Music streaming services are a great way for fans to access, consume and discover music on the Internet. They also offer bands and labels great ways to get discovered, build a fan-base, and, for some, there is even some money to be made. Unfortunately there are many misunderstandings about the different services on the Internet and this post will (hopefully) clear up some of the questions that Bandzoogle members, and other DIY musicians and indie labels might have.

So, what exactly are “streaming services”?

The “ownership” of music has become less relevant over the last years. Many people (myself included) don’t feel they need to own any CDs, vinyl records and mp3s if most music is available on the Internet to listen to. Ownership results in maintenance and responsibilities: we have to clean records and make sure they don’t get damaged. We have to back up our mp3 collection and make sure we keep the format up to date (who knows if mp3 as a format will still be relevant in five years ?).

A great alternative to the above is using a music streaming service to access music. The files are stored “in the cloud” and we only access them through the Internet as opposed to owning them. Typically, you will not pay every time you listen to a track but you will pay a subscription fee, or there will be advertising that you will be exposed to in order to listen to the music for free.

What is important to understand (and this is where it gets tricky) is that there are basically two types of services: “radio” and “on-demand” streaming.

The “radio” option is borrowing its name from a technology it has little to do with, but it refers to the fact that it’s more of a hands-off experience. A “radio” streaming service will play a music selection that you cannot directly decide. You might chose a genre or an artist you like and tracks will be streamed to you that are similar to what you have selected. It’s a music discovery experience to help finding new music based on what you already like. The only influence on what you will hear is that you might be able to skip or rate what you are listening to (helps the service personalize your playlist) but you will not be able to decide exactly what is playing next. Streaming services like Pandora and Last.fm fall under category “radio”.

“On-demand” streaming is a more active music listening experience where the listener can directly decide on what they want to listen to. It feels and often looks like an online jukebox where you can listen to specific tracks, whole albums or build playlists.  These kind of offerings can really replace a CD collection: if the service has all the music that you like there is no need to own the recordings any more. Spotify, Rdio, Rhapsody, and MOG are examples of an “on-demand” streaming service.

The reason why it’s very important to understand the difference between those two types of services is that the licensing and royalties structure work very differently in each one. Without going in too much details, a “radio” service would only pay a fraction of the royalties an “on-demand” service is paying, due to the different type of music consumption in each service. Also, a “radio” service might pay the royalties to a collection society (such as SoundExchange in the US) and an “on-demand” service might pay steaming royalties directly to the artist or label. All this also depends on the country the service is operating in. And that explains why some services are not available in countries where agreements are not in place. Confusing, I know.

As an artist, how can my music get on one of the streaming services?

Just like traditional record shops, most streaming services don’t deal with artists or smaller labels directly.  This is because very small teams run those companies and they do not have the resources to deal with thousands of artists every day. There are some companies out there that might be able to help you get on some of the streaming services; ReverbNation, CD Baby, Ditto Music and Tunecore are popular with DIY musicians, and companies like IODA, The Orchard and IRIS deal mainly with independent labels. Keep in mind that they might not be able to get you on all the different streaming services.

Is it really worth it that I add my music to those services?

There have been many discussions on the web about the amount of money that is paid out to artists by streaming services and those numbers seem to be low. But they aren’t. Every one of the big streaming services (certainly the ones mentioned above) are paying out millions of dollars every year to the music industry. There are a lot of misleading articles out there (such as this one) that make it look like the money paid out is very small. But, I like to make the comparison between traditional FM radio stations and streaming services: the digital services pay out much more to artists and labels per listener than the FM equivalents – and in the U.S. the FM stations are not paying anything to the artists (only to songwriters).

One thing I hear a lot is that music streams might cannibalize sales of music and therefore some artists are understandably hesitant to make their work available for streaming. I have not yet seen any hard evidence that anyone sells less music because fans were able to stream their music. In fact, music streaming is a great way to promote some of the products that cannot be digitally delivered through the Internet such as tickets to gigs, merchandise or limited edition premium CDs/LPs.

So should your music be available for streaming? I think every artist should make sure their music is available on the new services. Other than the fact that there is ultimately some money to be made, there is a much more important argument: your music has to be where the fans are so the “old” music industry don’t even have the choice to fight this development and progress. The days where artists and labels can control the music and decide where fans will find and consume it are over. This might not always be advantageous for the musicians, from an artistic or financial point-of-view, but fighting this development is not only hugely frustrating but also a waste of time. Every musician is an entrepreneur, and part of that means you have to understand your market and be reactive to changes quickly.

