streaming

Euro 2016 – Staying on TV

As Euro 2016 kicks off in France tonight, my inbox has become flooded with nonsense PR stories. My email address has recently been sold to a number of PR agencies and I get a wide variety of emails asking me if I’m interested in writing about things I’m not interested in writing about.

I silently archive them all, but one company keeps popping up with some ludicrous claims about the end of TV as we know it.

This was the lead line (I won’t mention the company specifically):

“Euro 2016 will likely be the final major international football tournament aired exclusively on television”

Well a few things to say about that:

  • This tournament won’t exclusively be on TV anyway. Both the BBC and ITV in the UK will be streaming their live matches on their websites and in their apps alongside their regular broadcasts.
  • The BBC and ITV already have the rights for FIFA World Cups 2018 and 2022, and Euro 2020.
  • Both the Euros and the World Cup are Listed Events – and have to be shown on free-to-air broadcast TV in their entirety.

So it would take a review of Listed Events (they’ve tried before, and quietly parked the idea), and the broadcasters who already have the television rights choosing not to broadcast them for some reason despite both of them having plenty of capacity.

I’ve no doubt that more people will watch on more devices than ever before, but those internet-connected devices aren’t going to usurp the broadcast audience any time soon.

The press release goes on to highlight lots of irrelevances:

  • La Liga broadcast a game live. They don’t highlight the fact that it was a women’s fixture. Until recently, women’s football wasn’t broadcast at all in the UK. So it’s great that there’s increased exposure for a game that is generally poorly covered.
  • Twitter is streaming Thursday night NFL games. Those would be the games that are being broadcast on the NBC and CBS television networks. The NFL knows how to disaggregate its rights to its best advantage like few other sports organisations. Sure they want some Silicon Valley cash!
  • BT Sport simulcast its European cup competition finals on YouTube. As I’ve noted elsewhere, that was to keep UEFA happy and try to reach a decent sized audience when relatively few knew about their free-to-air channels.

Marketing Week recently carried a great piece noting the inequality of counting BARB measured TV audiences versus 3 second views on Facebook or other streaming platforms. They’re not the same and they shouldn’t be compared.

Last October, for example, Yahoo claimed its livestream of an American Football game attracted 15 million viewers. That’s an impressive debut given the average TV game garners 18 million. But this is not an apples to apples comparison, it is an apples to orange skins stuffed with bullshit comparison.

While 15 million different people did indeed, at some point, briefly encounter the coverage, the average audience per minute for the livestream was only 1.6 million viewers – less than a 10th of the typical TV audience.

Every time you see a digital video “audience” it is crucial to query the metric being used to define it. For example, we know thanks to BT that the Champions League final at the weekend was “watched” in this country by a total of 4.3 million people on TV and a further 1.8 million on digital platforms. Yet BT used BARB data for TV – so someone had to tune in for a least 30 seconds in a minute to be counted as viewer – while the digital figure is a “unique view” and “not done on time like BARB”.

So let’s not be stupid about all of this.

Is streaming growing? Certainly.

Is broadcast still dominant? Absolutely.

Will streaming one day beat broadcast. Quite probably – but that day is still a long way off.

Finally, just consider the last time you had internet problems? Perhaps you had no coverage somewhere rural (or urban!), or data went down on the network, or you were in a busy area, or you had to wait two weeks dealing with BT Openreach to get your broadband up and running, or… The list goes on.

Yet your local TV broadcast mast is probably really pretty good. The worst I ever get, is some satellite break-up in particularly heavy rain. The technology is incredibly robust.

Streaming will dominate eventually. But not yet.

The End of Digital Downloads?

That’ll teach me for writing this too quickly. I based this on a Digital Music News report which was published Wednesday evening UK time. A few hours later, and ReCode was reporting that Apple is planning no such thing. Of course plans change all the time, and record labels can get angry. So who knows what the truth of it was. But I think the piece stands either way.

On Sunday, after a week or so teasing the internet by turning their website to pure white and closing various accounts, Radiohead released their new album, A Moon Shaped Pool. I was able to head off to their website and buy a download instantly.

I’d given Radiohead some money – cutting out middlemen retailers as it happens – and they’d given me some files that, as long as I’m careful, will be playable for years to come.

This is essentially the same kind of transaction I’ve been conducting when I buy music, since I was a child.

But we are in the early 21st century, and it’s all about streaming. So if I hadn’t chosen to spend £9, how else could I have listened? Well, there’s Apple Music or Tidal. The new album is available to stream on both platforms.

Notably though, it’s not on Spotify.

No skin off my nose, as I don’t pay for a premium Spotify subscription, and only every rarely listen to the free service.

But if I was a different – probably younger – listener, I might be a bit miffed. Because if I have a Spotify subscription, I’m unlikely to have either an Apple Music or Tidal subscription as well. Why would you pay twice for access to the same music?

And therein lies my problem with streaming services – they don’t always deliver. Indeed, Radiohead has reportedly been removing some of their other music from Spotify as rights return from their old label to the band itself.

So in that context it was interesting to read a report that suggests that Apple will phase out digital download sales from iTunes within the next two years. The US and UK are likely to be first!

[Update: Apple has quickly denied that it is planning to stop selling downloads according to ReCode.]

The thinking is this:

  • Download sales peaked a couple of years ago and are now falling.
  • In their place is rapdily growing subscription revenue, so why maintain a dual economy?

The article also mentions some Apple specific issues around matching music incorrectly, and “orphan tracks.” Those are a bit of a red herring though since they’re software issues that Apple could quite easily solve if it really wanted to.

iTunes Song Downloads

If download sales are in decline, then why should Apple bother continuing to support them?

But look at this larger picture chart of music industry revenues:

Infographic: Rise of Digital Music Stops the Industry's Decline | Statista

While digital overtakes physical, it doesn’t show a healthy overall picture, and that’s because streaming revenues don’t make up for losses from physical and downloads. Growth is actually coming from other revenue areas.

