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10 Careers In Music And How Much Money You Can Make 

10 Careers In Music And How Much Money You Can Make

When it comes to working in the music business, most people’s minds go to those performing on stage, but behind the curtain are a number of fulfilling, and often lucrative, jobs. Here we look at the top ten jobs in the music industry. 

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Guest post from Berklee Online 

When you think of a career in music, you might start with the performers who are center stage. But when you pull back the curtain, you’ll find people with an array of music business jobs and careers that help make performances possible. You have the people who coordinate and promote the music, the folks in the recording studios and on the soundboard who make the musical act sound topnotch, the writers who compose and arrange the music, and much more. 

There’s more to a career in music than just performance — it can involve one or many disciplines. The more versatile you are, the more opportunities you will have to work in the music business. 

Breaking into the music business is harder than other industries. Competition is high, but if you hone your craft, network with the right people, and put in the hard work, here are some music business careers to consider and what compensation you can expect out of them.* 

* Salary information is from the 2016 Edition of Music Careers Dollars and Cents by the Career Development Center at Berklee College of Music 

1. Music Producer 

 Want to be a jack of all trades? A producer understands both the creative and commercial side of the business and develops relationships with both musicians and the record label. A producer should create an environment that enables artists to create and express themselves. A producer also assists an artist’s recording project with many of the details, including choosing which material to record, interfacing with the recording engineer, adapting arrangements, balancing the recording budget, and influencing mixes. 

What to Learn: If you’re looking to become a music producer, consider learning about foundational audio and music concepts, start studying various types of software, and dive into what makes a good sound. To be a truly great producer, you’ll need to acquire knowledge in engineering and mixing. Look at the credits of your favorite albums: who produced them? Who engineered them? Find out what other albums these people produced, and get even further acquainted with their style. Read interviews with these people about their techniques. There isn’t one path to success here, but you can forge your own way as you develop the necessary skill set.  

What’s the Money Like? 

$25,000 – $1,000,000+  

 

2. Recording Engineer 

 An audio engineer is responsible for capturing sound and manipulating it in the studio. You’ll deal with both analog and digital audio, compressors, microphones, and signal flow—and typically combine both traditional and tech-savvy recording techniques to record music. You could also be responsible for organizing recording sessions and repairing any technical problems when they arise. And sometime you may catch the brunt of the producer or musicians if something goes wrong in recording that magic take! 

What to Learn: Become well-versed in multiple recording technologies and develop file management skills. Some jobs in sound engineering may require additional training in mixing and editing. You’ll also need to know how to solve problems, run recording sessions and take initiative. 

What’s the Money Like? 

$25,000 – $150,000+ 

 

 

 

3. Musician for Hire/Session Musician 

 As a session musician, you back and perform on another musician’s album or perform with various acts onstage. This means you have the freedom to dabble in multiple styles, genres, and sounds. You’ll interact, meet, and form relationships with a heap of other musicians. You may be asked to contribute to a recording session or join a band on tour. If you’re extremely proficient at your instrument, the path to becoming a successful session musician can be rewarding and even lead to a solo career. Before their solo careers, Stevie Ray Vaughan was a session musician for David Bowie, Sheryl Crow was a back-up singer for Michael Jackson, and Jimmy Page played in countless recording sessions. And some recording studios even have their own house bands. (See Standing in the Shadows of Motown, Muscle Shoals, and Twenty Feet From Stardom. Really! See these movies!) 

What to Learn: A successful session musician is a connoisseur of their instrument and has a solid reputation for their craft. You should be able to step into any musical arrangement to offer your skills and also be proficient and experienced at improvisation. Another necessity is to learn how to build a reliable network and solid relationships. You’ll want to have great communication skills and general industry knowledge. 

What’s the Money Like? 

