WEBVTT - The Real Reason So Many Musicians Are Frustrated By Spotify 0:00:11.119 --> 0:00:15.560 Hello, and welcome to another episode of the Odd Lots Podcast. 0:00:15.680 --> 0:00:21.720 I'm Joe Wisenthal. Unfortunately, my colleague Tracy Elloway is out today. 0:00:22.000 --> 0:00:25.080 I'm kind of disappointed, actually a little bit, because even though, 0:00:25.160 --> 0:00:27.680 like Tracy and I have been doing the podcast for 0:00:28.160 --> 0:00:31.000 several years now, there are some things I still don't 0:00:31.040 --> 0:00:33.920 know about Tracy. Like I don't really know what kind 0:00:34.000 --> 0:00:36.560 of music she's in two for example, I've gone to 0:00:36.680 --> 0:00:38.559 karaoke with her a couple of times, so I know 0:00:38.760 --> 0:00:40.880 a little bit about what she likes to sing, I think, 0:00:41.240 --> 0:00:43.680 but in terms of what she listens to, I actually 0:00:43.680 --> 0:00:46.760 don't know. I was going to ask her. As for myself, 0:00:46.960 --> 0:00:49.479 you know, like I'm a forty one years old, so 0:00:49.520 --> 0:00:54.800 I have very cliche tastes. I would suppose I like 0:00:55.560 --> 0:00:58.680 a lot of old indie rock, and I hardly I'm 0:00:58.720 --> 0:01:01.760 not very good on keeping up with new music. By 0:01:01.920 --> 0:01:05.360 and large. Pretty much, if I discover new music, it's 0:01:05.400 --> 0:01:10.880 often courtesy of the algorithm that Spotify serves up to me. 0:01:10.959 --> 0:01:13.000 But I don't really know about how it all works 0:01:13.000 --> 0:01:16.160 and how the industry works and who benefits from this 0:01:16.440 --> 0:01:19.280 current system, and I've always wanted to learn more. It's 0:01:19.319 --> 0:01:22.400 particularly interesting now because of course we've had a number 0:01:22.400 --> 0:01:26.880 of artists take their music off Spotify, notionally sort of 0:01:26.880 --> 0:01:30.080 in defiance of Joe Rogan's We're All There. But also 0:01:30.160 --> 0:01:34.039 I think there's been a lot of musician frustration with 0:01:34.240 --> 0:01:37.760 Spotify and other streaming platforms, the new economics of music 0:01:38.120 --> 0:01:42.320 that long precede any of the current drama. So in 0:01:42.480 --> 0:01:44.560 light of all that, I want to learn more. And 0:01:44.600 --> 0:01:48.440 I'm very excited about our guest because he writes a 0:01:48.520 --> 0:01:51.160 lot about the economics of the music business and how 0:01:51.200 --> 0:01:53.680 it all works and where the money is and so forth. 0:01:54.000 --> 0:01:56.640 But also beyond that, he was a member of one 0:01:56.640 --> 0:01:59.520 of my favorite bands, and so this is personally very 0:01:59.600 --> 0:02:03.440 enthusist estek I'm gonna be speaking with Damon Krakowski. He 0:02:03.600 --> 0:02:07.480 is was the drummer of the indie rock band Galaxy 0:02:08.320 --> 0:02:12.720 and currently part of the duo Damon and Naomi. Damon, 0:02:12.840 --> 0:02:16.080 thank you so much for coming on odd lot, Thank 0:02:16.080 --> 0:02:18.960 you for having me. You know, with musicians don't get 0:02:19.000 --> 0:02:22.519 asked about business very often. I'm really grateful for the opportunity. 0:02:23.040 --> 0:02:25.799 Will you write a lot about business? And I guess 0:02:25.639 --> 0:02:28.880 that's that's why we could have this sort of music 0:02:29.200 --> 0:02:33.359 slash your business conversation. Why do you write about business? 0:02:33.600 --> 0:02:35.200 Why is it? You know, there are a lot of 0:02:35.280 --> 0:02:40.840 musicians who probably are frustrated with the economics of the 0:02:40.919 --> 0:02:43.560 music industry, but you were. You write quite a bit, 0:02:43.600 --> 0:02:46.720 You've written books, you have a sub stack, a newsletter 0:02:46.720 --> 0:02:49.079 about it. Why is it important for you to uh 0:02:49.160 --> 0:02:51.560 to write about music? Yeah, it's a really it's a 0:02:51.639 --> 0:02:55.000 question I asked myself pretty often. So, yeah, I started 0:02:55.000 --> 0:02:59.000 a sub stack. It's called Dotta Drummer Almanac, and my 0:02:59.080 --> 0:03:01.560 Twitter handles dot a Drummer That's where that came from. 0:03:01.600 --> 0:03:03.720 And you know, I started writing about the business of 0:03:03.800 --> 0:03:07.079 music very accidentally. It's the same way that I had 0:03:07.120 --> 0:03:09.399 to pay attention to the business of music accidentally, which 0:03:09.400 --> 0:03:12.800 is from being a musician. And you just end up 0:03:12.840 --> 0:03:15.320 at the other end of so many contracts and so 0:03:15.360 --> 0:03:20.120 many deals and so many accounting reports that you know, 0:03:20.160 --> 0:03:22.680 you either I guess at a certain but for quickly 0:03:22.720 --> 0:03:25.480 early on, decide I'm never going to pay any attention 0:03:25.520 --> 0:03:28.480 to any of this and turn it over to someone 0:03:28.520 --> 0:03:32.120 who convinces you that they are, or you start reading 0:03:32.120 --> 0:03:36.000 all that stuff. And there actually are a surprising percentage 0:03:36.000 --> 0:03:39.000 of us that do read all that stuff. Um, some 0:03:39.000 --> 0:03:41.560 some just out of necessity, because if you don't have 0:03:41.600 --> 0:03:43.920 a manager, or you elect not to, or you don't 0:03:43.920 --> 0:03:46.920 trust your manager, or your manager cheats you. I mean, 0:03:46.960 --> 0:03:49.200 you know, there's so many ways that musicians end up 0:03:49.880 --> 0:03:52.840 having to look finally at, even if they didn't want to, 0:03:52.880 --> 0:03:55.400 at what the hell is going on? And once you 0:03:55.440 --> 0:03:58.360 take a look, well, it's a big business and so 0:03:58.560 --> 0:04:01.160 it's got a lot to learn. Takes a time for 0:04:01.240 --> 0:04:05.160 you to learn how this came to be because musicians 0:04:05.160 --> 0:04:08.000 tend to be they come in very young, many are 0:04:08.000 --> 0:04:10.440 not in the business very long, and the business is 0:04:10.480 --> 0:04:13.480 oriented toward the next set of musicians that are coming. 0:04:13.480 --> 0:04:16.240 You know, not you, um, you're always you're just a 0:04:16.279 --> 0:04:19.720 temporary talent for an industry that has set itself up 0:04:19.760 --> 0:04:23.640 to deal with a revolving door of talent. And so 0:04:24.120 --> 0:04:26.880 you know, things are not explained to you. It's kind 0:04:26.920 --> 0:04:29.080 of like who can bother who? You know, why bother 0:04:29.200 --> 0:04:32.040 explaining something to a band. They're only gonna be around 0:04:32.520 --> 0:04:36.320 at best, you know, a few years, a few albums, whatever, 0:04:36.320 --> 0:04:39.080 we're gonna make our money and move on. So just 0:04:39.200 --> 0:04:41.440 get what you can. So you know, there's a lot 0:04:41.480 --> 0:04:44.280 of that, but then we learned, you know, so what 0:04:44.400 --> 0:04:47.880 happened to me was our first band, Galaxy. You know, 0:04:47.920 --> 0:04:51.599 we were young. We signed the classic contract that handed 0:04:51.680 --> 0:04:54.839 over all our rights and uh, and then the record 0:04:54.920 --> 0:04:59.599 label declared bankruptcy and our contracts were thrown into Banks 0:04:59.839 --> 0:05:05.560 Co in Manhattan. I spent over a year dealing with that, 0:05:06.160 --> 0:05:09.280 trying to extricate our contracts and an ownership of our 0:05:09.320 --> 0:05:13.840 records in perpetuity throughout the universe, known and unknown. These 0:05:13.839 --> 0:05:17.039 are boilerplate things that are typical of music contracts, UM 0:05:17.120 --> 0:05:20.279 and all formats uh, you know, as yet undiscovered and 0:05:20.320 --> 0:05:23.880 all you know, blah blah blah, every contingency. Um. They 0:05:23.880 --> 0:05:26.440 were just thrown into this Banks record and and and 0:05:26.520 --> 0:05:29.760 put up for auction. So I spent a long time. 0:05:29.880 --> 0:05:31.800 You know. We called our music business lawyer who we 0:05:31.839 --> 0:05:34.479 had a very fine firm, grew Upment and Turskey Schindler 0:05:35.200 --> 0:05:38.839 representing us at the time. They were Madonna's lawyer and whatever, 0:05:39.520 --> 0:05:41.120 and they said, I'll forget it. You know, you have 0:05:41.160 --> 0:05:42.920 no you have no rights to have no chance. I mean, 0:05:42.920 --> 0:05:44.760 you signed that deal and we're like, you told us 0:05:44.760 --> 0:05:46.880 to sign that deal. They're like, well that spoilerplate. The 0:05:46.880 --> 0:05:49.960 company goes bankrupt, you know, it goes into bankruptcy court. 0:05:50.000 --> 0:05:52.640 It's and that your contracts are an asset. It's like, 0:05:52.680 --> 0:05:55.040 no way, you know, what do you mean? It's it's 0:05:55.120 --> 0:05:59.799 just an asset gone into into bankruptcy court, our own contracts. 0:05:59.839 --> 0:06:03.159 As I understood that the stock from the warehouse went in, 0:06:03.360 --> 0:06:06.159 I understood that maybe the Master Tapes head ownership, but 0:06:06.279 --> 0:06:10.280 I mean our contracts were that. That was insane to me. 0:06:10.720 --> 0:06:13.400 So anyway, I was like no, So I read all 0:06:13.440 --> 0:06:17.120 the stuff and did my own negotiations, you know, and 0:06:17.360 --> 0:06:21.040 called up the bankruptcy court appointed lawyer and taught myself 0:06:21.080 --> 0:06:23.920 the business. Uh and we won. We got our rights. 