How So Much Music Ended Up Online w/ Milana Lewis

Is there too much music? Okay, now that I've hooked you with a bit of a controversial question, let me explain what I mean. So there's over 100,000 songs that are being uploaded to streaming services every day, according to Luminate at this point. And in 2023, over 45 million songs didn't have a single stream that year. Plus, French Streaming Service Deezer just reported that it's found 44% of daily song uploads are now 100% AI-generated songs. And that's not even counting all of the AI-assisted work that's likely also coming onto the platform at the same time. Several of the smaller streaming services, including Deezer, have expressed that there's an unsustainable cost that's mounting when they try to store all of these songs. And then ask any artist that you know, and with all this noise, it is incredibly hard to get your songs noticed today. So yes, I am here with my guest, Melana Lewis, who's the CEO and founder of STEM to ask the hard questions. How do we get so much music? And are we getting to a place where it's all too much? Welcome back to On the Record, a music business podcast from Billboard and Sig Bird Productions. As always, I'm your host, Kristen Robinson, and today I'm joined by Melana Lewis, the CEO and founder of STEM, an indie distributor with the mission of getting the works of artist big and small, including Brent Fias, Mike Mill, Empress of, Cash Cobain, Debnever, and more on two streaming platforms. We'll be talking about the extreme volume of music that's getting put out into the world today, and how young artists can still win. Hear me when I say this. I love the idea of more and more people making music and discovering the healing power of playing or writing songs. I know that's been a godsend in my own life, but there is an undeniable reality that we have to face in the music industry. There is so much music, there's no way for anyone to listen to it all. It puts a strain on streaming services, music businesses, and most importantly, other artists, they have to compete with all of this content for listeners attention. Content on streaming platforms today though is not just songs by young musicians hoping for a shot. There's also a lot of other stuff that's accounting for this rapid growth of daily uploads. I said before, AI music is a big part of this growth, but there's also white noise and other non music, and not everyone's intentions are pure. Streaming fraud and spam remain constant struggles for streaming platforms, and every time a new rule is enforced, the bad guys find another way in. I wanted to talk about this today in part because this was actually the subject of a South by Southwest panel that I participated in earlier this year, and I found by doing that panel just how frustrated the crowd was by the volume of music today, and many of the frustrated folks were actually the musicians. So I thought I'd bring the subject to the pod, and I can't think of a better person to discuss it with than Milana. So please welcome to the show Milana Lewis. Milana Lewis, welcome to on the record. Thanks for being here. Thanks for having me. Okay, so I have a big burning question. I've had this question for a long time, which is, are we getting to a place where there might be too much music, and I don't know if it's sacrilegious to say that because obviously I love that so many people are making music these days, but there's so much of it that's ending up on streaming services that it does have a really big effect on the market. And I think there are so many downstream effects, so I want to get into all of those today, but before we get started, I wanted to ask you how we got here these days we have over 100,000 songs are being uploaded streaming services daily according to eliminate. So can you walk me through a little music business history as to how we ended up with this much music. Yeah, I'm going to give you the version of it from my personal experience, which really just dates back to like 2013, 2014, my first heart of paying attention to the problem and then 2015 when I first started stem. The short answer to your question in terms of my opinion is yes, and I think we also need to clarify the difference between music and sound because when you put those two together, like, there's way too much noise, yeah, and sound. Yes, lots of like legitimate white noise and random stuff. And by the way, like the other part of the conversation, which I hope will end up having is like, how do you measure value and effort and does that matter in this equation in terms of interpreting my language, right? Because I could also argue with you that white sound could be more valuable to listener than a song. Yes, I definitely want to get into that way to we can get into that part of it. It's so interesting because I grew up professionally around the same time that Chris Anderson had the whole theory of the long tail. And he wrote that long article on wired magazine. And I think back then the long tail just wasn't so long, right? Like we're looking back at even like 2013, 2014 when there were still less than 100,000 songs being released a year. And this is post-napture era, right? So let's talk about like what happened in the digital space post-napture and also how that had an impact on the music business that I think created an environment where there's a plethora to quote my old investor Frank ramen, a Cambrian explosion of music. And he had a perfect storm of things, right? So you had the evolution of social media and digital media, which gave anyone the ability to post in public content YouTube had a huge role to play in that. And so you had a lot of that you had an industry where the economics were effectively sucked out of the business because so much music was being pirated. And as a result, the major label infrastructure started shrinking. And so you had all of these all it creative and an R and also administrative workers who were leaving the major label system either because of layoffs or shutdowns or consolidation and restructuring. And a lot of those people became either freelance workers or the became music managers or started their own imprints. So you just had so much more independent talent that develops artists and music available to work with a generation of creators who were emerging independently through social channels. I think that makes a lot of sense. And I think coupled with that on the creative side, you have the rise of laws, digital audio workstations, like garage band logic, etc. So people could actually make realistic good music without having to book a studio session. And so the correct rooms. Yeah. And then posted on SoundCloud or YouTube. Yeah, exactly. So it's like you can get discovered on your own with no upfront, you know, expenses from the label. Yeah, you can make it on your own. You don't need the expensive studio sessions or anything like that in order to make a really great song. And so I feel like that it has so many effects. It's hard to even narrow it down. But I mean, I think one of the immediate effects that I think about is, you know, the rise of DIY distribution, aka, you know, your district kids, two and four CD babies that allowed these people who are making music in their bedrooms to put it out no matter who they were just for a flat fee. And then also you have at the labels, they start signing later, they let people develop themselves. And I mean, also that kind of left a great space for STEM to come in. So can you explain what pocket you feel like STEM serves. Yeah. So we're a curated distribution platform that gives you the same self service tools that a distro kid or a tune core would offer you, except they can also pick up the phone and call someone. And so you have a team around you that you could use not only as a soundboard, but as a strategic lever that helps you with everything from putting together your release to coming up with the whole rollout