🔵 Why two-tier licensing may be a positive step for DIY artists.

Not all change is bad.

Hi there,

With Spotify's revised remuneration system landing next year, and Deezer's new deal with Universal now pulling in more and more labels, it is a reality that we will soon have a two tier licensing setup. The first tier will be those negatively affected by the remuneration changes, and the second will be the beneficiaries. The former will comprise rising and DIY artists. The latter is those accelerating beyond that, out into a broader cultural mainstream of a sort.

In his latest article, Mark Mulligan of Midia outlines the impact of this, and it makes for something of a stark warning. Whilst this two tier system might work in the short term, the longer-term impact may well be the outcome I have written about before now: a split landscape in which new artists simply avoid DSPs in favour of other platforms instead.

The likes of Bandcamp and SoundCloud arguably offer alternative remuneration systems that favour new and DIY artists far more in terms of delivering meaningful revenue back. However it is equally possible that new services may appear to bring more competition too, something I think wouldn’t hurt the general evolution of the music business.

Mulligan's warning is of a potentially bleak outcome, stating that this could kickstart a slower move away to alternative platforms, taking cultural capital and precious audience attention with it, which in turn might trigger a terminal decline in DSPs user numbers.

I prefer to view this outcome (should it happen) as a market shift, which the music industry has seen many times before now. One might even argue we are overdue another fundamental change, given streaming has been the dominant format for a decade or more now.

So whilst the broader narrative might position these new streaming deals as a bad thing for new, emerging and DIY artists, I prefer to see it as a necessary evolution. Streaming is still not really working; we have reorganised how the pie is divided up, but that doesn’t really change the fact that it doesn’t work for everyone. Ergo, new things will need to come in and challenge this.

I look forward to seeing what might step up.

Have a great evening,

D.

🎶 written whilst listening to "Rising” by SUSS and Andrew Tuttle. ‘Ambient Country’ is a genre I’ve never come across before now, but I’m 100% here for it. If you ever loved things like Ry Cooder’s ‘Paris, Texas’ album, or the pedal steel guitar moments in The KLF’s ‘Chill Out’, or an album like Earth’s “Hex” then this is gonna be a total delight. Huge thanks to

Flow State

whose interview with SUSS was what introduced me to them.

🤖 playing with the new Network Notes Music League! Yes, you all voted for it so we’ve set it up - scroll to the bottom for full info, or click here if you just want to join right away. See you there!

Stories from the Music Industry:

Identity and culture have killed genre in a scenes-driven industry

The influx of creators has meant that success as an artist has become far more competitive than it ever was. It is not enough to make good music and promote it on social media because success comes from sustaining differentiation and inimitability. The best way to do that is to use identity to spearhead a scene that no one else can authentically lay claim to.

👆🏻Hot take: a great think piece from Kriss at Midia. Shifting from a genre-based view on your audience to a more broad personality one is perhaps not new in and of itself, but that core shift in mindset from genres to types of people is undeniably necessary now.

Two-tier licensing is about to become a reality

Perhaps it would serve bigger labels and artists well, to have smaller artists and labels focus their attention elsewhere. But if they do so, then they will take audience attention and cultural capital with them. At some stage or another, that kind of shift will start to bite into DSP acquisition and retention rates. By which stage it may be too late to halt the decline.

👆🏻Hot take: this reinforces the point I’ve been making around this change to streaming payouts - namely that it might well create a two-tier system in which new artists simply don’t place releases on streaming platforms. I still feel that would be no bad thing - though it would have consequences in time as this article suggests.

Bandcamp union files complaint with National Labor Relations Board

Bandcamp United, the staff union for Bandcamp employees, has filed a complaint with the US National Labor Relations Board. KQED reported that the complaint focuses on the fact that all eight of the union’s bargaining committee members lost their jobs as part of the layoffs that accompanied the sale.

👆🏻Hot take: curious to see if this complaint will be considered when I’m not 100% sure the union was even recognised in a formal capacity. What I do feel is that Songtradr are doing a really poor job of managing this negative narrative, which is at risk of spiralling out of control. A frank, honest interview with a large trade publication would be a wise move, just laying out the facts IMO.

Morgan Stanley is investing more than $700m to buy music copyrights in partnership with Kobalt

Kobalt has today (November 1) announced a new partnership with investment funds managed by Morgan Stanley Tactical Value to invest more than USD $700 million to acquire music copyrights over the next few years. As part of the venture, Kobalt will manage the creative, synch, licensing, administration, and investment services for the copyrights. “Kobalt is a pioneer in investing in music, increasing the value of copyrights, and creating music as a viable asset class,” said Laurent Hubert, Chief Executive Officer, Kobalt.

👆🏻Hot take: I had been curious whether the issues around Hipgnosis might cause a chilling effect elsewhere, but this move suggests not.

Stories from the Broader World of Tech:

Netflix, Pushing Into AVOD Fray, Plans New Ad Formats, Sponsorships

Netflix says its ad-supported tier has won over 15 million monthly active users across the globe. In an October letter to shareholders, Netflix said advertising-tier subscriptions accounted for approximately 30% of all new sign-ups in the 12 counties that supported that platform.

👆🏻Hot take: proof that the ad-supported gamble has paid off? Curious to see if this will influence others to follow the same route.

Microsoft accused of damaging Guardian’s reputation with AI-generated poll

Microsoft’s news aggregation service published the automated poll next to a Guardian story about the death of Lilie James, a 21-year-old water polo coach who was found dead with serious head injuries at a school in Sydney last week. The poll, created by an AI program, asked: “What do you think is the reason behind the woman’s death?” Readers were then asked to choose from three options: murder, accident or suicide.

👆🏻Hot take: a timely reminder that AI can sometimes go horribly wrong. Lessons to learn all round methinks.

Need something else to read? Here you go:

Bryan Johnson's Quest For Immortality

Johnson, 46, is a centimillionaire tech entrepreneur who has spent most of the last three years in pursuit of a singular goal: don’t die.

👆🏻Hot take: another look at the eccentric millionaire spending his fortune on trying to reverse the ageing process. A strangely fascinating read.

The Untold Story of Tucker Carlson’s Ugly Exit From Fox News

Fox never explained that abrupt firing of cable news’ biggest star, allowing conspiracy theories to fester. Now, in his new book, Network of Lies, Brian Stelter explores the myriad factors contributing to Carlson’s cancellation.

👆🏻Hot take: an insight into what went on behind the scenes at Fox News when Carlson was ousted. What caught me is how unplanned it appears to be - no successor planned, no show to replace him etc.

Join the Network Notes Music League!

We asked, and you voted - and people are up for the Network Notes Music League! For those that missed this, Music League is a free site and app where you create a league comprising a number of (customisable) rounds. Contestants are then asked to submit songs based on themes, e.g. “greatest cover song”, or “guaranteed floor filler” etc.

Once everyone has submitted, a Spotify playlist is then sent to all contestants and everyone gets to upvote (and, yes, downvote 😬) songs they love. Contestants’ place in the league is then revealed as the votes come in.

It’s highly addictive, a great laugh and a fine way to discover songs you might never have known about.

Care to join us? Click here to join! All you need is a Spotify account.