Speaker 1Hello once again and welcome back to the James Kennedy podcast. I hope you're all good. We've got a super interesting one today which is very close to a lot of the things that I've ranted about in my book and in my interviews and things like that to do with music streaming and the new business model of music. We're going to get straight down to business today so before I do so I want to remind you guys to please subscribe to the podcast, give me some star ratings, hit that five star rating and leave a review, you know, leave some comments and get involved. I've also launched a support platform to directly support the podcast if you are able to do so. Please don't do so if you're not able but if you are able to spare some shekels to support me in the continuation of the podcast, you know, equipment and the time that goes into doing it, I've set up a page at paypal which is paypal.com forward slash paypal me forward slash jameskennedyuk. There'll be a link in the descriptions of the podcast as well. If you've got any spare change that you want to share with me, please let me know in the comments. Offload onto the podcast. All proceeds will go to the maintenance of the podcast so that I can keep giving you guys these awesome chats. Right now today's guest. I've often ranted about the merits of the new model of the music business over the old model. I did so in my book. I get devoted a whole chapter to it in my book Noise Damage and I've spoken about it many times in interviews as well where I've said that as an independent artist the new model is way better because the door was closed to me in the old model. But I'm going to be chatting today with someone who I think has a very different perspective on the music business. I'm going to have a different opinion to myself on this issue. So this should be fun. I was also a massive fan of his band back in the day when I was a much younger man and we used to sit around in college smoking weed and listening to this guy's records and having our minds blown at just how fucking crazy the music was in a totally awesome way. So it's mad how life goes you know that I now get to sit down and have a one-to-one conversation with him and be put to rights probably on a lot of the issues that I've been misadvocating for the past two years. So as well as being in a band the blue all of our innocent young minds to bits when we were students. I'm talking of course about the genre bending band Gomez. Tom Gray is also a board director of the PRS and the Ivers Academy as well as being an active and outspoken campaigner for fairer pay for musicians with his broken record campaign. We've got a lot to get into today so I'm super excited to welcome onto the podcast Mr. Tom Gray. Thanks so much for your time today mate. How are you doing? I'm very well thanks man. Yourself? Not too bad not too bad yes you know I'm looking forward to picking your brains today man because um oh god that sounds that sounds creepier than it is like I'm sure. Oh pick pick away pick away. Well I thought it'd be like to start it would be good to give the listeners a picture of just how bad the situation is currently for artists. I mean everybody knows that nobody makes any money from streaming but I don't think the average music fan has got a sincere idea of just how bad it is. How bad is the picture? How are we looking in 2022?
Speaker 2Um it's it's pretty shocking uh for what let's let's let's just say what we should call probably the professional class of music maker. So somebody who's actually devoted their life to making music they get up in the morning and the thing they do is music you know and it's important to make that differentiation before we get going because people are always like oh what you know of course why aren't these kids who are throwing their music up on distro kid every day making money that well that's not who we're arguing for and that's great that they're doing that and they have that access that's a wonderful thing but that's not you know that isn't the fundamental part of the music industry that needs preservation and needs protection right and it's it's the thing for me is you know if if if all the cathedral builders are dead you can't build cathedrals anymore right um and our studio for many years have been imperiled many many have been closed small venues are closing down all around the country for many years as well there's very little of the old infrastructure that used to exist uh and it's all based on this idea that we can all record at home and which is all well and good but you know the average musician in this country is earning around twenty thousand pounds per year according to census and uh you know um um survey work that we've done and it's been repeated several times uh the government just did it the intellectual property office did um a review of earnings last year and found the same thing and most of that money isn't coming from recorded music it's coming from second jobs in hospitality in teaching in doing all of these other things and they're making maybe two grand or less a year from their recorded music um and that's when you start kind of going oh wait a minute what's going on here why have we got it's always been a difficult career right it's always been perilous it's always been hard no one ever said getting into music was going to be easy right but the problem is is when actual success or what looks like a success to the outside world doesn't translate into financial reward then you end up with a really difficult disconnect in culture because the people who are making the stuff that you like can't afford to keep making the stuff that you like right and that's where it gets weird that's where we have a problem um and and you know to go even further on that riff you know that the thing with that streaming that people don't realize is streaming is replacing two things it isn't replacing just people listening to their record collections because that is what it's doing right so most listening now is on streaming they're not people aren't listening to their cds anymore they're listening to their their subscription service in their pocket but it's also replacing linear broadcasting it's replacing radio right i'm very purposefully going after that advertising that's been radio um because there's a lot of money there right so but so people don't there's two things that people don't understand is that on the one hand artists used to make a lot more money up front from sales of physical records than they do from streaming um but also radio has a performance uh royalty built into it called extra equitable remuneration remuneration it's such a hard word to say man equitable remuneration that's the one that uh that means that that performing musicians session musicians the performer of the song themselves everybody gets paid a direct amount of money from that remuneration from that performance on the radio now as if you're if you can imagine both of those income streams are going away right slowly but surely and we're going to be just left with streaming but streaming the per stream rate if well there is no per stream rate but if you divide up all of the money in the streaming pool by all of the streams in it you come up with a a rate right of what a per stream might be worth and it's half what it was worth a decade ago wow right so it was about naught point naught naught seven in spotify um so that's about three quarters of a penny in 2011 now we're way south of naught point naught naught four so we're nearly down to about a third of a penny and so this is this creates a very confusing kind of economics um where it seems to be getting bigger but the per stream rate is going down which is very confusing for most people to get their heads around and that works fine for these massive aggregators of rights for these huge record companies who have got like massive 35 percent market share doesn't