TimeOut writer Lydia Jenkin looks at how streaming services are affecting our local music industry.

• Local band She's So Rad earned multiple 5-star reviews for their album Tango and have two songs on A-rotate on Hauraki.
• Yet they've only sold a total of 20 physical CDs and 50 digital albums.
• They have had 90,000 songs streamed on Spotify, earning them a projected $130
• Toy says: "It's just much worse than we expected. I expected it to be bad, but this far surpasses it."

It's not a topic many independent artists are keen to discuss, at least not publicly.

But the reality of how difficult it is to make money as a musician in New Zealand came to our attention once more this week, sparked by a Facebook post.

Jeremy Toy, who is one half of highly regarded alt-pop duo She's So Rad, revealed in a simple, matter of fact way, just how hard it is for a local independent artist to make any money from their music at the moment.

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He took the post down after someone began trolling it, but later posted again, further explaining his position, which is this: Despite very strong reviews for their album Tango (including a 5-star review in TimeOut, as well as other major New Zealand print publications, and on Radio NZ), and despite having two songs on A-rotate on Radio Hauraki, plus good support from student radio across the country, they've sold 20 CDs, 20 digital copies through Bandcamp, and 30 digital copies through iTunes since they released the album in May. They had 300 people at their album release gig at the Kings Arms, and sold 1 CD.

But when you look at their streaming data, they've had 90,000 streams on Spotify in the last month, and something in the realm of 80,000 individual song streams on Soundcloud.

The projected revenue for their online streaming was $130, though their distributor has since said it's likely to be higher, probably equal to 25 album sales.

Auckland duo She's So Rad. They've got the reviews but not the money. Photo / Supplied
Auckland duo She's So Rad. They've got the reviews but not the money. Photo / Supplied

Soundcloud doesn't pay out any royalty payments, Spotify pays a tiny amount per stream based on your popularity on the service and their revenue, and YouTube has different methods of calculation depending on your deal and whether you're helping them to earn advertising revenue.

So essentially, an act who's getting reasonable radio play, strong reviews, and tallying up 90,000 streams in a month on Spotify is somehow still making next to nothing.

Experience and talent is not adding up to sales

Toy's not a newbie to the music business, he's been making music for decades in bands like Sommerset and Opensouls, working with a long list of artists like Anika Moa and Hollie Smith, working as a producer, beat-maker, DJ, and session musician. The first She's So Rad album In Circles also received glowing reviews, they were nominated for the Taite Prize, and found interest in the UK, Australia, and Japan.

So he's seen the industry change, and had low expectations for selling any albums this time around - but the reality surprised him.

"Basically it's just much worse than we expected. I expected it to be bad, but this far surpasses it."

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No one's actually talking about it, because the industry is scared to talk about how bad it is

Toy isn't bitter or twisted about it either - he's not trying to figure out who to blame, he even laughs when reflecting on the numbers.

"Of course we're not doing it for the money. But [this situation] is something that has been in the background churning away. It was an interesting Facebook post, because a few people started talking to me about it, other musicians, and said, 'No one's actually talking about it, because the industry is scared to talk about how bad it is'. I mean, I know I'm a small fish, but I think our situation reflects what's going on, on a wider scale."

Why no one wants to talk about it

He's not wrong about the reluctance to discuss it - gathering wider feedback from the local musical community about the issue, it became apparent that not many artists want to seem like a "whistleblower" or talk in specific numbers about their own sales, because success in an industry as small as New Zealand can have a lot to do with perception.

There are also a huge number of variables which make different methods or mediums work better for some artists than others.

For example, it's generally believed that if an act has an older fan base (40+), they're more likely to sell a greater number of physical CDs or digital downloads (Sol3Mio being a good case in point, having sold more than 100,000 copies of their debut album in New Zealand alone).

There are also some particular genres where that seems to hold true - alt-country artists in New Zealand, like last year's APRA Silver Scroll winner Tami Neilson, also seem to get by selling physical albums while on tour, and through local record stores.

On the other hand, there are also artists like newcomer, 19-year-old Thomston, who has done very well via Spotify, where he's had over 10 million plays worldwide from two EPs, despite not being a conventionally mainstream artist, and not doing much promotion.

Rising local 19 year old star Thomston has had great success with streaming his music on Spotify, having reached over 10 million plays.
Rising local 19 year old star Thomston has had great success with streaming his music on Spotify, having reached over 10 million plays.

