Psonar Blog

The Way We Were
Promoting music has never been straightforward and people have always tried to game the system – radio pluggers being the obvious example in the age of vinyl records where radio airtime determined a song’s success or failure. But the structure of the industry was well-understood and the relationships between the players and, more crucially, their economic interests were aligned.

Digital Confusion
Now, with the rise of digital music, it’s different – some bands achieving considerable success without a label (OK Go’s Damian Kulash wrote about this in the Wall Street Journal) others giving their music away (e.g. Nine Inch Nails). Even major bands, including Radiohead with the ‘In Rainbows’ album, have experimented with a ‘Pay What You Want’ approach – although it was not successful enough for Radiohead to use it for subsequent albums.

A Tale of Three Artists (and Labels)
Out of this confusion it’s possible to discern three different outcomes for artists and, to some extent, labels.

The Major Artist
Major artists signed to major labels (Sony, Universal, EMI, Warner) can rely on their pre-existing reputation and following and/or the marketing effort of their label to gain mindshare among music fans. They monetize this through gigs (see this latest excellent Economist piece in a series on the economics of live music), conventional CD sales, digital downloads and subscription streaming services. Moreover, focussing on spend per consumer rather than revenue per track, the streaming music services have started to close the gap with iTunes in the revenues they routinely return to the major labels. This is an arrangement that can work well for both major label and major artist, especially if the latter is the author as well the performer of the music.
The Emergent Artist
Online services such as Bandcamp, ReverbNation, HypeMachine, SoundClick or SoundCloud serve emergent artists very well. Their primary objective is to gain the exposure that will translate into traffic to their own websites, sales of gig tickets and growth in their fan base. Monetizing their music is nowhere near as important as getting people to listen to it, like it and share that enthusiasm with other people.
The Squeezed Independent (and Authors and Others)
Independent artists and labels sit squarely in the middle of these and face a dilemma. They need their content to be available on streaming services so that millions of users can access it but they get little collateral marketing benefit, have to deal with opaque accounting and suffer poor pay-out rates. Yet they need to make their music available on Spotify or Deezer in order to maximise the chances of discovery by new fans. Even then there’s a further dilemma since a subscriber to an ‘all you can eat’ streaming service is unlikely to make the additional outlay to purchase a download when they can listen to the music as often as they like through the streaming service (especially if it offers offline caching on mobile devices).
Independent artists don’t always have the fan base to fill a major gig venue so their live performance options are limited and generate poor returns. For the majority of independent artists, paid download of whole tracks and CD sales remain the principal ways they earn a living and online music service need to be complementary to these and not risk cannibalising them.
The increasing focus of the subscription streaming services (and major labels) on revenue per user, rather than revenue per track played, disenfranchises everyone involved in the track except the label itself and, perhaps, the featured artist (though there’s even dissent there). Publishers and authors (i.e. composers and lyricists), managers, session musicians and anyone else involved in creating a song and turning it into a recording, rely on the revenue per track played to earn their livelihoods and revenue per user undermines these economics.

An Open and Transparent Digital Music Service
Now Psonar wasn’t created to right the wrongs of the music industry but its simple and transparent business model is good for both fans and artists & labels.

For fans, Psonar Pay-Per-Play offers easy, selective access to streaming music on a per-track, ‘pay as you go’, value-for-money basis. They can pay via mobile phone (pre-pay or contract), credit card or PayPal. They can also share music on Facebook, Twitter, blogs or email, where other people can pay to play the music shared. Fans can also gift plays via Facebook Messaging, Twitter DM, SMS or email having pre-paid for another person to listen.

For artists and labels, Psonar Pay-Per-Play has a single, straightforward tariff that’s the same for all distributors or labels, as well as clear and transparent accounting where every stream is monetized apart from promotional activity. Psonar offers labels the tools to build highly social, viral promotion campaigns that don’t involve unlimited free access to music and which can be fine-tuned to generate revenue or promote viral spread (or both) as the label judges best. Since all monetization is per track streamed, everyone with an economic interest in the music earns their share of the revenue generated.

Psonar is the digital music service that reaches the ‘mobile music generation’ – digital natives unwilling or unable to pay for subscription streaming – with rich, social features that allow artists and labels to seed the viral spread of new music confident about monetization, transparency and pay-out levels.