Tiers in the subscription model - Audio in Elements discussion

Envato Authors AudioJungle
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This issue has been discussed HERE. Right now Envato is collecting feedback mostly from selected <100 authors who will be first to participate in Elements. This topic can be a natural feedback from the rest of the community.

Audio in Elements is a priority for the Envato and we can’t change it, no matter how much we are worried about the changes. Subscription model is something inevitable for the whole royalty stock industry. Many other markets have made already similar services which are very attractive for a big group of potential buyers. I suppose the main goal for the Envato is to collect a huge number of subscribers and a huge amount of money to share. System should be as much simple and clear as possible. For audio content main target are amateur or small professional video creators, especially youtube content creators like vloggers, small video studios and marketing agencies, etc. Correct me if I’m wrong.

What can we do? Now it’s the time when Envato is trying to find the best solutions for us and them. They are not composers, they are not even from the industry, so they need a huge feedback. Our main goal should be finding the best form of the subscription model which will be profitable both for authors and for Envato. This is how we can protect against loosing big money in the future.

Few weeks ago Envato wanted to include in the Elements <10mln audience broadcast use. But we all have expressed our concerns about commercial profitability of this move, because clients who create contet which will be broadcasted, usually have medium or big budgets. Including them in the elements would be a loss for authors and for Envato.

Thanks to this Envato proposed that they will exclude broadcast use. But in the future they may include it as a part of some higher tier of subscription plan. And this is place where we are.

How do you think tiered subscription model should look like? What should be included, what excluded, what competition did already? Straming vs broadcast or maybe individual vs company tiers?

What we don’t want in this topic is an unproductive complaining about Elements. We can’t stop Elements, so please focus on improving it.

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For me both divisions are ok: streaming vs broadcast or individual vs company.

Streaming vs broadcast - the downside to this is that there are also huge companies creating streaming content. They have big budgets and they are eager to buy music. And it’s a future of the industry.

Individual vs company - it will be hard to define which buyer is a company or not.

EDIT: another option is:

commercial vs non commercial

In fact there is another important issue. In current standard Elements plan physical products and downloads are allowed. I can imagine big companies with huge budgets (e.g. toys producers) using tons of our music for 33$.

I would also reconsider creating a tiered content. Maybe creating a batch of standard tracks for all and some kind of unique content for higher tiers would work well? Music is something special - it can be played separately, it can be universal, it can totally change the mood of media, it can be artistic or simply commercial. Music is something completely different than other media from this market, so maybe it needs different approach?

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Thanks for starting this highly important thread, I hope as many authors as possible contributes with ideas. Lets focus on solutions rather than problems.

Would it be easier to define if it was divided in Commercial or non commercial use or is that also hard to define?

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Commercial vs non commercial - ok, but their should be a line which will separate small commercial usage from bigger ones. Small commercial usage usually have the lowest possible budget for music (like tons of commercial rookie vloggers) and Elements is made for them.

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Cut and paste from a Elements announcement post from @AAMediaMusic A system that might be an idea to look into.

There is plenty to be made from YouTube via subscription, and that can be divided into tiers based on channel size and views. As the channel size grows, the subscription rate goes up. One I’ve seen ( and perhaps so have you ) is $15/month for basic up to 500K monthly views, $30/month for 500K to 5M monthly views, $150/month for unlimited views and channel size. Broadcast use and commercial use are not allowed in that model. For that, the customer goes to single track licensing starting at $99. I can’t see anyone having a problem there and that company is doing extremely well. Because it is not open for commercial use, large companies still have to go through the single track process. Some models do have what they call “enterprise agreements” with large corporate entities needing a lot of music. That can be very lucrative as they are negotiated.
[/quote]

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I’m wondering if the next type of plan would work:
Don’t know if it fits this thread idea.

Dividing the subscription model in few plans:

An idea could be plans with limits like this or something similar:

$15,00/month you can download 5 items
$25,00/month you can download 15 items
$50,00/month you have unlimited downloads

Or having plans with credits. The more $ you spend the more credits you got like this:

10$ you get 10 credits
20$ you get 50 credits
30$ you get 200 credits
50$ you get unlimited on elements

With this kind of model each item on elements could cost 1 credit and a cool thing with this model is that if you can’t find the item you need on the limited portfolio in elements you can go to Audiojungle and spend credits there too with slight expensive items like 10 credits or 15 credits each item.

