Latest / The Price of Music / Steve and Stu answer your questions! Does the money from a stream get split evenly? Do bands get paid if a festival is cancelled? How do music-making AIs work? What is Spotify's Discovery Mode?

Transcript

Steve and Stu answer your questions! Does the money from a stream get split evenly? Do bands get paid if a festival is cancelled? How do music-making AIs work? What is Spotify's Discovery Mode? · The Price of Music

• 0:07
  Hello and welcome to the Price of Music, brought to you by
• 0:10
  Music Ally, the show that's fascinated by the fun and games
• 0:13
  and finances of the music world as explained each week by me,
• 0:17
  Steve Lamac and him Stuart Drayton.
• 0:19
  What we're going to, we're going to answer some of your questions
• 0:22
  this week. Thank you very much to everyone
• 0:24
  who's been in touch. We'll turn our hands to that in
• 0:27
  just a second. But first, as we promised last
• 0:31
  week, can we return to the announcements which came from
• 0:35
  the Department for Culture, Media and Sports about, well,
• 0:39
  referencing some new streaming reforms.
• 0:42
  And in fact, when when the announcement finally came, which
• 0:46
  was while we were on air last week and we'd speculated about
• 0:50
  what might be included in this new report, and in fact, a lot
• 0:55
  of the points that your contacts had predicted did appear, didn't
• 0:59
  they, Stuart? But run us through what was
• 1:02
  exactly unveiled and what has the reaction been from the
• 1:06
  interested parties? By the way, for everyone looking
• 1:09
  forward to Stuart's big number, this story will include Stuart
• 1:13
  directors big number for this week.
• 1:15
  So, so So what did what did they announce and how have people
• 1:20
  reacted? OK, yeah, I was going to run a
• 1:23
  lap of honour for not getting anything drastically wrong.
• 1:26
  I've been celebrating for days. Yeah.
• 1:29
  So basically it's a it's a package of measures that the
• 1:33
  labels say are going to help put more money in their pockets of
• 1:35
  musicians, including artists and songwriters.
• 1:39
  It includes some stuff that's been announced before and
• 1:41
  sometimes new. So one of the things that's
• 1:44
  happened is it's about legacy artists.
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  So we're thinking here of artists who got signed deals
• 1:47
  before 2000. That's kind of a lot of the
• 1:50
  focus here. So people want deals before the
• 1:52
  streaming era that maybe don't cover streaming or have terrible
• 1:54
  terms. So one thing that's happened is
• 1:57
  the major levels are going to disregard unrecouped advances.
• 2:00
  So if you were paid in advance back in the day and you haven't
• 2:02
  earned it back, they're not going to wipe it.
• 2:04
  They're not going to get rid of it.
• 2:05
  They're just going to ignore it when it comes to streaming
• 2:07
  royalties. So you will get paid.
• 2:09
  So what's happened? There is some people who haven't
• 2:11
  recouped, haven't received any streaming royalties.
• 2:13
  It's being sucked up by the debt and that's going to change.
• 2:16
  Now. This was happening already.
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  All three major labels announced plans to do this a couple of
• 2:19
  years ago. So this is kind of an existing
• 2:22
  thing, but it's they're committing to it.
• 2:25
  And we should say that there are some labels, beggars group is a
• 2:27
  good example, who actually wipe balances.
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  They've been doing that for a long time.
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  If you assigned to begggers in before 2000 and you're
• 2:34
  unrecruped, you get your balance wiped.
• 2:36
  So labels can still do more than this, but it's like a minimum
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  commitment. Right.
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  If an artist feels your deals unfair, like if you signed your
• 2:43
  deal a long time ago and you're like, hang on a minute, I'm
• 2:46
  getting absolutely nothing for Stream Rogers, even if they do
• 2:48
  pay me. You can ask for a renegotiation.
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  You can go back and say I'd like to renegotiate.
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  This is unfair. And what's happened is labels
• 2:55
  are promised to respond within 60 days to your request.
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  So no guarantee they will renegotiate or give you a better
• 3:02
  rate, but they will respond. They won't ignore it.
• 3:05
  So that's a commitment and they're also going to give these
• 3:07
  legacy artists help to grow their streaming audience.
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  So they're going to help with marketing, help with the
• 3:12
  management catalog. So if you're, if you're an
• 3:14
  artist of a certain vintage, I think it's all pre 2000 signed,
• 3:19
  then your label will help you to in theory grow your streams,
• 3:22
  grow your listeners, which then will grow your money, right.
• 3:25
  So those are the three artist things.
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  They're also going to pay some. We talked about this, they're
• 3:29
  going to pay songwriters £75 per DM plus expenses if they come to
• 3:32
  like a writing session. So often if the label at major
• 3:35
  levels got an artist, they'll bring in songwriters to do some
• 3:38
  writing for them. And it turns out often you don't
• 3:41
  get paid for that time. You get paid royalties for the
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  songs you write, but you don't get paid for the time.
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  And that's changing. And they've promised that money
• 3:48
  won't be taken out of the artists.
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  So if you're an artist who's having songwriters brought into
• 3:52
  work with you, you're not suddenly paying them a per diem
• 3:54
  out of your share of the royalties.
