Archive for the ‘music Industry’ Category

With Grammys Near, Will Prince’s Music Make a Big Return?

February 7, 2017

Ben Sisario NY Times.com 2/6/17

At the Grammy Awards next month, the biggest question for fans may be whether Adele or Beyoncé takes home the prize for album of the year. For the music industry at large, however, perhaps an even bigger question is whether the show will finally usher Prince fully into the streaming age.
The Grammys ceremony, on Feb. 12, is the focus of a major marketing campaign set up by the music companies that have rights to release Prince’s songs, and by the streaming services that have been hungry to carry the music but were blocked from doing so by Prince himself before he died last year at 57. (Currently, Prince’s albums are only available on Tidal.)
If all goes according to plan, Prince’s music will be made available on virtually all streaming services around the time of the Grammys, where an all-star musical tribute to Prince is expected to be one of the show’s splashiest moments.
To promote the music’s availability online, Spotify is expected to run a number of promotional spots, including, perhaps, a television ad during the broadcast and a series of online teasers to begin as early as next week, according to several people with direct knowledge of the plans who were not authorized to speak about them. Spotify declined to comment.
But when it comes to managing Prince’s music, nothing is easy.
Despite the eagerness of the music industry to promote Prince’s music online, many issues with the estate remain unresolved. As a result, the plan to offer Prince’s music around the Grammys, first reported by Bloomberg News, remains uncertain and could still fall part, these people said.
“The drivers of what will happen with Prince will be the estate,” said L. Londell McMillan, a lawyer who represented Prince and is one of two experts advising the estate’s administrators on entertainment deals. “When you are looking to release product, you’re looking for the right moments. The Grammys may represent a moment in time, but it’s not certain that that’s going to be the case.”
Here is a look at some of the complications about the estate and the legacy of Prince’s music.
A Complex Estate
Since Prince died without a will, a Minnesota court is overseeing the estate, whose value has been estimated at up to $300 million. Major tasks still need to be completed, like valuing assets and confirming heirs, although the judge overseeing the case has indicated that the heirs will likely include Prince’s sister, Tyka Nelson, along with five half-siblings.
Those presumptive heirs have split into two camps over the management of the estate. One group, including Ms. Nelson and Omarr Baker, one of Prince’s half-brothers, have nominated Van Jones, the CNN commentator, to be a “co-personal representative,” a role similar to an executor. The other four favor Mr. McMillan.
In a nod to the feuding and finger-pointing of the proceedings, the judge, Kevin Eide, ruled last week that he would not appoint anyone to the role unless all heirs agreed and questions of conflicts of interest are sorted out. The estate’s next step, expected next week, will replacing one bank with another as administrator, a move that will bring in yet another round of lawyers and other overseers.
Music executives who have dealt with the estate say that these issues have not interfered with deal-making, but they raise questions about how the estate will be managed in the future and who will benefit from its business.
A Tangle of Rights
Prince maintained close control of his music rights, and wielded them to an extent few other musicians can. For instance, he used his ownership of music publishing rights — the copyrights for songwriting — to block his music from appearing on YouTube, Spotify and other streaming outlets.
But that control led to problems after his death. Prince withdrew his membership from Ascap, the organization that manages performing rights, and it was not until the very end of 2016 that his estate signed a new deal with Global Music Rights, a boutique competitor to Ascap. Performing rights are essential to having music played on the radio or streamed online.
Randy Grimmett, a Global Music Rights executive, said that before he died, Prince had been considering managing his performing rights himself, a burden that few musicians could manage. “He would have been the first — and only — major artist that I know of to have taken that on,” Mr. Grimmett said.
In November, the Universal Music Publishing Group announced that it had made a deal with the Prince estate to act as administrator for the publishing catalog, and signaled that it was ready to release his music widely. But as with most deals, it still needs approval from the estate.
A Vault of Recordings
The estate still has one more major musical asset to offer: the recordings Prince released after leaving Warner Bros. in the mid-1990s, as well as his storied vault.
That trove of unreleased recordings, including hundreds or even thousands of songs, was stored in two actual vaults at his Paisley Park complex outside Minneapolis, and has been the subject of fan fascination for years. The estate has shopped this material to the major record labels, but no deal has been struck yet; executives briefed on those talks have noted the difficulty setting a value for such a range of material, and Warner Bros. still has rights to a large part of it.
Some unheard recordings, however, are set to come out soon. After putting one long-bootlegged track, “Moonbeam Levels,” on a hits compilation last year, Warner Bros. is set to release a new version of Prince’s biggest album, “Purple Rain,” this spring, with a full disc of unreleased material.
A Lawsuit With Jay Z
When it comes to Prince and streaming, the estate faces a question in court: whether or not Tidal, Jay Z’s streaming service, has exclusive streaming rights.
Tidal and Roc Nation, Jay Z’s management company, have argued in court that Prince granted Tidal rights to his catalog. But the estate disputes that point, and in November sued Roc Nation for copyright infringement, saying that Jay Z’s companies have produced no evidence of a deal.
The suit has become a tantalizing sideshow; one document filed in court shows a lengthy marketing presentation for Roc Nation apparently intended to woo Prince. But so far it does not seem to have slowed down deal activity.
What Would Prince Have Done?
Even if the estate is able to get Prince’s music available on all streaming services, is that what Prince would have wanted? He was well known for policing his catalog carefully, pulling it down from services he found unappealing. “Spotify wasn’t paying, so you gotta shut it down,” he told Ebony in 2015.
But associates who worked with him say that Prince’s true intentions could be hard to divine. After writing the word “slave” on his cheek in protest of his Warner Bros. contract in the 1990s, he returned to the label in 2014 to make a deal that was highly favorable to him.
A high-ranking entertainment executive who worked closely with Prince said that after pulling his catalog down from streaming services in 2015, Prince continued to discuss with them the possibility of returning it. He was in those talks until the end of his life, said this executive, who spoke anonymously to avoid revealing details about working with Prince.
Alan Leeds, Prince’s tour manager in the 1980s and later the president of Prince’s label, Paisley Park Records, said that Prince’s attitudes toward technology in particular could be unpredictable but were focused on protecting his interests.
“Prince’s wishes were subject to change,” Mr. Leeds said. “His attitude toward technology was that when it served him he embraced it, and when it didn’t he turned his nose up. It varied day to day, depending on his mood.”

