All posts in “Spotify”

Spotify’s massive $1.6 billion lawsuit reveals how it must adapt if it wants to survive

Spotify’s rapid ascendance has a price: A $1.6 billion lawsuit for failing to pay some artists for their songs.

The music publisher Wixen, which represents artists like Neil Young, the Black Keys’ Dan Auerbach, and Tom Petty, has sued Spotify to the tune of $150,000 per song. Wixen says Spotify failed to get the necessary licenses to play over ten thousand songs.

The lawsuit underscores that while Spotify has grown quickly, it still faces issues with how it compensates artists and songwriters due to complex questions around music rights. Spotify will need to adapt to address that issue ahead of its debut as a public company — and as it looks to turn a profit for the first time.

The Hollywood Reporter first spotted the lawsuit, which Wixen Music Publishing filed last week in California. Wixen specifically cited that Spotify, “in a race to be first to market, made insufficient efforts to collect the required musical composition information” and “built a billion dollar business on the backs of songwriter and publishers.”

The lawsuit suggests that a whopping six million songs could lack the necessary licenses, although Wixen has dominion over just a portion of these songs.

“Music licensing for the kind of streaming that Spotify does is inherently complicated and imperfect,” said Larry Miller, the director of New York University’s music business program, in an email.

Every song, like Neil Young’s “Heart of Gold,” is copyrighted in two ways. The actual sound recording is owned by the record label that produced the song. Then, there’s the ownership of the song’s actual composition (technically called “mechanical licensing”) — in which the all the song’s writers must be paid. Take, for instance, The Rolling Stones’ “Start Me Up,” which was co-written by Mick Jagger and Keith Richards. 

The problem — and this lawsuit — lies in the second copyright, the crediting of a song’s composers. 

“Licensing musical compositions is far trickier, and from Spotify’s perspective, far riskier,” said Miller.

It’s trickier because for each song Spotify must know all the co-writers “of literally every song Spotify wants to play,” explained Miller (Spotify says it offers over 30 million songs). And accordingly, there’s great risk for infringing upon the rights of songwriter they’ve excluded or didn’t know about — as the $1.6 billion lawsuit shows. 

“Music licensing for the kind of streaming that Spotify does is inherently complicated and imperfect.”

But Spotify simply doesn’t have an efficient way to know who was responsible for writing every song on every album. A single song can have three or more songwriters. Or an artist could cover a song — meaning Spotify would need to pay the actual songwriters for the streamed song — not just the artist who recorded it. 

“There’s an information problem here,” said Robert Weitzner, an assistant teaching professor at Drexel University’s Music Industry Program.

Weitzner refers to this informations as “metadata,” which incorporates all the background information about the song. This includes all the songwriters and how much songwriting credit, or split, each songwriter is entitled too. 

“There’s incomplete metadata that’s delivered to streamers,” he said, noting that record labels (who own the sound recording) often don’t provide this information to streaming companies. 

This leaves the burden on sleuthing out all the songwriters on streamers like Spotify, which might not wait to tediously compile this information in a competitive music market.

“There’s a race to market,” said Weitzner.

But there’s also a solution: Adapting to the way most people listen to music today (six out of every 10 dollars in recorded music revenue go to streamers) and developing a system to make this songwriting information more easily available. Such a weighty lawsuit — while perhaps not ideal — could move the needle. 

“The information around the songs — who wrote it, who recorded it — needs to be readily available to people,” said Weitzner. “That’s what’s going to happen. What we’re seeing through these lawsuits is this system working its way through that.”

This certainly isn’t Spotify’s first lawsuit on the matter. In May, the streaming giant agreed to pay $43 million to artists that had filed a class-action lawsuit for not properly licensing songs. Wixen, however, did not agree to this settlement — which is still pending approval by a judge.

Even without these licensing disagreements, adequately compensating musicians for streamed songs is still complicated. The basic formula involves dividing an artist’s streamed songs (relatively tiny) by the total number of streamed songs — which is a huge number (in the billions). This tiny percentage is then taken from Spotify’s total revenue for subscriptions and advertisements, which is then paid to record companies. Companies then give a small percentage to publishers like Wixen, which then pays songwriters. 

