A lot gets written about streaming music. It isn’t all true. Perhaps even more frustratingly when it is true, it isn’t always the whole truth. Here are ten misconceptions about music streaming, which I’ve attempted to explain. If you have questions, please use the comments section, and I’ll do my best to answer them or, at least, to explain why I can’t.

1) Streaming services are all basically the same

Streaming services are not all the same. They all play you music over the Internet, but that doesn’t make them the same. They use different technologies, have different content, different ways to find music and they don’t even all sound the same. We run four different streaming services at price points from $19.95/year to $300/year per subscriber. There are lots of others.

2) Royalty rates are scandalously low

There’s a big range of royalty rates paid by streaming services. We have deals with services including Rhapsody, Napster and Spotify, but we also have our own streaming services (Naxos Music Library, ClassicsOnline and Naxos.com) so we get to see a lot of the figures. Services pay us between three cents a track and a quarter of a cent per track¹.

Whether or not this is low depends on what you’re comparing it to. If your reference point is a paid download², then yes, it’ll seem low, but the two simply aren’t comparable. A stream is ephemeral, a download is permanent. In this regard, a stream has much more in common with radio than it does with either a download or a CD.

When one of our tracks is played on internet radio in the US, we get about a quarter of a cent per listener³, comparable with the very lowest streaming rates. We get a little over half that from satellite radio, and nothing at all from traditional radio.

The royalty rate correlates closely to the degree of interactivity. At one end of the spectrum, you’ve got the download, which is yours to play whenever you want. At the other end is traditional radio, where fixed playlists and a small number of stations give you very little choice indeed.

This correlation even applies among streaming services, where Naxos Music Library (an academic research tool designed for people who really need to hear a specific track in detail) pays a higher rate than consumer-focussed sites, which are more likely to be used for background music.

3) Streaming services are not for serious listening

This accusation has been levelled at just about every innovation since letting common people into the concert hall. The gramophone reduced serious symphonic works to 7-minute soundbites. LPs lacked the clarity and immediacy of shellac. CDs sanitised the sound and took the tactile ceremony out of listening. The iPod reduced serious symphonic works to 7-minute soundbites. Streaming made us careless consumers who don’t really pay attention to what we’re listening to.

The idea⁴ is that if you don’t have to pay for music before you listen to it, you don’t have much of an investment in it. You’ll pick the singles, skim over the album tracks, and get stuck in an ever decreasing circle of superficial instant gratification.

It’s a plausible argument, but it’s the answer to the wrong question. We’re not looking at a world in which streaming subscriptions become the only way of consuming music – just a world where they’re one of many options. Streaming has been around for about a decade, and it shows no sign of taking over. People still press vinyl, CDs are very popular and downloads have a growing share of the market because they all have different advantages, and each is the best solution to a different problem. The same goes for streaming.

It’s true that streaming services mean you don’t have to make a financial investment in a piece of music before you hear it, but there are foreseeable positives to this too: with nothing at risk but your time, you can take a chance on new repertoire.

Public libraries didn’t turn out to be bad for literacy in the long run. In the same way, we think the wider availability of music will be good for music appreciation.

4) Streaming is bad for artists and/or independent labels

We’re adults. We look carefully at each contract before we sign it⁵. If we thought streaming subscription services were bad for labels, we wouldn’t have started our own and we certainly wouldn’t have signed up with others.

There are some widely-reported examples of artists receiving very low payments from streaming services⁶. It’s worth remembering these payments are made under the artist’s contract with the label, to which the artist agreed as a consenting adult, and that contract may involve the deduction of a proportion of those royalties. You can’t work out what the service is paying the label by looking at what the label pays the artist.

5) It’s all a scam cooked up by the major labels

It’s not a scam. It’s a deal. Consumers should do it if it makes sense to them, labels should do it if it makes sense to them, artists should do it if it makes sense to them. If a lot of people do it, it’s because a lot of people think it makes sense. If it doesn’t make sense to you, don’t do it.

6) It’s the end of the record collection

As a consumer, if you like records, there’s nothing stopping you from buying them. Almost all releases are still available on CD and as downloads. Vinyl is growing in popularity.