Special offers aside, the cost to a consumer of a streaming subscription is $120/£120 pa. Yet the average amount spent by British consumers on music currently is less than £40 a year.

By removing the option to buy, Apple is banking on a good number of current downloaders stepping up to become subscribers, yet for the “average” person, that involves a 200% increase in their music spending!

Well, good luck with that.

But my main issue is the one that I started with. Music rental removes my control over my music.

  • If EMI goes out of business tomorrow, my EMI CDs are still safe.
  • If Radiohead decides it doesn’t want to be on Spotify, my Radiohead CDs and downloads remain available to me.
  • If Spotify goes bust, I still have access to my music library.
  • If Apple Music puts its subscription rates up tomorrow, and I can’t afford the new price, I can still listen to all the music I own today.

It’ll be interesting to see how the music industry reacts to this story.

BBC Store – Initial Thoughts

After much ballyhoo, the BBC Store is finally with us, and well, um, it sells downloads and streams.

You buy episodes rather than rent them – although the prices are much of a muchness really with television. And then you play them back via the web, or in due course, mobile apps. To be honest, I’m surprised that the apps aren’t there at launch, but we’re told they’re coming.

Now it’s true that the BBC Store doesn’t offer particularly better value than other retail outlets. A few comparisons:

– Fawlty Towers costs £15.98 for two series on BBC Store, £14.99 on iTunes and £9 on DVD at Amazon
– Yes Minister costs £24.99 for three series on BBC Store, £9.99 on iTunes and £14.50 on Amazon (but you get two series of Yes Prime Minister in that boxset too!)
– Edge of Darkness costs £7.99 on BBC Store, £5.99 on iTunes, while the DVD is £4.17 on Amazon (an utter bargain whichever way)
– Planet Earth costs £10.99 for SD and £12.99 for HD on BBC Store, and the same pricing in iTunes, while the DVD is £7.71 and BluRay £10.90 on Amazon

(Note: I’ve not factored in the current 25% off they’re offering for introductory purchases)

Essentially the BBC isn’t able to undercut its rivals by selling programmes cheaper, but this random selection shows that it’s mostly more expensive.

However, if all of that sounds negative, then there is always the great redeeming feature of finding something you thought would never otherwise be available to buy.

I doubt that the current Helen Czerski series on BBC Four about Colour would have ever been made available to buy on disc, yet you can buy a download on BBC Store for a very reasonable £4.99 for the series.

Similarly episodes of BBC Four series Timeshift on some very esoteric subjects are also available to own; whereas they’d never have been made available to buy on physical media. Although it’s a shame that I can only see one episode of Arena (they claim two), which is the recent Nicolas Roeg edition, when I know there’s such a rich history to that series.

On the other hand, I’m not sure that there’s anyone alive who needs to own one of the 248 episodes (at time of writing) of Bargain Hunt that are available to own for £1.89 a pop, unless you actually appeared in it. In which case, didn’t you either record it at the time, or get the production company to send you a copy? But fill your boots otherwise!

Casualty isn’t the kind of series that regularly got DVD releases either, but there are 137 episodes (at time of writing) up for grabs if you just can’t get enough Charlie.

And every episode of Eastenders since August 2014 is there to buy too. (And there are over 400 episodes of Doctors come to that!)

I would imagine that the cost of adding programmes to the BBC Store is low, so putting these episodes online is probably near automatic and for the few devotees who do want to buy individual episodes then there’s minimal cost to stocking these programmes and selling them to those who want to own them. That’s the beauty of digital.

The store does let you know when episodes are still available to watch free of charge on iPlayer which is good, because episodes can reach the store as soon as they’ve aired.

Programmes usually include subtitling and occasionally sign language – almost certainly a rarity. And there is a parental lock available on programmes labelled as such. I must admit that I find these things fairly arbitrary – either being unrated (family friendly) or “G.” Who knows what determines a “G” rating?

But there are a few problems.

We’re promised mobile apps will follow, although I’d have thought that they should have been there for launch. And I can’t access my programmes from within the TV app versions of iPlayer right now. I can however reach them from the regular iPlayer site within My Programmes > Purchases. Again, we’re promised that this will be fixed in due course. This is all a bit unfortunate because I like to watch TV on, well, my television. I ended up using the Windows 10 app, and outputting the pictures via Micro DisplayPort on my PC to HDMI on my TV. All a bit messy really. Incidentally, there was a free Fast Show offer for users of the Windows 10 app.

It doesn’t make clear anywhere whether episodes are in HD or not – you have to click on a price before it tells you. Clearly that won’t be the case for older archive material, but it’d be nice to know from just looking at the programme that it is available in HD. I also don’t like the practice of hiding higher HD prices behind lower SD ones. Sky is also guilty of this.

And while we’re told that HD is at least 720p, my TV is capable of more than that. I’d like to know that I’m getting 1080p if the programme was made in HD, as I would if I bought a BluRay.

There’s a serious lack of meta data behind the store from what I can see. I can’t search by actor, writer or director, unless the store has already created a section for them – so I can search for Benedict Cumberbatch or Dennis Potter, but few others. That’s a big miss as both Netflix and Amazon realise a lot of people look for things starring particular people. It would be great for finding “before they were famous” appearances in Casualty and the like.

I did find some pricing oddities including a Timeshift episode priced at £1.89 for SD and £12.99 for HD! Definitely a mistake, and in any case, it’s a bit dubious having increased HD prices for a series made up largely of SD archive material anyway that for the most part has just been upscaled to HD.