Extremely wide range, $100 – $2,500 per day or up to $100,000+ 

The American Federation of Musicians (AFofM) specifies the minimum rate 

 

4. Artist Manager 

 An artist manager exists to create opportunities, connect, and propel the musical act forward. You have to wholeheartedly believe in your artist and help them build a strong and sustainable career through planning, organization, directing, and negotiating. You may not get all of the credit and adoration that the artist gets, but you’ll have to do as much—if not more—work! See that photo above? You probably recognize at least 80 percent of the people, and know their names. But how about the man in the center? That’s Brian Epstein, the manager of the Beatles during their rise to fame. Without the influence of Brian Epstein, it’s likely you’d never know the names John, Paul, George, and Ringo, much less know any of the music they made. 

What to Learn: Management and leadership skills are key here. Not only will you be streamlining and organizing multiple moving parts between musicians, publishers, and booking agents but you’ll also be making sales calls, negotiating contracts, and giving constructive criticism. 

What’s the Money Like? 

10 -50 percent of artist’s earnings 

$30,000 – $200,000 for a developing artist 

$2,000,000 – $10,000,000 for a mega successful artist 

 

5. Tour Manager 

As a tour manager, you’ll be involved in every aspect of a band’s career on the road. You’re the behind-the-scenes mastermind who has hands in every piece of transportation, accommodation, scheduling, and finances of a tour. You’ll make things run smoothly for everyone involved. You’ll need to have self-motivation and be okay with shouldering the band’s responsibilities—especially the financial ones. 

What to Learn: You’ll need to know the industry like the back of your hand. There are music business management programs you can study but you should also self-study tour logistics, accounting principles, and daily scheduling management. Get experience in different components of the live music industry and learn to anticipate and cater to needs while sticking to the schedule. To get a more thorough sense of what this job entails, read our profile on Berklee Online alum and Wilco tour manager Ashley ‘PK’ Mogayzel. 

What’s the Money Like? 

$2,500 – $10,000 per week for theater/arena-level touringBreaking into the music business is harder than other industries. Competition is high, but if you hone your craft, network with the right people, and put in hard work, here are some careers to consider and what compensation you can expect.… Click To Tweet 

 

6. Music Teacher 

Teaching can take on a variety of forms. You could teach in a school, a small music shop, or teach independently. You could teach theory or a specific instrument. You’ll also have freedom to choose which age range you’d like to teach—each one comes with its own advantages and obstacles. If you like encouraging people, sharing knowledge, and practicing patients, a career teaching music could be right for you. 

What to Learn: Your required education and background depends on which teaching path you’re most interested in. For example, teaching in a school will likely require more certifications than going down a self-employed route. You’ll certainly need to be proficient in the subject you’re teaching and feel confident giving lessons. 

What’s the Money Like? 

$30-$120 per hour for studio teacher/private instructor 

NOTE: Lesson fee should reflect amount of teaching experience and the going rate in a region. Be aware that it may take some time to build up a profitable clientele. Travel to a private student’s home may require an additional fee. 

$30,000-$71,181 for a public school music teacher (K-12) 

NOTE: Requires state certification. Schools are supported largely by property taxes so schools in wealthier communities are typically able to pay more. 

$43,140 -$67,360+ for an assistant professor (full-time on a tenure track) 

NOTE: Salary depends on the size of the institution, budget, and reputation of the teacher. At least a master’s degree is required, more often a PhD. 

 

7. Booking Agent 

 Your job here is to get the band onstage. Booking agents facilitate a lot of the logistics around live performances, including securing concert venues, negotiating deals, arranging technical equipment, and hospitality. You’ll work closely with management (of the artists and the venues) and event promoters and determine what an artist’s touring schedule will look like. 

What to Learn: A degree in music management, marketing, or accounting would help you prepare you for a career as a booking agent.  You’ll want to learn about contract negotiation, copyright law, sales, marketing, and event planning. Begin working in event promotion and administrative roles to understand the foundational elements of booking shows.  

What’s the Money Like? 

$20,000 – $3,000,000 

Commissions range, typically 10-20 percent of the act’s gross income per show. 

