Before the popularisation of streaming services, many modern music makers had resigned themselves to the fact that any profits they were likely to make, weren’t going to come from song sales. So why is it that now, when a real and affordable alternative to illegal downloading has been presented, industry professionals and musicians alike are getting up on their high horses and defending artistic rights which haven’t existed in any real way for years?
Here are some of the main criticisms of streaming services debunked.
Streaming doesn’t pay as much in royalties as iTunes.
No, it doesn’t. And it probably never will. But there aren’t that many people paying for music on iTunes, at least not enough to slow the decline in record sales as a whole. The vast majority of consumers get their music illegally, and like we maintain, something where there was nothing is better than nothing. To break it down for you, every time you stream a song on Spotify, the artist receives an average royalty of 0.29 of a cent. Compare this to the (approximate) 70% profit from iTunes sales (i.e. if a song is $1 the artist gets around 70 cents) and it does seem pitiful. But more to the point, compare it to the $0.00 paid from pirating music, which is still by far the most popular form of obtaining recorded music, and 0.29 of a cent starts seeming OK.
Record labels aren’t seeing enough royalties
Since its inception, Spotify has paid $150 million in royalties to labels and publishers and as of 2010, Spotify is making music labels the most money of any platform online or off in its native Sweden with many other European countries nearing this trend. The average first world citizen spends less than $70 on recorded music per year. On average subscribers to streaming services will pay $12 a month (or, $144 per year) for unlimited, ad-free content on computers and phones. And besides since when are we, the public, on the record company’s side?
We should be encouraging people to buy music
No, we should be encouraging people to consume music. If you didn’t stream it, chances are you wouldn’t buy it. In this case something is better than nothing. Sure, there some musicians’ whose music you may continue to purchase at full cost, and you can keep doing that: no one is stopping you. But if you’re craving a listen of ‘Single Ladies’ but don’t’ want to commit to the track,, then streaming is a great alternative.
It’s hard for Indie bands to get ahead
No, it isn’t. Through artist aggregators, streaming services like Spotify and Rdio are attempting to broaden the amount and kind of independent artists they have on file for streaming. So chances are, if you can get on iTunes, you can get on streaming services. Rdio are also planning on trying to get industry and label execs on side by providing an incentive payment scheme to artists for each new subscriber they refer to the service, and as much as $10 a subscriber is being discussed.
Musicians don’t like it
Maybe some of them don’t, and they’re allowed to not like it. Just like they’re allowed to not like you downloading their music for absolutely nothing. Or like they’re allowed to not like having to tour every year to make the money they used to from CD sales. Artists like Adele and Coldplay held out and didn’t put their chart-topping records on Spotify for obvious reasons; people were actually buying them. Australian hip-hop group Hilltop Hoods recently tweeted “Just got Spotify. Wow. As an artist this is terrifying. As a fan this is rad.” Hilltop Hoods’ music is on most streaming services. Musicians are allowed to complain, just like they’re allowed to accept the royalty cheques.
Spotify are greedy
False. In fact, some business analysts have said that Spotify’s business model is flawed as it gives record labels too much power. We wont bore you with the details (but this guy will), but basically regardless of how successful an artist is, or how many plays they get on Spotify, the record companies have fixed it so they get primo payment independently of anything else.
There has also been the more abstract criticism that streaming systems of any kind (be they music, film or television) encourage a dissonance in humankind. You aren’t purchasing a tangible thing or a unit, you’re purchasing the right to access things. Kinda like renting a house instead of buying one, except cooler.
So, you can’t complain that piracy is ruining the music industry, then reject every other alternative. People aren’t going to pay $30 for 12 songs anymore. That just isn’t going to happen. And while there is a place for the tangible (see our article on why Vinyl is here to stay), the future of music does not rest in looking at how things used to be done. The rules have changed.
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