The fall and rise of Philippine music

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By Bjorn Biel M. Beltran, Special Features Writer

AT THE University of the Philippines Fair early this year, April Hernandez had the lucky role of opening for the popular band IV of Spades. Under the stage name “TheSunManager,” she has just around 3,000 monthly listeners on Spotify while IV of Spades has a following of over a million.

So Ms. Hernandez played her set with the knowledge that most of her regular listeners did not show up to support her. She even understood when many in the audience started cheering in the middle of her performance when they saw IV of Spades’ roadies setting up the band’s equipment behind her.

“Who am I compared to IV of Spades?” she said in an interview, smiling. “It’s like that. I’m used to it.”

What she was not ready for was her manager pointing to someone in the audience during her performance. Amid the sea of IV of Spades banners and placards, a girl was holding up a sheet of paper with a message.

It read, “Hi TheSunManager. Your music saved my life.”




Ms. Hernandez created the indie-folk persona of TheSunManager while studying at the College of Fine Arts in UP Diliman. As TheSunManager, she released a self-titled EP in 2014, and released her debut full-length album, entitled Worth, in early February of 2017. Currently, she works as an industrial designer for a business run by her aunt, a job that allows her the time and freedom to pursue what she calls her “other job.”

She is one of the legions of independent musicians carving their own niches in the Philippines’ music scene, an industry that has been seeing a resurgence in recent years amid the opportunities brought about by online streaming services like Spotify and YouTube.

Online streaming services, which mostly operate on a subscription-based business model, have both revolutionized the way consumers listen to music, and how artists produce it. Rather than having to buy individual albums or singles from any particular artist, consumers need only pay a recurring fee for access to a library of millions of songs made by artists from all over the world, which they can then listen to any time and anywhere as long as they have a data connection.

The benefits for the artists are twofold. The open nature of such services has given small-time musicians like Ms. Hernandez a platform on which to release their music and draw an audience, while those with larger fanbases get paid by the listeners who would have otherwise resorted to pirating their content.

In fact, streaming has become the biggest contributor to the growth of the recorded music market. According to data released by the International Federation of the Phonographic Industry (IFPI) in April, streaming is the industry’s single largest revenue source, the main driver of its recorded growth in 2017.

The global recorded music market grew by 8.1% to a total of $17.3 billion last year, its third consecutive year of growth since IFPI began tracking the market in 1997.

“Streaming remains the main driver of recovering revenues and, for the first time, has become the single largest revenue source with 176 million users of paid streaming services contributing to year-on-year streaming growth of 41.1%,” IFPI’s Global Music Report 2018 said.

“Streaming now accounts for 38.4% of total recorded music revenue and its growth has more than offset a 5.4% decline in physical revenue and a 20.5% decline in download revenue.”

What’s more, grouped collectively with all digital formats, total digital income last year accounted for more than half of all revenue (54%), the first time in the industry’s history.

Which is a welcome development, as far as music is concerned.

Historically, the advent of digital technology has spelled nothing but catastrophe for the global recording industry, at least in terms of revenues.

THE PIRATES
Around the turn of the millennium, the global recording industry took a huge hit with the arrival of peer-to-peer file sharing. The Napster and LimeWire networks together were used by several millions of people who were stealing music and redistributing it for free all over the world.

How many dollars were lost to such piracy is still largely unknown, but many accounts figure it in the billions. Total revenues for CDs, vinyl, cassettes, and digital downloads in the United States in the 21st century reportedly dropped to $9 billion in 2008 from a height of $14.6 billion in 1999.

IFPI data indicated that despite 2017 being the industry’s third consecutive year of growth, it followed 15 years of significant revenue decline. The revenues in 2017, despite the uplift, were still only 68.4% of the market’s peak in 1999.

