Century Media Was Destined to Return to Spotify
-- Citing Spotify's promotional value and feedback from fans, metal label Century Media has returned its catalog to the on-demand subscription service. At the time, the label said Spotify's streaming royalties "accelerates the downward spiral" by disrupting traditional revenue streams. Now it sings the praises of Spotify's promotional value and the feedback it received from its fans.
So what changed? The parties have released a by-the-numbers press release and Billboard.biz had not yet talked to either side. But the various statements in the press release point to one simple factor: fans expect to access the label's music at Spotify.
And why wouldn't they expect to get access to Century Media's catalog? Nearly every other label offers its catalog at the service. Subscription services' early adopters have been spoiled by the catalogs of Napster and Rhapsody. iTunes has just about everything they want to buy. And YouTube has, well, anything and everything.
One can also assume Century Media's revenues have not taken a downward spiral. Eleven months is long enough for Century Media to assess Spotify's impact -- positive, negative or neutral -- on its sales and overall revenue. That's enough time to perform plenty of due diligence -- something Century Media president of North America Don Robertson suggests in the press release did not happen before the decision to pull the catalog.
"After practicing some due diligence, we're moving ahead confident that both the artist and the fan are being fairly served by this developing platform," Robertson stated.
Century Media's decision adds to the evidence that subscription services aren't killing overall revenues. Spotify's remaining holdouts are a minority in a record business that has overwhelmingly welcomed the access-based models that depart from the normal retail model. They can hold out for a while, but few will be able to resist the evolution. Rhapsody president Jon Irwin hit the nail on the head when he wrote, "Business arrangements that leave music fans out in the cold may be attractive for bands in the short-term, but may have long-term negative consequences."
Many well-publicized digital holdouts have acquiesced in the last year. Three of the most notable Spotify holdouts -- Coldplay's "Mylo Xyloto," Adele's "21" and the Black Keys' "El Camino" -- didn't hold out long. In addition, the Red Hot Chili Peppers finally jumped into streaming in April (in an exclusive deal with Spotify) and Bob Seger made the digital plunge last September.
A few digital holdouts remain, including Led Zeppelin, Def Leppard (except for its recent re-recorded output), Pink Floyd (except for a couple tracks), AC/DC and Metallica. Note that these artists' sales peak decades ago. A new artist, raised on YouTube and MP3s, is unlikely to have a problem with subscription services. They want to be heard where people listen to music.
A few holdouts may remain, but the winds of change aren't going to reverse. Expect opposition to subscription services to settle down in the coming months and years as people get more comfortable with a mix of revenue streams that includes both downloads and streams. Perhaps it's a generational thing. Remember, it wasn't so many years ago that most artists refused to license songs for commercials. Today's generation of artists are accepting of licensing's place in the music business.
There's one event that will get artists riled up again: people are sure to freak out if and when Spotify goes public or is acquired. The major labels have equity in Spotify and aren't likely to split the proceeds with the artists whose catalogs they leveraged to get those equity stakes. Many artists are already unhappy that labels do not share with artists their cash settlements from copyright infringements lawsuits. Their consternation would increase a few notches if labels kept the proceeds from a sale of IPO.
( Century Media, via Music Ally)
Why Do Australians Pay More for Music Downloads?
-- Australian legislators are asking why downloads and other digital goods cost more in Australia than other countries. In the world's sixth-largest music market, consumers pay between $21.45 (US $22.53) and $21.90 (US $23.00) for a download of Lady Gaga's "Born This Way," according to an Australian government submission. The album currently costs $7.99 for the regular version and $15.99 for the deluxe version at iTunes U.S.
The Australasian Performing Rights Association (APRA) and Australasian Mechanical Copyright Owners Society (AMCOS) have argued their licensing fees are not the reason Australians pay more than most other countries. "Our license fee… is the same or around about the same as it is in overseas territories," said Richard Mallett, APRA and AMCOS director of revenue, during a hearing. "There are a range of differences why the prices could be different, but I don't know why they are."
Consumer group Choice blamed "international price discrimination." Choice has found that Australians pay 52% more than U.S. consumers for songs in iTunes' top 50. The group dismisses the notion that sales taxes, warranties and other factors play much a role.
More on this as it develops.