A brief introduction to Musical Innovations
Ever since the invention of the microphone it seems like technological innovations change the way how humans consume the art of the ears. Soon after the microphone, during the great depression, magnetic tape and vinyl records hit the markets. A couple of years later a German inventor created the first marketable tape recorder. Skip 20 years, our world was introduced to the portable radio. Now, skip to 1970s Sony revolutionized the world with ‘The Walkman’, an innovation directed to individual enjoying its music tastes. Between the 1970s and the 2000s, major technological advances moved from the development of the portable Walkman to CDs, the worldwide web, professional tools, MP3 players and Auto-Tune. These have been major leaps forward, similar to technological leaps in many other consumer goods industries. Music had been spreading like wildfire, the inception of the IPod further pushed the boundaries. Steve Jobs and rivals started acquiring electronic platforms in order to make music production more widely accessible and viable. Lastly, nearing the end of the first decade of the new millennia platforms such as SoundCloud and Spotify started providing their music streaming services.
Steaming Platforms: the Netflix of Music
The ease of music consumption that music streamers provides nowadays, would be Alien-like five decades ago. SoundCloud offers free access to its contents online. However, with poor governance, the platform saw many artists move away. The poor governance was due to a major redesign in 2012 which introduced the ‘repost’ feature that led to the platform opening up and integrating with social media. Consequently, artists abused the feature by constantly reposting their own tracks. Similarly, people abused this feature and started offering paid reposts which led to misrepresentation of the actual picture. While negative feedback loops were affecting SoundCloud, another major streaming service took the throne, namely Spotify.
Spotify, a Swedish based music platform, is changing the game of the music industry today. The company’s valuation is reported around $16 billion dollars. One of the ways the company got here is through its major asset ‘recommended playlists’. After individual track searches, these are the second most popular transaction in the platform. You can basically find any playlist targeted to any music preference on the platform. This aspect makes the move to mono-homing more likely for its users.
Continuous Innovation Rise
Recently, Spotify announced a further technological differentiation strategy; Rise. Through the rise program the platform hopes to expand its long-tail even further by discovering ‘new music stars’. The company will hand-pick artists and will aid there breakthrough through social promotion, a special form of marketing. Hopefully our ears will be blessed with new beautiful music!
References:
https://www.theverge.com/2017/7/21/15999172/soundcloud-business-model-future-spotify-streaming
Hi Derrick,
Interesting post about the music industry. I agree with you that the emergence of Apple music and Spotify definitely has changed the way people listen to music. From walkman, mp3, CD to searching and adding most updated new songs, and listening to them anywhere they would like.
However, i must say that this development has killed the physical albums market. Artists now barely sell any physical albums and consumers might not even have a cd room anymore in their laptop. How the current market works is also decreasing the pay-off of the artists. Even though artists nowadays also sell their albums digitally, many people won’t even buy the albums. This is because they already have access to these songs/albums with their subscriptions on Spotify. Perhaps new-era artists need to find other ways to become successful than aiming to sell million copies of album.
Kind regards,
Jessica
Hi Derrick, nice article about how listening to music has quickly changed over the years. I still remember walking down the streets with my Sony Walkman and my first iPod, what huge difference now. Also, we’ve come from far with regard to searching for new music.
Yet, both SoundCloud and Spotify are struggling to make a profit. Spotify lost 539 million dollars in 2016, its biggest loss yet even though it added millions of new customers. This underlines the difficulty to make streaming music profitable. Also, the major music labels show recurring revenue as streaming by third parties is becoming more popular. When they renegotiate their contracts with the streaming music companies, they will surely increase their bids. Furthermore, there is also a lot of unlicensed music now available on Spotify. However, this decreases because more and more right-holders are found. So, I am really curious how this will develop in the coming years. What do you think? Will streaming music become profitable ?