Dr. AIX's POSTS NEWS — 14 July 2015

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Streaming is the new “next thing”, right? Wrong. Someday soon artists – major celebrities and those struggling to get a foothold in the business – are going to realize that streaming music benefits only the established large technology companies and the current big three record labels AND they’re going to abandon Spotify, Google, Apple Music, and all of the other services. There is simply no incentive to participate in these services when there is no upside to the artists creating the music.

If you’ve been paying attention to major issues associated with streaming, you know that Taylor Swift pulled here catalog from Spotify with great fanfare. You’ve probably heard that major artists are receiving very small checks for having their music streamed millions of times. It used to be possible for an emerging band to sell 1000 physical CDs or downloads and manage to come out ahead…at least a little ahead of the costs. Now if 1000 people stream the same album 10 times, the band receives pennies. It’s simply not sustainable.

The same model applies to little labels like AIX Records, 2L, Linn, Pentatone, MA Records and others. We manage to get by selling a few thousand physical copies of our handcrafted music. The economics almost make sense. If it costs $15,000 to record a typical project, do all of the post production, and replicate/package 1000 Blu-ray discs, then selling 1000 copies will cover it. Every sale beyond that first 1000 pays the artist and the label. It’s still not a moneymaking business but there is great satisfaction in producing well-recorded music. And once in a while a nice licensing opportunity comes along and some nice checks along with it.

So musicians have a couple of choices…give their music away for free in the hopes that they can build a following and secure some paying gigs or a short tour OR they can participate with the commercial streaming services and get only marginally more. It’s a lose – lose situation.

There was an announcement the other day that Apple has plans to provide “higher quality” audio this fall with the release of iOS 9 for their family of portable devices. As everyone already knows, they’re playing catch up to the streaming companies. Thus the high profile launch of Apple Music. I haven’t bothered to sign up for a free three month subscription…I just don’t do music that way. The sound experience is almost as important as the song for me. I know I’m the odd man out but I’ve become quite spoiled with the sound of my studio and my 2014 Acura TL with its DVD-Audio 5.1 surround system in it.

Apple has stated that the new iOS 9 will allow users to opt for “high-quality music streaming”. Currently, Apple Music plays at 256 kbps AAC, which is the same quality as iTunes downloads. However, this level of quality is only available if you are connected using Wi-Fi. If you’re stuck on a normal cell connection, the fidelity drops. With the new OS feature, Apple promises that users will be able to forgo some “extra data” in exchange for better quality Apple Music.

So don’t count on getting ever CD spec sound anytime soon on your new phone 6S. Whether Apple will ever give user access to real high-resolution files is doubtful. They may be late to the party but that party doesn’t include high-resolution music.

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About Author

Dr. AIX

Mark Waldrep, aka Dr. AIX, has been producing and engineering music for over 40 years. He learned electronics as a teenager from his HAM radio father while learning to play the guitar. Mark received the first doctorate in music composition from UCLA in 1986 for a "binaural" electronic music composition. Other advanced degrees include an MS in computer science, an MFA/MA in music, BM in music and a BA in art. As an engineer and producer, Mark has worked on projects for the Rolling Stones, 311, Tool, KISS, Blink 182, Blues Traveler, Britney Spears, the San Francisco Symphony, The Dover Quartet, Willie Nelson, Paul Williams, The Allman Brothers, Bad Company and many more. Dr. Waldrep has been an innovator when it comes to multimedia and music. He created the first enhanced CDs in the 90s, the first DVD-Videos released in the U.S., the first web-connected DVD, the first DVD-Audio title, the first music Blu-ray disc and the first 3D Music Album. Additionally, he launched the first High Definition Music Download site in 2007 called iTrax.com. A frequency speaker at audio events, author of numerous articles, Dr. Waldrep is currently writing a book on the production and reproduction of high-end music called, "High-End Audio: A Practical Guide to Production and Playback". The book should be completed in the fall of 2013.