strategy executing against it, looking at the data as it's coming back and being smart about what you do next. And then more recently, we've had various rules of capital that we can invest across different types of artists at different stages. At this point with the deal we deal with concord a year ago, we can now invest at any stage of any artist and to pretty much any check size, which is a huge unlock for our business. But you're right, like the platforms like distro kid tune corn CD baby existed before stemmed it and the reason I started STEM is because in my previous role at UTA, which was one of the first agents in the digital department over there, I realized there's a huge gap because not only were your friends who were making music off their laptop and their bedrooms releasing music through tune corn distro kid. I actually had more established talent, whether they were actors that were transitioning into music or YouTube stars like the choice of uns of the world and Shawn Mendes is who decided to move off of YouTube and use music as their primary form of media that they were creating to establish artists that were leaving the major label system looking to do things independently, all trying to figure out how you get music out there. And yet they're not the kind of people that like just want to put something out, they want to talk to someone they want to get to know their partners, they want to sounding bar to help them navigate the complexities or the challenges in releasing music globally by yourself without real infrastructure. And that's why we created STEM is to be that home for those types of people. That's fascinating. Okay, so we moved from iTunes into streaming now streaming is like a totally different paradigm for the music industry, but it did help us recover from piracy. I feel like streaming was another inflection point where it encouraged even more people to start releasing their music because now there's no pay barrier. Like on iTunes, you still have to pay if you want to listen to the whole song. So if you're an independent artist, it's going to be hard to get people to pay. But now people can get discovered with no pay barrier. Yeah, I feel like that makes the discovery process a lot easier for these small independent artists who are trying to do it on their own. Do you see streaming as an inflection point where things the volume got even larger? No, I think social. Oh, I think YouTube was really the inflection pointer platforms like SoundCloud. And I think it came from the necessity to be able to register your music on platforms like YouTube and Facebook that became. the catalyst for more digital distribution because I think there was a separation still. I think up-and-coming artists didn't aspire to make their music on Spotify immediately. I think they were using platforms like YouTube and SoundCloud to do that and the advent of technologies like content ID to register your copyright so that you could keep it claimed as yours and register and collect money on it even if other people were using it in their videos was the genesis of at least a number of the YouTube clients that I was working with wanting to pursue digital distribution. It wasn't so much about selling the music on iTunes or making it available on Spotify. I was more like, "Hey, I know this is going to make money online. I want to collect it." So you had to pursue the path of finding a digital distributor in order to do that and then you might as well have released it everywhere else too. >> That's my anecdotal perspective on it. I could be wrong. I've never studied it. >> I do think social media shouldn't be discounted in this conversation as such a big factor in encouraging people to start sharing their work online. But I think an interesting thing that's happening much more recently within only the last few years is that of these over 100,000 songs that are being uploaded to streaming services every day and increasing percentage of those are AI songs. So we recently had Oliver Schusser from Apple Music on the podcast. He said that they're seeing a third of monthly uploads that are 100% AI-generated songs. >> Wow. >> And then Deezer says it's even higher for them. They say that it's 44% of what they receive every single day. That equals out to, I believe it was 75,000 AI-generated songs. And that's 100% AI for both of those companies, not partially AI. >> Sorry. The whole concept of 100% AI is hilarious because you're still a human in the loop. >> Yeah, yeah. It's like there's a human prompting it. >> Correct. So it's not 100% AI. There's still someone that has a vision that understands what the cultural messaging needs to be in order for it to resonate to get it out there. >> Yeah. Well, okay, yeah, that is a very good point. I think when I say, and when I hear them say, 100% AI-generated, what they're thinking of is the output. >> Yeah. >> Is 100% generated by AI, but the input side, they are putting in some work. >> Sure. >> They might be inserting their lyrics, which on the output side, you can't really tell that. >> Yep. They did that or they didn't. They're prompting it. And also interestingly, with the US copyright office, their current guidance says that prompting alone is not enough sufficient, like, you know, human input to make it a copyright. >> Which I think is like a good place to start. >> I think it's a good place to start. I think it's definitely going to evolve. >> It has to. >> It has to. We're at the very beginnings of this. >> Yeah. >> And whenever I talk to streaming services about AI songs growing on their platforms, that's kind of what they always tell me. Is there like, we're implementing XYZ new policy, but we are still just scratching the surface at what's going to happen down the road. They still don't really know what's going to happen. None of us really do. But what is true right now is there's a lot of AI generated material that is ending up on streaming services. And I'm wondering from your vantage point, what do you think that does for artist discovery? >> I want to answer this directly, but I feel like I have to leave the foundation for my thoughts first. >> That's a feelings. >> Do it. >> Because I can't just point the problem at AI. >> Yes. >> I'm going to read a music. Great. AI assisted music, AI artists are still a vehicle for storytelling. And I think the majority of the function of music in our society has always been to tell a story, to connect people through a common shared narrative. Either that's through lyrics or melody. And it serves a functional purpose. Whether it's bringing out a sense of emotion in a listener or carrying an idea that they can't figure out how to articulate themselves or passing a long history. Or creating music that captures a moment in time that people can reflect on, right? And AI can still do that for us. Where part of the thing comes into question is around the issue of effort. Because the effort to make music, you can argue is a lot less in a world with AI tools than with instruments. >> Totally. >> Yeah. >> But then through that line, it's like as dance music, any less valuable, because it's a lot easier to make. >> I have thought about this so much. And in terms of both AI songs, and also which we'll get to later, like the idea of white noise or nature sounds maybe being uploaded as a form of audio content. >> Yep. >> On these platforms, I had a friend who I was talking, she works with songwriters and she cares about them so much. And so when I told her about how much white noise AI music and stuff is ending up on these streaming services. >> And how much generating? >> Yeah. Yeah, yeah. She was appalled by it, which rightly so. But she was telling me she was like, well, that just shouldn't earn a royalty. Or it shouldn't earn a royalty as much as what my artists are doing or what my songwriters are doing. >> Or I should have a separate home and a separate monetization strategy for it. >> But