• 3:56
  Right, OK. So that's good.
• 3:57
  And then finally, session fees are increasing for pop and
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  classical musicians. But this was happening the
• 4:02
  things to read last year, and it's kind of just restating
• 4:04
  something that's already happening.
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  So those are the five things, and all of them will put more
• 4:08
  money into the pockets. And here's the big number.
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  According to the labels, it could mean 10s of millions of
• 4:15
  pounds in new investment support creators by 20-30.
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  And this is where the arguments start.
• 4:21
  OK. All right.
• 4:23
  So there doesn't seem to be a lot for contemporary artists in
• 4:28
  in this, as you say, there's a lot for possibly for legacy
• 4:32
  artists. What has the reaction been then
• 4:37
  when you say this is where the arguments start?
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  Who's who's already come out fighting?
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  Yeah, So what happened was this was announced and the all the
• 4:45
  labour bodies, BPI and AIM and the and the Council of Music
• 4:50
  Makers, which is kind of the musicians, they all came out and
• 4:53
  they all said we welcome this. There was an announcement from
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  the government with the government quotes and these
• 4:57
  quotes saying it's good. But the Council of Music Makers,
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  so this is the body they include the Musicians Union, the MMS
• 5:04
  managers body, they include featured artists, coalition
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  producers, like the people representing musicians and
• 5:10
  producers. So they have since come out and
• 5:12
  said, yeah, actually we're not happy with this.
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  This is the bare minimum. And the reason for that is so if
• 5:18
  you remember 4 years ago we had this big streaming inquiry in
• 5:21
  the UK which had a parliamentary inquiry.
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  People gave evidence, then there was a report and this report
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  recommended, and the quote was a complete reset of the streaming
• 5:29
  economy and the way musicians get paid.
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  And it gave these recommendations that were
• 5:33
  included equitable remuneration, where streaming royalties get
• 5:37
  divided more more evenly between artists and labels before they
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  get split up. It recommended a right to
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  recapture your work. I think it was 20 years after
• 5:44
  you wrote a song or released track.
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  You could then get those rights back, which is something that
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  exists in the US in law, but not here.
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  And it recommended that songs get a bigger share of the
• 5:52
  streaming pie compared to recordings.
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  And, and those are all big changes and they're not in this
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  week's announcements. And, but essentially the
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  creative body is saying, hang on a minute, this enquiry
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  recommended this stuff that we liked and none of it's been
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  done. There's a quote from the
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  featured artist Coalition which says it falls significantly
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  short of the ambition shown by Parliament and is couched in
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  vague, non binding language. It does not deliver the
• 6:15
  structural change required to fix the broken economics of
• 6:18
  music streaming. So essentially the the creative
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  body is saying this is not enough.
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  It's just tweaks around the edges.
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  It's not going to change things. And now they're fighting.
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  We should say there's none of you, which is the label side,
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  the BPI, the labels, they were quite unhappy with the
• 6:35
  recommendation of the report. They've been talking a lot about
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  how this would do more damage than good.
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  It could harm the industries that would invest in artists,
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  and then that could hurt artists.
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  So there are two points of view here.
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  So I think from a label's point of view, this week is a very
• 6:47
  good compromise of stuff that will make a difference to some
• 6:50
  musicians. But the creative is saying it's
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  not what we wanted, it's not enough, and we're going to carry
• 6:55
  on fighting. And what they've said is they're
• 6:56
  going to fight for the stuff that wasn't included this week
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  to be made part of law next year, perhaps when the
• 7:01
  government is doing AI laws, they're going to fight for it to
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  be included in that so that these changes do happen.
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  And that's. What I mean it, it does very
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  much feel, I mean, we both sort of said this last week that it
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  felt like this was going to be very much a sort of interim
• 7:13
  announcement as government attempted to bring the different
• 7:17
  parties together over, you know, the the issues which you've just
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  described actually like the way artists are played in the in the
• 7:24
  streaming era. But this feels, I don't know,
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  it's, it's, it's basecamp one. This isn't it.
• 7:29
  They've gone, they've gone up the hill just a little way to
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  basecamp one. But from here on in the hill
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  gets steeper and steeper. And that's the arguments that
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  are to come and. That's it.
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  And like, you know, the one thing I'd say is people love to
• 7:44
  be rude about the government, don't they?
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  And love to shout at ministers. But everyone, the one thing
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  everyone here agrees on is they, they all praised the minister,
• 7:52
  Chris, Sir Chris Bryant MP, who kind of banged everyone's head
• 7:54
  to get this done. And they all said, we appreciate
• 7:56
  his efforts. We appreciate he's tried to get
• 7:59
  something committed to. So they all agree on that.
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  And yeah, I think, I think it is this is, this is what people
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  could agree on. And it, it's, it's small
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  compared to what has been suggested in the past.
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  And yeah, it's going to be, it's going to be a big fight, I think
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  because and this, this is the other point I wanted to raise.
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  There's a lot going on, isn't there?
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  At the moment. There's obviously people talking
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  about what's happening in live and the government's doing stuff
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  were there. But the government is also
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  starting to figure out what its policies on AI and regulation
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  are. How should they?