$50,000 for a developing artist 

$500,000 – $3,000,000 for a star 

$50,000 – $250,000/Booking Specialty Agent 

 

8. Publicist 

 A music publicist works closely with media outlets, marketers, and venues. Publicists ensure that their musicians’ concerts, releases, and announcements are covered by the media in a way that feeds positively into their public perception while increasing awareness of the artist. The good news is that you’ll see your hard work pay off in a very tangible way—whether that’s a sold-out show or a spot on the radio. It can be tough to break through to journalists in a media landscape that is increasingly cutting staff and eliminating outlets that cover music. This role is more than just PR—it’s about selling a story, building a network, managing a reputation, and staying ahead of the game. 

What to Learn: This is a communications and marketing-based role, so start there. Learn the basics of public relations strategy and develop your people skills. To become a publicist, you’ll have to network, be tenacious in your outreach efforts, and ask the right questions. Arm yourself with on-the-ground experience as well as writing, crisis communications, and publicity campaign development.  

What’s the Money Like? 

$500-$10,000 per month 

 

9. Composer 

 Composers aren’t just tied down to the classical music genre; they can write for film, TV, and video games. They can also write and arrange recorded or live music across genres. Regardless of which avenue you wish to pursue, you must have a masterful understanding of music theory, you must be able to really play one or many instruments, and have the technical capabilities to capture your compositions effectively, whether it be through music notation or recording. 

What to Learn: Formal education and experience are keys to success here. Composers are proficient in one or many instruments and have a deep understanding of music theory and arrangement. Being a great composer means understanding the technicalities and mechanics of music on multiple levels. Start learning composition software and begin practicing. There are event elements of sound engineering that can come in handy, like notation software and recording programs. 

What’s the Money Like? 

Composers are usually paid on a per-project basis. 

Television 

$1,500-$7,500+ for a 30-minute episode 

$2,000-$15,000+ for a 60-minute episode 

$2,000-$55,000+ for a TV movie 

Film Score Composer 

$0-$10,000+ for a student film 

$2,500-$500,000+ for an indie feature  

$35,000-$2mil+ for a studio feature  

Video Game Composer 

$30,000-$75,000+ for Creative Fee deal – interactive game (30 min. of music) 

$30,000-$60,000+ for Package Fee deal – interactive game (30 min. of music) – covers composing and all expenses 

$300-$600 per minute of finished music for casual games (creative fee only) 

 

10. Music Arranger 

A music arranger is responsible for taking a piece of written music and reorganizing it to achieve a new sound or goal. You might have a client ask you to take a pop piece and add a Latin rhythm, shorten or lengthen a piece, or change the key. Arranging is a specialized skill and those who pursue it can work as a freelancer or for a band or music organization. 

What to Learn: Music arrangement can be a single career or an added skill set as a writer and composer. An arranger, like a composer, also requires a deep understanding of music theory, different instrument groups and how they work with one another. Before learning about arranging, learn the fundamentals of music theory, composition, and the technical aspects involved. 

What’s the Money Like? 

$20,000-$43,000+

How Many Spotify Streams Are Necessary To Live Above The Poverty Line?  

How Many Spotify Streams Are Necessary To Live Above The Poverty Line? 

The royalties earned off of Spotify streams are notoriously low but do provide some income to artists. So just how many plays does it take for a musician to live above the poverty line? 

Guest post by James Shotwell of Haulix 

Spotify streaming royalties often upset artists, but how many plays does a musician need to live above the poverty line? We did the math. 

The streaming wars are raging on. Spotify has more than one hundred million monthly subscribers worldwide, which places the platform far ahead of its peers, but Apple Music and Amazon Music are gaining millions of new users with each passing month. Whether or not the global economy can sustain the numerous streaming platforms won’t be decided for some time, but whether or not artists can survive the streaming economy is a hot topic that needs to be addressed. 

Any industry expert will tell you that musicians today have it easy. There are more avenues for exposure than ever, recording music is (or can be) cheap, and an increasing number of artists are finding success outside the traditional label system. It is theoretically possible for anyone with access to a laptop and the ability to convey a melody to become a digital sensation who has fans all over the world without the aid of big label money (though, to be fair, big label money still makes a sizable difference). 