For artists and labels, there’s not a lot of evidence to suggest streaming leads to an overall reduction in the sales of other formats. There’s plenty of speculation about how consumer behaviour will change, but the only way to find out for sure is to try it and see what happens. So far, from where we’re standing, it looks good.

Streaming services certainly do change our relationship with the recordings we hear. Unless you’re very young, it’s likely you already own a whole bunch of music, so a service like Spotify or Naxos Music Library becomes an addition to the collection.

For some people, it’s a way to check out recordings before buying them as downloads or CDs. For others, it’s a way to hear the music they don’t like enough to buy. Some might stop listening to their existing collections altogether, choosing instead to create playlists of favourite albums online. No matter how we use streaming services, we’re still actively involved in listening, and in curating a selection of music. It doesn’t look the same, and it doesn’t take up anywhere near as much space, but all the musically significant parts of building a record collection are there.

7) You’ll be locked in

If you spent your life putting together your record collection – if you’ve carted crates and crates of LPs and CDs from your parents house to college to your first flat to your first house to the place you raised your kids, adding all the time to a library of physical objects that together form a soundtrack to every special memory you possess – if this sounds like your collection, you might well be uneasy at the idea that your music might no longer belong to you, and that you’ll lose it if you stop paying for it at a price that could increase significantly at some point in the future.

This is, though, only half the story. You’ve still got your records, and a subscription isn’t going to take them away. Unlike a physical collection, any new playlists you create are stored on remote secure servers, can be easily copied, and will survive fire, flood or burglary in your home. Right now, a Spotify playlist isn’t compatible with Rhapsody, but as the market matures, it will become easier and easier to transport the playlist element of your collection from one service to another.

8) Successful pop artists are holding back releases from streaming

“Because Coldplay does it” is not a good reason to do something. If it was, I’d have a child called “Apple”.

In the film industry, it’s normal to release a film first in cinemas, then for rental, then to buy on dvd, and finally for broadcast on television, giving each platform a chance to play to its strengths. This works well for blockbusters, but smaller movies adapt the pattern to suit their own niches.

We may one day see a similar standard release pattern for music, although it’s unlikely we’ll see one plan work for everything.

In the meantime, you can expect to see more albums held back as our whole industry tries to work out what the ideal pattern looks like for each type of music.

9) Streaming services aren’t sustainable. They’re just trying to build interest so they can sell to Google (or somebody else).

Articles like this one contain a lot of speculation. I can’t speak for anybody else’s business, but I do know that Naxos Music Library is already profitable and continues to grow.

10) The audio quality is bad.

If this is your only objection, then you want to be wrong about this, because this one issue stands between you and great convenience. Research has repeatedly shown that our expectations have a big impact on our perception of the music we hear, so do yourself a favour and enlist a friend to help you with a blind trial. I suggest comparing Spotify on the premium subscription (which streams at up to 320 kbps) with a CD (or WAV/FLAC files) of the same music. Have your friend test you: if you can’t tell one from the other without peeking, sit back and enjoy the music.

 

Footnotes:

¹Streaming services typically pay out a fixed percentage of their revenue, shared out amongst the labels according to the proportion of total streams apportioned to that label’s content, so if your music was responsible for ten percent of total listening, you get ten percent of the total money. When a service has just launched, most users will be on a free trail, and the pre-stream revenue can be very low. Sometimes there are per-stream minimums built into the deal, but these don’t always determine the sum you actually get, and it isn’t the same every month, so it would be misleading to simply say “we get x per stream.”

² When you buy a track on iTunes in the US for 99 cents, we get 70 cents. We pay 9.1 cents in music publishing (if the work is still in copyright) and that leaves us with about 60 cents, which is somewhere between 20 and 300 times what we might get from a stream. It’s tempting, then, to say that unless users listen to their downloads an average of 20-300 times, they’d be better off with streaming and we’d be better off with downloads. This is an oversimplification: it assumes that users only stream or download, that nobody buys anything after streaming it, and that streamers and downloaders listen to the same amount of music, regardless of cost.

