Weekend Thinking: What Does Streaming Mean for the Music Business?
The issue is nothing new.
Since the arrival of the first MP3 players, the world has been discussing what digitalizing music means for the industry, and for the artists in particular.
It wasn’t too long ago that the music industry, which was booming in the in 90’s through early 2000’s, was suddenly began faltering. People were no longer buying CD’s, instead opting to pirate their music for free.
Although there are still dedicated fans purchasing physical records, a good chunk fans are choosing to still purchase music are doing so digitally through services like iTunes.
Now, many are not bothering to download their music at all when they can just as easily stream it.
Services like Grooveshark (R.I.P.), Spotify and Apple Music allow users to stream any song or artist they want for free (with ads) and/or a small monthly fee (without ads).
In the beginning, streaming service played in a huge legal grey area, particularly Grooveshark, which is now out of business due massive legal battles with record labels.
The latest season of Startup podcast did a story on Grooveshark’s journey. You can listen below:
Thanks to Grooveshark serving as the unfortunate guinea pig in the streaming world, today’s steaming services like Spotify and Apple Music have been able to develop ways to do so legally by making deals with the record labels.
However, how much an artist gets paid from streaming is based on each artist’s contract with their record company. This has led to some artists including Taylor Swift and Neil Young to pull their music from Spotify in protest. Jay Z was so pissed that he even started his own competing streaming service, Tidal, that claims to be more fair to artists.
Nevertheless, some artists are embracing streaming services. In the video below from AJ+, OK GO front man Damian Kulash describes why streaming is a positive thing. It’s also a great run-down of the streaming model and the issues surrounding it:
Kulash argues that streaming makes music more accessible to fans, and if artists choose to pull out of such services, they are removing themselves from the “cultural dialogue.” Rather than selling albums, Ok Go makes most of their money by touring, selling merchandise and working with partners and advertisers.
Ok Go isn’t the only group who feels this way. For instance, Kurt Vile did a partnership with Spotify to help promote his latest album that came out last year. He was essentially encouraging his fans to stream his music.
Now I want a beer.
Love it or hate it, streaming music can now be done legally and cheaply. Cleary, the jury still out on if services like Spotify are ultimately good or bad for the industry. Either way, it’s certainly not going anywhere, and the industry is going to have to find way to either adapt to it, fight it, or embrace it.
Here are some questions to ponder:
-Is touring, merchandise sales and sponsorships the way artists need to make money now? Are there any other ways?
– Is there a different, more “fair” model services like Spotify can adopt to better compensate artists that also wouldn’t hurt it’s user base?
– How does pulling their catalog off of streaming services affect artists? What’s the difference if Taylor Swift does it compared to a lesser-known indie artist? Does it even have an impact either way?
– What, if anything, will come after streaming?