Streaming payouts are a relatively new revenue stream for musicians. No one is suggesting artists survive on streaming royalties alone. Still, with physical media sales bottoming out and competition for tour revenue increasing, the money made from streaming can have a significant impact on an artist’s ability to develop, not to mention sustain themselves. 

Still, every other week someone goes viral online and builds an entire career of the profits made from streaming royalties. The majority of these overnight sensations are young and without families to support, but they still have the cost of living expenses that need to be met. That got us to thinking: How many streams does it take to survive on streaming revenue alone? 

According to the Assistant Secretary for Planning and Evaluation (ASPE), the poverty line for single-person households is $11,770. If we ignore how that figure would be hard for anyone to live on in a major city (and most mid-size cities), then we can round up to $12,000 and use streaming revenue calculators to figure out how many Spotify streams someone would need to sustain themselves. 

At an average payout of $0.006 per song stream, a musician living in the United States needs 3,000,000 plays annually to have a gross income of $12,000. 

Of course, if the artist has a label deal the record company would get paid before the artist. Depending on the amount owed to the label, the artist may need millions of addition plays to see the same amount of income themselves. 

But what about people with families? The ASPE puts the poverty line for a family of four (2 adults, 2 children) at $24,250. Using the same average royalty rate, a musician would need 6,062,500 Spotify streams to earn that amount of gross income. 

These numbers get much bigger when the musician is part of a larger group. If a band has four members and all four have families where they were the sole source of income, the group would need to generate 24,250,000 Spotify streams to gross enough so each member’s family would be at or above the poverty line. 

Again, no one is saying an artist should survive on streaming royalties alone. Some will be able to make it work, especially if they have a large following and low overhead, but most will need to create as many revenue streams as possible to survive. The key to a long career in music today is through the development of a community around an artist and their work that promotes purchasing merch, physical media, and concert tickets. That has always been true, and likely won’t change anytime soon.

2020 Colorado Music Educators Conference Presentation 

I am looking forward to speaking at the 2020 Colorado Music Educators Conference at the Broadmoor Hotel and Convention Center in January.

My topic: Makin a Living Making Music: Entrepreneurial Opportunities in the New Music and Entertainment Industry.

Click here to view the CMEA Conference Schedule

Today’s music industry is the wild, wild, west! The gatekeepers who once determined the fate of an artist’s success, the projects that would be recorded, the songs to be released, the bands that would take the stage, no longer wield their career crushing power. To succeed in today’s music industry, musicians need to expand their skillset from being musicians alone to being musical entrepreneurs. This session, Making a Living Making Music: Entrepreneurial Opportunities in the New Music and Entertainment Industry, will help you discover and declare your IDENTITY as artists and entrepreneurs, your VISION for the life and vocation you dream of, and your INTENTION and plans to begin to transform your dreams into realities. 

I was fortunate enough to be invited to speak by CMEA Tri-M Music Honor Society Chair, Michelle Ewer. Tri-M Music Honor Society offers students, grades 6 through 12, an opportunity to perform, serve the community as well as places them in leadership positions. It helps to bring a music department together and operate as one. Tri-M looks different in every school. Colorado has one of the most robust Tri-M conventions across the country; Students come together to share and discover new ways to make their chapters stronger. Students walk away feeling excited and eager to try new ideas they have experienced at the convention. Feel free to click on the links below to answer questions that you may have.  

Click here to start a NAfME Tri-M® chapter at your school 

Click here for NAfME Tri-M® chapter resources

Michael Pickering, President and Chief Creative Officer of Lionsong Entertainment, Inc., and former Director and founder of the Music and Entertainment Entrepreneurship program at the Community College of Aurora, is a creative leader, entrepreneur, educator, and musician. He holds a Master of Arts in Music Business Degree and a B.P.S. in Interdisciplinary Music Studies Degree from the Berklee College of Music. He has served on the boards of local arts and entertainment organizations, authored post-secondary music curricula, and spoken at many local and national music industry events. He also provides music and entertainment business and performance consulting services (www.mpickeringmusic.com). Michael and his wife, Amy Pickering, remain active as national headline music and clean comedy performing artists for corporate, theatrical, educational, outreach, cruise, and private clients worldwide — www.michaelandamy.com.