Before peer-to-peer file sharing, cassette tapes and compact discs (CDs) opened the door to music piracy around the world. Emerging as an effective, convenient, and portable way of listening to music in the 1970s and the 1980s, the cassette tape also had the useful feature of being recordable, allowing individuals to copy music onto the tape directly from the radio. Recordable CDs, which exploded as a popular method of electronic data storage in the 1990s, made copying music even easier.

In a smaller market like the Philippines, this was perhaps even more pronounced. Marivic A. Benedicto, chair of the Philippine Association of the Record Industry, said in an interview that music recording certification around the late 2000s had to change because CD sales could not support the previous model any longer.

“Gold and platinum records used to signify 15,000 and 30,000 units sold, but no one was reaching gold anymore,” she told BusinessWorld.

“We decided to lower the threshold. From what was 15,000 and 30,000, it became 10,000 and 20,000. Then two years later, we had to lower it again to 7.5 thousand and 15,000. That’s where it is at now.”

It is in this climate that Spotify finally came into the country in 2014 under a partnership with Globe Telecom. The online streaming platform, Ms. Benedicto said, offered fixed global rates in exchange for the license to distribute over 90% of the Philippine record industry’s repertoire.

Music labels, publishers, and composer groups welcomed the proposal with open arms, in the knowledge that there was no better alternative for their salvation. Major record labels like Warner Music Group were ditching physical sales altogether to make way for a new era of music. Everything that the industry knew at this point had changed. Streaming — digital music in general — had become the future.

UBIQUITOUS
Last October, IFPI released its Music Consumer Insight Report 2018, which examined the ways in which music consumers aged 16-64 engaged with recorded music across 20 of the world’s largest music markets. Unsurprisingly, it found that 86% of consumers listen to music through on-demand streaming, with the youth being the most engaged. More than half (57%) of streamers aged 16 to 24 years old admitted to using a paid audio streaming service.

“Streaming is virtually ubiquitous,” the report concluded.

On average, each of the respondents listened to music 17.8 hours per week, with the car being the most popular listening location. Music consumers especially enjoyed listening to local music genres, with 66% of consumers in Japan listening to J-pop, 69% of consumers in France listening to Variété Française, and, in Brazil, 55% listening to Música popular brasileira.

While specific data on the Philippines was not included, that the recent resurgence of popular “original Pinoy music” (OPM) is in part due to the advent of digital music platforms had already become a worn-out talking point.

“Accessibility-wise, [Spotify] became an advantage,” Ms. Hernandez said. “It was kind of difficult at first, because not everyone had Spotify yet. But it slowly became the standard for listening to music. It’s just easy.

Just have an account and then you can listen to so many types of music. As musicians, that’s what we tap into, as the most accessible platform.”

In addition to Spotify, websites like Bandcamp and Soundcloud have ignited a spark that set the careers of grass roots musicians ablaze.

“Online streaming platforms like Spotify and Soundcloud democratized music consumption. It made it easier for local artists to be heard and to compete globally,” Dinah Remolacio, executive director of the PhilPop Foundation, the organization responsible for the annual Philippine Popular Music Festival, said in an e-mail.

“There is a resurgence of OPM. The local music industry is teeming with excellent millennial bands and a new breed of songwriters. As proof, PhilPop receives thousands of entries every year. There are also hyperactivity of music scene in VisMin (Visayas-Mindanao) areas, with the advent of [the] Bisaya Music Festival, VisPop and Mindanao Music Festival.”

Ms. Hernandez said artists like her could simply make use of independent digital music distribution services like DistroKid to publish their discography on platforms like Spotify, Amazon, and iTunes. Such services are slowly supplanting conventional record labels in the role as the mediators between the musicians and the digital platforms. For a set fee, DistroKid and other similar services ensure independent artists get published on their platforms of choice and collect any royalties they earn in their place.

TheSunManager came into her own in this way. Songs were recorded, the albums uploaded and distributed, the websites built, all with minimal outside help.

