Indie Musicians Sound Cautionary Notes on Digital Media

By Bryant Fraser for studiodaily.com 

There has been a lot of hubbub in the news lately about the business of digital media distribution, and what it means for the future of film. As platforms like Netflix streaming, Hulu, iTunes, Wal-mart’s new VUDU, Xbox Live, Playstation Network, and more offer consumers more choices of where and how to consume media, filmmakers see a host of new ways to find viewers — especially niche audiences who might most easily be reached through a link from a special-interest website or through a videogame platform.

Commenting on a blog post I made earlier this week about the IRS questioning whether documentarians really have a profit motive, one writer encouraged filmmakers to embrace new distribution alternatives like Amazon, Netflix, and the ad-supported YouTube to increase their chances of seeing a return on their investment in their films. And it’s true that these services can be valuable — Steve Pond of TheWrap reported earlier this month about the new Polish Brothers film, For Lovers Only, which has made $200,000 through video-on-demand and iTunes with no real investment in production or marketing. That’s a solid number for that film, and an encouraging development.

But filmmakers — especially independent filmmakers — have to be on their guard. Music critic Bill Wyman got a lot of attention for a piece he wrote in Slate warning that the movie industry is about to suffer the same fate as the music industry, which held the line against digital downloading for years. The recording industry addressed the situation by filing suit against tens of thousands of music downloaders. It took third parties — namely Apple, which seemed to be the only company that could figure out how to effectively sell music online — to coerce the major labels into offering compelling digital products to their online customers instead of court papers.

These days, the online marketplace for music is fairly mature, and new services keep cropping up to offer consumers access to more music at ever-more-attractive prices. The latest entrant to the U.S. market is Spotify, which earned a reputation as an exceptionally user-friendly music streaming service in the years when it was only available in Europe. Basically, the music lives in the cloud. Free users can stream any song they like from Spotify’s extensive library, with occasional commercial interruptions. The commercials, along with rules that limit the number of times a single song can be played as well as the number of hours of music that can be streamed in a single month, go away with different levels of paid subscription (currently $5 and $10 a month).

Users love Spotify. It’s like being let loose in a well-stocked record store where you can open and play whatever you want, just for the heck of it. The major record labels, which negotiated the company’s entrée to the U.S. market, are presumably at least mildly enthusiastic about its revenue-generating prospects. But indie bands are probably underwhelmed. Take a look at this posting from musician Benji Rogers, of the band Marwood, in which he spells out exactly what he gets when a user listens to one of his tracks on spotify: $0.00077601. (Yes, that number is less than one-tenth of one cent.) Doing the math, he estimates that once a track is listened to 8,174 times, it will earn him the $6.30 he gets from a single CD sale through CD Baby.

Excerpt from studiodaily.com. Click here for the full article.