This is a presentation I made (in French) at the Siestes Electroniques Music Festival in Toulouse, in June 2013. It starts with a brief history of music distribution and then gets into to the details of digital music and streaming

1. Digital Music Distribution
Andy Richards / Uniform Motion
This is a presentation I made at the French
Festival “Les Siestes Electroniques” in Toulouse,
June 2013
.

2. 40 000 - 60 000 B.C
Prehistory
Why start a presentation about digital music
distribution with a picture of a caveman playing a
guitar?
Because guitar players are all cavemen? Maybe!
In fact, music has existed for about 50000 years and
for tens of thousands of years, the only way to get
your music heard was to play it for people.

3. 2,000 B.C
Writing
Things start to evolve when man invents writing..
The Nrst traces of written music are from 4,000
years ago.

4. 1490
Printing
Then we invented printing, which allowed us to
reproduce written music more easily.

5. 1791
European Copyright
And following the French Revolution, French
writers obtained the 'Droit d'auteur' (copyright)
which allowed them to get paid when a copy of
their work was made.
New technology: you adapt and get organized.

6. 1850
SACEM – French PRO
In the 19th
century, songwriters were rather
unhappy to see their work played in public places
without them getting any compensation.
Ernest Bourget, a French songwriter, refused to
pay the bill in a restaurant that was playing his
music.
The resulting lawsuit, which he won, was followed
by the creation of SACEM, a performance rights
Organization.
.

7. 19th
Century
Recorded Music
During this time, inventions like the phonograph
changed the way we listened to music. For the
Nrst time in history, you could record sounds, and
play them back.
The mechanical piano (a piano that can play on
its own using perforated paper became more and
more popular) and printing machines became
more industrialized..

8. 1921
Radio
The Nrst public radio station in France was
launched in 1921 (1920 in the US).
On the one hand, you can record sounds, and on
the other, you can play them over the air using
radio waves.

9. 1935
Mechanical Royalties
Mechanical piano and phonograph sales, and
radio ads all generate revenues, partly thanks to
compositions written by members of the
Performance Rights Organization, SACEM.
The writers adapt to these new technologies and
get organized so they can collect their rights.
The SDRM (society for the administration of
mechanical rights) is founded in 1935 to collect
rights when compositions are played
mechanically. ie: phonograph, piano, radio)

10. 1948
The album
The next invention to revolutionize the music
industry was the 33 1/3 RPM vinyl, released by
Columbia in 1948.
Prior to its release, a record could only play about
10 minutes worth of music.
This new Long Play format allowed you to play
roughly 40 minutes of music, which become the
default format for albums, and has been ever
since.

11. Television
1950's
Television became more popular in France after
the Second World War.
SDRM quickly adapted by signing an agreement
with ORTF (Public broadcast company) to collect
rights for music played on TV.

12. 1954
Pop stars
One of the consequences of the development of
television is that people could see what the
performers looked like.
1954, Elvis Presley performed on the Ed Sullivan
Show and pop music has not been the same ever
since.
The performer era begins.

13. 1955 - 1959
Performers' rights
Up until the 1950's, the French PRO, SACEM, was
defending songwriters' rights only so the
performers decided to join forces, to adapt and
get organized by setting up ADAMI in 1955 (who
represent the performers whose names are on
the album cover) and SPEDIDAM in 1959 (who
represent the performers whose names are not –
studio musicians for example.)

14. 1962
The cassette
A new format comes along that's going to shake
up the industry, the cassette tape.
It's small, cheap and you can record music on it
yourself, and make copies of other cassettes.

15. 1979
The Walkman
With the Walkman, cassette tapes become highly
portable and sales increase.

16. 1981
Video killed the radio star
Next important date, 1981.
MTV is launched in the US.
The labels are selling large amounts of music at
the time and see MTV as a way to promote
records so they don't Nght hard to monetize the
videos.

17. 1982
The CD
The next year, the compact disc is released.
At Nrst, the CD is considered as an audiophile
format, especially for classical music.
Rikodisc beneNt from this perception, when they
Sign David Bowie, Frank Zappa and Robert Wyatt
to their CD-only record label.

