Everyone in the music industry is caught between a rock and a hard place. Sales of physical albums are way down. Free pirated music downloads abound. The industry thought it had a great solution with Apple’s iTunes and the iTunes Store — music could be easily and rather inexpensively downloaded in a standardized virus-free format.
So, now, it all sounds good because of iTunes? Right? Well, not really. The industry has underestimated the impact of LEGAL, industry-supported sites such as Spotify and Pandora on revenues.
As Ben Sisario reports for the New York Times: “Like plenty of music fans, Sam Broe jumped at the chance to join Spotify two summers ago, and he hasn’t looked back. Spotify, which began streaming music in Sweden in 2008, lets users choose from millions of songs over the Internet free or by subscription, and is increasingly seen as representing the future of music consumption. Mr. Broe, a 26-year-old from Brooklyn, said that having all that music at his fingertips helped him trim his monthly music budget from $30 to the $10 fee he pays for Spotify’s premium service. A decade after Apple revolutionized the music world with its iTunes store, the music industry is undergoing another, even more radical, digital transformation as listeners begin to move from CDs and downloads to streaming services like Spotify, Pandora, and YouTube. As purveyors of legally licensed music, they have been largely welcomed by an industry still buffeted by piracy. But as the companies behind these digital services swell into multibillion-dollar enterprises, the relative trickle of money that has made its way to artists is causing anxiety at every level of the business. Late last year, Zoe Keating, an independent musician from Northern California, provided an unusually detailed case in point. In voluminous spreadsheets posted to her Tumblr blog, she revealed the royalties she gets from various services, down to the ten-thousandth of a cent. Even for an under-the-radar artist like Ms. Keating, who describes her style as ‘avant cello,’ the numbers painted a stark picture of what it is like to be a working musician these days. After her songs had been played more than 1.5 million times on Pandora over six months, she earned $1,652.74. On Spotify, 131,000 plays last year netted just $547.71, or an average of 0.42 cent a play.”
Click the Spotify logo to read more from Sisario.
The music industry definitely will have its hands full for the next few years. While music is easily available for streaming these days I know of almost no one (myself included) that actually takes the time to buy songs or albums even from iTunes. What I find disturbing however is how small the royalties these artists receive are. I personally have always imagined that even though I just stream music for free the artists are still making plenty of money. Spotify and Pandora are definitely the future but there has to be a way for everyone to win.
good observation
Specifically, the music business is absolutely a tricky industry to fulfill. Not only is the competition extremely difficult, but as Dr. Evans described, these other music sites are growing. Coming from a person who uses alternative music sites such as Pandora, Songza, and Spotify, I can see how frustrating it is for the music artists from lack of payment. Clearly, the economy is at an all time low and who wants to actually pay for music when free streaming music is available at your fingertips? Hopefully this growing issue will be resolved before talented music artists strike.
It should be interesting to see where a profitable business like iTunes will go from here within the next decade. Spotify, Pandora, and etc. have definitely been becoming more mainstream along with illegally downloading music which has always been around. Unless you’re super famous like Psy, I don’t see everyone going to iTunes to purchase a certain artist’s songs. From my own standpoint, I personally haven’t clicked on iTunes in over a year… Maybe it actually is dying, who knows?
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Although legitimate sites such as Pandora and Spotify have helped to reduce the number of illegally downloaded songs, the end result for the artists’ is more or less the same. It is truly unfair and discouraging for songwriters to spend large sums of time writing music only to realize that the financial gain is minimal regardless of the song’s popularity. That being said, although these sites are a step in the right direction to steer away from piracy, their is still much work to be done to ensure that artists are given the rewards that are rightfully theirs.
Whether people are downloading music illegally, which has been going on for more than a decade now or listening to music through free sites like Spotify and Pandora, artists are not making the money they should be making from album sales. However, the benefit I see in all of this is that artist’s music is still reaching their targeted audience and possibly other demographics as well. Now that music is available to people for free through multiple channels doesn’t necessarily mean that the amount of listeners has decreased. I think what should be looked into is the increase in ticket sales at concerts since these sites have been available to the public or the time it takes for tickets to sell out at a venue.
Still, it’s tough to make a living unless you are a super star. 🙂
Hasn’t it always been? Won’t it always be? These are the struggles in the industry that new artists will have to deal with and work around if they want to make a living. A billion views on Youtube isn’t going to make you a billion dollars but I’m sure when you decide to book a show you’ll get at least a couple hundred people there.