Looking forward to feedback and questions: feel free to leave comments here or contact me on Twitter or my blog.

One area that is highly interesting from my point of view are ‘music delivery services’. That’s what I call sites and services that can deliver recorded music to me, may as be as a permanent download or as a stream. Also, looking from it from an North American angle, I wanted to see what is happening on this side of the world. As I posted before, unfortunately most of the excitement in terms of digital music is not happening in Canada so my Ace VPN account came in very handy when I needed to pretend to the in the US to access the American services.

Even though there are a lot of new on-demand streaming services starting right now it seems like almost none of them are actually doing anything differently: many of them are web-based and offer mobile apps, cost $10 per months with a three day free trial, and you can stream as many tracks as you want on-demand. I understand that most of those features and mechanisms are actually dictated by the record labels which is a sad development: having ‘suppliers’ decide on business models will never encourage innovation and creativity which is what the industry needs more than anything.

If exciting, disrupting, user-friendly and useful are the criteria then I really want to mention three ‘music delivery services’ in this post:

1. Playdar

I’m not going to pretent that I fully understand what Playdar could do but I love what I can see so far. They call it a ‘Music Content Resolver’ which means that Playdar is a technology that can find music for you, may it be on your computer, your local network or on other music services.

The key is that Playdar is an open-source technology and anyone can either use Playdar to find and stream music within their application or build plug-ins so Playdar can find music in new places. Playdar is neither useful or user-friendly at this point but Richard Jones (Last.fm co-founder and one of the guys who started Playdar) told me that there should be a desktop application soon.

2. ExtensionFM

I love mp3 blogs and there are a quite a few I’d like to check on a regular basis. Call me lazy but I just can’t check 20+ sites every week to see if there is anything new on there that I might like. Also, I will have to download it all and add it to my iTunes. Oh, and of course having to listen to it as well.

ExtensionFM is a great solution for this. It’s a Chrome plug-in that automatically adds mp3s that are available from websites you select to your ExtensionFM library. It then checks on a regular basis if there are new mp3s available from these sites and you can listen to then straight in your browser. Just like the HypeMachine it does not allow you to download the tracks but you can go to the actual mp3 blogs later and download the mp3 from there.

ExtensionFM does something similar to Peel which I have written about on here before. What I like about ExtensionFM is that it’s all happening in the ‘cloud’ and there is no need for me to download anything. I’m desperately trying to move away from having any files on my computer and this is another step toward my cloud based entertainment world.

ExtensionFM is certainly a disrupting concept; record labels as well as mp3 blogs will potentially not agree with the way ExtensionFM finds content and streams it.

3. Spotify

I will not write a blog post about Spotify, there are enough out there. We can’t really call Spotify exciting any more but it’s the most useful and user-friendly music services out there;  I now use it almost exclusively for my music consumption needs. A UK credit card and £10 per month make it possible. If you have access to those two things then you should subscribe to Spotify right now.

Just like there is no lack of music fans in Canada there is no shortage of talented programmers and entrepreneurs – other digital businesses (e.g. games, advertising, movies) seem to be quite healthy. Companies like Pandora, Spotify, MOG and Rhapsody however have never launched their service in Canada and others like Last.fm only have a limited service in the second largest country in the world. Also, looking at the new players that have seen some hype recently (such as mFlow, Thumbplay and rdio) have not announced any plans for a Canadian launch.

After speaking to a range of people about the lack of access to legal digital music in Canada there seem to be different explanations:

1. Licensing difficulties (1) – it is complex and expensive to license content from record labels for Canada

I find that hard to believe. When licensing reordings from labels or aggregators you will often strike multi-territory deals so there is not a lot of additional work needed when including Canada as a territory as part of a launch (for example) in the US. However, depending on the label, you might not be able to license content for all of North America under one deal but you have to go through two offices. There might be one department dealing with the US and one with the Rest of World.

Nevertheless, when launching an international music service it shouldn’t be too hard to include Canada as a territory from a label licensing point of view.

2. Licensing difficulties (2) – getting publishing rights is a nightmare

Yes it is. But it is everywhere. At least in Canada there is only one collection society dealing with the rights of the music composers whereby in the US you have to go to a bunch. In Europe you will (normally) still have to deal with a different organization in each country which is slowly changing so pan-European licensing should be easily possible at some point.