matter as long as the market keeps growing they keep making more money and their profit and their profit margins go up and their share value goes up right it's public companies but to a musician who has a fixed audience right which is like let's be clear not your big stars who are getting ramping up your harry styles and your ramping up these huge billion streams every day and and the algorithm's telling you to listen to them again and again again i'm talking about the people who have who are artists who have spent years developing their own audience gathering that fixed fan base you know they're not expecting to be playing wembley any day right they just want to play gigs and exist making their work and they've succeeded they've really succeeded in building a genuine solid fan base those people with a fixed audience they've watched their income go through the floor because a they can't sell physical product the per stream rate is going down and down and down a hundred thousand streams was worth twice what it's worth now at 10 years ago and that's not even including deflation right if you include deflation inflation rather or the deflation of the value to the to the artist it we've it's the whole value of music's gone down about 25 in 10 years as well because it was 999 in 2011 it's 999 now yeah now the really funny thing is guess how the first streaming service people always talk about streaming coming along with spotify but didn't it it came along with rhapsody in 2001 and guess guess how much rhapsody cost in 2001 go on 999 so we've had 21 years streaming costing exactly the same amount and that's about 40 that's about 40 percent default so you start kind of going oh wait a minute there's a fundamental problem here but you know that is just the pricing issue which is like it's sent the value of music all over the place and has had lots of weird ramifications to all of us as artists but all that's that's come along sitting on the back of the 20th century unfair model anyway it was never the the system that was in place was never fair to musicians it wasn't like we weren't doing great out of it record deals didn't look equitable people weren't having a good time but hilariously streaming people always talk about like tech being like a disruptor oh yeah it's so disruptive tech so disruptive well guess what here's what spotify did it did no disruption to the music industry it completely kept the entire old system in place and in fact built on it right so what you have is the old crazy inequity of the 20th century with this mad tech that's crushing the value of music sitting on top of it yeah so you have these artists who've got like deals from 15 years ago for like 15 percent and because they were selling their records over to a company who would manufacture and distribute and do all of these incredibly costly things on their behalf where where now those companies are doing none of those things but they're still keeping 85 percent of the money right right and this is the this is the madness right is that trying to explain to people that there's so many things wrong there isn't just these crazy tech and the fact that it's replacing physical it's replacing this it's the fact that we've still got this horrible old old-fashioned yes and inequitable system that runs right the way through the music industry and we've never done anything to sort our faces out and and that's what this has all been about it's kind of going no this isn't just about fuck spotify because that's the most blithe easy thing to say yeah and it's meaningless right actually what i always say to people is we need to unfuck spotify and beyond that like it's about unfucking the real estate market and that's what we need to do and i think that's what we need to do and that's what we need to do and that's what we need to do and that's what we need to do and that's what we need to do and that's what we need to do and that's what we need to do and that's what we need to do and the royalty systems and all these things which because government successive governments have just heard from these companies are not heard from the creators right we've ended up with a like the weight of the world on our shoulders yeah well
Speaker 1that would brilliantly put man abroad as well there's so much stuff in there that we want to could unpack you know one at a time i'm taking notes here um i'm sort of someone that's guilty of of playing devil's advocate um on a lot of those issues because i'm an independent artist myself i always have been i never i mean when i when i wrote my first album like 20 years ago um it was like 10 minute long prog metal songs i know the chance of me getting a record deal at that time and radio playing stuff like it was that door was shut big time and it always has been so for me i've gradually over the years established myself as an independent artist i've got seven album back catalog i've got a small but loyal audience i play all my own instruments i do all my productions i do all myself and in the very room that we're sitting in now um so i'm always i i espouse a lot of the good sides of the new model that with if i was around you know four years ago i wouldn't have had the ability to do any of that if i couldn't get a deal it was game over you know go get a job as it is you know i haven't had a day job in a long time i've managed to make an okay living out of my music and with spotify i mean during the pandemic i was making about five to six hundred bucks a month from spotify because because i have got a back catalog and i had a new album come out which drew a lot of traffic to the back catalog um so i was actually paying my you know my bills and everything through the pandemic purely from streaming so there is the opportunity for that to provide that platform to artists who are shut out with a traditional model but this it's over simplistic i think to say that um that's possible for everybody because it's
Speaker 2not no i mean look i i i'm always very careful to say yes there are people who benefit from streaming and i'm benefited enormously from streaming i mean you you only have to look at the fortunes of british black music since the sort of hierarchical gatekeeping of the old media was taken away right so so you kind of you access has been the big win of streaming right that is the big win but i we need to massively caveat that yes right because fully independent music as it stands is only has six percent of the value of the total market right right six percent so 94 is music that's on traditional labels yes right independent and the majors right which basically have the same structure look very similar as companies right you do a deal with them they take your rights they pay for the marketing etc etc um using a thing called the recoupment deal which we can get into later but clearly hasn't affected you but the point is you are it shows how much more likely you are to be successful if you are on a label yeah right so we haven't got rid of the traditional gatekeepers we're just sitting alongside them right and they're making way more money than you yeah right um and and this is the crazy thing like there's something like seven million creators in inverted commas on spotify but all seven million are only worth around six percent of the market so we're talking about a few thousand artists that are making 94 percent of the money and several million who are sharing six percent right now at the present rate of growth it'll take 25 years for the fully independent market to reach parity with the people who are in the eye of the beholder let's say right and i'm i'm really glad that people like yourself who are incredibly self-motivated who are you know driven can produce a result where you you know you're getting 300 quid a month and that's covering a lot of your shit right and that's that you know that's keeping you in in in bread and butter yeah that's