Lessons From Prince's Legacy And Struggle With Digital Music Markets

from the innovative,-but-controlling dept

Undeniably, Prince’s death last week marked the loss of a true musical genius and maverick. In his life, he was known for being a talented musical innovator with flamboyant clothes and a contrarian streak. He was adept at a range of instruments, as well as in multiple genres of music including funk, jazz, pop, rock, and R&B.

As broadly gifted an artist as he was, Prince never quite found the right approach when it came to licensing his music for distribution -- in spite of the fact that sold over 100 million records, placing him among the best-selling artists of all-time. He won an Oscar, a Golden Globe, and seven Grammys, among other accolades. His massive discography includes 50 albums, 104 singles, 136 music videos, among other creative works. And yet his fans were left in the odd position, on the news of his death, of being frequently unable to provide links to Prince’s massive oeuvre.

Like David Bowie, who died only a few months earlier this year, Prince was constantly reinventing himself throughout his career. But one key reason for his reinvention -- at different times, he was known by “Prince,” “Jamie Starr,” an unpronounceable glyph, and perhaps most notoriously, as “The Artist Formerly Known as Prince” -- was his unhappiness with his record labels, and later with digital/Internet distribution.

And even now, if you’re looking to listen to your favorite Prince tracks on popular digital music services like Spotify or Apple Music, you’re out of luck. While you can find some live performances on YouTube, and a couple exceptions like his single “Stare” on Spotify, the streaming rights to his music are licensed exclusively through Tidal -- a niche subscription-only service owned by Jay Z.

You can see why Prince may have been attracted to Tidal as a service. Since its launch in late 2014, a number of major artists have embraced it, offering exclusive releases and touting the service’s better deal for artists. Indeed, Tidal purports to “pay the highest percentage of royalties to artists, songwriters and producers of any music streaming service.”

But it’s hard to see how it would make business sense to exclusively license with them, as Prince did. For one thing, it’s not entirely clear that Tidal’s rates are that much better than Spotify. Respectively, they each claim to pay out 75% and 70% of their revenues to rights holders. Yet, Tidal has also claimed that they pay out four times Spotify’s royalty rate.

Vania Schlogel, then executive at Tidal, clarified their rates in an interview for the Hollywood Reporter

There was some confusion on the Internet about whether “royalty rate” was a percentage of Tidal’s total revenue. According to Schlogel, it is. The industry standard royalty rate, she says, is 70% (roughly 60% to record labels, roughly 10% to artists via publishers). Tidal pays 62.5% and 12.5% (which equals the 75% Jay Z is referring to).


This makes their base royalty rate going to artists 25% higher than Spotify. But Tidal also has about 45% of their subscribers on a $19.99 per month premium tier. This would make the share of revenue going to artists around 80% higher.

That’s a lot more! Artists should all be switching to exclusive deals with them, right? Well...not so fast. Spotify alone has 30 million paying subscribers. 100 million if you include ad-supported free tier listeners. Apple Music has another 11 million paid subscribers. Compare that with Tidal’s relatively paltry 3 million. Not to mention commercial distribution to YouTube’s 1 billion active users, or the dozen other streaming services out there.

Assuming those subscribers have comparable activity profiles, it wouldn’t make business sense even if they paid ten times the royalty rate -- at which point it would be more than total revenue. Although, artists can do whatever they want. It’s a free market (sort of).

But for Prince, his embrace of Tidal may not have been just about royalty rates. Rather, it may have been a reflection of his proclivity to assert tight control of his brand. As Vox’s Constance Grade writes:

It's classic Prince: Tidal is the best program not only because it pays better, but because it gives him the most control over his music and his persona. And Prince never let someone else control his persona if he could help it.

This was fully consistent with the character of a man who preferred to play small, intimate venues even when he could have been selling-out stadiums.

But making music less accessible poses serious challenges for artists and consumers alike. For one thing, as English singer/songwriter Lily Allen explains, it will reinvigorate incentives for piracy (notably, she has also had an interesting relationship with Techdirt):

I love Jay Z so much, but Tidal is (so) expensive compared to other perfectly good streaming services, he's taken the biggest artists ... Made them exclusive to Tidal (am I right in thinking this?), people are going to swarm back to pirate sites in droves ... Sending traffic to torrent sites.

Perhaps unsurprisingly, when Kanye West decided to release his album The Life of Pablo exclusively on Tidal, it was pirated over 500,000 times in its first day alone -- drawing fire for reinvigorating online music piracy.