I don't think the solution here, it lies within us determining what's valuable or how much effort should be valued. I actually think that that is up to the consumer and the way that they make that decision is with their purchasing power or their consumption and their attention, right? >> Yeah. >> Where I think we need to spend time on solving is like, what are the consequences to people who are putting content out there that no one cares about? Because there is a cost to serve of maintaining music on servers. And it wasn't possible in a retail world because space is limited. There's no space. And so there were consequences if you tried to put content out there. And it didn't sell. You had restocking fees. You had overage fees. You had warehouse fees that you had to pay as a business. So you were more intentional with what you're choosing to invest to put out into physical product. And that still exists largely online, right? Obviously with fast fashion, you can have turnaround times much sooner. And so you can produce a lot more shit out there than what is necessary for people to actually consume. But there's still a cost to carrying extra in excess. So I think we need to think about what that looks like in a digital world. And there's rumors I've heard of various DSPs who are twang around with fees. Where they're going to charge distributors for content that's below certain thresholds and maintaining it. There should be a shelf life of music. So if your music's out there and it's not being consumed for a period of time, it should be taken down. The shelf space should be cleared for someone else. And if you as an artist are still active and you want to pursue that, then you just have to re-upload repackage and reposition. Yeah, or pay some sort of a fee to keep it up for a certain period of time. But I think you need to think about repositioning. I think you have to be more intentional because if it's out there exactly as it was and no one's consuming it, you have to think of a way to reach audiences differently. So I think you should be forced to repackage it in a way. Yeah, I mean, it's interesting. I have had multiple streaming services, some on some off-record, expressed to me that they are very concerned about the amount of storage space they require. At this point, to hold 100,000 plus songs being uploaded every day, and not even just songs, white noise content, AI songs, whatever. Just sound. Sound, media files. And I've asked Spotify multiple times. They say they don't have a problem with it. I do imagine that maybe they're all data centers. Well, yeah, I imagine because they are the biggest fish in the pond. It might be less of an issue for them than it would be for like co-buzz or diesel or these smaller streaming services that are not able to devote the exact same resources that a Spotify can. It's a problem for another one of the big ones. And I've had conversations with people who work there. And it's not so much about restoring it. It's about the cost of merchandising and curating it as well. Okay. So like algorithms, editorial staff. Yeah. Okay. Interesting. Listening to it for fraud, detecting it, like having to run various, not test on it, but just like being able to drive various metadata tags and, like, sort of like ability to know how to place it in the digital sphere, which goes back to curation, I guess, because that's sort of the purpose for it. But you're scanning all the music. Yeah. You're still having to run stuff against it. And you're still having to maintain it because it is copyrighted information. So there is a cost. Now, could it be nominal? Sure. But at high volumes, what we're dealing with today, it's costing, I think, the worst part of it for my lens is that it is making it harder for artists who are career artists. And I can't define that other than they have decided to dedicate most of their time to trying to turn music into a business. Yeah. To stand out because there is a lot of stuff out there. And I think part of the promise of digital streaming and all it like the democratization of social media was that every niche would find its audience. And I would argue that we're actually being pushed to more of a monoculture than ever before. Oh, that's interesting. Okay. You think it's being pushed more to a monoculture? Yes. Why do you think that is? I think it's all not all. So like, one of my issues with meta and like Instagram, yeah, is that it's so highly connected to my social graph. So if I find something and I like it, it's going to be surface to people who follow me that have somewhat similar tastes simply because they're connected to my social graph. Okay. Yeah. I've gone as far as to recently create like different accounts where I'm not connected to my phone. I'm not connected to my social graph. So they can't necessarily derive who I spend time with other than the proximity that I spend with them because that's a dimension that they look at. Like, they know that you and I are together in the same room right now. They do. They're watching always. I do that in an effort so that when I'm discovering new music or new artists, like there's not as much of a signal author and it's not being served to other people that I know in the industry. Well, that would be so funny if it's getting served to other people who are doing essentially like talent scouting A&R work and then it's like we're all competing over the same thing all of a sudden. We're seeing that now aren't we? Like everything's a bidding war. Everything is a bidding war. Everything. It feels like no one can actually really get too early on anything because we're all using not we I don't do this. All my friends who are in A&R are all using basically the same hacks in the same metrics and everyone has access to the same metrics. In some ways that's great but also it leads to a bunch of bidding wars. But yeah it's interesting you said something earlier that I really liked. You're talking about how like kind of the listeners decide what they want to listen to and it really shows when people just don't really want to listen to whatever the content is. For example, I know that for AI music 100% AI music whatever. I think it was Oliver who said that AI songs are only 0.5% of listening on Apple Music. And so the market is showing that there really is not much of an interest in AI generated songs quite yet. I do wonder if that will evolve in change over time. It does feel like people are very negative on AI music right now, which is understandable. But another interesting layer to this is I'm just throwing out all my facts here. But like, Dzer has done so many studies and so much research on this space. And they released a figure that I thought was really shocking. They said that 97% of people that they surveyed could not tell a difference between AI music and non-AI music. Got that good? Yeah. So I'm kind of like I wonder if that shares. I think because it's gotten so good to the music that's commercially available, which isn't as good. Which way is it? I mean, everyone uses like the term of like, oh that's AI as saying, as like a shorthand for saying that music sucks now. But it's funny because yeah most people cannot tell the difference. Very vast majority of people can't tell the difference. So I mean, I just think it's really hard to surface artists. Another layer to this is that there's been a big decline in gatekeepers. Getting on a top Spotify playlist used to totally make your career overnight. That doesn't no longer the case. And you can't get on it just because your song is being pitched. You have to create a spark elsewhere. Yeah. That was I think our last big gatekeeper era. If there is one Spotify playlisting. But on top of that, I mean, you know, you're not saying Apple Playlisting because Apple's editorial thing that they try to sort of tap more so that it's more human. Yeah. Well, yeah. That I mean, what they do to me feels like a radio service. I do think