0:06:24.760 --> 0:06:30.360 I love that. So so I'm I'm a Galaxy fan. 0:06:30.480 --> 0:06:33.800 I discovered it. I discovered the band Luna first three 0:06:33.880 --> 0:06:35.479 year old band mate Dean were them, and then of 0:06:35.520 --> 0:06:40.000 course I went backwards and discovered Galaxy for for listeners 0:06:40.640 --> 0:06:43.600 who maybe aren't from the layer, can you describe like, 0:06:43.800 --> 0:06:46.400 I think it's a pretty influential band, but a little 0:06:46.400 --> 0:06:48.640 bit sort of like how big you guys were, however 0:06:48.680 --> 0:06:51.360 you want to measure it and what kind of contract 0:06:51.920 --> 0:06:55.680 gets offered to a sort of highly influential, but I 0:06:55.720 --> 0:06:58.960 don't think like a Billboard chart topping band in the 0:06:59.040 --> 0:07:02.000 late eighties, right, No, we weren't a pop band by 0:07:02.040 --> 0:07:05.560 any by any measure, and nobody nobody saw us that way, 0:07:05.680 --> 0:07:09.680 most importantly ourselves, and so we had no pop ambitions 0:07:09.800 --> 0:07:13.720 and there was no question of trying to be world 0:07:13.720 --> 0:07:17.480 conquering multi millionaires would have. So anyway, we were a 0:07:17.560 --> 0:07:21.560 niche band. Uh an in indie band when we started 0:07:21.680 --> 0:07:24.760 was called college rock because it was college radio stations 0:07:24.800 --> 0:07:27.040 that played on our music, not commercial stations, and that 0:07:27.080 --> 0:07:31.119 divide was very um significant at the time. It meant 0:07:31.440 --> 0:07:34.240 the major labels produced music that they tried to get 0:07:34.240 --> 0:07:38.040 on commercial radio and into the chain store record stores, 0:07:38.200 --> 0:07:42.320 and that that was their world and we really had 0:07:42.320 --> 0:07:45.280 no part of that world. But but a lot of 0:07:45.560 --> 0:07:47.440 people in the music industry were not part of the 0:07:47.480 --> 0:07:50.600 world yet were in the music industry and built a 0:07:50.680 --> 0:07:55.000 fully functioning, very very efficient and good system of distribution 0:07:55.040 --> 0:07:58.360 and sales outside of that. So we had independent stores 0:07:58.520 --> 0:08:03.320 in every town. We had uh college radio stations which 0:08:03.320 --> 0:08:06.960 are mostly nonprofit but or community stations also but played 0:08:06.960 --> 0:08:09.680 our records, and you know, the potential on the air, 0:08:09.760 --> 0:08:12.400 it's the same as a commercial station, so you still 0:08:12.440 --> 0:08:15.840 can reach people. And we had venues that we played 0:08:15.960 --> 0:08:19.240 that the major label bands didn't go near, and so 0:08:19.280 --> 0:08:22.400 we had a fully functioning network. That network was hard one. 0:08:22.960 --> 0:08:25.720 It had been built by a generation or two of 0:08:25.840 --> 0:08:29.400 bands before hours. It was really mostly the hardcore scene. 0:08:29.440 --> 0:08:31.840 Actually from from our from my point of view of 0:08:31.960 --> 0:08:35.440 kind of white college indie rock more or less was 0:08:35.520 --> 0:08:39.160 more was pretty much forged by the hardcore bands who 0:08:39.160 --> 0:08:41.960 went out and slept on people's floors and and found 0:08:42.120 --> 0:08:45.920 alternative spaces to play and built this system. We came 0:08:45.960 --> 0:08:50.079 in a sort of a more diverse musically, a little 0:08:50.120 --> 0:08:56.160 bit less male, unfortunately, still pretty close to white, which 0:08:56.160 --> 0:08:59.240 is something that really wasn't discussed or acknowledged nearly enough 0:08:59.440 --> 0:09:02.360 at the time. But we came and sort of stepped 0:09:02.400 --> 0:09:04.520 into that world and opened it up musically, I think 0:09:04.520 --> 0:09:06.760 a little bit more than it had been and so 0:09:06.880 --> 0:09:10.000 a lot of types of bands went through those channels 0:09:10.800 --> 0:09:13.840 to the point where the major labels turned around and 0:09:14.320 --> 0:09:17.959 realized that there was a market there that our world 0:09:18.040 --> 0:09:21.520 had developed and was communicating with and selling product too, 0:09:22.040 --> 0:09:25.200 and they were not. And that's the expression would happened 0:09:25.200 --> 0:09:28.479 in the nineties. So the major labels kind of realized 0:09:28.520 --> 0:09:30.200 that they had missed the boat on a whole lot 0:09:30.280 --> 0:09:33.240 of music that was potentially more salable than they thought. 0:09:33.760 --> 0:09:36.520 So they looked at our scene and they, you know, 0:09:36.559 --> 0:09:38.760 they sent their and our scout, they hired in our 0:09:38.800 --> 0:09:41.840 scouts out of our scene, sent them back in to 0:09:42.000 --> 0:09:45.640 kind of evaluate who could take it to another level commercially. 0:09:46.280 --> 0:09:49.160 And then there was this really pretty ugly moment in 0:09:49.280 --> 0:09:52.640 the late eighties early nineties where our scene that had 0:09:52.720 --> 0:09:57.280 existed was destroyed more or less by the major labels 0:09:57.320 --> 0:09:59.360 coming in and investing in it. So what they did 0:09:59.440 --> 0:10:02.439 was they he picked from bands. They broke up Galaxy 0:10:02.440 --> 0:10:05.280 five hundred by well Gas Bars being offered a major 0:10:05.320 --> 0:10:09.480 label contract of its own, and in its place, Dean 0:10:09.600 --> 0:10:12.439 was offered a solo deal by an A and our 0:10:12.480 --> 0:10:14.840 guy who had worked for our record label, Rough Trade 0:10:14.840 --> 0:10:18.199 and independent label, had been fired by Rough Trade, had 0:10:18.320 --> 0:10:20.080 told his colleagues a Rough Trade that he was going 0:10:20.080 --> 0:10:23.120 to break up our band in retaliation, got a job 0:10:23.120 --> 0:10:26.320 with Electra, which is owned by Warner Brothers, and offered 0:10:26.320 --> 0:10:29.079 Diana solo deal. At the same moment that Galaxy of 0:10:29.160 --> 0:10:32.640 Hunter was being offered a band deal by Columbia. So 0:10:33.160 --> 0:10:37.600 Dean double cross to us he signed the deal on 0:10:37.640 --> 0:10:39.880 his own with a different label instead of signing the 0:10:39.880 --> 0:10:41.959 deal that we had already negotiated with our mutual lawyer 0:10:42.080 --> 0:10:47.079 with Columbia. Besides old arguments which are long since, I mean, 0:10:47.080 --> 0:10:49.760 you know, this is a long time later. But what 0:10:49.880 --> 0:10:52.160 illustrates is what happened to the scene as a whole. 0:10:52.920 --> 0:10:56.079 The deal that we had negotiated with our lawyer as 0:10:56.120 --> 0:10:59.920 a band with Columbia was going to have complete artistic control. 0:11:00.040 --> 0:11:02.000 We were going to choose our producer for our records, 0:11:02.040 --> 0:11:04.560 we were going to choose our singles for our records. 0:11:04.600 --> 0:11:07.640 We were going to control our videos. Our lawyer said 0:11:07.679 --> 0:11:09.839 to us, and this gives you a hint of how 0:11:09.880 --> 0:11:12.200 this all goes down. Our lawyer said to us in 0:11:12.200 --> 0:11:16.360 our band meeting with him in street conference room, if 0:11:16.400 --> 0:11:19.240 you insist on that you will get less money. You 0:11:19.320 --> 0:11:22.880 understand that. And we all said yes. But of course 0:11:23.640 --> 0:11:27.040 I realized in retrospect that Dean didn't necessarily say yes. 0:11:27.200 --> 0:11:31.319 He just was sitting there not saying no. So so 0:11:31.400 --> 0:11:34.480 you know, and then um, the deal that Dean signed 0:11:34.920 --> 0:11:38.319 with Electra Solo, where he had no negotiating power as 0:11:38.320 --> 0:11:39.839 a band because we had built our brand and we 0:11:39.880 --> 0:11:44.080 had built our audience. That deal was without any artistic control, 0:11:44.280 --> 0:11:46.520 and so he signed as a solo artist to be 0:11:46.600 --> 0:11:49.640 shaped by the label, and the band that he then 0:11:49.679 --> 0:11:54.640 put together was his were his employees. The label chose 0:11:55.080 --> 0:11:58.440 his producers, the label chose his singles. The labels ran 0:11:58.600 --> 0:12:01.280 him a million dollars in at as we all now 0:12:01.360 --> 0:12:04.360 know because he has spoken about it in interviews and such, 0:12:04.880 --> 0:12:09.120 and ultimately dropped the band. Of course, that's that's that's 0:12:09.160 --> 0:12:13.000 what happened, kind of largely to the scene as a whole, 0:12:13.600 --> 0:12:16.080 because how do the major labels work. Well, It's like 0:12:16.440 --> 0:12:19.680 they have a bunch of hits that fund everything else 0:12:19.800 --> 0:12:21.839 is not a hit, and everything else is not a 0:12:21.880 --> 0:12:25.320 hit eventually just drops off their radar altogether. They're not 0:12:25.320 --> 0:12:27.320 really in it for anything else, and only the hits 0:12:27.840 --> 0:12:31.040 fund the business. That's how entertainment generally works as an 0:12:31.120 --> 0:12:35.559 economic model. It sounds like the venture capital industry to 0:12:35.760 --> 0:12:39.959 where you you sort of aim for one massive winner 0:12:40.120 --> 0:12:42.640 that the returns a hundred extra on your investment, and 0:12:42.679 --> 0:12:46.960 then everything gets sort of tossed by the wayside before 0:12:47.000 --> 0:12:49.959 we sort of move on from like this moment, Like, 0:12:50.040 --> 0:12:52.640 can you just talk a little bit more about the 0:12:52.679 --> 0:12:56.520 economics of a Galaxy five album in terms of like 0:12:56.880 --> 0:12:59.160 the income that you were able to generate both from 0:12:59.280 --> 0:13:02.320 how much is from album sales versus how much was 0:13:02.400 --> 0:13:04.400 from the touring that you did, Like what is the 0:13:04.840 --> 0:13:08.120 what does that look like? Obviously? Um, yeah, on the 0:13:08.280 --> 0:13:11.880 on the indie labels of the time, right, Well, it 0:13:11.960 --> 0:13:15.240 all speaks to the same two differing models really, right, 0:13:15.240 --> 0:13:18.000 so that we just talked about the major label model 0:13:18.679 --> 0:13:21.880 classic entertainment business. And it's interesting to hear you compare 0:13:21.960 --> 0:13:24.559 to venture capital. I'm sure it's the same idea. You're 0:13:24.600 --> 0:13:27.720 basically gambling, but you the odds are are pretty good 0:13:27.800 --> 0:13:30.520 that you know, if you have like a thousand pieces 0:13:30.559 --> 0:13:33.840 of product, you know one one is going to become huge, 0:13:33.920 --> 0:13:36.960 and you stack the deck by making sure you control 0:13:37.360 --> 0:13:40.680 the distribution channels and the promotion channels that all those 0:13:40.760 --> 0:13:42.960 hits go through. So whatever it's gonna hit is going 0:13:43.000 --> 0:13:45.240 to be one of the ones that you have. It's 0:13:45.240 --> 0:13:48.640 not gonna be somebody else's, right. That's that's crucial, and 0:13:48.679 --> 0:13:51.280 that's crucial to looking to what's happened now with streaming 0:13:51.520 --> 0:13:54.120 the other model is an independent model, a niche model, 0:13:54.640 --> 0:13:56.880 which is what the independent world that I was a 0:13:56.880 --> 0:13:59.880 part of and still am operates on. And that is, 0:14:00.040 --> 0:14:02.560 like I've always said, it's like running a lemonade stand. 