18. 1985
“La rémunération pour copie privée”
SDRM ADAMI
SPEDIDAM
SCPA
SCPP/SPPFSACEM/SACD/SCAM
The labels hate the cassette tape.
Songwriters, performers and record producer
organizations lobby the French government to
vote an exception to copyright law in exchange
for a tax on blank cassettes. Today, these taxes
still exist on CD-R's, hard drives and even
smartphones.
SDRM = 50%
ADAMI/SPEDIDAM = 25%
SCPA = 25%

19. 1991
The PC
The CD is a digital format. It's fairly easy to
convert the contents of a CD to a computer
readable Nle.
In the 1991, the WAV format is released.
However, few households are equipped with PC's
at the time and songs in WAV format take up a lot
of space on the small hard drives people were
using.
Add to that the fact that PC loud speakers were
lousy, it's not that surprising that the record
industry didn't see computers as being a much of
a threat

20. 1995
Then the MP3 format comes along.
You can compress the song to make it smaller.

21. Internet
1990's
Then all you need is a worldwide computer
network and sharing music freely is easy!
We all know what happens next.
The slow and painful death of the music industry!

22. 1997
CD distribution
Perhaps not all of it...
The internet has also had some positive side to it
like when Derek Sivers founded CD Baby in 1997.
Derek wanted to set up a webite to sell his CD's.
His friends asked him if he could sell theirs too
and then CDBaby, who are great at designing
logos, became one of the biggest distributors of
unsigned music.

23. 1998
1st
MP3 store / MP3 player
People generally think of Apple when you
mention legal download stores and digital music
players but the very Nrst MP3 store was
launched in 1998 by eMusic, and the Nrst MP3
player (MPMan) was released the same year in
Korea.

24. 1999
Peer to Peer
Napster was founded in 1999. The site was based
on peer to peer technology and allowed people to
share their music collections. It was almost an
overnight success. 80 millions users within less
than a year.
At the time, I thought it was a great promotional
tool and uploaded some demos I had made on my
4-track.
What I didn't understand, was why artists like
Madonna were sharing their music for free on the
site.
Strange!

25. 2000
The lawsuit
I got a better grasp of what was going on the next
year when the record companies (with the help of
a few artists) sued Napster.

26. 2001
January July November
Death of Napster – The rebirth of Apple
Napster was forced to close down its service in
2001.
Coincidentally, the same year, Apple released
iTunes (which at Nrst only allowed you to rip CD's
and play back your digital music collection)
And towards the end of the year, the iPod!
It's a revolution!

27. 2002
Social
2002 marked to beginning of social
recommendation in music with the launch of
Last.fm/ audioscrobbler, a plugin that scans the
music you listen to and uploads it to site that
displays what you've been listening to and makes
suggestions based on what people with similar
taste listen to.

28. 2003
iTunes Music Store & Myspace
2003 : Apple releases the iTunes Music Store.
It's the beginning of the Apple ecosystem. They
Nx the 99 cent download price.
The same year, Myspace was born. A place for
friends which soon became a place for unsigned
bands.

29. 2003
Digital Distributors
Just like some were able to adapt quickly to the
CD, certain companies were quick to react to the
new digital landscape.
Digital distributors, based on the same model as
physical distribution were set up to provide
music to iTunes. They are selective and take a
percentage of each sale.
.

30. 2005
Digital distribution for DIY musicians
Luckily for DIY artists, CD Baby (who improved
its logo slightly) and Tunecore..
CDBaby takes a small % and Tunecore takes 0%.
For the Nrst time, independent/unsigned artists
can get access to worldwide distribution for a
small fee and keep all their rights.