What the industry reports say

The reports from Recorded Music New Zealand (the non-profit trade association who represent recording artists, labels and distributors), which add up all reported revenue from physical, digital, and streaming, across major and independent labels, also show that while overall revenue continues to decline marginally year on year, and revenue from physical and digital sales continues to drop (physical sales went from $35.5 million in 2012 to $21.4 million in 2014), the revenue from streaming has increased exponentially from $1.8 million in 2012 to $12.7 million in 2014.

That paints a moderately hopeful picture, and revenue from streaming services does look likely to increase year on year.

But whether that increase can make up for the decrease in physical and digital sales remains to be seen, and that seems to be the trickiest point for some local artists - they're seeing a quickly rising number of streams and steeply falling number of album sales, but the revenue doesn't balance out.

The acts stuck in the middle

Certainly the area that seems to suffer the most in the current market are independent artists whose audience might be somewhere in the middle (25 to 40), who are technically savvy enough to have switched to a streaming service like Spotify or Apple Music, and believe they are supporting artists that way, so have stopped buying albums.

Anthonie Tonnon has had great reviews for his album Successor, but finds online streaming services less useful, and the best way to sell his album is through record stores or at his shows.
Anthonie Tonnon has had great reviews for his album Successor, but finds online streaming services less useful, and the best way to sell his album is through record stores or at his shows.

Another local artist who has found himself curious to work out how these numbers really break down is Anthonie Tonnon.

He recently released Successor to rave reviews, and is held in high regard by the local music community. He's also spent a good chunk of time over the last few years touring the US and Australia, honing his skills, and aiming to be a full time musician. But it's not as easy as it might sound.

"The numbers I've experienced with this album release aren't bad - I'm doing well enough selling CDs, vinyl, and digital downloads. But I play a lot of live shows, and I sit on the merch desk every night because that's the difference between selling two CDs and ten CDs for me."

To him, unless you're getting millions of hits on a platform like Spotify, they're not financially useful, and even as an industry tool or a way to help promote your music, they can be tricky.

"The thing about these services, is that they can be useful to some, and you can use them to make money from your music, but it's so specific to your individual position, and your kind of music. You need big numbers. There's a breaking point with Spotify or Soundcloud, where your streaming data becomes big enough that it's a bargaining chip for getting more press, or management, booking agents, playing festivals. Internationally, all sorts of deals are done largely on that data.

"The other thing is, that all of these [revenue] equations, at this point, they only work if you're being played a lot, millions of plays. If you're anywhere below that, you'd be much better off getting tens or hundreds of Bandcamp sales than tens of thousands of plays on Spotify. The money would be better."

Understanding the consumer position

Both Toy and Tonnon, like many local artists, have plenty of empathy for consumers. They understand that plenty of people are struggling in the current economy, and music is a luxury. But that doesn't make their lot any easier.

"I got off stage in Australia, I was playing to 300 people, and as I was running to the merch desk, a guy stopped me halfway to say "Are you on Spotify? I've got a premium account!", and I just thought, 'Dude, that's great for you, but that's not the same thing as buying my record" Tonnon laughs.

Toy says: "I still actually buy music, but I'm a DJ, so I buy music to play music, and if I like something I'll buy it. But I know the ins and outs of where the money goes, so I'll buy it on Bandcamp, or I'll buy it, if I have to, on iTunes.

"But I don't know if the general public know about where the money goes, and fair enough - everyone is finding life pretty tough at the moment, and spending money on music is a bit of a bonus.

"But I guess it's interesting to be in a position where you make music so accessible, and people still won't pay for it. Even when it was harder and you had to go to a record store to buy the thing, you had more sales then, whereas now it's at your fingertips and people aren't buying it."

Can we fix it?

Exactly what the solution is of course remains unclear. The best revenue streams for artists in terms of profit - digital and physical sales - are no longer as appealing to consumers as they once were.

"The idea of owning a digital file is not appealing to anyone and fair enough" Toy adds. "I pay for digital content not because I want to own a digital file, but because I want to show support to the artist which in turn helps make their art sustainable" Toy. "Streaming doesn't help to keep music a sustainable resource.

"It's tricky to work out what that means in the future. It just seems a pity that music can't thrive because it's an important part of our culture. I mean, I guess everyone could just be making it for free, which is essentially what a lot of us are doing, but everyone will burn out I think."

- TimeOut