“I have my own home studio, because it’s now cheaper to build your own as opposed to before when you had to book a studio,” Ms. Hernandez said. “It used to cost tens of thousands of pesos to record an album, and how much of that will see returns? It wasn’t a sound investment. Now, I can just buy a recording interface for about 15 to 20,000 [pesos], and I can make a number of albums out of it.”

She’s in great company. Artists like Reese Lansangan, Autotelic, Ben&Ben, and even phenomena like the FlipTop Battle League — the first and largest professional rap battle conference in the country — have found massive success in independently reaching an audience through digital platforms.

Even a band as big as IV of Spades shares the sentiment. “Having the access to music production can help local artists to create music on their own. For us, digital technology is not an enemy, but rather a change when it comes to creating a generation movement,” the band said in an e-mail.

“Online streaming has helped starting artists to share their music to a wider audience. It has also helped the listeners to have a wider repertoire when it comes to listening to music. This streaming era would be one of the trademarks of our generation’s music.”

“They don’t even need record labels now. That’s something we have to struggle with all the time,” PARI’s Ms. Benedicto admitted. “Are we giving enough premium that artists will still come to us? That’s the dilemma of the record industry.”

“It’s so easy to self-publish today. [Artists] don’t need record labels, they don’t need a corporate structure to propagate their music.”

BREAKING DOWN BARRIERS
Digital technology, much like the radio and television before it, has broken down the barriers of communication, allowing culture to transcend local borders and connect people together. Worldwide, independent music has seen an unprecedented consumption boom as more people get exposed to music that was once unavailable to them.

The Merlin Network, which represents the rights of the independent label sector in 53 countries, including Brazil, Mexico, Chile, the Philippines, Thailand, Indonesia, North America, the UK, and Europe, found that 42% of independent labels received more than half their digital revenue from consumption outside their home territory. By comparison, only 17% stated this was the case for physical sales of CDs or vinyl. Audio streaming accounts for the bulk of digital revenue for two-thirds of Merlin members.

Charles Caldas, CEO of Merlin, said in a statement: “Merlin’s independent record label members already occupy a unique position on streaming services, with their repertoire consistently over-indexing on subscription tiers compared to free ad-supported ones. Users of these services deeply engage with Merlin members’ music and are willing to pay for it.

“We now have irrefutable evidence that the new dynamics of streaming are opening up previously inaccessible territories to independent music, with a phenomenal consumption surge in Latin America and across Asia. What feels particularly exciting is that we’re only at the start of this growth trajectory — and with potential of relatively untapped markets, including China, Russia and Africa, still to be realized.”

The question now is this: With so much growth in the music industry, is music now a viable way to earn a living?

One would think that the prevalence of music in the age of content creation will cultivate a heightened appreciation for the medium and its makers. Surely with the incredible reach of platforms like Spotify, Bandcamp, SoundCloud, and even crowdfunding websites like Patreon, Kickstarter, or Indiegogo, digital technology has in some way improved how artists make money from their art?

In reality, as with most things, it’s a bit more complicated than it appears.

“This is a complicated question because it somehow implies that there was and is money to be made in the first place,” Monika E. Schoop, a post-doctoral researcher in the Musicology department at Cologne University, Germany, said in an e-mail.

Ms. Schoop has spent most of the decade researching about the Philippines’ independent music scene and how digital technology is shaping it. Her book, Independent Music and Digital Technology in the Philippines, explores “the diverse and innovative music production, distribution, promotion and financing strategies that have become constitutive of the independent music scene in 21st century Manila” through extensive fieldwork online and offline.

What she found was that the machinations that allowed for the explosive growth of independent labels have created the issues that pushed the decline of the major recording industry (i.e. labels like Warner, EMI, Sony BMG, and MCA which suffered major losses due to CD-R piracy in the early 2000s and later on through file sharing). Piracy remains a key of these concerns.