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Stem Helps Split Royalties, and Takes Off as Music Distributor

February 7, 2017

By BEN SISARIO NY Times.com 2/5/17

When Frank Ocean’s album “Blonde” came out in August, it went straight to No. 1 and became the talk of the music business because it was released completely outside the usual channels of the recording industry. The mystery was how Mr. Ocean and his team did it.
One answer was revealed on Sunday in an online ad promoting “Blonde” as one of the most acclaimed releases of 2016 and noting that it was “powered by Stem.”
That service, which began only a year ago, has quickly become a player in a fast-growing corner of the music industry: online platforms that cater to independent artists by distributing their music to streaming services and organizing the many strands of royalties that accumulate from fans’ clicks.
Stem, founded by three 20-somethings in Los Angeles, has attracted a clientele of young artists who operate independently yet tend to collaborate frequently with other acts, some of them stars. For them, Stem’s attraction is its ability to easily manage the complex “splits” — the divvying up of royalties among multiple parties — that result from such collaborations. Stem Disintermedia, the company behind it, has raised $4.5 million from investors, including Upfront Ventures and Scooter Braun, who is the manager for Kanye West and Justin Bieber.
The indie music sector already has a well-established network of alternative distribution companies like TuneCore and CD Baby, which deliver unsigned artists’ work to online services for what is usually a small fee. But those services have no means to divide the royalties if a song has, say, two producers and five writers, an example of the kind of collaboration that is now common in pop. Instead, the main performer would be responsible for accounting.
Stem eliminates that burden by tracking every collaborator on a song, and requiring all parties to agree on percentage splits. Milana Rabkin, Stem’s chief executive and one of its founders, compared the service to online payment apps that let friends easily split a restaurant tab.
“In a world where Venmo exists,” Ms. Rabkin said in an interview, “why isn’t there a Venmo for Apple and Spotify?”
Stem’s consensus model, however, could also be its Achilles’ heel, since it will not allow any party to be paid until all agree on the splits, a process that gives holdouts bargaining power. Ms. Rabkin said that most projects reached consensus in a few days and that the longest had taken “a couple months.” The service takes a 5 percent cut on royalties.
Representatives of Mr. Ocean declined to comment on exactly how he had used Stem. But aside from the album’s initial appearance on Apple Music — when it was delivered directly to Apple — Stem appears to have been the vehicle used to release “Blonde” to most major services. Stem distributes music to Spotify, Apple, YouTube, Amazon, Tidal, SoundCloud and several other outlets.
While Stem’s model was novel when it first appeared, it now has competition. In December, CD Baby quietly introduced a new distribution service, Soundrop, which, like Stem, tracks royalty splits — although without the consensus requirement — and caters to a generation more likely to post songs on YouTube and think about making money later.
“It’s an opportunity to reach a demographic that wants to create differently,” said Kevin Breuner, the vice president of marketing at CD Baby. “Music distribution is a secondary thought to them.”
Stem, by contrast, is catching on among a class of young professionals who often operate independently but may be involved in the highest creative levels of the business. Its clients include Childish Gambino and the electronic producer Deadmau5. The company says it has distributed 6,000 pieces of content that have been streamed 500 million times.
Dina LaPolt, a lawyer representing Deadmau5, said her client was using Stem to track his music on YouTube, but explained that Stem’s royalty-tracking system was particularly important to artists in managing the otherwise daunting task of tracking royalty splits.
“Music is the only business in the world where the artist is responsible for doing all the paperwork,” Ms. LaPolt said.
Among Stem’s most vocal advocates is Anna Wise, 28, a singer and songwriter who won a Grammy Award for her work with Kendrick Lamar. She was working as a nanny before she began using the service, which she said had provided her with a steady income — “enough to pay Brooklyn rent,” she said — and devote herself fully to making music. Her latest album, “The Feminine: Act II,” released through Stem, comes out on Feb. 17.
The company’s system, she said, allows her and friends to quickly and transparently arrange deals among themselves, maintaining control and minimizing any disruption to creativity.
“It’s essentially like a smart contract,” Ms. Wise said. “It’s easier and simpler, and I love easy and simple.”

Popular music and the Loss of Anger

July 16, 2016

By Lorraine Ali LATimes.com 7/15/16

When Beyoncé released her album “Lemonade” earlier this year, it took America by surprise, and not because she dropped it unexpectedly on a Saturday evening, or that it fueled speculation that her marriage was in trouble.

The singer’s newest work stood out because it was unapologetically angry.

Though popular music has historically served as a barometer of youth culture’s discontent, and almost every meaningful evolution in pop, rock and hip-hop has come from a place of disillusionment or outrage, pop music is now one of the few areas in American culture where anger is in short supply.

EDM, celebratory club music that’s often lyric-free, has hands-down been the biggest draw at music festivals over the last few years. The top rapper in the country, Drake, is a docile Canadian. And if you’re R&B’s the Weeknd (also Canadian), introspection means recounting all the ways in which you feel worthless for partying too hard the night before.

While pop has managed to celebrate as the rest of the world burns, television and film have increasingly channeled the ire of a shrinking middle class (“Breaking Bad,” any given Trump or Sanders rally), institutional racism (“Selma,” “Fruitvale Station”) and the numbness caused by bad news overload (“Mr. Robot,” “Unbreakable Kimmy Schmidt”).

“Every single era has had escapist music: In the 1950s, there was the pop that came after Little Richard,” says Billie Joe Armstrong, singer and songwriter of Green Day, arguably the last major rock band to turn fury and indignation into a top 10 album with 2004’s “American Idiot.”

“After the turbulent ’60s, you got ’70s schlock — quiet and boring [music], lots of earth tones — then punk came around. Music goes through these cycles, but this happens to be the longest cycle I remember without someone breaking through on a meaningful level; someone who really has something to say.”

There are some small signs that music is waking from its stupor.

Beyoncé’s rage about being deceived, rapper Kendrick Lamar’s artful commentary on inequality and other notable releases by artists such as Kanye West and Rihannah have expressed outrage and dismay in ways that challenge the passivity of their peers.

The Black Lives Matter movement has propelled stars like Snoop and Drake to express their anger at protests and on social media. Jay Z and Miguel recently released their own tracks about unarmed black men being killed by police.

But it’s all a proverbial drop in the bucket, given that anger – from the fury of talking heads on Fox News and CNN to heated congressional sit-ins over gun control — is now a common currency in American discourse.

There is plenty of music out there with a healthy sense of moral outrage, but it isn’t trending on iTunes or Spotify. It’s underneath a billion other choices competing for your attention, bumping up against popular tastes, waiting for the shift that will upend music’s current stalemate.

Traditionally, pop music has been the most nimble medium when it comes to reflecting the national mood, simply because making an album or single is quicker and less expensive than producing a film or TV show. But as free streaming services, YouTube and the like continue to deplete record industry revenue, major labels are less inclined to take risks on music that might alienate its young base.