“So you might understand why songwriters and publishers feel marginalized under the current licensing regime for streaming,” Miller said.

Still, Weitzner believes it’s important for Spotify to adapt and solve its recurrent copyright struggles. Spotify, he notes, is a stand-alone company (not part of the likes of Google or Apple) generating billions dollars (though is not quite yet profitable) — something that the long-struggling music industry can continue to thrive on.

“We have got to sort this out now,” said Weitzner. “It’s important to see Spotify survive. It’s important for the industry to see Spotify successfully navigate this transformative period.” 

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Amazon Music may soon be part of your car

Image: brian ach/Getty Images for Audi

In case you haven’t had enough of Amazon, it may be on its way to your car. 

The online retailer has partnered with Audi and Porsche to integrate Amazon Music with their vehicles’ entertainment systems. 

Owners of eight 2017 and 2018 Audi models and an undisclosed number of Porsche models can now stream Amazon Music through their vehicles’ multimedia systems. All models 2019 and later will be fully integrated, the company told Mashable. 

Amazon Music is free for Amazon Prime members, and Amazon Music Unlimited (Amazon’s equivalent of Spotify Premium) is significantly more expensive for non-Prime users. 

The integration will make it more convenient for drivers of these vehicles to use Amazon’s streaming service instead of its competitors such as Google, Apple, and Spotify, which users still need to access on third-party apps. In a market where there’s little to differentiate such streaming services from the rest of the market, such convenience may be the tipping point for drivers who are indecisive — and could convince them to join Amazon Prime. 

This may hold true especially for Porsche owners, whose vehicles are currently not compatible with Android Auto

Many of Amazon’s moves over the past few years have been aimed at making Amazon Prime a necessary part of your life: Everything from Amazon’s extensive video streaming library to last-minute holiday shipping, meal kits, Twitch streaming, and even exclusive concerts are available exclusively to Prime members, and it seems that more perks of the $5.99/month membership are popping up every day.

If this latest scheme catches on, it could make Prime an essential purchase not just for online shoppers, gamers, and concert-goers, but to anyone who drives. Non-Prime members, it’s not quite time to panic yet — but prepare yourselves. 

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To fix SoundCloud, it must become the anti-Spotify

Startups die by suicide, not competition. It wasn’t that anyone was stealing SoundCloud’s underground rappers, bedroom remixers, and garage bands. SoundCloud stumbled because it neglected these hardcore loyalists as it wrongly strived to usurp Spotify as the streaming home of music’s superstars.

But four months ago after laying off 40% of its staff, SoundCloud scored a do-or-die investment of $169.5 million that saved the company and brought in a new CEO. Now the question is whether SoundCloud can get back in the groove. I sounded the alarm about SoundCloud’s mishandled headcount cuts, misguided direction, and morale problems, so it feels important to lend some suggestions alongside the criticism.

SoundCloud has something no one else does: the world’s biggest archive of user uploaded music and audio — around 120 million tracks. And so that must be the center of the service.

It once was, but rather than doubling down on independent creators, helping them monetize with ads and commerce, and selling subscriptions to enhanced ad-free access, SoundCloud wasted years chasing the major record labels in hopes of building a Spotify competitor full of the most popular music. Finally in mid-2016 it launched the $9.99 SoundCloud Go+ subscription with ad-free access to mainstream music and indie stuff, but it was already years behind Spotify and Apple Music.

In the meantime, the distraction led to extraordinarily slow progress on scaling up advertising, both in terms of the volume of ads on the sites and the independent artists who could get a revenue share. Ads weren’t a big part of SoundCloud, so many users don’t feel its worth paying to get rid of them. Creators strayed to YouTube and Patreon, investing their attention and driving their audience to where they could earn money. And spurious take-downs of creators’ music that they already paid SoundCloud to host further burned the company’s cred with its core constituents.

