What are an Artist’s Metrics for Success in the Digital Age?

Last night I was fortunate enough to be on stage with Talking Head David Byrne and legendary DJ Dave Haslam at the Royal Northern College of Music discussing Byrne’s latest book ‘How Music Works’.  It was a fun event with a lot of thoughtful debate and also insight into Byrne’s approach to making and performing music.  Prior to our discussion I gave a short presentation on the state of the digital music nation to help illustrate how the music market is so dramatically different after the music industry’s first digital decade.

One of the slides I updated for my presentation was that of artist ‘success metrics’ in the digital age (see figure).

Prior to the advent of digital, and more specifically the spread of the contagion of free, the way in which artist’s measured their success was primarily through sales of albums.  But in the digital era, with album sales becoming less and less important to many artists, metrics such as total YouTube views and number of Facebook likes are becoming just as important measures of success.

As we are still in the early days of digital, the shift in success metrics does not apply in a uniform manner.  Some artists’ success metrics still look more like those of artists from the analogue age than they do the digital age.  Take a look at two of the UK’s most successful contemporary artists: Adele and Coldplay.  Both of these artists are still predominately album artists and both have had huge success with their latest albums.  Yet look at their YouTube views and Facebook likes, and they significantly trail more canonically digital-age artists such as Rihanna and Lady Gaga.  This is illustrated even more starkly by the case of Pitbull who has sold a relatively modest 8 million albums but has a staggering 2.95 billion YouTube views.

A key factor that underpins this diversity is the age of the core audiences of the artists.  Coldplay and Adele appeal more to older audiences who are still in the habit of buying albums, or who do not buy many albums anymore but do so on occasion when an album like ‘21’ comes along.

Does this mean that as we progress more deeply into the music industry’s second digital decade that the success metric balance will tilt more firmly in the favour of YouTube and Facebook?  Quite probably.  Which inherently means that album sales will continue to dwindle.  A key reason for this is that the majority of album buyers are still CD buyers, and more of these consumers are stopping buying music entirely rather than going digital.  In the UK the total number of people buying music dropped by 5.1 million between 2008 and 2011.  Against a population of 61 million that is a vast number to lose in such a short period of time.  In the US the numbers are similar but slightly lower on a per capita basis.

Until a clear path is carved for physical album buyers into the digital realm, album sales will continue to dwindle.  And that not only matters in industry revenue terms, it matters from a creative perspective as well.  I am not arguing that we try to turn back the tide of album atomization (many consumers will forever more only want individual tracks from many artists).  But what must happen is the emergence of a new generation of album products that deliver not just as much, but more value to music fans than CD albums currently do.  This means leveraging the principles of DISC (Dynamic, Interactive, Social, Curated) to create a new breed of album experiences.  Because the alternative is swapping albums sales for YouTube views and Facebook likes, neither of which pay the bills.

Why It Doesn’t Really Matter Whether Adele Sells More Albums Than Lady Gaga This Year

You may have noticed the unattractive furore surrounding Adele’s contest with Lady Gaga to become the biggest selling artist of the year.  The momentum appears to be with Adele, with her hugely successful ‘21’ album yesterday becoming the first ever album to sell more than 1 million digital copies on iTunes in Europe.

But the simple fact is that albums are no longer the definitive marker of success that they once were.  The shift from the distribution era of the album to the consumption era of the stream and the download have seen a shift from buying to free, and from albums to singles.  The download store allowed music buyers to deconstruct the album into cherry-picked bite size chunk; file sharing enabled people to stop buying albums altogether; and streaming let fans assemble single tracks into their own personal albums (i.e. playlists).