Just an idea.

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What if items on Elements would have “mini” licenses for a limited usage?

For example, Standart License on AJ allows you to use your music in a one end media product up to 52 times in a year (like tv series with the same video opener in it).

So, what if License on Elements would allows you to use 1 track 1 time only?

This way, people with low budgets (like small YouTubers) would prefer Elements, and the customers with higher needs would have to buy a proper licenses on AJ.

It’s just rough thoughts, but you get the idea)

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Great brainstorming, keep it coming.

I think we have to keep in mind how much music a Commercial Rookie vlogger might need: Lets say a super active person makes a video 5 times a week, and needs 5 tracks to each video. Thats 25 a week, extreme yes, but some might need that and then they would use the subscription services that offers that amount a month for 15 $ or similiar price

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Yes, and this the most important idea of subscription model. Existing one (AudioJungle) is ineffective for most vloggers and amateur/semi-professional video content creators. The most commercially profitable system have to be perfect for all those “rookie video content creators” but it has to prevent medium and big players from using the cheapest possible subscription option. If they have medium/big budget for music, why not to convince them to pay for it?

So if there would be some kind of limit, it has to be relatively high. 5 tracks are not enough for the amateur Youtube video creators. But in fact it’s more than enough for big marketing agencies.

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It does. There’s no series clause in the Elements license… one download, one end product.

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Didn’t know that. Thanks!

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@Wolf_Music Yes, there is one use per one license. But still you can download one file how many times you want and register it as separate end products. In fact you can use one item many times.

Register items each time you use them

Each time you download an item, you get an ongoing license for a single, specified use. Want to use an item again? No problem! Visit your downloads and simply register it again for a different end use.

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Subscription models can not be stopped because they are here. They’ve arrived and the companies launching them will undercut each other until we bottom out at .00000000000000000000000001 cents a download.

Until all the mob bosses running these companies call a meeting to discuss how the entire music licensing industry can be saved, I am afraid this is where it’s headed.

Artists and music producers are entirely to blame because they willingly and foolishly agree to participate.

No matter what kind of model is invented, it is still a hopeless scenario. Eventually it will come down to lawmakers congress and parliaments, in conjunction with PRO’s in various countries around the world to set a “royalty rate” .

For Spotify the rate seems to average .002 cents a stream but that will probably head south too. Spotify is going to lose, I’ve heard 500 million to $1 Billion in 2018, yet the founder of the company Daniel Ek is worth 3 Billion today. How does this stuff happen?

The only hope I see for all of us is our PROS continuing to shake businesses down for money. BMI, ASCAP, and SESAC…and probably GEMA, PRS, and BUMA STERMA are continuing to collect record revenue. This is one positive. Eventually I predict a world where there is no up front sync. We will enter a back end only world where compensation is set by various usages. YOUTUBE streams will pay 000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000001

The only solution is to get every music producer/ artist in the world to bail on participation of this model and take a stance where you say “If you need my track, this is what you have to pay me”.

We, the artists creating the content, never take that stance and foolishly allowed corporations to set the price of our works. It took 11 years for envato to say “OK you now can set your own price” too little, too late.
I predict we have about 1 or 2 more years left of selling up front sync licenses (at most).

If none of us participate in the pooled revenue subscription model and all collectively say “sorry you need to pay me a toll if you want my track” we may save our business. Otherwise hope that the rate courts and PROS find a solution. This is the beginning of the end so prepare yourself. Sorry to be so pessimistic.

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is about to be replaced by
.0000000000000000003
.00000000000000000001
.0000000000000000000000000000005
etc.

And it’s entirely and collectively music producers fault, as it always is.

I will resist the model with everything I have because I want to set the price of my own works and keep my dignity. Perhaps the video editors around the world will feel sorry for us and find a few bucks in their pockets to pay us. Voluntary charity.