“The reason we think of popular music as being more revolutionary in previous decades is because now, pop is aimed at a younger audience than it was,” says the Boston Conservatory at Berklee’s Joe Bennett, a forensic musicologist who analyzes popular music. “There was always [bubblegum pop] for younger fans, but there was lots of other stuff too, like rock, that tended to appeal to an older audience. That’s an audience who may have burgeoning political sensibilities and antiwar sentiments.”

The target music consumer of today is a millennial born between 1983 and 2003. Millennials are the largest generation in U.S. history, taking over that distinction from their boomer parents. They’re also an optimistic group that appears to have nothing in common with the angsty Gen-Xers who came before them.

“The visible manifestation of anger, just getting mad at someone, plays out differently in different age brackets,” says Neil Howe, author of “Millennials Rising” and a sociologist who specializes in generational changes.

“Millennials find that angry punditry on Fox or MSNBC is an old person’s thing,” Howe says. “They are more trusting of the system, they’re more optimistic about the future, and they believe strongly in community. That’s why they like EDM — you enjoy it in a group, and that’s totally in sync generationally. It’s also totally happy and escapist. Millennials aren’t interested in introspecting and devising new social movements through music. Music is just fun to them and not much more.”

The passionate songs that have gained traction with millennials, such as Taylor Swift’s “We Are Never Ever Getting Back Together,” come from a more tempered place than say, Alanis Morissette’s 1995 smash hit “You Oughta Know” or the Who’s 1971 track “Baba O’Riley.”

“Angry songs are now nearly all enraged breakup songs,” says Bennett. “Why did you dump me? Which speaks much more to individualism than societal indignation as rage.”

Since every new generation strives to set itself apart from the one that came before, there is an argument that the relative silence is millennials’ reaction to the anger engulfing our nation.

“Ignoring it, that’s their statement,” says Armstrong, whose kids are now 18 and 21. “That’s their anger. You’re making me angry, so I’m turning my back on you. They’re done dealing with it all. They’re like, ‘I’m going to binge-watch zombies eating each other.’ ”

Top-grossing musical genres have also evolved recently in kinder and gentler ways — confrontational styles such as punk, gangsta rap, metal and grunge have given way to a proliferation of teen sensations and party-friendly hip-hop.

“It’s not usually the case that songwriters write to the market, but the market does decide what it wants to buy,” says Bennett. “In that regard, pop music fans are going to gravitate toward what they feel and what they’re thinking about at that time. Pop is merely reflecting the moods of their time, rather than steering it, and that mood will change.”

Adds Armstrong, “It’s come to the point where artists are backed into a corner where there’s really no other place for them to go. You look at what’s happening with the news, and everything that’s going on in the world, and it’s kind of like ‘The Walking Dead.’ it’s coming right at you. You better write something about it.”

Music World Bands Together Against YouTube, Seeking Change to Law

June 1, 2016

By BEN SISARIO  NYTimes.com 5/31/16

A few years ago, the biggest enemy of the music industry was Pandora Media. Then Spotify became the target.

Now it is YouTube’s turn.

In recent months, the music world has been united to a rare degree in a public fight against YouTube, accusing the service of paying too little in royalties and asking for changes to the law that allows the company to operate the way it does. The battle highlights the need to capture every dollar as listeners’ habits turn to streaming, as well as the industry’s complicated relationship with YouTube.

The dispute has played out in a drumbeat of industry reports, blog posts and opinion columns. Stars like Katy Perry, Pharrell Williams and Billy Joel have signed letters asking for changes to copyright laws. Irving Azoff, the manager of artists like the Eagles and Christina Aguilera, criticized YouTube in an interview and in a fiery speech around the Grammy Awards.

Also, annual sales statistics were released showing that YouTube, despite its gigantic audience, produces less direct income for musicians than the niche market of vinyl record sales.

“This is the result of an explosion of views of music videos on YouTube against a backdrop of decline in the recorded music business in general,” Larry Miller, an associate professor of music business at New York University’s Steinhardt School, said of the fight.

With more than a billion users, including the youngest and most engaged music fans, YouTube has long been seen by the music business as a vital way to promote songs and hunt for the next star. At the same time, music executives grumble that it has never been a substantial source of revenue and is a vexing outlet for leaks and unauthorized material.

It may not be a coincidence that the major record labels are also in the midst of renegotiating their licensing contracts with YouTube this year.

In its newest effort, the music industry has asked the federal government to change the Digital Millennium Copyright Act, saying that the law, which was passed in 1998 and protects sites like YouTube that host copyrighted material posted by users, is outdated and makes removing unauthorized content too difficult.

Cary Sherman, the chief executive of the Recording Industry Association of America, says that even when songs are taken down, they can easily be uploaded again.

“This is a new form of piracy,” he said. “You don’t have to go into dark corners and sell stuff out of your car. You can do it in plain sight and rely on the D.M.C.A. to justify that what you’re doing is perfectly legal.”

Europe’s copyright protections are also under review, and last month, Andrus Ansip, the European Commission’s digital chief, called on YouTube to pay more for its content. But so far, YouTube does not seem shaken.

In an interview, Robert Kyncl, YouTube’s chief business officer, said that since its inception in 2005, YouTube has paid $3 billion to the music industry around the world. (In earlier statements, YouTube has said that Google, its parent company, paid that amount across all of its sites, but Mr. Kyncl now says that YouTube alone has contributed that sum and that other Google services have added even more.)

“Music matters tremendously to us,” Mr. Kyncl said. “Artists matter to us. We are connecting artists and fans on our platforms.”

He also pointed to the site’s new subscription plan, YouTube Red, and said YouTube’s copyright protections were functioning as they should. Content ID, the site’s proprietary system, lets copyright owners keep track of their material, and when the system detects a new video including a tracked song — whether in a full music video or just the background of a user-uploaded clip — the owner can choose to keep the video online or take it down.

According to YouTube, 98 percent of copyright claims on its system are made through Content ID, and 99.5 percent of the claims related to music are handled automatically. YouTube says about half the money it pays in music royalties is related to user-generated videos that incorporate music processed through Content ID.

“We are working to create what has become the most significant revenue generator in the entertainment industry,” Mr. Kyncl said, “which is a dual revenue stream where you monetize all people: heavy users through subscription, and light users through advertising.”

But the music world argues that YouTube’s financial contributions have not kept pace with the popularity of its streams. In March, the recording industry association’s annual report of sales statistics, usually a dry financial summary, criticized YouTube harshly. It said that free ad-supported sites like it, which let users pick specific songs on demand, paid $385 million to record labels in the United States — less than the $416 million collected from the sale of just 17 million vinyl records.

Spotify paid about $1.8 billion last year for music licensing and related costs, according to the company’s annual returns, although the average royalty rates for its free tier are not much different from YouTube’s, by some estimates.