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  And specifically that includes if you train your AI and
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  copyrighted music and other stuff, should you pay, license,
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  so on. And the music industry is very,
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  very keen to all be united on that and saying what they want
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  and saying, we want you to do this and that and to make sure
• 8:44
  that we get paid. So the kind of the tensions
• 8:48
  kicking over from this streaming reform, I wonder if they could
• 8:52
  start to hamper that if everyone's kind of cross about
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  streaming royalty still, will it will it harm them come into
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  agreement on what they want from AI?
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  Will we see they created what he's kicking off about AI and
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  say, well, actually hang on a minute.
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  If you want to license music to an AI company, you've got to ask
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  the artist permission. They've got to have a veto.
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  That's what they've been calling for.
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  So that argument could become more, what's the word?
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  You know, when you're kind of you're, you sort of draw up your
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  line, your battle lines. That's the that's, that's the
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  worry here, I suppose, is that some of the stuff the whole
• 9:23
  musician does want, they're going to have to be dealing with
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  all this, these tensions to make sure that happens.
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  Yeah, we shall. We shall see, right, Shall we?
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  Should we skip forward to, we'll go straight to any other
• 9:38
  business, I think because we have a pile of questions.
• 9:41
  What should we start with? Let's go with this.
• 9:43
  This is from Mark of the band Rocketsmith, who says, just
• 9:49
  found your podcast and I love it.
• 9:50
  Thank you very much, Mark. Thank you for putting the stuff,
• 9:53
  this stuff out there. It says you mentioned in a
• 9:55
  previous episode the YouTube AI creation feature.
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  How are they navigating training?
• 10:02
  The AII assume it's being loaded with examples of music, in which
• 10:07
  case anyone whose music is in the LLM should benefit from
• 10:13
  revenue generated surely? And AI without knowledge as part
• 10:17
  is just a Commodore 64. Very good.
• 10:21
  Have you got some thoughts on this Stuart include actually
• 10:23
  including just for me. Can you explain what LLM is I?
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  Thought you were going to say what's a Commodore 64?
• 10:30
  Because I've got, I've got a good 10 minutes on that.
• 10:32
  It's a computer I grew up with. So when an LLM is a large
• 10:37
  language model, so it's essentially an AI model.
• 10:40
  So ChatGPT or the thing behind that, any AI model we talk about
• 10:44
  there, it's a large language model.
• 10:45
  Large language model means text. So it's the chat bots.
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  But increasingly these things can also create images, can
• 10:51
  create videos, can create music. So yeah, essentially LLM, it is
• 10:54
  a technical term that's a meaning, but it's it's an AI
• 10:57
  model. Right.
• 10:58
  OK, so so who? Who stands about who's going to
• 11:02
  get paid? How does it all work?
• 11:05
  OK, so it's a complicated question.
• 11:07
  I'll try. And so Google has various AI
• 11:10
  models within Google. So it has Gemini, which is kind
• 11:13
  of its chatbot helper thing. It's got VO, which is a video
• 11:16
  generating model. And it's got a thing called
• 11:17
  Lyria, which is its AI music generator.
• 11:19
  So there's a bunch of different AI models within the Google
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  YouTube family and it hasn't come out and said exactly this
• 11:26
  is what we train these things on.
• 11:28
  So we've only got some reports to go on.
• 11:29
  So there was a report last month talking about how Google does
• 11:33
  use its catalog of YouTube videos to train its AI.
• 11:35
  So it trains its AI on videos on YouTube, but it's at a time it
• 11:40
  only uses some of them. And it said there's a quote
• 11:43
  honours specific of agreements with creators and media
• 11:45
  companies. So we don't know if it's using
• 11:47
  all the music on YouTube or not. It hasn't said, but it does say
• 11:50
  it respects rights holders. And this comes back to a couple
• 11:54
  of years ago, YouTube actually signed a deal with the Universal
• 11:56
  Music Group to develop some of its AI music stuff, which
• 12:01
  involved kind of giving a group of its artists early access to
• 12:04
  tools to give feedback. And had this quote from like UMG
• 12:07
  Boss, Sir Lucy and Grange, who said it was a deal where artists
• 12:11
  and songwriters have the ability to maintain their creative
• 12:13
  integrity, their power to choose and to be compensated fairly.
• 12:17
  So with that in mind, if YouTube was training its say, eyes on
• 12:20
  all the music without permission, Universal is very,
• 12:24
  very hawkish on that. Wouldn't you wouldn't expect it
• 12:26
  to stand for it. So that that's a pointer towards
• 12:28
  YouTube doing things in a way the music industry likes.
• 12:32
  Equally, in January last year, Billboard, the trade
• 12:35
  publication, had this report and it said that Google ADEA trained
• 12:38
  its music model on a large set of music, including copyrighted
• 12:41
  major labour recordings and then went to show it to rights
• 12:44
  holders. So that reports yesterday,
• 12:47
  YouTube had built a musical eye. It trained it on music without
• 12:51
  licensing, but rather than just release that model and let
• 12:54
  people use it, it had then gone to label, said look what we've
• 12:56
  built. This is what it is now how can
• 12:58
  we work together? So it's kind of a halfway house
• 13:01
  there of it's not it's not it didn't sign licenses to that
• 13:05
  front necessarily, but it has been going to labels and saying
• 13:07
  we want to work with you. So I would say on the grounds of
• 13:10
  things, YouTube seems to be trying to walk that line well of
• 13:14
  we're going to respect rights holders and of course not have
• 13:17
  them sue us. But with so many AIS, it's very
• 13:20
  rare for now to say here is exactly what we trained it on.
