The NYT laments the sorry state of royalties paid out by music streaming services like Spotify.
A decade after Apple revolutionized the music world with its iTunes store, the music industry is undergoing another, even more radical, digital transformation as listeners begin to move from CDs and downloads to streaming services like Spotify, Pandora and YouTube.
As purveyors of legally licensed music, they have been largely welcomed by an industry still buffeted by piracy. But as the companies behind these digital services swell into multibillion-dollar enterprises, the relative trickle of money that has made its way to artists is causing anxiety at every level of the business.
So I really don’t know enough to comment on whether or not the whole royalty situation for streaming will pan out (or not!) the way some think it will, but the interesting thing here is the narrative.
The NYT credits iTunes with revolutionizing the music world, and in some ways it did, but only by making the revolution legal. The real shift began with file sharing services like Napster. One of the old narratives that the music industry endorsed was that if you liked a song and wanted to own it, you had to also purchase the 10 or so other songs that surrounded it on an album. Napster was free, and while it’s ability to enable widespread music theft was probably the cause of its popularity, it also changed that whole album purchasing paradigm. You like “For Whom the Bell Tolls”, fine, download it and stick it to that annoying Lars guy. No need to go buy the whole album. Apple, to their credit, realized that the narrative had shifted, and when they implemented iTunes, they allowed customers to purchase only the songs they wanted.
Like I said, the free downloads were probably the main cause of Napster’s popularity, but the success of iTunes shows that the whole a la carte idea was also a key component. A decade later, and the narrative is changing again.
The thing that struck me reading the article is that free music streaming services like Pandora and Spotify, while providing truly minimal royalties, also shine a light on another narrative about listening frequency. Namely, once you bought a record, the music industry could care less how often you listened to it. But streaming services aren’t based on sales, they’re based on “listens” – the number of times you streamed a specific song.
I’m probably the last person in the world who should be commenting on listening habits, as I suck at music. I love it, I’m just bad at keeping up with this stuff and constantly go back to the same well (What? I’ve got movies to watch, books to read, and beer to drink over here, leave me alone!) All of which is to say that I have to wonder how the metric of “listens” will impact the industry. I tend to listen to the same thing over and over again, and when I do that, I’ll probably earn someone a few cents of royalties. But I have a large suspicion that a lot of people will give most music a single listen (especially given the low barrier of entry on streaming), maybe revisiting once or twice if they’re really psyched about it.
Music is certainly relistened to more than movies are rewatched, and being more of a movie guy, that might throw off my calibration on this issue, but I really have to wonder about the relationship between sales and listens. Yeah, such and such album or song may have sold a million copies last week… but how long will that song be in heavy rotation in streaming? And when you literally have millions of songs on your fingertips, are you likely to cast your net far and wide, or return to the same music over and over again? Will this notion drive what kinds of music becomes available? More pop music with clear hooks, less experimental stuff? Will those experimental folks be able to survive on the long tail?
I don’t have any answers here and I don’t really know enough about the music industry to say how this will play out, but I’m thinking we’ll see some interesting developments in the next few years. Incidentally, movie streaming doesn’t seem to have caved to streaming in the same way. They don’t charge streaming services like Netflix per watch, but for the general ability to stream a certain catalog. I’ll be curious to see if we ever reach a Spotify-level streaming service for movies. As I’ve mentioned before, I don’t think that’s going to happen anytime soon… but again, the next few years will be interesting.