0:14:02.640 --> 0:14:05.200 It was like we didn't need any more economic know 0:14:05.360 --> 0:14:08.199 how than a kid opening a lemonade stand on the sidewalk. 0:14:08.280 --> 0:14:09.959 It was like, we had a product, we had to 0:14:10.000 --> 0:14:12.120 sell it for a couple little bit more than we 0:14:12.320 --> 0:14:14.720 caused us to make, and we had to know who, 0:14:14.760 --> 0:14:16.599 how many too, how much to make. I mean, that 0:14:16.720 --> 0:14:18.520 was all it was. It was like it was just 0:14:18.600 --> 0:14:23.880 like basic capitals and any like American five year old understands, 0:14:24.400 --> 0:14:26.480 and that's all we were doing, and that's all any 0:14:26.520 --> 0:14:28.720 of the bands in our scene were doing. We were 0:14:29.160 --> 0:14:32.680 pressing records, in selling them for more than they were 0:14:32.960 --> 0:14:35.840 cast us to make, and making a small profit. And 0:14:35.880 --> 0:14:39.120 there was no model that would take that much bigger. 0:14:39.360 --> 0:14:42.160 But you, as you well know, on that model or 0:14:42.320 --> 0:14:46.800 is pretty much like every small business traditional small business ever. 0:14:47.240 --> 0:14:49.360 So it was like having like a small grocery store 0:14:49.440 --> 0:14:53.360 or harbor store or anything that serves the neighborhood of 0:14:53.440 --> 0:14:57.960 community and survives by pays the bills plus then some 0:14:58.960 --> 0:15:02.080 and you have a p business model. It is not 0:15:02.200 --> 0:15:21.040 a business model that attracts capital, right, So this is 0:15:21.120 --> 0:15:23.680 really interesting, and I guess it gets to the heart 0:15:23.760 --> 0:15:27.400 of the tension here, which is that we all sort 0:15:27.400 --> 0:15:30.920 of understand that I mentioned VC, but I think Hollywood 0:15:31.040 --> 0:15:35.200 is the same. And I guess currently sort of mainstream music, 0:15:35.520 --> 0:15:39.280 which is it's really about the hits, and you aim 0:15:39.440 --> 0:15:41.520 for one hit out of I don't know, a hundred 0:15:41.640 --> 0:15:44.120 or a thousand, and it's just so big and so 0:15:44.240 --> 0:15:48.720 massive that you could have numerous flops and it doesn't matter. 0:15:48.760 --> 0:15:52.200 And this sort of the tail is very, very skewed 0:15:52.400 --> 0:15:55.000 towards these mega stars. And today you know obviously Taylor 0:15:55.040 --> 0:15:58.520 Swift and Adele and a handful of artists that just 0:15:58.560 --> 0:16:01.480 sell an absurd amount. And so I guess the question, 0:16:01.720 --> 0:16:04.360 and maybe this sort of leads into where we are now, 0:16:04.520 --> 0:16:08.960 is like, is the lemonade stand model effectively dead? At 0:16:09.040 --> 0:16:13.520 this point? There's just no other route to music other 0:16:13.600 --> 0:16:16.800 than or sort of Yeah, there's the lemonade stand model 0:16:16.880 --> 0:16:20.040 dead in a world of streaming only, Yes, that's the 0:16:20.040 --> 0:16:23.520 way to put it. Yeah, recorded music, yes, because what 0:16:23.640 --> 0:16:27.520 happened was they were there were parallel methods of distribution 0:16:27.560 --> 0:16:31.560 and sales and reaching your audience before and the majors, 0:16:31.600 --> 0:16:34.040 So the majors when they broke up for example, My 0:16:34.200 --> 0:16:36.080 I mean, they've done this time and again, but my 0:16:36.200 --> 0:16:38.720 particular moment, it wasn't like indie rock was like the 0:16:38.760 --> 0:16:41.240 only time this ever happens, happened over and over and 0:16:41.280 --> 0:16:43.720 over and over again in many many different genres to 0:16:44.360 --> 0:16:46.520 the independent jazz world that you know, all these things 0:16:46.520 --> 0:16:50.720 have gone through similar cycles. My particular world, you can 0:16:50.760 --> 0:16:53.200 see it very clearly again to stick with with references 0:16:53.240 --> 0:16:56.560 to your generation and my generation of artists. Um, you 0:16:56.600 --> 0:16:59.400 can see it in Nirvana. So at that moment the 0:16:59.400 --> 0:17:01.520 gas have found broke up was also the moment that 0:17:01.600 --> 0:17:06.359 Nirvana was signed by Geffen and we all knew. We 0:17:06.359 --> 0:17:10.160 were all all told because Nirvana was on another independent label, Subpop. 0:17:10.280 --> 0:17:12.360 They were on our scene. We were playing the same 0:17:12.440 --> 0:17:15.240 venues that they where. We were at all the mutual friends. 0:17:16.000 --> 0:17:19.800 Everyone knew before the public knew that Nirvana was going 0:17:19.840 --> 0:17:21.440 to be a huge hit and this was going to 0:17:21.560 --> 0:17:24.600 change everything. And that's also why that's when Dean got 0:17:24.640 --> 0:17:27.080 signed to a solo contract, everybody was already in gear 0:17:27.359 --> 0:17:32.080 looking for more Kirk cobains, because it was like, Okay, 0:17:32.119 --> 0:17:34.840 they can take something from our scene and turn it 0:17:34.920 --> 0:17:37.760 into this other model, which is you have one hit 0:17:38.200 --> 0:17:41.040 and a thousand failures, and that's just part of the model, right, 0:17:41.280 --> 0:17:45.080 And so what what I witnessed in on my own 0:17:45.119 --> 0:17:48.040 little scene in the late eighties early nineties was the 0:17:48.040 --> 0:17:51.040 way that that all shook out. The difference to now 0:17:51.200 --> 0:17:54.520 is that even though that happened, the rest of us 0:17:54.560 --> 0:17:59.520 could continue our non major label model of distribution and 0:17:59.560 --> 0:18:04.280 sales and of lemonade stand style business. And we did, 0:18:04.640 --> 0:18:06.720 you know, Naomi and I formed to do. We signed 0:18:06.720 --> 0:18:10.000 with sub Pop, which had been Nirvana's previous navel, and 0:18:10.240 --> 0:18:13.760 continue making records and touring at the same kind of 0:18:13.760 --> 0:18:17.200 scale budget that we always had, reaching the same sort 0:18:17.200 --> 0:18:20.320 of curtailed subset of of a music audience that we 0:18:20.359 --> 0:18:23.399 always had been a part of, and being played on 0:18:23.440 --> 0:18:27.080 college radio, non on commercial radio, and not making videos 0:18:27.080 --> 0:18:31.399 for MTV, etcetera. So that continued. And so what's changed 0:18:31.440 --> 0:18:36.720 now is that there's no parallel network for distribution and sales. 0:18:37.240 --> 0:18:41.760 So what digital did was, as in all our businesses 0:18:41.760 --> 0:18:46.880 and all our communications, it uh scaled everything up through 0:18:46.960 --> 0:18:50.840 fewer channels, and you don't really have another way now 0:18:50.960 --> 0:18:55.760 of distributing music. There's no indie channel for um sales 0:18:55.800 --> 0:18:59.439 and distribution online. We have to go through the same 0:19:00.080 --> 0:19:04.760 channels that everybody does. It's Spotify, it's Apple, it's Amazon. 0:19:05.160 --> 0:19:08.159 These are the biggest corporation. Well, Spotify is one of 0:19:08.200 --> 0:19:11.280 the biggest corporations, but in music they're enormous. I mean, 0:19:11.280 --> 0:19:13.879 their valuation on the stock market is bigger than the 0:19:13.920 --> 0:19:17.680 major labels, and Apple and Amazon are literally among the 0:19:17.680 --> 0:19:20.240 biggest corporations in the world. So we're talking about like 0:19:20.600 --> 0:19:23.439 little me and also not just middle aged me, but 0:19:23.760 --> 0:19:27.520 young versions of this of the pattern that I followed, 0:19:27.920 --> 0:19:32.119 who really have no choices and no already established audience, 0:19:32.119 --> 0:19:35.840 and no ways of navigating this outside the way that 0:19:35.880 --> 0:19:38.800 everybody does. So everybody just has to put their music 0:19:38.840 --> 0:19:41.120 up in the same platform. It's as if back then 0:19:41.160 --> 0:19:44.280 in the eighties and nineties, we all had to put 0:19:44.280 --> 0:19:47.160 our compete for this for the sales space in Kmart 0:19:47.640 --> 0:19:51.480 and Walmart and and and eventually Target, instead of being 0:19:51.480 --> 0:19:53.240 able to go to the independent record stores. If you 0:19:53.240 --> 0:19:57.520 see what I mean, there's no other channel, and that's 0:19:57.560 --> 0:20:00.720 the problem with with the model that's going on now 0:20:01.359 --> 0:20:04.400 because there I mean, there are many problems that I'm 0:20:04.400 --> 0:20:07.359 happy to go into, but the basic, basic one from 0:20:07.480 --> 0:20:10.840 music music business point of view or a band's point 0:20:10.880 --> 0:20:13.880 of view, is that there's no choice. And the other 0:20:13.960 --> 0:20:15.879 thing is that these platforms treat us just like they 0:20:15.880 --> 0:20:20.080 do consumers, where we're kind of just like another It's 0:20:20.080 --> 0:20:22.879 just like Facebook, you know, we're just like users. We 0:20:22.920 --> 0:20:26.000 don't get some special status because we're producing the content. 0:20:26.400 --> 0:20:29.119 They treat us just like all social media. There's no 0:20:29.200 --> 0:20:32.919 distinction really between content producers and consumers. So I just 0:20:32.960 --> 0:20:36.439 have an account. Basically, I can't get anyone on the phone. 