• 13:23
  So we don't know exactly. But if we take the universal
• 13:27
  announcement for granted, the the principle here is that
• 13:31
  artists whose music is used to train should benefit.
• 13:34
  How much how when those details aren't public?
• 13:38
  A question from Bob Bright, who says welcome back.
• 13:41
  I've missed you. We've missed you too, Bob.
• 13:45
  Just a minute. We had all this stuff in our
• 13:46
  heads and no one to share it with.
• 13:48
  So he's nice to be back. Bob says there have been a few
• 13:52
  local festivals cancelled this year.
• 13:54
  Am I right in thinking the bands Slash Artists are paid upfront?
• 14:00
  And conversely, if they pull out, they have to repay the
• 14:03
  fees? And I'll be brutally honest with
• 14:05
  you here, Bob, and I'm slightly embarrassed to admit this, but I
• 14:09
  thought that can't be right, can it?
• 14:11
  Because it that just sounds too complicated.
• 14:14
  But Bob, I can tell you now, yes, you sort, you are actually
• 14:17
  sort of right because I put this question into a secret live
• 14:22
  agent who, who then completely baffled me because I, because I,
• 14:26
  I didn't know what an escrow account is or even if that's the
• 14:30
  way you pronounce it. And I don't know whether that's
• 14:33
  just an average 70s comprehensive school education
• 14:36
  or just because I'm not very, you know, fiscally worldly wise,
• 14:40
  but an escort. I'll give you the definition and
• 14:41
  then I'll get to answering your your point, Bob.
• 14:44
  But an escrow account is a temporary legal arrangement
• 14:48
  where a trusted third party, often a bank or an escrow agent,
• 14:53
  holds funds or assets on behalf of two parties involved in a
• 14:57
  transaction. This account ensures that the
• 15:00
  payment is only released when all terms of the agreement are
• 15:04
  fulfilled, thereby reducing the risk of non payment or fraud.
• 15:09
  Bear the. So bearing that in mind, this is
• 15:12
  how our friendly agent responded to your question by saying
• 15:17
  actually the answer is yes. The money, the fee, the payment
• 15:21
  is held in escrow until the event has happened.
• 15:25
  If the festival doesn't happen, then contractually the agreement
• 15:29
  is often settled on a 50% cancellation fee.
• 15:34
  So the artist will get 50% of the fee.
• 15:36
  Despite the fact that the gig was pulled, however, our agent
• 15:41
  continues. What's what's been happening a
• 15:44
  bit recently. What often happens in the
• 15:46
  current climate is that the festival is in financial
• 15:48
  difficulties, so you don't receive a deposit in a timely
• 15:52
  fashion. And then the festival folds and
• 15:54
  the band ends up with all the costs like accommodation, buses
• 15:59
  and crew wages that still have to be paid even if a gig doesn't
• 16:03
  happen. And that's a bonus.
• 16:06
  And he says, and they're not very happy with the agent
• 16:09
  either. So there you go.
• 16:13
  So in theory, you're sort of right, Bob.
• 16:14
  So the money is held ready for payment, but it's not actually
• 16:18
  in the artist's account. There may well be a clause in
• 16:22
  the contract saying that if the show doesn't go ahead, then the
• 16:25
  artist is still entitled to 50% of their fee.
• 16:30
  But obviously, as our friendly agent says, due to, I mean, due
• 16:35
  to the problems facing festivals at the moment, which are various
• 16:39
  and many, this is, this is, you know, this is a, is a
• 16:44
  problematic time when it comes to festivals folding.
• 16:49
  I mean, this is something which we're hoping, we're actually
• 16:50
  hoping to get a guest on to talk about this hopefully sometime in
• 16:53
  the next month. But yes, festivals folding
• 16:57
  sometimes leads, leads to artists being left out of
• 17:02
  pocket, especially. It's mainly, I think it's the
• 17:04
  upfront costs really. And, and I say this with some
• 17:07
  authority because I was booked for a festival a few years back
• 17:11
  in in Hampshire and I, I don't get any approaches from
• 17:15
  festivals. I don't know why.
• 17:18
  No, I mean no sarky comments here, please.
• 17:19
  I don't get any. I don't, no one ever comes to us
• 17:22
  saying do you want, do you want to play a festival?
• 17:24
  So anyway, I thought, yeah, well, and it looked like a good
• 17:26
  festival, so I said yes. The only downside was that it
• 17:30
  was, it was the day after the festival was the day after I was
• 17:34
  doing a two night stand of my one man show at the Edinburgh
• 17:38
  Festival. I thought that's it'll be,
• 17:41
  that's fine. It'll be really exciting.
• 17:42
  It'll be like being on a proper tour.