³ More on US rates for digital radio here: http://en.wikipedia.org/wiki/SoundExchange

⁴ Gabriel Kahane puts the case eloquently here: http://gabrielkahane.com/?p=358

⁵ The deal terms described in this article are fairly accurate. What isn’t accurate is the analysis, which misunderstands the nature of a monopoly and wrongly presents the terms as onerous, unfair, or impossible to deal with.

⁶ This article describes one example: http://www.guardian.co.uk/music/2010/apr/13/spotify-songwriters

Books have been around for thousands of years. They’re a great place to put words. Their batteries don’t run out, you don’t need anything else in order to use them, they can last for hundreds of years and nobody tells you to put them away just before the plane takes off.

Books about music, though, can be a bit frustrating It has been said many times that writing about music is a bit like dancing about architecture. I don’t really think this is either true or particularly helpful* but words alone can struggle to describe the sound of great music.

I’m no choreographer, but clearly a ballet about buildings could benefit greatly from good set design. That’s not usually an option when you’re writing a book about music, but with the help of an iPad, some imaginative computer programming and some Naxos recordings, we’ve got something pretty close.

Download any of our latest books from the iBookstore to your iPhone, iPod Touch or iPad, and you’ll see play buttons alongside the text, allowing you to listen to full-length tracks as you read about the music.

We’ve got full-length biographies of Beethoven, Tchaikovsky, Dvorak, Mahler, Haydn, Chopin and Liszt as well as shorter portraits or Shostakovich and Rodrigo as well as bite-sized profiles of Kraus and Vanhal. The Beethoven bio reached the top of the chart in the  iBookstore’s Music category, and is one of their top picks for the year in their 2011 iTunes Rewind promotion. Check them out today.

*How is anything like dancing about architecture? How is writing about music any more futile than writing about anything else?

 

In my last post, I talked about digital only releases. One thing I didn’t mention is that, when it comes to compilations, you can take much bigger risks with a digital-only product. Here’s one we might not have dared put out on CD. It’s a collection of Wagner highlights.

ClassicsOnline | iTunes | Amazon

You’ll sometimes hear people use the term “bleeding chunks” to describe excerpts of operas, played out of context. The phrase was coined by Sir Donald Tovey in his 1935 Essays on Musical Analysis Vol. II (1935) p.71, where he wrote, “Defects of form are not a justifiable ground for  criticism from listeners who profess to enjoy the bleeding chunks of butcher’s meat chopped from Wagner’s operas and served up on Wagner nights as Waldweben and Walkürenritt“*.

It’s a striking image, but it’s also an ad hominem argument. He’s not addressing the issue, he’s addressing the people, and he’s wrong. There’s nothing unsophisticated about wanting to hear all the best bits. You might even call it elitist.

We like Wagner’s music, and we have a sense fun, so we put all the best bits on this album, which we’ll be listening to as we delight in the irony that Sir Donald’s essay has been misquoted, relieved of its context (the programme-notes for Bruckner 4), reduced to a soundbite, and, finally, turned into a compilation. We hope you enjoy it.

You can download Bleeding Chunks of Wagner from ClassicsOnline, iTunes and Amazon today.

* Oxford Dictionary of Music, (1994) p. 98

If you’re shopping on iTunes or ClassicsOnline, listening on Pandora or Spotify or Naxos Music Library, you mostly don’t care where else a record is available. You’re just happy you can listen to it however you choose. It wouldn’t affect your life if the album never came out on CD at all.

I have, though, run into some strange ideas about digital-only releases, so I’d like to take this opportunity to set the record straight about five major misconceptions:

1) A digital-only release isn’t a proper release

Not true. In the US, more than half of all record sales are digital, with sales of downloads outnumbering sales of both CDs and LPs put together. It might not be what we’re used to, but this is the way most music is purchased now.

In 1992, when CD became the dominant format, nobody could sensibly argue that a CD wasn’t a proper release unless it was also available on cassette, but the argument is basically the same. To dismiss digital releases is to dismiss the reality of the modern music market.

Digital-only releases are recognised as proper releases by every major trade body including Nielsen Soundscan and The Official Charts Company. They have been eligible for the Grammy awards since 2001, and just this year a digital-only release won a major award.

2) A digital-only release is much cheaper to make

Not true. CDs and downloads have many of the same fixed costs, because the expensive parts of releasing a recording are making and marketing the album. Even after you’ve made the master, the CDs themselves account for a small part of the overall budget.

