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MARTY BANDIER ON STREAMING: THE LIMITS
OF FREE

The King of Music Publishing on Freemium and Fair Compensation

Sony/ATV chief and King of Music Publishing Marty Bandier has been a fierce advocate for songwriters’ rights throughout his career, and with the growth of streaming services has focused his energies on ensuring that creators are properly compensated. When we asked him to weigh in with us, he sparked up a Cohiba and got to business.

Do you share the positions recently expressed by Doug Morris and other major-label leaders that the industry should move to end the “freemium” tier of unlimited, ad-supported, on-demand streaming?
Yes. There is little to differentiate at present between the free tier offered by on-demand streaming services and the paid-for tier. The free service is simply too good and provides little incentive for consumers to upgrade by paying for a subscription service every month. The unlimited part is the big problem. It is not a trial offer and there is no cut-off point. It is simply a free service with no time limit.

What would be the ideal streaming outcome for songwriters? With cover versions and user-generated content, do they derive significantly greater benefit from ad-supported streaming than recording artists who don’t write?

We all love Spotify. We love any service that provides opportunities for our writers, but only if they can earn a fair living from it. In the U.S. we are subject to a compulsory license, which results in unacceptably low royalty rates for our songwriters, whereas in other territories, including Europe, we can negotiate directly with services to agree on royalty rates. We would like to be able to do the same in the U.S. so we can achieve fair market rates for our songwriters.

At present songwriters are not deriving significantly greater benefit from ad-supported streaming compared to recording artists. Although YouTube offers opportunities for songwriters for cover versions and user-generated content, YouTube is an even bigger problem. While YouTube is the biggest music service out there, it continues to have issues identifying the videos posted up and then matching them to the right content owners. That’s our biggest problem. There are millions and millions of plays that are not credited properly, and the money is therefore not flowing to the right people.

How do you respond to the argument that freemium remains valuable as a way of “on-boarding” consumers to the streaming model, and that Spotify is proving successful in moving its users from free to paid? What role, if any, might there be for some kind of free streaming tier?

It can have a role, but not as an unlimited free tier. If you buy a new car you sometimes get a limited, free trial of SiriusXM.  Then one morning, when you suddenly find it’s no longer there, your first instinct is to accuse your wife of interfering with the radio, before you realize your free trial has come to an end—and if you want to continue with the service you have to start paying for it. It should be the same with Spotify and any of the other services with free tiers. It should be for 90 days or less and come with certain conditions, like you have to supply your credit card information. 

What do you see as the primary challenges of transitioning consumers to the subscription streaming model? What do you anticipate from the forthcoming Beats/iTunes service?
Again, it comes down to there not being enough incentives for someone to upgrade from free to subscription. On Spotify, all the tracks that are available on the paid-for service are available on the free service as well, so why would you want to pay out $9.99 for exactly the same songs?

We love any service that provides opportunities for our writers, but only if they can earn a fair living from it. 

Anything Apple ever does is always worth paying attention to, given their incredible track record, so we are anticipating something interesting from them in this space. We expect their streaming service will be strong on curation and we hope for the sake of our songwriters it doesn’t have an unlimited free tier. 

How, if at all, do you think the “Blurred Lines” decision is affecting the narrative today?
The case has obviously generated a lot of press coverage, but it needs to be put into some context. It is a one-off decision by a jury, and the verdict has not changed the copyright laws in any way. You still cannot copyright a genre, feel or groove of a song. People have always been influenced by their musical heroes, and it would be wrong if that couldn’t continue. But all the publicity surrounding this case may mean the number of similar cases could increase. 

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