Spotify – the PONZI Scheme

I wrote about the state of the music industry back in 2015 (Open Letter to the Music Industry) and when I thought about writing this article I went back to look at what I had written. I admit I was ready to cringe and get that hot sweaty feeling I always get when I think about stuff I’ve done that maybe common sense tells me not to. Like when I bought those tickets to Greece on credit knowing that balance was gonna sit on my card indefinitely. My inner financial advisor was saying, “credit card debt is the first sign of financial ruin” but my inner “The Secret” just said, “think positive a world of wishes fulfilled is just around the corner.”  Guess which self won out? Well, I’ve already told you, haven’t I? And yes, my article is still relevant today but this time I have another solution.

I feel like the people at Spotify live in my favourite world of optimistic oblivion. I’m often living on this plane too, despite the desperate attempts of others to bring me into THEIR reality, one that relies on the mantra of “get a real job”.  I think it is these people who are ruining it for Spotify too. Their negative thoughts are just too many for the billionaires behind the Ponzi scheme we call Spotify. I mean how many times have you heard, “there is no money in music?” This mantra out of the mouths of so many must present considerable barriers for the poor Spotify leaders.   And yet they forge ahead under these conditions digging deep into the pockets of unsuspecting investors. Maybe they have promised rock star status for these investors with access to groupies and adulation. Or are these investors just the groupies providing adulation and free sex for the rock star, Spotify? After all, Spotify is providing the music.

Where am I going with this? Well, as a recording artist (insert shameless plug and website here), I am at the mercy of social media and the avenues in which the public consumes music. One of those avenues is streaming and streaming’s king is Spotify with 157 million active users. Its closest competitor, Apple Music, boasts only half those numbers. It was started as a file sharing company meant to replace the pirate, Napster. Its co-founders were awash in tech-boom money and wanted to help out the struggling music industry with of the goodness of their own hearts. They founded Spotify in 2006 and launched their service in 2008. Their rise to the top of the streaming pack was probably helped by the fact that one of the cofounders was also the cofounder of one of the world’s leading digital marketing companies, Tradedoubler. If you’ve heard of SEO, you’ve heard of Tradedoubler.

But were the founders really interested in saving the music industry or just bailing out the record labels, who all happen to be minor shareholders? Is Spotify just a huge marketing platform for the labels, since we know that only 13% of the boosted content is from indie artists? Hmmmm, but which Indie artists? Are these “indie” artists in the Merlin network, who also own a small share of Spotify? Good luck on Spotify if you ARE truly indie. Really, why do I bother? Insert my Spotify link here.

Ok, back to why Spotify is a Ponzi scheme or even just a form of extortion by the record labels, who actually get a payout of approximately 70% (https://techcrunch.com/2017/03/18/dictate-top-40/ ) on revenues generated from their artists on Spotify, which is effectively 70% of all Spotify revenues. What is a Ponzi scheme?

A Ponzi scheme is a fraudulent investment operation where the operator provides fabricated reports and generates returns for older investors through revenue paid by new investors, rather than from legitimate business activities or profit of financial trading. Operators of Ponzi schemes can be either individuals or corporations, and grab the attention of new investors by offering short-term returns that are either abnormally high or unusually consistent.

Companies that engage in Ponzi schemes focus all of their energy into attracting new clients to make investments. Ponzi schemes rely on a constant flow of new investments to continue to provide returns to older investors. When this flow runs out, the scheme falls apart.https://en.wikipedia.org/wiki/Ponzi_scheme 

Hence Spotify’s IPO in April 2018. Let’s spread the Spotify investing scheme to the public. Let’s leave them holding the bag. Since Spotify opened its portal for business in 2008, it has yet to turn a profit and yet the investors flocked to the emperor with no clothes on April 3, 2018.

“Spotify is growing fast, losing money, and burning through a common measure of cash flow. According to its prospectus, between 2015 and 2017, revenues grew at a 45% annual rate to €4,090 million. In 2017, Spotify reported a net loss of €1,235 million, nearly six times more than it lost in 2015, and its Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) was negative €324 million.”  https://www.forbes.com/sites/petercohan/2018/04/04/3-reasons-not-to-buy-spotify-stock/#71775b002ffc

Do you see my point? And yes, the Spotify IPO generated a little over $26 billion in new investment money. Can you spell P O N Z I?

Ok, well maybe I’ll give them the benefit of the doubt and maybe they raised that money to buy the labels out so they could run their shop more like Netflix, where they become the content providers, essentially becoming the labels, removing the middle man and lowering costs. Hmmm, I’m not so sure. The labels still own so much content it is a hard one to swallow. People don’t consume movies like they do music.

Music follows us with an emotional response that brings us back to a time and a place. We never get tired of hearing our favourite song. Movies just don’t have the same grasp over our emotional memories as music. Music allows US to fill in the picture with the memories we associate with a time, place and even person. I’m not buying the Netflix model in the short-run. It would take generations to make new music wield the same power as The Rolling Stones today.

