Stream If You Want To Go Faster

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In recent years, there’s been a phrase that’s almost taboo in the corridors of the music industry. It’s a phrase that can only be uttered in hushed tones or whispered covertly, such is it’s incendiary nature; akin to talk of evolution in the church or global warming at BP shareholders meeting. Music streaming.

It’s long divided opinion, berated by record labels and loved by the file-sharing types, but with more and more acts beginning to pre-release entire albums via free streaming, why has the official stance seemingly shifted so dramatically and what, if any, are the benefits?

Spotify, by far the biggest name associated with streaming, was established back in 2008 to a mixed response. In the UK, artists were sceptical about the seemingly paltry payments, paying out on average £0.0033 per stream. This has led to an abundance of artists such as Coldplay and Adele banning their albums from Spotify’s “freemium” package in order to protect first month sales, with other acts banning their albums from Spotify and other services like Deezer all together.

However in Sweden, Spotify’s nation of origin, streaming has been taken up with hugely positive results, now accounting for 89% of digital music sales in the country. This trend towards streaming has led to an overall boom in the Swedish music industry too.

Streaming revenues in Sweden rose 79% in the first half of the year, bringing an increase of over £25 million on the previous years sales. Independent labels and artists have profited massively from this boom too, growing industry confidence providing more investment in smaller acts that would previously have been considered risky ventures or not commercially viable.

But let’s go back to that figure of £0.0033. It doesn’t take a great mathematician to note that there’s too many zero’s the wrong side of the decimal point in that number. Especially when you compare this figure with the payout per play on a radio station such as Radio 1 for instance, shelling out roughly £50 every time a track is played. The difference is, however, that a play on Radio 1 goes out to approximately 9 million listeners at a time whereas with streaming, what is being listened too and by how many is purely down to consumer choice. Compare this too America, where artists receive no revenue at all from radio play, and the rate of pay begins to look significantly fairer.

But it’s still nothing next to payments from iTunes and physical sales you say. This is true, however when an album or single is bought in either of these ways, the payment is a one off. With streaming, the potential is to make an income from a song repeatedly throughout an artist’s entire lifetime.

Another benefit to smaller acts is the accessibility of their music in such a format. While musicians like Jon Hopkins have gone on record to publicly bemoan Spotify for it’s small payments, it is hard to deny that without Spotify, an underground act such as Hopkins would hardly be making any money AT ALL from radio play or physical sales; his career palpably benefiting through exposure on such a medium, discouraging consumers from resorting to piracy.

While the UK market place may still be playing catch up, things are beginning to head in the right direction for streaming. Spotify’s UK losses are down to £2.1 million from £26.5 million in 2010 and subscriptions are up, adding a £27.4 million boost to the company coffers. Record companies are now beginning to cop on to the fact that streaming is here to stay too, exploiting the service in surprising ways.

Websites such as The Guardian have begun hosting a range of pre-release album streams. Whereas in the past singles would be the main way to promote an album, labels are experimenting with streaming the entire product before the release date in a try-before-you-buy tactic. It’s hoped that this will encourage more purchases come release and less piracy from leaked recordings that would often circulate the net in the lengthy gap between single and album release traditionally, making money for the artist in the interim period.

We’re still a long way from making the quantum leap that’s been seen in Sweden, but the road ahead for the music industry is looking decidedly more certain, taking the digital revolution onwards and upwards for everybody.

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