• 17:45
  So anyway, I said yes, booked flights for myself and the tour
• 17:47
  manager, which I mean, tour manager.
• 17:50
  It's just been best to make for me, points me in the right
• 17:52
  direction and, you know, make sure I make sure I don't
• 17:56
  oversleep. But anyway, we're all set.
• 17:59
  Early flight out of Edinburgh to Southampton, all all ready to
• 18:02
  go. Festival cancelled and so I
• 18:06
  looked into booking some new flights direct back to London
• 18:09
  but in the end that didn't really make any financial sense.
• 18:12
  So in the end we did the two nights in Edinburgh, then got up
• 18:16
  early, flew to Southampton anyway, spent an hour in the bar
• 18:21
  at Southampton and then got a train back to London.
• 18:25
  But so. So yes, if you have booked the
• 18:28
  cheapest non refundable hotels and flights, you you might lose,
• 18:32
  you might lose a bit of money, the artist might lose some
• 18:35
  money. I mean, at the same time, you
• 18:37
  know, we have to say, I mean, our heart goes out to all the
• 18:40
  people who who are attempting still to put on festivals.
• 18:44
  But as I say, for a variety of reasons, they're having to pull
• 18:47
  the plug and you know, they'll undoubtedly be disappointed and
• 18:52
  out of pocket as well. So This is why I guess.
• 18:55
  This is why, you see, I guess sometimes you'll see an artist
• 18:57
  when if something's been cancelled, they'll be, they'll
• 18:59
  be their range, a new gig of their own, won't they, A local
• 19:01
  venue. And that's not just because
• 19:02
  they're kicking their heels for a night and want something to
• 19:04
  do. It's probably because they're
• 19:05
  thinking right, we've got the crew, we're here.
• 19:07
  You probably need to earn some money back to kind of to cover
• 19:10
  the loss we've made for the festival.
• 19:11
  So, yeah, anyway, Bob, Hope that answers your question or
• 19:15
  confirms the fact that you're already new.
• 19:18
  This is good, right? Because this is this is our best
• 19:21
  pseudonym of the week. We don't often get questions set
• 19:26
  by people using pseudonyms. I'm presuming this is a
• 19:29
  pseudonym Roy Altiz from Crew. Well done, Roy says.
• 19:37
  I know that when you stream a song, both the person or people
• 19:41
  who wrote the song get paid, as well as the person or label who
• 19:45
  owns the audio recording of it. So when a song gets streamed on
• 19:48
  a platform like Spotify, is the royalty payment split 5050?
• 19:53
  Is it 5050 between the songwriting and recording?
• 19:57
  Stuart, over to you here. We go in a word, no.
• 20:00
  And this is one of the arguments we talked about earlier on.
• 20:03
  But yeah, they're actually, I've got some recent stats that I can
• 20:05
  use to show this. So I've got some US stats and UK
• 20:09
  stats and they kind of agree. So there's a there's an
• 20:12
  organization called Dema, which is like the trade body for the
• 20:14
  streaming services. So Spotify, Apple Music player
• 20:16
  as members. It published a report and it
• 20:18
  broke down where every $100 made from a streaming service goes,
• 20:22
  right. So every $100 that a streaming
• 20:25
  service makes, on average it keeps about $26.30 of it.
• 20:30
  And so $73.70 goes to rights holders.
• 20:34
  And of that, around just under 80% goes to recording and just
• 20:37
  over 20% goes to the song. So songwriters in the UK, when
• 20:43
  we had our streaming inquiry, there's a report that actually
• 20:46
  broke down that too. And they said, yeah, but about
• 20:47
  the same. About 78% of the royalty payouts
• 20:50
  go to recordings, about 22% go to songs.
• 20:54
  So for a million streams, they reckon it's around £4000 to the
• 20:58
  recording rights holders and about 1150 to the publishing
• 21:02
  rights holders. But there was a twist to this.
• 21:05
  So that sounds terrible for some writers.
• 21:08
  And this, this is one of the things that people are.
• 21:10
  But songwriters get a much bigger share of the royalties
• 21:14
  that go to their side than artists do at the recording
• 21:16
  royalties. OK.
• 21:18
  Right. So according to the UK inquiry,
• 21:21
  songwriters get about 75%, so 3/4 of the money the payout.
• 21:26
  So they get around £865 per million streams if they were,
• 21:30
  you know, whoever the writes are.
• 21:32
  Whereas artists, if they're on like a 20% deal, might get £800
• 21:36
  at the recordings royalties. So there's kind of a nuance here
• 21:40
  and that that there's a lot, a lot bigger share goes to
• 21:42
  recordings, but songwriters get a lot bigger share of their
• 21:45
  royalties. And that the the amount that
• 21:48
  gets left with the musicians at the end isn't so different.
• 21:50
  And that's the thing. In the US and that and that's
• 21:52
  because of the the the way the deals are structured, the
• 21:54
  difference between a record deal and a publishing deal, the
• 21:57
  publishing deal is weighted more favourably towards the the
• 22:01
  actual artist, the writer. Yeah.