A recent study by Columbia University (among other research including the Copia Institute’s “The Carrot Or The Stick?”) confirms that providing access to good legal alternatives is effective at reducing online piracy -- particularly among young people. To take another example, the rise of Spotify in Sweden was followed by a major decline in music sharing on the Pirate Bay. According to Copia’s study, “a similar move was not seen in the file sharing of TV shows and movies...until Netflix opened its doors in Sweden.”

During his career, Prince also flirted with various album release strategies, and explored ways to cut out the middleman by going fully independent.

Prince’s strategy was visionary, but ahead of its time. A solution that’s just now coming of age is blockchain-driven smart contracts for digital music consumption. If they catch on, they could cut out the middleman and transparently distribute revenues directly to artists behind a given work, according to pre-arranged terms. Prototype service Ujo is already doing it with artist Imogen Heap’s single “Tiny Human.” So, in actuality, perhaps Jay Z should be more worried about blockchain than Spotify.

Indeed, as streaming becomes the dominant revenue source in the music market, and consumers continue to shift away from physical media and digital downloads, the pressure from artists will only increase as they seek more transparency, and a stronger ability to renegotiate their share of revenues from all sides (but particularly from labels).

On Twitter, Allen echoed this sentiment, writing that rather than demonizing streaming services, artists should look towards the hefty cut of revenue taken by labels:

For Prince, online streaming services were just the latest challenge in his complex relationship engaging with evolving digital markets. Like Bowie, Prince was a digital pioneer -- among the first to embrace the Internet’s potential to create a direct relationship with his fans. In 2001, he opened one of the first music subscription services, NPG Music Club, which was open for 5 years. In 2009, this was succeeded by lotusflow3r.com. As the Wall Street Journal describes it:

LotusFlow3r.com, resembled a galactic aquarium, featuring doodads like a rotating orb that played videos. The promise: fans who ponied up $77 for a year-long membership would receive the three new albums, plus an ensuing flow of exclusive content, like unreleased tracks and archival videos.

It was also met with a mixed reception, and a year after its launch, it went dark.

Ultimately, as the Internet came of age, Prince met it with increasing resistance. Likely, he saw his ability to assert control slipping away. He wasn’t a fan of people repurposing his work in the analog era, so why should we expect him to embrace a digital one -- where it’s far easier to remix, edit, dub and repurpose? As Mike Masnick explains, Prince became a militant enforcer of his intellectual property, who played fast and loose with the law in his litigiousness:

He's also gone legal a bunch of times, suing a bunch of websites, threatening fan sites for posting photos and album covers on their sites, suing musicians for creating a tribute album for his birthday, issuing DMCA takedowns for videos that have his barely audible music playing in the background and 6-second Vine clips that are clearly fair use.

At one point, he even declared that the Internet is a fad, rebelling against a model that wouldn’t work on his terms:

The internet's completely over. I don't see why I should give my new music to iTunes or anyone else. They won't pay me an advance for it and then they get angry when they can't get it.

(At this point he could have styled himself “The Prince of Denial.” He even deleted his Facebook and Twitter accounts.)

Famously, Prince, via Universal Music, was responsible for the infamous “dancing baby” DMCA takedown over a video featuring Prince’s “Let’s Go Crazy” playing faintly in the background of a short clip as a toddler danced*. Ultimately our friends at EFF, who were representing Stephanie Lenz, prevailed on their fair use claim. In 2013, EFF awarded him their “Raspberry Beret Lifetime Aggrievement Award” for “extraordinary abuses of the takedown process in the name of silencing speech.”

Despite all the digital-copyright agitation Prince managed to generate in the steps he took to express his unhappiness with Internet distribution channels -- and despite his insistence, it doesn’t seem as if the Internet is “over” quite yet -- he will of course be remembered primarily for his genius as a songwriter, performer, and producer. And, also, as a visionary. Although he passed away just before the rise of virtual reality and mixed reality technologies, one can only imagine him as someone who would have embraced it. Even if imperfectly.

Ironically, given his virtuosity and lasting impact on pop music, limiting his digital distribution, and the ability of his fans to find new creative uses for his work, makes it orders of magnitude more difficult for fans to bring his music to new generations of listeners, who may never know what all the fuss about Prince was about. And that’s a shame.

* Post updated to reflect that while Prince/Universal sent the initial DMCA takedown, it was Lenz and EFF who brought the lawsuit for that takedown.