0:20:36.920 --> 0:20:40.520 I can't ask a question can you update? Like can 0:20:40.560 --> 0:20:43.040 you write your band bio or anything like that. They're 0:20:43.160 --> 0:20:45.760 very limited ways in which you can interact with these platforms, 0:20:45.800 --> 0:20:47.840 just like there are on any platform. Like yeah, you 0:20:47.840 --> 0:20:50.280 can change your profile picture, you know, it's it's it 0:20:50.320 --> 0:20:54.480 doesn't go much beyond that. On Spotify, you can't just 0:20:54.560 --> 0:20:57.960 upload your music Spotify. They're a handful of distributors that 0:20:58.040 --> 0:21:01.199 have access to that obvious. The three major levels are 0:21:01.240 --> 0:21:03.840 the main ones they hold. I forget the exact percentage, 0:21:03.840 --> 0:21:07.359 it's over the copyrights that are on there. The Indians 0:21:07.440 --> 0:21:10.440 go through consolidators that are approved and have an account 0:21:10.480 --> 0:21:13.080 with them. It's already limited in that way. It does 0:21:13.119 --> 0:21:15.840 make room for independent artists and all kinds of ours, 0:21:15.920 --> 0:21:20.320 everything can be up there. Theoretically that's important to their 0:21:20.400 --> 0:21:23.960 business model, but that doesn't give us any status beyond 0:21:24.400 --> 0:21:27.679 really essentially just another user on the account. They create 0:21:28.000 --> 0:21:31.400 websites that we can interact with in this extremely limited, 0:21:31.560 --> 0:21:35.280 condescending manner and change, you know, tiny little bits of 0:21:35.320 --> 0:21:38.600 the of the individual page, but really so limited that 0:21:38.600 --> 0:21:41.959 it's ridiculous, but limited enough that I've gone on Spotify 0:21:42.040 --> 0:21:45.840 and our one artist official playlists that we're allowed to 0:21:45.840 --> 0:21:50.399 create is called I forgot exactly jording. I said, Damon, 0:21:50.440 --> 0:21:53.320 you have me official downloads available on band camp. That's 0:21:53.359 --> 0:21:55.160 the name of the playlist, so that if you click 0:21:55.240 --> 0:21:57.600 on it, if you look for the artist official playlists, 0:21:57.600 --> 0:22:00.280 it will be called go to band camp. And of 0:22:00.280 --> 0:22:02.320 course Spotify doesn't notice that and take it down because 0:22:02.320 --> 0:22:06.720 they're not looking at my account. So I mean, Galaxy 0:22:06.960 --> 0:22:11.280 is there's probably a lot of listeners on Spotify still 0:22:11.680 --> 0:22:14.239 I presume I don't know. I mean it comes up 0:22:14.240 --> 0:22:16.120 on my playlist a lot but I guess that's because 0:22:16.160 --> 0:22:18.640 I listened to it, But I presume that on sort 0:22:18.680 --> 0:22:22.000 of related artists it's probably I don't know, above it 0:22:22.080 --> 0:22:24.040 for people who are fans of a certain style of 0:22:24.080 --> 0:22:28.239 indie pop comes up decently. What do you get from that? Like? 0:22:28.280 --> 0:22:30.920 What are the benefits to you? And you know, obviously 0:22:31.000 --> 0:22:32.480 one of the things that people talk about all the 0:22:32.480 --> 0:22:35.120 time is like, Okay, yeah, you're not gonna people musicians 0:22:35.119 --> 0:22:39.280 don't make that much recording, but other things live concerts 0:22:39.440 --> 0:22:42.160 and so forth, Like what does that look like as 0:22:42.240 --> 0:22:47.119 a not huge but also not irrelevant indie band? Now 0:22:47.359 --> 0:22:50.920 the sort of the ongoing listenership of Spotify, I think 0:22:50.920 --> 0:22:52.680 you said there have been something like sixty two million 0:22:52.760 --> 0:22:55.560 users or sixty two million streams of your song, Like, 0:22:55.600 --> 0:22:58.120 what's the benefit to you from there's only really one 0:22:58.320 --> 0:23:00.879 for a band like Cars, which is no longer performing. 0:23:01.480 --> 0:23:06.120 We haven't played a show as God's Fence, so um, 0:23:06.160 --> 0:23:09.280 But that's not irrelevant because the bulk of streaming on 0:23:09.280 --> 0:23:14.439 Spotify is catalog, because the platform is actually oriented toward 0:23:14.920 --> 0:23:19.120 non working bands or anyway old records catalog. So it's 0:23:19.119 --> 0:23:21.600 no surprise. Why is that? How sorry? How is like 0:23:21.680 --> 0:23:25.200 in what sends. Does Spotify oriented itself towards non working well, 0:23:25.359 --> 0:23:27.320 is it? Really? It's a great question. I mean, one 0:23:27.359 --> 0:23:30.159 of the things that that Spotify is not is transparent. 0:23:30.760 --> 0:23:34.800 So we don't know how those algorithms work, and they 0:23:34.800 --> 0:23:39.920 won't share that information. So why my band, my old 0:23:39.920 --> 0:23:43.280 band might pop up on your feed, will never know. 0:23:43.480 --> 0:23:47.600 But I'll tell you this, if we pay Spotify to 0:23:47.920 --> 0:23:51.840 boost our work in their algorithm, they tell us, they 0:23:51.840 --> 0:23:54.359 brag about it, that it will it will come up 0:23:55.200 --> 0:23:59.040 more often. I didn't even know that. I didn't even 0:23:59.080 --> 0:24:00.920 know there was a thing paying to be well, it 0:24:00.960 --> 0:24:03.280 shouldn't even be legal, is what you was. The other 0:24:03.320 --> 0:24:05.080 thing you might say, I didn't even know that was legal, 0:24:05.240 --> 0:24:08.400 because if it was radio or analog distribution, it would 0:24:08.440 --> 0:24:12.080 not be legal. That is payola. Those these were fights 0:24:12.119 --> 0:24:14.879 that were fought in the nineties, fifties and sixties about 0:24:15.000 --> 0:24:19.040 radio broadcast because radio becomes so powerful and corrupt and famous. 0:24:19.119 --> 0:24:23.320 DJ got caught and there was congressional action about it. 0:24:23.560 --> 0:24:28.200 So paola wasn't illegal before Congress got involved. Spotify is 0:24:28.200 --> 0:24:30.439 in a digital space. They claim they're not governed by 0:24:30.520 --> 0:24:34.720 radio broadcast rules, and so they say they're not covered 0:24:34.760 --> 0:24:38.040 by payola rules, so they have an official marketing. It's 0:24:38.320 --> 0:24:42.560 two sided marketplace. They bragg a better in their investment 0:24:42.560 --> 0:24:47.040 call and their investor calls. It's the discovery mode. They 0:24:47.040 --> 0:24:50.280 call it Capital D and it's a program where this 0:24:50.359 --> 0:24:52.720 is This is the small way. They say it's not payola. 0:24:53.200 --> 0:24:56.440 They say they're not taking cash. They're taking a lower 0:24:56.680 --> 0:25:02.280 royalty on selected tracks. But for all we know, there 0:25:02.280 --> 0:25:04.880 are other ways that they are taking cash because their 0:25:04.960 --> 0:25:09.240 contracts with the major labels, for example, are privately held 0:25:09.280 --> 0:25:13.879 and never disclosed. So we've always believed in the industry, 0:25:13.960 --> 0:25:17.080 those of us who watched this, that the playlists were 0:25:17.119 --> 0:25:20.760 for sale. How could they not be Radio always was 0:25:21.160 --> 0:25:23.760 radio continued to be after payal the laws, just in 0:25:24.280 --> 0:25:27.879 third party arrangements so called radio promoters who handled the 0:25:27.880 --> 0:25:30.840 cash in between. I mean, this is in my experience 0:25:30.840 --> 0:25:34.439 and my direct understanding knowledge, So how could it not 0:25:34.480 --> 0:25:37.320 be on Spotify, which is even so powerful these playlists, 0:25:37.600 --> 0:25:40.040 so in any case, but then loan behol while we're 0:25:40.040 --> 0:25:43.560 busy accusing them of that. But officially, just but just officially, 0:25:43.600 --> 0:25:48.080 we don't. There's no evidence as such, other than the 0:25:48.200 --> 0:25:50.879 part about how you can an artist can agree to 0:25:50.880 --> 0:25:54.400 take a lower royalty and theoretic right, but taking here, 0:25:54.400 --> 0:25:56.680 but here's the evidence. I mean, for one, taking Lottle 0:25:56.720 --> 0:26:01.600 royalty is paying Spotify obviously say currently they say they're 0:26:01.640 --> 0:26:04.399 algorithms are based on the consumer's interest, right, Like so 0:26:04.520 --> 0:26:06.520 if you if you're wondering why this gaspel fund to 0:26:06.560 --> 0:26:08.919 come up in your playlist, you'd be thinking, what is 0:26:08.920 --> 0:26:11.120 it about my taste? That's the first thing you said 0:26:11.240 --> 0:26:14.120 as you introduced it. But if that's the case, how 0:26:14.160 --> 0:26:16.600 could it change by if you give them a lower 0:26:16.680 --> 0:26:20.080 royalty on a given track? Is not editorial placement on 0:26:20.520 --> 0:26:24.040 They have two types of placement on playlists. One is editorial, 0:26:24.200 --> 0:26:27.960 one is algorithmic. They distinguish them even on their reports 0:26:28.000 --> 0:26:31.960 to us. They give gasp Funder, for example, next to 0:26:32.040 --> 0:26:35.040 no editorial placement. I don't know if that's because I've 0:26:35.040 --> 0:26:37.440 been so vocal, but I will tell you that Damon 0:26:37.480 --> 0:26:40.919 and Naomi, my own personal band, gets zero editorial placement. 0:26:41.119 --> 0:26:44.159 They give us a percentage of our plays based on playlists, 0:26:44.400 --> 0:26:47.520 and the percentage for editorial placement is zero percent. And 0:26:47.720 --> 0:26:50.840 other artists who are very active and critiquing Spotify have 0:26:50.920 --> 0:26:54.240 a similar issue. Now I'm not saying I know that 0:26:54.240 --> 0:26:57.080 that's why, but I will put it out there that 0:26:57.119 --> 0:27:02.480 we know what for For what is the breakdown of 0:27:03.240 --> 0:27:06.719 algorithmic streams versus editorial I think editorial streams for Galaxy 0:27:06.720 --> 0:27:09.880 is something like five of our total stream so that's 0:27:09.920 --> 0:27:12.600 next to nothing. In others we have not been given 0:27:13.119 --> 0:27:18.879 the benefit of their is they're officially declared editorial interventions, 0:27:18.920 --> 0:27:21.320 which is they create a playlist that's like, this is 0:27:21.359 --> 0:27:24.680 the music you should listen to if you like. Now, 0:27:24.720 --> 0:27:26.840 then there's the other type, which is algorithmic. Now, the 0:27:26.880 --> 0:27:29.840 algorithmic playlists, which both both of my bands get to 0:27:29.960 --> 0:27:34.280 various degrees and it swerves around with time, are totally opaque. 