3) Nobody really invests in digital-only recordings

Not true. It’s actually easier to invest in a non-physical release, because you don’t have to gamble on the future of CD retail. We expect CDs to be around for many years, but by committing to a growing sector of the market, we can plan to recoup our investment over a longer period of time. It is true that we invest in different things. We don’t, for example, include digital-only recordings in our sales brochure, because almost all of the thousands of copies are sent to physical retailers. It would be a waste of ink and paper. Instead, we focus on online promotions. Where these are less expensive, we can do more of them.

4) If we expected an album to sell, we’d put it out on CD

Not true. The mix of physical/digital sales isn’t the same for every type of music. Operas sell very well on CD. Chamber music, large collections and contemporary music all sell very well as downloads. An album we expected to sell 96% of copies digitally (and such records do exist) could spend ten weeks at the top of the Billboard classical chart through digital sales alone and still not sell enough physical CDs to justify manufacturing. Our digital successes tend to be a bit more modest than that, but there was no shame in a CD-only release in 1992, and there’s nothing wrong with a digital-only release today.

5) It only makes sense to review CDs

Not true. Most reviews are of the music, not the packaging. Many publications have stuck with music reviews through the changes in format from 78 to LP to Cassette to CD, and this is just one more step. Downloads are more popular with classical consumers than SACD, Blu-Ray, LP or any other specialist format. CD sales continue to fall and download sales continue to grow, and digital-only releases will form a larger and larger part of the entire recorded music business. A publication that ignores these releases is at risk of becoming irrelevant to modern consumers, and that’s not good for anybody. It’s not good for artists, labels, publications, reviewers or, most importantly, the music lovers whose support is so vital to everything we do.

Anyhow, thanks for reading. It’s only fair to leave you with some music. Our latest digital-only release is Liszt’s Via Crucis performed by Alessandro Marangoni, Ars Cantica Choir and Marco Berrini. You can hear it on Naxos.com, Naxos Music Library, ClassicsOnline, iTunes, Amazon and EMusic. It’s a proper release in every way, and I think it’s rather lovely.

According to the Nielsen mid-year report, record sales in the US are up for the first time since 2004. That’s obviously great news for musicians and labels, but it’s also good for the record-buying public – more sales means more recordings to choose from.

CD sales for the first half of 2011 are actually a bit lower than in the first half of 2010. The growth has come from an 11% increase in digital downloads. Where are people buying all this music? It’s not easy to find out. I looked around online and found a lot of stories about where people can download classical music, but not much about where people actually do download classical music. “That’s ok,” I thought. “We must have that information.” I went digging in our royalty reports.

Here’s a graph of our digital sales for the whole of last year. I’m using a full year’s worth of data because different stores report their sales to us at different intervals. In each case, I’m counting wholesale revenue because that’s the thing we can most consistently measure. The chart shows sales for Naxos, but I’ve looked at the data for the other labels we distribute, and the overall picture is very similar:

1) iTunes is #1, and has been since shortly after its launch in 2003. With 225 million users, and just about every recording under the sun, it has become the one-stop-shop of choice for many downloaders. Some critics complain about the search engine and the sound quality. I never saw the problem when I worked there, and it seems like customers agree: if you exclude the streaming services (which are a bit different), iTunes sells more classical downloads than all the other stores put together.

2) At #2, we have Naxos Music Library, which offers a streaming subscription service to universities, libraries and music professionals. It’s one of three specialist classical streaming services in the top ten, and it’s very popular. Ask about it next time you’re in the library – you might already have access (half of all American college students do). You don’t have to be in the library to listen, it’s free to use (the library pays for it), and it even works on iPhones and Android devices. If you piled up all the CDs on Naxos Music Library, they would form a stack 1,400 feet high – that’s taller than the Empire State Building.

3) The third most popular online destination is Amazon’s MP3 store. Amazon is also a very popular place to buy our CDs – great news if you prefer a product you can hold, because Amazon keeps growing and with almost infinite shelf space, we expect all our CDs to be available here for years to come.