(31) Readers Comments

  1. Apple’s support of the USB Audio 2.0 standard allows Mac’s to serve as the main music server: Amarra, Audirvana… and people say that Mr Jobs was an audiophile. He and Apple lead the market, but keep it slow. Perhaps Tidal, whose $20/month hifi sounds pretty good, can succeed enough to force the issue in quality.

    As for making money: full catalogs cannot be streamed, but a few tracks must be streamed. AIX should stream a few on Tidal. Go track by track with artists, make an AIX Playlist (not an album) of about 5-10 tracks (so that it shows on one web page or phone). The tracks will show up with Album and artist information. Don’t offer the key titles like Guitar Noir; unless the artist wants.

  2. Let me clarify. The store that attaches to Tidal is meant to be a store like AIX! People will only buy recordings that are better than Tidal, but Tidal is needed to show the value of higher quality in the first place. It effectively advocates and screens. Experiments on how many streaming titles to offer vs sales are dynamic (Amazon does this with pricing). Furthermore, purchasing titles can open up more titles in a stream. In Tidal code, the songs allowed could have levels triggered by the owners of the songs. This gives power to the bands and lets them determine the right balance. Also, HiFi listeners should have a few more songs available. That’s a Tidal decision in conjunction with artists (an updateable checklist).

  3. Great article Mark, thank you. The current disastrous economic climate for musicians re: streaming royalties reminds me of the early and mid-sixties when artists such as the Byrds , Young Rascals and others had million-selling singles for which they were paid 1/2 cent per record sold. Now, talent-less artists (Justin Bieber, Britney Spears,) make fortunes while putting out crap.

    I too am a ‘physical media’ guy, and there are still a number of us left. Personally, I see streaming such as Tidal as “the new FM” for decent quality casual listening. As for the long-term situation, I cheerfully predict that we will hear the old saying “You don’t miss your water ’til your well runs dry,” and for all we know, the vastly over-maligned CD may well become ‘the next vinyl’ as folks snap them up for 1.00 at garage sales etc., in reaction to the realization that they love music but glean no personal collection or library from streaming music; they have to keep borrowing the book from the library because it does not live on any shelf at home.

    I have little faith in Apple re: much better sound quality. It is my (possibly incorrect) understanding that long before Steve Jobs was mortally ill, your friend Neil Young approached him on the topic of significantly raising the median available sound quality,and long before your favorite whipping boy Pono was even embryonic. I was told that Jobs’ response was terse ,” There’s no money in it.” Perhaps if he had shown a positive response back then , none of the controversy and b.s. around hi-res might have ever arisen. So no, I don’t hold out much faith in the Apple core ethos. Jeez, if they’d just do even 320kbps well, that would be admirable and noticeable by most.

    Mark, there has been so much of this ridiculous ‘folks can’t hear a difference’ stuff. I give professional demonstrations for a living as a key job aspect, and I have derived one unshakeable conclusion from 31 years of observing client reactions. Across the board, when distortion, especially various forms of I.M. distortion drop radically by comparison to a previous playback, 100% of the folks clearly notice and react positively 100% of the time.
    Again, thanks for outing the dark side of streaming. Just as with the advent of HDTV, people have been anticipating ‘free lunch music’ for a long time. Well, every donut has a hole, and kudos for exposing same in this instance.

  4. What’s the artist compensation picture for XM-Sirius and the music channels on cable and satellite TV?

    • I’m sure I have the details on these services but I imagine they work like traditional radio broadcasts. The performing rights organizations monitor the playlists and the XM-Sirius people have to pay them. Then BMI, ASCAP, or SESAC distribute the money based on their statistical models.

  5. Anil “Innerviews” Prasad penned a very interesting, and increasingly viral, article on this very subject.
    http://www.dailydot.com/opinion/apple-music-spotify-self-destruct/

    • This was the inspiration for my piece…I think Anil got is exactly right.

