FEATURE: Age Against the Machine: Is the Dominance of Streaming a Sign the Music Industry Is Changing for the Better?



Age Against the Machine


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Is the Dominance of Streaming a Sign the Music Industry Is Changing for the Better?


TODAY is a day that finds me….


reinvestigating a few areas I have stepped into before. I have been a little ambivalent towards the role streaming services are playing in the music industry. One of the reasons I am reversing my policy is the way it is rejuvenating labels and doing wonder for new musicians. Alongside the rise and takeover of streaming services; vinyl is still holding strong and we have not completely lost out affection for physical music. I will bring in a couple of articles that look at streaming and how the market is changing. Another reason why I have been imperious when faced with the sea of digital music is the way one forms memories. I do not feel I would have such a vivid and undying attachment to music were I raised through the Internet. The nature of holding music and having something tangible has produced sentient memories and a life-long obsession with the form. Whilst I believe there will be fewer diehard music fans in years to come – who have the same memories and broad tastes – I will concede there are obvious advantages when looking at streaming services. Smooth out issues around paying artists (some, in the past, have not compensated fairly) and it means we are able to give a real market to new artists. Look back a few years ago and it would not have been possible to provide opportunities to unsigned acts.


The only way their music could make its way into the public forum was, well…I am not sure it would have been possible. Now, any artist can get their sounds into the world and earn money. In 2018; streaming revenue and profit have overtaken physical sales – we are spending more on digital downloads than ever before. This is good news for the future of music. I am still nervous that, one day, we will say goodbye to the humble C.D. and see vinyl’s role in the world reduced. Can we really say that the streaming growth has dented music and meant that artists and labels are suffering?! I look back at an article from the end of 2016 and some clear facts come to mind

Five years ago, the demise of the music industry seemed almost inevitable. Recession, rampant piracy, falling CD sales and a fear that “kids just don’t buy music any more” had giant record labels, once oozing wealth, counting the pennies.

Yet 2016 has seen a reversal of fortune – and the industry’s saviour is not what many predicted. Profits from music streaming, first championed by Spotify and now offered by Apple and Amazon, have given some labels their largest surge in revenue in more than a decade.

At the beginning of December, one of the world’s biggest labels, Warner Music, announced revenues of $3.25bn (£2.66bn) this year – its highest in eight years. More significantly, $1bn of that was from streaming, more than double its download revenue and more than $100m more than its physical revenue.

The surge in profits is being seen across all the major labels. In the first half of 2016, streaming revenue in the US grew by 57% to $1.6bn, and worldwide digital revenues overtook those from physical sales for the first time in music industry history, mainly because of streaming. This year’s most-streamed artist was Drake, with 4.2bn streams”.

Maybe, in a way, streaming availability is helped keep physical sales afloat. You cannot contest that the reason why so many people are buying vinyl is that they can hear albums online! I have dug back into the crates of music and played a record like Tusk (Fleetwood Mac). It sounds good coming out of my speakers: it sounds even finer crackling from the turntable. I feel we are more informed as a consumer nowadays. When we only had radio and record shops; we often made our buying decisions based on the charts and what specific D.J.s deemed worthy of focus. Now, in a busy market; we all have more options available and a wider range of music at our feet. Radio plays a pivotal role in the way we buy music – streaming allows us all to become more investigative and curious about artists. I have a paid Spotify subscription and will happily continue that. I feel guilty streaming and accessing music for free: everyone should be made to pay a subscription so that artists are fairly remunerated. Is there, however, still issues around royalties and how much every artist gets? Following Spotify’s announcement to go private; I read a Rolling Stone article that raised some interesting points:

Spotify's plan to go public, filed last week, could generate $23 billion and make the world's biggest record labels hundreds of millions of dollars richer — but the Swedish streaming giant has yet to soothe grumbling and litigious artists and songwriters who say its royalty payments are unfairly low. "They rigged it so they don't pay the artist," David Crosby tells Rolling Stone. "I've lost half of my income because of these clever fellas. I used to make money off my records, but now I don't make any."