4) At #4 is the most popular specialist classical download store, ClassicsOnline. It’s run by Naxos, and it sells classical music from almost all independent labels. If you can’t wait for your local library to get a Naxos Music Library subscription, you can also listen to an even larger selection of full-length recordings on ClassicsOnline for a monthly fee.

5) Next comes EMusic, offering a great many bargains in jazz, rock, and pop as well as classical music for indie music fans. Customers commit to purchase a monthly download allowance which doesn’t roll over, so this store works best if you regularly purchase indie music from all genres.

6) & 7) Rhapsody (#6) and Napster (#7) have been around for along time. They both let you to listen to huge collections of music for a monthly fee. Rhapsody has grown a bit lately, but Napster isn’t as popular as it once was. Neither was really designed for classical music, but they still deliver more classical music to customers than all but two of the specialist classical sites.

8) The new kid on the block is Spotify. This Swedish company made waves in Europe with a free service that allowed users to listen to a lot of music and a few adverts, with the option of paying a monthly fee to lose the ads and access playlists through a mobile device. The free service has some limitations, and it isn’t exactly tailor-made for classical music, but Spotify just made a much-anticipated US launch. Even if it doesn’t change the way you listen to classical music, I’ll expect to see this one in the top five at the end of 2011.

9) Classical Archives is one of the oldest classical music sites on the web. It now offers streaming and downloads from a large selection of recordings, alongside the massive library of midi files that made this site famous back in the days of dialup Internet, when downloading a whole album of high-quality audio would take about as long as listening to the Ring Cycle.

10) Of course, there are lots of smaller digital music stores to explore. Between them, they account for just under 3% of our digital sales. Some are small because they’re new, others because they serve niche markets. HDtracks is one of the more popular destinations for high-quality downloads. Qobuz does a great job with classical downloads for the French-speaking market. eClassical just relaunched with an innovative pricing-by-the-second model. The Classical Shop (run by Chandos) offers a nice selection of independent recordings and high quality downloads. We’ll look forward to seeing these stores grow in the years to come.

 

Where do you go for music on the web? What makes the perfect record store? Use the comments to tell us what you think.

I spend most days at the office trying to come up with ways to get music onto your computer. I’ll try to sell you downloads and subscriptions, direct you to websites and encourage you to rip your CDs. Before I give you the hard sell on any of that, it’s only fair to tell you how to get that music out of your computer and into your stereo, so you can enjoy it at its best.

1) The 20¢ solution: Burn a CD

You can use iTunes, Windows Media Player or another jukebox application to create a CD from your downloaded music. This won’t help you with streaming music from ClassicsOnline.com or NaxosmusicLibrary.com, but it’s the best solution if almost all your music is on CD and you have a small number of downloads that you’d like to hear in your car or on your stereo. CD-Rs are cheaper in bulk – $7 /£5 or so for a pack of 50, but then if you’ve got fifty albums on your computer, it might be worth exploring some of the other options below.

Pros: Easy. Flexible. Inexpensive for a few CDs.
Cons: Your house or car quickly fills up with CDs. Doesn’t help with streaming sites.

2) The $5 solution: Buy a cable

The easiest way to connect your computer to your stereo is to use a cable. What kind, though?

You’re almost certainly looking for a 1/8 inch (3.5mm) to dual RCA cable. Hosa make a very affordable range of these in a variety of lengths, and they’re available at many large retailers, including Amazon in the US and UK.

It’s possible to spend a lot of money on cables, but in my experience your effort is often better spent on carefully planning where you put them. Coils of excess wire act like antennas for interference, especially if they’re near power cables or transformers, so get a cable the right length. I use nylon cable ties to keep the audio cables away from the tangle of mains leads and power supplies that seem to be breeding in the space behind my computer.

If you’ve spent a fortune on your stereo and want a cable to match, there are many options out there. Just remember that the retail margins on these can be quite high, so once you’ve decided what you want, it’s worth shopping around for the best deal.

If, like me, you find yourself fumbling in the gloom behind your computer in search of the correct plughole, it may help to know that the one you want (the Line Out socket) is almost always green. If there’s a volume control back there, adjust it so your computer is as loud as the other inputs on your stereo.