The fight over the Digital Millennium Copyright Act has touched a nerve. The music industry is bracing for what may be a high-wattage lobbying battle reminiscent of the one over the Stop Online Piracy Act, a bill that was abandoned in 2012 after opposition from technology activists and Internet giants like Google and Wikipedia.

The copyright law gives “safe harbor” to Internet service providers that host third-party material. While music groups criticize the law, some legal scholars and policy specialists say any change to it would need to be considered carefully, particularly to preserve protections like fair use.

“Anything that rewrites the D.M.C.A. isn’t just going to affect YouTube,” said James Grimmelmann, a law professor at the University of Maryland. “It is going to affect blogs. It is going to affect fan sites. It is going to affect places for game creators and documentarians and all kinds of others.”

In December, the United States Copyright Office asked for comments about D.M.C.A. as part of a review of the law, and filings by record companies show how laborious copyright policing can be. Universal Music said that after Taylor Swift’s album “1989” was released in late 2014, the company devoted a team of employees full time to search for unauthorized copies; to date, the company said, it has sent 66,000 takedown notices to various sites about “1989,” in addition to 114,000 blocks on YouTube made automatically through Content ID.

Maria Schneider, a Grammy-winning jazz composer, said in an interview that the problem was particularly acute for independent acts like her, who do not have Content ID accounts, and that the D.M.C.A.’s takedown process discouraged lawful requests.

YouTube says that about 8,000 companies and organizations have access to Content IDand that independents may get access through affiliated companies and industry groups. Mr. Kyncl said the steps in the takedown process were meant to ensure the accuracy of requests and deter false claims.

Mr. Azoff said that after the Copyright Office made its request, he and other managers asked artists they represented whether they wanted to sign a letter calling for changes to the law.

“Not one artist declined,” he said.

“But if there are creators who like their music on YouTube and SoundCloud, that’s fine,” Mr. Azoff said. “The whole point is choice: Artists should be able to choose

Record labels are far from the evil suits Prince made them out to be – they’re redistributive business models

April 27, 2016

When big acts attack the funding model of record companies what they are doing, whether they know it or not, is pulling up the ladder behind them

Ben Chu http://www.independent.co.uk 4/26/16

When pop stars go to war with their record companies which side do you get behind? The creative artists or the money-grubbing, talentless, suits? Surely a no-brainer. And yet reading about Prince’s epic battle against Warner Music in the 1990s I can’t help but feel sympathy for the suits.

Prince was signed as a precocious 18-year-old by Warner in 1977. He produced an album every year between 1978 and 1981. None of them were commercially successful but Warner kept on funding him as a promising prospect. Then the breakthrough came with the hit single “1999” and Prince was suddenly pop royalty.

The dispute apparently came when the prolific Prince wanted to release a studio-load of new material all at once. Warner said no, arguing that oversupplying the market was not the way to maximise revenues. They wanted the best possible return on their investment by restraining the supply of Prince. This would avoid swamping demand and also enable them to maximise the sense of occasion around each new release.

Warner got their way because they owned the rights to Prince’s music. Prince was royally annoyed though. He eventually likened his relationship with Warner to “slavery” and, later, advised all new artists not to sign contracts with record companies.

This was – and probably still is – terrible advice. Around a decade ago there was lots of optimistic chatter about how the internet would enable new artists and bands to reach audiences directly. They could, we were told, make the commercial big time without having to tap the promotional resources of record companies. The web would enable the talented to cut out the greedy middle man. But it hasn’t worked out like that. Vanishingly few artists have made it big without serious support from record companies somewhere along the line.

But don’t record companies milk top artists like Prince unfairly? Not really. Think about the model from the point of view of the record company. You sign a host of promising new acts. You pay for them to record. You promote their work. But only a tiny number will prove successful. The money the record company has spent on the unsuccessful acts is gone for good. The company makes all its money from the ones that do make it. That’s why it takes such a large share of the proceeds from a minority of successes.

The big acts simply see the large sums of money made by the company from their work and they resent it. But they often fail to grasp that these funds are what enable the record companies to invest in new acts and keep the machine running. Globally, record companies spent $4.5bn (£3bn) on marketing and investment in 2014, representing a quarter of their total revenues.

Small acts might be tempted to think established artists are looking out for their interests when the big guns attack the rapacious record company model. And there has been a lot of purple prose in recent days talking about how Prince valiantly stood up for all musicians with his various battles with record labels. But it’s nonsense. When big acts attack the funding model of record companies what they are doing, whether they know it or not, is pulling up the ladder behind them.

This isn’t to defend the taste of the record companies and the acts they select to sponsor. And there are signs that they do not stick with new artists as long as they should. It’s unlikely that an artist today would get funding for four years without any major hits, as Prince did. They would probably be cast aside much earlier. Nor is this to argue that record companies are saintly. It’s merely to point out that the underlying business model is a redistributive one in a way that the top artists generally fail to acknowledge.

Prince certainly didn’t acknowledge it. Yet he was remarkably quick to capitalise on another trend in popular music economics. He released his Planet Earth album free with the Mail on Sunday (of all publications) in 2007. People said he was crazy for giving away his product. They said he was devaluing it. That’s certainly what his (new) record company felt. They hadn’t been told and were forced to scrap plans to sell the album in UK shops. But Prince himself still made a commercial killing from a back-to-back run of 21 live British shows in the wake of the stunt. What Prince discovered – and many have discovered since – is that the big money in music is now in the live “experience”, not the recorded product.

Of course Prince was a quixotic character – and not just creatively but commercially. He spent a lot of time in the years following that Mail on Sunday give-away trying in vain to stop his music being distributed for free online. In that sense Prince actually had something in common with the record companies, who wasted vast sums fighting an unwinnable battle with the unlicensed distribution of music online.

Record labels are starting to be more sensible now. They seem to have grasped that there is money to be made from working with the internet rather than fighting it; from advertising revenues from music videos on YouTube, from legal downloads on iTunes and from royalties from streaming sites. Global industry revenues in 2015 rose for the first time in two decades.

But the digital world is still in flux. Online music consumption is increasingly shifting from downloads to streaming. And the lion’s share of revenues could in future flow to the streaming companies – cutting out artists and maybe even record companies in the end.

In response the big players of the artistic world including Jay-Z, Rihanna, Beyoncé and Arcade Fire have established their own streaming service: Tidal. This week Beyoncé released her new album, Lemonade. It will exclusively stream on Tidal. The dominant streaming players, such as Spotify, Apple Music and Deezer, have been cut out (although it is available to buy on iTunes). This is an attempt by group of successful artists to monetise musical content once again, not just experiences. This will be the biggest test yet of their model. If an artist with the reach of Beyoncé can’t make it work, it may be a dead end.

