Syncopation Of Streaming Services

This month has seen a major announcement in the intersecting worlds of economics and music when streaming giant Spotify announced it had filed the paperwork necessary to take the company public in the near future. This comes at a time when the world of online streaming is becoming evermore splintered. In addition to Spotify’s announcement, this week also saw another major music headline when Martin “Pharma Bro” Shkreli was ordered as part of a settlement to forfeit $7.4 million, including the only existing copy of Wu Tang Clan’s album Once Upon A Time in Shaolin. The future of the mythical album, a modern day version of the Beach Boys’ Smile if you will, has only furthered my interest in the society of streaming, as the album’s extremely limited pressing was done as a public taunt to the online music industry.

But these are not the Wild West days of Napster when everybody was downloading as much free music as they could before Lars Ulrich came to smash down their doors. With up-and-coming artists dropping mixtapes on free services like Soundcloud, and other artists raging against the streaming machine that they say is keeping small-time artists in their garages, it seemed like a good time to examine the history and current environment of the music industry.

Spotify going public represents yet another curve in the cosmic loop of the music industry. For millennials, we have seen this cycle play out starting with CDs in the 1990s through to the digital age of the 2000s. This was a time when listening to the same album all day long was not particularly a compliment to the album, but rather a reflection of the owner’s collection (or lack thereof) of compact discs. The first CD I ever received (NOT bought) was Nickelback’s All The Right Reasons and I didn’t listen to it on every road trip just because I wanted the words to “Rockstar” forever burned into my brain – which was an unintended consequence.

Then in the early 2000s the industry took a major turn when personal computers become commonplace, which corresponded with the prevalence of downloading music. On one side there were the do-gooders out there who chose to pay $.99 for each song on iTunes or similar services and on the other were the ne'er-do-wells who lived like outlaws and got their music for free. This sparked intense philosophical debates and exaggerated advertisements from, shockingly, the music industry which was losing millions of dollars to peer-to-peer sites like Napster. The accessibility of such technology was common knowledge to anybody under 25 and remotely computer-literate, while those out of college thought of the world of music piracy as the high seas ruled by the Dread Pirate Roberts. However not until March 2000 did it dawn on members of the industry, specifically Metallica, that people were listening to their music for free when a song from the upcoming movie Mission: Impossible 2 started getting airplay before the song’s official release. Metallica and other artists including Dr. Dre and Madonna soon ventured down the rabbit hole and the dream was over.

Soon every artist on the Billboard 200 was filing lawsuits against Napster, and some (like Lars Ulrich) even took the time out of their busy schedules to personally drop off the usernames of thousands of Napster accounts that downloaded music illegally. But this was merely another part of the cycle of the music industry, much like taping songs off the radio after the introduction of tape recorders. The fun was over, and we had to go back to prying open our pocketbooks to listen to the artists who made our lives worth living. How unfair.

But out of the ashes of the wide-open plains of Napster, where the internet pirates roamed, came the next revolution in listening — Rhapsody. In the post-Napster 2002 internet, Rhapsody was as close to stealing music as one could get without James Hetfield and company getting on your case. For a flat monthly fee, listeners could help themselves to as much music as they wanted from the five major record labels. While early versions of the service offered a mere 175,000 downloadable songs, this was one giant leap for stream-kind. Much of the industry ignored this advancement, as only 13 percent of listeners in the U.S. 12 and older had burned a CD with music downloaded from the internet in 2001.

This DIY sector of the music world, that burnt their own custom CDs rather than buying factory-produced ones from major retailers, went largely unnoticed for nearly a decade. Even as a Swedish startup streaming service called Spotify launched in 2008 in its homeland and eventually opened registration to the U.K. in 2009, the music industry took little notice. When Spotify reached the 1 million users milestone in 2011 and opened registration to users in the U.S. the same year, the service was still far from the radar of the American music industry.

By this point you may have noticed a recurring theme in the cycle of the music industry: when new developments begin emerging to overtake the old ways of doing things (CDs to Napster, Napster to Rhapsody to Spotify, etc.) the mainstream music industry pays it no mind. Then when suddenly the entire industry is insolvent, they all cry unfair. Users of premium services (i.e. you actually pay for Spotify instead of braving the ads) have no reason to feel bad about the music industry’s lack of preparedness for this technology. They should have heard the footsteps coming ten years ago.

However, it is not the fault of the artists that the industry that represents them was completely unprepared for the emergence of “new” technologies. Now, many artists pine over the days before streaming services put them in the poor house, or keeping other musicians off the charts. Notable examples include the aforementioned Wu Tang album or Taylor Swift’s famous decision to leave Spotify along with her timeless quote that “music should not be free.” Which is all well-and-good for when you are selling out arenas across the globe but not for any musician who has gone up in front of the drunken crowds of an open-mic night.

So here we are again in a situation very similar to that of the Napster dilemma of the early 2000s. Consumers have access to all the music they can handle, while the artists themselves complain of not being able to forge a living and thus the eroding of their product. The key difference this time is that it is all legal because the artist is still being paid, however little. But how much exactly? According to Sony’s contract with Spotify, the average compensation to the rights holder of the song is between $.006 and $.0084 per stream of a song. And with Spotify’s “2017 Wrapped” feature that allows listeners to examine the statistics of their listening habits, users are able to crunch the numbers and determine how much they are actually paying artists. For instance, I listened to “Queens and Kings” by Vibe & Direct 212 times over the course of 2017. So I contributed a whopping total of between $1.27 and $1.78 to the rising Cleveland jam band.

So what do you do as a listener? Do you ditch Spotify and only purchase CDs or vinyl? Good luck, especially if you’re listening to anything below the Billboard 200. Do you go back to iTunes and purchase songs for $.99 a piece like your parents? The answer is to keep right on doing what you’re doing. You should not feel guilty for taking advantage of technological advances like Spotify. But there are other ways to support musicians than smashing your smartphone.

One of the biggest ways that artists have made up for the loss of revenue from streaming services is by touring more frequently, playing more dates and the rise of music festivals. Go see them. That is where the actual money (and the actual art) takes place. If you really do love an artist, go see them in-person where they are able to construct the proper listening environment for their song and interact with the listeners. Yes Ticketmaster and LiveNation are vultures with their astronomical ticketing fees, but it’s worth it if you really do love certain musicians. On April 21, go out and buy some vinyl for Record Store Day. Buy a T-shirt. You don’t need to feel guilty about streaming, but if that is all you’re doing for your favorite artists you might as well go back to Napster.