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  • icon
    That One Guy (profile), 28 Apr 2016 @ 11:49am

    Not really, no

    Ironically, given his virtuosity and lasting impact on pop music, limiting his digital distribution, and the ability of his fans to find new creative uses for his work, makes it orders of magnitude more difficult for fans to bring his music to new generations of listeners, who may never know what all the fuss about Prince was about. And that’s a shame.

    Fitting yes, a shame no. If a creator deliberately makes it as difficult as possible to access or find their work as they can, if they go after fans that are simply trying to show support or enthusiasm for the creator's works, and as a result potential fans never even hear about them that's not a shame, that's an obvious consequence of their actions.

    If Prince's actions while alive drove away fans and kept others from becoming fans by making it so that they never even ran across his music I'd say that's a good thing, as it allows other musicians a chance to scoop up those fans and have their music become more widely known and potentially even longer lasting as a result.

    reply to this | link to this | view in chronology ]

    • icon
      Mason Wheeler (profile), 28 Apr 2016 @ 12:16pm

      Re: Not really, no

      Precisely. As has been said of others in the past, "I'm not glad he's dead but I'm glad he's gone." Whatever his musical talents may have been, his impact on the broader world of music, and its culture, was more negative than positive.

      reply to this | link to this | view in chronology ]

    • icon
      Violynne (profile), 29 Apr 2016 @ 7:15am

      Re: Not really, no

      Agreed.

      Prince, the artist, will be missed. I concur with the article's accolades of his achievements.

      However, Prince himself destroyed any chance anyone will "fondly remember him" who didn't grow up in an era where his videos were plastered on MTV every 12 seconds or on the air with this old thing call "radio".

      The majority of Prince fans come from this era, not the current digital era. Sure, a handful will mostly know him (death does wonders for an artist's career), but the many more simply won't care as they ask "Prince who?"

      That's not a shame. That's precisely what happens when an artist punches their fans in the face while trying to hit back against the record label, or worse, pretend they have control over what can and cannot be used by the fans they're trying to serve.

      So, a cautionary tale for you imbeciles out there who think it's possible: IF YOU WANT TO KEEP CONTROL OF YOUR WORKS, KEEP THEM TO YOURSELF.

      Trust me when I say there's more than enough to go around and we certainly don't want your nasty attitude.

      reply to this | link to this | view in chronology ]

      • icon
        The Wanderer (profile), 1 May 2016 @ 5:19am

        Re: Re: Not really, no

        However, Prince himself destroyed any chance anyone will "fondly remember him" who didn't grow up in an era where his videos were plastered on MTV every 12 seconds or on the air with this old thing call "radio".
        Possibly relevant:

        I am 37 years old. With the exception of a stop-over in Canada for a few months, I have lived in the USA my entire life; I would estimate that my family has been no worse off than lower-middle-class during that time.

        The first time I remember having ever heard of Prince was during the news-cycle flap over his "The Artist Formerly Known As" name-change.

        The evening after he died, when I was driving home from work, I heard a piece on National Public Radio, on the subject of his legacy. At the very end of it, they played a song, which I presumed was by him.

        So far as I am aware, this was the first time I had ever actually heard any of his songs.

        reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 28 Apr 2016 @ 11:54am

    Prince certainly couldn't complain about the situation.

    The bullet in his foot came from his own firearm.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 28 Apr 2016 @ 12:09pm

    Just saying this is a well thought out article Zach

    reply to this | link to this | view in chronology ]

  • icon
    OldGeezer (profile), 28 Apr 2016 @ 12:29pm

    People can remember him as a musical genius if they want to but despite his talent I will always think of him as a dick. The take down of the dancing baby video cinched it for me. Michael Jackson was also a gifted performer. People forget that he was a kiddie diddler. Not guilty? Yeah right, so was O.J.

    reply to this | link to this | view in chronology ]

    • icon
      Mason Wheeler (profile), 28 Apr 2016 @ 12:43pm

      Re:

      I saw a great cartoon in the paper once. For context, it was right after Jackson had escaped justice for his child molesting for the second time, and right around that same time, Allied forces in Iraq had overthrown Saddam Hussein's government and captured Saddam.