“When life gives you lemons, make lemonade”. That’s the reference in the title of Beyonce’s new album. It’s what Prince, generally, did. It’s what the record companies seem to be, finally, doing. The Tidal crew are trying it. The question as far as fans are concerned, though, remains the same as ever: is the music sweet or not?

 

Recovering music biz still can’t cash in on YouTube

April 12, 2016

By Claire Atkinson NYpost.com 4/11/16

The music business has finally hit bottom and is beginning to bounce back.

After years of falling album sales and piracy woes, the global recording business notched its first significant revenue uptick in almost two decades last year, according to a new industry report set to be released on Tuesday.

The International Federation of the Phonographic Industry’s 2015 digital music report will show that revenue rose more than 3 percent, topping $15 billion, in 2015. That’s the first significant jump since 1998, when global revenue rose 4.8 percent.

While the long-awaited gain should have the industry singing an upbeat tune, the big record labels are far from happy with the state of music streaming.

Most of last year’s revenue growth came from paid subscription services, a category that includes Apple Music, and Spotify’s premium tier. That’s a business the labels would like to keep growing.

But the industry is less than pleased with the revenue artists and others collect from ad-supported services such as YouTube, where users flock to stream music and watch videos for free.

The IFPI report is expected to throw more shade on the Google-owned video platform, which is facing licensing negotiations with the big three record labels.

YouTube’s deals with Universal Music Group, Sony Music and Warner Music have either expired or will this year, the Financial Times reported on Sunday.

Last month, the Recording Industry Association of America slammed YouTube in a separate report, saying it doesn’t pay its fair share of royalties despite surging usage. That report revealed the music labels derived more revenue from vinyl than all the ad-supported YouTube consumption created in advertising revenue.

The IFPI report is expected to add to the noise surrounding ad-supported services by showing that just 4 percent of global revenue, or around $600 million, is derived from ad-supported platforms, of which YouTube is by far the biggest.

By comparison, paid subscription services generated an estimated $2 billion in revenue in 2015.

Total paid-music subscribers grew to 68 million in 2015, up from 41 million the previous year, the IFPI report will show. But that’s dwarfed by YouTube’s 900 million users.

“The main concern is the fact that ad revenue is not climbing in line with views,” said a top industry source. “The value of a stream is dropping and we want to make sure there’s a floor in the per stream rate.”

YouTube’s chief business officer, Robert Kyncl, has been making the industry rounds to explain how the music business can better monetize its advertising on its platform. Kyncl’s has been preaching that “free is the future, ad supported is the future,” one source said.

“To date, Google has paid out over $3 billion to the music industry — and that number is growing significantly year on year,” YouTube said in a statement to The Post.

“Only about 20 percent of people are historically willing to pay for music. YouTube is helping artists and labels monetize the remaining 80 percent that were not previously monetized.”

What The Music Industry Could Learn From 1920’s RCA

February 24, 2016

Ted Gioia thedailybeast.com 2/20/16

During the middle decades of the 20th century, RCA showed how artistry and technology can work hand in hand. Could the RCA strategy fix the problems facing the music business today?

The economic crisis in music has many facets, but the biggest problem can be summed up in simple terms. Tech companies have seized control of music from the record labels. Power has shifted from Hollywood to Silicon Valley, and most of the profits from music-making now enrich the coffers of Apple, Google, Amazon, Spotify, and other tech providers.
You don’t need a degree from Julliard to understand why this is bad for music. The people making the key decisions affecting musicians today have never written a song, produced a record, or played a gig. Their goal is to sell devices or generate clicks or convince consumers to sign up for Amazon Prime. Music, in many cases, is a “loss leader” for them. Apple, Google, and other tech giants would even be willing to give away every song in the universe for free if it helped them gain enough share in their base businesses.
Stop and think about the long-term implications of this shift. What happens when our music ecosystem is controlled by outsiders with no stake in the health of the art form? What happens when artistry is forced to serve technocrats who see creative talents as mere “content providers”? What happens when the dominant business model is built on squeezing profits out of songs and reinvesting them in new gadgets, watches, Google glasses, and the like? Well, that’s pretty obvious, no? You get a decimated music business and software developers earn ten times the wages of a typical musician.
How did we get here? The music industry itself must own most of the blame. The leading entertainment corporations simply sat and watched while tech companies took control of the downstream distribution of music over the last twenty years. Universal, Sony, and the other record labels could easily have developed their own iTunes and streaming tech—that software isn’t very complex—but they refused to do so.
Fast-forward to the present day. Apple generates more revenue from music than any record label in the world and, even worse, controls access to the consumer. Apple’s CEO Tim Cook now has more influence on the future of music than anyone on the planet, with Larry Page of Alphabet running a close second. Musicians now live and die based on decisions made in Silicon Valley boardrooms.
It’s still not too late for the music industry to wake up and wrest control of the business away from engineers and technocrats. They still have one huge advantage—they have a lock on the “content” (what we previously called “artistry” and “creativity”). Apple is hollow at its core without the music. Alphabet won’t get beyond its A, B, and Cs without a supporting soundtrack. The music business can still set the tune…if it takes the right steps.
If curious music moguls want to see how it’s done, they have a great role model—they simply need to look back at the leading entertainment company of the ’20s. The strategy that worked back then is still the right one almost a century later.
A few old-timers might remember RCA, once a dominant brand in both music and consumer technology. RCA was the most glamorous company in the world back in the ’20s. Under the leadership of David Sarnoff, the Steve Jobs of his day, RCA took the first “wireless technology”—what we now call the radio—and brought it into the households of America. Then in the ’30s, RCA developed the market for electronic turntables and laid the foundation for the modern recorded music business. RCA capped the decade by displaying a working television at the 1939 New York World’s Fair.
But here’s the most important fact about RCA: The company may have developed pioneering technologies, much like Apple today, but it was a music company at its heart. Through its acquisition of the Victor Talking Machine Company in 1929, RCA became the world’s largest seller of recorded music. The greatest musicians in the world were part of the RCA roster—Louis Armstrong, George Gershwin, Enrico Caruso, Sergei Rachmaninoff, Duke Ellington, Benny Goodman, Arturo Toscanini, Jimmie Rodgers, the Carter Family, and many others.