The digital transition makes a case for new measures of success

Income from live, merchandize and other sources have been becoming increasingly important for artists and yet we still measure an artist’s success in terms of how many units of music they sell.  Live revenues are certainly one measure, and of course radio.  But Facebook likes and YouTube views are becoming an increasingly important indicator of success also. And yet, measuring success is not as simple as choosing between one metric or another.  The music industry is in a transition stage, as is consumer consumption of music.  Thus we have a mixture of artists ranging from those that are clearly of the digital age and those that are transition artists, who are entirely contemporary artists but are more at home on a CD than they are YouTube.  I’d put Lady Gaga in the first camp and Adele in the second:  just as measuring Adele solely on her YouTube views would miss the mark, so measuring Lady Gaga on album sales alone would miss the mark.

The chart directly below illustrates the point further.  Here artists are mapped according to their total YouTube views and total Facebook ‘Likes’, with the bubble size representing the total number of albums sold globally.  I have picked a sample of artists that are, or have been, top tier and that represent a range of different artist career models.

A number of trends become apparent:

  • A new generation of artist is emerging. Lady Gaga may be the poster girl for the YouTube generation but she also shifts a good number of album units too.    Artists like Cuban American rapper Pitbull are the sharp end of digital age artists. With 1.5 billion YouTube views to his name and tens of millions of singles sold PitBull is a mainstream success story of the highest order, and yet he has sold fewer than 10 million albums.
  • Target audience counts. Coldplay and Adele are both top tier contemporary artists, and yet their YouTube views pale compared to Pitbull.  What they have instead are big album sales (50 million for Coldplay, 15 million for Adele).  Why the difference? Because Coldplay and Adele appeal most strongly to people in the their late 20’s and upwards i.e. the people who still buy albums. While Pitbull is much more youth focused.
  • The 100 million selling album artist is a dying breed.  Just in case you were wondering why Sir Cliff is in the chart, he achieved the not insignificant feat of selling 100 million albums. He was at his peak during the album’s apogee and although his digital stats are pretty modest, it is hard to see the likes of Pitbull or, perhaps, even Lady Gaga ever matching Cliff’s album sales.  That is not a reflection on those artists but instead on the changing dynamics of the music market.
  • The exceptional success stories break the rules.  Lady Gaga and Michael Jackson break the rules.  Lady Gaga is – by contemporary measures at least – a strong album artist as well being in a different league in YouTube and Facebook.  Michael Jackson was firmly an artist of the album apogee era and yet his unique profile has ensured that his success continued into the digital age, and by the rules of the digital age.
  • Facebook is the better measure of sustained, organic success.  The problem with YouTube is that it is susceptible to the impact of flashes in the pan.  An artist can have one or two massive YouTube hits and then disappear, or simply be early on in their career.  Facebook ‘Likes’ however are a better measure of longer term, organic popularity.  Take the example of Dev who has close to 300 million YouTube views  - which is nearly as many views as Coldplay.  Yet take a look at Dev’s Facebook ‘Likes’ and you find that she has just 256,00 compared to Coldplay’s 15 million.  YouTube is the key digital popularity measure but needs to be blended with other measures to be truly effective.

Many, rightly, think of YouTube and other free streaming services such as Spotify and Pandora as promotional and discovery vehicles, a digital equivalent for radio.  And yet they are also much more than that: they are increasingly the ends as well as the means.  The chart below shows the number of albums sold per YouTube view.  Cliff Richard’s rate dwarves the rest because his peak was in the album era and his remaining fans aren’t exactly widespread among millennials. But the overall trend is nonetheless compelling: for the true ‘YouTube Generation’ artists, the ratio is dramatically weaker than for album artists.

6 years ago Paul Myers – then CEO of Mp3 download store Wippit – told me that “rock n’ roll was dead”, that the last great album was ‘Thriller’ and that we would never see an album that successful ever again. I was sceptical at the time, but those words are appearing ever more accurate as each year passes.  Looking at the first chart above it is clear that no artist is ever going to come close to selling the amount of albums Michael Jackson did.  But artists will still be successful: we will see artists break the 2 billion YouTube views and we will see artists break the 100 million Facebook ‘Likes’.  As this transition phase continues to play out, artists will evolve how their careers work and the industry will increasingly have to change how it measures their success.  Companies like Music Metric are already starting along this path and the traditional sources of measurement such as Nielsen and the Official Charts Company are also evolving their approaches.  These shifts are crucial, because measuring an artist’s success isn’t just a marketing trick, it is the litmus test with which their fans relate and by which history will remember them.

