The streaming revolution

Image source: lazytechguys  

You may have heard some paranoid doomsayers tell you that the humble record store is dead. You might even be forgiven for reckoning they’re on to something. But could it be that even the slightly-less-humble mp3 download is also on the way out?

In the age of ‘the cloud’ anything is possible. With super-fast broadband, huge bandwidths and unlimited monthly caps, lossless music and video-streaming are a ‘thing-of-the-present’ and this is already affecting not only the industry, but we the listeners.

For well over a decade, the music industry has been battling the scourge of illegal downloading. Record labels, artists and manufacturers have tried several approaches to prevent free downloads (or at the very least make them more difficult to acquire), from litigation against downloaders to the development of copy-protection technology on CDs and even mp3s, yet the success of these measures has been limited.

In response to the early failures to prevent illegal downloads, economists devised the ‘Open Music Model’ at The University of Massachusetts, claiming that subscription-based listening services would be the only commercially sustainable model for the music industry.

Services such as Spotify and Grooveshark have been developed in adherence to this model and aim to bridge the gap between illegal downloaders and artists/record labels. The idea is that listeners pay a monthly or yearly fee to subscribe and are then able to listen to all the music they like from any computer or portable device.

If users don’t wish to pay they can still listen to the music; they just need to put up with advertising in between songs. Spotify has emerged as the frontrunner of these style sites, launching recently in the USA with rumours that an Australian launch is imminent.

What it means for the artist
In theory, the artist gets paid depending on the number of times his or her songs are streamed. Popular artists earn more and obscure artists earn less (just as they do under every other music business model).

The money to pay the artists is generated from listener subscription fees and display advertising revenue. It’s divided among artists via a complex royalty calculation formula that’s designed to comply with the requirements of the major performing rights associations around the world.

At present the payments are a little controversial, with artists claiming they receive a pittance considering the popularity of their tracks (it was reported recently in The Guardian that Mercury Prize-nominated artist Jon Hopkins received just AUD$12 for 90,000 plays of his songs). Despite this, Spotify alone has paid over $150 million to artists, labels and publishers.

What it means for the industry
One thing is for sure – streaming (including free, ad-based streaming) is preferable to illegal downloading. For starters it is regulated, allowing labels and publishers to keep track of the popularity of their artists, even if they feel that the royalty payments are insufficient.

In fact, the statistics that can be gleaned from streaming are extremely useful. Industry folk can track where their artist’s fans are located, what other music those listeners consume and even what other interests they have listed on their Facebook profiles. For label A&R and marketing departments it’s a dream come true. While it has sometimes been argued that the one saving grace of illegal downloading is that it can help build an artist’s profile and career, there is little doubt that streaming does this better.

Of course, the ‘industry’ extends beyond just labels and publishers. There are also retailers, manufacturers and service providers to consider. If your company happens to make CD players, you’re out of luck (unless you also happen to make computers and MP3 players). If you sell records and CDs, you’d better hope you also sell iPods and modems (hello JB Hi-Fi). If you’re an online retailer (such as Apple’s iTunes), you’ve probably already hedged your bets to cover all possible developments in the music business. Finally, if you happen to supply internet to thousands of households, you’ve got it made.

What it means for the listener
For the audiophile, streamed music sounds better than mp3. Spotify, Grooveshark and Soundcloud offer lossless format streams, which are uncompressed and offer the full spectrum of frequencies. Many can’t hear the difference, but those that can find compressed audio pretty ‘hard-listening’.

Some argue that how we consume music affects our relationship with the songs; that the acts of dropping the needle onto a record or sliding a CD help us to fall in love with the band, singer, or song. But is this really so?

Based on recent evidence (particularly the heavy swing towards mp3 downloads) it would seem this romanticised notion is redundant. Each day, thousands of kids fall in love with recorded music, just as they did in the 60s, 70s and 80s. They learn the songs, obsess over the artists and become true fans. After all, music is experienced through the ears and how it gets there is relatively inconsequential. Regardless of whether it is downloaded, streamed or purchased in the store, music retains the power to seep into the brain and the heart of the listener.

Of course, if streaming becomes the dominant paradigm for music consumption, we’ll no longer get to ‘own’ the songs we love. But again, the power of song is surely in the experience of hearing it, not the pride of owning it.

So…is it time to get streaming?
Well, to be honest, chances are you’re streaming already. You watch music videos on YouTube, you listen to songs people post on Facebook and you might even already be using Grooveshark (it launched fairly quietly here a couple of years ago).

People should strongly consider the advantages of taking the extra step to subscribe to a streaming service. Not only will you get to hear uncompressed audio, you’ll also be able utilise features such as ‘offline listening’, mobile-device compatibility, easy sharing (so you can turn friends on to new music) and ad-free consumption. Best of all, you can feel good knowing that you’re making a financial contribution to the artists you love, ultimately allowing them to continue to make music.

Music traditionalists may find that the best way to deal with change is to embrace it. In this business, change is embraced slowly. The Open Music Model was originally devised in 2002 and it’s really just gaining acceptance now – ten years later. If the idea of having access to all of the music in the world sounds appealing to you, you may want to move a little faster.