that it's clear based on speaking to people in the industry that particularly a Spotify playlist can make or break things. Like anecdotally, I had a friend who was managing an artist who got number four on Laura when that was super, super hot. And they just got calls from everyone the next day. It was as easy as that. And she did end up signing. That no longer for the last few years has been making a huge difference in an artist's music's trajectory. And you know, we've also seen the decline of other gatekeepers, you know, your late night shows, press, radio, all that stuff is kind of like you have to make the spark yourself and then maybe we'll notice it. Yeah. And for some artists, it does help because there's some artists who you don't really know much about that seeing them being a little bit more casual and funny on a Jimmy Kimmel Show matters, right? It does matter. I don't want to say it doesn't matter. It's part of building the narrative, but it's not a launching pet anymore. Yeah. Well, it's not going to make a break your career overnight. But it is, I think all of those elements are still important, especially. I think a lot of people are talking about clipping right now, which has been a thing for a while, but clipping up a late night show is more valuable than being on the actual broadcast of the late night show. It has more reach. Yeah. And I think clipping is powerful when a song needs to be heard in a bunch of different contexts before it fully resonates with someone because that used to be the case. Like radio used to do that for us. Used to be out shopping listening to a song. You were stuck in traffic listening to the same song in the radio. You were at home getting ready. You're cooking dinner or passing by a story. You were shopping at right? Like you heard the same song in so many different contexts and maybe the first five times you heard it. It like whenever you're head and you weren't conscious of it. But then maybe there was a context at a restaurant when you were on a date and like you heard a song and it like suddenly like resonated because it imprinted in your brain as a memory of that connection. And then later you hear it and has a totally different emotional response for you. And I think we're probably going to get into sort of some of that music in the questions later. We don't have that as a society anymore in the same way. And so I think what clipping is doing is it's creating and testing a bunch of different contexts, both visual and lyrical, or melody I guess, and lining up all three of those elements into one piece of content and testing the shit out of it to see if they can get it to resonate with the certain audience. Okay. One thing that people always like to say these kind of music industry pundit types will say is that you know it's never been better to be an artist than today. You have all these tools that your disposal, you can release your music by yourself. Everything is so cheap. I do think that that point is up for debate though. What do you think? Do you think that this is the best time to be an artist or no? No, because you can't just be an artist. You have to be a media creator and you have to be a marketer and you have to have a point of view on who you are and how you position yourself and you have to think about that in the context of various ways that you appear, because before you used to think about how you appear in press versus how you appear in a live show versus how you appear when you're recorded. Now you have to think about that so many different ways because even when you look at social, it's so different. The way that you would talk on a TikTok versus the way that you would post content on Instagram versus a YouTube or a Reels or keep naming it, right? There's so many different places that you're expected to appear and sometimes you don't want to appear yourself and you don't want to do it at all. Then you have to rely on other people and your fans to create that content for you because if you're not on there, you're not relevant as the unfortunate reality. We have these conversations with our clients all the time. There are some clients we work with who are not active on social media. Then it's a matter of do you have a rabbit enough fan base that's going to be amplifying everything that you do without any effort on your end? If you don't, then we have to rethink about that. Then we have to rethink that and get creative and how we do that. That's where things like clipping agencies become helpful or managing fan accounts. It gots me so much. I was reflecting on a call that I had last week with an artist who we just signed and they're going to be touring internationally, but they don't have fan accounts in those territories where there's other, they're not native English speaking territories they're going into. Part of me, hated the fact that my recommendation was that we need to create those accounts and manage them and amplify the content because it needs to be translated. This is an artist who's not active on social media. This is an artist who doesn't want to be hosting a bunch, but they're also so curated in what's out there about them. It's really challenging to come up with strategies for the various types of artists that exist today and you end up having to either, yes, it might be less to produce content and to make music today, but it's a lot more expensive to cut through into market. Yeah, that's a very good point. On a recent episode of this podcast, I had on the founders of chaotic good. I don't know if I met them. But yeah, that went more viral than I expected. And it's part to very big conversation about digital marketing and I think a lot of people felt like they had been duped that record labels are doing all this nefarious stuff to manipulate algorithms that no one had any idea that they were doing. I think the rebuttal to that though is for certain artists like you're describing, they might be a very curated person. They're not necessarily great at making a TikTok video every single day or multiple TikTok videos a day. And this is one of the only ways it feels like the industry is found to combat or to help an artist like that because we're in an age, not just a volume on streaming services, but also volume on social media. So so much slop. Yeah, it's like fighting volume with volume, basically, which is only possible in a world where posting distribution is free. Yeah. But I do wonder though, we're fighting volume with all these clips, all this more volume on social media. Where does this end? Like because we're contributing to the volume. Oh yeah. And then it just keeps getting bigger and bigger and bigger. And so the cost to participate in artist marketing is now getting more and more and more. I don't, where do you think it ends? I don't know. And that's one of the reasons why I'm really frustrated right now. It gets really hard to set and be intentional and incredibly authentic in an environment like this. And I also wonder how AI is going to increasingly play a role to help everyone keep up with the volume that keeps mounting and mounting and mounting and digital marketing. Well, it's making it worse because you can clip a thousand different videos now in a matter of minutes using AI. Yeah, before you needed a human editor that was. It was like yeah, clipping it out, which I mean, obviously there still is a benefit to having a human being carefully clip those out. But there are some people who just don't care. They're just as many clips as we can make of this one performance. Let's just put it out there. And I've heard TikTok is coming down on this. Like there are a lot more conscious of all it like these clipping accounts or the ones that post mostly clipped content. And I think if there's not real authenticity behind it, like they'll shut it down. But I can't like get over the fact that I like I've started paying a lot of attention on who follows me and my social media