Music Diary Notes: Will Streaming Music Kill an Already Weak Industry?

OK, I know … how many times can I say that ‘music sales are dismal’? Well, with each newly discovered nugget of information, a pattern emerges: one that we implicitly already know, with a clueless music industry trying to somehow get back to the ‘good old days’ of early 70’s record sales with 100% annual growth, or even the late 1990’s when the CD was king.

But the graph shows the reality: the entire music industry is shrinking, and the rise in digital (last year just 5%) and ‘performance rights’ such as internet radio and subscription services, are doing nothing to stop the slide. We also know that the majority of sales – and marketing – are focused on a very small number of artists. Further, we have heard rumors that Lady Gaga, who had the #1 song ‘Poker Face’, only received $176 from Spotify for the millions of plays for the song (note: this figure is in dispute).

Also, the ‘performance rights’ segment, which includes Spotify, Slacker, Pandora, Rdio and others, last year saw the first ever decrease in revenues!

That is the concern – just as streaming sources with their crazy royalty models are getting more popular, and are set to explode globally over the next few years, the money flow from these sources seems to already be stagnating.

And what happens when Spotify and Rdio and other streaming services gain even more traction? I mean, I have been living on Rdio recently, and its ability to integrate my music, allow me offline access to stuff I like, and so on, have definitely made an impact on my habits – and decreased just how much stuff I feel the need to keep on my iTunes active library!

As it is, the music industry is wringing their hands and gnashing their teeth because people don’t want to buy CDs anymore … and generally don’t want all of the songs from a CD! I know that some think that much is lost in the move to a ‘singles’ mindset, but they also need to remember that before CDs there was an equally focused world – and while it is easy to trot out Pink Floyd’s ‘Wish You Were Here’ or the Beatles ‘Rubber Soul’ or The Who’s ‘Tommy’ as examples of records that should be consumed in total, look at the vast and overwhelming majority of pop records and you’ll find that all of them contain at least 50% filler.

So while the industry wants people to buy full CDs and are trying to force things back in that direction, things are actually headed in the opposite direction: I will listen to a greatest hits collection on Rdio by Elton John or Boston and will likely not listen to those songs again for a year or more. And the same is true for my family – we all have stuff we want to own, but the ability to simply ‘listen now’ to the EXACT song you want satisfies an itch that would have otherwise had us try to get it to stream on Pandora or look it up on iTunes.

The amount of money made by artists for a stream compared to a purchase – even a single purchase – is staggeringly different. And unless the music industry wakes up and figures out how to adapt their business models (hint: it isn’t by clamping down even tighter on monopoly radio stations and buying more Best Buy and Walmart aisle space to force feed us their 20 favored bits of pop-product), they will continue to slip further and further from relevance.

Source: HypeBot

Categories: Music Diary

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4 replies

  1. Bookmarked : Will Streaming Music Kill an Already Weak Industry?

  2. A bunch of falsified data proves nothing, except that you are so silly as to think we will all believe that there were no paid music performances before 2002.  The music industry DESERVES to die, and the sooner the better.  A bunch of greedy old fools stealing money from artists and preventing any innovation beyond the wax cylinder is long overdue for extinction.

    • Um … false data?  The laws and rules change over time, so how things are reported and broken out change as well.

      As for the industry, we don’t disagree – in fact, recently I have been hearing more about artists who are REAL artists and are making a decent living.  THAT should be the future …

      • “The laws and rules change over time, so how things are reported and broken out change as well.”
        Yet it is all displayed on one graph as if it is all the same?  That is falsification of data.  Case closed thanks to your admission.