Company executives have a very different attitude towards music when they actually have artists such as Louis Armstrong and Arturo Toscanini under contract. They realize that the corporation’s success is inextricably linked to the creative work of the performer, and they work hand in hand with musicians to enhance the aesthetic experience of music.
RCA’s ribbon microphone, developed in 1931, added new warmth to Louis Armstrong’s vocals. RCA tube amplifiers helped countless musicians achieve a richer, deeper sound—and still fetch a high-price on the resale market today. RCA gave Duke Ellington enormous creative freedom, and this led to a body of work in the late ’30s and early ’40s that, in my opinion, ranks among the most important American music of its era. But many critics fail to recognize how much better the sound mix is on these records than on competitive products on other labels. Again and again, RCA put its technology at the service of the artist, rather than the other way around (the formula practiced by tech companies today).
This strategy of using technology to boost the artist’s success continued into the ’50s and ’60s. RCA invented the 45 rpm single in 1949, and this fueled the careers of the leading stars of the next decade, including Elvis Presley (under RCA contract), the biggest-selling recording artist of the era. In 1954, RCA made its first stereo recordings, featuring the Boston Symphony Orchestra (under RCA contract). Technology empowered the artist, and both the company and musicians benefitted.
But the most revealing chapter in the history of RCA took place in the ’60s, when the company commercialized color television. By this juncture, RCA was a dominant player in television content as owner of NBC, and the corporation realized that they needed exciting color TV shows on its network in order to sell this new consumer electronics innovation. So RCA invested heavily in creative content as the foundation for marketing its “devices.” Color TV took off, and both RCA and performers shared in the success.
In other words, RCA was the mirror image of Apple Computer. It was a company that championed creativity and hired the most impressive roster of artists on the planet during the middle decades of the 20th century … and then built the best technologies to showcase this talent. Apple, in contrast, may want to hire the best software or engineering talent, but it doesn’t want those pesky musicians under contract. The company’s business model is based on squeezing the musician to fund new initiatives in other areas.
From the sound-on-film technology to Technicolor, RCA was always looking for the next innovative platform to feature creative professionals at their best. Not every bet paid off. The 8-track tape developed by RCA lost out to the cassette technology pushed by Phillips. RCA’s quadrophonic sound technology was a flop. RCA tried to enter the computer business, but stumbled badly.
The RCA magic finally wore off when the company started forgetting about the artists. The retirement of David Sarnoff in 1970 could symbolize the end of the golden age of RCA. That same year RCA announced acquisitions of Banquet Foods, a leading supplier of frozen meals, Coronet Industries, a carpet manufacturer, and Cushman & Wakefield, a major real estate company. A few months later, RCA exited the computer business, and acquired two more frozen food companies.
What were they thinking? When Japanese consumer electronics companies ramped up their presence in the US during the ’70s and ’80s, RCA was not prepared to withstand the onslaught. RCA Records also faltered during this period, as its executives lost touch with new trends in music. By the mid ’80s, the company was losing money on its albums. Soon after, RCA was acquired by General Electric, swallowed up by a corporate culture focused on selling hardware—from refrigerators to power generators—not artistry.
But the RCA model is still the right one for the music industry. The major record labels should invest in building their own tech, instead of living off the crumbs from Apple and Google’s table. And they should create technology platforms that are designed with the primary goal of showcasing artistry in the best way possible.
Maybe then consumers wouldn’t have to live with the lousy compressed sound coming out of Silicon Valley devices. Maybe then we could enjoy streaming services that actually told us the names of the musicians and composers. Maybe then we would have albums with liner notes and photographs and all the other extras that have disappeared down the digital rabbit hole. Maybe then we would have a music business controlled by decision-makers who love music and understand what it needs to flourish.
It’s not too late, but it may be soon. Fortunately, the strategy was already laid out back in the ’20s. It’s still there for those who pay attention.

The Devaluation of Music: It’s Worse Than You Think

January 24, 2016

Starving artists have been affected by more than just piracy and streaming royalties

In their many (justified) laments about the trajectory of their profession in the digital age, songwriters and musicians regularly assert that music has been “devalued.” Over the years they’ve pointed at two outstanding culprits. First, it was music piracy and the futility of “competing with free.” More recently the focus has been on the seemingly miniscule payments songs generate when they’re streamed on services such as Spotify or Apple Music.

These are serious issues, and many agree that the industry and lawmakers have a lot of work to do. But at least there is dialogue and progress being made toward new models for rights and royalties in the new music economy.

Less obvious are a number of other forces and trends that have devalued music in a more pernicious way than the problems of hyper-supply and inter-industry jockeying. And by music I don’t mean the popular song formats that one sees on awards shows and hears on commercial radio. I mean music the sonic art form — imaginative, conceptual composition and improvisation rooted in harmonic and rhythmic ideas. In other words, music as it was defined and regarded four or five decades ago, when art music (incompletely but generally called “classical” and “jazz”) had a seat at the table.

When I hear songwriters of radio hits decry their tiny checks from Spotify, I think of today’s jazz prodigies who won’t have a shot at even a fraction of the old guard’s popular success. They can’t even imagine working in a music environment that might lead them to household name status of the Miles Davis or John Coltrane variety. They are struggling against forces at the very nexus of commerce, culture and education that have conspired to make music less meaningful to the public at large. Here are some of the most problematic issues musicians are facing in the industry’s current landscape.

1. The Death of Context

Digital music ecosystems, starting with Apple’s iTunes, reduced recordings down to a stamp-sized cover image and three data points: Artist, Song Title, Album. As classical music commentators have long argued, these systems do a poor job with composers, conductors, soloists and ensembles. Plus, as I argued at length in a prior essay, they’re devoid of context. While there are capsule biographies of artists and composers in most of the services, historic albums are sold and streamed without the credits or liner notes of the LP and CD era. The constituency of super-fans who read and assimilate this stuff is too small to merit attention from the digital services or labels, but what’s lost is the maven class that infuses the culture with informed enthusiasm. Our information-poor environment of digital is failing to inspire such fandom, and that’s profoundly harmful to our shared idea about the value of music.

2. Commercial Radio

It’s an easy target, but one can’t overstate how profoundly radio changed between the explosion of popular music in the mid 20th century and the corporate model of the last 30 years. An ethos of musicality and discovery has been replaced wholesale by a cynical manipulation of demographics and the blandest common denominator. Playlists are much shorter, with a handful of singles repeated incessantly until focus groups say quit. DJs no longer choose music based on their expertise and no longer weave a narrative around the records. As with liner notes, this makes for more passive listening and shrinks the musical diet of most Americans down to a handful of heavily produced, industrial-scale hits.

3. The Media

In the 1960s, when I was born, mainstream print publications took the arts seriously, covering and promoting exceptional contemporary talents across all styles of music. Thus did Thelonious Monk wind up on the cover of TIME magazine, for example. When I began covering music for a chain newspaper around 2000, stories were prioritized by the prior name recognition of the subject. Art/discovery stories were subordinate to celebrity news at a systemic level. Industry metrics (chart position and concert ticket sales) became a staple of music “news.” In the age of measured clicks the always-on focus grouping has institutionalized the echo chamber of pop music, stultifying and discouraging meaningful engagement with art music.