31. 2005
Other types of online music
Jamendo, a website with royalty free Creative
Commons based music, proposes various
different synchro and public performance
licenses.
Pandora, after failing to successfully sell their
automotive orient music product, based on the
Music Genome Project, decides to launch Pandora
Internet Radio. Using 400 criteria (vocal style,
instrument type, tempo, etc...) gives a digital f
ingerprint to a song. Their service then makes
playlists based on the similarities between songs.
Even though YouTube was launched as Video
sharing platform, many users start uploading
songs with static images.

32. 2006-7
The birth of streaming, Amazon enters
Although Spotify was not the Nrst streaming
services (Rhapsody was doing long before they
were) it was the Nrst to use peer to peer
technology to improve the reliability of its
service. The interface is simple. The catalogue of
music is huge. Spotify has been pretty successful.
Deezer has been doing rather well in France,
mainly due to a deal they have with Orange, the
largest internet provider.
Around the same time these streaming services
started, Amazon entered the digital music space,
becoming a fairly serious competitor for Apple.

33. 2006-7
The Marketing Tools
As digital music became more widespread,
marketing tools and services were made
available.
Like Topspin (initially only for big name artists)
and Reverbnation (for DIY artists).
And SoundCloud, which is the YouTube of sound
according them.

34. 2008
And in 2008, Bandcamp is launched.
I love Bandcamp.
They have loads of really useful stuff for DIY
artists. You can Nx your own price, the user gets
an immediate download in the format they want
when they buy a CD, you can integrate your page
really easily with your website. They have fan
proNles, stats.
Along with MailChimp, Bandcamp has been a
great tool for us.

35. 2009
Content ID
In 2009, Kickstarter started the crowdfunding
trend.
The same year, YoUTube started experimenting
with Content ID, a technology that allows you
identify your content on YouTube.

36. €0,000/stream!
€0,01/stream
€0,004/stream
€0,004/stream
€0,00028/stream
€0,70/song
€0,70/song
€0,70/song
€0,21/Song
Streaming & Download Revenues
Source: Uniform Motion Sales
So let's look at some numbers now.
Concerning Spotify, the number above is an average. I
have a seen per stream rates ranging from €0.0002
(free version ) to €0.0122/stream (premium version).
The current debate is about whether a) the rates are
high enough and b) whether or not streaming
cannibalizes sales.

37. Downloads Vs Streams
Source: Uniform Motion Sales
2010 2011 2012
0
20000
40000
60000
80000
100000
120000
140000
160000
180000
Downloads
Streaming
Our download sales (iTunes, Amazon,
Bandcamp) are in blue.
Our streaming numbers (Spotify, Deezer and
YouTube) are in orange.
You can see that streaming has largely
increased over the past 3 years and
downloads have decreased slightly.

38. Revenues in euros
Source: Uniform Motion Sales
2010 2011 2012
0
500
1000
1500
2000
2500
3000
Downloads
Streaming
Total
But this is a little apples and oranges so let's look
at revenues instead.
Download revenues are in blue, streaming
revenues are in the orange and the sum of both is
in yellow.
For the moment, it looks like streaming is
cannibalizing download sales and isn't paying
enough to compensate for the loss.

39. 2012
Spotify = Stable revenues
Source: Uniform Motion Sales
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
0
500
1000
1500
2000
2500
Streams
However, one thing to note is that unlike the old
model, streaming is a constant, regular revenue
stream
You can clearly see that the numbers of streams
is fairly stable over a whole year.

40. 2013: Spotify streams growing
Source: Uniform Motion Sales
Jan Feb Mar
0
500
1000
1500
2000
2500
Streams
And the trend so far in 2013 is that the numbers
are increasing.

41. 1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
0
500
1000
1500
2000
2500
3000
3500
4000
LP
Cassette
CD
Digital
Streaming Sub
Total
Worldwide album sales (Source: IFPI)
If we look at the sales of various different formats
over the past 40 years (thank you IFPI) you can
clearly see the rise and fall of the LP, the cassette
tape and the CD.
You can also see that it took the CD 20 years to
get to its sales peak.
Streaming is in its early stages, you have to give
it some time.
Services like Spotify, Deezer and Rdio, are still
fairly small and are used mainly by early
adopters.

