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.

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.

I don’t actually want to quit my job at Last.fm (I do really like it) but it’s time to set new challenges and see new things. I have been in London for about eight years and been with Last.fm for four of them and now it’s time for something new.

One of the most important things in any job is that you keep learning. It is part of your pay package and if you don’t gain any knowledge you are essentially underpaid. Applying that logic I was paid extremely well for years at Last.fm: I met a lot of great people, learned about the business (and its countless issues) and saw some amazing places. Unfortunately by definition any learning curve has to flatten out so it’s time to find something where I can start at the steep end again.

Raila and I will move to North America early next year after taking some time off and spending a few months in South America. We will live in Vancouver. My last day with Last.fm will be the 2nd October 2009 – please get in touch if there is anything you need before I’m off.

It might seems a bit counter intuitive to have a radio show hosted by Last.fm since the service is all about your personalized music experience and not about us three DJs deciding what will be played. But we came up with a slightly different idea:

The two hour set will be based on the Last.fm Hype Chart as well as the music taste of the people who are attending the festival. This way the Last.fm users have indirectly decided what will be played and we only act as a filter and make sure we don’t only play Michael Jackson. To give the show a bit of a ‘geek edge’ we will be talking about Last.fm, how it works and what we are doing at the festival.

I believe we are on air from midday to 2pm on the Sunday. I wonder how many people will actually be away at that point but that will not stop us from having some fun in the studio.

If you’re going to the Big Chill this year, make sure you mark your attendance here and we might play your favourite songs. We might even give you a shout out (your Last.fm user name of course).

I was there for an event organized by the YLE (“the Finnish BBC”) called “Embracing the music – music, Internet and public service” last Friday and it was well organized, informative and a lot of fun. Often these kinds of events are exactly the opposite.

As well as taking part in a big panel discussion I did a presentation (hopefully) giving an overview of the development of digital recorded music over the recent years and where it might be heading in the future. It had the catchy title “Development of digital recorded music and the way we consume it – the past, present and future”. I even had slides (which I never do).

My talk was built on the following assumption:

Music is like a rumour:

• It will spread around and one cannot control it
• It has a creator but no owner
• It has a ‘value’ but it can’t be set by the creator

“Control” is the key term here – we lost it when we started digitizing our recorded music and started to conntect our computers to a network. Control over recorded music is something we will never get back and any effort on this is wasted energy.

There we discussed the future of music reviews anf journalism. In this very lively discussion I took the role of someone who doesn’t believe that we need ‘professionals’ that recommend music to us and who decide what is good and what isn’t. My point was that we have enough tools that allow us to find more music in a democratic way such as Last.fm.

Almost ironic to hear that from someone who is producing a radio show every week for over four years. I guess have fully excepted the fact that it’s very old fashioned and that the ‘relevance’ of my show can only go down from now on.

Many readers of my blog will be aware of all the sites below so this might be more relevant listeners of my show on Tide 96.0 in Hamburg.

First of all, if you want to discover music easily on the internet you of course need a Last.fm account. I’m scrobbling everything I listen to to my Last.fm account in order to get events and new music recommended to me automatically by the system. This is a must have.

Over the last few months Spotify has become an essential tool for many people to listen and discover music. I used to use it only to listen to tracks that I knew already but more recently I started using the the shared playlists to find new tracks – I’ve started a heute:pop:morgen collaboratice playlist, feel free to add tracks.

I’ve been talking about Peel before on here. It is basically a software that automatically goes through a bunch of mp3 blogs and finds all the mp3s for you so you can easily download and listen to them. It safes me a lot of time every week when I want to find new songs to play on my show although I still have to go through a lot of tracks that might not be suitable for heute:pop:morgen. Mp3 blogs that I check out regularly include  Captain Obvious, Music Is Art and Song By Toad.

I actually still like reading print magazines but after my subscriptions ran out (I must have had at least 10 at some point) I never renewed them. I don’t mind paying for them but having all that paper around is a bit of a inconvenience sometimes. I pick up (print) magazines when I travel but don’t read any on a regular basis any more.

As you can see, what I produce every week is a very ‘traditional’ way of recommending music: putting together 13(ish) tracks, talking about those (amonst other topics) and playing them on the radio. But as much as I enjoy creating this I also still appreciate this as a way of finding new music: the BBC shows are something I listen to on a regular basis but only after they went on air in the iPlayer or (where available) as a podcast.

What am I missing?

I will leave you with with a video from one of my favourite bands of the moment, Frightened Rabbit (found this via nomnomnom). Awesome stuff.

Frightened Rabbit “I Feel Better” from Sam Molleur on Vimeo.

“The web is home to more new music each year than was released in many previous decades. Critics say the music is mostly junk – but the same could have been said for the Web before Google made the knowledge there accessible.”

I couldn’t agree more.

With the Artist Royalty Program we wanted to solve a crucial problem. Since we started in 2002 we had licensed music from various ‘content owners’ (major and indie labels as well as digital music distribution companies), and we also paid money to collections societies all over the world. But there were certain artists and labels losing out: those who do not have access to all the above, or chose not to be part of this traditional music industry network.

The process to solve this started with two goals. First, we wanted to continue to be an effective promotional platform for all artists, a place where we could connect music makers with new fans. (Our recommendations are key to achieving this: an artist on Last.fm doesn’t have to keep reaching out to people, as our system will automatically find new music for everyone based on their existing music taste.) Secondly, we wanted to build a fair system that shared Last.fm’s revenue with those artists. In this way, as Last.fm grows, the commercial success that comes with that will be shared with all music makers, of whatever stripe.

After months of research, discussion and technical development, we launched our Artist Royalty Program at the beginning of July. From then on, artists and labels that opted into the program started accruing royalties (if their music was being played on the site, of course). Last Friday we finished the final part of this work, and have published royalty reports to all artists, and will now automatically do so every three months. And for the first time we could actually see ourselves how our royalties were being distributed between all artists and labels.

First of all, I saw something that was not surprising: there are many labels that will collect a small amount of royalties and some who collect a lot. The Long Tail never fails. Then I was looking through the labels that were the top earners and I made some interesting discoveries: there were plenty of labels in there that I had never heard of. I was surprised but equally pleased that some (what I would call niche) content owners used Last.fm to find their audience through our recommendation system, and were able to do this successfully. We have been saying for years that Last.fm can work very well for less well-known artists – since our recommendation system will find fans even for the most obscure artist – and now we have some very hard proof for that.

There are now 85,000 artists and labels collecting royalties from us directly and this number is rising steadily. And of course I want to mention: if you make music too you can join right now.