• 22:03
  So in the US, out of that $100 spent on a streaming service, on
• 22:07
  average, around about 9 pounds, $9.23 ends up with the artists
• 22:12
  and around $8.24 ends up with the songwriters.
• 22:16
  And of course, all of this is subject to individually what
• 22:20
  deal you're on, how many of you are there.
• 22:22
  If you're if you're the sole songwriter of an Ed Sheeran hit,
• 22:24
  you're doing well. You do sing a lot of money if
• 22:26
  you're 1 of 17 songwriters on something else, you know, so it
• 22:29
  all it on an individual level. There's no set figure, but yeah,
• 22:33
  about 8020 recordings to songs. There you go.
• 22:37
  Thank you very much for that one.
• 22:39
  And we fit one more in, I think. Shall we do Alan's question?
• 22:44
  Thank you Alan, Alan said this. This is a good discussion I
• 22:48
  think, which I think you'll prompt here.
• 22:50
  Alan says, have either of you read Liz Pelley's book Mood
• 22:54
  Machine, The rise of Spotify and the Cost of the Perfect
• 22:59
  Playlist? She's clearly not a Spotify fan
• 23:02
  and I think it's a quite one sided book.
• 23:05
  That said, there's some interesting insights on how
• 23:07
  Spotify creates playlists and also encourages labels to take a
• 23:12
  lower royalty in return for promotion.
• 23:16
  I think it's significant that apparently none of the major
• 23:19
  labels have taken advantage of this, it's just the
• 23:22
  independence. Do you think this is Paola?
• 23:27
  That's quite like I've, you see, I've not read the book.
• 23:30
  I've seen it talked about but haven't had a chance to actually
• 23:32
  read it myself. So I don't know what claims it
• 23:35
  makes or or whether we'd get in trouble for repeating them.
• 23:38
  Have you, have you, have you come across it?
• 23:41
  Have you read any of it? Do you know what it alleges,
• 23:43
  Stuart? Yeah, yeah, I followed her work
• 23:45
  for a while. Actually, she's probably, she
• 23:46
  probably is the journalist who is has been the most critical of
• 23:49
  Spotify for the longest time. Right, OK.
• 23:52
  In terms of what it does, but also she talks about its impacts
• 23:55
  on music and culture. Like she's, she's very, she's
• 23:57
  very, very, very critical. And she has a very strong point
• 24:01
  of opinion to Alan's point, but she's also a good journalist.
• 24:04
  Like she does the legwork. Like her book is about the
• 24:06
  research he's done, the people she's talked to.
• 24:08
  So it's not just someone sitting at a keyboard going, I don't
• 24:10
  like Spotify. Like she's, she is, she's one,
• 24:13
  she's a critical voice, but someone who does the research to
• 24:16
  kind of try and back up a case. And yeah, the book distills with
• 24:19
  that. The book is about, it's about
• 24:20
  how Spotify deals with playlists.
• 24:22
  It's about one of the things that got lots of press is
• 24:25
  whether it commissions background style music to put in
• 24:28
  its playlists. And that was a big that made
• 24:30
  lots of headlines. And she talks about this, this
• 24:33
  thing that Alan refers to about discovery mode, which is not a
• 24:36
  secret thing. It's one of Spotify's marketing
• 24:37
  tools that I can explain. So yeah, it's a I've got this
• 24:42
  thing. So I've read about Spotify since
• 24:44
  they started and I've written about the good stuff, all the
• 24:46
  bad stuff and the fights. And I think it's really
• 24:49
  important that that you have these, these voices, you have
• 24:52
  voices that are very firmly pro Spotify, the industry, and you
• 24:54
  have journalists like Liz, who is very much coming at it saying
• 24:58
  I'm going to prove these evil bastards, they're evil.
• 25:00
  And I think, I think all these, all these, these opinions, like
• 25:04
  I think journalism, it's important to have those critical
• 25:06
  voices. So, yeah, I'm a I'm a fan of her
• 25:09
  stuff, even though I don't, I haven't always agreed with bits
• 25:11
  of it or I might have a different take on it sometimes.
• 25:14
  But yeah, it's a book worth reading if you're interested in
• 25:16
  Spotify. Yeah.
• 25:18
  Tell us, tell us about the the well what the points that's been
• 25:23
  raised here. And I tell them I'm interested
• 25:26
  to know about discovery mode and I'm interested to know about
• 25:29
  labels being offered lower royalty, lower royalty rates for
• 25:33
  inclusion in playlists. Yeah, and this is you can, you
• 25:36
  can Google Spotify discovery mode.
• 25:38
  There's a page about the website and all of what I'm about to say
• 25:40
  is said there. So it's not a secret thing.
• 25:42
  It's the first thing to say. So yeah, basically it's a
• 25:44
  promotional feature. So if you're an artist or label,
• 25:46
  you can say Spotify, right? I've got this track I want to
• 25:48
  promote. It might be a new song.
• 25:50
  It might be a catalog track. And what happens then is Spotify
• 25:54
  will tell its algorithm. This is not a technical term.
• 25:57
  It will give its algorithm a good talk to you and say, look,
• 26:00
  we want this, this, this song is going to get a bit more weight
• 26:03
  in three specific places on Spotify.