3. Canadian copyright law is in limbo

Whereby this is true it shouldn’t stop anyone from launching a music service in Canada. Without wanting to go in too much detail this is the deal: many people say that the Canadian copyright  law is outdated and needs modernisation. This was suppose to happen for years but whenever there is a new government the proposed changes are being put ‘on hold’ (read: ‘thrown away’).

The international music community is actually quite upset about the lack of movement in Canadian copyright law calling it a “major source of the world’s [music] piracy problem” (IFPI). Ouch.

Again, this should not stop anyone to launch a digital music company in Canada since the changes in copyright law are unlikely to affect consumer facing music delivery services.

4. Canada is too small to make an investment like starting a music service worth-while

This is probably the excuse I hear most often: It seems that companies feel their investment will not be returned because the music market in Canada is too small. And starting a music service is a rather big investment with the largest cost being music licensing.

I think this is a fair argument but doesn’t explain why services are being launched in the smaller countries in Europe (just one example here). So starting up a service in an English speaking country that has a similar music taste to its big neighbour shouldn’t be so hard then, right? After all, Canada is the seventh biggest music market in the world (2005).

‘Big neighbour’ are two very important words here. It’s a psychological issue that the US (population: 309m) is so big and suddenly makes Canada (population 34m)seem so small. Living here now for a few months I can see that Canada has a complex about being the ‘small neighbour’ and everything has to be compared with the US. And of course everyone has to agree that when it comes to starting any business, given the choice, one would have to go to the US as the market is simply larger.

But this is not what it’s about: Canada needs digital music companies that have already proven success in other big territories to launch locally or alternatively a new breed of Canadian companies that can move music fans away from unlicensed music usage.

Photo: EliB

The recording industry has always been more obsessive about metrics than other entertainment areas: music charts have been a vital tool not only to measure success of songs and albums but also to act as a marketing tool for record sales.

Over the last few years we see a lot of new services that focus their business on collecting and aggregating more accurate and detailed music data. The internet has enabled those services to get access to richer data sets than the pre-web sales driven charts such as popularity and discussion around artists.

In the second OpenMusicMedia NYC we want to discuss how those companies can (or maybe cannot) help the music industry to make better decision. Questions we want to address include:

• How important is more detailed data for the music industry?
• Does an obsession with numbers and statistics stop companies from taking risks and therefore stop innovation?
• Collecting data from different websites and displaying those seems straight forward – but what about interpreting them?

We have invited Alex White from Next Big Sound to lead the conversation and guide us through some of the issues of music related data aggregation. As always, this will not be a presentation but an open conversation between everyone in the room with Alex leading what could almost be called a round table discussion.

Moderating for the event will be Jonas Woost, co-founder of OpenMusicMedia as well as the former Head of Music at Last.fm. Jonas joins us from from his new home in Vancouver, where he is setting up a media consultancy business. Our co-moderator is Steve Savoca, global head of digital business for Domino Records and producer of OpenMusicMedia NYC.

We will meet on the 7th July at reRun and the event is free and open to everyone. However we would appreciate if you could RSVP on our facebook page. We look forward to seeing you there!

OpenMusicMedia NYC
Wednesday, July 7
at reRun (part of reBar, 147 Front St, 2nd Fl in DUMBO, 11201, New York, NY)
7-9 PM
Map: http://bit.ly/9VqMoh

Please RSVP on our facebook group.

The event is organized by Generator and Evolution 2010 and I will be joined on stage by Ben Perreau (Global Radio/Gigulate) and Paul Campell (Amazing Radio) on the 24th May.

When I was on the phone today with our moderator Russ Conway I was reminded again of the gap in our terminology: we keep using the word ‘radio’ when we speak of services such as Last.fm and Pandora. The truth is that they have very little to do with the original ‘one-to-many’ broadcasting service called radio but we don’t seem to have a better term. ‘Personalized Streaming Music Service’ just doen’t sound very neat.

And something became clear today: I’ll probably have to get used to the fact that people will call me a ‘former Last.fm-er’. I noticed that’s the case with many of the guys that left Last.fm and I now often catch myself introducing myself as the former Head of Music. It just makes it easier for other people to understand what I’m all about even though we are more than the name of our old employer.

As a co-founder of OpenMusicMedia I certainly wanted to see what the guys in Toronto are doing with the idea since I knew they had some good events last year. What I didn’t expect is that they would invited me to lead the conversation is the next OpenMusicMedia Toronto event which will take place on the 12th May.