  6. I remember reading, at least 10 years ago, that even big artists no longer make their big money from album sales. It’s the concert tours that rake it in. They release a new album, everyone puts on a black eye patch and steals it, then they go on a world tour and everyone PAYS SERIOUS MONEY to see them play. And then the fans upload illegal clips from the concerts on YouTube, as an analgesic for the wallet pain of attending. That’s the new Rich Rocker model. As long as the big labels get a cut of the tour money, they’re half sweet with the rampant theft of music. Well, that’s what I read.

    But I have no idea how the small and struggling can survive in that world. Your article shows one way and is informative.

    The audiophile market is big enough to support numerous hardware companies (look around). Why can’t it also support a good range of musicians and recording studios? The audiophiles I know generally spend 30% to 60% of their hobby budget on music purchases. That money should be enough to support new music production. Or it would be, if audiophiles were interested in good new music. Far too much new money goes into old music re-releases. That frustrates me. I’m sure it frustrates you too. So many audiophiles say to me that new music isn’t enjoyable like old music. I tell them that there is bad old music too, just like there is bad new music, but there is also good new music. They are not trying, they are not looking, and you guys in production really aren’t getting through to them. Now there’s a challenge.

    As for streaming music, lossy compression is a no-brainer for the foreseeable future. Look at the video streaming market: see any lossless formats on offer? Any in the wings? Anyone arguing “it can’t be high-def if it is lossy”? Nope. Well the same goes for audio: the argument should be about which lossy formats sound great, instead of the current agenda that argues they all must sound inadequate, by definition, because “I insist on lossless”. MQA to the rescue? I don’t know, and it’s hard to be informed when the dominant cry is that nothing lossless can sound great to a listener with high standards.

    • It’s true that big artist make big money from touring. When I did the Stripped enhanced CD for The Rolling Stones in 1995, it sold about 2 million copies. The band made about 5 million…the tour that year guaranteed them 250 million. Small acts on the other hand struggle to get by. They still use their recordings to generate fans and interest in their shows, and they count on ticket sales.

      Video is very different from audio. A small pixel dropout is very different than a tick in an audio stream. We should get past lossy audio.

      • “We should get past lossy audio.” Mark, are you suggesting that lossless high-res streaming audio is a realistic proposition anytime soon? We can’t ‘get past’ something if it is the only option.

        • Grant, it’s already happening…and has been for a while. Orastream, Deezer, Tidal, and soon others. These companies are making “lossless” CD spec audio available as streams. The dawn of MQA won’t change the provenance problem we have but it will make “lossy” streaming a thing relegated to non-music fans.

  7. I’m not saying that I know better than you (because I don’t) but I have read interviews with independent artists that “self release” their work who say they are quite happy with the royalties they get from Spotify. It’s the artists who have signed with record labels, and have contracts that treat streaming royalties different than CD royalties, that are seeing very little payout. Spotify claims the royalty checks sent to Taylor Swift’s “rights holders” are in the millions, but of course not all of that $ makes it to the artist. And besides, reports are that Taylor pulled her catalog from Spotify not because of royalty amounts but rather because she feels that the free streaming offered by Spotify “devalues” music. She continues to license her music to the other pay streaming services – and someone, hopefully Taylor, rakes in a lot of dough because of it.

    • Self-releasing an album is better than going through a label but it still doesn’t generate the same revenue as physical discs or downloads…not by far. Spotify is ripping artist off by paying the rights holders and angling for the big go public dollars. Taylor Swift’s $2M from Spotify would be multiples of that in the traditional model. 34 millions streams generates about $2500…not cool.

  8. Mark,
    Music has already died, streaming may just be the final stake in the heart.
    Very Very Sad.

    • As the old guy in the Monty Python movies said, “I’m not dead yet”.

  9. HDTracks has just done a monster 10 album High Def release of Iron Maiden. REALLY?

    • It’s a high-resolution transfer…best we’re ever likely to hear.

