Is Spotify killing the music industry?

Is Spotify killing the music industry?

I’ve always been a music junkie, way back from the time I was in kindergarten and received my first transistor radio for my birthday, along with a copy of “Little House on the Prairie.”  Over the years, my medium evolved.  In grade school, I bought my first album (actually double album): the “Grease” soundtrack.  In high school, I evolved to tapes.  I even joined one of those record clubs where you get a gazillion cassettes for a penny.  How else to explain Loverboy in my collection?  It was free!

The advent of the iPod was amazing for me.  Being able to have so much music that I wanted in one small place was like magic.  But I outgrew even that.  Now, I can tolerate nothing less than streaming my music.  My drug of choice is Spotify, which allows me to listen to pretty much anything for only $9.99 a month (I think- I haven’t checked lately).  Now I can literally listen to pretty much anything I can, including new releases.  I LOVE IT!

But with my Spotify passion comes a pang of guilt.  I’ve heard rumblings that streaming is killing the music business because the artists really don’t sell many records anymore.  That people have developed A.D.D. with respect to music (guilty).  That the only way for bands to make money is to tour (and sell tickets for insane amounts of money).  That no one listens to the radio anymore (false: I listen on my drives to and from the train, five minutes each way).  Yikes, am I contributing the problem?

While I rejoice in how much money I’m saving paying the equivalent of a couple lattes a month for a music library the size of the universe, the artists are crying that they earn next to nothing from these streaming services, which pay them based on how frequently the tracks are played.  However, the money earned from each play is so miniscule that it’s nearly impossible to make a go of it.  Spotify itself might be feeling a little defensive on this point as their website offers an explanation:

In general, however, Spotify pays royalties in relation to an artist's popularity on the service. For example, we will pay out approximately 2% of our gross royalties for an artist whose music represents approximately 2% of what our users stream. A popular song or album can generate far more revenue for an artist over time than it historically would have from upfront unit sales.

In just three years since launching in select countries, we’ve already paid out royalties of more than $500 million USD. These royalty payouts are growing dramatically each year, reflecting our rapidly increasing popularity.

The issue is a primarily a concern with newer artists who are trying to grab new listeners and can’t make a go of it on the pennies they’re earning from having their songs played.  Since touring is the big money maker in music, it’s a tough road for the starving (musical) artist.

There have also been concerns that the instant gratification that Spotify and other streaming services offer doesn’t give the listener an opportunity to engage with a song.  I’m torn on this point.  I admit I’m much more likely to dump a song that doesn’t grab me right away, but if I do like a song, I’ll add it to a playlist and it will get tons of listens.  I’m also much more likely to listen to something unfamiliar or outside my comfort zone than I would be if I had to fork out money for it.  In that sense, new artists would seem to benefit from the streaming services.

There are some artists who have not allowed their music to be Spotified.  Last summer, Thom Yorke of Radiohead pulled his music off Spotify in protest of the service’s royalty agreements.  Yorke hoped other artists would follow suit, but aside from The Black Keys’ latest album, which they declined to have on Spotify, that doesn’t seem to have happened.

I see artists looking for the latest gimmicks to grab listeners, and it honestly has a ring of desperation to it.  Kanye West projected images from his album on the sides of buildings in many cities, including Chicago, before it was released.  Miley Cyrus projected her body all over North America for months before her album came out.  Lady Gaga released a song a week in the country she was visiting leading up to the release of her album released last week.

Perhaps in the future something bigger and better than streaming will come along, and artists will scramble even further to hold onto—or find—their riches.  In considering the past few songs I’ve added to my “2013 Favorites” playlist on Spotify, I can honestly say that I would not have purchased several of those songs individually, but I love being liberated to listen to Moon Hooch and James Blake (Who? Right!) risk free.

With that, I retract my guilt and proclaim that in a small fraction of a penny way, I might possibly be helping the small artists by listening to Spotify.  Happy listening!

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