¶ Our economy relies on math. Too bad our culture doesn't value it. · 20 December 2015 listen/tech
A couple days ago The Washington Post published a plaintive T Bone Burnett lament headlined "Our culture loves music. Too bad our economy doesn’t value it."
The specific outrage that the piece builds from is this quote:
"In 2014, sales from vinyl records made more than all of the ad-supported on-demand streams on services such as YouTube."
which comes from this article at The Verge:
Vinyl sales are more valuable than ad-supported streaming in 2015
which is referring to this RIAA report:
News and Notes on 2015 Mid-Year RIAA Shipment and Revenue Statistics
But if you you read the actual report, you discover that this comparison is wildly and almost certainly deliberately misleading.
In the case of ad-supported on-demand streaming (a category which, for technical reasons, really only counts YouTube and a small part of Spotify), the report is calculating actual royalties paid to the music industry, which is sensible.
In the case of vinyl, however, the report is calculating the hypothetical total suggested retail prices of all vinyl albums shipped.
So:
- shipped, not sold
- suggested retail prices, not actual prices paid
- suggested gross prices paid to retailers, not net revenue to the music industry after taking into account wholesale prices and manufacturing and distribution costs
This comparison is insane. It's like saying that your dog is taller than you based on how tall the dog would be if it learned to walk upright on the amazing stilts you dreamed about making.
Tellingly, the RIAA does not provide any of the figures necessary to accurately correct the comparison, but my rough guess is that the vinyl figure is inflated by a factor of somewhere between 4 and 10.
A more plausible conclusion, thus, would be something like "Even amidst a crazed temporary vinyl-fetish bubble-market, 'free' ad-supported YouTube and Spotify streams actually made more money for musicians by a wide margin."
And of course this arbitrary legal streaming category excludes Pandora and other non-on-demand streaming, which added more than twice as much revenue to the music industry, and all paid-subscrition streaming like Spotify Premium, which added three times as much.
Even more glaringly, the equation also excludes paid downloading, and CDs and other physical formats. But put together, all stream/download-based music sources contributed 4 times as much actual music-industry revenue as the hypothetical total retail value of all the physically-distributed music. So by my 4-10x guess at figure inflation, this would mean that these newfangled demons from the callous musician-hating technology cabal produced somewhere between 16x and 40x as much music-industry support as the old, supposedly-musician-loving physical objects.
So while I'm not claiming that there aren't still serious systemic problems in the music economy, we're never going to fix them by letting disingenuous numbers lead us on literally counter-productive crusades against the future.
(Minor PS to Burnett: It also makes particularly bad sense to portray Taylor Swift as a defender of musicians in this specific context. When she dramatically took her music off of Spotify, which has both free and paid tiers, she left it on YouTube, which at the time had only a free tier and later changed to exactly the same free/paid model as Spotify. This might be a defensible business decision for her or her corporate backers, but there's no coherent way in which it's a moral one that has anything to do with other people.)
(PPS for anybody reading this who doesn't already know me: I work at Spotify, but this is my personal blog and these are my personal opinions. I am not directly involved in Spotify business deals or music-industry policy, but I have loved music for far, far longer than I have worked at Spotify, and I wouldn't be doing the latter if I thought it was hostile to the former.)
The specific outrage that the piece builds from is this quote:
"In 2014, sales from vinyl records made more than all of the ad-supported on-demand streams on services such as YouTube."
which comes from this article at The Verge:
Vinyl sales are more valuable than ad-supported streaming in 2015
which is referring to this RIAA report:
News and Notes on 2015 Mid-Year RIAA Shipment and Revenue Statistics
But if you you read the actual report, you discover that this comparison is wildly and almost certainly deliberately misleading.
In the case of ad-supported on-demand streaming (a category which, for technical reasons, really only counts YouTube and a small part of Spotify), the report is calculating actual royalties paid to the music industry, which is sensible.
In the case of vinyl, however, the report is calculating the hypothetical total suggested retail prices of all vinyl albums shipped.
So:
- shipped, not sold
- suggested retail prices, not actual prices paid
- suggested gross prices paid to retailers, not net revenue to the music industry after taking into account wholesale prices and manufacturing and distribution costs
This comparison is insane. It's like saying that your dog is taller than you based on how tall the dog would be if it learned to walk upright on the amazing stilts you dreamed about making.
Tellingly, the RIAA does not provide any of the figures necessary to accurately correct the comparison, but my rough guess is that the vinyl figure is inflated by a factor of somewhere between 4 and 10.
A more plausible conclusion, thus, would be something like "Even amidst a crazed temporary vinyl-fetish bubble-market, 'free' ad-supported YouTube and Spotify streams actually made more money for musicians by a wide margin."
And of course this arbitrary legal streaming category excludes Pandora and other non-on-demand streaming, which added more than twice as much revenue to the music industry, and all paid-subscrition streaming like Spotify Premium, which added three times as much.
Even more glaringly, the equation also excludes paid downloading, and CDs and other physical formats. But put together, all stream/download-based music sources contributed 4 times as much actual music-industry revenue as the hypothetical total retail value of all the physically-distributed music. So by my 4-10x guess at figure inflation, this would mean that these newfangled demons from the callous musician-hating technology cabal produced somewhere between 16x and 40x as much music-industry support as the old, supposedly-musician-loving physical objects.
So while I'm not claiming that there aren't still serious systemic problems in the music economy, we're never going to fix them by letting disingenuous numbers lead us on literally counter-productive crusades against the future.
(Minor PS to Burnett: It also makes particularly bad sense to portray Taylor Swift as a defender of musicians in this specific context. When she dramatically took her music off of Spotify, which has both free and paid tiers, she left it on YouTube, which at the time had only a free tier and later changed to exactly the same free/paid model as Spotify. This might be a defensible business decision for her or her corporate backers, but there's no coherent way in which it's a moral one that has anything to do with other people.)
(PPS for anybody reading this who doesn't already know me: I work at Spotify, but this is my personal blog and these are my personal opinions. I am not directly involved in Spotify business deals or music-industry policy, but I have loved music for far, far longer than I have worked at Spotify, and I wouldn't be doing the latter if I thought it was hostile to the former.)