Netflix vs. Spotify

Once upon a time television was like radio, something you received over the air for free via an antenna. But in the eighties, TV moved to a subscription model, people paid for cable, for a better picture and more and better programming. So, customers became inured to paying a subscription fee, every month, in perpetuity. And they still do, despite all the hoopla about cord-cutting, the truth is you're paying for access, whether it be with the cable company of yore or via FiOS or LTE wireless, all of which you pay for each and every month.

And then came home video. Initially an ownership market, it didn't burgeon until it was turned into a rental market, which flourished until it became a dirt cheap ownership market which threw off tons of cash, then Netflix brought back rental and then went streaming and the cash cow ownership model crashed.

Music was always about an ownership model. And this was resented by consumers when DVD prices dove down to nothing and included all the music on the CD for a lower price than the music only disc.

And then the internet hit. All media were unprepared. And music was affected first, because of the small size of the files. But TV learned and created Hulu and Netflix flipped its model to streaming, which, if you remember, customers hated, but have now embraced. Furthermore, streaming is cheaper than all its predecessors, and it's all you can eat.

In music, we stayed with the sales model deep into the twenty first century, way too late, with the iTunes Store. We broke out the single from the album, Steve Jobs tried to keep the prices low, but the labels lobbied for an increase, which they finally got, driving their enterprise right towards the cliff when YouTube emerged.

There was no viable alternative. Yes, Rhapsody existed, but most people had no idea what it was, and unlike in TV/movies, people were not in the habit of paying a subscription fee, which they'd already been doing in visual media for decades. So with no viable alternative, the youngsters, who are cheap and have loads of time, flocked to YouTube, which the rights holders eventually monetized.

Now visual creators and actors get paid in the new streaming era, just not much. The rights holders bundle their products and license them to distributors. Actors and writers agitate, even go on strike, but it's seen as a battle between them and the studios, not them and the distributors.

But it's different in music. Because despite hefty advances, artists got royalties, which were frequently a laugh in visual entertainment, owed, but not paid.

Now visual entertainment is screwed because it believes it's ahead of the game, believes it's got it all figured out, when the truth is you need multiple subscriptions to get everything you want and as a result piracy is rampant. In music, one subscription will get you everything, so piracy has tanked. But in both worlds, streaming rules. It's just that ownership fell by the wayside eons ago in visual entertainment.

Also, visual entertainment is still holding on to windows, it's still trying to figure out how to replace DVD sales revenue, never mind make its nut via streaming income, whereas windows are passe in music, but the reduction in income...creators are still bitching about that.

But consumers don't care. They're in heaven. And they're never going back to the old ways.

So where does this leave musicians?

Believing that the barrier to entry is so low, the ability to get your stuff streamed so easy, that they should all be millionaires, not realizing consumers have very little time and infinite choice and they probably won't choose you but the hits.

Whereas in visual entertainment, the hobbyist doesn't believe his productions should be offered on Hulu or Netflix. And doesn't believe he should make bank on YouTube unless he's got millions of plays.

The song remains the same. If you're popular, if you've got leverage, you'll make money. Actually, popularity now rules because of the suddenly seen metrics, no one with 1,000 plays is bitching they're not getting rich off of YouTube, but somehow people with the same number of streams on Spotify believe they should.

So what we've learned is that access has won. And in this case, TV preceded music by nearly two decades, it trained people to pay, every month. Furthermore, the public was weaned from ownership by insanely low rentals, like Redbox, and nearly as cheap streaming. This is the future of music too.

So music has to train its audience to pay. It was blindsided by YouTube, which has become the music destination of choice. Blame the labels, who didn't license Spotify, et al, earlier, forcing Spotify and its clones to offer free subscriptions just to get people to try them out, because YouTube is free.

But movies were never free. There did not need to be a free Netflix. The only thing the visual purveyors are fighting is piracy, which is incredibly significant, but convenience is helping them, because you can watch so much instantly, at your fingertips, on all your devices.

Yet in music, the makers abhor convenience. They trumpet CDs and vinyl. They insist people listen to the album when they don't want to. They're pushing the ball uphill, they're fighting their own best interests.

So get with the program. Know that streaming has won and the goal is to get everybody to pay for a subscription and that winners will be paid handsomely and losers should just thank their lucky stars that they're able to play.

And, now that visual entertainment is everywhere, along with video games, it's incumbent upon musicians to make art that trumps its competitors, that is better than "Homeland" and the rest of the cable shows.

That's quite a challenge, but I know you're up to it.

Some of you.


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