amazing but i can't you know i know how self-motivated you probably had to be to produce that result oh yeah right right now not every artist is going to be that person a lot of artists are quite financially incapable many of them certainly if my friends are um incredibly neurodiverse and have all kinds of um many are just highly dyslexic for just to get just to just to get started you know what i mean so the idea that everybody who's good at making music could also be this incredible manager of content and marketing and consideration and all of these other things is just a lie right and in fact so so so my problem is is like where what great music are we missing out on because there isn't like these opportunities that there is the access but there isn't the opportunity got you understand yeah got you and that and that's that's the problem that's the bit where it's like i'm not really certain and and i always feel like it falls down a bit as an argument like i'm i i you know i've i'm probably a little bit biased because i came from i had a music career before 2000 yeah i came from the very last of the old world yes the record industry right yeah and i know what that looked like right and i know how much money people had in their pockets and i know how much money people had in their pockets and i know how much money and i know how much money people had in their pockets and i know how much money people had in their pockets and when i speak to like younger musicians who are just really grateful that they've got a few hundred quid i'm like i'm not sure how grateful you should actually be right i think that yeah you could be doing a lot better if this market was more competitive if your music could access more of the algorithm and get more playlisting and all of the rest of it you would probably be doing a lot better if this market was more competitive if your music could access more of the algorithm and get more playlisting and all of the rest of it you would probably be doing a lot better than you are but you'll never be doing better because that most people's ears are still gatekeeped right from you yeah you're mute like the way i often describe it to people is like yeah your music is in the argos warehouse but it's not in the catalog at the front right right got you yeah yeah you know what i mean yeah so and that's and that's the problem the the the catalog at the front is owned by the majors they own it right right and so you know i i just kind of want to i i i for me it's like yes there is opportunity yes there is the chance to and like that shouldn't be undersold like it's a fantastic amazing thing and and and i applaud you and your intent and your work and that's we should be celebrating that but if we're talking about the general health of the music creation the producers the songwriters the people playing in bands you know you're one man right right and If you had five members in your band, how far would that throw you for them to go? Well, it's a different story then, yeah. Well, it's a different story, isn't it? Yeah. So it's like, well, wait a minute. We end up in a situation where the only kind of artist we can have is the self-producing solo artist. Yeah. What does that do to the music? Right. I mean, music, as you know, is a collective experience, right? It's supposed to be made by groups of people, right? And it's all well and good being like a leader artist in your own right. And, you know, that's a brilliant thing. But you know that we don't want to lose bands and ensembles and all of that. And yet the economics state that we have to lose them. I mean, that's mad, isn't it?
Speaker 1Brilliantly put, man. Yeah, I appreciate you sort of like putting me to rights on that issue as well, because I've been a very vocal advocate of the new model, like I say, in my book and in my interviews and things like that. And it's very easy when you are, like, an entertainer. You're a very independent artist, because you, as you said, you know, that kind of the level of self-motivation and hard work that goes into it is a 24-7 job. And not everybody is able to sort of sustain that for the length of time that you need to. And where I was going with that was that, like, when you do live with that level of self-motivation and self-discipline that you have to have, and it is a 24-7 distraction, you kind of, you lose a point of reference, I suppose. Like, my only point of reference is the people who were on the radio. The rung of the ladder beneath me, who were earning absolutely fucking nothing from Spotify. So the fact that I bring in a few hundred pounds, it's like, oh, fucking hell, well, Gary Newman was moaning about only making 30 bucks from one of his hit singles, and I just made fucking 10 times that. They're doing nothing. So, hey, I must be doing something right. But, yeah, I, you know, when you exist in that kind of one-man independent island, you become blissfully unaware of the true nature of the broader picture up on the mainland, you know, outside of your little island bubble. So, you know, I appreciate that. I appreciate you sort of getting me straight on a lot of that, because I have been a very sort of a vocal advocate for the new model, but based exclusively on my own experience within James Kennedy land.
Speaker 2I think that there's two different things here, which is the financial health of one individual within any economic model, right? And then there's the much broader picture of the way that any technology or model affects culture, right, broadly. And it's the latter. And it's the latter thing that bothers me. Yeah. Right. I, of course, there's people doing well out of streaming. You know what I mean? Ed Sheeran could probably own half the flipping country with the money he makes from streaming. There are people doing well out of streaming. Nope. Which is why that's just not the argument. Right. The argument is neither of these two things, which is, one, that the kids who are throwing their music up through DistroKid ought to be making money the next day just because they can play the ukulele. That obviously is false. Two, people. People aren't making money from streaming. No, that's false as well. Of course they're making money from streaming. It's what are we doing about making sure that the kids who aspire to have a career in music can have a career in music. And when they get there, there's going to be money waiting for them. And then it's going to keep them financially reasonably secure. And it's not just going to have to be a side hustle alongside 50 other things that they do. Right. Right. And it's because I won't be able. I won't be able to make great music. I don't want them to make like. Affordable music. Yeah. Affordable music or music that they had time to make in between their three other jobs. Yeah. It's like, it's just, that's not, that's not what we should be doing for ourselves as, as, as, as, as a species. Yes. It's not, it's, and so it's like, all you have to do is tweak the economic model to make sure that the spread of money is, goes a little bit further. Right. And it isn't just focused on. You know, this total winner takes all spot, right? It gets shared out down the road and we make sure that the deals that are in place are fairer so that the money that does get to those labels is getting to those artists and those songwriters.
Speaker 1Well, I want to come on to solutions because I know that you do have solutions for a lot of these issues, but before we do so, I just wanted to clarify what the role is of the major labels in all of this. I mean, I know that they, you know, of course, conveniently stand to, to be the main benefactors of the current system. But is that. Um, did they have a role in the structuring of the backend of the streaming model or are they based, you know, are they the winners of the new model strictly because of this sheer amount of, um, the dominance in the market share?