It’s on this guy, SoundCloud’s new CEO Kerry Trainor, to right the ship. I’ve met him, and he’s cooler than he seems.  (Photo by Todd Williamson/WireImage)

Luckily, SoundCloud has now booted its former management team, replacing Alex Ljung with former Vimeo CEO Kerry Trainor. That gives SoundCloud an opportunity to realign its strategy with the creators who made it unique in the first place. Here’s what we think it needs to do:

Don’t Fight Spotify Head On

SoundCloud will never be the #1 pop music streaming platform, and it needs to accept that. It got started on subscriptions too late, doesn’t have the industry buy-in the way Spotify does from taking the labels on as investors, the recommendation data Spotify got from acquiring Echo Nest, the massive device install base or war chest to leverage like Apple Music, or massive ad-supported audience like 1 billion-user YouTube.

So instead of trying to compete with the big dogs directly, SoundCloud should invade from downstream. Rather than marketing its $10 SoundCloud Go+ subscription to casual music fans, it should concentrate on locking in hardcore listeners who love its indie stuff via its free tier or $5 SoundCloud Go subscription just for user generated content. Then it should upsell them to the $10 plan by touting the convenience of listening to everything in one place, rather than paying $10 a month just for mainstream music elsewhere. The $5 plan should be the focus, and the $10 plan should be the bonus.

Protect The Legal Grey Area Of Music

SoundCloud buddied up to the major labels at the expense of the DJs who fueled its ascent. The legal grey area of unofficial remixes and DJ sets are what made SoundCloud indispensable, but are also what got criminalized and sometimes booted off the platform after its label deals. SoundCloud needs to figure out how to settle the copyright payouts on this kind of content so it can stay up on the platform. Whether that means developing its own rights disbursement technology, partnering with a provider of this payout distribution tech like Dubset, or outright acquiring it, SoundCloud must be a safe home for this content you can’t find anywhere else. Otherwise, SoundCloud isn’t special.

Become The Musician Fan Club Platform

Everyone knows streaming music platforms only pay out a fraction of a cent per listen. That can add up to millions a year if you’re Taylor Swift, but often isn’t enough to support the livelihood of smaller niche artists. But no matter how big or small, almost every artist has a percentage of listeners who are diehard fans, willing to pay far more than they’d earn a creator in streaming royalties or ad revenue share.

That’s why artists of all types have turned to subscription patronage platforms like Patreon where you don’t need millions of fans, just a few thousand paying a buck a month. YouTube, Apple Music, and even Spotify have failed to go deep in assisting artists with direct commerce. YouTube is testing Patreon-esque Sponsorships, and Spotify offers some tiny merchandise and concert ticket options on artist profiles.

BYRON BAY, AUSTRALIA – MARCH 27: Fans react to The Wailers performing live on stage at the 2016 Byron Bay Bluesfest on March 27, 2016 in Byron Bay, Australia. (Photo by Mark Metcalfe/Getty Images)

But SoundCloud has a massive opportunity here because it knows its artists can’t sustain themselves on royalties, and the type of listeners on SoundCloud are serious music aficionados. SoundCloud should provide bold options for artists to sell merch and tickets and teach them how to use data to create goods their fans want to buy.

That also means pushing artists towards new revenue streams like offerings exclusive experiences. Help artists sell phone calls, meet-and-greets, signed memorabilia, webcam footage of studio sessions, exclusive video streams, and more. And finally, provide a channel for artists to communicate directly with their top listeners in more intimate ways than email blasts and Twitter broadcasts.

SoundCloud should be the modern fan club. In an era where you don’t “own” music anymore, the app’s audience of early-adopting hipsters might be eager to show their allegiance to their favorite artists with their wallets, not just their ears. And that’s good for everyone.

Let Spotify and Apple Music be the impersonal place for superstars who don’t care about you. SoundCloud could give listeners a deeper experience, artists a bigger paycheck, and itself a lucrative corner of the otherwise overcrowded music space. So, Kerry, what are you gonna do?

Featured Image: Bryce Durbin/TechCrunch

Review: Shinola Canfield headphones are an overpriced mess

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he Shinola Canfield headphones cost $600 and do not ship with a 1/2-inch stereo adapter. That should tell you everything you need to know. But if not, keep reading and let me explain why these fashion headphones are not worth the price.

