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Music Streaming Services

Is the Future of Music Disposable?

“Education in music is most sovereign, because more than anything else, rhythm and harmony find their way to the innermost soul and takes the strongest hold upon it, bringing with them and imparting grace, if one is rightly trained.” Plato

Music Streaming Services

Music streaming, is a process of delivering media, live events, music, movies, and video, in real time and does not refer to the type of media itself. In other words, it is the means to the end but not the end. Computers can stream some media, but additional software may need to be installed. With true streaming, there is no downloading of files or saving for viewing later. Instead, the data is continuous and available immediately without having to wait for the end point of delivery. As a recent development, made available through broadband connections, media used for streaming requires little bandwidth due to its high level of data compression.

The speed of streaming is favored by broadcasters to prevent illegal distribution and for the protection of copyright. Pandora is an example of non-interactive streaming that is similar to a radio service. The problem lies with interactive streaming services provided by companies like Spotify, Rdio, Deezer, Google Play, Xbox Music, and Sony Music Unlimited. There are more than 470 million people using the internet in China who can download legally almost one million songs using Baidu, the country’s version of Google.

What is the Price Tag on the Value of Music?

At one time music was an infinite and an almost corporeal form of entertainment, education, and culture. Leaders and masters in their genre work hard from a young age, making their way up the ranks to stand on top of a musical podium. As children we were often forced to learn a musical instrument. As parents we endured the recitals and snapped a few photos of our children manoeuvring through the most basic songs on the recorder. How many of us may someday regret never learning to play, and how many young artists never get the opportunity to learn? The qualitative price tag of music is timeless and priceless.

However, music has turned into a finite and virtual commodity to be traded and bartered, and even the quality of music has changed, crippled by fortune seekers. Today, there are nearly forty million songs available digitally and immediately. As the face of technology advances, and under the influences of quick changes and turnabouts in trends and fads, we can no longer keep up. Original hard copy forms of music like CDs have become archaic. We do not need to own an album in order to listen to our favourite song, and how should we identify a new musical product? The quantitative price tag of music is slowly losing its value.

Streaming: The Impact on Artists

It takes a long time to make serious money in the music industry, but with changes in media, it takes even longer to get noticed and there are more and more artists. Using the pie analogy, Streaming divides the financial pie into more pieces. Therefore, even though more people are putting their money into the service, less goes to each artist. Immediate access to individual songs leads to disposable music, and if an artist does not capitalize quickly they get lost in a multitude of hopeful performers. In addition, artists, labels, and producers have difficulty keeping track of revenues from the postproduction of music releases – often available to little or no cost to the listener.

The argument also revolves around confidence in copyright laws and royalties. Last month, Taylor Swift spoke out against Streaming, after she pulled out all her music from Spotify’s online streaming service, and suggested it is bad for artists. According to Swift: “It’s my opinion that music should not be free, and my prediction is that individual artists and their labels will someday decide what an album’s price point is. I hope they don’t underestimate themselves or undervalue their art” (Engel. 2014).

Streaming: The Impact on Record Labels

Notwithstanding the impact on large label companies, Streaming reduces the ability for independent labels to establish themselves in the copyright battleground. Major labels have come under scrutiny for paying their artists a small fraction of what the Streaming providers are paying them, but they too are experiencing growing pains. Under frequent law suits, continual piracy debates, the definition of what constitutes a sale versus a license, and how to determine an actual product. Stuck in the middle of a tug of war, labels endure most of the financial burden. Furthermore, it is a label’s job to find new talent, but as Streaming saturates the market, it becomes more difficult to distinguish a great artist from one who has a large marketing budget.

This year, Karim Fanous, Head of Research at Music Ally, a leader in the digital music business, acknowledged that Streaming is here to stay, which means that record labels, especially independents, need to be flexible and think globally. Quoting figures from the largest independent group of labels in the world, Beggars Group (the British record company), Fanous cited: “Globally, in 2012 it (Beggars) generated 78% of digital revenues from downloads and 22% from streaming. In 2013, that ratio changed from 70% for downloads and 30% for streams, but in the last six months, it’s been 60-40. By the end of 2014, or at least shortly afterwards, streaming may well overtake download revenues for Beggars” (Dredge. 2014).

 

Streaming: The Impact on the Industry

“Every time the industry gets powerful, and corporate thinking dominates what the music is, then the music really pales.” Paul Simon

The iTunes Music Store was introduced in 2003, but according to a report by CNN in 2013, “Music sales have plummeted in the United States, from $11.8 billion in 2003 to $7.1 billion last year, and when adjusted for inflation, revenue has been more than halved since Apple launched the iTunes Music Store” (Covert. 2013).

Instead of purchasing one CD, people now purchase one song. Using the pie analogy once more, if someone buys two CDs for $10, the money goes to two artists and their team. If they download $10 worth of music, the money goes to approximately ten artists and teams. If they stream $10, they money gets dispersed over thousands along the production line.

Ultimately, the industry follows the laws of economics: supply and demand, and the future of music will come down to the survival of the fittest and the hardest workers will be rewarded for their efforts. Streaming is an inevitable evolution of computer networking and multimedia, and as technology continues to advance, it is probably the most practical solution to music distribution. Streaming is an affordable option for consumers, whose tastes change like the tides.

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