To engage enough fans to make money, music artists today are forced to spread their work across several different services, which means they lack unified data about interested listeners. But Spotify’s new partnerships with Topspin, Next Big Sound, and Songkick could tilt the music industry—both publishing and distribution—away from the record companies and other music services.
With a unified analytics platform, Spotify hopes to offer three things to artists. First, it's a way to see who their listeners are and possibly how they became listeners—that's what they gain from the partnership with music analytics and data company Next Big Sound. Secondly, the new service will allow artists to go beyond selling just music and offer other items like concert merchandise for sale through the web using Topspin, a company that helps connect artists to their fans. Lastly, via the Songkick partnership, come direct ticket sales. It's exactly the type of thing we recommended Spotify do to placate artists after Thom Yorke's anti-streaming outburst this summer.
By comparison, iTunes is still a black box for artists. Today, an independent musician has to sign up for a third-party service to get music into the iTunes store, and then if anyone buys the music, they only get a simple payout report—no data, no segmentation, nothing. Apple helped kill the old distribution networks for independent music, but it hasn’t yet figured out how to take these independent artists to the next level by empowering them as small business people.
Spotify is not without competitors, however. Beats' streaming music service will reportedly launch in early 2014 and with Trent Reznor helping to craft the service, so you can bet there will be plenty of focus on treating artists fairly. YouTube is already the place to find free music, but rumors and hints indicate the service will officially join the streaming music game soon as well. There’s also existing services like Deezer, which will be coming to the U.S. in 2014, and Rdio, which cut staff and brought in a new CEO in an attempt to refocus. All the movement suggests this is a turning point for digital music and its relationship with those actually creating the music, rather than any rights holders removed from a musician’s hardships.
Part of this transition also means there needs to be more transparency. Spotify has revealed how its payout system works, something it had kept vague up until now. Based on the information and charts provided it does appear Spotify is competitive against other new models like YouTube’s ads, but streaming still isn’t set up to create a middle-class music economy for independent musicians. This has caused a lot of artists to seek out music licensing which can help add additional funds beyond direct sales.
The frustration that artists feel toward iTunes is similar to what other creatives—namely, developers—have with the App Store. The lack of information provided to sellers is by far one of the biggest complaints with Apple’s digital stores. No one knows how people found their content, what they searched for, or even where it’s being featured, unless you find it on your own. Not knowing some of this trivial data hinders growth and being able to fully re-evaluate the direction of your app or album. If Apple doesn’t make some changes to its user data policy, the huge number of songs in its music catalog will not be enough to keep musicians and other content publishers around.