin tracks and play list to the  top of your profile with Spotlight, for $6 a month or $55 a year. On the  other hand, “On SoundCloud Pro Unlimited”   offers content providers unlimited uploads, city to city tracking, website and app analytical reports  for a cost of $15 a month or $135 a month.  As stated before although  these offers have been available,   the  fact that  it will no longer be free for artist to  upload their music causes conflict

Today, SoundCloud has become the format of how people receive artist music. Due to the fact that  mp3 files appear to take up too much space in some audiences  emails. Therefore the question appears will artist be able to  afford to release music once this new fee is established. On top of this ,  the music industry is raising the barriers of entry for independent   to break into the industry. Purely it can be seen through pricing.  By Warner Music Group buying into Sound Cloud it becomes a competition.

References:

http://online.wsj.com/articles/warner-music-group-nears-deal-to-license-music-to-soundcloud-1415127425

https://soundcloud.com/pro

http://www.wired.com/2014/11/aloe-blacc-pay-songwriters/

Taylor Swift Pulls Her Catalog from Spotify

Just recently 24-year-old pop star Taylor Swift pulled her entire catalog from Spotify.  Spotify is a digital music streaming service that provides listeners with millions of songs at their fingertips. Despite the fact that, fans enjoy Spotifiy’s services, artist is not happy.  Taylor Swift has vocally voiced her opinion in numerous interviews. Taylor Swift is convinced that music-streaming services don’t value her art. (Business Insider, 2014) At the same time, Taylor Swift is certain that Spotify could hurt music sales. Her argument that Spotify could hurt music sales is supported by the fact that artist are not even making half of what they could make from an album sale.  Retail sites such as iTunes offer artist albums for $9.99, while Spotify provides artist a payment of $.007 per stream. Essentially, this proves that this model undervalues the artist worth. Even more importantly it’s showing the direction of where the music industry is heading. As consumers demand for digital streaming services increase it makes it more difficult for artist to make a profit from their works. Granted the IFPI views the digital download model as a  “ key revenue stream”, digital downloads are declining. In the last year the IFPI stated “ Revenues from downloads globally fell slightly by 2.1 percent in value, the decline being offset by increases in streaming and subscription revenue”. Obviously it is clear that the streaming and subscription model is here to stay. Nevertheless in today’s mixed economy of revenue streams Taylor Swift should be able to find a solution to her problem with Spotify.

At the same time Taylor Swift should also confront Universal Music Group about the financial terms of her royalties. Granted Spotify may have made a payment to her label the head of the label takes a proportion as well due to their overhead costs.