As I do at the end of each year, we take the Top 100 selling songs of the previous year and look for patterns on what’s making a song a hit. Some of our findings for this year:
The average length of a song intro continues to be 7.1 seconds long
71% of the intros in 2011 were under 10 seconds long
Over 1 out of 4 intros were zero seconds long
The average tempo for a song was 101 BPM
Despite feeling like the charts are beat driven, 54% of the top sellers were 100 BPM or less
Rather than write a lot of words, I figured it’s best to show you the rest in a very snazzy infographic, courtesy of my new friends at Killer Infographics. Enjoy!
I’m a big fan of the book The Curse Of The Mogul. Authors Jonathan A. Knee, Bruce C. Greenwald and Ava Seave discuss the historical facts of disruption on many businesses and how it relates to the modern entertainment business. One important idea is that when the walls of distribution come down, with access comes devaluation. In recent weeks, I’ve come to fully embrace this as the root cause behind artists’ displeasure at perceived royalty rates.
The first clue came in a recent Businessweek article where three anonymous music executives said the average person spends $60 a year on iTunes. Since Spotify and other subscription services charge $10 a month, this means the revenue per consumer should double. Sounds like great news for the music business. While I know that the “average” won’t literally double, let’s just go with it for the sake of this example, and keep in mind that what I’ll outline is therefore a “best case” scenario.
If the average person is spending $60 a year on iTunes, it stands to reason that they are spending it on a minimum of 4 artists (4 albums x $15 price tag for deluxe albums) and a maximum of 87 artists (87 singles x $.69 discount price). Realistically, most people will be smack in the middle having bought a couple of regular $9.99 albums and a few singles at the $1.29 premium. If narrowed down to a month, on average the most someone would spend money on is 7 artists.
But how do we know how many artists get heard on Spotify? Well, we can make an educated guess by looking at the Facebook streams of playlists. This is admittedly unscientific, but will highlight the issue nevertheless. I examined what 10 random Facebook friends of mine listened to on a variety of subscription services. They ran the gamut from one person who listened to only one album to someone who listened to over 400 songs, which included albums, singles and playlists. What I found is that the average person listened to 3 songs per artist.
Data on how much people are listening to subscription services on a monthly basis is not available enough to get an exact reliable statistic. However, looking both anecdotally online and from my own personal knowledge, the average person is likely listening to 10-15 hours a month. Using this statistic, we can deduce that people are listening to somewhere between 40 artists (120 songs (5 minute song average x 10 hours) divided by 3 songs per artist) and 100 artists (300 songs (3 minute song average x 15 hours) divided by 3 songs per artist) per month.
In an iTunes world, the average person consumes music by, at most, 7 artists a month. In a Spotify world, the average person consumes music by, at least 40 artists a month. So in the best case scenario, even though the dollar pool has increased by 2x, the number of artists the payouts are distributed to has increased by nearly 6x. Given that this is the best case scenario, the figure is almost certainly higher than that. In a dollars and cent perspective, while the average artist grossed as little as 69 cents per person in iTunes revenue, the average artist probably grosses no more than 25 cents in subscription revenue.
The reality is that the very thing that gives indie artists access to subscription distribution is what is keeping the royalty rate low for everyone. The pool to increase payouts per artists not only doesn’t exist, it CAN’T exist without raising the price of subscription to a price-prohibitive rate of $50/month or higher. The only other potential solution would be to create a service that excluded access to many artists to allow existing artists to obtain a larger chunk of the royalty pie. This would give services a gatekeeper role not unlike current physical music retailers. Many artists would certainly complain because they were kept out, but the ones that did get in would be happier with a more reasonable rate.
As a new independent label owner, I actually welcome all the artists and labels keeping themselves off Spotify. It actually allows for an opportunity for us that are on these services to command a larger slice of the royalty pie. However, don’t think of Spotify as being cheapskates. The truth is that as an unknown artist, if you want access to the big game, you must understand that until you’re popular that it comes at a (lower) price.
The insider music biz controversy this week involves the Megaupload song. This is a song created by the popular crowd file-sharing site that features some musical celebs endorsing the service. This is controversial because it’s widely known that there are often many files on the site that are pirated.
Universal Music Group (UMG) ordered YouTube to pull the video over copyright restrictions because its artists were performing on it without their permission. Megaupload claimed they had all the footage cleared and threatened to sue UMG. Recently, the video came back on YouTube after they sided with Megaupload on the ownership. Watch the video for yourself here:
Now, I’m not here to debate the ethics of Megaupload nor whether UMG overreached in their takedown relationship with YouTube. What interests me is that this may actually turn into an interesting case on sampling and at what point a sample turns into a song.
At this point, given what is known publicly, I’m going to make some assumptions that I don’t have confirmation of. It appears that Megaupload was able to get interviews with celebs including Kim Kardashian, Serena Williams and Kanye West where they endorse the site. Given the pushback that Megaupload gave to UMG, I assume that these interviewees signed artist release forms that gave the site permission to use that footage in promotional videos without further compensation. These are standard agreements for artists to sign in these situations. UMG generally has control over the usage of the artist when they are singing/performing, but not over interview footage. As such, Megaupload would likely be correct in their assertion of ownership.