The FAQ on the BBC Store downloader only mentions Windows 7 to Windows 8.1. They might want to mention Windows 10 – even just pointing you to the app (I searched for it in the Microsoft Store). Similarly OSX stops at 10.10 with no mention of the now current 10.11. And the use of Microsoft SilverLight for offline downloads is a serious disappointment since it’s no longer being actively developed by Microsoft, and support is beginning to be removed from major browsers as most video streamers move to newer technologies.

One download device per account is very stingy. Let’s hope that’s upped when mobile apps come along otherwise it’s unsustainable.

There are also issues around descriptions of programmes. It’s nice that I can buy BBC Proms concerts, but I’d probably have to go somewhere else to get a bit more information:

Episode 13: Friday Night at the Proms: Bernard Haitink Conducts
4 Sep 2015 120 mins
Schubert’s Italian Overture and Ninth Symphony, and Mozart’s A major Piano Concerto.

I’d also like to know the orchestra, and it wouldn’t be hard to include a bit of additional detail in there from the Proms website.

I note that they’re steering clear of allowing user reviews.

And of course everything is full of DRM meaning that long term, I can’t be certain I’ll have continued access. From the help section:

We cannot guarantee that you will be able to stream or download content that’s in My Programmes forever. However, when our right to make content available is due to expire, we will do our upmost to inform you of this by email so that you have the opportunity to download and then continue to playback the content through the BBC Store Download Manager.

If I had DRM free copies of course, I could make them part of my back-up regime, and should the BBC Store ever close down, I wouldn’t lose anything, or be reliant on technology that might have limited or no future support. This is the key issue with all DRM-d media, and it’s why for the most part I continue to purchase physical copies ahead of DRM-filled downloads. Even though there is encryption on DVDs and BluRays, they can be ripped, and I can maintain access once players become redundant (I confess, I’m not looking forward to days of ripping however).

But I will forgive an awful lot when I find a series I’ve been after for years, is now available to buy on the BBC Store. In this instance I’m talking about Tender is the Night, the 1985 Dennis Potter adaptation of the F Scott Fitzgerald novel with Mary Steenburgen and Peter Strauss. I’ve longed to be able to get hold of a copy of this, and missed the recent BFI screening. Curiously the series is not listed in the Dennis Potter section of the store.

For me, issues surrounding pricing and playback options at launch can be mitigated by depth of catalogue. So let’s see BBC Store add more classic material to its output. I’d like to see things that aren’t currently available on DVD or BluRay, but have never been released before.

So dig deep into the archive and surprise me! (And get those mobile and smart TV apps sorted out.)

Note: Prices correct on 20 November 2015 when I wrote this.

[To readers of James Cridland’s Future of Radio newsletter – welcome! I should point out that the BBC still has a BBC Shop – it sells physical discs and, er, Doctor Who Christmas jumpers. BBC Store is their online only operation. Interestingly when Google first opened their online offering in the UK they localised it to be the “Google Shop.” They subsequently reverted back to Google Store. Yes, it’s Americanised, but I’m not sure that it’s not the right name for a digital outlet.]

The Joys of Online Streaming Sports

Picture the scene.

You’re travelling and Twitter tells you that the final rugby World Cup quarter final is a tight affair. There are just minutes left, and a single score could send the match either way.

The final “northern hemisphere” side are fighting to stay in the competition.

You fire up ITV Player on your mobile. Be damned the streaming data cost! You’ll watch the last few minutes online as your train travels along a largely 4G route.

But first a pre-roll advertisement… which has to buffer before it plays.

You’re not interested. Time is ticking away. Sure, you know that commercial television is supported by commercials, but come on!

The ad ends and a loading icon appears… and appears… and appears…

Time passes.

Finally a second ad begins to play.

This is getting frustrating now. But you watch the ad as you have no other choice.

The ad ends and… another loading icon appears.

Oh COME ON! Not a third ad surely?

Well I couldn’t say for sure, because after about 30 seconds of that, I abandoned ITV Player, switched to iPlayer Radio, launched Five Live which booted up instantly and listened to what were now the final three minutes of the fixture.

Radio trumps TV.

(Or at least in the app world it does, particularly if it doesn’t carry ads).

Here’s a thought – if you’re down to the final scheduled few minutes in a live sporting fixture, then ditch the pre-roll ads. Because while pre-rolls are something the audience knows it has to “endure” ordinarily, they become a serious frustration at the end of a major fixture when the clock is ticking. And people swearing at your app and then going somewhere else is probably not what you’re after.

How Should Spotify Pay For Its Music?

Ooh Chris Martin on your Radio

Yesterday I got into a bit of a discussion with James Cridland on Facebook about the rights and wrongs of how services like Spotify distribute their revenues. And I thought it was worth sharing and expanding on some of my thoughts on the matter.

This comes off the back of a Medium piece from Sharky Laguana.

But I’ll preface things by reiterating that I don’t think the flat subscription model works at all well for the music industry. Go back and read this piece to understand why I say that.

Sharky explains how Spotify uses what he calls the Big Pool method of distributing royalties. He believes that the Subscriber Share method would be fairer.

Big Pool

The Big Pool method takes all the revenues that Spotify earn and attributes to rights holders – about 70% of the money subscribers give them – and then it divides that pot of cash by the total number of streams delivered. In his example, which uses December 2014 data, that means $0.007 per stream. Spotify then pays out that money accordingly, based on the number of streams each song has had.

I’ll leave you to read why he thinks this method is bad. But in essence it means that a large proportion of the money you personally give to Spotify each month goes to artists and rights holders that you don’t yourself listen to.

Subscriber Share

The Subscriber Share model works in a different way. It looks at each user’s listening habits and apportions the relevant money that subscriber pays (~70% of your monthly fee) to those artists/rights holders. Ed Sheeran might be one of the most popular artists on Spotify, but because I don’t listen to him, none of my subscription goes to him – it just goes to artists that I listen to.

So which of these methods is fairer?

I would actually argue that they’re both legitimate ways of dividing the spoils. The difference between them depends on how you look at an offering like Spotify.