The Awkward, Unanswered Questions That Led to Coldplay’s Spotify Embargo

Coldplay have opted to not have their latest album Mylo Xyloto made available on streaming services…all of them, though of course Spotify is the core motive for this move.  It is yet another thrust of the wedge which is inserting itself between the streaming service and artists.

The download / streaming revenue disparity

Coldplay – with apparently begrudging support of their label EMI-  have made a business decision that they would prefer to have a smaller number of people listening to Mylo Xyloto to ensure that a larger number of them are buying it.  The problem with Spotify is that it generates so little income per activity to artists compared to downloads, but this is not just a Spotify issue.  In my earlier post showing PledgeMusic’s Benji Rogers’ digital income I showed how the average pay out per activity for streaming services (premium ones included) is over 300 times smaller than the average pay out per activity on iTunes.   Now to be clear, we are not comparing apples with apples here (no pun intended).  An activity on iTunes is a one-off paid download, whilst an activity on a streaming service is one stream and that play could occur multiple times for the same song.  Yet it still leaves a rather large number of plays required before you start catching up with an iTunes pay out.

The three possible reasons why artists get so little from streaming services

So what is broken with the model?  Streaming services already feel that they pay out too much to rights owners: services typically pay out in the region of 80% of their income to rights holders. So increasing their royalty payments would likely put many services out of business, unless of course they hiked their prices. But 9.99 a month is a hard enough sell as it is, let alone anything higher.

So where is the money going? Here are three possible scenarios:

  • The long tail is getting mined, and some.  One possibility is that users of streaming services are spending their time listening to such a vast diversity of catalogue that any one artist only gets a minimal amount of plays and thus only small pay outs.  However, with discovery features so weak on most services, the opposite is more likely to be true for the majority of users.  Indeed 24/7’s CEO Frank Taubert once stated that a third of 24/7’s catalogue had never been downloaded, not even once. (24/7 remember is the service that powers the remarkably successful TDC Play unlimited music service in Denmark).
  • Messy metadata is to blame. Streaming service metadata is a complex beast.  With so many different sets of fields from different rights holders having to be blended into one massive dataset by each service, and each time in a slightly different way.  There is always going to be room for error.  This may be causing some proportion – possibly a significant share – of plays not getting reported.  When Benji Rogers decided to test how well Spotify paid out, he left his albums on permanent stream for a month.  Yet his digital income reports for that month not only fell well short of that number of plays, some of the catalogue was listed as not having even been played once.  Given the complexity of rights reporting it is unrealistic not to expect at least some loss of  data quality along the path of point-of-listening: in-service reporting; in-service data cleansing; data warehousing; distributing data to rights holders; rights holder data analysis; rights holder accounting; rights holder pay outs to artists.
  • Rights holders aren’t distributing all royalties appropriately. The conspiracy theory is that the big bad labels are collecting swathes of digital income from streaming services and then secretly squirreling away the majority of it for themselves.  Though this is less likely than it may seem, there are a number of label practices which can cumulatively contribute to creating the effect.  All artist/label contracts have stipulations about recouping costs – some of which are skewed against artists – and most have different stipulations about digital pay outs.  So there are contractual and accounting reasons why some artists will not see all the income they expect.  The notoriously Byzantine accounting practices of major labels are another potential related factor.  The Achilles Heel of major label public relations, questionable accounting practices have resulted in many an artist horror story.   The possibility of sums of unpaid royalties, stuck in escrow somewhere until forgotten about is every artist’s nightmare.

The likelihood is that all three scenarios play a role.  I don’t believe that any party, Spotify or the labels included, have intentionally embarked on strategies to cheat artists out of money.  But there is a distinct possibility that not all involved parties are exactly incentivized to plug the holes in their processes to thus bring the increased accuracy and effectiveness which could result in larger artist pay outs.