Speaker 2Um, well, it's down to market share, but it means that because of their market share, they're first in line. So their licensing deal gets done first, right? So, so if I'm a streaming service. And I look at like, which is the biggest record company in the world? Oh, it's universal. How much, how much of the market they got 35% globally in the UK might be an excess of 40%. Right. That's a monopoly, right? So they've got that much of the music that's being listened to, not all the music in the world, obviously, but the music that's being listened to the music that's being monetized, right? They've got 40% of it. Now I need, I know I need their catalog to make. Money, right? If I haven't got the right to that catalog, I haven't got a streaming service, right? Cause they own 40% of all the music that anyone wants to listen to. Right. So I have to go and get them first. So the terms of that deal are, first of all, going to affect everybody else because no one's going to get a better deal than them. Right. But secondly, there can be things in that deal, which we can't see because none of us can see these deals. Which means that certain artists of theirs or whoever else might be getting paid in different ways. Money can be finding, finding its way around in different ways. They can have different minima that mean that their streams are more valuable than streams that are going through an independent distributor that's being distributed by Merlin or whoever. Now, these are, these are, these are just factual things, right? So whatever they take, there's less for everybody else, right? Right. Now the other two majors will have these things called like most favored nation clauses or whatever in their deals, which means that they'll get the same deal that the universal got. But not everybody can rely on that or even get that. And in fact, a lot of the time when you're putting your music through a independent distributor, independent distributor, you don't even know what you're, you're just the mercy of whatever gets spat out back at you, right? You've no idea what's. No, the mechanics of it are completely gone to you. So, so they're negotiating for the value of your streams on a total stream count divided by the total amount of money that's being given to them as their licensing share. Now, how that works is, is anyone's guess. But if I was universal, I'd definitely be making sure that I'm getting paid better than everybody else, wouldn't you? Yeah. And, and, and then of course you have the issue. The issue of the songwriting, which is that, you know, streaming has maintained this analog model because not all of you listeners may know this, but there's two copyrights in music, if not three, but there's two copyrights in recorded music as, as, as streaming works presently, which is the songwriting, the authorship of the song and the recording. Yeah. Right. And it's whoever made the recording that owns bizarrely. Who owns the authorship of the recording? Yes. Not, not the person who makes the sound on the recording, which is the great failing of law. But anyway, um, so, so, so there's the recording and the authorship now on a piece of like vinyl or on a CD, the split between the money was like 92% went to the recording and 8% went to the, uh, the authorship. Right. And that was 8% was pretty good when you were selling like 16 pound CDs. Yeah. Now, but basically in the streaming world, because the record companies sign those original licensing deals and controlled how streaming was going to pay, they effectively kept the balance between the songwriting authorship and the recording as it was from the historically, because they make more money from recordings than they do from songwriting. Right. They keep on average about 80% of the money from their artists or the recording, but only give about 20% from their publishing. Right. So if you had a choice of valuing. If you had a choice of valuing the right way, you keep 80% versus the right way. You keep 20%. Which one are you going to favor? Right. They kept that in streaming, even though streaming doesn't look a lot like a record, right? It doesn't, there's no physical object. Why, why is this the way that is also amazingly, this is where it gets really confusing. And because streaming does bear a resemblance to broadcasting, because it does bear a resemblance to. Radio, it pays a performance, right? To the songwriter, right? So you get PRS for your streams, right? Now that's crazy. If you think about it, because on the recording side, you're not getting a performance royalty, but on your songwriting side, you are getting a performance royalty, right? So, so in publishing, you're getting a mechanical authorship, right? Right. And then the other half of it, MCPS and the other half of it is your performance, right? Which. it's like it's been performed publicly yeah right but on the recording side there's no public performance oh no and that's not happened there is there's no radio in this that we're not going to pay equitable remuneration thank you very much this isn't broadcasting what are you talking about right so they've managed to maintain this system where they get the lion's share of the money the songwriting gets paid very little of the money we're about 15 a bit less but around there um within spotify and it's meant that you know it's actually crazily more profitable to be somebody with an acoustic guitar covering other people's songs to get them on like a playlist yes than it is to be the actual creator of the song yeah right and we see that yeah so so it let it led to this massive gaming of spot of streaming if anyone knows about this this is what's this what most of the material on spotify is is people sitting at home covering other people's songs is that is that is that actually true that's most of it really of course it is of course i mean what what what do we what what i mean like there's people it's like uh if you put in a version name of a song in spotify you'll find all the different like you wouldn't necessarily get the original artist version of it right you'll get like uh all the cover versions yeah somebody uh an acoustic guitar version of it a bagpipe version of it a violin version of it that takes up a good chunk of the
Speaker 1content on the service of course it does because because
Speaker 2because that's that's the easiest way to manufacture loads of music is just by recording other people's songs i'm off to go and spend the
Speaker 1rest of the week doing cover versions of hd and songs there
Speaker 2was it was an easy way of making a lot of money out of streaming early on right because people would be like oh yeah i want to listen to acoustic guitar moods right and and if you'd recorded like a stevie wonder song and a beatle song and a it could become massive beyonce acoustic guitar like you do whatever you just you did all of that so you could basically and you're getting paid at five times the rate of stevie wonder got you for recording on your on your little acoustic guitar so of course you're gonna do that that perfectly illustrates
Speaker 1the madness of this system that you're describing and the way it's been set up with the with the recording versus the publishing splits yeah yeah that that clearly demonstrates it perfectly yeah