Music Publishers Are Driving A Full Stack Music Revolution 


Music Publishers Are Driving A Full Stack Music Revolution

As the value of music publishing catalogs have multiplied, so have the ways in which forward-thinking companies like Downtown, Round Hill, Kobalt, ole/Anthem, Primary Wave and Create Group monetized those catalogs, says MiDiA entertainment industry analyst Mark Mulligan. 

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Guest post by Mark Mulligan of MIDiA from the Music Industry Blog 

Music publishing catalogs are gaining momentum fast as an asset class for institutional investments, with transactions ranging from large catalog mergers and acquisitions (M&A) through to investment vehicles for songwriters’ shares such as the Hipgnosis Fund and Royalty Exchange. Since 2010 the number of publicly announced music catalog transactions – across recordings and publishing – totaled $6.5 billion, with a large volume of additional non-disclosed transactions.This growing influx of capital has implications far beyond publishing, however, as ambitious publishers are using the access to debt and investment to reverse into the recordings business. 

Streaming, the change catalyst 

As with so many music market shifts, streaming is the catalyst for these changes. Streaming represented 27% of publisher revenues in 2018 and is set to near 50% by 2026. However, songwriter-related royalties – incorporating publisher and CMO payments – from streaming are less than a third of what labels get. Small-but-important increments such as the US disputed mechanical royalties rate increase are a) difficult to push through, and b) will not get publishing royalties to parity with label royalties. This means that publishers will underperform compared to labels in the fastest-growing revenue stream. The alternative is a ‘if you can’t beat them, join them’ strategy. 

BMG Music Rights and Kobalt set the precedent with label services divisions alongside their publishing businesses, enabling them to play on both sides of the streaming equation. Now a wide range of publishers, both traditional and next-generation, are expanding their non-publishing businesses. – from ole/Anthem buying production music companies Jingle Punks and 5 Alarm Music, through Reservoir Music buying Chrysalis Records to Downtown buying CDBaby parent AVL. All have the common theme of publishers diversifying away from their core businesses to ensure they compete across a wider strand of the music business value chain.

CD Baby, Tunecore, DistroKid Add Rapid Apple Music For Artists Verification  

CD Baby, Tunecore, DistroKid Add Rapid Apple Music For Artists Verification 

Top 3 DIY music distributors CD Baby, Tunecore and DistroKid have all added rapid Apple Music For Artists verification, unlocking the platform's expanded analytics for their artists. 

To be eligible, artists must use the same email address and password that they use for their distribution account when signing up for Apple Music For Artists. 

Here's how CD Baby describes what Apple Music For Artists offers: 

When you claim your Apple Music for Artists profile you’ll be able to: 

  • Express your visual brand on the platform 
  • View the real-time results of your music promotion 
  • Ensure that your music catalog is accurately represented 

With Apple Music for Artists you can view: 

  • Plays from on-demand streaming 
  • Average Daily Listeners 
  • Song Purchases on iTunes 
  • Radio plays on Apple Music 
  • Shazams (yes, Shazams!) 
  • Insights and milestones for your music worldwide (for instance, “You passed 10,000 all-time plays in Canada”) 
  • Plays from Playlists 
  • Most Played Songs 
  • Popular Countries (with heat maps) 
  • Demographic and geographic information about your listeners (by song, album, playlist, etc.) 
  • And more

APPLE MUSIC FOR ARTISTS LAUNCHES, RIVALLING SPOTIFY’S ANALYTICS TOOLS 

APPLE MUSIC FOR ARTISTS LAUNCHES, RIVALLING SPOTIFY’S ANALYTICS TOOLS

Artists and their managers have long appreciated the royalties they receive from Apple Music – which, on a per-play basis, are reportedly close to double what they get from Spotify. 

Yet Spotify has always won far more praise when it comes to another valuable asset for musicians: data. 

Spotify launched its Spotify For Artists app in 2017 (an evolution of the ‘Fan Insights’ tool it introduced two years earlier) to provide artists and their teams with information pertaining to their popularity on the service. 