  • Do you consider your usage in isolation: you have £9.99 to spend on music each month, how do you spread that out? Which artists do you apportion that money?
  • Or are you paying £9.99 for a service. Your cash pays for access to 30m+ tracks which you can listen to as much or as little as you like?

Spotify as a Service

Spotify treats the money in the latter manner. And this is not an uncommon way of doing things.

Think of your pay monthly phone tariff. For a flat fee the operator gives you unlimited calls and unlimited texts. I might be a relatively light user of the service, only speaking for a couple of hours a month or sending a handful of texts. You might live your life on the phone and send hundreds a texts a day (OK – I know all the kids are on WhatsApp or whatever, but you get the point). The operator prices its products on the overall usage. It has inter-network fees it has to pay, and it needs to make sure that the overall spread of usage is balanced out by the subscription fees it collects.

Or think of a gym membership. You and I both pay £50 a month. We can go as often as we like. But I’m lazy and I only go once a month. I should really cancel my membership. Each visit is costing me £50 a time! You go daily, and you get great value from your membership – use of all those facilities and only £1.50 a time! The gym needs to ensure that it collects enough subscription revenues to pay for itself and not be full the entire time.

At its very simplest, this is how our taxes work too. I don’t have children, but some of tax money is spent on schools. You might have a serious medical issue, and the NHS may offer treatment vastly in excess of the income tax or National Insurance you pay.

In terms of Spotify, some people get amazing value from the service – they listen morning to night and stream thousands of tracks. But most subscribers stream far fewer. There’s nothing to stop them streaming more, just as there’s nothing to stop you going back for seconds at an all-you-can-eat buffet. But some people are full after one trip, while others are students who want to get full value!

In terms of how artists and rights holders get paid, should this depend on how much I personally use the service? Or should it depend on the overall usage by all the service’s subscribers? After all, even without considering rights payments, someone who streams Spotify 10 hours a day is costing more in bandwidth than someone who streams for 10 minutes a day.

Think of it in “Entertainment Hours.”

Ed listens for 10 hours a day or 300 hours a month, while Taylor listens for just 30 hours a month.

Should each Entertainment Hour delivered to Ed be worth less than each Entertainment Hour delivered to Taylor simply because Ed uses the service more?

Indeed the Big Pool share is pretty consistent with how music is paid for in general. In UK radio for example, stations have to return a list of all the tracks they play, and royalties are calculated by simply dividing the stations’ royalties fees accordingly.

If I want to start an online streaming radio service, I will quickly discover that royalties are charged on a per-song/per-stream basis. In other words if there are 10 people listening to my service when a particular song is played, then it costs me 10x that per-song/per-stream price.

We Don’t Have The Data… But Denmark Does

None of what I’ve argued here should discount the Subscriber Share model as being a legitimate alternative method to paying out royalties, although I think you’d have to consider what Spotify is as a very different beast.

But to truly calculate the impact of one method of payment to another we need data. It requires a big bulk of real usage data sampled properly from the full Spotify subscriber base. Because it’s simply not possible to calculate which artists do better out of which system without access to that data.

In Sparky’s example, he points out that Alt-J might earn $1.75 from a single subscriber under the Subscriber Share method assuming that user plays them 25% of the time. Based on the same average usage, the band only receives $0.35 based on the Big Pool method.

But what that ignores is the overall playing of Alt-J across all users. If the Ed Sheeran/Taylor Swift playing mainstream, who account for the bulk of subscribers, also stream just a single Alt-J track, does that add up to more money? Under the Subscriber Share model, the amount might be incidental. But added up across many more listeners, could the Big Pool revenues actually add up to a similar amount? Without the data we simply don’t know.

Via a comment to Sharky’s Medium piece, I was directed to this fascinating Danish report based on a month’s worth of Danish streams via WiMP (available in Denmark, Germany, Norway, Poland and Sweden).

The report looked at the top 5,000 artists played across that month. Unsurprisingly the top 1% of artists accounted for 28.2% of streams, with the top 20% of artists accounting for 80.1% of streams. The tail gets long very quickly.

What the report also clearly showed is that people who listen to less popular artists also listen to more artists. And that doesn’t help the economics for those smaller artists.

“Because the most popular artists have the least intensive listeners, per user distribution [Subscriber Share] would generally move money from the tail towards the head.

“Among the top 5,000 artists, per user distribution would primarily benefit the most popular artists at the expense of the less popular. The top 1% among the top 5,000 artists would go from 28.2% of payout with the current model [Big Pool] to 31.0% of payout with the per user model [Subscriber Share]. Artists between 1,000 and 5,000 would go from 18.1% of payout with the current model, to 15.9% of payout with the per user model – a relative decrease of 12.1%.” [My emphasis]

This also goes back to my contention that the music industry loses out massively from its biggest fans by letting them have everything for a flat rate when they were previously spending much more.

Other Considerations

What happens to your subscription money if you don’t listen in a given month? Under the Big Pool method, it makes no difference. Your 70% rights share gets thrown into the pot. But under the Subscriber Share where does it go? Does Spotify just bank it? This isn’t quite as niche a case as you might think. Globally some mobile phone operators include Spotify Premium subscriptions in their packages, and not all of those subscribers will take them up on those deals, but revenues are probably collected. I know that I used to have a Deezer subscription via Orange that I essentially never used.

The major labels may also have determined minimum pricing per stream. Under the Subscriber Share model, it’s possible that the price paid per stream would drop, and that may cause issues.

And it’s worth noting that while I’ve no doubt that the Big Pool method works satisfactorily for the major record labels (they wouldn’t have signed up otherwise), it must surely do OK for the independent labels represented by groups like Merlin. Spotify et al need indie labels for their services. As well as some major superstars like Adele appearing on Indie lables, the services simply wouldn’t have the requisite breadth without them.