0:27:34.440 --> 0:27:37.800 We have no way of knowing what what is doing this. 0:27:37.960 --> 0:27:41.160 But they have now admitted by bragging for their own 0:27:41.160 --> 0:27:45.199 marketing program making this available from manipulation, that if you 0:27:45.359 --> 0:27:48.600 cut them a deal, they will boost it so that 0:27:48.600 --> 0:27:51.159 that's the algorithm that's not the editorial side. So this 0:27:51.240 --> 0:27:54.639 is the side that's supposedly based on nothing. But you 0:27:54.680 --> 0:27:57.480 know all this data that they're collecting, so obviously the 0:27:57.560 --> 0:28:01.160 data is manipulatable, that the algorithm is manipulatable. I mean 0:28:01.200 --> 0:28:04.040 of course it is theoretically anyway, because human beings create 0:28:04.080 --> 0:28:08.040 those algorithms and make choices. But this is officially saying 0:28:08.040 --> 0:28:11.960 it is manipulatable for business purposes. Now, once you get 0:28:12.000 --> 0:28:16.760 that understanding of how Spotify is working, then it starts 0:28:16.760 --> 0:28:18.600 to open up a whole lot of other explanations of 0:28:18.600 --> 0:28:21.920 how their entire business model is working. Because let's not forget, 0:28:22.000 --> 0:28:25.520 since we're on a business podcast, Spotify declares a loss 0:28:26.080 --> 0:28:30.720 nearly every quarter on music. Music is a losing proposition 0:28:30.800 --> 0:28:34.480 for Spotify, according to them. And yet I'm sure a 0:28:34.520 --> 0:28:37.199 lot of people are listening to this have invested in 0:28:37.240 --> 0:28:40.160 Spotify and are not thinking they're losing punk cop proposition, 0:28:40.920 --> 0:28:43.760 because of course they aren't. But music is a loss 0:28:43.840 --> 0:28:46.880 leader for them. That's what they That's what they claim. 0:28:46.960 --> 0:28:51.160 So where is their profit coming from? And that's what 0:28:51.240 --> 0:28:53.440 you really got to start to look at with Spotify. 0:28:53.520 --> 0:28:56.640 It's obviously coming from like other tech platforms that give 0:28:56.680 --> 0:28:59.200 away their product for free, their content for free, It's 0:28:59.240 --> 0:29:02.600 coming from data. Uh, It's coming from two sided marketplace 0:29:02.640 --> 0:29:06.480 deals like Paola. It's coming from the stock market, from 0:29:06.480 --> 0:29:09.920 capital investment, from growth, it's coming from market share that 0:29:10.000 --> 0:29:12.680 they leverage in all kinds of other ways that have 0:29:12.840 --> 0:29:15.440 nothing to do with music, So they move further and 0:29:15.480 --> 0:29:18.640 further from the lemonade stand version of music. It's not 0:29:18.760 --> 0:29:22.440 my product or galaxy of hundreds product that makes Spotify 0:29:22.560 --> 0:29:25.960 any money anyway, and that's crucial to seeing what what 0:29:26.040 --> 0:29:44.320 what's wrong with the with the industry? Well, let me, 0:29:44.560 --> 0:29:47.680 I mean the whole reason Spotify is back in the news, 0:29:47.760 --> 0:29:50.320 And I mentioned this in the intro, of course, Neil 0:29:50.400 --> 0:29:53.400 Young saying he's going to take his music off of Spotify, 0:29:54.120 --> 0:29:59.400 ostensibly out of his anger about their contract with Joe Rogan. 0:29:59.720 --> 0:30:02.920 But how much is that as sort of in your view, 0:30:03.440 --> 0:30:06.200 I guess a, I don't know, an excuse, but as 0:30:06.240 --> 0:30:09.320 sort of like trigger point of there's already a number 0:30:09.360 --> 0:30:13.920 of musicians large and small, frustrated with Spotify. Spotify, in 0:30:13.960 --> 0:30:17.880 your view, doesn't care that much about musicians. It may 0:30:18.000 --> 0:30:22.120 view podcasts as more profitable and a potentially more durable 0:30:22.720 --> 0:30:26.280 business model. So how much is the recent kerfuffle like 0:30:26.320 --> 0:30:28.240 sort of like a bunch of people who didn't like 0:30:28.280 --> 0:30:31.080 the model anyway suddenly like this is a good uh 0:30:31.280 --> 0:30:35.320 rallying point to voice their displeasure with the platform. There 0:30:35.400 --> 0:30:39.680 was certainly no no organization taking advantage of this current moment. 0:30:39.720 --> 0:30:42.440 Neil Young did that as he's always done things in 0:30:42.480 --> 0:30:46.320 his career completely on his own, without announcement and without 0:30:46.440 --> 0:30:49.720 contacting groups like my group Union of Musicians and Allied 0:30:49.760 --> 0:30:54.720 Workers that's been organizing very diligently for for over a 0:30:54.800 --> 0:30:59.280 year about UM the financial model of Spotify UM. But 0:30:59.840 --> 0:31:03.200 the flashpoint is telling for so many reasons. It's actually, 0:31:03.240 --> 0:31:07.040 if you're interested in pursuing a musician's version of what's 0:31:07.040 --> 0:31:09.440 going on with Rogan, I would look to India Ari, 0:31:10.400 --> 0:31:15.600 who was very very articulate about putting together all these 0:31:15.680 --> 0:31:18.640 various issues that are going on with Spotify, Joe Rogan's 0:31:18.720 --> 0:31:24.720 racism being paramount because it speaks to a model of 0:31:24.760 --> 0:31:29.480 discriminatory practices that are tied to the type of capitalized 0:31:29.520 --> 0:31:33.200 businesses Spotify is. And that I mean, I don't think 0:31:33.200 --> 0:31:36.680 you have to be a Marxist like I probably would 0:31:36.680 --> 0:31:39.760 be identified by by some of your listeners to to 0:31:39.840 --> 0:31:43.000 appreciate that these issues are tied together. On that how 0:31:43.040 --> 0:31:46.760 you treat your labor force is tied to how you 0:31:46.960 --> 0:31:51.120 reward your labor force and also how you you know 0:31:51.120 --> 0:31:52.920 how you set up your business in terms of capital 0:31:52.920 --> 0:31:57.400 and labor. Spotify is set up capital. They have no 0:31:57.600 --> 0:32:02.200 connection to music. We are the labor that provides the 0:32:02.240 --> 0:32:04.600 content on that platform, or that has built it to 0:32:05.200 --> 0:32:07.440 at least in its first stage of development as a corporation, 0:32:07.800 --> 0:32:10.160 to the point where they're on the New York Stock Exchange. 0:32:10.640 --> 0:32:13.480 They are a music company, and they do not negotiate 0:32:13.520 --> 0:32:16.240 with us. They do not extend us even the common 0:32:16.280 --> 0:32:20.080 courtesy of having a relationship with us UH and they 0:32:20.120 --> 0:32:22.479 certainly don't reward us in any kind of way that 0:32:22.520 --> 0:32:26.400 we consider most of us consider fair. And yet we 0:32:26.440 --> 0:32:28.920 have no way of organizing and demanding anything from them. 0:32:28.920 --> 0:32:32.360 We were not even at the table. They only cut 0:32:32.400 --> 0:32:36.080 the deal with the three major labels, not their artists, 0:32:36.600 --> 0:32:38.960 but just the labels themselves. And the way they cut 0:32:39.000 --> 0:32:41.240 the deal, the way they entered the US market, was 0:32:41.280 --> 0:32:45.960 they gave the three major labels ownership shares in Spotify 0:32:46.000 --> 0:32:48.880 before they went public. Now this is how then the 0:32:49.360 --> 0:32:53.360 labels cut them a deal that screwed their artists. They 0:32:53.400 --> 0:32:57.000 cut them a deal of minuscule royalties because the royalties 0:32:57.280 --> 0:32:59.440 from the major labels point of view passed through the 0:32:59.440 --> 0:33:03.320 major label to the artist accounts. Ownership was held by 0:33:03.320 --> 0:33:06.280 the corporation and was pure profit for the corporation, so 0:33:06.360 --> 0:33:10.360 they traded ownership for decent royalty deals. So the artists 0:33:10.360 --> 0:33:13.760 on the major labels were not any better represented than 0:33:13.840 --> 0:33:16.320 I was without any seat at that table at all. 0:33:16.840 --> 0:33:19.760 They were sold out by the majors. So the major 0:33:19.840 --> 0:33:22.520 label artists are no happier with this than the rest 0:33:22.560 --> 0:33:24.960 of us. Now. The one difference, though, is that there 0:33:25.000 --> 0:33:27.240 are certain artists on the major labels who've been making 0:33:27.280 --> 0:33:30.200 money hand over fists from streaming because what the model 0:33:30.240 --> 0:33:33.160 does is consolidate it's more of the money in the 0:33:33.240 --> 0:33:37.000 music industry into the top of the pyramid. It's it's 0:33:37.120 --> 0:33:40.400 it's designed that way. The way they calculate royalties, they 0:33:40.400 --> 0:33:42.760 put everything into one pot. It's called a pro roder 0:33:42.840 --> 0:33:46.040 system that they capitalized on. The majors have proved this, 0:33:47.000 --> 0:33:50.200 So my streams go into the same pot as Taylor 0:33:50.240 --> 0:33:53.520 Swift streams, and then we each get paid back out 0:33:54.120 --> 0:33:58.280 according to the percentage of all the total streaming that 0:33:58.320 --> 0:34:02.240 we each hold. Mine is of zero to to disappearing 0:34:02.280 --> 0:34:06.080 infinity compared to what the few people at the top hold. 0:34:06.240 --> 0:34:08.160 Now we get back to the whole question of the 0:34:08.200 --> 0:34:12.560 playlists and the algorithm where Spotify is steering consumers to listen. 0:34:13.000 --> 0:34:17.000 Of course, they're steering them towards a handful of places, 0:34:17.040 --> 0:34:20.200 because the whole thing is designed to consolidate as much 0:34:20.320 --> 0:34:24.520 all the money in the industry into the top. Then 0:34:24.560 --> 0:34:27.280 we get to the podcast because here's the magic for podcasts. 