Streaming has been successful for Wellington bands The Phoenix Foundation. Photo / Supplied
Streaming has been successful for Wellington bands The Phoenix Foundation. Photo / Supplied
Industry sees the jump in revenue to $74 million for 2015 as positive first step towards helping NZ musicians.
The New Zealand music industry has experienced an annual growth in revenue for the first time in 15 years, the increase coming from streaming services such as Spotify and Apple Music, says a report out today.
Recorded Music NZ presented the annual report, happy to show that wholesale revenues to the local industry grew 12 per cent in 2015 to $74.4 million, with streaming accounting for $25.7 million, or 35 per cent.
That's more than double the amount earned from streaming in 2014.
Recorded Music NZ CEO Damian Vaughan described it as "a great first step towards a more positive future for recording artists and record companies in NZ".
To have overall growth for the first time in 15 years is undoubtedly great news for the industry, which has spent the past two decades losing money through the rise of piracy. It seems streaming services are slowly combatting that problem, having become part of everyday listening habits for many New Zealanders.
Of course the amount of revenue being passed on to artists by streaming services has been much discussed in the industry, with everyone from Taylor Swift to Thom Yorke weighing in on whether the new model devalues music, or is fair for the artists, and the depressingly minuscule amounts that independent artists are making from several thousand streams a month have been well documented.
So it's interesting to ask whether this impressive growth in streaming revenue is helping New Zealand bands and artists.
The overall sentiment seems to be yes, increased income from streaming is certainly helpful, and the information or data about fans you can obtain from streaming is a real bonus.
But this is balanced by the frustration that the amount of money coming in is still low, and the difficulty with a lack of clarity around the financial agreements which are in place.
Craig Pearce, who manages successful Wellington-based acts The Phoenix Foundation and The Black Seeds, explains how streaming has been helpful in their particular circumstances.
"Both acts are lucky enough to have extensive catalogues, so while we might not be as popular as some newer acts that get a lot more streams on one or two singles, collectively their repertoire gets streamed a lot. This helps us make up for the large impact in physical and download reductions we have experienced over the past few years."
The more consistent and continual income spread out over the months or years has also helped in terms of budgeting and managing cash flow.
"We don't have huge fluctuation in revenue periods like we used to. It used to be (back when CDs were king) a massive spike when a new album was released, then it tapered off to almost nothing until a new album came out. Now we have a very consistent streaming income each month (which will only vary 5 to 10 per cent) and we will see a smaller spike when new material is released."
Ben Howe, who is head of local labels Flying Nun, Arch Hill and Flying Out store, says an increase in streaming opens up possibilities for local artists.
The Black Seeds. Photo / Supplied
"For us, streaming and vinyl are areas of growth. The ability for an artist we work with - for example, Doprah or Aldous Harding - to quickly reach a sizeable global audience via a platform like Spotify is pretty exciting."
Both those acts have recently gained enough international interest to warrant significant international tours, which may well have been helped by streaming. And it seems the local industry is agreed that the data you can glean from streaming platforms helps to identify specifically where your audiences are, how big they are, and how passionate, which has value.
"When someone bought a download or a CD we only knew where they purchased it and that they would listen to it at least once. Now we get to see in real time where, when, what and how often people are listening to our music and allows us to target other parts of our business a lot more accurately, like building a tour run around where we can see the majority of our most active listeners are," Pearce explains.
"What I don't like about streaming is obviously the rate per stream we get, and all the ambiguity around the deals between the record companies and the platforms. I do feel that rates will slowly come up as more consumers subscribe, and it has somewhat helped combat piracy, which is a good thing."
But though a 12 per cent increase is positive, it masks another issue, which is that only a small portion of this revenue is actually going into the local music community.
"Almost all the revenue goes offshore," says Howe.
"In my opinion the only fix is to aggressively find ways of increasing our New Zealand music market share, ideally from the current level of around 5 to 10 per cent, to at least 30 per cent.
"I think it would be fantastic if industry organisations with large local memberships - like Recorded Music NZ - led the initiative to grow the NZ music revenue share."