Digital commercial practices complicate matters further

The waters are further muddied by major labels becoming stake holders in some digital services, raising the prospect of portions of income from those services being joint venture income and therefore not subject to reimbursement to artists.  Add to that the issue of the large advances services have to pay labels in anticipation of actual revenues, how much of that is paid to artists, and when, and especially if the service doesn’t ever generate the income guaranteed by its advance.

All these are valid issues that would benefit markedly from an open dialogue across the value chain.  Spotify is left looking like the pantomime villain but is likely no more than a cog in a machine that nobody seems to really want to fix other than the artists.

But fixed it must be.  Spotify and YouTube massively outpace most other digital music services in adoption and usage, yet they deliver a tiny fraction of the income.  Artists cannot afford for these services to behave like radio (i.e. the tool to drive sales) when they are also becoming the end product for many music fans.

The case is clear for a transparent and robust dialogue between labels, artists and services.

Coldplay have the benefit of being big enough to dictate terms.  Most other artists don’t have that benefit.  Greater transparency, effectiveness and accuracy in revenue reporting and distribution will help drive not only artist trust, but, via increased income, greater support too.  The alternative is that piracy gets another free shot at goal, which is what Coldplay have already likely delivered, driving many Spotify users back to Torrents to find Mylo Xyloto for themselves.

Are EMI Censoring the Coldplay vs Joe Satriani Debate on YouTube?

You’ll almost certainly know by now that US ‘axe-hero’ Joe Satriani is suing Coldplay for plagiarism.  He claims that Coldplay’s ‘Viva La Vida’ (an EMI recording) stole from his 2004 track ‘If I Could Fly’ (a Sony recording).  This was becoming a PR disaster for Coldplay and a couple of videos on YouTube comparing the two songs were each getting a couple of million views.  In short the controversy was generating a lot of online buzz.  Some commentators were advising that Coldplay should kick their PR machinery into action.

 

Well it looks like that advice has been heeded.  As of today those videos on YouTube comparing the two songs (and other similar ones) have been removed, in their place is the following message

 

This video is no longer available due to a copyright claim by EMI Music

 

Because YouTube has licensing relationships with the labels it has to be sensitive and responsive to their requests.  It looks like copyright infringement has been used here as a pretext for removing an awkward embarrassment.  Indeed a quick search finds other non-official copies of ‘Viva La Vida’ available for viewing, some (such as this one) with nearly 1 million views i.e. videos that are infringing copyright on the same song but not including reference to the Satriani controversy.  It’s somewhat ironic that copyright infringement has been used as the reason for pulling a video that discusses a copyright infringement controversy.

 

 

But this isn’t the first time the ‘copyright claim’ has been used to cover up YouTube embarrassments.  Back in July 2007  Beyonce Knowles took a dramatic tumble at a gig and mobile phone video footage spread like wild fire on YouTube.  In a desperate bid to airbrush out history SonyBMG got all the offending videos pulled, under the cover of the same ‘copyright violation’ tactic EMI have used here.  Similarly as now, plenty of other bootleg Beyonce live footage, some from the same gig, remained untouched.

 

What I said in my post at the time about Beyonce’s fall applies here also:

 

 

“What I find particularly interesting about this though is the fact that it is YouTube’s close ties with the record labels that has resulted in them filtering out the footage. To much of its audience this will feel like police-state style censorship and the curious will look elsewhere. Perhaps this an early sign that YouTube is becoming too closely aligned with ‘the establishment’ for ‘the kids’?”

 

 

 

And finally, if you want to judge on the Satriani / Coldplay controversy for yourself, here are YouTibe clips of both songs.  For ‘If I Could Fly’ move in 50 seconds and you’ll hear the part in question.

 

 

 

 

Joe Satriani ‘If I Could Fly’

 

Cold Play ‘Viva la Vida’

 

 

What do you think?