0:34:27.280 --> 0:34:29.520 From Spotify's point view, you might have been wondering, why 0:34:29.520 --> 0:34:33.000 are they spending so much money on podcasting. Podcasting doesn't 0:34:33.000 --> 0:34:35.879 seem that lucrative. I mean, in present company, I'm sorry, 0:34:36.000 --> 0:34:39.160 podcasting as is not that lucrative in it for a 0:34:39.160 --> 0:34:41.239 lot of reasons. But of course he has a lot 0:34:41.239 --> 0:34:43.520 of listenerships, so you know, can you turn that into 0:34:43.920 --> 0:34:48.000 money somehow? Here's the thing for Spotify. There's no royalties 0:34:48.040 --> 0:34:52.480 on podcasts, so Joe Rogan streams have no royalties to 0:34:52.520 --> 0:34:57.000 pay right, Taylor Swifts do Adele's do. It may be 0:34:57.400 --> 0:35:00.880 from my point of view, too little the Spotify sharing 0:35:00.920 --> 0:35:03.680 for the royalties, but from Spotify review, it is a 0:35:03.719 --> 0:35:07.520 serious expense, and the more they stream music, the more 0:35:07.560 --> 0:35:10.040 that expense goes up. It's one to one. They can't 0:35:10.040 --> 0:35:13.920 get around it except by pulling cacamam schemes like reduce 0:35:13.960 --> 0:35:16.600 your royalty and will boost your algorithm. Right that what 0:35:16.680 --> 0:35:19.560 they're after is reducing their overhead. I mean again, it's 0:35:19.600 --> 0:35:23.000 just back to the that's lemonade stand I understand they're 0:35:23.040 --> 0:35:26.080 trying to reduce their royalty exposure. They only have two 0:35:26.080 --> 0:35:29.120 ways to do it, pay musicians even less or get 0:35:29.160 --> 0:35:32.160 to stuff that doesn't have royalties. So they're doing it 0:35:32.200 --> 0:35:35.320 in multiple ways. One is podcasting. There's no royalties on podcasts, 0:35:35.360 --> 0:35:41.160 as you know. Second, they're commissioning music and owning content. Now, 0:35:41.160 --> 0:35:44.439 there's another long standing scandal in the music world that 0:35:45.080 --> 0:35:47.319 didn't get out to the general media, but did enough 0:35:47.360 --> 0:35:50.160 in the music press that is commonly accepted now of 0:35:50.200 --> 0:35:53.640 the so called fake artists. This is because Spotify at 0:35:53.640 --> 0:35:56.560 the at the top of some of Spotify's most popular 0:35:56.719 --> 0:35:59.600 playlist So that means all the money and Spotify is 0:35:59.600 --> 0:36:02.919 in the play lists, okay, because you go on the site, 0:36:02.920 --> 0:36:05.000 they push you to a playlist that then they control 0:36:05.040 --> 0:36:07.239 what you what you're going to stream, and it's not 0:36:07.280 --> 0:36:09.480 just on the popular place at the top of the playlist. 0:36:09.520 --> 0:36:11.600 Because of course, how many songs you listen from the 0:36:11.600 --> 0:36:14.560 beginning and how how deep do you get into playlist, well, 0:36:14.600 --> 0:36:17.239 most listeners just get a few songs in, so all 0:36:17.320 --> 0:36:19.839 the money is caused. It's the same pyramid thing. All 0:36:19.880 --> 0:36:22.799 the money is concentrated in the top of the top playlists. 0:36:22.840 --> 0:36:25.399 That's where the bulk of the streaming is happening. That's 0:36:25.400 --> 0:36:28.880 why payola is so crucial here, because of course, getting 0:36:28.880 --> 0:36:31.240 on the top of the playlist will make you a living. 0:36:32.040 --> 0:36:35.879 What is Spotify do to to reduce their royalty exposure? Well, 0:36:35.920 --> 0:36:39.120 they started inserting tracks in those playlists and those popular 0:36:39.120 --> 0:36:42.600 playlists that they own. How did they do that without 0:36:42.600 --> 0:36:47.279 consumers noticing? They created fake bios for fake artists, That's 0:36:47.280 --> 0:36:49.640 what That's why it's called fake artists with you know, 0:36:49.680 --> 0:36:53.720 photos that they pulled off of the internet, fake bios 0:36:53.760 --> 0:36:56.719 and a song title and they slip it in to 0:36:57.000 --> 0:36:59.840 a playlist. I mean, is this just on like you 0:37:00.000 --> 0:37:03.920 instrumental sort of ambiance? No? No, no, no, no no, no, 0:37:04.040 --> 0:37:08.759 it's anything, it's anything. So there other fake country musician, Well, 0:37:08.800 --> 0:37:11.960 I don't know specifically country, but there are fake well 0:37:12.040 --> 0:37:15.520 so called fake there are fake tracks scattered throughout Spotify. 0:37:15.680 --> 0:37:18.320 The only way we know about them is that journalists, 0:37:18.360 --> 0:37:21.920 investigative journalists figured it out. They figured it out by 0:37:22.160 --> 0:37:24.120 not recognizing a name at the top of the playlist 0:37:24.200 --> 0:37:27.800 and googling it, finding a bio page and then finding 0:37:27.800 --> 0:37:30.560 no other links. It didn't have any existence. These artists 0:37:30.560 --> 0:37:33.319 have no other existence anywhere in the world except at 0:37:33.320 --> 0:37:36.520 the very very top tier of one of the top 0:37:36.560 --> 0:37:40.080 tier playlists. So it's clear that it's Spotify owned and 0:37:40.120 --> 0:37:42.800 not just someone who used like one of the aggregators 0:37:42.800 --> 0:37:45.040 to upload because I found that, because you can trust 0:37:45.080 --> 0:37:47.000 the copyright. And where did this music come from? There 0:37:47.000 --> 0:37:50.919 all come from Swedish recording studios Spotify. The Swedish company 0:37:51.120 --> 0:37:54.440 Spotify said well, these aren't fake artists. These were created 0:37:54.440 --> 0:37:57.200 by these producers in Sweden that that we paid to 0:37:57.320 --> 0:38:00.920 produce this music got it. So their argument is what 0:38:00.960 --> 0:38:03.040 do you mean fake? This is as real music as 0:38:03.080 --> 0:38:06.440 anything else. And now you get into another set of 0:38:06.480 --> 0:38:09.160 investments to Spotify has been making, which is into AI. 0:38:09.440 --> 0:38:11.400 What is AI going to do for them or is 0:38:11.440 --> 0:38:15.000 already doing for them? You can create sound like music 0:38:15.320 --> 0:38:18.839 that people can't distinguish in terms of style or you know, 0:38:18.880 --> 0:38:21.839 so you feed in, take the take whatever is at 0:38:21.840 --> 0:38:23.840 the top of the charts at the moment, feed it 0:38:23.880 --> 0:38:26.760 all into AI and have it spit out a track 0:38:27.280 --> 0:38:31.080 that's enough like it that a listener on a playlist, 0:38:31.120 --> 0:38:34.520 as passive listener on a Spotify playlist, will not stop 0:38:34.560 --> 0:38:37.320 the playlist and move away from the from it, letting 0:38:37.360 --> 0:38:41.200 go continue when they hear it is maybe not an 0:38:41.320 --> 0:38:44.040 artist they recognize, but they accept it going past them. 0:38:44.160 --> 0:38:46.879 It sound I'm just looking. I'm reading a I pulled 0:38:46.960 --> 0:38:50.879 up a Variety article from and it sort of gets 0:38:50.880 --> 0:38:54.520 at this, and they deny that fake artists exists, although 0:38:54.560 --> 0:38:59.440 the Variety article sites insiders who say that it is about, 0:38:59.600 --> 0:39:04.000 as you say, reducing the streaming royalties that they owe, 0:39:04.080 --> 0:39:08.279 the leverage that they have against the record labels. So yeah, 0:39:08.719 --> 0:39:10.640 but I think if you look at the language of 0:39:10.640 --> 0:39:13.320 their denial, all they're saying is that these are real people. 0:39:14.040 --> 0:39:17.360 But the fact that they own those tracks is the 0:39:17.400 --> 0:39:20.080 crucial part here. I mean, whether it's an artist that 0:39:20.120 --> 0:39:23.000 they signed to their own label like Rogan, that they 0:39:23.040 --> 0:39:26.040 own a percent. So the key with the difference would 0:39:26.040 --> 0:39:30.680 be essentially in your view, that they are real people, 0:39:30.960 --> 0:39:37.520 but have Spotify commissioned the songs and therefore the royalties 0:39:37.920 --> 0:39:40.160 they're not leaving, They're not They're not going as far 0:39:40.280 --> 0:39:42.200 they're not well, they're not going anywhere they own. The 0:39:43.360 --> 0:39:45.920 problem is Spotify cannot be and this is the Rogan 0:39:46.080 --> 0:39:48.239 controversy has brought this to the fore, and I've been 0:39:48.280 --> 0:39:51.360 really happy to see this terminology surface in the mainstream 0:39:51.440 --> 0:39:54.879 press about it. Spotify cannot be a platform if they're 0:39:54.880 --> 0:39:58.360 also a producer, right there, a producer of music tracks. 0:39:58.400 --> 0:40:01.080 We have known this for years in the music business. 0:40:01.160 --> 0:40:04.200 We have been screaming about this. Nobody cared, of course 0:40:04.360 --> 0:40:07.840 outside the music industry, and those who are running the 0:40:07.880 --> 0:40:10.800 show don't care because they're making money hand over fist. 0:40:11.040 --> 0:40:12.719 I mean, the estimates are that the major levels are 0:40:12.719 --> 0:40:16.000 making a million dollars a minute from streaming. So obviously, 0:40:16.160 --> 0:40:19.080 I mean, we started this conversation and you know, as 0:40:19.120 --> 0:40:24.040 you point out the beginning, Galaxy never aspired to be 0:40:24.120 --> 0:40:26.560 like a true like pop band that was going to 0:40:26.640 --> 0:40:29.319 have like a megahad. Wasn't your seeing the lemonade stand 0:40:29.360 --> 0:40:34.120 business model. Nonetheless, the pop scene has always existed the 0:40:34.239 --> 0:40:37.240 hits driven record you know, whether it's radio stations, record 0:40:37.280 --> 0:40:42.000 store CDs, etcetera. That's always existed just within the realm 0:40:42.040 --> 0:40:45.920 of pop setting. Aside, the end of the lemonade stand model. 