Why I believe in Music Streaming

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Music streaming services like Spotify, Deezer or Apple Music have changed not only the way we listen to music, but also begun to alter the whole business model itself. The big question may be for the better or the worse? The answer on that question may depend – as usual – on who you ask. It goes without saying that there are still some shortcomings in the business, but I think the shift comes with winning advantages for everybody. Especially for artists and their audience.

Making my Change as Listener

First of all, I have to admit having had some difficulties in leaving the good old ways of buying and owning music in the beginning. I never bought a MP3-file at iTunes or any other music store of that kind. Too much nostalgia did I attach to owning a physical vinyl or CD. Not the mere possession of the music was important to me. But the haptic quality of a whole product delivered with artful and well manufactured covers, booklets and sound carriers. Sometimes, I decided to play an album just because I spotted a CD in my shelve. Only because it reminded me of some episode of my live as soon as I grabbed it. Immaterial memories and feelings connected with tunes. That is why I kept all of my CDs in spite of hardly using them at all anymore for playing the sounds of my life. That service is doing Spotify for me now. I chose the premium account for the same reason I do only rarely listen to public radio – If I want to have music around, I want to be in control of the songs played. And I do not want any bothering ads interrupting my session.

Even though I sticked to my CDs, I soon recognized the convenience of digital music in general. All my songs got converted to MP3-files and organized in a way my CD-rack would not allow me to. Tagging the songs with genre or mood classifications, ratings and additional information helped me to structure the mass. Finally, I created playlists to quickly have the right tunes for the right use cases at hand. All this was fun but also a lot of work, especially with each new album to be added to the collection or new playlist to be created. Every once in a while, I had to sit down updating this rather static system of limited scope. You probably see where this argument is leading to.

With Spotify, not only the new portability is something I really enjoy. It is the smart way music is recommended to me, which I did not know before. Just by analyzing my behavior when listending to my long beloved favorites. The algorithms may still be in its infancy today, but I feel where the train is pulling to. Beyond static playlists, the service will become an ever more better way to know what I want, what I like, what I need even before I do. Some day I will only say how I feel and get the music that fits my mood best. Or even the app knows itself what to play, when I leave office late in the evening after a much too long working day without real lunchbreak.

The Market View

The market for music streaming is highly competitive these days with more and more players emerging and trying to get a foothold. After the big malaise of music piracy especially in the 2000s and early 2010s, it provides the industry with an opportunity to get their feet on the ground again. It makes music much more affordable while being easy and moraly accessible for many people. However, a lot of critique is to be heard as well. The most common one I often hear is that actually nobody earns decent money on that business. Neither the service provider nor the artists. Many calculations are to be found that try to make plain how little especially artists earn on the pay per play basis. Much less than selling their albums on CD or at iTunes. Information is beautiful provides a great infographic on that. The heated and polarized debate on the profitability of music streaming for artists is totally understandable. It has become a big business with obious winners as top earnings show. And still, even though earning a living from streaming services as artist is hardly possible for the majority of them regarding the needed audience today, such claims miss some crucial points that outweigh all the cant in my eyes and open a solid perspective on the horizon.

Artists are payed for good work – not good marketing (alone). Everybody knows that – buying an album because of one or two great songs on the radio and then discovering the weakness of the remainder. Or you bought it only due to the thinking that after three good LPs the fourth one must be a winner as well. At least the record label told you so. A lot of stuff is sold just due to its billboard chart position or the promotion on the radio, tv shows and so on. Big labels have for sure their ways to exert influence on that system. But that is changing at the hands of the audience now. Longtime artist-development becomes the key for success and not the make-and-break decisions of the record labels. However, I agree that artists are brands that need to be promoted. But with music streaming, they will only succeed if the quality of their work holds up the promises made before. Otherwise, people won’t play their songs again and move on.

More effective distribution via recommendations. This argument is directly related to the former. If people like your music, they will either share it directly to their friends via the streaming app or social networks. Even to see what my friends are listening to, is raising my attention on artists I did not hear of before. Additionally, the services with their smart ways of recommending their customers new music they might like, have a huge impact on the spread of music to new audiences. All this does not need an effort by the artist or producer but raises their earnings. Even to get on the right playlist, can make a huge difference as proven with Perrin Lambs success on Spotify

Scalable earnings per play instead of single-sellings. The most calculations made on the profitability of music streaming for artists compare the selling of a CD or digital album at iTunes with the playing on a streaming service. What is left out of many arguments is the point, that you can sell the CD only once. It is a fixed price per customer. Streaming is like getting some money for every time somebody puts the disc in the player. Maybe it is true, that you need to play it a thousand times at Spotify to equal the price of the CD today. But I am convinced that will change when the market gets ever more settled and the number of paying listeners rises. The latter are not only personal subscribers as growing partner programs have to be taken into account as well. Finally, I think the general business model of streaming music is good. What needs to be adjusted is the fair sharing of the revenues between all involved parties. As long as record labels keep their hands on it strongly, many artists will not get a fair deal on the streaming revenues.

Easier market entry for artists. It may sound like a myth, but I am sure it holds some truth. Streaming services ease the way to market and to the audience for new talents in the same way as MySpace and YouTube have already prooven. Artists will still need the support of the music labels to get a really big share. But it gets easier without the need of the production and distribution of physical sound carriers or the dependancy on the promotion by the radio djs. Provided that the algorithms of the streaming services are fair and not biased towards or against particular artists.

Avoidance of physical waste. Last but not least, a huge pile of waste is prevented to come into existence in the first place. How much bad CDs are still to be found on stores that nobody wants to buy? Even the ones that got sold, have a ecological impact that is really questionable. Both the production as well as the dumping of them costs a lot of energy and resources.

 

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