Now, Apple is stepping up to the plate.

Guest post by: BY TIM INGHAM of Music Business Worldwide

Today (August 8), Apple Music For Artists (AMFA) is emerging out of Beta and is being made available for every artist on Apple Music. Like Spotify for Artists, the service is available as both a desktop interface and a standalone mobile app (in AMFA’s case, currently only on iOS). 

MBW understands that in the limited industry meetings Apple has had during AMFA’s Beta, it has been confidently telling artists that its app is “the best available” in the market. 

We’ve taken a look at the platform, both on desktop and via the iOS app. As you’d expect, it allows artists to monitor the volume of their streaming plays on Apple Music and album/song sales on iTunes, all within a data set that updates daily. 

Artists can also drill down into how specific songs and/or albums are performing (and how their fans are growing) in specific markets around the world – down to a city-level in over 100 countries. Apple believes this will help artists to plan tours, tailor setlists for fans in each city, and uncover hitherto unknown pockets of popularity around the world.

Artists can also monitor how many plays of a particular song in a given period have been generated by playlists, as opposed to ‘organic’ plays from fans – and what position their track has been placed within these lists. And they can also see how many of their streams are the result of algorithmic radio (i.e. ‘lean-back’) versus active plays. 

This won’t shock you, but it’s a big differentiator: Apple is putting Shazam data front and center within its AMFA app, allowing artists to examine where their music has been most Shazam’d in particular locations and in particular time periods. (Apple fully acquired Shazam for a reported $400m in September last year.) 

In addition, artists can see a basic count of the average number of daily listeners to their music, broken down by country, city or song, while there is a dedicated section breaking out their video plays on Apple Music. 

Plus, Apple has updated its data to cover music industry standard release weeks to enable artists to better monitor week-to-week success. 

And in a feature which reminded us of the much-vaunted artist app from AWAL, acts are automatically alerted when there are meaningful changes to their data, for example: (i) The first week plays of a new release versus their previous week-one plays; (ii) Milestones like ‘1 Million Plays’; (iii) Sudden spikes in streams anywhere around the world; (iv) When they are added to a major Apple Music playlist. 

Unlike some third-party distribution/services companies, Apple does not provide insights on how an act’s streams translate into royalty payouts.

Spotify Invests $10M In Facebook's Libra Cryptocurrency  

Spotify Invests $10M In Facebook's Libra Cryptocurrency

Spotify has officially joined Facebook's new Libra global cryptocurrency initiative. Spotify stands out as the only music or media company among 28 A-list players ranging from Visa to Uber to Andreessen Horowitz that each invested $10 million. 

Here's of Techcrunch describes Libra: "Facebook wants to make Libra the evolution of PayPal. It’s hoping Libra will become simpler to set up, more ubiquitous as a payment method, more efficient with fewer fees, more accessible to the unbanked, more flexible thanks to developers, and more long-lasting through decentralization." 

All that delivered locally on a global scale and with bitcoin tracking built in, and you get some idea of what a massive project this is. 

Why Spotify? 

For Spotify, Libra offers a chance to more easily receive payments globally, including from the many outside the banking system.  Someday soon, Libra could facilitate payments to artists and rights holders, as well. 

Alex Norström, our Chief Premium Business Officer, explains: 

“One challenge for Spotify and its users around the world has been the lack of easily accessible payment systems – especially for those in financially underserved markets. This creates an enormous barrier to the bonds we work to foster between creators and their fans. In joining the Libra Association, there is an opportunity to better reach Spotify’s total addressable market, eliminate friction and enable payments in mass scale.”

Apple Reportedly Ending iTunes 

Apple Reportedly Ending iTunes

The file organization system you've been finding ways to work around for over a decade is about to be no more. According to a report from Bloomberg, Apple is hoping to phase out iTunes in the near future. Apple CEO Tim Cook is expected to announce the decision to move away from iTunes as part of a push away from the iPhone in coming years. 

