Give Jay-Z's Tidal tune stream thing a chance, says indie label boss
Income from loopy, star-owned vanity project better than no income at all
Interview Jay-Z’s much-mocked Tidal deserves a chance, says veteran British indie boss Martin Goldschmidt. Goldschmidt says the music industry should worry more about free and freemium services and offerings than piracy, and reminded us that digital sales are highly profitable – if you can make one.
Goldschmidt started indie label Cooking Vinyl from a spare room in 1986 – co-founder Pete Lawrence went on to found the Big Chill events in the 1990s – releasing a cassette tape of then-unknown singer Michelle Shocked recorded at a folk festival. The group now handles artist one-offs for mature acts such as The Prodigy and Gary Numan, and includes a marketing arm, Essential.
The jury is still out on the long-term viability of streaming, he says, but digital retained a lot of advantages to lugging cardboard boxes full of plastic around the country.
“Nobody talks about profit. What’s more important: profit or revenue? If margin’s going up more than revenue is going down, you’re really happy. And it is. You don’t have to deal with returns – and the cost of distribution is lower,” he told us.
While streaming services like Spotify needed to be more transparent, but now represent serious money, physical still represents around 50 per cent of the label’s sales – a remarkable story helped by a rise in independent retailers and HMV’s comeback. (In January, HMV reclaimed its status as the biggest seller of CDs in the UK from Amazon).
“We’ve seen income in one month from Spotify higher than from iTunes. It was a blip, but it’s now a very significant income stream,” Goldschmidt says.
The majors hadn’t done the industry any favours with their financing of the services – pocketing the cash for unsuccessful ventures.
“With streaming, the huge advances that tech companies pay to major record labels in advance isn’t apparent. If a service isn’t popular enough, then 90 per cent will sit with the major label as breakage,” he explains. (“Breakage” is the term – not particular to any one industry – for unattributed income. Think of gift cards bought but not redeemed. That’s breakage.)
Sponsored: Becoming a Pragmatic Security Leader