The challenges faced with the future of the music industry and the popularity of music streaming.
Written by George Kilpatrick
Spotify, Pandora, Apple Music, and Tidal are all at the
forefront of the music industry because they represent its future. These are all major streaming services that
will change the way in which money is made in the music industry. For a small fee or for free (with
commercials) users have access to thousands of records in any genre the can
think of. This creates opportunities to discover
new music easier, build ones following quicker, and challenges music industry
professionals to innovate the ways in which they make money off of music.
Traditionally artists and musicians would make money via
records sales and liver performances. However, the digital music age has
changed that model via early sites like Napster and LimeWire, the flagship
provider of legal digital music; Apple’s iTunes. Now we have modern streaming
sites Pandora and Spotify who pay artists a fraction of a cent per stream using
two different algorithms respectively.
Pandora’s rate is based on radio streaming rates whereas
Spotify’s rate is based on an equation they created an attempt to fairly pay
artists. This presents a challenge to
artists because it signifies the end of the traditional model of music making
in the industry. Artists may spend thousands to produce a record and only
receive a fraction of what they would make traditionally via record sales
because of streaming. However the
benefit of this is Spotify and Pandora have attracted users who would otherwise
pirate music and given a chance to new artists to get major exposure.
Therefore if an artist were to cut costs on a record and use
Spotify and Pandora to build their fan base, they could then use the attention
garnered to do more live shows and performances. Music is a performance art and
the recording industry side of it is now pushed to adapt back to artists making
the majority of their money from performances and promotions.
A major example of this is Chance The Rapper who has been
majorly successful on the user-friendly streaming site SoundCloud and has not
charged for any of his records. However the popularity of his music and the
ease of accessibility helped him gain the attention of major label artists,
given him a huge fan base, and keeps him performing around the world.
This is one example of ways in which streaming can be
advantageous to new artists because they can be juxtaposed alongside major
artists. Thus enforcing the idea that streaming allows for different styles of
monetization.
The classic Buggles record says “ video killed the radiostar,” we can make a parallel to that and say “ streaming challenges the
recording industry.” The people affected the most by this are those who make
the majority of their money off of record sales, labels. However many
non-mainstream artists and musicians have music on neither Spotify nor Pandora because
they make the majority of their money from performing.
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