What is the last time that you bought a song or an album?
Probably a long time ago. Almost no one buys music anymore. In the new age of internet musicians have to focus on concert/festival bookings and sponsor deals to earn one’s daily bread. When Internet became affordable and available for the “ordinary” people, many started illegally downloading their MP3’s from sites like The Pirate Bay. Nowadays, music streaming services like Pandora, Apple music and Spotify are becoming more and more popular. These streaming services seem ideal as a new platform to listen to music. Music is easy accessible, there is huge variety in music and foremost, everything is legal. Take Spotify as an example, a Swedish music, podcast and video streaming service earning their money with ads or subscription fees if you are a premium user. Spotify negotiates with record labels and if they come to an agreement, the company pays for the respective license and royalties to have the rights of the content. Since the introduction of streaming services like Spotify, illegal downloading and piracy have significantly dropped. It looks like artists can rely on selling their records again, but this doesn’t seem to be the case. At least, if we have to believe some artists who publicly discredited Spotify by saying they’re are being exploited.
Spotify’s income structure
I want to go more deeply into Spotify’s income structure to explain the ambiguities around the streaming services. When Spotify wants to acquire a song or album, they approach the record label. The two parties negotiate about a fixed price for the rights to make the song digitally available. If the firms come to an understanding, the record label will ask for a royalty rate. This is the amount that the artists get per stream. These rates are different between free and premium users. Taylor Swift pulled her music from Spotify after they refused to make her new album only available for paid users. Other artists including The Black Keys followed her by removing some albums or songs from Spotify. There is no difference in content availability between the paid- and non-paid users which result in musicians debating the compensations they get.
The future, not the end
In some eyes, Spotify is seen as a villain in the music industry. However, I think that streaming services are necessary to keep the industry moving forward. The world is changing and so do we. People are not willing to pay for songs or albums. However, many people are interested in paying for music in general. Paying a monthly fee to listen to all music that is available (and in the case of Spotify, that is a lot) is for many worth the investment. In comparison to torrents, the artists get actually paid by these royalty rates. The average rates are between 0.006 and 0.0084 USD. This doesn’t look like much, but take Beyonce’s “Drunk in Love” with more than 134 million streams, this equals between 804,000 and 1.3 million dollars that goes directly to the artist. Of course, selling 1.3 million singles in a store or directly via the artists own website would result in more earnings, but the reality is that there aren’t many willing to do that. The content that is available on Spotify is growing each day and so are the subscribed users. Wrapping thing up, I think music streaming services are a good development in the music industry, what do you think?
Sources:
http://www.cheatsheet.com/business/why-streaming-is-the-future-of-the-music-industry-not-its-end/
https://www.spotifyartists.com/spotify-explained/
http://pitchfork.com/features/article/9896-is-the-era-of-free-streaming-music-coming-to-an-end/
Dear Dave,
The article was a interesting read and made me think about the actual change in the music industry which has occured. The changing music market caused by the upcoming digital music market making it necessairy for most companies to change their business models the last decades has to be recognized (Malt, 2015). The changed the music market as from my perspective can’t fully be serviced with the streaming opportunities which have arised such as spotify.
The introduction of spotify and other streaming services have began to shift the music market from free as offered by youtube toward spotify’s paid tier when you would like to listen to music undisruptively (Titlow, 2015). I would think that such a development would come with resistance because the null option is to remain with the same music for free.
Secondly, the ending of the music market might still occur because of the deregulated pirating markets despite of multipele regulations made by for instance the US goverment (NBS news, 2011). The effort of the goverment to seizure multipele websites offering free music have simingly not diminsh the media traffic violating the U. S. copyright law. Regulating a market which is mostly underground could give faulty data as to how much music is still downloaded for free of the internet.
Still, the portability offered by spotify with the newly introduction of a gadget which facilitates you to stream music without your phone really gives spotify and other streaming sides an edge compared to torrenting your music forehand (Barnwell, 2016).
Concluding, as promising as the upcoming streaming market may seem it isnt a solution to the current position the most internet musicians are in. It is imperative to adress this problem to take into account that the music forehand could be consumed for free on the internet. Still, the streaming of the market which increases portability of the music could surve as a provisional solution.
Dear Dave,
Interesting read and this is worth thinking about. Does Taylor Swift forgot where we came from? Can we go back to Steve Job’s iPod and iTunes. De big record labels thought he was crazy, however everybody committed to downloading their music instead of buying records, Free Record Shop going bankrupt as a consequence. Since the introduction of Spotify, everybody can never say that music is hard to get or expensive to buy (Pinas, 2014). So yes, Spotify is the future of music.
However, maybe one element could stand in the way of… The comeback of vinyl. Only for hobbyists or is this going to catch on? And get us all back to buying records again?
What do you think?