However, some of the interview samples were altered to fit rhythmically and musically to the instrumental backing track. In my opinion, this would include Will.I.Am’s appearance at the beginning as well as Chris Brown, Diddy & Lil’ Jon’s appearance at the bridge. While spoken word has been altered to fit a musical composition for decades now (groundbreaking group Tackhead first comes to mind), this is the first instance I can think of where interview footage of major musical artists privately-owned by a company was altered into a musical composition. This opens up a Pandora’s box of questions:
If the broad clearances for interview footage do allow for alterations into musical compositions, might many media outlets (such as Entertainment Tonight or CNN) now be able to create songs from stars without further compensation to said stars?
If it could be determined that these sampled portions are part of the musical composition, wouldn’t the artists (Will.I.Am, etc.) be entitled to songwriting credit? As such, wouldn’t they be able to block the song since they would have to approve first use? I would doubt that Megaupload had clearance so broad to allow for blanket first use permission prior to creation of a musical composition. If the artist would receive songwriting credit, then presumably they would profit from the YouTube exploitation as well.
If these portions are indeed to be found as musical works, wouldn’t UMG’s takedown claim prove to be true as their exclusive contracts with their artists would supersede the artist’s own signature with Megaupload? If they are not musical works, can we expect a rash of altered samples of speech by musical artists to become legal for stream and sale? And if so, how would payments work given the above questions regarding songwriting credit/royalties?
Will this change the dynamic of the artist release agreements all major media outlets utilize? Will they now have to be altered to give the artists some comfort that the footage would not be used for musical compositions?
Sampling in general has been a game of testing the limits ever since it was first implemented in the music business. I’m not really taking a position either way on this issue because I get the value in both sides of the argument. What will be interesting is the outcome as I presume it will have some lasting impact on songs to follow.
I know there are many sampling and free speech experts who read this blog and have far more expertise than I do on this subject. What are your thoughts?
UPDATE (12-19-11): Today, the agreement form with Will.I.Am leaked online and can be found here. The language is typically broad and standard. While I’m not a lawyer, there is certainly reason to side with Megaupload because the language is so broad to cover all the examples mentioned above. If so, then they’ve screwed the pooch for themselves and others as now you’ll likely see many music biz pros taking a fresh look at these agreements and refusing many of these reaches. Of course, there’s a confidentiality clause that’s obviously now been breached. I would presume Will.I.Am did not do the breaching, so could that now make the agreement null and void?
The music business has changed in so many ways over the last few decades, but how much has it changed? Sometimes it’s good to look back just to see how far things have come in the last few years.
As I was cleaning up around the house, I stumbled across an old promo item from U2 that I had from many years back. It was a Solicitation Kit to convince retailers to stock their then-new Achtung Baby album on store shelves. With all the recent hype around the album’s 20th anniversary, I cracked it open to remind myself of the kit’s contents. Inside, it contained an advanced cassette of several songs, a video tape, and of the greatest interest here, the original marketing plan. There’s nothing inherently controversial in what was done to market the album 20 years ago, but there is a lot of interesting tidbits that show how much marketing has changed in the last 20 years, including:
In the last few days, chatter has grown in the indie community about pulling releases from the new (to the U.S.) music subscription service Spotify. The complaints largely stem from miniscule royalty checks at lower rates than majors receive. Spotify has responded to the complaints but that only seems to add fuel to the fire. What is the real issue?
Last week, Pandora announced their first post-IPO earnings report. They did post a loss, but they had higher revenue than Wall Street expected. This was not only good news for Wall Street, but also for artists and labels who get royalties from Pandora airplay.
It’s halfway thru 2011 and time to make my 2nd annual midyear report. This report defines a hit as a song that has sold the most downloads. I look at the Top 50 biggest selling downloads in the US as a group. This year, these Top 50 downloads accounted for nearly 89 million downloads (and nearly $115 million in gross revenue). Once again, about 1 out of every 3 paid downloads of a new song came from this list of 50 titles. The exact figure is 32.9%, which is an increase over the 32.3% from last year. In fact, having a hit is becoming increasingly important. While the overall download market has increased 11% so far over 2010, the Top 50 downloads have increased in sales at a faster rate (by 15%). The #1 selling single for the year so far is Katy Perry’s “E.T.” with 4.1 million downloads sold. That’s a 22% increase over last year’s #1 song at this time. Also, for the first time, every single title in the Top 50 downloads has sold platinum in the last 6 months.
What exactly is Klout? Klout measures your overall online influence on a scale of 1 to 100. It looks at Twitter, Facebook and the like and examines several factors. It looks at your True Reach, or how big is your engaged audience. It looks at Amplification Probability, or how likely a person on your audience will click your link. It also looks at your Network Influence, such as how often you get retweeted. All told, it can measure exactly how influential you are.
Have you ever moved 12.5 million units of anything? Music? Dollars? Grains of rice? Almost certainly not. Do you agree that this is a lot and if you were to move this many units in music, it’s a good success, right?
Last year I did an mid-year analysis of the top 50 selling songs of 2010 thus far. I found that there was an increased use of the word “I” (and its derivatives) in relation to “you”. In fact, the variations of “I” were used nearly twice as much as the variations of “you”. I didn’t really have any historical data to back up whether or not this was an increasing trend or this was somewhat normal. A couple of pop music people I talked to suggested that this was the relative standard for the past few years.