accounts. And I click through it. So I don't block my because I don't want to. But I do review every person that follows me, and I'll block individual accounts that do not seem human to me. - Really? Yes. - Wait, what's the benefit of doing that? - I just don't want that. - I'm also a little bit cautious of the security issues around being public on social media, and I've been hacked in the last year, and I've had stolen some super sensitive to that. - We don't physically stolen. - I have my car stolen in front of my house. - Wait, are you serious? - In January, yeah. - It's a bizarre story. I've had a lot of money stolen also. - Oh, it's been hacked, yeah. - Okay, this was good for me to know as I continue to post on social media every day. - Yes, don't reveal where you are, don't reveal personal images about yourself. I mean, there's a whole lesson I've learned. - I do feel like I learned actually a lot from Kim Kardashian's incident in Paris, where she was robbed, and it was because she had just posted, I believe this is the story, sorry if I'm wrong, but I believe the issue is that she had posted that she was in Paris, and so people tracked down what the hotel she was staying at and caught her there. - I now implement a policy, if I'm only posting a story after I've left the place that I was at. But yeah, you just never know. People are really, really talented at doing bad things, which I guess brings me to another point with this whole discussion about how much music there is out today. There are also people out there who are not putting out music with good intentions, so they will put out maybe like a spam, equivalence worth of content, just tons of music in the hopes of running a bot farm on it, artificially streaming it, which ultimately does steal money from a royalty pool, which is divided up among real artists. - Correct. So I'm wondering when did you notice that streaming fraud or artificial streaming was starting to pick up on streaming services and become a real problem for artists like the ones you work with? - It's interesting because we haven't felt that pain as much as a lot of other distributors because again, we're curated. And so we choose to work with our artists, we're not that hands off, we're pretty hands on the marketing strategy. So we typically have an idea of who they're using as vendors and what they're doing. There are definitely cases where the artists and their management team are ignorant to who they hire and who those people are hiring to execute some of the work. And I think that's where we've been the most able to witness that I would say. - So true. - Don't hire someone on five or to put you on playlists. - Or like a lot of these marketing companies that just do marketing services also inflate there are a Y-B hiring, you know, various strategies and firms and like I've heard as much as like that some of our competitors or one of our competitors has bought like over a million iPhones and hand them out. - A million? - Yes. Huge investment to make. - Wait, a distributor has hired or has bought a company. - A company has bought a million iPhones and hand them out. - But like as a distributor, it's not really like on you how many streams. Well, I guess. - No, it is. - 'Cause you're also a marketing agent. - Yeah. - Distributors have to be marketing agencies now. - Yeah. - Well, it's okay, let's make this down. - Especially like the higher tier ones like STEM where it's like you're doing playlist pitching people and like these other. - And marketing services. I think let's clarify, right? There's delivery services. I would put companies like District Head, CBB, and Tune Corps under the brand Tune Corps as delivery services to get you music up there. Some of them like to lost in Tune Corps I would say have a new tier of service. I think District Head's experience with this as well where they have more hands on artiservices, right? - Oh yeah, two big solid. - Or a distribution. - All it. And then there's distributors, whether it's companies like us or the major label on distribution companies, like the Virgin's and the orchards and whatever ADA used to be and whatever it is now of the world delivery services wouldn't care because they're getting paid up front for whatever music they just care about volume. But distributors care because again, your job is to find not only deliver, but to distribute and distribute means drive attention and awareness and positioning in the marketplace and the music. And they're economically in line 'cause they're participating in the part of the revenue as well. - Oh yeah, so true. Yeah, the economic model is different. It's not just a flat fee. It's you're taking a percentage and interesting. - If you're releasing music, you should be collecting publishing royalties. Get over one billion in publishing royalties go uncollected every year. That's where cosine comes in. Cosine powered by cobalt gives artists and songwriters access to cobalt's best in class global publishing administration services. But in a highly streamlined format and with the flexibility to cancel on a rolling quarterly basis. In just one year, cosine has grown to represent over 65,000 songs. This includes songs from Billboard Top 10 producers, to rising artists and industry veterans. And unlike other publishing administration services, cosine is available via application and invite only, allowing them to stay focused on delivering premium service along with world class collections. Applying to cosine is quick and easy and applications are open now. Learn more at cosinemusic.com. That's k-o-s-i-g-n music.com. - I also wanted to ask you about how this increase of volume has led the major music companies to increasingly get interested in distribution. Can you tell me a little bit about that evolution and how they've continually invested in these distribution services? - I think it's because they just want to be in earlier. You just don't know what's going to stick, right? And you want to be on top of the trend and you want to be early. And so what a better way to be early in their opinion than to open up the funnel. We did the opposite. We closed our funnel. We were super early. And we, I don't know if you remember this. So STEM has never been a long-tailed distribution service. We've always been in-by-d-only. There was a moment in time where on STEM because we always paid out multiple parties for a song. So you would get an invite into STEM if you were my collaborator getting paid on a song. And there was like a four-month period where you then also had access to upload your own music. And so by nature of that network effect, we grew exponentially because our collaborators were then uploading music. And so we had a lot of volume. And it was a range of artists that were well-known for us to be working with that are now huge mega-superstars to your friends from high school's cousin making music in their bedroom. And that just didn't serve the problem we were looking to solve. It made things a lot more difficult for us because I don't want to be in the volume business, right? We're here to serve a very specific segment of the market, which are career artists who want to be autonomous. I can't even say independent because they might be independent for one project or two, but they might choose to work with a major for something else and have them feel like they can be successful doing it on their own terms. So for us, being the volume business just doesn't work. And we thought that it was a big distraction. It was also very costly. We looked at our Uniteconomics and our Costs to Serve. And we said that that's just not how we want to structure our business. Because we didn't want to charge our flat fee. Because again, we want to be aligned and incentives with our clients to help them make more money and help them reach more audiences. We shut down the ability for people to upload content. And we went as far as to even help them migrate their