Speaker 2people are listening to it because they love the song they're not listening to it because they love that recording of the song they love the song they love the song they love the song they love the they like that melody right they like what somebody authored now why is it that when we're in a song economy when we've got basically albums i still love albums but people aren't listening to like that in that way anymore people want a song they fall in love with a track yeah it's playlist it's all over the place we're in a song economy and yet the song is massively undervalued right and and and that undervalued valuation has directly come from the major music industry rights groups having control over how licensing was done from the day one within streaming yeah there's just no question about it right because if you looked at streaming and what it actually is you'd kind of go well it's somewhere between radio and a sale it isn't a sale right is it it's not a sale you don't own anything sold you don't own anything and it's a bit like broadcasting but it's like one-to-one so it's like digital direct right algorithmic radio on some level but the rights that we have as musicians from radio don't exist entirely within streaming we only get them in the writing side we don't get them in the recording side right because like if your song is played on the radio i mean to you as a fully independent artist it's fairly meaningless you'll get both halves of the equitable remuneration as the right holder and as the performer right you get both sides yeah ppl right if you get played on the radio yeah but to most performing musicians my deal right with emi from a thousand years ago right i'm still in debt on and i've never been paid for those gomez i've never made any money from gomez on the back end right apart from my when those songs are played on the radio i get paid 50 of that money directly that doesn't go against my debt that's money in my pocket right right which is why the record companies don't want to accept that streaming is anything like broadcasting because if they did half the money got you have to go to me right also also in my record contract it says any third party license i get paid 50 on and it's going against my debt now if anyone wants to explain to me how streaming is not a third party license when they have done a licensing deal which includes my music right how is that not a third party license which is what i don't know if anyone's following there's a big there's a big court case at the moment which involves four tats kieran who's suing domino it's in the high court at the moment and it's basically about this right which is that that that he's saying i think i ought to be getting paid 50 of the money from my streams based on my contract says and it's going to be a very interesting um outcome let's say let's see how it goes but but that a lot of these artists you know a lot this is this maybe i'm going a little bit into the woods here and you're gonna have a hell of a time editing
Speaker 1i'm i'm leading you into the woods it's my fault man i'm just there's so much i want to know about it's fascinating oh
Speaker 2yeah but like i mean it's really complicated there's lots of aspects of it that ought to be more beneficial to artists but but because majors have such dominant control of the market they have defined the market right to their own benefit yeah that is the part they have played right now that doesn't really affect fully independent artists because you're keeping all the money anyway yeah right um it might affect you if you use session musicians because if there was an equitable remuneration a small percentage of the money would have to go to your session musicians but my point is always if there's money in the system and we can get it to any kind of person who's making music that's where it should be going yes because because i'm just like there's a big old ecosystem out there of performing musicians who who are going to need this money and what happens you know does anyone think realistically that we're going to be doing that i mean why would we be doing that i mean you might i mean i guess it just doesn't strike me as being very like curate their
Speaker 1own radio station now which is essentially what streaming
Speaker 2is isn't it yeah and and here's the really bizarre thing in a like that there are these algorithmic radio stations right that are based on your personal preferences like pandora yeah right now hilariously pandora play pandora play a lot of music and they're playing a lot of music and they're playing a lot of music pays equitable right but right so how can anyone explain to me what the difference is between pandora and spotify algorithmic radio that they actually call radio as well can anyone tell me what the difference is because i can't tell the difference and yet one incurs a performance right and one doesn't so am i right and
Speaker 1then in assuming that the solution to this is based upon that distinction between the difference between a sale and a radio broadcast
Speaker 2well no i mean there's multiple solutions to this okay one of the one of the solutions i think is that some form of some form of remuneration needs to be paid to musicians for their performance right within streaming and and i think that's just basic human rights i think the the platforms are enjoying the benefit of a performance that they have not paid for and there should be some money there to to go to the music community it doesn't have to be a lot but it should be a lot of money there and to go to the orchestral players and the saxophonists and the guitar players and the drummers and the singers and everybody else right it should just be a pool of money that is helping to sustain the music community right i don't know how you share it out probably by a performance but you know we worry across that bridge when we get to it right that's that's one but but also i think the pro rata system which is the system we presently have where we take all the money and we divide it up by all the streams i think it's very dangerous for culture i think it's leading to cultural stagnation i think it leads to an even more winner takes all system than we had before right and there are lots of opportunities the way how you could amend it so that it's fairer and that more genres do better there's there's something called user-centric that we probably should talk about which is where instead of instead of all the money going into a big pool of bucket of cash and then being divided by all the streams all that happens is your individual subscription is divided up by what you listen to right well that makes sense yeah right exactly so and what you see on the user-centric is genres do better so classical gets paid about 20 percent more jazz gets paid about 20 percent more wow it gets rid of fraudulent streaming because that's a big problem and it just accounts to about five percent of the market is spin fraud so wow well
Speaker 1that that to me is so simple but that just makes perfect sense like how could it be any other way you know If all you're listening to is classical music, why the fuck should you be giving Ed Sheeran money, for example?
Speaker 2Well, but this is precisely what most people don't realize is most of their money is going to music that they don't like or listen to. Right, yeah, of course. Your average person doesn't have an awful lot of time to listen to music. They may be listening to, if they're lucky, 500 tracks a month. If you do the maths of like 500 times by a third of a penny, you'll kind of come out at somewhere around a couple of quid, right? And you're like, wait a minute, so only two pounds of my 10 pounds a month is going to the music that I listen to. What's happening to the rest of that money? Well, let me tell you, the rest of that money is going to Ed Sheeran and Billie Eilish and Drake. And that's where it's going, because it's going to music that's being hyper-listened to, mainly by kids or being played on illegally via Spotify accounts in cafes and hairdressers. And that's what you're subsidizing. And there's no reason for it. There's just no reason for it, because what actually could happen is your tenor could be split up amongst the 500 tracks that you listen to. It would lead to a way more dynamic payment system, because, of course, if I only listen to one track in a month, that one track is going to get the whole tenor. Yeah, fine. But so what? So what? Yeah. So what? So that's an option, right? That's option one, which is user-centric, which I think is way better for culture and leads to a total flattening of the payment at the top. It takes about, it takes about 10% of the highest earners and shares it with the sort of couple of percentiles lower down, right? Which is kind of the effect that I'm looking for, which is like a bigger group of people at the top of music who are making a decent amount of money, right? Which is what we need in order to maintain a professional class, right? So that's what, that's cool. And what is user-centric?
Speaker 1Is that an idea or is it an actual scheme that exists?