• 26:05
  So it's in its mixes. See, like the personal mixes for
• 26:08
  you in its radio feature, because there's a radio style
• 26:11
  feature on Spotify play and an autoplay, which is when, if you
• 26:14
  play a playlist on Spotify, if you have this turned on, when it
• 26:17
  gets to the end, it just carries on playing stuff that's similar
• 26:19
  to that playlist. So you can, you can say, right,
• 26:23
  I want to use discovery mode for this track.
• 26:25
  And it will, it will have a bigger chance of appearing in
• 26:27
  those three places for people who the algorithm thinks will
• 26:31
  like your song. So it's not like if you're an
• 26:33
  indie band, you're getting shoved into the the ears of
• 26:35
  Drake listeners and vice versa. And the pitch is you don't pay
• 26:39
  to do this. You don't pay Spotify money, but
• 26:41
  it charges a Commission on the the royalties from the streams
• 26:44
  of those tracks in those places. It takes a 30% cut.
• 26:47
  So essentially you take a 30% cut in the royalties from any
• 26:51
  streams that come from using discovery mode.
• 26:53
  And the argument is, but you will reach people who don't know
• 26:57
  about you but would like you, and they may then save your
• 27:00
  track or follow you, add you to their playlists.
• 27:02
  And in the long term, you'll make more money than you have
• 27:04
  given up, right? And that's there's a whole
• 27:07
  section of case studies of how artists used it.
• 27:11
  And one of the arguments it makes, which kind of goes back
• 27:13
  to Alan's point, is Spotify says this is a thing that works for
• 27:16
  independent artists because you don't need money upfront to use
• 27:20
  it. So it's not like another feature
• 27:21
  where you might have to need a major level marketing budget to
• 27:24
  pay them to do something. It's like you can just opt into
• 27:26
  this. The money comes out the Rogers,
• 27:28
  but you'll hand back and that is their argument.
• 27:31
  But as Alan notes, it has been criticised that some industry
• 27:35
  bodies, so they don't like it. It's kind of in the US this term
• 27:41
  payola has huge historical resonance, doesn't it?
• 27:44
  It's about the DJs being paid to play songs and no one knew and
• 27:48
  so essentially bribes and this is a huge thing.
• 27:51
  So it's true, this has been a controversial.
• 27:54
  Not everyone likes that and some labels choose not to use it
• 27:57
  because they don't like it. Others do.
• 28:00
  And I've kind of, I don't know, I'd like to hear your feelings.
• 28:02
  I've got mixed feelings about it as a listener because I kind of
• 28:06
  like in today's Internet, I'd rather know when something's an
• 28:09
  ad or sponsored or being paid for.
• 28:11
  Like if I'm reading an article and it's an advertorial, I want
• 28:13
  to know it's an advertorial. And they're quite clear rules,
• 28:15
  aren't they? You have to say this is an ad.
• 28:18
  Even on social media, if you're an influencer promoting some old
• 28:20
  shit, you know from on your on your Instagram, you have to say,
• 28:23
  this is an ad. I've been paid to do this and
• 28:25
  you get in trouble if you don't. And Discovery made is this weird
• 28:28
  grey area because it's kind of it's a promotional thing, but
• 28:31
  there's no way at the moment it's what we're saying this song
• 28:34
  you're listening to right now or the song I'm about to play you
• 28:38
  is being promoted through our discovery match like that
• 28:40
  wouldn't. So I do feel a bit I'm
• 28:43
  interested to see how people view this and whether they
• 28:46
  whether they mind, because in theory it's a band who I should
• 28:50
  like giving up some royalties to reach me if I haven't heard them
• 28:54
  before. I'm not really against that if
• 28:57
  they're, if they're in control, which they are.
• 28:59
  I didn't know. What do you think?
• 29:01
  Well, first for a start, when how well can the algorithm read
• 29:05
  your mind? I mean, how, how, how successful
• 29:11
  is this going to be? Are these groups who are taking
• 29:14
  the royalty rate cuts? Are they the sort of groups you
• 29:18
  would like? How how dependable is is the is
• 29:23
  the algorithm? That's my first point because it
• 29:25
  you know, even though because we are I don't know I mean, I I'm
• 29:30
  quite it will surprise people to to know this.
• 29:33
  I'm quite picky about music and I get quite annoyed when
• 29:38
  algorithms throw up things that you think plainly.
• 29:41
  You can't see the subtlety, the difference in the track X, which
• 29:46
  I really like and this nonsense, which you obviously you've put
• 29:50
  before us. So that's the point and I
• 29:52
  suppose and from this, and I don't know anyway, I mean if
• 29:55
  anyone listening as has attempted this or has has gone
• 29:59
  for this discovery mode option, I'd love to know whether it was
• 30:03
  successful because does it, will it work?
• 30:07
  If it does work, well, you know, maybe there is an argument for
• 30:10
  it being particularly for people who don't have a lot of money to
• 30:14
  promote themselves with. Maybe, maybe you can understand
• 30:18
  why, why this would be tempting. But if it if it doesn't work,
• 30:22
  it's just another part of the music industry which has been
• 30:25
  created to effectively. And I know they're not charging
• 30:27
  them upfront, but they're still charging the artists.
