Vocana is a new streaming service with the stated goal of putting artists first. We spoke with President Neil Sheehan to find out how the venture plans to beat Spotify.
Taking on Spotify is no easy task. That’s what new music streaming service Vocana is aiming to do. Aside from Spotify, there’s also Apple, Tidal, Amazon, and all the other established players to contend with. Vocana plans to do things differently, however, with a user-centric payment model that sends your subscription money to the artists that you listen to, and royalty rates much higher than the industry standard.
We spoke with Neil Sheehan, the President of Vocana, to find out how the upstart company plans to compete in a very crowded marketplace.
Attack: How does your royalty payment system work?
NS: It’s one of the four pillars (that we’re founded on). The first one was, How do we pay independent artists more fairly? The large DSPs use pro rata. Your $10 subscription fee goes in this large pot and it gets broken down by market share. It doesn't go by who you listen to. Even if you and I are listening to, say, Morrissey, Taylor Swift is going to get the largest pot of this.
The proof will be in the pudding when bands are showing checks that they're making more (with Vocana) than they would be pro rata. Just look at the stats. There are between eight to 12 million artists on Spotify and 99.8% make less than $10,000. There's a huge swath of artists there that want to get paid more.
How will you still make money?
We are like any other streaming platform. We have to pay out 30 percent of subscription fees to MLCs, or mechanical royalties, and then to PROs (Performing Rights Organizations). Then we take a small margin of about 20-plus percent, and the rest goes back to the artist.
Why have you chosen to exclude major labels?
Well, if you look at the history of how pro rata started, it was because Napster came out and people were pilfering stuff. And then Spotify … went out and did deals with the major labels, or at least the larger major labels at the time. Part of that was getting advances and getting shares, but also cutting them good deals based on market share versus being allocated towards artists.
I'm not in the boardroom of Spotify or Tidal. Would they want to try a user-centric system? Do they think it works? I've seen papers that people have put out and said it doesn't work for major label artists. But I think they have an anathema towards it right now because their partners don't want it. For us, our ethos, our North Star, has always been to assist independent artists. Major label artists already get enough help.
Neil Sheehan - President of Vocana
[quote align=right text="(We’re) definitely not competing, just giving artists a better platform to get discovered first, and maybe get paid as well."]
I see that you’re also allowing for merch sales.
We have a third-party API (Application Programming Interface) with Printful. Bands can create their own web store within our app. Every fan has a profile, every band has a profile, and there’s a streaming player on it. What an artist can do is create a merch profile within their profile and send their fans to it. Printful does all of the design for them, all the shipping for them. The band doesn't have to pay anything in advance. Essentially, it's print on demand. The artist doesn't have to do anything but accept a royalty check from all of the merch.