0:40:46.239 --> 0:40:50.840 Has it gotten even more skewed? Is streaming royalties to 0:40:51.080 --> 0:40:53.080 the handful of artists that make a killing on it, 0:40:53.600 --> 0:40:56.040 like the Taylor Swift, like the Adeles? Is it even 0:40:56.120 --> 0:40:58.480 more skewed than it used to be if we went 0:40:58.520 --> 0:41:02.160 back to say, record sales and radio plays in the 0:41:02.200 --> 0:41:06.680 era of say Madonna, Well, here there's some squish nous 0:41:06.800 --> 0:41:10.080 because it's very hard to compare one to one because 0:41:10.120 --> 0:41:13.040 there has been a sea change from analog to digital 0:41:13.440 --> 0:41:16.480 in terms of how the business is structured and how 0:41:16.480 --> 0:41:19.920 the royalties are calculated, etcetera. I think everybody feels that 0:41:19.960 --> 0:41:24.959 it has gotten more concentrated. I don't know of any 0:41:25.000 --> 0:41:28.120 good studies that I can point to two that make 0:41:28.200 --> 0:41:31.440 the case with numbers. I hope they're out there. If 0:41:31.440 --> 0:41:33.840 they're not, I hope somebody's working on it. But it 0:41:33.960 --> 0:41:36.160 is a kind of a difficult thing to compare. And 0:41:36.320 --> 0:41:39.399 this is a lot of the discussions around what's wrong 0:41:39.440 --> 0:41:44.319 with streaming sometimes quickly revert to, well, how many hours 0:41:44.400 --> 0:41:48.719 we're making a living in right versus today. It's just 0:41:48.800 --> 0:41:52.960 not the type of calculation that's that that exists because again, 0:41:52.960 --> 0:41:55.680 because the business was decentralized so much more. And I 0:41:55.719 --> 0:41:58.080 think that even framing the question those terms is an 0:41:58.120 --> 0:42:01.640 indication of how centralized it is now. We do have 0:42:01.760 --> 0:42:04.160 the figures for right now and here they are, according 0:42:04.160 --> 0:42:08.400 to Spotify themselves. Because so my my scrappy group of 0:42:08.880 --> 0:42:11.840 independent arts, self employed artists that got together during COVID 0:42:12.239 --> 0:42:14.160 and are forming a new union called the Union of 0:42:14.200 --> 0:42:17.359 Musicians and Allied Workers Union of Musicians dot org. We 0:42:17.760 --> 0:42:21.680 launched our own punk rock campaign to alert people to 0:42:21.680 --> 0:42:24.360 what's going on with Spotify and streaming in general. But 0:42:24.400 --> 0:42:26.880 we used Spotify as our target because they're they're running 0:42:26.880 --> 0:42:29.000 the show, they have the largest market share, and they're 0:42:29.160 --> 0:42:31.080 they're such a good enemy because they put the foot 0:42:31.080 --> 0:42:34.120 in their mouth all the time. So we chose them well, 0:42:34.160 --> 0:42:36.680 i'd say, as this podcast proves. And you know, we 0:42:36.760 --> 0:42:40.120 launched a campaign called Justices Spotify, and we've got all 0:42:40.239 --> 0:42:42.520 close to thirty thou musicians have signed onto it. It's 0:42:42.640 --> 0:42:46.239 it's it's it's really it's made ripples in the music world, 0:42:46.520 --> 0:42:49.560 and it certainly has called Spotify's attention, because then they 0:42:49.680 --> 0:42:53.840 launched a website to answer our accusations called Loud and Clear, 0:42:54.719 --> 0:42:57.440 and that was a website just directed to it's like 0:42:57.480 --> 0:43:01.360 a giant f a Q with their talking points counted 0:43:01.400 --> 0:43:05.480 to our arguments for what's wrong with Spotify on that website. 0:43:05.520 --> 0:43:09.440 So this is on Spotify's own pr designed to counter 0:43:09.640 --> 0:43:13.960 musicians complaints. They say, wait, look how many people are 0:43:14.000 --> 0:43:17.520 making a living from from Spotify and they say it's 0:43:17.640 --> 0:43:24.440 thirteen thousand, four hundred globally are grossing fifty thou dollars 0:43:24.520 --> 0:43:28.120 a year or more? Okay, so this is their claim 0:43:28.360 --> 0:43:32.000 to the success of this model. It's very hard numbers 0:43:32.280 --> 0:43:35.040 so well as they're just like lift a little corner. Now, 0:43:35.080 --> 0:43:37.080 the only reason they said that was they thought it 0:43:37.120 --> 0:43:39.759 sounded so good. First of all, their mission statement was 0:43:39.840 --> 0:43:44.680 to make a million artists a living. Four hundred is 0:43:44.760 --> 0:43:50.120 not a million. They're off by nine eight, seven thousand whatever. Right, 0:43:50.560 --> 0:43:53.839 they're wildly off. And now let's consider what fifty thou 0:43:54.000 --> 0:43:58.239 grows is for a musician, typically for a band, or 0:43:58.280 --> 0:44:01.640 for any artist, there is a label involved. We talked 0:44:01.680 --> 0:44:06.400 before about how Spotify doesn't even platform unless you go 0:44:06.480 --> 0:44:09.960 through at least a distributor, but mostly the lion share 0:44:10.040 --> 0:44:13.239 of stuff on there is from the majors over and 0:44:13.280 --> 0:44:15.400 then you've got all the independent labels on top of that, 0:44:15.480 --> 0:44:17.719 So most people on Spotify are on a record label. 0:44:18.120 --> 0:44:20.680 Labels have various deals. Of course as a private contracts 0:44:20.760 --> 0:44:23.440 privately negotiated, but as a rule of thumb, you can 0:44:23.480 --> 0:44:27.600 assume the labels taking at least fifty of that income. Okay, 0:44:27.640 --> 0:44:31.640 so now we're talking thousand dollars a year for thirteen 0:44:32.000 --> 0:44:35.520 and a half thousand artists globally. Now, so you get 0:44:35.560 --> 0:44:38.600 twenty five dollars in for a year. Now that's gross. 0:44:39.040 --> 0:44:41.160 Say you're in a band, say you're in Galaxy off 0:44:41.200 --> 0:44:44.480 I foundred that has three members that split the money evenly. Well, 0:44:44.520 --> 0:44:48.839 now you're earning a third of dollars gross. That's without 0:44:48.880 --> 0:44:52.359 any percentage that goes to management, distribution, all the other 0:44:52.440 --> 0:44:55.840 overhead that any artist has producing product that gets itself 0:44:55.880 --> 0:44:59.839 on Spotify. So you're talking about below minimum wage. And 0:45:00.000 --> 0:45:02.799 this is the figure that they're bragging about as their 0:45:02.920 --> 0:45:06.719 big model of success. They have drained the music industry. 0:45:07.120 --> 0:45:11.680 Streaming is now eight of all revenue in the US 0:45:11.920 --> 0:45:16.960 for recorded music, all revenue from all sources, and of 0:45:17.040 --> 0:45:21.319 that Spotify as alliance share. So yes, it's a little 0:45:21.320 --> 0:45:23.080 bit more from the other platform. So if you're making 0:45:23.480 --> 0:45:26.560 k from Spotify. Yeah, you're probably making I don't know, SEV, 0:45:27.560 --> 0:45:29.680 but you're not really making that. You're making less than 0:45:29.719 --> 0:45:33.000 minimum wage. So what have we traded for this global 0:45:33.080 --> 0:45:37.160 model for most of us, for almost all of us, nothing, 0:45:37.320 --> 0:45:39.319 We get nothing out of it. I could make that 0:45:39.400 --> 0:45:43.360 money back with with two tho LPs or less, but 0:45:43.840 --> 0:45:46.400 they're making it impossible for me to do that. I 0:45:46.520 --> 0:45:50.239 have to go through Spotify, and that's the problem. So 0:45:50.640 --> 0:45:52.680 before we wrap up, but we just have a couple 0:45:52.680 --> 0:45:54.399 of minutes left, I want to ask a couple of 0:45:54.480 --> 0:45:56.600 quick questions about this, because this is where I was 0:45:56.640 --> 0:45:58.560 about to go. I mean, first of all, you know 0:45:58.600 --> 0:46:02.319 you're talking about okay, just modified but versus say the 0:46:02.400 --> 0:46:06.239 late n A band can raise their profile in all 0:46:06.360 --> 0:46:09.879 different kinds of ways, and there's Twitter, and there's Instagram, 0:46:09.960 --> 0:46:13.920 and there's Facebook, and so sure, maybe the record stores 0:46:14.239 --> 0:46:17.759 that network maybe is uh diminished, although there are still 0:46:17.760 --> 0:46:20.680 our record stores and some independent music stores. But what 0:46:20.719 --> 0:46:24.040 if someone says, like, you know, look, it's two Yes, 0:46:24.520 --> 0:46:26.520 there are obviously things that have gotten more skewed. On 0:46:26.560 --> 0:46:29.400 the other hand, the ability of a musician or a 0:46:29.400 --> 0:46:32.759 band to become a name to promote themselves. They don't 0:46:32.760 --> 0:46:35.080 have to go through a record label anymore. There are 0:46:35.080 --> 0:46:38.200 other things that have countervailed that that allows someone to 0:46:38.280 --> 0:46:42.160 get awareness and build fans on the internet and monetize 0:46:42.200 --> 0:46:45.279 their music in some different ways. Why why does that 0:46:45.360 --> 0:46:48.400 not work? Why why does it not counteract by the 0:46:48.440 --> 0:46:50.800 fact that there's all these new platforms for an artist 0:46:50.800 --> 0:46:54.640 to promote themselves, well, because none of them are are monetizing. 