Speaker 2User-centric is a scheme that actually exists. It doesn't, in fact, SoundCloud have started something called fan-powered royalties, which is effectively user-centric. Right. But they're only doing it on music, which is they could only do it on music, which is directly distributed through SoundCloud. Right. Because they haven't managed to get anybody else to license it yet because the majors strangely don't want it. Anyway. Surprise. So, in fact, Deezer in France for years tried to introduce it. But, I mean, I think it's pretty common knowledge now that Sony stopped that from happening. Right. Because they didn't have enough French catalog and they worried user-centric would lead to regional music doing better than the global pop that they own such a lot of. Heaven forbid, right? Right. So that went on. So user-centric apps, everyone knows what user-centric is. For me, that's the rational way of sorting a lot of this stuff out. You've got to change the balance between the song and the recording. The song should be getting more money. Like, why isn't the song getting 25%? I don't know why it's not getting 25%. Nobody seems to know why it's not getting 25%. It's definitely worth. I mean, the platforms are keeping 30% and they're only paying 15% for the song. It's like, wait, you're worth twice as much as the song. I'm not sure that's true, Mr. Spotify. This is Apple. I'm not sure that's true. So we changed the divide towards the song. The other thing, actually, this is kind of an interesting. Part of ProRata, or consumption share, as it's sometimes known, which is the system we presently have, it comes from radio, right? Because radio, since the 1950s, the way that radio was licensed was they go to, like, a PRS or whoever, whoever the authors are, and they go, here's a lump of money that we can afford to pay you to have the license of all the music, right? And then. We're going to give you our data and you're going to divide that up amongst your writers, right? Based on how often they were listened to and da-da-da, right? Now, that's where Spotify got ProRata from. That's where it comes from. That's where consumption share comes from. But what's really stupid is how backward we've been about this because radio had two really important caveats to the ProRata system because they realized that you wouldn't. It's not. A play isn't just a play. It's a play, right? There was two ways you get paid by the radio are based on the duration of your song. So, in streaming, you just get paid if something's played for 30 seconds. 30 seconds, yeah. Right? On the radio, you get paid twice as much for a four-minute song as you do for a two-minute song. You get paid three times as much for a six-minute song as for a two-minute song. Because guess what? Somebody's been listening for longer, right? Right, yeah. Now, user-centric does that anyway because it's. The limitation is the scarcity of the individual user's time. But there's no reason why we couldn't just add duration to the streaming ProRata system as well and say, actually. Because, like, jazz, right? The average track in jazz is over eight minutes, right? Which means they're being clearly punished for having longer tracks because that person gets paid the same amount as somebody who's listening to a 31-second hip-hop skit. That makes no sense.
Speaker 1And it's that. That cultural impact that you were talking about earlier as well, like bands saying, hey, we'll just do all your best shit in the first 30 seconds, the rest doesn't matter, you know?
Speaker 2Exactly, right? Now, the second caveat that radio made in the 1950s, so 70 years ago they came up with this and went, well, obviously, that should have an effect on how people are paid, was audience share, right? So it was the number of people listening at any given time and the duration would affect how much you were paid. So if you have. Still to this day, if you have a song played at, like, drive time on Radio 2, that's worth more money than if it's played at midnight on Radio 2. Got you. Right? Because they know that there's 3 million people listening at drive time and there's 300,000 listening at midnight, right? Now, in streaming, there's this totally crazy situation whereby 50,000 people listening twice has the same value as 5,000 people listening 20 times, right? Now, which has more, or even make it even worse, 25,000 people listening once or one person listening 25,000 times has the same value, right? Now, which has greater cultural impact, would you say? 25,000 people listening once or one person listening 25,000 times, right? And because there isn't this cultural valuation, and it's just about the. just numbers, it leads to this total skewing of the relationship, right? All you need is to get a song that's on a playlist that's played 10 million times, but you've only got 10,000 monthly listeners. I mean, that's, like, that doesn't necessarily. There's a kind of disconnect in, like, how we value music and the impact of music on people. Right? So that's something that could easily be done to the pro-artist system as well, to kind of go, wait a minute, how many actually people care about this artist versus is one kid sitting in their room listening to that Billie Eilish song over and over and over again until they go mental? Like, and why are we funding that? Why can somebody hyper-listening extract 40 quid's worth of streams in a month from a £10 subscription? How, why is that possible? Yeah. Right? And why is everybody else paying for it? Anyway, so that's my point. I mean, that's one way that you make culture or the value of audience and the relationship between the fan and the artist far clearer. The other problem, of course, with the pro-artist system is there's a total disconnect between the artist and their fans, right? And it was a huge problem. And streaming, I mean, Spotify have gotten better over the years with the Spotify for Artists, et cetera, et cetera. But still, you can't actually see who the person is who gave you the money, right? Now, back in the day when someone bought your record or whatever, you could get them on a mailing list and you'd have a direct relationship with them and da-da-da-da-da-da. And that's how we did it. Whereas now, because of pro-art, because it's just all of this money coming out of pots and being listened to wherever, there's a total disconnect between knowing how big of a fan they are of your music because you can't tell. Because you can't see how much time they're spending with you. You can just see that it's been played once or here or a dot on a map. Whereas if you went to the user-centric model, there'd be nothing to stop because the licensing wouldn't be based on big record companies going, we're going to take this much of the money. It would just be, we're going to pay out what we get to you based on that individual's listening. At that point, you're going to be able to see who your biggest fans are, how much time they spend listening to you because there's going to be a direct financial relationship between how much they listen to you and how much you're getting paid. So at that point, it becomes way easier for you to sell them a gig ticket, sell them a t-shirt, you know what I mean, because you're not disconnected.
Speaker 1We're getting closer to that old model again.