I tested these headphones in a way that I thought they would be most widely used. I pitted them against several competitors using my iPhone 8 with Spotify. I also used an Onkyo stereo receiver with a Audio Technica turntable to test their upper limit. It was an enjoyable afternoon.

Before we get started, it’s important to note that I’m not a professional audio reviewer. I don’t have balanced power cables or a selection of FLAC tracks dedicated to testing equipment. But I do have a nice collection of headphones and a rather shitty taste in music. I don’t like a lot so I listen to the same stuff over and over. That’s annoying for passengers on road trips but handy when testing headphones.

The Shinola Canfields are the company’s first set of headphones. They’re built overseas, and tested in Detroit where Shinola also puts together watches and constructs leather goods. These come from America. Kind of. Let’s back up.

Shinola is a watch company born from the minds behind Fossil and launched as a marketing scheme out of Plano, Texas. The company set up shop in Detroit where it starting assembling quartz watches, adopting the Made In Detroit tagline. Later the company expanded to leather goods, bikes, and other products including turntables and now headphones.

Here’s the kicker: Shinola headphones are much like Shinola watches. They look fantastic. They’re heavy, solid, and feel like they’ll last a lifetime. They’re not worth the price. The appeal stops at the casing. The insides, much like Shinola watches, are comprised of low-end components, not worthy of the lofty price tag.

Review

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found the Shinola Canfield headphones to be flat, tinny and bland. When used off an iPhone, the sound is underpowered and muddled. When used off a stereo amp, the sound is improved but still lacks the inflection and range of lesser-priced headphones.

Classic rock is a great place to start with headphone reviews. First, the music is amazing, but second there’s generally a range of instruments with great soundstage separation. Carry on Wayward Son starts with a beautiful harmony of vocals followed by a couple quick hits on the snare and guitars. Through the $600 Canfields, the vocals are muddled together where on the $449 Audeze Sine headphones the soundstage opens up and there’s distinct separation that’s simply beautiful.

The dull vocals are even more evident in Pink Floyd’s Wish you Were Here. I have the original vinyl and it’s of course on Spotify, too, making it a great test track. The intro is long and classic Pink Floyd but it’s telling as a sample. Here I used the Audeze Sine headphones and the Massdrop-made Sennheiser HD 6XX headphones and the difference is stunning. Details are simply missing when the track is listened to through the Shinola headphones. The Shinola headphones did not reproduce David Gilmour’s smoker coughs and sniffles during the song’s intro; one cough sounds like shuffling papers. The sounds are clearly audible through the other headphones. When Gilmour finally starts playing, the Audeze headphones produce a stunningly clear guitar twang where the Canfields fall flat.

When this track is played through the turntable and amp, the differences are magnified. While the Shinola headphones sound better than when used with amp, the Sennheisers sound exponentially better and this track, and others like it, come alive.

Even when compared to Bose Quiet Comfort 35s, the Shinola Canfields come up short. The Bose headphones have a notoriously small range, but I use them a lot. I’m on a plane every few weeks. I put up with middle-of-the-road range because the noise cancelation is the best available. I threw Green Day on the turntable and loaded it on Spotify and found yet again, the Shinola headphones did not live up to their price.

I never found a music genre where the Canfields lived comfortably though they fared better with hip-hop than most. They do not have the soundstage or highs required by classic rock and jazz is a sloppy mess. It was hip-hop where they finally started sounding the part.

Sonos One users can now ask Alexa to play Spotify music


In October, Sonos launched the Sonos One, raising the bar on what is already the gold standard in wireless whole-home audio. The big new feature? An integrated microphone that added support for Amazon’s Alexa.

However, there was one big caveat: While Alexa was integrated to control music services like Apple Music, Google Play Music, Soundcloud and others, it was missing a major player in the form of Spotify.

That’s not to say that Sonos users couldn’t listen to Spotify at all — once you started playing Spotify music from your iPhone or desktop, you could then skip tracks and change the volume with Alexa.

But part of the beauty of Alexa integration is the ability to simply ask for the music of your choice out of thin air.

Today, Sonos has rectified the situation, the Verge confirms. Now, Sonos One users can ask Alexa to play their custom playlists, Discover Weekly, or any other music mix that Spotify might offer.