One final crazy thought, if we the artists here on aj and the other big market that everyone knows about shut subscription down and never allow it to come to fruition and do miraculously find a way to continue to sell sync licenses one at a time, maybe the artists participating on those other sites will bail out and come to a market where you sell tracks 1 sync license at a time. Wishful thinking.

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Are you 100% sure about this? What if the model prevents medium+ companies to participate in subscription for example and routes them to the marketplace instead? Or Envato decides to raise the subscription fee 10-20 times for medium+ companies?

This I think we all can agree is a hopeless scenario, like you have said before its like herding stray cats in Rome. I think it would be better spent energy if you focus all your drive and passion on communicating to Envato what solutions can be done to protect marketplaces as long as possible.

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Mojo…we’ll continue to get paid royalties, but nothing up front. The “up front” sync license is dead in the water.
The only way it can be protected is by every artist/ music producer in the world refusing to participate in such a model. It’s impossible because so many have sold their tracks and large companies now own the content.

UMG can start a sub model for youtubers and the world will have access to the pop stars and bands for their videos. Game set match…this party is over.

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Well I hope you are wrong. I don´t think anyone can say for certain whats gonna happen next 5-10 years. Maybe we all are going to have significant revenue from stolen Content ID tracks… I still think it should be nr. 1 priority to find solutions to protect marketplaces as long as possible in terms of company use. If Envato starts at “healthier” subscription model, others will follow for sure.

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If Envato wants to compete in the youtube subscription model and go against the “epidemic” of other subscription models… they should buy the tracks outright (publishing and master) for a reasonable fee upfront from authors the same way that other companies do and have at it. Let the authors have their writers royalties and carry on… This points sharing system is complete B$ imo and again just gives Envato more control over authors.

At the very least it should be based on channel view counts, highly targetted at low-budget people and not eligible for any company that has any money to spend on background music.

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Robert, it really is kind of useless at this point. I read about that “artsy” company and heard the deal was $200 sub fee paid by client and ONLY $60 of that is going to the artists “pool to be paid out each month”. YET some how some way, many signed up and accepted those terms. I can not verify these numbers because it’s based on 1 artist mentioning that was the deal. The written terms of the deal are not published. How do you fight against insanity?

The models and subscription plans are out there for all to see…all Envato can do at this point is match the competition. Once that match is made, the competition will undercut.

The undercutting will continue to a point where the subscription plans will cost .000000001 cents a year to get unlimited access to 50 million tracks.

Ironically, I just had my best revenue month of 2018 selling at $49 a unit. This entire scenario is so sad and depressing mostly because the clients are not asking for this massive pay cut. They are just being granted one from total insanity and greed. Some folks out there DO KNOW how to herd up cats. They herd them up and enslave them. There are genius minds out there.

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What is the payment for the artist?

.002 is the payment per stream

How much revenue per year does Spotify generate?

Dear Shareholders,

Today Spotify is reporting results for Q2 2018. The quarter was largely in line with our expectations, with some metrics performing at the high end of our guidance range.

We finished the quarter with 180 million Monthly Active Users (“MAU”) and 83 million Premium Subscribers, up 30% and 40% respectively, Y/Y.1

Total Revenue was €1,273 million, up 26% Y/Y and 34% Y/Y after adjusting for the negative impact from changes in foreign exchange rates.2

Gross Margin of 25.8% was at the high end of our guidance range of 24-26%.

Our Operating Loss was €90 million or approximately 7% of Total Revenue. This includes a €30 million cash expense related to our direct listing on the NYSE in April (“Direct Listing”) and €32 million of accrued social costs for options and RSUs3 (€24 million more than anticipated in our Q2 guidance as a result of the strong stock performance in the quarter). Excluding increased accrued social costs for options and RSUs, Operating Loss would have been at the low end of our guidance. Net cash flows from operating activities were €30 million, and Free Cash Flow was €18 million.

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The fact of the matter is that Spotify can eventually enact a subscription premium plan where subscribers can download anything on the platform and sync the music to a video and probably just put everyone out of business. Daniel Ek sure did know how to herd cats into one house.

Oh…and then there is Apple.

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