Speaker 2Yeah, because the data is reconnecting. you're like you can see who your fans are yeah directly because the only reason why you can't is because the pro rata model licensing system has to make all of that opaque you're not really allowed to see how the money is getting to you because the licensing deals state that you're not allowed to like there would be a breach of the nda agreements that kind of cover so you can't you don't know where if you actually go through if you do yeah i've seen or um you know people have shared them with me probably quite illegally but if you look at like audits of streaming that come from certain labels whatever artists are getting paid at like over 30 different rates from different you know based on you know is it the family pack in peru or the it's come from a duo account in germany oh it's somebody it's somebody listening on freemium in it's and everyone's there is just it's chaos right from an artist's point of view it's total chaos right and and that for me is the issue right is that what we need to do is is reconnect fans with them with the music that they like reconnect artists with their their consumers there's just enormous benefits to all of this if we just get rid of the pro rata model which basically only the big basically whoever if you're a huge aggregator of rights that's who pro rata suits right it doesn't suit anyone else right typically
Speaker 1that's fascinating man it comes back to what you said right at the start like this is so much bigger than just fuck spotify and fuck streaming way more complicated than that but it's heartening to hear that the um the capacity and the potential is there for this to work and the solutions to make that possible do already exist which is so who are we up against then i mean i'm guessing that the major labels and the tech companies are not going to want to change you know their current monopolistic system um so what's the fight what we've got to do to get this over the line and what are we up against
Speaker 2well look we've you know it's been it's been two years work to get to where we're now which is we're in the middle of a competitions and markets authority study of the music market so they're looking at the major labels and the streaming companies to decide whether they're breaching copyright or not breaching copyright and breaching competition uh law and whether market power is distorting pricing and distorting the way people are getting paid um so the first thing you can do if you are a musician is write to the competitions and markets authority and say i don't think i've got you know access to market i see this you know this is what it looks like for me you know and to and to say i mean the thing that we asked for i don't you may remember or not remember but like two years ago i wrote a letter to boris johnson and i got like the rolling stones and paul mccartney and kate bush and all these people to sign it right and got the mu and the ivors on it and um we asked for an adjudicator now basically because what we think is this there needs to be like an external like power statutory power that can basically say you know that's not on right yeah because that's we're totally unregulated as an industry there's there's copyright law but there's just no regulation right it's it's basically the wild west still right music industry and so what the main thing i would say is after is is that that that what we need is an adjudicator because of because of um of how our dominance in the market and and the fact that you don't think there's a fair and open playing field in music and i think that it would be powerful if anyone wants to do that to do that there's you know at the same time the government have been running a program with the intellectual property office um to look at contracts and transparency and data and um equitable remuneration and that's all happening at the moment so that's we're in the middle of a government process that's been going on for about six months
Speaker 1already right okay
Speaker 2um so and you know the government don't want to legislate obviously they don't like legislating but you know if anybody wants to write to their mp that is always an incredibly powerful thing to do as well right is to just put pen to paper don't type it don't email it literally write their name at the top tell them what you do that you're a musician that you struggle with it that it's hard to get paid that it's a it's you know that that you want them to be showing support for any kind of reform of the music industry in order to help working musicians in the uk you know that getting put through their letterbox that house an effect right and and you know and i think the big thing for me in broken record has been really showing people that you can you don't need to go outside and wave placards you don't have to protest you can just walk in to position places of power and have conversations with people right and and effect change just make some noise and normalize the conversation and the issue totally right and it's because it's because because people think that that actually their first option is protest well
Speaker 1they've just made that illegal now so you can't anymore oh no well i know well yeah it's a separate conversation that's not going so
Speaker 2well for us is it um but the uh i think that's a good point i think the uh but the truth is is that we do live in a democracy and you can engage your political um representatives you have an mp you can go into their office you can ask to meet with them in a clinic and do all of this stuff that people don't normally do it right they just think oh it it's just fucked it's just beyond repair we can either shout and scream about it or we can get on with it right that's usually like and and it's just just wrong that you can totally get these people's imagination by talking to them and explaining to them what you do and as one of their constituents they have a responsibility to you so i would say people just just actually engage the political process genuinely go and meet these people and say hello this is who i live in your community you know it's hard doing what i do right i know that there is an existing process what are you doing to help it move along and help us where do you stand on this yeah yeah where do you stand on it where are you going to help us get reform you know or are you going to back these multinational foreign corporations who are taking
Speaker 1all the money and we've got millions of supporters as well you know the everyday music fans the people that the people want to support their favorite artists and independent artists i get so much love from my fan base but you know i mean there's only so much they can do to help me within the existing framework that exists you know so we you know we're a large community we've got a lot of support you know for a lot of love from people so i mean we can make a lot of noise on this issue
Speaker 2i think 100 you know just stay on him that's basically the trick is just stay on him make make sure that they know about it because if they don't know about that basically a politician is somebody who's just going through life trying to lead a quiet life but but but you know the squeakiest wheel gets the
Speaker 1oil i love that phrase so this is fundamentally then a legal issue at this point you know we need to get the regulations
Speaker 2changed oh yeah right it's the regulate regulations or legislation um because because these forces are too powerful for us to change them as individual musicians right we're just we're just dickheads with guitars right that's the way it should be too right we should be playing music you know exactly right we shouldn't have to be doing this um um but that's you know that's that's that that's what we're up against and that's why you know it had to be about the only way to solve this had to be about engaging political power because that's the only thing that they fear right only thing that these companies fear is regulation well then
Speaker 1let's go and get them you know i mean fuck them i mean the game is the game is afoot let's go and do it 100 mate do you think then uh just to wrap up because i don't want to keep you all day because i which i could easily do um if we could get this over the line would you say that the music industry is generally moving in in a better direction than the industry as it was when you first came on the scene as a band you know and then in the old model
Speaker 2um i think it you know as we move forward through time uh the music industry loses the sort of scent of organized crime slowly but surely right um which i think there was still a lot more of that visible when i started um and everyone's had to get a lot more transparent and a lot more honest and there's less brown bags onto the table you know right and um and i think that's a good thing um you know and i think like i say the fortunes of of lesser represented groups uh the black community and women and um has been hugely amplified uh rightly um in the modern era and that's been massively beneficial um but in terms of you know people thinking how they think about musicians and how we value them as a society i don't know if we've actually moved much like in terms of actually um taking it seriously and thinking about how uh music plays into our lives and public life and um as an art form how how much people rely on it but just don't think about it um i'll take it particularly seriously um even though most people get up and turn on a tune yeah right i mean that's the bit that i don't that's the bit that really fundamentally needs to be fixed especially in this country we have a very um i think screwed up relationship with um uh you know whenever we want to talk about the country we go oh yeah the beatles blah blah blah but at the same time don't really want to do anything to preserve and protect and make sure that we keep being the best in the world at doing
