Independent music artists may no longer need to compete with major label artists to make a livable wage thanks to Arena Music, a new music streaming service based here in Arizona.
The innovative platform, which was originally a distribution company, was developed three years ago when founder and CEO Damon Evans realized the direction the music industry was shifting because of the ability to stream music rather than purchase it.
“The only way a music distribution company would survive is to evolve,” said Evans, a likely strategy for artists as well.
In the past, distribution companies and artists could profit from album and vinyl sales, in addition to other marketing areas such as merchandise. After the rise of streaming services, which give consumers the ability to pick and play a song at any time for a monthly fee, the avenues by which artists could make a profit diminished, said Evans.
The most popular streaming services such as Spotify and Apple Music “pay artists three to six thousandths of a penny per stream,” he said. For most independent artists that rate “will net about $30 to $60 for every million streams on average.”
In order to make a livable wage, artists would need to attain millions of streams — a difficult endeavor for less well-known artists.
“We were seeing (independent) artists leave because it wasn’t a viable career,” said Evans.
Arena’s model is unique in that independent artists who are contracted with the company receive a full penny per stream. In addition, Arena markets and sells the artist’s merchandise, resulting in a more profitable option for the 700 independent artists already contracted with Arena.
The unique alternative stemmed from the realization that while people may have no interest in purchasing music they still want to buy merchandise, Evans said. Artists receive 50 percent of the revenue from merchandise sales sold through Arena.
Arena prints and manufactures a large number of artist merchandise to reduce costs. Using the revenue from printing and funds from the original distribution company, Arena has been internally financed.
“The goal is to finance Arena with as many outside revenues as possible so that our artists can take more shares of the music royalties that come in,” Evans said.
Arena offers music to consumers at no cost and without advertisements, using non interactive streaming, similar to Pandora’s radio service. “All consumers want is to press play and have an unobtrusive listening experience that aligns with their music tastes,” Evans said.
Consumers listen to a playlist designed to align with the listener’s tastes, made from Arena’s library of over 2 million tracks. The playlist combines songs from independent and major label artists, a deliberate method to help promote the independent artists while keeping in mind more mainstream interests.
The non-interactive streaming is supplemented by the Listen to Own program, in which consumers can earn one credit by listening to any song five times. Over time the credits can then be used to own music from independent artists or purchase merchandise from any artist.
Since Arena is not associated with any major labels consumers do not have the ability to own music from major label artists.
“You can hear a song five times from say Young the Giant but instead of generating a credit for a download it can only be used to purchase merchandise,” said Evans.
Consumers will soon be able to listen to music, purchase merchandise and utilize the Listen to Own program on Android and iOS devices when a new version of the Arena app drops later this week.
Source: Sayo Akao