The Rise and Rise of Streaming
written by Irving David Partner at DWFM Beckman Solicitors
Media & IP Lawyer
Until quite recently, if you wanted to listen to music or any other type of audio, you would download a digital audio file in a format such as MP3, WMA, AAC, OGG, or FLAC.
But now the question is: along with vinyl, the cassette and the CD, how much more of a future do digital downloads have? Because streaming is rapidly becoming the only game in town.
Streaming differs from downloads in that no copy of the music is saved to your hard drive. If you want to hear it again, you just stream it again, although some paid streaming music services permit you the option to do both—to stream and download.
When you use a streaming delivery method, there is no need to download a file. You can start listening to a song or piece of music immediately. An audio file is delivered in small “packets” so the data is buffered on your computer and played straight away.
So long as there is a steady stream of packets delivered to your computer, you will hear the sound without interruption.
Spotify is the biggest and most successful music streaming service of its kind globally. Since its launch in Sweden in 2008, it has distributed more than US$5bn in royalty income to rights holders
Now available in 60 markets globally with more than 100 million active users and over 50 million paying subscribers it gives its subscribers on-demand access to over 30 million tracks. Its mission is to make all the world’s music available instantly to everyone, wherever and whenever they are.
Spotify currently has more than 100 million monthly active users, of whom 50 million are paying subscribers. The company’s closest rival, Apple Music, has 20 million paying users; Tidal, fronted by the rapper, Jay Z, a little over 1 million. Amazon and Google are also players, with Facebook a likely entrant.
Spotify has direct deals in place with all the major labels. Additionally, a number of companies deliver independent labels’ music to Spotify and collect royalties on their behalf.
Of these companies, Merlin is at present pre-eminent, describing itself as being ”the global digital rights agency for the independent label sector” and it has been acknowledged as “the Independents’ Champion” at the A2IM Libera Awards for two years running.
Merlin, like Spotify, launched in 2008 and is often referred to as “the virtual fourth major”. Spotify has enabled Merlin’s member companies to successfully benefit from streaming services.
It offers, via a single global licence, access to music from thousands of independent record labels and distributors from more than 50 countries across the world.
Merlin’s member companies include Armada Music, Beggars Group, Domino, Entertainment One, Epitaph/Anti, Hopeless Records, Kobalt Music Recordings, Mad Decent, Naxos, [PIAS], Secretly Group, Sub Pop and Warp, representing many of the world’s most important and successful artists.
Merlin ensures these companies have effective access to new and emerging revenue streams and that their rights are appropriately valued and protected.
Apart from its agreement with Spotify, Merlin has also licensed other key digital services including SoundCloud, YouTube Red, Pandora, Google Play, Deezer, Vevo and KKBOX.
It has reached a number of high value copyright infringement settlements on behalf of its members with, amongst others, Limewire, XM Satellite Radio and Grooveshark.
AIM and A2IM
AIM (“the Association of Independent Music”) is a trade body based in the UK. Established in 1999, it provides a collective voice for the independent music industry.
AIM represents over 800 member companies, from the largest and most respected labels in the World, to small start-ups and individual artists releasing their own music for the first time. AIM promotes this diverse sector globally and provides a range of services to members, enabling member companies to grow, grasp new opportunities and break into new markets.
AIM member companies represent artists who have claimed six of the last ten Mercury Music Prizes and regularly account for 30% of all UK artist album awards (silver, gold, platinum). Artists signed to member labels include Adele, Amadou and Miriam, Arctic Monkeys, Bon Iver, Bjork, Caro Emerald, Franz Ferdinand, Friendly Fires, Grimes, Netsky, Radiohead, Roots Manuva, Royksopp, The Prodigy, Queens of the Stone Age, The Strokes, The Walkmen and The White Stripes.
AIM’s US associated company is called A2IM (“the American Association of Independent Music”) and represents over 500 Independently-owned American record labels.
A2IM’s independent label members include music labels of all sizes and staffing levels across the United States, from Hawaii to Florida, representing musical genres as diverse as its membership, including Bluegrass, Blues, Children’s, Classical, Comedy, Country, Dance/electronic, Gospel, Folk, Hawaiian, Jazz, Hip-Hop, Latin, Metal, New Age, Pop, R&B, Reggae, Roots, Soca/Caribbean, Traditional American, World, and more.
As you will see from the above, “Independent” does not refer to a specific genre of music. Nor does it mean lesser-known artists.
For example, A2IM member labels have issued music releases by artists including Taylor Swift, Mumford & Sons, The Lumineers, Adele, Alabama Shakes, Arcade Fire, Run the Jewels, Bon Iver, and many others.
One of the benefits of joining AIM or A2IM is that they have negotiated reduced distribution fees with Spotify via Merlin. This can result in a valuable cost saving to any small independent label when collecting streaming income through Merlin.
For more information on this topic or on any other music industry related matters please contact Irving David in our Media and IP Department:
T: 020 7408 8888