Summary

As I said right at the start, I wouldn’t argue that the Subscriber Share method isn’t a valid one, but it’s not as black and white an issue as might be painted. Spotify is a service, and like every service you use it to a greater or lesser extent. But it does at least treat artist equally, and each play is valued the same. So in that sense it’s equitable.

And the Danish report suggests that it’s actually a better deal financially for smaller artists. In fact it’s the biggest artists who should be complaining.

Apple, Spotify and a Binary Way of Selling Music

Microphone in Studio 2

Apple Music is now up and running. If you have an iPhone, you’ll be pestered to update your device, and a new Music app will appear that on first open is desperate to give you a 90 day free trial of Apple’s Spotify-like experience.

So I dusted off an iPod Touch (mainly bought to use Lightroom Mobile when there was no sign of an Android version), and updated last night to see what the fuss was about. But I didn’t bother with the free subscription because I’m old. I already own lots of music – far more than I actually listen to. So I don’t feel the need to invest in a paid subscription music service.

Beats 1 seemed to work fine when I tuned in. But I tuned out again pretty quickly because, well, it’s not really up my street musically. Their exclusive upcoming Eminem interview is not really something I’m likely to tune in for.

But the station worked, which was more than could be said for all the other “stations” I was presented with. Perhaps they didn’t work because I’m not a subscriber? Or perhaps because it was day one, and there are some bugs to fix?

The BBC World Service – seemingly the only non-Apple station on the service at launch – did work though. So in practice I was presented with a choice of either Beats 1 or the World Service. I confidently predict a surge in World Service streamed listening! (Disclaimer: I’m working alongside the team that did this deal. Radio folk – I bet you’re jealous that your stations aren’t there!)

The question then is, what impact will Apple have on other people’s music usage? Will they tempt new users or bring Spotify users across? How invested are they in their playlists? Or do you want to hear an exclusive new Pharrell song? (So good you can only get it there, or just a particular live version?)

No sooner had Apple announced it’s Music proposition a few weeks ago, than Spotify responded with new record figures.

In a blog post, it reported that it now has 20 million paying subscribers globally up from 10 million a year ago. And it also now has 75 million active users – defined as those who’ve used the service in the past 30 days.

Those would seem to be some very solid growth figures. But although all 20 million are paying customers, it’s not clear that they’re all paying £9.99/$9.99, and whether they’re doing so directly out of choice. It’s quite a big step to hand over £120/$120 a year for music, even if it’s in small “insignificant” monthly payments.

It’s notable, for example, that various mobile carriers around the world are bundling Spotify into their offerings.

In the UK Vodafone offers Spotify on some of its packages, in the Phillipines Globe Telecom offers it with some tariffs, while in Hungary Maygar Telecom offers it. Of course Spotify isn’t alone in doing these kinds of deals. I first used Deezer via an Orange tie-up for example.

The problem is that these are not necessarily permanent offers. Telecoms operators provide them for a while as marketing initiatives, but can quite as easily switch to something else. Orange became EE, and I no longer have Deezer. That has the potential for seeing premium subscriptions fall in the future if operators choose different marketing initiatives to attract and retain customers. Alternatively, telecoms groups will be able to drive down prices because the streaming companies need them to keep paying customer numbers up, more than vice versa. I suspect that some of the most important jobs in streaming companies like Spotify are handling relationships with mobile operators.

Spotify has also published a slightly defensive video explaining why it has a freemium model. It says that 80% of its premium customers began on its free plans, and it likens its model to music being available free on the radio, leading to music sales in record shops.

Undoubtedly the revenues that Spotify is earning are growing, and therefore so are the amounts that are being paid out to artists. (Cumulative payments to artists, incidentally, are meaningless, and we should stop looking at them. Annual revenues are the real benchmark.)

But it’s not at all clear to me that the subscription model provides a net gain for the music industry over Digital To Own (DTO – or downloads, to you and me).

While streaming revenue is growing, album and single sales are declining in value (regardless of whether in physical or digital format), and overall in 2014 there was a decline in value of the UK recorded music industry of 1.6%. And globally, industry revenues fell 0.4%.

I’ve argued before that this must largely be down to the inequal way people used to buy music, and the binary way we are being pushed into paying for it today.

Put another way, the BPI says that the average UK spend on music in the UK in 2014 was £39.52.

While averages can be dangerous, remember that this incorporates both those who spend nothing at all, and those who buy many albums a week. In essence then, a lot of people are buying perhaps the equivalent of 2-3 albums a year, and a significant minority of music fans, spend an awful lot more than that.

Or at least they used to. Here’s a thought experiment:

Think of a light music purchaser and a very heavy one.

The light music buyer used to buy perhaps the equivalent of a couple of albums a year. Maybe a few big tracks and one of the big albums in the run-up to Christmas. Maybe they spent £25 in total (£39.52 was the average remember, lots of people are spending less than this).

Today, in a convenient streaming world, they instead get Spotify Free, and put up with the limitations it offers and the adverts. This actually gives them access to much more music than they had previously when they were hearing the same few tracks or albums over and over.

But does the value of the advertising revenue Spotify hands on to labels make up for their share of what was previously £25? No, they don’t have all the convenience of mobile apps and offline listening, but these people really aren’t interested in music that much. There are a lot of them, and a shift to Spotify is a net loss.

The heavy music buyer used to spend perhaps £30 a month on music. Once upon a time they’d have been trawling the shelves on a Monday in a record shop looking at the new releases. They shifted online, but they were buying a lot. Perhaps they were driven by the music press or blogs. Those who bought physical formats had collections that spanned walls or even rooms. They were spending £360 a year!

Today, in a convenient streaming world, they instead pay £10 a month for Spotify Premium (or Apple Music) – or £120 a year. Sure they buy a handful of other albums to own, perhaps those of favourite artists. Let’s be generous and say £100 worth. But that’s still a massive shortfall: £220 instead of £360.

