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"What happens after the money leave's Spotify's hands is not in our control."
—-Steve Savoca, Spotify
NARM: TURNING MUSIC STREAMS INTO REVENUE STREAMS
The Plan to Monetize Sub Services Is Just Getting Started
On NARM’s last day, digitalmusic.org, started by the org’s Digital Think Tank in ‘09, hosted this morning’s sessions. 

One of the most well-attended concerned how music streams are getting monetized. The panel was moderated by The Collective’s Aaron Ray with panelists Dean Bolte from Omnifone (a platform provider for mobile), Spotify’s Steve Savoca, Crush Mgmt’s Dan Kruchkow, IDJ/Universal Republic’s Russell Fink and eMusic’s Adam Klein. The session was a love fest for music streaming with nary a word against the services that provide them.

Ray wasted no time in asking the question to Spotify: “A lot of money is changing hands, but we’re not exactly sure where it’s gone. It doesn’t seem to be trickling down to the artists.” Savoca responded that he was sorry about the “murkiness” of the process, but that Spotify has given $250 million to rights holders “What happens after the money leaves Spotify’s hands,” he said, “is not in our control.”

Crush’s Kruchkow added that it’s still too early to expect to see checks. “It’s only been a year,” he said. “I expect that it will improve.” He went on to say he really liked the product and that the industry had to have some faith. Fink echoed that sentiment: “We’re in our infancy,” he said, “We can’t judge where we are already or we’re just defeating ourselves. It’s so early in the game.” He insisted that his labels are seeing increases every month and that he is very bullish.

“It’s not black and white,” added Savoca, “when it comes to turning streaming into sales. We believe that we are helping to drive Gotye from a marketing perspective.” Fink agreed, noting that Gotye is seeing 1.3 million streams and still selling 350-400k in tracks a week. “We don’t see any cannibalization.”

eMusic’s Klein talked about how his subscription service caters to an older audience that prefers ownership of full-length albums and that his demographic spends more money on music. “But our audience wants to hear it first,” he said. “They want to stream before they buy.”

Bolte talked about how very early we are in the mobile space as well. “The technology is just catching up to what’s possible. Mobile is starting to come to fruition,” but added,  “We believe that it’s going to grow quickly.”

Savoca touted the fact that Spotify’s relationship with Facebook, opening up their API, was a very important step. He insists that new apps were helping to drive sale and is making their company more of a discovery service than ever.

Klein also applauded Spotify’s opening of their API and said that it’s made a huge contribution. “We have to keep connected to streaming services,” adding, “mobile has a huge growth potential that we all have to focus on.” Speaking to the subject of discovery, Fink noted that there is currently no Rock station in New York: “You have to be able to discover that music another way.”

Bolte seemed to wrap it up with the obvious. “We’re still on a huge learning curve.”

Agreed.

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