42. 2011
€0.002/match
So far, Apple has not launched a streaming
service but they have been testing the water.
In 2012 they launched iTunes Match, a service
which allows you to store your music collection
(even songs you didn't buy on iTunes) in the
cloud?
For each song that is matched by iTunes they pay
€0.0025.

43. 2013
iTunes Radio
€0.0009/stream
+15% of ad money
In 2013, Apple announced iTunes Radio.
According to several reports, the service will pay
€0.0009/stream and 15% of ad revenues.

44. How do I get my money?
So what can I do as an independent DIY artist to
get my money?

45. Sell your soul to the devil !
One solution is to sign with a major label. They can do
all the work for you but you don't necessarily want to
work with a major, and perhaps they're not interested
in your music. :)

46. 50%
EDM artists
As a side note, just in case you think that it's not
really an issue, you may be interested to know
that according to PRS for Music, 50% of EDM
artists do not collect their songwriters royalties
for radio play.
And electronic music makes up 15% of the music
played on BBC Radio 1.

47. CDBaby just released a cool infographic that
explains how the money from streaming services
is collected.

48. Getting your music on Spotify and iTunes is easy.
There are loads of digital distributors who can do
that, who then pass on the royalties from the
master.
But as you can see on the CDBaby infogaphic,
certain rights are collected by PRO's and
mechanical royalty collection societies. Without
being a member of all of them, it's next to
impossible to collect all the money you're owed.
TuneCore and CdBaby both recently set
publishing services.
They register your songs with ASCAP, BMI,
SACEM, GEMA, etc... and collect your rights.
You could do this all on your own, but it will cost
and arm and a leg and a lot of time.

49. YouTube
Source : Digital Music News
We've talked about iTunes and Spotify, but what
about the biggest streaming platform of them all,
YouTube.
As you can see on the graph above, YouTube is
huge compared to other streaming sites.
And YouTube generates revenue from your music
on their site, through ads.

50. Monetizing YouTube
€0.00028/stream
You can become a YouTube partner and monetise
the videos on your channel.
But what about songs that were uploaded by
someone else?
A new company called Audiam can help you
identify your songs on YouTube, place a buy ad
next to them and monetise them.
Zimbalam and some other digital distributors
propose similar services.

51. USA
In the US, the 1998 Digital Millenium Copyright
Act was voted. It allows companies to set up
internet and satellite radios, and non-interactive
streaming services without having to license the
music directly. They just have to pay the rates f
ixed by the government.

52. 20 million users
2.5 million users
70 million users
DMCA
SoundExchange is the organization that collects
the rights on behalf of record producers and
performers. It's free to register with them as a
producer and performer.
(Pandora and SiriusXM pay songwriters via
PRO's - ASCAP/BMI/SESAC)

53. ADAPT & GET ORGANISED?
As we've seen so far, for the past 200 years, we've
been adapting to new technologies and getting
organized to make the most from new
opportunities.
Today, PRO's are protecting the interests of
songwriters, the SCPP is Nghting for the labels.
And ADAMI is doing their best to help
performers.
But it's pretty everyman for himself.
So who's out there defending the rights of DIY
artists who compose, record and release music on
their own?

54. Because some are getting organized and are
adapting quickly, like Sony ATV – one of the
biggest publishers in the world, who recently
separated from ASCAP in order to negotiate for
their songwriters directly.

55. Adami sent an open letter to the French
government to plead with them to help protect
the industry from Apple and YouTube.

56. Pandora is paying lobbyists to help try and lower
the rates Nxed by the copyright board, and even
went so far as to buy a radio station in North
Dakota so they could beneNt from special internet
rates for FM radio stations.

57. In Germany, an alternative to the PRO's
(SACEM/GEMA, etc...) is currently beging set up
that would allow artists to release music under
Creative Commons licenses and collect rights for
commercial uses, which is next to impossible to
do under the current system in place.

58. ADAPT? GET ORGANISED?
.

59. Thanks!
andy@uniformmotion.net
www.uniformmotion.net