VLOG #6: Streaming Royalties, Music Marketing, Budgets & More

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VLOG #6: Streaming Royalties, Music Marketing, Budgets & More

Hey folks, Matthew Weiss, and welcome to the
Friday show.

We’re going to kick this off with a little
bit of news.

There was an article put out by Engadget that
is pointing out the discrepancy between the

amount of music income based on streaming
revenue and music income based on other sources.

Last year, 2016 notably marked the first year
in which streaming revenue surpassed all other

forms of revenue coming into the music business,
including digital downloads, CD purchases,

vinyl purchases, cassettes, etcetera, etcetera.

Now we’re seeing that trend continue, and
the discrepancy is growing further apart,

with the streaming revenue increasing 17%,
while the digital downloads have actually

decreased by 24%.

But there’s something more interesting in
this article.

Engadget is pointing out that subscriber based
revenue to streaming services is hitting 1.7

billion, but the ad supported free services
are only hitting 273 million, which is way,

way less.

So what does this mean exactly?

Well, it means that the way streaming services
are distributing their revenue is changing,

and in general, artists are actually starting
to get paid more based on streaming services,

and there’s been a lot of controversy around
these services in the past, and still to this

day of course, and we’re going to start with

So Spotify claims that they pay 0.6 cents
to 0.8 cents per stream.

However, a lot of research has shown that
those numbers have been closer to maybe about

0.4 cents per stream, and where that discrepancy
comes from, I don’t really know, I don’t even

really want to get into it.

The bottom line is that now, because there
is more operation going on, even if the actual

percent of the streaming value is low, the
total payout is getting higher and higher

because there are more users.

Now let’s compare that number really quickly
with Terrestrial Radio.

Terrestrial Radio has paid out two cents per
play, which is five times more, but I’d like

to point out a couple of things that are very
important to consider when looking at these

numbers, and I’m going to actually kind of
stick up for Spotify a little bit here, which

I don’t traditionally do, but when Terrestrial
Radio came out, the pay per play was based

on the station itself.

So every station was paying two cents.

However, streaming, it comes from the other
direction, it’s per listen.

So while radio stations are paying two cents
for every time it hits the play button, Spotify

is paying 0.4 cents for every time someone
else does, which means a much larger group

of people clicking that button.

The other thing to consider is that Terrestrial
Radio demands that you have a Terrestrial

Radio receiver, which is traditionally found
within a handheld radio device or a car.

There were limited positions in which you
could actually play Terrestrial Radio, whereas

with the streaming service, you can literally
play it on any device almost anywhere.

You could be jogging, you could be at home,
you could be in the car, you could basically

be wherever, and you could still be generating
those streams.

So I’m going to say that while I don’t absolutely
love the 0.4 cent number, I don’t hate it


I think that it’s good.

I think it could be a little bit better and
still be fair to the company, but I think

that we’re in the right ballpark.

Now, of course, not all companies are created

Let’s take a look at another common streaming
platform, SoundCloud.

SoundCloud pays out nothing.

I cannot imagine why anyone puts their music
on SoundCloud.

Anything that I produce, I stipulate very
strictly in the contract, if I have control

over the situation, that the music is not
to go on SoundCloud.


It does not pay anything.

Does SoundCloud have a way of monetizing?

Yes, it has a premier partnership program,
which means major labels are able to cash

in and that’s it.

So if you’re on a major label, congratulations,
you’ll make money off of SoundCloud.

How much?

I don’t know.

I couldn’t find any information on it.

I saw a few estimates that said something
like 0.25 cents.

Something like that.

But even that, I don’t really know how accurate
that is.

Of course, people will argue that SoundCloud
is good for brand building.

Personally, I don’t see it.

Maybe there’s something that I don’t know,
but first of all, the sound quality itself

is so bad, it actually interferes with the
enjoyment of the song to my opinion, and I’m

really not precious about that stuff, even
though I’m a mix engineer.

Also there’s no component for visuals.

There’s really very limited space where you
can put up any kind of artwork or any kind

of visual media.

I don’t think you can put video at all, which
is a good segue to talk about YouTube.