music over to another distributor. And moved it off our platform. And we consistently revisit our client base and we have honest conversations with them whether or not with the right partner going forward. It's an ongoing conversation that we have because we want to manage our volume. So when did you make this move? So the first change, the big announcement around like, ending the call it like, virality and like the top of funnel access was back in 2019. I want to say. Mm-hmm. OK. Yeah. And it was really controversial at the time. Yeah. And it turned out it wasn't so controversial because Spotify shut down their long tail initiative too when it came to direct distribution. Can you explain that a little bit more for us? Yes. So there was a moment in time where Spotify wanted to enable anyone to release their own music on Spotify. And they were a little bit more curated with it and they ran the experiment. And then they realized that like, it was not a great experiment. So they shut it down. Yeah. I think there were others that tried that too and decided it wasn't right for them. And what we realized is that like, we can still drive the right type of referrals and business without having to catch everything just by being intentional with the relationships and having great taste makers in the business in the building. So we have our artist relations team whose job it is to get to know all the managers and all of these sort of pockets of all like creator groups that are happening largely domestically because that's where we focus. We're not really in an international company yet. And being smart about like what we bring in and what we double down on what we bet on. Well, I think another thing to discuss in this conversation all about volume ending up on streaming services is that now with streaming because there is no pay wall behind or preventing someone from listening to any given song. Not only are new artists competing against other new artists, they're also competing against every artist from the past. Correct. And so I wonder for you, how do you think that's impacted the frontline music industry? I mean, the first place my head goes to, which is not answering your question, unfortunately, is just how much music's being remagined, right? How many samples from the past are reemerging in new music? Yeah. And interpretations, there's more remixes, there's more sampling. Yeah. And I think what's interesting is a lot of people who are not in the music industry wouldn't know that some of that is completely intentional. So coupled with everything that we're talking about here, the catalog market is really hot right now. now. And so there are a lot of catalog buyers who are looking to up the value of the asset they just bought. And so there are things called flip camps that are starting to take place where people will say, "Hey, I just bought this catalog from Jeff Leopard or whatever. Come here and remix it or interpolate it, meaning like taking the melody of it and make it into a new song." And that actually has done really well. A lot of those songs have ended up on the Hot 100 because I guess it just proves that people love nostalgia. And we actually don't want something that's too new. Sometimes it's interesting just how much the catalog game has coincided with this, you know, emergence of more and more frontline acts. It feels like with streaming's infinite shelf, another thing that I've seen start to happen is that there are artists like Morgan Wallen, Taylor Swift, Drake, there's so many others I could name, I'm not trying to single them out, but there are a lot of artists like that that are starting to release extra long albums. So like 30 plus songs on a given album. That was not a thing really back in the days of physical. If it was, then you would need to do a double vinyl. And that's so expensive that why would you do that unless you're a big star. Which they're all big enough, or that would be justified. True. True. Morgan Wallen is doing well. And so is Taylor or so straight. So, but I do wonder, do you think that these albums are getting so long, almost as a way to combat how much volume there is out there? Does this just give artists more shots at getting a hit? I think it just makes it easier to qualify for RAA Miles Stones as an album versus singles. You have more at-bats. Yeah. So like every time the streams are counted, if you count 30 songs, 30 streams. Yeah. I think that makes sense. I think I don't know if that's like the only thing driving it. It's definitely a benefit of that strategy. It could also be that they just made it. I mean, the amount of music that's being made even in these sessions before they put together the album probably makes it harder for people to decide like what actually makes the cut. Yeah. Well, I mean, and also there's just the simple fact that you can put it all out. Yeah, why not? I'm sure it has been historically very challenging for artists to narrow down their favorite 10 songs from their list of 50 that they've made. And so now you kind of just don't need to. Maybe. Right? More shots. I think another interesting thing that kind of goes along with all of this is that we're seeing viral moments happen both from songs that are brand new and also from songs that are a few years old. Dominic Fike right now has a hit with Baby Doll, which was released in 2018. Why did that not go viral in 2018? I don't know. But virality is definitely a big thing that is putting small artists on the map right now. Sorry, Dominic Fike is not a small artist, but I guess he was in 2018. He was. He was emerging then. But I'm wondering for you, how do you advise artists when they experience these viral moments? How do you help them make that from a viral moment into a lasting impact and a lasting uplift in their career? You have to understand what is the source of the virality? Right? What registered? What hit? What got traction? Why? With what community and where do they live? What also they listening to? What does that tell you about your fans? And how do you double down on that investment? And what is the peripheral fan base next to that? And how do we invest in having that leak over? Which by the way, is impossible to do if it's manufactured using clipping agencies or farms or anything like that, right? Like you that's when you see the big hip and then it just drops off because you can't do anything about it because it's not natural. There's no narrative. There's no purpose. There's no intention. So how do you know when a viral moment is actually real? You look at the source of stream. Okay. You look for themes. You look for repetition. You look for patterns. And I imagine that's what a lot of these algorithms had Spotify and Amazon and Apple is all using for detection of fraud and streaming fraud. Is that there are no clearly human patterns or natural human patterns I would say? Interesting. I mean, we've talked a lot about AI music in this discussion and we talked about how many songs are being uploaded daily. Do you think that the solution for all of this music is essentially algorithms getting better or you know, essentially more AI in a way to sort through all of the most technical AI? Well, to detect the AI, but also to recommend songs that actually do deserve to be pushed through the gigantic. No, you should be I think a filter needs to come through and I think the barrier to entry needs to be brought down so that there's that content with real intention comes through and everything else gets stopped or slowed down. So how would you envision that actually looking in practice? I think the cost to publish should not be free. I think there should be a cost to maybe not pushing content out in ish lane publishing it, but maintaining it if it's under certain consumption threshold where it's not generating a thing to pay for itself. Do you have any idea what that threshold should be? No, but there's people much smarter than me that have