      • My point was more like Iron Maiden, who would really care.
        Just about the time period and reason music went on life support. LOL

        • Iron Maiden fans will care…the real question is whether any of them are audiophiles.

  10. Hi Mark,

    I’m glad you brought up the streaming debacle and the huge damage it’s inflicting on musicians and the sustainability and quality of their creative work. Nevertheless, I don’t think that streaming is somehow opposed to the current business model; on the contrary, it fits right in with the business and profit logic of the music industry when you factor in digital rechnology. The ultimate problem isn’t the business model, but having modelled music as a business and as an industry in the first place. We in the industrialized western world consume music, it’s a commodity, and just like fashion, we want it cheap. In many other parts of the world, music is part of ancestral, traditional, religious, social and cultural practices, it is still much more than just a commodity, and it has a profound role within communities that involve all individuals and clearly trascends a mere business. The value of music is not foremost – and perhaps everything but – monetary. The moment music regains social, cultural, religious and traditional values, it will find it’s true place in our societies, and it will become once again more a question of participation than originality.

    Digital technology has the potential to definitively cut out the middle man and thus definitively leave behind the current business model and industry, to which, in my opinion the physical media belong. The control over production and distribution by artists themselves is already here, and the cost of physical media is the last barrier – and consumerist fetiche – standing in the way of artists’ true independence, both creative and economic.

    You wrote:

    “If it costs $15,000 to record a typical project, do all of the post production, and replicate/package 1000 Blu-ray discs, then selling 1000 copies will cover it. Every sale beyond that first 1000 pays the artist and the label. It’s still not a moneymaking business but there is great satisfaction in producing well-recorded music.”

    You also mentioned other labels like MA recordings, but I doubt Todd Garfinkle has the same production costs. Nevertheless, he also treasures the physical object and produces those beautifully printed digipacks, etc. This is where independent musicians can easily cut down production and distribution costs, and make their revenue more attractive, and in my opinion make a valuable contribution to the environment, as well as a contribution to the universal access to culture and the arts, by also reducing prices without the loss of the abusive streaming services.

    I believe the independence of musicians from an abusive industry and the predominance of the monetary value of music, will eventually change the way we make, listen and relate to music, and thanks to digital technology; it will radically shift the role of music, performing arts and medias within our societies, as the commodification of arts and culture that is part of consumerism will at least be challenged as our pedominant relationship to music.

    Cheers!

    • There is room for little guys like me and Todd and Morten to make a living…although Morten gets government support. But it’s not a great living for the effort involved.

  11. “If you’ve been paying attention to major issues associated with streaming, you know that Taylor Swift pulled here catalog from Spotify with great fanfare. You’ve probably heard that major artists are receiving very small checks for having their music streamed millions of times.”

    If you’ve actually been paying attention you also know that the sum deemed insufficient and “very small” was actually TWO MILLION DOLLARS in one year. Just from spotify. Ill spare my tears.

    craig allison: care to back that up with ABX? Most people definitely would not notice the difference between AAC 256 and 320. Most folks definitely find 256 transparent with today’s encoders. Thats not debatable. The only one thing of interest is whether you personally have golden ears that can in fact tell. Maybe you can. The vast majority of your clients only do because you tell them to. If you don’t believe me set up some proper blind tests and you’ll be amazed.

    • The $2M dollars was for hundreds of millions of streams! Peanuts. 34 million streams pays $2500…not realistic compared to the download model. Go ahead and try to make a living as a musician. I know a lot of people that have dedicated their lives to their art…and my son struggles with his band now. There is no appreciate for music…it is a commodity.

      There are differences between MP3 files and CD res and High-res. Are they huge…no. Do people care…no. Does it matter to Craig and me…yes.

  12. I think it will take some time for enough artists to come around to the fact that they make very little money from streaming…. It is so convenient for many listeners and most artists will do anything to get people to listen to their music. That being said, I think most artists will figure out that they should also use physical media so that they can actually make a living.

