Radio fading away?
Not so fast. Radio is adopting some online, internet-streaming tricks.
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While music lis-teners now benefit from a raft of choices, the losers may be the musicians themselves. Agreements between labels and Internet music providers can be opaque, if not secret. Some companies remain diffident about what kind of service they want to be. For example, Turntable.fm – which allows user DJs to "spin" tracks for a room full of listeners who then vote on what they like, earning points for the DJs – initially claimed it didn't need to negotiate licenses, arguing that they fell under an exception for "noninteractive" services. With their audience exploding and more venture capitalists expressing interest, they changed tack.Skip to next paragraph
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While in most cases streaming services have established agreements with labels and artists organizations, the payouts can still be meager, which has earned pungent criticism from musicians and groups such as BASCA, which represents British artists. A number of independent labels have removed their music from Spotify, arguing that the payments are insufficient.
It can be difficult to tell how much musicians will get paid – the money has to go from the streaming service to the rights organization and then to the songwriter and publisher; record companies may also earn a cut – but the consensus is that it's not much. In early September, the indie band Uniform Notion posted on its Tumblr blog a now widely shared post explaining how much they earn from purchases – from sites like eMusic, Amazon, and iTunes – and from streaming. For a single play of a song on Spotify, the band would earn about $0.004. Listening to the entire album would earn them 4 cents.
Bruce Houghton, president of booking agency Skyline Music and editor of the music-technology blog Hypebot, argues that patience is in order. "While many wish there were more transparency, most understand that we're in the early stages of music streaming and are optimistic that enough will become willing to pay for subscriptions so it becomes a significant revenue stream."
BMI's Conlon offered similar thoughts, saying that "the royalty payments when you get to the end of a quarter might be small. The good news is that they're there."
Streaming revenue for musicians
Spotify and other such services have created revenue sources for some musicians who previously could only count on their music being pirated or never heard at all. "I think it's done an amazing and wonderful job with flattening the playing field," says Conlon. "We get e-mails every quarter from writers who've never seen money before. The long tail is alive and well," he says, adding that rates may be negotiated upward in the future.
For now, that's good news for commercial radio, whose industry power remains significant. Only a few car companies offer access to in-dash streaming services – and only on a few models. According to Arbitron, the number of drivers streaming music in-car tops out at about 6 percent (for Pandora). Eighty-four percent of drivers still listen to radio.
But many streaming services didn't exist just a few years ago, and they're especially popular with young consumers. Auto companies are sure to find a way to satisfy the demand to bring Spotify or Rhapsody on the road, and cellular companies will be expected to help. Says Conlon, "When we have pervasive Wi-Fi" – omnipresent 4G or faster connections – "I think we're going to see some very cool stuff."