And welcome back to this week's episode of the production talk podcast. Thank you very much for tuning in again and it's really fantastic to have you on board. Thank you to all the listeners. It blows my mind every week that I'm in front of a microphone and I know that there are so many people out there listening. To what I have to say it's a very humbling experience and yet again I just want to say? Thank you this week I would like to talk about our love hate relationship with streaming services I am pretty sure that. You're all aware about the problem and just the other day I had an interesting discussion with a handful of young producers and 1 of them brought up the idea that in order to be successful today to start from scratch as a young artist. There is no other way but effectively giving it away. Not asking for money just to invest your own music and send it out and try to get a big following that way. So that later they can then start to make revenue from from that so that got me thinking and I have a couple of different thoughts. About this and it all ties into the bigger discussion of how musicians make a return with their music these days and the role that common streaming services play in that world these days. I'm sure you're all aware about the controversy surrounding businesses such as spotify spotify is named very publicly very often on social media as the bad boy. However, it also applies to most other streaming services. It just turns out that Spotify is very successful. Um. In the sense that their market share is significant. It's 1 of the biggest players in the world as you all know, um, but at the same time they pay out 1 of the smallest percentages to musicians and an additional concern that I personally share is that they also sound absolutely terrible. In my personal opinion compared at least to the competition. So when it comes to sound quality. There are definitely streaming services that outperform spotify by a mile but let's say this is another subject. So let's not go into the sound of the streaming services that would probably fill another episode. And I would get very passionate about this personally. But anyway, let's go back to the aspect of money. So this young producer suggested that in order to make it somehow we first have to just take um ah music make it available to everybody in order to gain some momentum and I think there are a couple of Ah, flaws with this way of thinking I'm not quite sure if I should call it flaws. But I think we are basically trapped in a certain position where we create our own problems in some ways and although there are some musicians who have successfully started a career like that. I don't think this should be the blueprint for everybody for for many many different reasons and I want to go into that for in a bit more detail so first and foremost are us streaming services is spotify and and and are they competitors are they going to raise. The revenue for ah musicians anytime soon. I've seen partitions and you know memes and all kinds of posts with often. Well not very favorable choice of language I've seen all of these things but is this going to change things and. In all honesty I believe it. It will not It is not the right way to do it because we just need to think about. We need to put ourselves into the position of the ceo of 1 of these leading streaming services for a moment and let's just consider how all of this looks from their end. They've basically hit. The the business jackpot they managed to find a market with a huge supply of of resources at a very very very very low price. And the resources keep on coming. They come with about 60000 songs every day they keep on coming keep on coming keep on coming and they just don't seem to end so there's and a huge supply on on resources which is our music at the same time they found a way. To build a website that distributes those products back to their clients. That's the Everyday listener and they pay a fairly low fee in return but then they manage to to multiply their business so well that this little bit of income. They generate per listener multiplied by. Millions maybe billions of listeners worldwide generates a huge income for them of which they keep the lines share. So the resource keeps them coming every day and the buyers are still there every day spending their subscription money. And returning this income back to the streaming services. What motivation would they have to change their business model. Why would they say oh gee we better increase the payout to musicians they have no motivation There is no incentive for them because the oversupply of music. Keeps them coming every day so this is not what what I want. It's not the way I want the world to be but in all honesty this is how it currently is and I don't think that the ceo of spotify is going to react ah to a partition. Or to appeals to their goodwill. That's just not how these people are the thing is as long as there's an oversupply of of their core resource. They will keep following their business model. They've established themselves and as an established business. It's their interest. To keep on going for as long as they can to ride the wave and make as much cash as as they can. That's the reality of it and I think if in order to change that we first need to start changing the resource because us we the musicians. We are just too happy supplying our music to them and accepting the prize they give us which is a fraction of a pittance of a pittance. So I guess it all has to start with us if we try to make the ceo of spotify and and the other streaming services change their mind. I think we're not on a winning streak here. This is not going to happen in all honesty, they won't so the only thing that we can change is us and that's what I want to talk about today. So let's get back to this young producer who told me that to build any kind of following he feels like. Ah, that he needs to give away his music for free for now. Um, the problem is that when you train a client to receive a product for free those clients will not turn into paying customers later on the track I remember this. All too well from and when I was a young engineer a young music producer trying to make a name for myself I was a nobody about 20 years ago and I needed to build some kind of a reputation and and a portfolio. So I started to work with ah bands to cut my teeth and in many ways I still learned the art of music production along the way because well in those days I