Indeed it’s reported that the top 10% of digital music buyers accounted for 55% of digital music spend in 2014 (Enders).

These people who are the bread and butter of the music industry – those who bought the magazines, and spent hours drifting through record shops – are now much less valuable if they shift to Spotify Premium or similar.

So even though consumption of music is probably higher than ever, with just about all recorded music at their finger-tips, the net revenues from them are less.

This is probably a bit of a simplistic model, but it explains why even though Spotify is showing solid growth, and ever increased revenues paid out to rights holders, that’s not really the whole story. (Inicentally, if anyone has access to the more detailed BPI numbers as published in their Music Matters yearbook, I’d love to see them. But not enough to pay £85!)

I’m left asking the question as to why the music industry thinks that this is a good model? Or if it is, why are the prices set at the levels that they are? And the binary “free” or “pay £10/$10” doesn’t seem to allow for any nuance. Tidal might have tried quality for £20/$20 but that seems unlikely to work.

The only way the sums can stack up for the music industry is if Apple or Spotify can persuade many more people to spend significantly more money on music than they’ve ever done before. They have to convert a £40 a year spender into a £120 a year spender. That’s a massive challenge in economic terms.

It’s not at all clear to me that the one-size-fits-all model works.

If it did, we’d see a lot more all-you-can-eat buffets instead of restaurants with set menus.

Apple Music

So now we finally know the details of Apple Music.

I won’t go through all the details because every site on the planet has already done so, breathlessly live-blogging the full announcement. So go elsewhere for those.

To be honest, as The Verge reports there are probably some sighs of relief around the rest of the streaming music world, because Apple hasn’t actually announced a service that’s leaps and bounds ahead of the rest of the pack.

They’ve got a streaming service, a radio service, and some kind of social media bolt on (nobody mention Ping, OK!).

And what they do have is scale. They’re launching in 100 countries all at once. I imagine, because they have gargantuan teams of lawyers who have been working those deals. Other services like Spotify have had to launch market by market. Even Netflix is still going country by country.

The price point for Apple Music in the US is the same as for all the competitive products – $9.99. I can’t find details of a UK price, but I imagine we can see a magic exchange rate in action and as for Spotify, expect to pay £9.99. There’s also a family plan which is innovative, although I suspect many families currently just share the same streaming subscription. And Apple is actually deigning to make an Android app, although not until the autumn.

The big play Apple has is that it will send an upgrade to all iOS devices with a no-doubt unremovable icon (or set of icons) promoting the service. Spotify et al need you to download and install their app. Apple does that bit for you.

[An aside: isn’t this sort of thing what the EU accused Microsoft of doing when it was rolling out Internet Explorer with Windows updates in an attempt to kill Netscape? They got very angry about that. I know the EU has been looking at suggestions that Apple wanted labels to limit Spotify’s free plan, but that’s somewhat different.]

To be honest, the most interesting part of the whole announcement seems to be Beats 1 which sounds very much like a regular radio station. Zane Lowe is the key person behind this and he will be broadcasting daily from LA with other shows coming from New York and London, live around the world (We’ll get Zane Lowe for drivetime). From what I can tell this will be an advertising-free experience.

In some respects then, another free online radio station. There are many of those already; licenced or not. But I wouldn’t underestimate the power of this station. Apple can throw more money at this project than any radio broadcaster in the world.

And it’ll be free to listen to. You won’t need to be paying for Apple Music to hear it. With big music acts doing exclusive things on the station, I imagine that this will be the free-entry point into the service. Something to persuade you to subscribe.

Of course it probably won’t be directly competing with your station because I suspect that the music mix will be quite eclectic. But it’ll have massive credibility. And I expect that the station will allow its presenters to have their own voices. Stations that do this seem to do well (cf. Radio 2 and 6 Music).

But then it sounds very much like Beats 1 is just the first of a set of Apple branded radio stations. They certainly use the plural in their promotional material.

Here’s an interesting thing though. A big part of Apple Music is curated listening. So rather than simply rely on algorithms, an actual programmer will build playlists (Spotify and others do this too of course). Apple is spreading their net far and wide to create those playlists.

I note from Apple’s website that various music magazines and sites are building playlists. These include Q and Mojo – owned by Bauer Media. That would seem to mean that Bauer on Apple will be competing with Bauer’s own radio services for listening! I suspect that Bauer thinks being inside rather than outside is the better bet.

Earlier I wondered on Twitter whether radio stations that in the past had been massive Apple fans, had been talking about Beats 1? 6 Music did, but I’m not certain about others.

Let’s face it, stations have previously been in a rush to align themselves with Apple and announce the cool new iPhones or iPads that they’ve launched. There’s been basically little need for Apple to run radio advertising (has Apple run any radio advertising in the UK?), because stations plug the products for them free of charge. Indeed ask any promotions team and they’ll tell you that Apple products are what prize winners want to win in competitions.

So will stations be quite as keen to hand over free publicity to a device that now has a button – front and centre – that will compete with your brand? Apple is now a well-funded competitor.

[Update: I thought this piece from The Guardian was well worth linking to, with some really interesting numbers. In particular the fact that the average consumer is not going to be spending £120 a year on music when they currently pay just £40. Sure, some people will. But most people just aren’t into music to that extent.]

Mozart in the Jungle

A mini-review of this new Amazon series, because I think it deserves it!

First things first: there’s no doubt that this is a terrible title for a TV series. It’s supposed to shout something like “classical music in New York City” but I’m really not sure it does. I complain when titles are boring, but this one is a bit lousy. It comes from the book of the same name, a 2005 memoir from Blair Tindall who spent many years in the New York classical music scene performing with various orchestras.

