Streaming giants and their stranglehold on the industry are divisive to say the least with everyone from Beyoncé to Taylor railing against them. But here record company exec Jamie Collinson argues they aren’t parasites, but the saviours of the music world
his year is touted as the year of reckoning for music streaming. But here’s the good news – your resolutions don’t need to include cancelling your subscription. Streaming saved the music business and created a much-improved landscape for recording artists.
As ever, the truth is complex, and it would take a book to cover this subject in full. The basics are as follows: before streaming, and despite the best efforts of iTunes, the digitalisation of music had led to wholesale theft. The global industry was contracting. It was thus risk averse, and this made it harder for any new artist to attract investment and break through.
Anecdotally – if you’ll forgive a foray into lived experience – this was a grim time. People were being fired, or jumping ship to music publishing or tech. Even more depressingly, there was no money to sign great, original new music. Cretins of various stripe would approach me at parties to tell me “music should be free” and that artists made all their money touring anyway. Frustratingly, the cretins were being paid for doing their own jobs, and booking agents’ first question to artists seeking tours remained “when is your album coming out?”
Then Spotify appeared, and things very quickly got better again.
Change is hard. The previous generation of artists found it difficult to accept that CDs once sold at £14 had been replaced by streams worth somewhere around half a US cent on average. Many of them used their platforms to speak out against Spotify. As the market leader, Spotify takes the blame but must also get the credit – it was they who provided a new business model for the music industry.
New, emerging artists can’t depend on the giant fanbases developed during the well-fed years before the MP3, and in partnership with corporate behemoths. For those new artists, and thus for the future, the choice was effectively between no money and streaming money. The artists who have embraced streaming and figured out how to make it work for them have thrived. For some of these artists, thousands of streams from the same individual fan can add up to a bigger source of income than they’d ever have seen under the old model.
Primarily due to streaming, global revenues have grown year on year for the last seven. This means far more investment in artists and a buoyant market generally. Big, exciting artist campaigns feed into the frenetic demand for vinyl, on which profit margins are much higher. Streaming services are far easier to partner with than their physical counterparts ever were when on top.
As ever, the major labels must take much of the blame for the problems that do exist. When Spotify emerged, they showed less interest in a high per stream payout than they did in giant, ‘direct to profit’ catalogue advances, which had the benefit of not being payable to artists. It’s also important to bear in mind that Spotify finds itself caught between a trillion-dollar hardware company in Apple, the world’s biggest retailer in Amazon, Google’s YouTube, and the US Copyright Royalty Board, which sets the songwriter payouts it must make in the biggest music market. It’s great news for fans and artists that it hasn’t simply been crushed.
And changing the payout system isn’t as simple as some would have it. It’s yet to be proven that the ‘equitable remuneration’ models being pushed for streaming payouts would actually benefit developing artists. The brutal truth is that many of these artists wouldn’t be doing better under the old model, and may in fact have been far worse off. Once again, thankfully, if the demand is there, so is the money. And with smart speakers in homes and phones in our pockets, there’s an explosion in music consumption, both for new releases and back catalogue.
Not every genre seems to thrive in the streaming world, but the same applied when radio and physical stores ran the game. In fact, it used to be much worse – anyone can be on a streaming service, but there’s always more limited space on a radio playlist and racking in a high street retailer. Pleasingly, streaming doesn’t appear to hurt well-curated indie record stores either.
The age of streaming has provided artists with an unparalleled level of control and independence – not always viewed as a good thing, from a label perspective. The services compete to provide the most useful analytics and data and to show artists what actually drives streams. This in turn helps them know where to invest time and funds in their campaigns. As WMG exec Max Lousada said recently: “artists have all this choice now.”
In 2022 the spotlight will move away from the payouts that streaming services make and onto the various models of payments between labels and artists. Change, as ever, may well come.
But this need not concern you, the listener. Whatever happens, the more music you stream, the better for everyone involved. Unless of course, I can interest you in some vinyl?