Our conversation will focus on location based music services and we’ll discuss if those are necessary for the industry as well as music fans. The idea started with me thinking that 15 years ago a lot of the music discovery and consumption happened on a local level: we would find new music on local radio station, in the local record shops or through friends we hang out and go to gigs with. With the Internet things became very global and now we can explore music from all over the world and we are not bound to our local areas.

More recently we see the success of services and websites that are focusing on your area (Foursquare being just one example) and in our next OpenMusicMedia session in Toronto we want to discuss what this means for the music industry. Do we need more ‘local music services’? What role will local radio stations have in the future? After the closure of many local record store around the world will we they see their comeback over the next few years?

As always with OpenMusicMedia, I will not answer those questions but only act as a moderator for a big discussion in an informal setting. If you’re around it’d be great to see you there.

I haven’t had an iPhone/Blackberry for four months and of course haven’t been working. But I also haven’t produced a radio show (in fact have hardly listened to any new music), haven’t been involved with the new OpenMusicMedia events and haven’t even been blogging.

I spent the last four months in South America with Raila and feel truely relaxed – in fact I’m surprised how easy it was to disconnect from my life in London. We are moving to Canada soon so I have been ‘homeless’ since we left and all my belongings boil down to a 15kg Deuter backpack. I have two pairs of trousers and two jumpers.

Nevertheless (or perhaps because of all this) I look forward to getting back into something you can call a ‘normal routine’. And for me this routine will start with something fun:

I’m moderating a panel at SXSW in Austin this year, the topic of our discussion is ‘how will we listen to music in 2020‘. I will be joined on stage on the 17th March by Alexander Ljung (SoundCloud), Ben Perreau (Gigulate) and Steve Savoca (Domino). With such speakers this should be an intersting talk, if there is anything specifically you want to see discussed, feel free to post a comment here.

If you are at SXSW as well please let me know, would be good to meet you there: jonas(at)jonaswoost(dot)com.

PS: if you’re more intersted in my time off rather than SXSW you can find some pictures here and you can follow me on twitter here.

After months of trying to get this nailed down we are very pleased to announce that Joi Ito will be in London and joining us to lead the conversation at the next OpenMusicMedia! Joi is the CEO of Creative Commons so make sure you clear your diaries for 17th September for what looks set to be a great session.

Most of you will probably have heard of Creative Commons already, but we think that it’s a topic that is not discussed enough by a music industry that has traditionally built its business around a different view of copyright. There’s lots to discuss and we’ll only have one evening, but here are just a few of issues that we’d like to talk about:

• What role does Creative Commons have to play within the music industry?
• Does CC mean we are just giving away our music for free and no one makes any money?
• The existing licensing structure for the music industry has been working for so many years, is CC just making it more complex?

As always we want you to get involved as much as possible in the conversation – before, during & after. We’ll be meeting at around 6pm and the talk will start at 7pm, usually lasting around an hour. We strongly recommend that you stick around after as often the best part of the conversation happens over a beer or two.

The event is free and open to everyone but please RSVP on Facebook to help us working out how many people will attend. Please note that we expect this to be a busy night so we recommend arriving early in order to find a seat. If you’re late we can’t guarantee entry. Leave a comment below or contact us on Twitter if you have any questions.

Thursday, 17th September 2009
6:00 PM

William IV

7 Shepherdess Walk
London, EnglandN1 7QE
(Yahoo! Maps, Google Maps)

Fortunately I was able to participate at least in one way: I took part in their Politalk48 session which is basically a panel of experts who discuss a topic via email over a period of 48 hours. The results are then published on the TransmitNow website for anyone to read. The topic was “Next Generation Leadership” and the outcome can be found here.

Looking into the past is vital but also fairly easy. The future is the tricky one and for some the most fascinating: I want to find out how we will consume recorded music in 10 years from now but to find some good answers I might need some help.

This is how I came up with my idea for a panel at SXSW next year in Austin. As you might know, they encourage people to come up with ideas for a panel or presentation and post them on their website for anyone to vote on.

Of course you guessed it by now: please vote for my panel suggestion at the SXSW 2010 Panelpicker. You can see from my description on there what I’m trying to do. Also, please suggest people that should be on that panel by posting a comment here or on the Panelpicker. Maybe I won’t be the only one that’s trying to promote themselves.