Music Muse

A Broken System : Why Streaming Needs A Change

Fenella Johnson explores whether the streaming industry provides a sustainable model for musicians and artists.

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On the surface, the arrival of a new decade brought good news for Spotify, the ubiquitous streaming service, with a forecast of a revenue growth of nearly 25 percent from this time last year. But despite the apparently constant rising of its user-base, the business appears to be leaking money : it has been grimly predicted to lose four times as much as it did last year in its first quarter. This raises questions about its ability - and that of other streaming services - to achieve profitability.  The streaming services of its two main competitors, Amazon and Apple, are seeing similarly deceptive figures of success, where the numbers bely the real problems of debt and the struggle to create a fully profitable model. But beyond the woes of major corporations, the major issue with the current streaming service model is that the vast majority of musicians cannot make a living wage from streaming service. Under current streaming models, average per-stream payouts from major streaming companies - Apple Music, Spotify, Amazon et.al - are between $0.006 and $0.0084, not nearly enough for less-well known musicians to make a great profit. Perhaps, the most damning indictment to the state of music’s finances came in 2017, with a Citigroup report that showed off the $43 billion generated by the music industry in 2017, only 12% went to recording artists.  As it has ever been in the history of recorded music, the money isn’t going to those who play a major part in making it.

Over the past decade, there has been a collapse in the CD market, as streaming slowly rendered buying music, at least for the casual listener, redundant. The steady decline of HMV certainly attests to this, as does the constant decline in world-wide album sales.While the current spike in vinyl and cassette sales is an unexpected positive, it is clear that, even for extremely famous musicians, streaming has affected the ability of musicians to benefit finically from their products.
Streaming has also meant musicians are increasingly alienated from their music due to the domination of the so-called playlist model, This model means that musicians can be included on branded playlists - for example, a Nike sponsored fitness workout playlist - appearing to ‘endorse’ the brand in question. The streaming service can do this without the need for consent or prior knowledge of the artist. And they don’t earn a penny for it.  A wider look at the state of the music industry only amplifies the worrying effects of the streaming industry. The muffling of smaller bands and artists by the double blow of narrowing revenue and a self-replicating system that continuously rewards the similar style of music, as companies prioritise inoffensive records in order to keep users streaming, even if their not listening. The figures predicted by Spotify suggested that the current streaming  model is broken and the state of the music industry only further suggests a need to start thinking about the creation of a new fairer streaming model.

What this new model could look like has been hotly debated. The most utopian vision is the  one suggested by the left-leaning magazine Tribune : a publicly-owned streaming-service, with open access, operating a bit like a library. A model proposed by the music website Pitchfork however is, I think, the most ideal one for musicians that streaming services are mostly likely to be on board with. This is a user-friendly model where each listener’s money is split between the artists they actually listen to rather than mostly towards the site. For example, if you stream 100 songs in a month, twenty of which are by Solange, for instance, then she (and the copyright holders of her work) receives a fifth of your subscription fee, minus whatever costs the service would deduct from that.This would, among other things, provide a significant pay bump for smaller artists who attract a handful of invested and engaged music fans. It’s not ideal - the more you use the service, the smaller amount each stream earns your favourite artists - but it’s still a more direct reward system than the one that exists currently. The reality is that there is no clear solution to this problem, and it is ultimately only sustained pressure from record companies, musicians, and fans, that will bring around any substantial changes. It’s not in any doubt that there will be a future for streaming services, but what we should be concerned with is who will shape it.

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