“Digital technology has provided the means for the rise of independent music and for the decline of the major recording industry alike,” Ms. Schoop said. “You could say that it’s two sides of the same coin. While it has facilitated access to music production and distribution for many, who previously had no or limited access, it has also provided new tools for music piracy. Piracy had of course already been around before (especially with regard to cassettes) but it has been taken to a new level though CD-Rs, file sharing and unauthorized downloads.”

Data from IFPI’s Music Consumer Insight Report 2018 found that still more than one-third (38%) of consumers obtain music through infringing methods — with stream ripping the dominant method (32% of consumers). While this was not to the extent it was more than a decade ago, the effect was the birth of a codependent relationship between major record companies and the digital platforms that mitigated such piracy. Nearly half (47%) of all time spent listening to on-demand music is through a single platform: YouTube.

Ms. Benedicto admitted that the biggest revenue generators for PARI members are YouTube and Spotify. In the case of YouTube, major record labels have the nifty feature of having their intellectual property protected by content ID algorithms that allow them to monetize user-generated content that use their music.

Sophisticated algorithms, however, do little to bridle the immense power these platforms have over the global music industry. Ultimately, what record labels stand to earn from the distribution of music through these platforms completely depends on how much the platforms decide to pay them for it, regardless of how much was actually earned from its use, a legal conundrum that IFPI calls “the value gap.”

To quote IFPI’s Global Music Report 2018, the value gap is “the mismatch between the value created by some digital platforms from their use of music and what they pay to those creating and investing in it.”

When Google released its “How Google Fights Piracy” report in November, a 25-page document that detailed the internet behemoth’s anti-piracy principles, Frances Moore, chief executive of IFPI, had this to say: “We welcome Google’s recognition that it and Google’s YouTube need to operate responsibly and properly value creators and their work. However, the figures in Google’s anti-piracy paper don’t match our own.

“It is difficult to get any clarity on Google’s claims as it doesn’t explain its methodology, but IFPI data shows that revenue returning to the record industry through video streaming services (including but not limited to YouTube) with 1.3 billion users amounted to US$856 million in 2017 — less than half of Google’s claim and less than US $1 per user per year.”

Ms. Moore said that in contrast, audio subscription services (both paid and ad-supported) with a much smaller user base of 272 million users compensated creators some $5.6 billion — a little more than $20 per user per year.

“This is the reality of the ‘value gap’ — in which user-upload platforms, such as YouTube, exploit music for profit without returning fair compensation to music creators,” she concluded.

Spotify’s record is far from clean as well. Many reports have already detailed the criticisms lobbed at the music streaming giant regarding artist compensation, with singer Taylor Swift being one of the company’s most prominent critics.

This is not mentioning that existing power structures and inequalities are being inadvertently reinforced by such Western-centric platforms.

“Research has shown that this is, e.g. the case for SoundCloud — artists from London and New York are more likely to ‘be found’ than artists from South East Asia. There is reason to be skeptical of the promise that digital technology leads to a real democratization of the music business,” Ms. Schoop said.

SHOW ME THE MONEY
For independent musicians, revenues from streaming are virtually non-existent.

“I can’t say that I super love Spotify. How much do we actually get each stream per song?” Ms. Hernandez said.

She admitted that unless they reach the heights of popularity currently enjoyed by the likes of IV of Spades or Ben&Ben, new artists do not have any guarantees that they can support themselves through their music, even with music distribution as free as it is now.

Part of the problem is inherent in the nature of globalization. As local shops and brands have to contend with added competition from foreign brands in exchange for the ability to bring their own wares to foreign markets, so do local artists have to compete for the spotlight on a global stage.

Some take this as a challenge. IV of Spades believes such platforms “challenged local artists to be more competent when it comes to raising the quality of creating music, especially in recording and production.”

For others, it remains a matter of opportunity and hard work.