The book seems to have simply been a jumping off point for the series which is set around the fictional New York Symphony, who is just saying goodbye to its old “maestro” (Malcolm McDowall) and welcoming its new South American genius, Rodrigo (Gael Garcia Bernal). There’s a feeling that new is replacing old on a slightly faster timetable than old would like.

We largely follow things from the perspective of Hailey (Lola Kirke), a young oboist who is striving to make a career for herself. She lives with her friend Lizzie (Hannah Dunne) in one of those preposterously large apartments that everyone seems to get in US TV shows even when they’re living hand to mouth (cf. Girls).

Amazon pitches the show as a comedy, but comedy drama would be a better way of describing it, with the show neatly divided into ten 30 minute episodes. At first it seems as though Hailey is going to dramatically get her dream job with the symphony until some real world concerns come into play. This is a heavily unionised world, where even a new conductor doesn’t get to hire and fire at will. We get to know various members of the orchestra over time, although the scale of the personnel limits things somewhat.

Notably we get to know Cynthia (Saffron Burrows) who’s had a relationship with the outgoing maestro, and is very welcoming towards Hailey as she struggles to make her mark. And we also meet Gloria (Bernadette Peters) the long-suffering manager of the orchestra, constantly juggling the financial realities of what they have to do with the needs of the musicians.

I’ve got to tell you that in spite of that awful name, I really enjoyed Mozart in the Jungle and binged on the whole thing in a couple of sittings – thirty minute episodes are very more-ish.

I did read an hilariously testy review of the series elsewhere which bemoaned some of the things that would “never really happen.” But this is something that anyone who’s ever worked in any profession that’s featured in television or film has known for many years. Do we really think any cop show bears more than the faintest reflection on reality? Or a medical show? Or a legal show? I know that scenes set in Frasier’s radio station were some of the least convincing portrayals of a radio station ever committed to celluloid. But that doesn’t mean that I don’t love the show and find it funny.

They obviously did make a couple of changes after the pilot episode though – reining in on classical musicians playing shot games with flutes and oboes and so on. And yes, it doesn’t make sense that a musician could do double duty performing in a concert hall and then dashing across town to play in the pit of a Broadway musical (shows start around the same time). But I’m pretty sure that musicians do supplement their income performing in other places. Whether the players in the premier orchestra would is a separate question, but these people have to make a living, and I’m pretty sure that in the UK your average violinist isn’t on six figures even allowing for currency conversions.

I found it interesting to see the hoops you have to go through to constantly bring in money – having lunches with elderly well-off ladies who bid to support your work.

Rodrigo, incidentally, is surely supposed to be Gustavo Dudamel, now at the LA Philharmonic. I suspect though, that while he may well do some things differently, he isn’t quite the madcap diva that Rodrigo seems to be, with his even crazier wife.

But this is a comedy drama, and so we shouldn’t take it all too seriously. It comes from Roman Coppola, Jason Schwartzman (who’s Bored to Death was wonderful), and Alex Timbers. Schwartzman shows up in a couple of episodes as the presenter of a classical music podcast with ideas perhaps a little above his station. And John Hodgman continues to refine his eccentric billionaire act (as seen on The Daily Show), playing an eccentric millionaire in a couple of episodes here.

There’s a light frothy air to the whole thing. The music is well handled, and you tend to be left wanting to hear more. The closing credits point out that much of the music is available on Amazon Music, although I didn’t find any direct links on their website, so they may be missing a trick. Give viewers a list of the pieces heard and direct links through to buy them! (Given that the producers are working with a real orchestra, I’d almost be tempted to fully film some of the pieces and offer them as streaming “extras” if they could find a way to do it.)

[One final aside. The pilot episode was obviously produced many months before the rest of the series. Invariably some things change between pilots of full series. Notably, producers decide to change their credits – either in style, or creating themes or stings. What I never understand with US series is why they don’t later go back and re-edit the credit sequences of the pilot to match the rest of the series. Yes, the pilot has long been available on Amazon, so that doesn’t make it as relevant. But this commonly happens with network fare, where beyond executives, nobody has really seen the pilot before it hits the screens, and then the first two episodes look different.]

The Price of Rental

I missed Guardians of the Galaxy in cinemas earlier this year. But it was well reviewed, and I did plan to catch it.

The good news is that it came out on “home video” recently. So I could either buy it on DVD or BluRay, or watch it in download/streaming.

If I choose to rent it, I have a few options.

I have a largish TV, so HD is my preferred option, and the industry continues to put some kind of quality premium on film rentals. But since I have a smart TV and a number of devices attached to my television, I have a few options as to where I get the film from.

Assuming they’re all much of a muchness with regards to quality, here are my options:

ProviderSDHD
iTunes*£3.49£4.49
Google Play£3.49£4.49
Amazon Instant Video£3.49£4.49
Wuaki.tv**£3.49£4.49
Sky Store£4.49£5.49

Huh? Why is Sky £1 more than all my other options?

It’s probably easiest since I tend to default to my Sky box when the TV is on, and Sky ensures that it downloads a healthy buffer so that once I start watching it, I won’t be interrupted by buffering. But I’m not so lazy as to not want to change inputs to either the Amazon or Wuaki apps on my TV, or Google Play via Chromecast on another HDMI port.

Maybe I’ve answered my own question. Of those who own smart TVs, x% (where x is a significant number) don’t use the apps on their smart TVs. And to use Google Play, I do need a Chromecast, albeit a relatively inexpensive device.

I tend to watch streaming services like Netflix or Amazon on my TV. Sure, I have the apps on my phone and tablet. But that big screen dominating one end of my living room, with the surround speakers is best for expensively made Hollywood films. For the most part, I don’t stream to mobile devices (downloads are different, and I might for travel).

And a recent report says that 78% of Netflix subscribers watch (at least some) programming on their TV.

But what I think this all boils down is that it’s laziness that allows Sky to charge another £1 more for their customers than anyone else!