was just a beginner and I remember how the only acts that I could get on board was basically my my own band which I produced. For countless hours days weeks and probably months wore myself out entirely for no money and um I produced a dear friend's band. My friend Daniel big shout-out to to Dan in Hamburg in germany who's 1 of the best friends I've ever met in my entire life, big shout out to you. My friend and I produced daniel's band back in those days and because I wasn't very good. It took me forever and in all honesty, the results. Well I think they're okay, considering where I was but it was not fantastic and. Look what struck me afterwards was that I got frustrated after finishing those productions because I didn't see a path forward of how to turn this what I just did into into paying clients and in all honesty I was just. Too unexperienced to understand that this can't possibly work so working for free can only ever be a short-term thing for the gain of building a portfolio the clients who you work with if you if you build a free portfolio. Will not be the clients who come around later and buy services at at a higher price. It is very important to to step away from this and write this work off as experience and it's a part of the learning curve that I needed at that stage. But I didn't quite understand how how this fits into the bigger picture of becoming a profession. It only ever serves the purpose of having a portfolio which then may lead to other- paying clients. But um I've I've also seen this with clients in the not too-distant past where um. A client asked me if I would ah start the very first project for for lower price and because there were friends here in east coast australia I decided to to agree and and give them a really really really good deal and undersold myself. To some degree I basically gave him the value of a fo production at a price sort of not even half of that which was mates' rates and it was also a good cause. But afterwards once it was time to talk about the next production they didn't have the money and again they went for somebody else who gave him a mate's rate. So what? what? I'm just trying to say is that when I set my price I also define the perceived value of my work and if I give my work away for free or if I give my work away for weight too low which i'm. Usually don't do anymore it shapes the perception that this is the associated value with this product. In other words, the listener hears my mix at a lower well perceived quality because the price was lower and this is an awkward thing to consider. But we basically train up our clients by giving them a certain value at a certain price and that sets an expectation and to change this later and increase the price is not going to go down well with clients. So. In other words, if you start in the industry as a studio musician as a home producer the clients that you start with for a lower price. They will not be the clients that you work with later in your career. You need to let them go. You need to move on to new clients that then. Pay a higher price for for a better service that you offer at a later stage when you're more experienced good. So let's tie this back into the friend of mine who who felt like he needed to to give his music away for free first and foremost it wasn't even his opinion. That's what others have told him and he sort of started this entire process based on well this sort of so-called rule that that he heard from many other people and he assumed this. It must be the the correct way to do it because other people have said. So. Well let me just ask you this if everybody does the same thing who is going to stand out. It's the person who swims against the stream. It's the person who's different so by doing the exact same thing that everybody does we basically. Declare ourselves to be just nothing but a drop in the ocean and as creatives we are really really well equipped to do something better than that we're equipped to do something unique something that represents us something that is surprising to others something that raises an eyebrow. That's us we are creatives. We can do that. That's in our very nature. We just need to apply the same creativity that we put into our music and apply it to our music marketing and I really recommend to to consider whether it's a smart idea to give. Weigh our music for free. How about we all think about it and ask ourselves where is our music available right now pick 1 of your songs. Maybe the latest song you've released and ask yourself where is that song available and there's a very good chance that might be possibly a youtube. Very likely on all the big players such such as spotify Apple music amazon and so on and just for a second do the maths and work out how much you're getting and I know that on youtube for example, you won't get a cent unless you have a certain number of of. Subscribers which some artists have so it may make sense for them. But if you start from if you start fresh, you probably won't have many subscribers at all in other words, everybody who clicks on your music. There will not trigger any money going into your pocket. And effectively for most of us our music on Youtube is free to the world. So if you just go through all the distributors of your music and rank them from how much you get in return chances are that youtube also spotify and some others. Rank at the very bottom and other services rank a little bit higher if we all collectively now decided to knock the bottom 2 or 3 of our list and withdraw our music from the services who play pay either nothing or the absolute minimum or smallest amount. We suddenly decrease the amount of ah resources floating through spotify's doors and that can be a starting point that requires a bit of collective action and I know this is a difficult thing to to achieve. But I believe this is the only way forward because as long as the seemingly infinite resource of music comes rolling in for people like spotify. They are not going to change their business model at all what we need to achieve is that Apple music title. Amazon spotify and so start to compete for your music there needs to be an interest while they would want your music and right now for them. It's just well, whatever a drop in the ocean and the only way to get there is to withdraw our support to the platforms who pain nothing. Or the absolute least and instead put our music only onto the services that give us a better return. Good here's the uncomfortable thought