Spotify's response to these types of criticisms has been the same for years: The service has paid more than $10 billion in royalties to artists, labels and publishers, according to its modified initial public offering, and the company has helped save the record business from online piracy. "Spotify was founded on the belief that music is universal and that streaming is a more robust and seamless access model that benefits both artists and music fans," reads the 260-page filing. Adds Jim Caparro, former president of Island Def Jam Records: "The winds of Spotify are blowing in the right direction for the music industry."

If Spotify's modified IPO generates anything close to $23 billion, Sony Entertainment, home of Beyoncé and Bruce Springsteen, could generate an estimated $1 billion-plus, and rivals such as Warner and Universal could make almost that much. All three major labels have pledged to share this windfall with their artists, but it's unclear how that will play out. "Nobody knows," says a source at a major label. "People say, 'Well, it's easy, you take the usage on the platform from the beginning of the service and you allocate it based on that.' But if Bruno Mars is driving the majority of recent usage, are you going to just write a huge check to Bruno Mars? This isn't easy stuff".


I have looked at streaming and its rise in a simplistic manner: feeling access and availability is the most important factor. If you think about the words expressed above; are we seeing an unfair distribution of royalties? If millions stream a Bruno Mars song and very few do the same with a Thom Yorke solo track; does that mean we are encouraging a disparity and wage gap? It is only fair, I guess, a popular artist is paid fairly and they are allowed to benefit from their fans. What worries a lot of artists is the gulf we are seeing in terms of streaming rewards. Should we, instead, take a more balanced and equal stance? Instead of paying artists in terms of total downloads; cutting the cheque so that everyone gets the same amount might be better? It is clear the new wealth of sites like Spotify are hiding rats under the floorboards. I love that I can pay a subscription and have access to a whole world of music, present and past. One can never know whether artists are getting paid fairly and whether new artists are getting as much from it as they should. My experiences regarding feedback have been somewhat mixed. Many artists feel streaming services are a lifeline in the modern age. Gigs are harder to come by and many venues cannot afford to pay them – they might kick in for petrol but that is where the till starts to close.


By having your music on a platform like Spotify – and pushing people towards it – that means you can guarantee a constant flow of cash. The actual reality is that no minor artist will get as much as they deserve. Reading another article from Rolling Stone and the boost and success of streaming services still is not at the level we should be seeing:

“…While streaming services have boosted music revenue to levels not seen in a decade, it remains 40 percent below peak levels, with digital and physical recorded music sales continuing to decrease. There was a 25 percent drop in digital downloads revenue, which came in at $1.3 billion in 2017. Although physical product revenue exceeded that of digital downloads for the first time since 2011, shipments of physical products declined by 4 percent to $1.5 billion”.

The argument complicates the good news we have been promised. It is true streaming is succeeding and major labels are flourishing; more and more artists are finding success and profit on Spotify – there are other streaming services available – and competition is forming. YouTube have announced they are going up against the likes of Spotify and iTunes. This recovery and success should be seen in pragmatic terms: the race is not over and it does not mean C.D.s and vinyl are a spent force. I feel, so long as we can maintain the success of streaming sites and ensure artists are paid fairly, we can all benefit.


I do not feel vinyl will end its life and decline anytime soon – I hope C.D.s remain viable for many years to come. I have changed my mind regarding streaming because I feel it is benefitting music as a whole. More and more people are discovering artists they might not have otherwise had access to. It is providing homes for new musicians and ensuring older artists are kept alive and relevant. Radio does that too but, in an age where we are all more aimed at digital outlets; it is not a bad thing we are spending time there and being more curious. One of my reservations regarding streaming was the fear physical music would cease to be and we would feel less need to get out there and visit record shops. Keeping a balance and ensuring artists are not taking advantage of is the most important thing we need to be aware of. I am not completely happy by streaming taking such a hold but know it is the future of the industry. There are multiple benefits and we can get music more quickly and readily than ever before. Anything that means new artists can get their voices heard and raise money can only be a good thing. I will leave things there but wanted to explore both sides of the argument and see where music is heading. If all the bumps and rough edges can be smoothed out; if we study the problems and ensure there is a fair playing field and balanced market; I feel music as we know it is entering an exciting and prosperous stage…


THAT will bring great music to more and more people.