Afterword: I watched the film via Google Play and my Chromecast. It’s not perfect as it’s streaming constantly so there was a buffering moment (and I have fibre). And there were occasional quality drops. So perhaps Sky does have a bit of a good hand to play. On the other hand, I’ve not noticed any discernible issues streaming either on Amazon or Netflix beyond an initial quality check.

* Actually, since I don’t have Apple TV, this would be the most awkward for me, requiring a laptop running iTunes connected to my TV via an HDMI cable. Still I include it for completeness.

** At the time I wrote this, there was something wrong with the Wuaki.tv website and Guardians of the Galaxy had a 404 error. However, were it to be available, it would almost certainly follow the same pricing as listed here because that’s the level at which they price the rest of their films.

Battle of the Streaming Services

This morning, Amazon UK announced a shake-up of its streaming offering, hitherto called LoveFilm. From next week, the service gets rebranded as Amazon “Prime Instant Video”, but perhaps more importantly, it gets rolled into the regular Amazon Prime offering.

So far, so good, unless you were attached to the LoveFilm name.

However there are price increases around the corner. Although it doesn’t say it anywhere I can see particuarly obviously on the Amazon website (indeed, I can’t see any press releases on the Amazon UK website post 2012!), the cost of Amazon Prime will jump from £49 to £79 for users. Anyone already on the £49 deal, or who joins before the end of the month, continues at the current price until the end of their 12 months. But the price is jumping up to that higher level with renewals or new starters after that point.

I’ve been using Amazon Prime since 2007, and it has undoubtedly made me use Amazon for many more purchases than I would have otherwise. The overall reliability of their next day offering, and the fact that I can use it easily for gifts, means that it’s been of immense value. I have to weigh that, of course, against Amazon’s avoidance of tax, the effect it has had on record, DVD and bookshops on the high street, and their reported working conditions. I try to use bricks and mortar bookshops as much as Amazon for this very reason.

When Amazon US started bundling streaming video in the US and offering it to Prime customers there, I wondered when we in the UK would get it.

Of course it was different market situation there to here. In the US, Amazon was the upstart fighting against the dominant Netflix. In the UK, Amazon had bought the market leader, LoveFilm (which had mirrored itself on the US Netflix model), and therefore didn’t need to offer a great deal to their customers.

In recent times, Netflix has made an inroad into that LoveFilm dominance, although I believe LoveFilm has remained bigger. And Amazon has been more heavily branding LoveFilm as Amazon LoveFilm in recent months until today when we lose the LoveFilm moniker altogether.

What they’ve not tried to do is work hard to upgrade UK Prime members to a package that included LoveFilm. They did have an offering – also at £79 – that gave consumers both. But it was handled strangely. You had to cancel your current Prime account, get a refund, and then take out the new deal. Amazon never seemed to try to upsell to the new package, I suspect because they always knew that today was on the horizon.

In many respects, it’s not a great deal. If you just want next day delivery on all your purchases, your cost has just gone up 61%! I would think that’ll be a deal-breaker for many people. Yes – there’s the Kindle lending library, but I’ll be honest, I’ve never used it – on the basis that most of the books I want to read are unlikely to be included (and I rarely see the icon on a book’s page suggesting that they are). So if streaming video is of no interest, you’re seeing an enormous price hike. And the new combined price of £79 seems particularly high compared with the $79 price for the same package in the US, even if in the US it’s more about two day delivery than next day delivery.

And it seems that those still on the DVD monthly rental scheme are seeing the basic price from £7.99 to £9.99. I’m sure that in time, Amazon would like to kill off that administratively complex model. But at the moment, it’s only via discs that Amazon is able to offer the widest selection of fare.

I did have a 6 month cheap trial of LoveFilm about 18 months ago, but I ended up not staying with the service. It just didn’t offer the choice of films I wanted. And there was a particularly frustrating issue with it allowing you to search for a film, only to discover that it was only available as a disc and not for streaming. Let’s face it, LoveFilm was able to offer every film as a disc, so that was particularly frustrating.

Amazon has obviously made inroads into original commissioning, and I’m interested to see their new pilots. However, it was Netflix that got me to sign up first, when they unveiled the first season of House of Cards this time last year.

Amazon will need to up its game in terms of making its device offering better. Netflix is currently superior. Incredibly, there is still no Android app! There obviously is a Kindle app (which of course is built on Android), but Amazon is so determined to flog Kindles, that it has deliberately not made an Android app – a marketing decision that is a strike against them, and is detrimental to the large core of its customers who own Android devices. Amazon does have an app for iPad though!

And the streaming technology used by Amazon is based on the abysmal Silverlight and is thus full of curious error messages and a lack of support on some operating systems like Chromebooks.

For what I imagine are rights reasons, neither Netflix nor Amazon yet offer cached offline viewing as, say, Spotify is able to. This is obviously a shame for those travelling with portable devices. From keeping kids quiet in the back seat to giving yourself a better selection of films than your airline has chosen, there is a significant demand for it. London commuter carriages are packed with people watching iPlayer cached video, and to a lesser extent Sky Go video.

It’ll be interesting to see what the next moves are.

At the moment, it feels that although Amazon is the bigger player in the market, it’s Netflix that has the can’t-miss programming that’s getting critical acclaim. Amazon hasn’t managed this yet. Which goes back to my note the other day about Netflix being a game-changer. Their batting average is high so far, but probability suggests that won’t last.

That said, I note that Amazon has stealthily added pay-per-view to its offering. So it’ll be able to offer Game of Thrones at £1.99 an episode or whatever.

The game’s afoot.

[UPDATE] And according to Re/code, Amazon is going to be launching its own set-top box next month. Whether or not it arrives in the UK, and offers more than their streaming service remains to be seen. One set-top box – one service feels very wasteful.