a lot more knowledge of what the cost to serve is. Yeah, to come up with that threshold. Fair enough. I mean, that reminds me of streaming 2.0, which was this big push that happened a couple years ago. I believe the years would probably be 2022, 2023. We see in Grange the CEO and chairman of Universal Music Group was talking about this a lot and this is a big initiative for him. And basically I think he surveyed what the landscape had ended up being like 10 years in streaming and saw that there were some things that might need to be changed. And so part of his push involved this thing called like adding a threshold. And so it's different for every platform, but basically you do not earn royalties until you hit that threshold. Sure. Because the long tail had gotten so incredibly long that there are so many people that weren't meeting the threshold, but they got half a penny. Yeah. And so those half a penny's were leaking everywhere. They're just going all over the place. By the way, I do agree with that as one of the strategies that should exist. Yeah. Yeah. I don't think it's the only one, but I think it's one of many. It was something that really upsets certain people. Yeah. Until they fully understood it. Yeah. I think, yeah, I think mostly I do understand that criticism, one of the criticisms that I heard that I thought was pretty fair is just that like, you know, the world's largest music company is pushing these new policies, which ultimately, well, I didn't finish explaining the threshold, but the idea is all of those saw all of those pennies that would have kind of leaked out to the long tail will be redistributed to people who've been above the threshold. So the idea was, you know, you know, UMG is pushing something that will benefit them, which is fair. I don't think it's just that it benefits me too. Yeah. No, that's my rebuttal to it. It is like, I mean, anyone who's running a distributor that's not a DIY delivery service could benefit from this. Yeah. Yeah. And I do think the redistribution will benefit the middle class most. And I think a lot of those people who are making music that are below that threshold, unfortunately, else label them as hobbyists. And if something is a hobby, you're typically spending money on doing it. You're not making money. You could be, that's amazing, but that's when it becomes something that may transition from being a side hobby to something that's more of a sustainable all it like, not necessarily career, but a side. Yeah. Business or side, and slayer revenue stream for yourself, which I'm all for in this economy, right? Like, I do think people should have the opportunity to create wealth for themselves. That's scalable. That doesn't correlate with the time they're putting into something. Mm-hmm. Another thing that was part of streaming 2.0 was targeting what Lucian called functional music. I think I've also heard terms like non-music. Yeah. This goes back to noise as well. So basically sounds or audio content that is not music. It's not a traditional song. So it could be anything from a bird's sound to white noise. Yeah. And basically the big push during streaming 2.0 is that, you know, those things should not be valued the same as a regular old song. And so they ultimately are on many services today being paid a lesser royalty. Mm-hmm. To be fair, there were, I know I personally know people in the music business that had a side hustle putting out white noise and then using their connections at streaming services to try to like boost up this random white noise album that they put out. So I get it. But I'm curious what your thoughts are on it. Do you think that that was the right approach to deal with this influx of non-music? I don't think you can have that approach unless you're willing to define what value means. Like what music is valuable and what music isn't. I know artists who are sitting on hundreds and hundreds of songs that feel like fast fashion to them because they're able to make that music so quickly and so easily without that much effort. Mm-hmm. And if they put it all out there, it might have a lot less value to a listener than a scientifically backtrack that someone research to come up with the right sound to put someone in a meditative state or to put them into a flow for work, right? And I think until you define the value and the effort and you're willing to create parameters around that, it's a pointless conversation. I wrote a story about ambient music and kind of this very experimental side of ambient music where I don't even know if it's music at that point, but it's something that someone poured their heart and soul into. And I kind of use that story as exploring the edge cases of some of this stuff might be automatically flagged by whatever detectors these streaming services have as non-music. But also it might have been someone's artistic intent to make it that way. - Yeah. - So you have unfortunately this category where there are people who are trying to game the system to earn extra money on the side. That's probably the majority of those people. - By the way, there's people doing that with human artists. - Yes, for sure. And then when you get into the AI stuff, it allows you to make a supply of content much larger, much faster. So then you can spread it out and be even more sneaky about the weird manipulation you're doing. I thought that story was really interesting to do because it allowed me to talk to some ambient artists who are like, I made a nature sounds record and I'm extremely proud of it and I traveled all over the world to collect bird sounds and this is my artistic intent and now it's worth, I forget what it is, maybe an eighth of this, a break through or stream or something like that. - Okay, so we've talked so much about volume here and how it makes it increasingly hard for a young artist to break through with their music. I'm wondering though what advice you would give to a young artist who is exasperated by this issue? They really want to find a way to break through. Do you have any tips or advice for them based on what you've seen? - I think the biggest thing is figure out who you're making music for. What is their call it customer journey, like fan journey? How are they behaving in the world? What else are they doing? How do you reach them where they already are and tell them something that they need to hear? 'Cause that's what I think the purpose of music is, is that the fans who relate to something, it's because they needed to hear it in that moment in that context, I think you just have to focus on the intention behind what you're saying and who you think needs to hear it and focus on how you can get it to them in the most efficient way possible. - Well, that's great. - Is everything else just amplifies it? - Yeah. - Everything else is if you can get the core growing, then you can start thinking about how do you double down on what's already working and then how do you spread that to a J-Send fan communities or a J-Send audiences? - Yeah, I think that's creative advice. So as we wrap up this episode, we always play a couple games. So are you game for a game? - Always. - Okay. - So my beautiful DIY wheel, this is a segment that we call, spend the record and I have a bunch of fun questions on here relating to our conversation and relating to your work at STEM. So if you could just. - Oh, you already wrote that many questions? - Oh, yeah. - Oh, yeah. - Okay. - We come prepared here. - Great. - So just spend the wheel and let's see what it lands on. I'll read it out. It's actually a pretty good spin. - Well, it's kind of in between two. - What are your tips for picking the right distributor? - Figure out what you need help with. Some distributors are really good at digital marketing. Some distributors are really good at content creation. Some distributors are really good at international. Some distributors are really good at, I wouldn't call it ANRing or Project, but getting