Music fans love the speed, ease and price of streaming, and it is growing in popularity. What has this done to the download business? Can artists still earn a living? What does the future hold?
Since the launch of iTunes in 2003, the music download phenomenon has grown exponentially and according to a BPI Report, now accounts for 51 per cent of all record label revenues in the UK. However, downloading faces some tough competition from streaming, which has taken the music industry by storm, offering music-lovers something downloading cannot – all-you-can-listen music for a fixed monthly fee.
Services such as Spotify, Deezer and Google Play offer the chance to stream millions of tracks onto your chosen device, to create playlists and listen whenever, wherever you chose, all for a low, fixed price of around £10 per month. Pulselocker, a streaming service specifically for “electronic music fans and DJs” provides “a music subscription service and storage locker”. All of these services remove the need for masses of storage space, either physically or in the digital world.
Downloads versus Streaming
In his Music Industry blog music analyst Mark Mulligan writes about the cannibalisation of downloads by streaming, stating, “the majority of subscribers were already digital music buyers before becoming subscribers” which ultimately means that if paying a monthly fee, subscribers are unlikely to fork out further to download music too. However, Mark Foster, CEO of Deezer UK believes that downloading and streaming, “are not mutually exclusive”. He argues that as, “more music consumers move into an access model… rather than an ownership model”, it is creating, “exciting future growth for streaming music on demand”.
The development of streaming is a revelation for music lovers. A relatively low fixed monthly price for as much music as you can listen to. No matter how limited your device storage, you can listen to anything, anytime, anywhere without the worry of having the space. If you are concerned about your data usage, you can save songs onto your device. For the consumer, it is a great package. But what about the music makers?
Impact on Artists
No doubt, it is an exciting time to be a musician. The explosion of social media has made it far more accessible for budding artists to publicise themselves and their work, and for fans to feel closer to the people behind the music they enjoy. However, with the growth of streaming and its sometimes complex pay structures, how will that affect the music makers who need to earn a living?
DIY musician Ari Herstand has recently written an article on Digital Music News explaining that streaming will soon be more profitable than sales. He quotes both The Wall Street Journal and an article on the BBC website and highlights Sweden’s Avicii as an example, pointing out that this superstar DJ who has dominated the charts for several years is making more money from streaming than from physical sales and downloads combined.
Granted, Sweden is some years ahead of the rest of the world in the popularity of streaming. It should be highlighted that, according to the BBC, “the Swedish music market’s 13.8% growth last year… was a figure most countries could only dream of, with global music trade revenues increasing by just 0.2%, the first rise since 1999.”
Couple with this the fact that Spotify, one of the world’s most popular streaming services originated in Sweden and it is easy to see why, as the BBC points out, “91% of digital income in Sweden now comes from streaming sites, compared with just 13% worldwide.” If these figures are anything to go by, streaming seems to be the way to go.
Musicians and Streaming
Not every musician commands the audience of Avicii, so what can the average artist do to make streaming work for them? Mark Foster believes that artists need to be creative in order to make money from streaming in the way they would have profited from downloads in the past, and utilising the power of social media provides the ideal platform. He sees musicians driving interest by, “posting messages to their fans on social media sites, such as “check out my new album”.” Each streaming service offers something different. For Deezer, it is the, “stripped-back Deezer Sessions… an intimate performance, and is exclusively available to Deezer users.” Foster hopes this, “will encourage people to come and check out not just their Session, but their entire catalogue.”
Foster believes that, “The more artists talk about streaming services in a positive way, the more people will use them to follow the artists they already like and, crucially, discover new ones, and the more revenue is generated for the artists as a result. Everybody wins!” A sentiment that is echoed by many.
Herstand argues that beyond money, streaming does something for the integrity of music. He believes that, “Streaming is a much better model than sales. Streaming rewards those who create great music – not just those who have the biggest marketing budget. Sure, it might take a few years for a DIYer to reach the same amount of streams a major label pop artist gets in one week, but the great music will last and continue to be played.”
If a musician or DJ can make money by creating great music, without the need for a record label and a multi-million marketing budget, it seems that Foster may have a point.