But there might be hope for our wishes-fulfilled-bunch at Spotify. Recently, Spotify asked select customers if they would pay for a bundled Spotify service with a data only mobile plan. Coincidently, one of the founders of Spotify, Martin Lorentzon, is also on the board of Telia Sonera, a mobile network operator. Could this be going somewhere? Is there really a method to the madness?  I guess only time will tell.

Or do we look for a new model, since this one has yet to catch fire after a 10-year run? If you’re interested, I have an idea for the music industry. One that will make money for its investors. Shoot me an email on my website, if you’d like to hear it.

Information taken from the following websites:

https://informationisbeautiful.net/visualizations/spotify-apple-music-tidal-music-streaming-services-royalty-rates-compared/#spotifybillionaires – investors

https://www.slashgear.com/spotify-teases-30-data-only-phone-plan-with-streaming-bundle-04532903/

https://www.androidpolice.com/2018/06/03/spotify-asking-users-theyd-subscribe-30-month-data-plan-spotify-premium-included/ – Data plan info

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Childish Gambino on Eastportlandblog

childish gambinoAs you may have guessed, I check out a lot of music blogs because I am a musician and sometimes I need inspiration. Some blogs are very well-known or should I say have a social media presence (IndieShuffle – 54k Twitter followers, Consequence of Sound -180k Twitter followers, Stereogum – 337k Twitter followers etc…) and many not so well-known (on social media) such as the Eastportlandblog. I came across this gem, East Portland Blog, on the Indie Bible – a must have for any indie artist. And I was astonished to discover it had NO social media presence that I could find. It didn’t have a Twitter account, a Facebook or an Instagram account and yet there it was and their content was brilliant or maybe I just got it on an extraordinary day.  I fell upon a succinct declaration of Childish Gambino’s genius in This is America . I hadn’t seen all the buzz around Donald Glover’s alter ego, Childish Gambino, until I’d read Harper Hull’s acknowledgement of Glover’s latest work (ya, I live under a rock). This song/video is a strong statement not to be taken lightly. The marketing machine behind the launch of Glover’s new single is obviously huge with a spot on SNL on May 5th, the eve of the video’s release but, in this case, much deserved.

However, what I really wanted to discuss was East Portland’s lack of social media presence and how I envy it. I admit that I do enjoy Instagram but I abhor Facebook and am indifferent to Twitter. I wouldn’t be using them if I hadn’t been conditioned to believe it was necessary for my business or should I say, “marketing efforts”. What a lot of rot! I’m with East Portland (but I will be promoting this post on all of the above).

Facebook is a joke and is for old people, like me. Twitter, what on earth IS that about? Oh ya, and Instagram, well I like Instagram cause I don’t really use it as a marketing tool so much as a way to record moments I would otherwise completely forget.

The fact is that Facebook only allows you access to 10% of your followers and then you need to buy access to the rest of them. Yes, the ones who ALREADY follow you, NOT new followers. Their ad campaigns then inundate your engaged “followers” with the shit they have already seen. I made the mistake of paying for a campaign and when it was finished Facebook made the mistake of telling me that my campaign was more successful that 90% of the Facebook campaigns.  Well, if that is success I would hate to see failure.

Next blog I’ll be tackling Spotify and what I really think about its Ponzie scheme!

If you like this post and wanna read more, sign up on my website on the contact sheet www.kathrynberry.ca  and maybe I can rid myself of social media too!

Discovering Quebec One Song at a Time

Discovering Quebec one song at a time…

I was introduced to this song on La Voix (Quebec version of The Voice) 2015 in the battle rounds with Jean-Sebastien Michaud and Philippe Clement  (http://sainescene.com/philippe-clement/ ). I would have included their version of the song in this post but it was not available on Youtube and had too many commercials on the La Voix site before it started.

The original version below, by Louis-Jean Cormier, is divine. Louis-Jean is an indie rock singer/songwriter from Spet-iles, Quebec (north east Quebec on the north side of the Saint Laurent). He won a Juno for his 2013 debut album where this song was featured! He was also a judge on La Voix in season 2.

Before I give you the translated lyrics below, I must interject that I do have a habit of making up my own lyrics and even words. Before I went to work translating the lyrics in earnest, I thought that  “La pesanteur” meant the button you press to go up or down when calling the elevator (thinking “peser” the verb to push) and  “La voie d’accotement ” was “La voix d’ecoutement” which is a phrase completely made up by me (there is no such word as ecoutement in French but I was thinking ecouter – to listen), meaning the PA system in the elevator. Enjoy!

L’ascenseur – This song is just beautiful…

Lyrics roughly translated:

L’ascenseur

Since they put music in the elevator,

No one thinks of their sadness

Between the partying and the fear,

The good and the bad

Between the stress and the force of gravity (the button you press to go up or down)

Between tomorrow and the present moment

Tell me where… tell me where do we get off?