Speaker 1this stuff and we totally are man for a little island man jesus christ we you know when we suck at cooking and many many other things you know one thing we can do is knock out some fucking great songs man you know what i mean some iconic bands yeah look at the list you know what i mean
Speaker 2i know it's off the hook and yet like it's not the central central thing that we're funding from the arts you know the theater and the opera get way more money film gets these massive tax breaks right what are we doing for music what's music got fuck all right is
Speaker 1the answer it's time to kick up a storm well tom thank you so much for everything you're doing man to shine a light on this it's such an important issue and i know that you campaign a lot on this as well you do you probably you probably answered these questions a thousand times before so i appreciate you for doing it again man you know for the listeners today and breaking it down in terms that people can understand you know because i think it's really important
Speaker 2oh it's a pleasure i just hope they did understand
Speaker 1me well i did and if i can understand you then you know i'm sure that listeners will will be just fine because as you said i am just a guitar slinging dickhead so i managed to keep up so but thank you so much tom honestly this is such an important issue for the community that i'm a part of you know and i know that so many people everybody loves music so this is something that you know is important to me and i think it's a really important issue for the so it can be complicated and it can be oversimplified as well into just like oh streaming sucks and all that sort of stuff so and i've been guilty of that myself so thank you so much for laying it all out for us today and for everything you're doing generally and yeah i think hopefully we've inspired people to get out there and take action and get involved and we can make this thing happen so so thank you man for being the uh the first one over the trenches and leading us over the hill pleasure mate pleasure thank you dude thanks man i'll speak to you soon thanks mate cheers dude bye wow okay so uh that challenged me on a few of my uh preconceptions and uh very eloquently articulately and uh and diplomatically done as well i really enjoyed that man um what a super nice guy as well i say that about all the guests and i we need to have someone on this a real prick so at the end i could say man what a dick that guy was you know but uh nah tom awesome guy man i mean that guy's you know he's fucking been around man he's been in a kind of uh you know a massive successful alternative band that's like toured the world so i think it's a really well signed to a major label you know he's released tons of albums you know he's done it he's seen the other side and as he mentioned earlier you know his band gomez came on the scene you know in the sort of early 90s you know when the old model was the only one that existed you know so um you know tom's kind of seen both sides of this and clearly knows what the fuck he's talking about and there was some great solutions there as well such as the user-centric idea which i love the sound of that and the uh i think he mentioned i was trying to scribble some notes as he went i think he mentioned competitions and markets authority i'll go back and check all that but um yeah i mean you know you listen to as much as i did um get involved man let's do this i think the case is pretty clear and if there is a way to make this brave new tech technological world that we all live in fairer for us humble musicians that provide you guys with all the fucking good medicine that you need to get you through your lives then uh you know we should definitely do it because as artists work our goddamn asses off to provide all this free content such as this podcast you know and albums and music videos and you know all this social media stuff that we have to do at the costs of fucking touring dude you know most bands you know like certainly now you're seeing bands are pulling tours left right and center um they're making up all these excuses like you know our um keyboard players ninth cousin has got covid or something it's because they can't afford to do it man as simple it's as simple as that touring costs thousands and thousands and thousands and thousands before you've even left the fucking house it's insane how much it costs to tour and if people aren't going to gigs you know and bands aren't selling records and venues are closing down the musicians they literally they can't function they starve you know it's it's not like it is in the music videos where you know we're all just fucking millionaires hanging around all day smoking weed and playing our guitars it's just not that's just never been reality and it's it's harder now than it's ever been and as tom laid out there about streaming i mean now that we're moving away from physical product altogether and moving into a future which is very much all about you know everything being in the cloud and streaming you know on demand at all times for a subscription or for free then you're going to reach a point where the only artists that are able to survive are going to be ones that have got rich fucking parents and who wants to listen to that shit so if there's a chance to fix this and make it fairer so that people like myself and others you know can actually survive and continue to do what they love and to give you guys the music that you want to hear and keep pushing the envelope so that we don't get cornered into some kind of cultural dilution of music that sucks written by people that shouldn't be fucking making it you know the only people able to stay afloat you know with rich daddies or whatever or major label artists that make safe you know commercial mass-produced music i mean who wants to live in that world so i think we've got a choice we're at crossroads and we can either get involved and fix this and actually really exercise some mass pressure to exert pressure on the authorities and the regulators to get these stupid laws changed or we don't and we reap the consequences of that which are going to suck so i thought that was super insightful very articulately and diplomatically laid out i really enjoyed the conversation and i'm glad that he's corrected me on a few of my uh misguided assertions that i've been throwing around the place quite uh perhaps over confidently in the past so you know i'm happy to admit when i'm wrong man you know it's all good it's all about growth and you know development and getting closer towards the truth so um tom has shown a lot of lights and stuff there that was a great chat i hope you enjoyed it go and check out the broken record campaign online tom's got a ton of other interviews and uh info online about this campaign the broken record campaign and you can check out tom gray on twitter at mr tom gray that's g-r-a-y follow him for the updates and everything he's doing you can put a bit of weight then behind his actions and um you know i'll be sharing them as well and i'll see you out there in the trenches until next time subscribe to the podcast i'm going to tell you one more time subscribe to the podcast and i'll see you in the trenches until next time subscribe to subscribe nag your friends to subscribe share these things man put it on your page if you thought that was interesting put it on your facebook page you know tweet about it tell your musician friends tell your your music nut fan friends about this because you know this is this is a community issue this is on us you know like our grandmas aren't going to help us with this you know we need we need the music community to come together on us and make this happen so share the podcast let people know about this information subscribe give me that rating give me a review and if you want to send me some shekels to paypal.com paypal me slash james kennedy uk i'll continue to keep doing these things for you like i said i don't get paid to do this it does take a lot of my time and i'm trying to fight the good fight here by sharing great information from great minds um so if you're enjoying them and you think that it's it's important and useful then throw me some beans and i can justify spending half my week doing it um until next time got another banger lined up for you next week man honestly um you know they just keep coming it i'm so fucking excited to share the next one with you as well uh so until next time stay good look after yourself be good to each other and have a great week and i'll see you next week cheers guys love you
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