Guest Post By Alex Galbraith

Unveiled in 2001, iTunes originally functioned as a music library and marketplace for iPods, iPhones, and Mac computers. As the company shifts its focus to other arms, the iTunes library will be replaced by separate desktop apps: Music, Podcasts and TV. iPhones and iPads already separate out libraries in this manner. 

The company's Worldwide Developers Conference is a closely watched event for fanboys and journalists. At this year's iteration, the company is also expected to announce greater freedom for their Apple Watch, which currently only works if it is connected to an iPhone. 

While the company is looking to roll out a new iPod soon, the move away from iTunes is probably a savvy business move given the recent raft of bad press attached to the brand. The company is currently being sued by users who allege that their iTunes data was sold to third parties who connected the data to personal information to sell to marketers. 

“None of the information pertaining to the music you purchase on your iPhone stays on your iPhone," the $5 million lawsuit alleged, per Billboard. “The data Apple discloses includes the full names and home addresses of its customers, together with the genres and, in some cases, the specific titles of digitally-recorded music that its customers have purchased via the iTunes Store and then stored in their devices.”

Here comes Amazon! 

Here comes Amazon!

Courtesy of Music Business Worldwide

Less than a week after the online giant launched its first fully free music streaming service, MBW has caught wind of the company’s next big plan to challenge the likes of Spotify. 

We understand that Amazon is currently in discussion with various large music rights-holders regarding the upcoming launch of a high fidelity music streaming platform – and that at least one major record company has already agreed to license it. 

I've heard this whisper from several high-placed music industry sources, who say the price of Amazon’s new tier will likely be in the region of $15 per month. It’s expected to launch before the end of 2019. 

“It’s a better bit rate, better than CD quality,” said one source. “Amazon is working on it as we speak: they’re currently scoping out how much catalog they can get from everyone and how they’ll ingest it.” 

The best known existing hi-def music streaming offering comes from TIDAL, whose TIDAL Hi-FI subscription tier costs $19.99 per month and offers CD-quality lossless streams at 44.1 kHz / 16 bit. 

In addition, TIDAL also offers a ‘Masters’ quality offering for pickier audiophiles, which presents thousands of albums at 96 kHz / 24 bit via desktop. 

“WITH AMAZON MAKING THIS MOVE, IT FEELS LIKE A POSITIVE STEP FOR PRICING FLEXIBILITY. SPOTIFY HAS JUST BEEN OUTMANEUVERED.” 

SENIOR INDUSTRY SOURCE 

TIDAL’s ‘Masters’ range is made possible by its partnership with digital hi-def music company MQA. It’s understood that Amazon has not partnered with MQA for its own HD tier. 

Meanwhile, Deezer offers a HiFi tier at a standard price of $19.99 per month, which, like TIDAL’s equivalent, streams music at 44.1 kHz / 16-bit via FLAC files. 

The world’s two biggest music subscription streaming platforms – Spotify and Apple Music – are yet to venture into the world of high fidelity audio. 

Will Amazon’s exploration of a launch in the area trigger their interest? 

A further senior US-based music industry source says, “Think about it: Amazon will have every tier of recorded music covered, from free streaming through to limited catalog via Prime, a full ‘Spotify rival’ in Music Unlimited and a hi-definition service – in addition to vinyl, CD, merch and more. We haven’t seen anything near what they’re capable of in music yet.” 

They added: “So far, Spotify and Apple have resisted launching a higher-price streaming tier, and [the labels] have resisted giving more away for the same [$9.99 a month] price. 

“With Amazon making this move, it feels like a positive step for consumer pricing flexibility, and good news for streaming ARPU generally. Spotify has just been outmaneuvered.” 

The launch of Amazon’s free music service on Alexa last week introduced an entry-level tier Amazon’s music streaming ecosystem. 

Amazon customers wishing to hear on-demand music without ads can upgrade to a Prime membership, which will offer them more than 2 million songs to choose from. And if an Amazon customer wants full, on-demand access to more than 50 million songs, they can sign up to Amazon Music Unlimited – for which a subscription locked to a single Echo device will cost $3.99 per month. 