      The cartoon depicted Saddam Hussein speaking with his lawyer, and the lawyer looks grim. "Mr. Hussein, I won't lie to you, things are pretty bleak. After reviewing all the evidence, it appears that the only chance we'd have of getting you cleared would be to have your case transferred to California."

      reply to this | link to this | view in chronology ]

      • icon
        OldGeezer (profile), 28 Apr 2016 @ 1:32pm

        Re: Re:

        Like the one where the lawyer says "I have good news and bad news" The guy says "give the bad news first". He replies "You are being charged with first degree and if they find you guilty you could get the death penalty". "How could there be any good news?" "You are being tried in California".

        California death row inmates have a far greater chance of dying of natural causes than the needle.

        reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 28 Apr 2016 @ 12:41pm

    When I heard he died I went to my Google Music subscription to listen to some of the classics but lo and behold they weren't there.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 28 Apr 2016 @ 12:43pm

    Interestingly, much of his music that was on YouTube has recently disappeared. My lady likes to listen to him and was shocked between one day and the next his music was taken off.

    reply to this | link to this | view in chronology ]

  • icon
    jupiterkansas (profile), 28 Apr 2016 @ 12:47pm

    You have to love these artists trying so hard to keep me from listening to their music. If Tidal's the only place I can listen to you, then I'm happy pretending you don't exist.

    These are the same major artists that once monopolized shelf space in record stores so that smaller artists' music couldn't even be sold.

    reply to this | link to this | view in chronology ]

  • identicon
    I.T. Guy, 28 Apr 2016 @ 12:50pm

    Ill remember the skinny fuk as the one who insisted we build runners off the stage 2 hours before doors "so he could get close to his people" and never stepped foot on them. He was an asshole.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 28 Apr 2016 @ 1:28pm

    I don't care how "creators" make money.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 28 Apr 2016 @ 1:39pm

    Interesting....

    After reading this, I decided to look and see if I had any Prince music in my extensive music collection. I did - 1999, off a WB compilation disc. That's it. While I've heard all of his singles on the radio, that's the only one that's shaped me socially, and it appears to be the only one I was able to get through regular licensing.

    reply to this | link to this | view in chronology ]

  • identicon
    FM Hilton, 28 Apr 2016 @ 9:43pm

    Where there's a will

    For all his legal bad-assing, Prince was dumber than hell in one respect: he reportedly left no will, which means that his entire body of work is now up for grabs by strangers. Also that the company that is inspecting his assets has reportedly found so much unreleased music that it would take years to release it all.

    He also had no direct relatives to claim his estate, so that means everyone can get a piece of it. Wouldn't he be just so pissed off!

    I bet he's spinning out of control...in whatever place he ended up. He would be furious that everyone now has a piece of his pies..and that he won't be able to dictate what happens to them.

    Death sucks. I'm sure he'd agree-because now it's all up for grabs and he no longer can bitch about it.

    reply to this | link to this | view in chronology ]

    • icon
      John Fenderson (profile), 29 Apr 2016 @ 9:12am

      Re: Where there's a will

      It's hard to say if that was an issue for him. If you have no relatives or people who you specifically want to ensure will inherit your stuff, then it's not stupid to skip making a will. Doing so would just be hassle for no benefit.

      reply to this | link to this | view in chronology ]

  • This comment has been flagged by the community. Click here to show it
    icon
    Whatever (profile), 29 Apr 2016 @ 6:59pm

    Considering Techdirt essentially ignored Prince (except to call out his copyright concerns), it's funny to see you climb on the "get traffic" bandwagon writing about him today.

    I guess artists only matter when they die and can score you some Google search traffic.

    How sad.

    reply to this | link to this | view in chronology ]

  • identicon
    Ritchie Venus, 17 May 2016 @ 6:57pm

    Selling Downloads

    I was never a big fan of Prince, but I'm 100% with him where selling downloads is concerned: iTunes is a typical example of a company that thinks it's too big to be held to account. When I found out they were selling illegal downloads of one of my records, I tried to telephone them to have a friendly chat about how it came to be on there, but just got a prerecorded message telling me to go on their website, after which I was cut off. Going to their website, I found a feedback page, but it said one would not receive a reply. Next I found a page for reporting tracks that should not be on their, but that was useless too, as I could find no way of expressing my telephone number (a required field)so it would not come up as invalid. Eventually, I found out that they will deal only with a select group of agencies, which makes it economic only if one sells millions of downloads. When I found out the track was one that had been licenced for a CD, the profits of which were for charity, I let it remain there and arranged to receive royalties, but they seem to pay the artists only 1c per download, which seems grossly unfair given the cost of a download. I would rather have people download my music free from You Tube than have iTunes make money from it.

    reply to this | link to this | view in chronology ]


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