Have You Heard the New Song By...?

            Spotify, Apple Music, and Tidal. These three companies have transformed the way in which individuals consume music. Music streaming is the present outlet majority of people use when it comes to listening to our favorite artist. So much so that according to Variety, the music industry made more money in 2015 from streaming than with physical CD sales or digital downloads. By signing up to a monthly subscription on one of many competitive platforms, one immediately has complete access to the music catalog of thousands of artists. With music streaming becoming the standard for the music industry, it’s important to understand the effects that it has.

I talked to my friend Darren, an avid music lover, about his take on music streaming. Darren had a positive outlook on the music streaming service saying, “I think before music streaming became prominent, consumers often engaged with music piracy. Individuals would download music illegally on there computers which hurt the artist and could cause computer viruses.” With this perspective, it’s hard to imagine any negatives about music streaming. But this is the perspective of the consumer. The consumer believes they are helping the artists through music streaming because of the paid subscriptions and ad-revenue that it generates. But an occurring problem that might go unnoticed is the fact these streaming services have hurt some artist financially.

Spotify as well as the other streaming services have come under scrutiny for not paying artists adequate royalties. Because of these issues, some artists don’t generate enough income from streaming. High profile artists such as Drake, Beyonce, and Kanye West might not have this issue as they generate hundreds of millions of streams. But for the smaller line artist, streaming doesn’t generate enough money for them. According to an article from the Verge, the average payout per one stream on Spotify is between $.006 and $0.0084. So an artist needs multiple streams just to make a dollar. For big artist, this payout might not be a big deal but it dramatically affects smaller artist. According to Digital Music News, a band that generated one million streams on Spotify over a 4-month period made about $5,000 in revenue for that 4-month period.

            When I brought this issue up to Darren, he responded that having some revenue is better no revenue. He said, “the alternative would be individuals downloading the artist’s music for free. Therefore even if they are not being paid a lot, they could possibly not get paid at all for their music.” While I found his point to be valid, I offered an alternative way to look at it. There might be individuals that would support their favorite artist by going out and purchasing their album, but because of streaming, they choose to stream the artist whereas before they would have purchased the artist’s work. So while streaming may prevent consumers from pirating music, it may also prevent other consumers from purchasing music. With the changing landscape of the music industry and how we consume music, it will be interesting to see going forward whether or not physical CD sales and digital downloads will disappear completely. It will also be important to see how artists will react and if they will demand higher royalties from streaming services.