For access to Amazon Music Unlimited across multiple devices, customers pay a $9.99 per month subscription, although those who already pay to be Amazon Prime members only need pay an additional $7.99 per month.

Amazon’s Ad Supported Strategy Goes Way Beyond Music 

Amazon is reportedly close to launching an ad supported streaming music offering. Spotify’s stock price took an instant tumble. But the real story here is much bigger than the knee-jerk reactions of Spotify investors. What we are seeing here is Amazon upping the ante on a bold and ambitious ad revenue strategy that is helping to reformat the tech major landscape. The long-term implications of this may be that it is Facebook that should be worrying, not Spotify. 

Guest Post By MIDiA analyst Mark Mulligan from his Music Industry blog 

In 2018 Amazon generated $10.1 billion in advertising revenue, which represented 4.3% of Amazon’s total revenue base. While this is still a minor revenue stream for Amazon, it is growing at a fast rate, more than doubling in 2018 while all other Amazon revenue collectively grew by just 29%. Amazon’s ad business is growing faster than the core revenue base, to the extent that advertising accounted for 10% of all of Amazon’s growth in 2018. 

"Spotify builds audiences to deliver them music (and then monetize), Amazon is now building audiences in order to sell advertising" 

Amazon is creating new places to sell advertising 

The majority of Amazon’s 2018 ad revenue came from selling inventory on its main platform. This entails having retailers advertise directly to consumers on Amazon, so that Amazon gets to charge its merchants for the privilege of finding consumers to sell to, the final transaction of which it then also takes a cut of. In short, Amazon gets a share of the upside (i.e. the transaction) and of the downside (i.e. ad money spent on consumers who do not buy). This compressed, redefined purchase funnel is part of a wider digital marketing trend and underlines one of MIDiA’s Four Marketing Principles. 

But as smart a business segment as that might be to Amazon, it inherently skews towards the transactional end of marketing, and is less focused on big brand marketing, which is where the big ad dollar deals lie. TV and radio are two of the traditional homes of brand marketing and that is where Amazon has its sights set, or rather on digital successors for both: 

Video: Amazon’s key video property Prime Video is ad free. However, it has been using sports as a vehicle for building out its ad sales capabilities and has so far sold ads against the NFL’s Thursday Night Football. It also appears to be poised to roll this out much further. However, Amazon’s key move was the January launch of an entire ad-supported video platform, IMDb Freedive. Amazon has full intentions to become a major player in the video ad business. 
Music: Thus far, Amazon’s music business has been built around bundles (Prime Music) and subscriptions (Music Unlimited). Should it go the ad-supported route, Amazon will be replicating its video strategy to create a means for building new audiences and new revenue. 

It’s all about the ad revenue 

Right now, Amazon is a small player in the global digital ad business, with just 6% of all tech major ad revenue. However, it is growing fast and has Facebook in its sights. Facebook’s $50 billion of ad revenue in 2018 will feel like an eminently achievable target for a company that grew from $2.9 billion to $10.1 billion in just two years. 

To get there, Amazon is committing to a bold, multi-platform audience building strategy. Whereas Spotify builds audiences to deliver them music (and then monetize), Amazon is now building audiences in order to sell advertising. That may feel like a subtle nuance, but it is a critical strategic difference. In Spotify’s and Netflix’s content-first models, content strategy rules and business models can flex to support the content and the ecosystems needed to support that content. In an ad-first model, the focus is firmly on the revenue model, with content a means to an end rather than the end. (Of course, Amazon is also pursuing the content-first approach with its premium products.) 

Amazon is becoming the company to watch 

So, while Spotify investors were right to get twitchy at the Amazon rumours, it is Facebook investors who should be paying the closest attention. Amazon’s intent is much bigger than competing with Spotify. It is to overtake Facebook as the second biggest global ad business. None of this means that Spotify won’t find some of its ad supported business becoming collateral damage in Amazon’s meta strategy – a meta strategy that is fast singling Amazon out as the boldest of the tech majors, while its peers either ape its approach (Apple) or consolidate around core competences (Google and Facebook). Amazon is fast becoming THE company to watch on global digital stage.