about this this will come at a cost. And the cost is that you have fewer clicks likes and listeners than you could have but before we let this freak us out. Let's just consider 1 more thing is a listener on spotify worth as much as a listener at a live show. And I think we would all agree that this is not the same value to you so I would always rank somebody who comes to your life show buys a ticket and has a dance much higher. It's a much more valuable listener to you than a random click on Spotify. So. I would say that the clicks on non-paying platforms are worth literally nothing whether you have 10 of them or a thousand literally makes no difference to your bottom line or very little so we need to rate some people higher. We need to rate the listeners on the higher-paying platforms better. They are worth more to us and they're still just worth a fraction of a person actually attending your live show or logging onto your Facebook streaming event or people who actually buy your merchandise or people who. Constantly follow you up on your social medias and interact in posts. Those people are more valuable. So if you were to lose. Let's say 1000 listener over all of this make sure it's the ones that are not valuable to you and then it will really make no difference. Actually know about quite a few local musicians who still play their guitar at the Farmer's market every couple of weeks and sell cds or Usb sticks and the return that they get from it by far. Outweighs or the income they get from streaming services. Although the streaming services obviously by numbers are much much bigger. They might have thousands of listeners there and maybe just a dozen listeners at the markets but those clients are more valuable. So. In previous episodes. We spoke about the eighty twenty principle it's a business term and I think it's time that we all put a little bit more common business sense into the distribution of our music the eighty twenty principle suggests that about 80 percent of your income comes from only twenty percent of your distribution channels. You can also turn this back to front about 80 percent of your troubles probably come from only twenty percent of your jobs the idea behind the eighty twenty principle is to take those twenty percent and cut them out of your life that may lead to a little bit less income for a moment. But if you then spend this time to focus on the. Other twenty percent that gave you 80 percent of your income and grow them some more. You'll be better off and probably much happier. Let's apply the same thing to streaming services consider cutting out all the streaming services that are not valuable to you instead. Focus on the things that actually matter focus on your home base focus on your local listeners play shows in your in your local area in the neighboring shire and the neighboring city travel up and down the coast build yourself a following from personal interaction. Those people. Even if the numbers don't come anywhere near what you can achieve on Spotify are worth a lot more to your business and your musical career. Good. Okay, so there's been other developments lately on the front of streaming services and. There are some people who believe that the era of spotify and so on is soon coming to an end I have no idea and I don't know. But if I had to if I had the opportunity to rewrite the musical distribution. History I would hope. Somebody came up with a brand new streaming service owned by musicians. In other words, my ideal scenario would be a streaming service that is run and hosted by musicians for musicians where you buy in shares imagine that imagine a world. All musicians would unite and say okay we have a new platform. That's the only place where we put our music out and we do it ourselves. That's the vision that I have for the future of the music industry and if we get to the point where the never-ending resource. That floats into spotify's front door starts to ab out and where no more music gets into those streaming services that pay fractions of sense then suddenly we will see a shift in attitude on the CEO levels. That's when the CEOs of the big companies. Scratch their head and say we've got to do something and they better come up with something that benefits us. That's my vision. That's my wish for the future for the next decade I guess of the streaming industry a few things to consider here I'm sure that whatever I predict today. Is probably not exactly what's going to happen. But I really hope that at least some parts of what I am hoping to achieve will come true at some stage. So if you agree with this maybe consider whether it's worth cutting out some of the streaming services that you've been using. And see if you can grow an organic following due to shows personal interaction. Social media interaction selling merchandise. There are all kinds of other ways that can help you to get a return. So. It's not just about the number of listeners. You need to think about. How valuable they are to you and I definitely always want to have ah people in front of the stage dancing. Those are the most important people you could possibly win over for yourselves. Good on these wise words I want to finish this episode Today. It's a bit of a shorter 1 I hope it makes sense to you. Um I have more interviews planned for the next couple of weeks. So hopefully we'll be back with more interviews I would also really like to invite you to. Join us on the production talk podcast community facebook group. You'll find us on facebook the link is in the show notes and if you haven't seen our show notes yet I recently moved them to a new website so that I get more control and better design. They're all available now online. So after finishing this episode. Why don't you just have a little look and scroll down click on the show notes and have a look around and I will make it a habit of adding additional information into the show notes. So. There's always a bit more to find than in my episodes. This is all for today I hope you had a good time I hope you got something meaningful out for yourself and let's all work together on a better future for the music industry. We can do it if we stick together if we do not give our valuable music away for free anymore. It is fair enough. To ask for something in return and to get more musicians on board. Why don't you just share this episode with all your friends on these words, let's finish up for today. You have a great week I hope to speak to you in a week's time bye bye.