Pros: Inexpensive, simple, reliable.
Cons: Either your computer has to be close to your stereo, or you need a very long cable.

3) The $20 solution: connect digitally

If you’ve got a sound card with a digital output and your hifi receiver or home cinema setup has a digital input, this is a great way to go. The quality of sound will depend upon the quality of your receiver. There are three common types of digital connector:

S/PDIF (coaxial): a single RCA plug, normally yellow
TOSLINK (optical): uses optical fibre to transmit the digitised music
HDMI: commonly used to for HD video, but also transmits digital audio

Most modern receivers have all three, but computers may have just one or none at all.

As a general rule, these connectors either work or they don’t, so the quality of the cable isn’t very important unless it’s more than about 20ft (7m) long. Be careful with optical cables: they’re great over long distances, but the good ones are made of glass fibres, and they can break if you bend them too tightly around corners. Prices change all the time, so shop around for bargains, and buy online: you can save up to 90% of the high street price.

Pros: High quality sound with no interference
Cons: Your computer and receiver must have compatible connectors.

4) The $99 option: Go Wireless

Perhaps you don’t want your computer in the same room as your stereo. Perhaps you use a laptop and don’t like to be tied down with cables. Either way, it’s time to go wireless. There are a number of options here, but I’m just going to tell you about two:

Apple make a device called the Airport Express. It’s a wireless router with an audio output and a USB socket, so you can connect it to your printer and your stereo. It will receive audio from iTunes, or you can purchase an application called Airfoil ($25), that will send all the sound from your computer to your stereo over your wireless network. It works with any wireless-compatible Mac or PC, and it costs $99. If everybody in your family keeps music on their own laptop, this is a great way to go. I’ve had several of these for years, and they’re great.

Pros: Also functions as wireless router and connects to printer.
Cons: Computers must have wifi. Doesn’t come with audio cable (see 1, above). Who wants their printer next to their stereo?

If your computer doesn’t support wifi, we suggest the Audioengine W1. You get two modules: a “Sender” that plugs into your computer’s USB port, and a “Receiver” that connects to your stereo. Unlike the Airport Express, this device creates its own wireless network. Your computer thinks it’s an external sound card. Your stereo thinks its just another input. Nobody needs to know that there aren’t any wires. I asked two people in our Nashville office to test this. The only thing they disagreed on was who got to take it home.

Pros: Simple to set up. Everything you need is in the box.
Cons: Only works with one computer.

5) The $150-$2,000 option: Go Audiophile

The law of diminishing returns is certainly hard at work in the world of computer audio, but there are still some very real gains to be made above the $150 price-point. The idea here is to bypass the digital-audio converter (DAC) in your computer (or receiver, if you’re using a digital cable) and use a standalone device to turn the bits into sound. It’s not cheap, but it gives you access to high quality circuitry that most computer users wouldn’t want or need, and allows you to play high definition files that a lot of computers can’t handle by themselves.

The headphone output on my laptop is ok, but it distorts when I plug in the really big Beyerdynamic headphones that I use to check new recordings. I use a DigiDesign MBox Micro 2 ($200), which plugs in the USB port and gives me a cleaner, more powerful headphone output. Now, if I hear a crackle or crunch, I know it’s on the record.

If you’re looking for a home system, Kirk McElhearn at Macworld has a lot of nice things to say about the Cambridge Audio DacMagic ($429). You can read his review here.

Audiophile Audition just reviewed a pair of similar (but much smaller) audio interfaces from High Resolution Technologies priced at $149.99 and $499.95. Really, though, if you’re going to spend that sort of money, you want to hear the thing in action before you buy.

In my office, I use an Apogee Ensemble ($1,995). This is a bit excessive for a home system, but its 8 inputs and outputs let me hear (and, if I want, record) anything up to 7.1 channel surround at sample rates up to 192khz. It’s the same technology used in making a lot of our records, so I have a fairly high degree of confidence in it. The ensemble only works with a Mac but Apogee also made a 2 channel converter compatible with both macs and PCs called the Mini DAC.

There are a few more expensive devices on the market, and you might like to try them, but this is where I hold up my hands and say “I can’t hear the difference any more”.

Ok. That’s enough from me. Now its your turn. How do you listen to your digital music?