4. Conflation

A little noticed but corrosive quirk of the digital age is the way our interfaces conflate music with all other media and entertainment choices. iTunes started it by taking software ostensibly for collecting and playing music and morphing it into a platform for TV, film, podcasts, games, apps and so on. This is both a symbol and a cause of the dwindling meaning and import of music in the multi-media onslaught that is our culture. The shiny displays distracting people away from “just” music are already ubiquitous. So why impose them on a music player? I believe that one reason vinyl and phonographs are hot again is that musically oriented people crave something of a shrine for their music — a device that is for music only.

5. Anti-intellectualism

Music has for decades been promoted and explained to us almost exclusively as a talisman of emotion. The overwhelming issue is how it makes you feel. Whereas the art music of the West transcended because of its dazzling dance of emotion and intellect. Art music relates to mathematics, architecture, symbolism and philosophy. And as such topics have been belittled in the general press or cable television, our collective ability to relate to music through a humanities lens has atrophied. Those of us who had music explained and demonstrated to us as a game for the brain as well as the heart had it really lucky. Why so many are satisfied to engage with music at only the level of feeling is a vast, impoverishing mystery.

6. Movies & Games

We as a culture do hear quite a lot of “classical” or composed instrumental music, but it has migrated from the concert hall to the video game and movie score. On one hand, that’s given young composers options to make a living, and some very good music is being imagined for these imaginary landscapes. But there’s a pernicious effect of the ubiquitous media sound track, in that whole galaxies of musical ideas and motifs and moods have been essentially occupied and rendered cliché. How does a young person steeped in the faux-Shostakovich rumbling of a war game soundtrack hear real Shostakovich and think it’s any big deal? This is rarely remarked on, but I believe that thousands of cumulative impressions of background music assigned to “romance” and “grief” and “heroism” have laid down layers of scar tissue on our ability to feel something when tonal symphonic music is made or written in the 21st century.

7. Music in Schools

It all begins — or ends — here. Like any other language, the rules and terms and structure are most readily absorbed by the young. And as music’s been cut from more than half the grade schools in the US in a long, grinding trend, the pushback has been based increasingly on evidence about music education’s ripple effects on overall academic performance — the ‘music makes kids smarter’ argument. This is true and vital, but we tend to lose sight of the case for the value of music in our culture — that music education makes kids more musical. Those who internalize music’s rules and rites early in life will be more likely to attend serious concerts and bring a more astute ear to their pop music choices as adults.


Those who care about the future of the music business ought to spend less time complaining about digital disruptions and expend more energy lifting up the public’s awareness of serious music, because we truly do devalue music when we reduce our most impactful art form to an artifact of celebrity and a lifestyle choice. Complex instrumental music has become marginalized to within an inch of its very existence, and that has a lot to do with industry folk defining “value” in only the way that affects their mailbox money.

Meet the Guy Who Gives You the Heads Up If an Album Leaks

December 1, 2015

Stanley Widianto noisey.vice.com/blog

Staffan Ulmert will let you know if and when an album has leaked.

His site Has It Leaked is like the Neighborhood Watch of musical leaks which, according to the official website, aims to mediate between fans and labels.

While it won’t provide direct links, Steffan says that the site acts as a platform for music fans to discuss leaks (and presuamably do a few quick searches and find them).

Ulmert, who has run the site from Sweden since 2012, is a music producer and podcast host, and fully understands the financial and creative harm of uploading records before their intended releases.

But digital music leaks have been a part of the way people listen to music since almost as long as the internet itself. Way back in 1993 a leak of Depeche Mode’s Songs of Faith and Devotion hit internet chat rooms in all it’s pre-mp3, pre-ADSL glory; and music fans have been clamoring for that early listen ever since.

Despite what major labels will have you think, leaks aren’t necessary a wholly negative thing for artists, and can also be used as a powerful tool in the right hands. Wilco’s classic Yankee Hotel Foxtrot started it’s life as a leak, after Warner refused to release it, and it was that buzz generated that secured the album an official release.

Leak culture is fuelled by enthusiasm. Labels can try and lock the recordings down and control the release, but if there’s music there and people want to hear it, then they will always find a way.

Noisey: Hey Staffan, how did the site start?
Staffan Ulmert: I was working as an artist and was disappointed in how the labels treated the promotional campaign. I was surprised at how non-creative the whole thing was. I figured that I should build my own platform where I could promote my own music. I started Has It Leaked because there was a lot of albums that I wanted to talk about and I wanted to know if they had leaked, so I wanted a forum for that to happen. And I didn’t need to figure out how to make that legal; I’m not for torrents, I’m not advocating [illegal] downloads. So that’s how I started Has It Leaked: just a way to promote my music, but that never really happened. It grew too big too quickly.

Are leaks here to stay?
Yes. Unfortunately, they’re a big part of the industry. Labels haven’t really figured out ways to prevent leaks from happening. I think some of the major publishers have begun to be better at surprise albums, but still, Beach House’s Depression Cherry leaked two months in advance and Sub Pop is a big label. I asked them to clarify but they didn’t want to draw attention to the leaks so they declined.

You interviewed Slade, a leaker who says that leaks can be beneficial to artists.
Sort of. In rare cases, I think a leak can be beneficial to artists. But in the end, let’s say you have a single coming up which is tied to Pitchfork and then suddenly your album leaks. And Pitchfork or other outlets will treat the campaign as if the album hasn’t leaked, but from a fan standpoint, it’s pretty much ruined. I think Slade is wrong about that. I mean Kanye leaked his second album and he created this major buzz. But you have to understand that there are PR companies behind that; that’s a calculated move. But, you know, leaks are bad for artists.

Is a leaker always to blame for the culture of album leaks or the eager fans downloading also have a part?
I think the leaker is to blame, definitely. I’m a fan myself, I downloaded albums illegally before. It’s very, very tricky to say no to a free album. Like you respect someone’s art, but you’re also a super fan. You want to hear that album. And I think the artist would understand that, but I don’t think they would understand the leaker.

What’s in it for leakers?
There’s an incentive for a leaker to brag about having an album and they want the attention. I had another interview on the site with a leaker and he said that he only wanted the five seconds of fame.

So it’s vanity rather than business?
There’s no money to be made from leaks. Slade’s getting some ad money, but it’s not much.

Has the site run into any any legal issues?
Around the time of JustinTimberlake’s 20/20 Experience release I got an email telling me that I should remove the post. I said no, because there were no download links. They threatened me with legal stuff because I was using the album covers. I removed the album cover, and that’s it.