Now, YouTube also pays out notoriously badly.

Not zero, but something about 0.1 cent per

The thing about YouTube is that while it does
not pay well, you can put up a music video,

which does supply a good branding opportunity,
and I can get on board with that to a certain

extent as well.

Also, it might be worth noting that branding
opportunity that you get from YouTube does

not necessarily cannibalize streams from a
platform like Spotify or Pandora, because

you would not be watching a music video in
the same context in which you would be listening

to a stream off of Spotify.

Maybe some overlap, but probably not a lot.

So now let’s talk marketing and forming a
comprehensive business strategy.

One of the fallouts of the streaming revolution
has been that it’s a pretty open platform

for any artist trying to make money, whether
they’re on a major label, whether they’re

on an indie, whether they’re completely independent.

Basically, a view is a view is a view, and
that’s what these companies are trying to


That interaction.

So if you can get it, you can get it.

Now, what does that mean in terms of marketing?

Well, let’s take YouTube for example.

The estimates that I’ve heard for getting
a million organic views on YouTube is about


Now, we’ve already talked about the payout
on that, what you’re going to get back is

somewhere between about $1,000 to 3,000, so
congratulations, you’ve just lost at best,

about $7,000 if you’re going only for the

So the first part of comprehensive business
strategy is having something that people actually


Do not half-ass the beginning of this, and
I know I am biased, because I am somebody

who works in the production field of music,
but a good song is really, really fundamental,

and marketing alone can not get it.

If marketing was not a non-zero sum game,
then the price of it would simply increase

until the demand just leveled it out.

But that means if you could guarantee that
you would get more money in views by investing

more money in to begin with, then everyone
would literally just do that, and then the

cost of views would start going up until it
was no longer so favorable.

So you need to have something that’s going
to perpetuate itself to a certain degree.

That million views or whatever you might go
for needs to lead to other sources of interaction,

so whether it’s a digital download, whether
it is a Spotify link, whether it’s — whatever

it might be, it needs to be a secondary source
from which you can garner income, and we want

to perpetuate this as much as possible, so
we start with a great product.

We start with a wonderful song with amazing
visuals to go with it, and we go from there.

From that, we want to make sure that we’re
capitalizing off of every possible thing that

we can, so we want to try and create a coordinated
plan, meaning the release of the video corresponds

time-wise with the release on Spotify and
the release on iTunes, as well as preferably

with a tour that’s lined up.

There’s a reason why these things almost always
go hand-in-hand.

Then we setup a couple of physical copies,
or perhaps USB drives, or maybe like little

download cards that we can sell at the shows
as well.

This way, we’re making sure that every dollar
that we put in to the marketing side of things

is being fully maximized, because yes, we
can probably capitalize off of just strictly,

you know, garnering a number of views off
of YouTube, and then having links to iTunes

and Spotify, and calling it a day, but if
you really maximize your presence on social

media on your own as well as hitting those
tours and everything like that, then you can

really start going in on it.

Then we also think about the long term plan.

The long term plan does not involve just strictly
the sales, it doesn’t even involve just strictly

the sales and touring, although at this point,
we’ve already made quite a bit.

Now we want to talk about synchronization.

We want to make sure we are visualizing where
our music could go in terms of advertisements,

in terms of television and films and movies,
because we want to make sure that we are exhausting

every possible revenue stream that is available
to us as musicians.

Now we’re going to play a little game.

This is going to be a hypothetical product
launch here with an artist, and that means

the production of the song, as well as the
marketing, and in this hypothetical, I’m going

to have $10,000, which I know, immediately,
off the top of your head, you might be thinking,

“Boy, that’s a lot of money.”

Well, yeah, it is, but I’m trying to be realistic.

So first of all, I’m budgeting about $2,500
to the creation of the product, which I wish

it could be bigger to be quite honest, but
the reality is if we want to promote it, we’re

probably going to need to dedicate about 75%
to the promotion, 25% to the actual production.

