5 Beloved Websites That Are Ruining the Music Industry

The advent of music streaming is essentially a plague on the industry, a cutpurse on the level of Napster.
5 Beloved Websites That Are Ruining the Music Industry

You may have heard the recent big news that Apple bought Beats Music for billions of dollars, which illustrates the growing trend of gigantic corporations trying to squeeze into a spot on the burgeoning streaming music scene. (The Beats deal has also fueled conspiracy theories that Dr. Dre is a sleeper agent in Suge Knight's long-simmering scheme to roll Apple into Death Row Records.)

But here's something you may not realize: The advent of music streaming is essentially a plague on the industry, a cutpurse on the level of Napster. The increasing popularity of music streaming services is almost guaranteeing that, 10 years from now, there will only be five or six bands left who can afford to keep making music, and they are the five or six bands that you are already tired of hearing.

YouTube Is Bullying Indie Labels Into Getting Their Way, or They're Gone

For most of us on the Internet, the music we stream comes entirely from YouTube, because it's easier than signing up for a music streaming service and nobody wants to admit to paying full price for "Tarzan Boy." Google wants to take advantage of that, because as they have spent the past year taking great pains to demonstrate to us, ruining YouTube is at the very top of their list of priorities.

You Tube 000148 3

"Man, all of YouTube's showing that drunken tadpole movie again."

For the last few months, Google's been hinting at the possibility of starting their own subscription music streaming service through YouTube. This was all but confirmed a week ago, when a contract between YouTube and various music labels was leaked. Among other things, the contract states that YouTube will have set royalty agreements with independent and major labels, but if a major label suddenly agrees to a lower royalty rate, YouTube has the right to force the indie labels to agree to the same rate. And as anyone who knows the difference between a family-owned drugstore and Walmart can tell you, major corporations can afford to sell their products for way less than smaller businesses that have to decide whether to pay their rent or their phone bill on a month-to-month basis.

5 Beloved Websites That Are Ruining the Music Industry
Maria Pavlova/iStock/Getty Images

"Nana is expecting a 75th birthday call. She's getting a 75th birthday call."

Several independent labels are reluctant to sign the contract, so YouTube has decided to flex the organized-crime muscle that suddenly clamping down on a decade-old free streaming service affords them by threatening to take down all of the videos of every label that refuses to sign with them. This means that potentially 5 percent of music videos will completely disappear from YouTube, which doesn't sound like a lot until you consider that the remaining 95 percent are videos from artists you are tired of hearing. And we aren't just referring to justifiably unsigned artists with banjos and electric harmonicas -- we're talking about all independent record labels, which represent artists like Adele, Arctic Monkeys, and Radiohead, as well as countless others you may never get a chance to care about.

Vevo can't be counted on to pick up the impending slack, because Vevo could very well be sold off to god-knows-which corporation that couldn't give half of a gnome penis about whether the general public ever gets to hear new artists. We may well be doomed to a generation of nothing but Rascal Flatts Greatest Hits albums and experimental records from Miley Cyrus, since those will be the only acts who can afford to keep their music distributed to a wide audience.

Music Videos Will Get Retroactive Ad Placement

Music streaming is making it really fucking hard for bands (and their Dickensian orphanage-baron labels) to make any money. Contrary to popular belief, it is impossible to continuously produce any kind of content without getting paid for it, because people have an annoying habit of needing to be able to pay for food and lodging. This hardship has given birth to companies like MirriAd, which specializes in retroactively squeezing ads into your favorite music videos with all the subtlety of a tyrannosaurus substitute teaching at an elementary school in Ohio:


"Can you change their instruments to controllers, too?"

They've been in the game of stapling ads to flat surfaces in pre-existing video content since the prehistoric era of 2012, but last month they announced a partnership with record labels to help them monetize their music videos. For example, check out the video for Aloe Blacc's "The Man," which originally featured a woman walking down the street with nuclear levels of swag:

5 Beloved Websites That Are Ruining the Music Industry
Interscope Records

MirriAd decided to blow our minds by asking, "What if the same woman was walking down the street while totally ignoring a Levi's billboard?"

Interscope Records

"Victoria's Secret was the original sponsor, but our pants-deleting technology isn't there yet."

MirriAd calls itself marketing for the "skip generation" (possible slogan: "We create ads for burgeoning criminals who refuse to watch ads and demand all of their entertainment be delivered free of charge"), and considering its partnership with Vevo, we can probably expect a lot more ludicrous product placement retroactively glued into our favorite videos.

Subscribing to Amazon for Their Newly Launched Music Stream Will Get You Nothing but Old Songs

Last month, Amazon.com announced its latest foray into an industry it has nothing to do with: Amazon Music. In exchange for subscribing to Amazon Prime at the moderately offensive price of $99 per year, you can now experience Amazon Music's ad-free music streaming service, giving you access to millions of songs that nobody would ever want to listen to.

5 Beloved Websites That Are Ruining the Music Industry

"Ad-free ... because all the sponsors laughed at our selection, but still ..."