0:46:54.680 --> 0:46:57.480 I mean, you stick monetizing monetizing in there, but but 0:46:57.520 --> 0:47:00.000 the platforms you mentioned are not. Don't pay. Twitter hasn't 0:47:00.000 --> 0:47:03.000 pay your Facebook doesn't pay you. So the only modernization 0:47:03.160 --> 0:47:05.120 that has been open to artists in the streaming era 0:47:05.320 --> 0:47:10.000 is live performance. And it is absolutely true that you 0:47:10.040 --> 0:47:12.759 can leverage your exposure. I mean it's basically, we're all 0:47:12.800 --> 0:47:16.279 interns through our recorded music to the music industry, and 0:47:16.280 --> 0:47:18.759 then we're supposed to make our living live. I mean, 0:47:18.760 --> 0:47:22.839 the truth is only some type of bands can make 0:47:22.880 --> 0:47:25.960 a living live. I mean, live music doesn't fit all 0:47:25.960 --> 0:47:27.480 the models of the type of music that you might 0:47:27.520 --> 0:47:30.680 want to listen to and recorded music, and there are 0:47:30.840 --> 0:47:33.920 entire genres of music that can't really turn a profit live, 0:47:34.719 --> 0:47:37.040 like jazz, for example. I mean there's a whole. There's 0:47:37.040 --> 0:47:40.280 a whole, there's a whole, vast amounts of recorded music 0:47:40.520 --> 0:47:44.359 that cannot translate into will go hit the road and 0:47:44.440 --> 0:47:46.560 just live that way. Then there are a whole lot 0:47:46.600 --> 0:47:49.799 of personalities and lifestyles that don't fit that way. Then 0:47:49.840 --> 0:47:51.040 there are a whole lot of people who fall to 0:47:51.120 --> 0:47:53.080 pieces on the road because you know, actually going on 0:47:53.120 --> 0:47:57.319 the road is is a tall order, okay from And 0:47:57.360 --> 0:47:58.920 there's a reason why we have all these stories, and 0:47:58.920 --> 0:48:00.960 there's a reason why the end of Kirk Evans story 0:48:01.040 --> 0:48:03.239 is what it is. But here's what happened in the 0:48:03.360 --> 0:48:06.399 last two years, which is COVID, so all of live 0:48:06.520 --> 0:48:11.240 music shut down. That's why my group got together Union 0:48:11.320 --> 0:48:15.000 musicians and allied workers because we were all unemployed because 0:48:15.000 --> 0:48:18.960 our only employment in the streaming era has been live performance. 0:48:19.239 --> 0:48:23.319 That is only monetization available to us. All the modernization 0:48:23.440 --> 0:48:27.120 channels of recorded music have been swallowed by streaming. That's 0:48:27.120 --> 0:48:30.320 that pie chart that the r i A, the Record 0:48:30.400 --> 0:48:33.880 Labels Association takes note of every year that's now up 0:48:33.920 --> 0:48:39.520 to from streaming. What's left in that seventeen is everything 0:48:39.560 --> 0:48:42.480 else you can think of. It includes soundtracks for films, 0:48:42.840 --> 0:48:46.680 uh selling to commercials. It includes radio performance, it includes 0:48:46.719 --> 0:48:49.640 satellite radio, it includes everything else you can think of 0:48:49.680 --> 0:48:54.160 that monetizes recorded music. Streaming has taken it all. It's 0:48:54.200 --> 0:48:57.000 done it by going into all the other markets and 0:48:57.080 --> 0:49:00.720 swallowing them. For example, back when we had coffee shops 0:49:00.760 --> 0:49:04.240 and bars, they play music, and they're supposed to play 0:49:04.320 --> 0:49:06.680 and we pick up a small license from that music. 0:49:07.160 --> 0:49:09.480 But what are they doing If you ever ask your barista, 0:49:09.760 --> 0:49:13.080 they're playing their own personal Spotify account when on a 0:49:13.280 --> 0:49:16.440 phone plugged into the onto the machine. They're not supposed 0:49:16.480 --> 0:49:17.960 to do it. And if you dig and dig and 0:49:18.000 --> 0:49:19.920 dig on Spotify's website, you will come up with a 0:49:19.920 --> 0:49:23.399 page that says, do not use this for commercial situations. 0:49:24.000 --> 0:49:26.200 But boy, they don't work very hard to let people 0:49:26.239 --> 0:49:28.560 know that do that. In fact, Starbucks as a deal 0:49:28.600 --> 0:49:32.200 with Spotify where they give free premium accounts to every employee. 0:49:32.520 --> 0:49:34.799 I mean, you can see what that does, right, So 0:49:34.840 --> 0:49:38.040 we lose that. Satellite radio it was a good income 0:49:38.040 --> 0:49:40.399 stream that was coming up because of they were being 0:49:40.400 --> 0:49:43.960 installed in all the new cars. And there's a different 0:49:44.120 --> 0:49:47.320 royalty model for salar radio that's very secure for musicians 0:49:47.320 --> 0:49:49.799 that was set up by Congress in the nineties that 0:49:49.880 --> 0:49:52.759 was really booming. I mean, it wasn't a lot of money, 0:49:52.760 --> 0:49:55.520 but it was going up straight line up. And now 0:49:55.520 --> 0:49:58.200 it's going straight down because of course, what is everyone 0:49:58.239 --> 0:50:01.640 playing in their cars? They stream instead of playing salid 0:50:01.719 --> 0:50:02.920 raid because you don't have to play, you don't have 0:50:02.960 --> 0:50:05.520 to pay the subscription Sali radio or maybe already have 0:50:05.560 --> 0:50:08.239 one subscription to streaming service. You just use that. So 0:50:08.440 --> 0:50:12.440 all these other channels branding, To take a great example, 0:50:12.520 --> 0:50:16.040 people think, oh, you build your your thing. Brands put 0:50:16.120 --> 0:50:18.839 on playlists on Spotify. They put our music on. They 0:50:18.840 --> 0:50:20.200 don't have to negotiate with us. They don't have to 0:50:20.239 --> 0:50:22.880 pay us anything for that because it's just another playlist 0:50:22.880 --> 0:50:26.160 on Spotify, Nike presents whatever the hell they want to 0:50:26.239 --> 0:50:29.160 label it. It used to be a brand wants student 0:50:29.440 --> 0:50:31.560 wants to associate themselves with your music. That was a 0:50:31.560 --> 0:50:34.560 big payday. The biggest payday Galax five hundred ever got 0:50:34.680 --> 0:50:38.279 was from Honda who used thirty seconds of instrumental track 0:50:38.360 --> 0:50:41.920 of ours in a television commercial. That was a huge 0:50:41.920 --> 0:50:44.600 pay day for us, more than our record royalties that 0:50:44.640 --> 0:50:47.799 we ever managed to collect from our labels. Um that 0:50:47.840 --> 0:50:49.879 we were assigned to before we took made our own label. 0:50:49.960 --> 0:50:52.800 That's much better. But in any case, that doesn't exist anymore. 0:50:52.840 --> 0:50:55.960 Honda wants to have a playlist on Spotify, they just 0:50:56.080 --> 0:51:01.040 build it. Do they pay Spotify? Probably to Spotify report 0:51:01.080 --> 0:51:04.399 that back as music income? No, right, you see how 0:51:04.400 --> 0:51:08.520 this goes, so that that's what's going on. Spotify has 0:51:08.520 --> 0:51:12.040 a model. It's unregulated. There are no set royalties from 0:51:12.040 --> 0:51:14.319 anything except the three major label contracts that they did. 0:51:14.800 --> 0:51:19.239 And that's a very winning model for destroying the music industry. 0:51:19.280 --> 0:51:21.759 But here's the kicker that I really want to emphasize 0:51:21.760 --> 0:51:25.200 for your listeners in particular, it's not a winning profit model. 0:51:25.480 --> 0:51:28.120 They still say they don't make money on music, and 0:51:28.160 --> 0:51:31.000 I believe them because look where they're putting their money. 0:51:31.160 --> 0:51:33.600 They're putting their money in Joe Rogan. And that gets 0:51:33.640 --> 0:51:37.000 back to why Neil Young calling out Joe Rogan, which 0:51:37.000 --> 0:51:40.960 he had every reason to do, was explosive because it 0:51:41.080 --> 0:51:44.640 actually speaks to the whole problem and in the ari 0:51:45.280 --> 0:51:48.360 put it all together, even putting it together with racial 0:51:48.400 --> 0:51:50.680 issues in the music industry, I mean, the music industry 0:51:50.719 --> 0:51:53.520 has a long, ugly history of making money from black 0:51:53.600 --> 0:51:56.400 artists that go to white executives, and you've got to 0:51:56.480 --> 0:52:00.680 look at this tie to that too. Well, Damon, this 0:52:00.800 --> 0:52:04.000 was a fascinating conversation, and I'm sure there's plenty of 0:52:04.080 --> 0:52:07.120 more roads and other aspects of all of this that 0:52:07.200 --> 0:52:08.960 we could go down, but I think that's a good, 0:52:09.040 --> 0:52:12.680 uh place to stop it. Really really appreciate you coming 0:52:12.680 --> 0:52:15.320 out odd Life. Thank you for having me, really appreciate it. 0:52:15.960 --> 0:52:28.880 Take care of them. Well, that was for me. I 0:52:28.960 --> 0:52:32.000 loved having that conversation. Like I said at the beginning, 0:52:32.080 --> 0:52:36.160 I'm a big fan of Damon's music and a galaxy, 0:52:36.400 --> 0:52:40.160 but that really did actually put some pieces together for 0:52:40.239 --> 0:52:43.480 me about the frustration because in my view or the 0:52:43.520 --> 0:52:45.840 way I thought about it before, it was like the music, 0:52:45.920 --> 0:52:50.160 the music industry is always brutal. Very few people actually 0:52:50.600 --> 0:52:54.560 get to become superstar musicians or make a living at 0:52:54.880 --> 0:52:57.680 Anyone who ever has made a living at recorded music 0:52:57.719 --> 0:52:59.960 has of course been very lucky. But this sort of 0:53:00.440 --> 0:53:03.800 comparison that he made between the the the hits driven 0:53:03.880 --> 0:53:06.520 pop model, which has always been hits driven, versus what 0:53:06.560 --> 0:53:09.520 he called the lemonade stand model, where you can not 0:53:09.760 --> 0:53:13.680 expect to make a gigantic hit, but maybe between record 0:53:13.719 --> 0:53:17.239 sales and touring taken a bit more income than the 0:53:17.360 --> 0:53:20.600 cost to put it all on. That really clicked for me, 0:53:20.760 --> 0:53:22.880 and that was that was really strike against. So this 0:53:22.960 --> 0:53:26.279 idea that with the loss of most record stores, the 0:53:26.320 --> 0:53:29.759 loss of the CD business, and recently, of course the 0:53:29.800 --> 0:53:33.319 loss of live music, that really everyone is shuffled into 0:53:33.320 --> 0:53:36.399 the hits business. That clicked to me. So I really 0:53:36.480 --> 0:53:40.480 enjoyed that conversation, and uh big thanks to Damon for 0:53:40.560 --> 0:53:44.000 coming on. So this has been another episode of the 0:53:44.040 --> 0:53:47.400 Odd Lots podcast. I'm Joe Wisenthal. You can follow me 0:53:47.520 --> 0:53:51.600 on Twitter at The Stalwart. Follow my co host Tracy Alloway. 0:53:51.640 --> 0:53:55.880 She's at Tracy Alloway. Follow our guest Damon Kurkowski. His 0:53:56.000 --> 0:54:00.279 handle is at Data Underscore Drummer. Follow our producer Laura 0:54:00.320 --> 0:54:03.680 Carlson at Laura M. Carlson. Followed the Bloomberg head of 0:54:03.680 --> 0:54:07.759 podcast Francesco Levi at Francesca Today, and check out all 0:54:07.800 --> 0:54:11.480 of our podcasts at Bloomberg under the handle at podcasts. 0:54:11.680 --> 0:54:12.480 Thanks for listening.