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Streaming vs. digital radio: Should they be the same per track play?

Photograph of the blog post author, Mary Woodcock

Mary Woodcock

9.7.2014

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This following royalty statement has been released by Grammy nominated Artist, Armen Chakmakian sharing his royalty statements. His main point states that his royalty payments for his track plays on streaming services (e.g. Spotify) should equal the digital radio royalty payments per track play. These however are two quite different situations. I’d like to dig a little deeper into those figures to explain…

A discussion point brought up by Armen is the statement that the digital royalty streams for one play is much more than the royalties paid out for one stream on streaming services such as Spotify. I challenge this point as when your music is being exposed by the radio, you’re not just reaching out to one listener but potentially thousands as opposed to streaming on websites such as Spotify, where you are most likely just being listened to by one user at a time. This is important to consider when comparing the two and also in relation to the business model of streaming services, the company are already in a loss and for streaming rates to match digital radio rates per play would possibly be unmanageable`.   The real question should be aimed at labels in relation to how much of the royalties that artists get of streaming plays which is a negotiation between labels & artists themselves, not streaming services.

It also worth pointing out that the actual amount of track plays in the world of streaming for this artist are not too great in number. This is not down to Spotify as a service for example; this is down to the marketing of the individual track(s) themselves.

Another point I’ve seen other the past week is that of George Ergatoudis. With the music industry rapidly changing George Ergatoudis,Radio 1,predicts that ‘Playlists will be the new albums. He states “There will still be some amazing artists recording amazing albums, but I think the number of artists that are selling albums, honestly, at a mass market level is already small and it’s going to stay very small.” he said.

This brings up an interesting point in that more music consumers are listening to music on a track by track basis as opposed to streaming full albums. This suggests that marketing of individual tracks should be emphasized as opposed to albums. In a playlist in particular this may be a collection of songs from one artist or a mixture of different artists but aimed at promoting individual tracks of an album better. For example a technique could also be to include different tracks from an album in different playlists based on genre/mood of a particular playlist meaning each track is hitting different yet targeted music consumers for each individual track which in turn would promote the album itself.  The album itself will stay but the promotion of the album through streaming services may change to this approach.

In conclusion, I would state that it is worth considering a) the amount of listeners for each track play b) the popularity of each track itself c) how to market that track through streaming services.

What are your thoughts on this? I’d be interested to discuss this in the comments below!


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