For the Record: What If a Label Ran a Streaming Platform?

Years ago, when the music business was at its low point, devastated by online piracy and struggling to sell one-dollar downloads, tech pundits used to ask why the major labels hadn’t just started their own online store. There are a few answers: They did (anyone remember PressPlay or MusicNet?), and a more serious effort would have outraged other retailers, which were still generating considerable revenue. Besides, consumers would have been reluctant to embrace a service with a limited selection, and getting too many labels together presented logistical issues (who would run it?) as well as legal ones, in the form of potential antitrust concerns. The result has been a business where technology companies have more control than rightsholders would like over pricing, promotion, and relationships with consumers.

That was then. It’s still hard to imagine any label creating its own mainstream streaming service – the kind that would compete with Spotify or Apple – but what about a smaller one, focused on a particular genre? It would be a tough sell now that consumers are used to getting all their music in one place, but the payoff – in profit, information about consumer preferences, and control of a direct marketing channel – could be significant.

As it turns out, there actually is such a service. On Nov. 21, Universal Music Group’s Deutsche Grammophon launched Stage+, which for $14.90 a month offers music from the label’s archive and that of sibling Decca Records, plus video programming and a new live performance every week. In terms of popularity, Stage+ can’t compete with mainstream platforms, but it’s not meant to – and it doesn’t even need to. It could make money with a number of subscribers in the low six figures, partly because it costs more than other services, and it gives Deutsch Grammophon a way to market other products directly to consumers.

Stage+, which was developed by Deutsche Grammophon president Dr. Clemens Trautmann under Universal Music Central Europe chairman and CEO Frank Briegmann, faces any number of challenges – consumer disinclination to subscribe to multiple services, existing specialist streaming platforms, even a rumored new project from Apple. But the product looks great, and it’s worth thinking about how a genre-focused, label-owned service might develop – and the issues it raises for the streaming model that has relatively quickly come to dominate the music business.

Right now, Stage+ only offers Universal Music content. But there’s no reason other labels couldn’t license it music. (Trautmann says he’s open to this, although he’s not seeking it out now.) Presumably, Sony Music Entertainment and Warner Music Group would be reluctant to license their classical music repertoire to a service run by their rival. But it might make financial sense to do so, since the subscription price for Stage+ would imply a better payout. Perhaps just as important, the Stage+ policy of dividing royalties according to listening time is fairer to classical performers than the standard number-of-tracks model. If you had spent decades mastering an instrument, how would you feel about hearing that your 20-minute recording was only worth a tenth as much as 10 two-minute pop songs that played for the same total amount of time.

This model could also work for other genres, which is where things really get interesting. The obvious candidate is jazz. Like classical music, it appeals to aficionados, many of whom might be willing to pay a premium price for a well-curated service that offers high-fidelity audio and video. As it happens, Universal has a substantial market share there, too: It owns Decca, Blue Note and Verve (which controls Impulse! Records) and has distribution deals with ECM Records and Concord Records (which owns the catalogs of the Prestige and Riverside labels). That’s far from everything – Sony has the important Miles Davis recordings, for example – but it would be one hell of a start. After that, who knows? Could there be room for an Americana platform, a service for independent punk, even one for jam bands?

The truth is that subscription streaming saved the music business, but the dominant model just isn’t great for some genres. Neither are the dominant services, which offer a mind-blowing selection of music but are aimed at a general audience. That has helped the music business grow, but it hasn’t always served fans focused on specific genres. Classical aficionados want better metadata to find specific performances of classic compositions, for example, while jazz devotees could use more information about which musicians play on certain recordings. Jam-band fans might want help figuring out the coolest versions of “Dark Star.”

These kinds of services probably won’t cost mainstream services many subscribers, but they could put a bit of pressure on them to reconsider some of the rules that favor pop at the expense of other genres. Why don’t services double-count songs that are more than 10 minutes long, for example, or create an easy and reliable way to search for albums based on the musicians that play on them instead of just the named artist? For the last few years, the music streaming market has been extremely competitive based on marketing and discounts – all the mainstream services offer the same music for about the same price, with a fairly similar experience. What would help record labels, as well as creators, is more competition in terms of business models, where services that offer different features face off against others that are aimed at different audiences. And who better to spark that competition than the labels themselves?

For the Record is a regular column from deputy editorial director Robert Levine analyzing news and trends in the music industry. Find more here.

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