Did you see it coming?
No, I’ve been surprised by how little legal action there’s been. Again, I don’t think this is illegal, but there are grey areas.

Is spreading word of a leak as bad as the actual leak?
I don’t feel that I promote leaks or help leaks gain attention. I don’t want piracy to grow, that’s not my thing. There’s not a lot of money in the site. I do it because it’s fun and I like to promote friends or stuff I believe in. I’m just a fan. If you search for an album leak before it’s leaked, there’s a lot of fake sites out there who want your credit numbers, make you take surveys and make a lot of money off of that. I don’t want them to make any money. So it’s better to have Has It Leaked say that, “no, it hasn’t leaked.”

What has the response to the site been?
Very few people are negative, which surprises me. I’ve had maybe 10 angry emails from artists, labels, people in general who don’t like the site. You can say that I’m promoting leaks. That’s the worst thing you can say about the site. I would say that I’m not making leaks a bigger thing than they already are.

Apple and Beats Developing Streaming Music Service to Rival Spotify

March 26, 2015

By BEN SISARIO and BRIAN X. CHEN NYTimes.com 03/25/15

In what would be the biggest change to its music strategy in years, Apple is pressing ahead with a sweeping overhaul of its digital music services that would allow the company to compete directly with streaming upstarts like Spotify.

Almost a year after agreeing to pay $3 billion for Beats, the maker of hip headphones and a streaming music service, Apple is working with Beats engineers and executives to introduce its own subscription streaming service. The company is also planning an enhanced iTunes Radio that may be tailored to listeners in regional markets, and, if Apple gets what it wants, more splashy new albums that will be on iTunes before they are available anywhere else, according to people briefed on the company’s plans.

In a sign of how important Beats is in reshaping Apple’s digital music, the company has made a musician a point man for overhauling the iPhone’s music app to include the streaming music service, as opposed to an engineer. Trent Reznor, the Nine Inch Nails frontman who was the chief creative officer for Beats, is playing a major role in redesigning the music app, according to two Apple employees familiar with the product, who spoke on the condition they not be named because the plans are private.

Perhaps most telling for Apple is what its new streaming service will not have: a lower price than rival services.

According to several music executives, who spoke on the condition of anonymity because the talks are private, Apple recently tried but failed to persuade record labels to agree to lower licensing costs that would have let Apple sell subscriptions to its streaming service for $8 a month — a discount from the $10 that has become standard for services like Spotify, Rhapsody and Rdio.

That $2 markdown may be small, but Apple’s failure to secure it reflects a shift in the company’s relationship with the music industry. While Apple once enjoyed enormous negotiating power as the dominant force in digital music — an area it helped pioneer more than a decade ago with music downloads — it now faces an array of new competitors and finds itself in the position of needing to modernize its offerings to catch up to the streaming revolution.

That has weakened Apple’s leverage — and the labels could not be happier about it.

Toni Sacconaghi, a financial analyst for Sanford C. Bernstein, said that Apple’s apparent struggle over lowering the pricing of its music service now was a result of being late to the streaming game.
Continue reading the main story
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“They’re used to being a shaper rather than a responder,” Mr. Sacconaghi said. “This is one of the few times where Apple is playing catch-up and not necessarily coming from a position of strength.”

Tom Neumayr, an Apple spokesman, declined to comment or make executives including Mr. Reznor available for interviews.

Apple’s turn toward streaming is a matter of necessity, as listeners increasingly shift from music downloads to streaming. According to the Recording Industry Association of America, downloads generated $2.6 billion in revenue in 2014, down 8.5 percent from the year before. Streaming made $1.87 billion last year, and overtook CD sales for the first time.
Continue reading the main story Continue reading the main story
Continue reading the main story

As the biggest retailer of music, Apple remains a crucial marketing partner for the music industry. Yet its absence from streaming has let others get a head start. Spotify, which started in Sweden in 2008 and came to the United States in 2011, said in January that it has 15 million paying subscribers around the world, as well as 45 million more who listen free, with advertising. (Apple’s iTunes has more than 800 million customer accounts.)

Exactly how Apple will match Spotify is unclear. Music executives say they have not been shown a prototype of the new streaming service, nor been given much detail on it.

The new music app, which is a collaborative effort between Mr. Reznor and other Apple and Beats employees, including Jimmy Iovine — who founded Beats with the hip-hop star Dr. Dre — will feature the streaming music service with many of the same characteristics as the Beats Music streaming service, one Apple employee said. Those may include curated playlists and a more vivid visual appeal, while conforming to Apple’s sleek and minimal design aesthetic, one person said. The name Beats Music will most likely be shed.

According to an Apple employee, the service is being tested as part of a new version of the company’s mobile software system, iOS, which has been given the code name “Copper” and is expected for public release this year.

Mr. Iovine has set the tone of the transformation of Apple’s music plans, according to music executives. Mr. Iovine, who reports to Eddy Cue, Apple’s head of software and Internet services, has been leading aggressive talks to secure prominent album releases that will be exclusive to Apple, akin to what Beyoncé did when she released her self-titled album on iTunes in December 2013. One music executive involved in the negotiations described this part of the new iTunes as “Spotify with Jimmy juice.”

A crucial difference for Apple’s streaming service is that unlike Spotify, it will have no free tier. That has greatly pleased top executives at major music labels, who have begun to complain openly that so much free music has given consumers too little reason to pay for it.

Apple is also expected to overhaul iTunes Radio, the free service that the company introduced in September 2013 as a competitor to Pandora, and which has had little impact on the marketplace. One new player is Zane Lowe, a former BBC radio D.J. known as a trend-spotter. Last month he announced that he would join Apple in Los Angeles, where the Beats team is concentrated.

Mr. Lowe is expected to play a role reconfiguring iTunes Radio. Among the ideas that have been floated for iTunes Radio are a more geographically targeted approach that would bear some resemblance to a traditional radio station, with Mr. Lowe as the voice, music executives said.

Whether or not Beats is a success, it would make just a small dent in Apple’s overall business. Mr. Sacconaghi of Sanford C. Bernstein noted that if Apple’s streaming music service were to make as much money as, say, Pandora, which generates roughly $1 billion in revenue a year, that amount would be less than one half of 1 percent of Apple’s annual $183 billion in revenue.

Ben Bajarin, a consumer technology analyst for Creative Strategies, said that the hope for online entertainment services like Beats is to add more hooks for people to keep buying Apple products. But a music service is just one potential lure among many others in Apple’s offerings, like apps, movies and the iPhone’s operating system.

“In the grand scheme of things, this isn’t trying to be the next big business,” Mr. Bajarin said of Beats Music. “It’s just trying to be an evolution in their ecosystem that has many moving parts, not just one.”