Since they put mirrors in the elevator,

No one complains about how slow is goes

Between the head and the heart

The black and the white

Between the drunkenness and the boost/accelerator

Between love and the side of the road (the PA system)

Tell me where…Tell me where do we get off

Between love and the side of the road (The PA system)…

Where do we get off?

It takes as much craziness as courage

For us to get off at on the thirteenth floor together

And close the door on the bad omen

With your hand as my only baggage

Tell me where… tell me where do we get off

Tell me everything…tell me everything

So I can calculate my momentum

Tell me when….so we can jump at the same time

Send me an email with your words of wisdom at info@kathrynberry.ca or find me on the web at

http://www.kathrynberry.ca

Twitter: @kathrynberryca

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Open Letter to the Music Industry

Hey, the music industry is failing and it’s all the fault of digital technology, streaming and the invention of the iPhone. Not really. It’s the music industry’s fault. They are stuck in a model of young and slick that no longer applies to where the money is at. FACT: 60% of all music sales come from OVER 35s, 40% of which are Baby Boomers, according to Nielson’s 360 Music report.

Sure, we can all complain that a billion views/streams only makes the artist $35 but the industry is marketing to kids, and let’s face it, they’re leeches. I should know I have a couple. Forget contributing, they actually expect YOU to PAY them every week – allowance -huh.

The music industry doesn’t understand that if you’re under 35, you’re probably still living at home asking for gas money or a basement dweller. Of course, they’re not going to pay for music. And yet the music industry spends millions on marketing to this generation for the return of a large pizza and blames technology for their failings.

Side note: recently, I went to a presentation on child labour at my kid’s primary school (ok, my kids are not basement dwellers yet) and I thought: now, THEY are onto something; there’s more than just yoga and Feng Shui that we can learn from the East Indians and the Chinese.

Let’s be honest, the over 35 market doesn’t want young and perfect; they want relatable. Adele was an incredible success not because she was young (I’m pretty sure her look was more middle aged 1950’s housewife than young vixen) but because of her awesome music and voice. Sam Smith grabbed our attention BECAUSE he was real…(ok and had a great voice and music). The buying public no longer wants young and perfect. It just wants good music and no amount of eye candy is going to get the discerning or undiscerning public to pay.

Music industry, if you want to sell music, find acts that can open for the over 50’s (I’m talking U2, Rolling Stones, Madonna etc…Your BIGGEST selling concert acts TODAY); acts THAT audience can relate to. Trust me, Madonna doesn’t just want a billion views, she’s looking for cold hard cash and you should too! So, music industry, I dare you to STOP belly aching and change the acts you promote and who you promote them to. Look outside the box! It is that simple.

PS you can find me at www.kathrynberry.ca Twitter: @kathrynberryca Instagram @kathrynberryca FB: https://www.facebook.com/kathryn.berrysauvageau I’ll be releasing my debut album in the fall 2015!

Come on in…

Name: Kathryn BERRY

And the final challenge is this…what to do when you can’t produce something you feel is worthy? You write something anyway and have fun with it. I wrote this on the fly with Matt in mind. I couldn’t get into his new head space so I hung out in a jazzy nonsense song and played with Lo-fi vocals. I know it is nothing like what was requested but you can’t blame a girl for just trying to get to the finish line at all cost.

Wait…. no I can’t have you hear that song so I’m posting a song I revamped with my producer, Sule Heitner. At least it has funky vibe. Still not a Matt Dusk song but getting closer…

The hardest part of this challenge was to be creative on demand. I usually just write when I feel like it; in the style that fits my mood. Writing to someone else’s mood was a bit nerve wracking. Clearly, this IS possible, as people do it every day in their jobs. Also, the songs that I have heard in the challenge prove this to be true. Many who contributed were consistently good throughout the challenge. I take my hat off to them, especially the people who worked on many co-writes and managed to produce incredible work. You know who you are 😉

This challenge gave me the incredible opportunity to meet and work with new people in the songwriting field. All of the people I worked with were generous and talented beyond my hopes. I felt a bit out of my league among them and am honored that I had the opportunity to work with so many and hear their inspiring work.

What did I learn? Well, I confirmed that I am a stress case and that working to a deadline sucks…for me and everyone around me. Are my children still alive? I better go check in their cages. I think I left them enough food and water.

Would I do this challenge again? Well, I don’t like being a witch with a capital ‘B’ so instinctively I would say ‘no’ but never say never…I remember saying I would never run another marathon again and I did. So give me some distance and I might find the courage to put myself in the line of fire again or rather put everyone around me in the line of fire again.

Here it is but I’m betting on Gordon and Adri-Anne! They killed it!

http://www.kathrynberry.ca