• 30:31
  They just found another way of charging, you know, young,
• 30:34
  naive, hopeful artists, some essentially some payback, some
• 30:40
  money to try and get to more people.
• 30:44
  Yeah, I mean. It's one of those things that
• 30:45
  feels uncomfortable. Well.
• 30:47
  It's one of those things, isn't it, where if everyone did it,
• 30:50
  everyone's getting low royalties and arguably no one's getting
• 30:53
  boosted because you're all doing it.
• 30:54
  But that's not. But yeah, I mean, it's
• 30:55
  interesting. So it is notable actually on
• 30:57
  their website. And again, anyone can go Spotify
• 30:59
  discovery mode and see everything there.
• 31:01
  They've got all these case studies and they're all
• 31:03
  basically independent artists. And that's the thrust of this.
• 31:05
  Their argument is like this is who it's for and they have stats
• 31:08
  about yeah, in the first month after using this the average
• 31:12
  uplift in how many people save your song, add you to their
• 31:15
  playlists, follow you is is this.
• 31:17
  So they they they have been putting figures out there saying
• 31:19
  this does work. Of course, it'd be interesting,
• 31:22
  like you say to them, that hear from people who've used it and
• 31:24
  have a different experience because they won't be on the
• 31:26
  case of these section it. Won't, it won't work.
• 31:28
  It won't work for everybody though, will it?
• 31:30
  That I don't think, no, surely it surely won't.
• 31:32
  I mean, and it's won't. Well, if I was to try, I'd be
• 31:36
  the one artist that for whom it wouldn't work.
• 31:38
  But. But they're hardly likely to
• 31:41
  amplify the voices of the disgruntled.
• 31:45
  Well, yeah, but it's, it's, it's one of those things I think
• 31:48
  where so much is marketing nowadays, isn't it?
• 31:51
  Like in a way, I suppose the one thing about every student, so
• 31:55
  that to take this away from Spotify, every streaming
• 31:57
  service, they all have the discovery algorithms, they all,
• 31:59
  they're all trying to understand our music habits and they're all
• 32:02
  trying to service stuff that we would like.
• 32:04
  And one of the things that I've been picking up on is that
• 32:08
  independent music is doing pretty well from this.
• 32:11
  Like I think it was half Spotify's payouts last year.
• 32:16
  And this is one thing where moving away from the stuff you
• 32:19
  pay for, marketing budgets, these algorithms don't really
• 32:23
  differentiate between major and independent artists.
• 32:26
  What they're trying to do is find the stuff that you, Stephen
• 32:28
  Mackle, me, Stuart would like. And that seems to be quite
• 32:32
  positive for independent artists.
• 32:33
  Now, there's always debates about how much they get paid and
• 32:35
  is it money enough and so on. But in a way that these services
• 32:39
  have given independent artists more of a level playing field to
• 32:43
  reach people who would like them.
• 32:45
  And like you say, when that when you get into the whole point of
• 32:49
  like, well, a lower royalty cut or paying for this promotion, it
• 32:53
  does make people go, I'm not sure about this.
• 32:55
  And so, yeah, I think that's, that's the most I can say is
• 32:57
  that there's, there has been debate with this feature and
• 33:00
  Spotify has defended it. And it's, it could have got rid
• 33:02
  of it quietly. It could have just said, we're
• 33:04
  not going to do it anymore. It's too much hassle.
• 33:07
  Because like in in the US, politicians have written letters
• 33:09
  to start by saying explain this to us and why it's not Paolo.
• 33:11
  Like there's, they've got some flak there, but they've kept on
• 33:15
  with it and they say it's working well for the people who
• 33:17
  use it. So yeah, it's it's one of those
• 33:18
  that's up in the air, I think. Yeah, I suppose the strange, the
• 33:21
  strange thing for me, and this is, you know, one of the chief
• 33:23
  differences, isn't it, between the era we live in now with the
• 33:26
  rise of the influence of the streaming services in bringing
• 33:32
  music to people and influencing their taste.
• 33:35
  Is, is algorithms rather than somebody you know, rather than
• 33:39
  in in radio. You you don't, you're not,
• 33:42
  you're not paying for somebody to put your music in front of
• 33:45
  people. It's a person who's thought this
• 33:48
  is a good band that I think my listeners will will like and and
• 33:52
  playing it. So that is a different curation,
• 33:55
  isn't it? You've got the human curation of
• 33:58
  radio and you've got the algorithm.
• 34:00
  But it sounds, it does sound like an interesting book, which,
• 34:04
  yeah, it's worth. It's worth really, even if even
• 34:06
  if you don't, even if you think you're going to disagree with it
• 34:09
  violently, It's I think people should be reading, you know, the
• 34:13
  the most critical views and the pro, most pro views.
• 34:16
  And you know, that's how you get a sense of what you think about
• 34:18
  stuff. Yeah, I recommend reading that
• 34:20
  and and all the other Spotify books.
• 34:22
  OK, we're out of time for this week.
• 34:23
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• 34:25
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• 34:29
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• 34:38
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• 35:21
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• 35:22
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• 35:26
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