“Even if your music is great or your branding is great, there’s always going to be factors of luck. I don’t mean to sound like a cynic but sometimes only right timing and hard work is the perfect combination. Even if you’re super hardworking, if your timing is off in terms of what the market trend is right now, you’re not going to leave a mark,” Ms. Hernandez said.

“This is the age of disruption. The digital platforms made everything more accessible and readily available. But disruption is a double-edged sword. With millions of artists trying to break through, and endless content supply that is readily available to the public, artists must be brilliant and creative enough to set himself apart from the rest of the herd,” Ms. Remolacio added.

The number of Filipino artists who can make a living making music in the country is so small that, in all her time spent doing fieldwork in the Philippines, Ms. Schoop mostly encountered musicians who, like Ms. Hernandez, had to have day jobs to make ends meet.

“More generally (not limited to the Philippine context) selling music as a product has become less lucrative and less important; the live sector has become more important. This also includes the sale of merch [merchandise] at shows,” she said.

“I do not have access to figures here but… from the experience of friends who run labels or are musicians platforms like Spotify are more about exposure that about actually making money.”

Ms. Benedicto agreed. There is still a healthy number of people keeping the live sector afloat, bolstered by the sales of merchandise like zines, freebies, stickers, posters, and downloadable codes.

“It’s like that if you’re indie. The recording doesn’t make you the money. It’s the bookings,” she said, adding that many fans today are happy to pay to see and support their idols live.

In an ideal world, Ms. Benedicto noted, music and the arts are meant to be free. As methods of self-expression, she said they are truly meant to be shared and appreciated by everyone. Copyright, along with the institutions and industries that have risen around it, are legal fixes only put in place to protect artists from exploitation. Sophisticated as such institutions have become, especially in the wake of the digital revolution, music as its core hasn’t changed.

“Music is about connecting to people,” she said.

CONNECTION
Digital technology then is not a panacea for the ills that for so long have plagued the industry. But it has changed what music can become for artists and listeners alike, closing a gap between art and audience that before was unfathomable.

With so much music available nowadays, one would think that achieving a genuine connection with a song is more a product of serendipity than artistry. However, never has it been easier to find and personally connect with music than in the era of Big Data, where algorithms like Spotify’s Discover Weekly tailor-fits a different, specific playlist of songs for each user every week, and YouTube’s Suggested Videos sidebar which accounts for roughly 75% to 80% of the Philippine record industry’s views.

While the exposure does not necessarily translate into adequate monetary compensation, for many it’s simply enough to be heard.

“The fans are the people who give reason for artists to continue,” IV of Spades said.

“[Independent artists] are not people-pleasers in a way. They don’t sing to make money and they don’t sing to please a lot of people. Most sing to please themselves and express themselves,” Ms. Benedicto said.

Ms. Schoop added, “I am still fascinated by the endurance of many artists. They often work long hours during the day, some have family responsibilities, and still play shows late at night — often putting up with the insane traffic to get to the venues. I really have lots of respect for that.”

Algorithm-based as it is, the relationship formed between artist and audience is no less genuine. Ms. Hernandez recalled that night at the UP Fair as one of the highlights of her music career.

“As much as there are many practical struggles, for me it’s still those little moments why I do what I do. That’s the goal,” she said.

“For me, I don’t find pleasure in just playing or making music. I think the reason why I really enjoy music is the connection it creates with people. That I can make a song and then this total stranger can hear it and she might feel that this person knows me or that they’re not so alone.”

“That sort of became what I want to do in life: to connect with people, help people out. Music is just one way for me to do that,” she added.

Moving forward, it is unclear whether the issue-laden YouTube and Spotify model of consuming music will be the conclusive way for artists to receive their due. With technological progress speeding up each passing year, it’s difficult to tell whether the recent recovery of the music industry is a sign of things to come, or simply a hopeful rally before its continued decline. What is clear is that for as long as intimate connections like that can be found, and for as long as humanity’s ceaseless need to create art endures, the industry has yet more music to play.