Well, that means that it’s really going to
be up to the creativity of the people involved

to make that money really stretch, so that’s
going to include all of the production of

the music, as well as the production of the
music video, which believe me, could get eaten

up very, very fast, but we’re going to do
it on a budget, we’re going to figure out

creative approaches, we’re going to do a lot
of it ourselves, we’re going to bring in the

experts where we need it, and make sure that
we have a great product that’s hinged on creativity,

because ultimately, creativity is what people
are really looking out for.

So okay, we’ve got that.

That leaves $7,500 left.

Okay, how many views on YouTube do I think
is going to represent good branding?

I really like the half million mark.

I think that there’s a 100 monkeys theory
that comes into play after we start getting

into that territory, meaning that once we
get to a certain point, the ball will start

to roll itself, and I think about half a million,
any way you look at it, is going to get the

numbers there.

It cements well in the mind, so I’m going
to think that’s going to cost roughly $5,000,

$6,000, somewhere in there based off the estimates
that I’ve heard.

Those many not be completely correct, so again,
this is a hypothetical, and that’s going to

leave us with a little bit left over for a
little bit of maximizing that.

So I’m going to have a link in the description
of the music video, and in that link, there’s

going to be the Spotify song, and there’s
also going to be the iTunes download, and

maybe the iTunes streaming as well, and I’m
going to make sure with that bit of extra

money that I’ve got left over that the curators
of the popular playlists on Spotify are taking

notice of our song here.

So we need to get verified as artists, which
means we need at least 250 followers on Spotify,

we’ve got to build that up through some kind
of social media management.

I think that could be done simply off the
merit of the half a million views, but it

could also be done extraditionally using maybe
like, $500 to use it using a social media

manager, and then once we have that, then
we want to try and get ahold of these playlist

curators to say hey, we have this song, it’s
popular on YouTube, we’d like it to be on

your playlist as well.

This way, we can get a little bit of a snowballing
effect by getting people to notice what we’re


By the way, in this hypothetical, I am talking
about one single song.

I am a humongous proponent of the bed of nails
theory, and listen, my job is to take music,

and to make it better, and I get hired on
a per song basis.

So if I’m saying that doing less songs is
really better, trust me when I say, I mean

that, because it actually kind of works against
my own business to say that, but I also want

people to succeed, and when musicians become
successful, that is humongously helpful to

my business, and that’s what’s really important

So bed of nails theory, if you have only $10,000
to support a song, it’s better to put that

behind one song than it is to put it behind
four, because even with four songs, we’ve

already spread our money very thin.

We can not really effectively promote the
songs to where we can generate income fast

enough to start to recoup and start to make
a bigger catalog to really get it out there.

Once we start actually seeing some money returned,
then we can reinvest in the song, we can start

putting together a tour, we can start reaching
out to the music publishers and the music

supervisors and editors in film and everything
like that, we can start getting our contacts

out to advertisement firms.

Whoever would possibly need music and be looking
to purchase it, so we continue this process,

but that’s how I would get it started.

And of course, you know, I’m not a music marketer.

I’m just getting into this side of things
because I’m becoming more interested in it,

so you know, comment down below, please.

Let me know what you think in terms of what
you would do.

Do you think $10,000 is way overkill to get
a song launched, or do you think that it’s

really, you know, too bare bones to make a
song happen?

Also, I’d invite you to play this game with

So in the comments section below, let’s say
you had $10,000 to spend on making and marketing

a single.

How would you put that together?

What would your game plan be for both the
production and for getting it out there?

I would love to hear your thoughts on this,
because I think it’s a fascinating topic that’s

going to help a lot of people.

Now, if you’re digging what I’m doing, you
know what to do.

It’s time to hit that like button, the good
old thumbs up, and if you want more really

good information from this channel, you’re
going to need to hit that subscribe button.

I believe in you, I believe in me.

Let’s do it.

The worst ending to a video ever!

Lastly, Mixing With Reverb, a full length
tutorial on how to incorporate reverb into

your productions and how reverb works is available,
and the link to that is in the description.

Don’t forget to check that out.

Alright folks, until next time.

VLOG #6: Streaming Royalties, Music Marketing, Budgets & More

In this vlog, Matthew talks streaming, music marketing, budgets, exposure and more.
Mixing with Reverb ➥ http://mixingwithreverb.com

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