You see, while Amazon Music may be an extremely convenient service for everyone who already has a Prime account to save on shipping for all the old Transformers and VHS porn they order on a weekly basis, when compared to other music streaming services, it's less like actual competition and more like an online version of being stuck at your parents' house with nothing but their old record collection to listen to. That's because Amazon Music doesn't offer anything current -- any songs from the last six months are missing from their service. Nine of the top 10 current Billboard hits are as absent from Amazon as J.K. Rowling's next book. Overall, they have a measly 1 million songs, as compared to the 20 million accessible on Spotify, which is sort of like driving an ice cream truck past Willy Wonka's chocolate factory.

Online Radio Is Set Up to Fail if It Gets Too Popular, So Don't Tell Your Friends About Your New Favorite Station

For everyone who's moved on from the angry thug fart that is YouTube, there are the real music streaming services, such as Spotify, Pandora, and Beats Music. Spotify is the biggest of all, currently claiming 10 million subscribed users all listening to the same computer-generated iPod shuffle as you. So what's the problem? Well, these independent online radio stations can only go so far until they collapse under their own streaming weight.

Let's take East Village Radio, or EVR, as an example. Since 2003, EVR has been slowly gaining in popularity as the premier place for upcoming artists to be discovered, playing decent music you've never heard while broadcasting interviews with the artists of said music, instead of playing Katy Perry's latest bubblegum-pop breast exercise or the soundtrack to whatever animal Lady Gaga decided to wear this month. As an online radio station that began with two guys in a stuffy room and grew to over a million listeners, it's the prototypical Internet success story.

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Erica Berger/Fast Company

"We did it without boobs or cats. They called us crazy."

Except online radio stations aren't like iPhone apps or even regular websites -- for every added listener comes an increase in the royalty fees they have to pay to each record label whose artists they play on their station. You see, Internet radio has to pay more fees than regular radio stations, for reasons that no one has yet to adequately explain. Entities like SoundExchange (an organization that exists entirely for the purpose of collecting royalties on behalf of artists and their labels) require 23 cents for every 100 listeners. Despite making more money in 2014 than in any year previous, EVR simply couldn't afford the royalty fees incurred by their massive audience. In an industry that depends on music reaching the maximum number of listeners possible, they were too successful.

The FCC has been looking into the issue (despite being an organization that randomly declared that they owned the air 100 years ago and have been dictating how we consume content ever since), but EVR was so pessimistic about the FCC's progress that they decided to give up. It's the American dream at work.

Erica Berger/Fast Company

"Hopefully, this whole FCC-siding-with-corporations-on-Internet-issues thing is a one-off."

Musicians Are Making the Worst Money They've Ever Made Thanks to Music Streaming

It's no secret that most musicians are as broke as a yard sale Game Gear. Justin Bieber and Kanye West represent the insurmountably tiny 1 percent of the recording industry -- virtually every other recording artist out there is struggling to pay their rent and is routinely expected to play shows in terrible dive bars for absolutely free, because the knowledge that you're getting your music out into the world should be more than enough to tide you over until your student loan deferment kicks in and allows you to purchase food. Keeping that in mind, consider this hard truth: Music streaming, while ostensibly fantastic for the listener, makes earning a living as a musician a thousand times more impossible.

5 Beloved Websites That Are Ruining the Music Industry
Maria Pavlova/iStock/Getty Images

"Pop-pop is expecting a 77th birthday call ... he's getting a birthday card made from an old McDonald's bag."

Over the first few months of this year, digital downloads from services like iTunes have been dying almost as quickly as Tom Cruise's exceptional spy team in the first Mission: Impossible movie, with a 13 percent drop in digital sales from last year. Streaming, on the other hand, has gone from 25.44 billion streams in the first quarter of 2013 to nearly 35 billion streams in the first quarter of 2014. And the problem with everyone moving to music streaming is that while billions of people may be listening to their music, artists are now enjoying the fruits of billions of people not paying to listen to their music.

For example, Grammy-nominated artist Armen Chakmakian demonstrated in a recent article that 14,227 streams of his music have generated him a sum total of $4.20, which isn't even enough to purchase a single issue of Electronic Gaming Monthly. That's less than a fraction of a fraction of a cent apiece. To truly understand the difference in revenue between digital sales and streaming, take a look at these two graphs:

Average Per-Steam Payouts, February, 2014 0.08 OOTA1T E 0.06 0 04573 poy 0.04 $003212 pofs 0.02 .001626 01578 001140 a0112 .000872 nOOT ab0 00062 0 pi

Basically, you could earn more with a hat and a street corner.

Here's the most mind-blowing part -- Spotify, despite paying each artist a measly 0.6 cents per stream, has reportedly lost $200 million since it was founded, because Spotify has to pay 70 percent of their revenue to the record labels. "So how can Spotify stay alive while smaller stations like EVR have to close down?" you might be asking. Well, because Spotify is owned by the exact same record labels they pay three-quarters of their revenue to. After all, it's not really a loss when your biggest expense is your own salary, is it?

And who gets screwed in all of this? The musicians spending all of the time (and usually most of the money) making those songs we love to listen to, because for some reason the entertainment industry is the only industry in the world where we expect people to work for free. Hooray, capitalism!

The third part of XJ's epic science-fiction novel is out now on Amazon. The first $0.99 novella can be found here, with Part 2 out here. Or leave a review and get a free copy! Poke him on Twitter and follow him on Facebook.

5 Beloved Websites That Are Ruining the Music Industry

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