  13. Neil Young agrees with you that streaming will be the death of music. he is in the process of pulling his entire catalog from the streaming services.

    • Neil’s reasoning is seriously flawed but he’s doing the right thing. Every musician/band and label should pull their content from the streaming services until the deal is more equitable. See the Berklee study on where your streaming money goes…not the artist.

  14. I’m a day behind, and way too often a dollar short, but two things came to mind.
    One is the Gillian Welch song “Everything Is Free”.
    https://www.youtube.com/watch?v=wFle2YoQwWg

    True artists/musicians are going to do it anyway. I sometimes watch a PBS show called “Song Of The Mountains”. Almost all bluegrass artists, most I have never heard of. They often say this is on our new album. These people love to make music, have regional popularity, and many may be weekend performers. It’s the love of music. As others have said, now musicians make their money touring. Very few artists can be stage shy, and live on a yearly release. Look at Bob Dylan, unless he has and does give away all his money, he doesn’t need to tour. I believe he does it, because he loves it.

    My second thought was, when I was 14 and discovered new music, it was by word of mouth or progressive radio. Before that I had some 45s and albums, the usual stuff, from that era, starting with Elvis, and then on to Beatles, Beach Boys, etc. Well from there it was a friend who turned me on to stereo systems. His older brother got him interested. I loved the music, I wanted to hear it as loud, and as clearly as I could. Before that first little packaged system most likely a rebadged Panasonic, bought from a Singer sewing machine store, I was listening on a clock radio.
    More components came and went, but I was always driven to get better sound. And I loved the equipment. We would go in to stereo stores, just to look and listen. And I wasn’t alone, many of my friends had really nice systems. Lots of Marantz receivers and Large Advents. These days, people think a Bose system is high end. In Milwaukee we have lost at least 4 stores that sold stereo, then home theater. Even home theater which was a thing for a while, is not selling like it did. The movie guys all got their big subwoofers and now they are set. No upgrade fever. And if they do want a home theater, they go to Best Buy. For us the music drove the interest in better sound, and better sound still drives the desire to acquire more music. I just bought 5 CDs, three were artists I only heard one song, played on our local college station.
    What do teens desire, for a music player. I would hope that some would want the Pono, or a device of equal, or better quality. That they would want those high end headphones, for home listening. I don’t think they do.
    So, I don’t think high end will die, but like us older guys, there will be less of us.

    I honestly have no answers, and no ideas how to turn this trend around. I’ve said this for many years now. The smart phone is going to be the downfall of modern society. At least when you needed a separate player, there were some different quality options, I bought an inexpensive little RCA MP3 player for the gym, but I knew if that was my thing, there were much better players.

    Hey, I took your advice, and found a used Benchmark DAC2 HGC. Now I need a computer capable of playing Hi-res. And unless I have no choice, I will still buy the hard copies of the music I really want.

    • Your computer could be a Mac Mini running Amarra. You’ll have a great Hi-res system for very cheap. The world of high-resolution audio/music is a myth. The organizations, labels, and retailers continue to insist that their old catalog in new overbuilt HRA devices will convince you to purchase the same old music one more time…for premium dollars. I reached out to the people at Magnolia about using some of my tracks in the new HRA demo rooms…no chance. Only the majors will have that opportunity.

      • Mark, is the info on the website? Or can you tell me what specs I need, I see there are older generations, and sizes of the Mac Mini. I imagine I need to add a separate hard drive too?

        I did some reading and I have a spare desktop that ran XP, or my current one with Vista. It said I would need a minimum of 8Gb of ram. I don’t think either will accept that much. I’m thinking the money I would have to put in, would be better spent.

        Would used be an option with a Mini, or too risky?

        Thanks for all your help.

        • A Mac Mini will be able to connect USB to your Benchmark. Then you simply have to get a player…Amarra is my favorite, and configure the sound output device to get the digital streams to your converter. Here’s a link:

          Setting up a Mac Mini computer music station

          • Mark, thank you. But, I don’t see a link.

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