more involved in the earlier point of creation having a real thought partner in the process and because you need the money, right? And some are just really good at giving you money and getting out of your way. - Yeah. - Decide what it is you're looking for and map to that. And I think the other point that's really important is, don't sign with the company, sign with the person. Because every distributor at this point has a point person, a point team will be working with. And just making sure that they're the ones that you'll be working with through the duration of your release and that they're actually gonna be there still 'cause there's some that have a lot of turnover. - You read my mind. I was about to say, what if your person leaves though? Unfortunately, that is the music business right now. - That is. - Speaking of what you were saying earlier at the very top of the conversation about how there was this time period around piracy when so many people at major labels got laid off and it led to this growth of independent sector. The amount of people that I know who have been laid off in the last two years is insane. I'm hoping that it leads to this beautiful resurgence of independent music companies and stuff, but. - There's been a lot of consolidation. There's gonna be a lot of fragmentation as a result of it, as always. - Yeah. - I know what this time takes. - I don't either, I don't either, but it's funny. I pitched the idea of a story about, like, you know, how could all of these layoffs lead to this beautiful resurgence of the independent sector? And one of my coworkers was like, I think I've written about that before. She's been a billboard for like 20 years. And I was digging through the archives to see if I could find it. And I found she wrote the exact same story in 1998. - That was 1998. - That's her days. - Yeah, it was like right before an appster, this was where UMG became what it is now. Essentially, there was a bunch of consolidation. And a lot of people lost their jobs and she posited the exact same thing back then. So the more things change, the more they stay the same. But let's get the wheel one more spin. What is the biggest lesson you've learned on the job at STEM? - This is one that I say all the time and it really is the simple for me. Do what you say you're going to do when you say you're going to do it. And if you can't, get ahead of it and tell people why. - Mm. That was great advice. It is just like, it's that easy in this business and it is not to be taken for granted 'cause it's so freaking rare. It drives me up the wall. - Yeah, I need to take that advice, unfortunately. - That is like the lesson. Everything comes back to that. And actually the other thing is, if it's a maybe it's a no. Every mistake I've made in decisions and that decision could be everything from partnering to hiring, to putting something out in the product, to something I've said in the press, if it's a maybe it's a no. Like follow your gut. Your gut has been oriented with you for as long as you've been alive and it has the ability to make decisions or guide you when you're entirely subconscious. Like I think your brain is not the only thing that guides you. - That's great advice. Okay, so we're moving on to what would you cue? Which I ask every time I do a podcast here. - Okay. - So what would you cue to take you back to your childhood? What's one song? - Thing that comes to mind are my first few CDs that I ordered off BMG, right? Which were TLC boys to men and all for one. - Ooh. - And then shortly after Spice Girls. And the amount of time that I spent in my childhood making up dances, trying to recreate the costumes off the music videos that I saw on MTV, that is my childhood, right? That is what I spent all of my free time doing. So any of those songs on any of those albums will cue that for me at those memories. - That's great. Okay, what would you cue to represent your favorite era of music? - Like my late teens into my early 20s, which was the resurgence of dance music. So I grew up in Detroit. I was really close to Windsor. There were really fun raves that were being thrown by Richie Hahn and Derek May. And that's really when I fell in love with music. Was just sneaking into Windsor and like going to those parties. And then after I moved to LA, it was very much like the pop emo scene here, which was fine and fun. And like I love Paramore. I love a lot of the bands that came out of that era. But I still loved dance music. And I think in the, probably early 2010s, in the 2010s, is that we call it? - I guess so. - How do you describe the 2012, 13, 14, 15 of the world? - Yeah. - 2010s, 20 teens. - Yeah. - Which was dominated by like the Dutch DJs. I thought that was a really fun era. - Yeah. - Is there one artist in particular that we should check out from that era? - Everything that was a VG and Afrojack, right? 'Cause it was like dominating the festivals is the beginning of like the Calvin Har, not the beginning, but like that's when Calvin Harris and T. Bayoki and Dylan Francis, and all these guys were emerging. It's funny, the DJ who I love back then, who's now like becoming the cool guy Solomon. - Oh nice, early on Solomon. - Yeah. - There we go. I love that. Okay, what would you cue to remember your favorite concert? I'm gonna give a shout out to my husband's artist and this one. And because it's top of mind, right? Carol G. Afkochala. One of my favorite shows I've ever been to was her show in Columbia, in Medellin and in her hometown. The energy, the venue, the music, the dancing, it was just so much fun. I also love seeing more on drugs. I don't listen to their music that much, but I like loved their show that I went to that was either, and I can't remember now if it was at the Greek or the Hollywood Bowl, but it was in one of those outdoor theaters. - Oh, I thought. - So fun. - You can't be Greek or Hollywood Bowl to me. - Well, the ambience is just incredible. - It's so much better than anything else. - Yeah, but it doesn't work for our v-artist. - No, no, no, you have to be a certain type of artist. Otherwise, it feels a little bit too, like I'm sitting on my seat. I'm removed from the experience. Some people are standing remotely type people, but. - I will say one other show that I thought was super fun that I wanted to this year, which was entirely unexpected. I saw one of our upcoming artist masterpiece in Brooklyn at a small venue with like 100 people, and I've never seen kids jumping so high for so long. They were just like so into him, and I loved watching every minute of it. - I feel like that's what this is all about. Is actually seeing the legitimate impact that the artist that you work with have in real life. - I've also seen their fans react when I go to those shows. I'm watching the show, but I'm more watching the fans, 'cause I'm so curious to like who's showing up. What is the demographic? Why are they here? What are they wearing? Who are they with? How are they moving? Like all of those elements, I think are really important to absorbing when you're deciding on how to help position an artist. - Yeah. Well, Molana, thank you so much for coming to our director. - Thank you for having me. Such a great conversation as always. - All right, thank you so much to Molana Lewis for joining me to talk about the crazy amount of songs that are being released every day, and how that is impacted. the music industry. And thank you for listening to this week's episode of On the Record. If you like today's show, give us a follow on Instagram or on our brand new TikTok page at Billboard on the record, where you can find new clips of the show every single week. We'd also appreciate it if you rated us on your favorite podcast platform. All of these things help on the record grow bigger and better than ever. Again, I'm your host Kristen Robinson and tune in next week for another Pete behind the curtain of the music business. I'll see you then. [Music]