Vicious: How Streaming Services Reshaped the Music Industry and Artists' Livelihoods.
80% of UK musicians and music creators earn less than £200 a year from music streaming.
Recent official studies have concluded 80% of all UK musicians and music creators earn less than £200 a year from music streaming*. For artists and music writers’ digital music streaming is conclusively not a replacement for a previous age of healthy record sales.
Streaming arose as an antidote to mass digital music piracy. Going back two decades, recorded music industry revenues were in decline. Labels were tanking. Artist development funding was becoming extinct. The music ecosystem was contracting fast and the livelihoods of many were in a critical state.
The music industry was simply not prepared for the 21st century and its arising technology and communications innovation. It was an industry largely siloed with its traditional business methodology, and not invited to the tech revolution party. For the first time in its history, it had lost control of music formatting and the means of distribution. It’s response? Suing kids who had downloaded the new Eminem album, or single mothers who owned the computer used by such kids. Desperate times.
As people flocked to the free music on mass, the key instigators of organised piracy file sharing operations criticised the music industry and talked about internet ‘freedom’ rights as they shared copyright material for free, what they did not declare so loudly was how they were getting extremely rich on ad revenues channelled by certain advertising networks toward their operations, as labels and artists saw nothing in return. This was pure parasite economics. Some even funded far right-wing politics with some of their newfound wealth.
Disruption.
Pirate Bay, Grooveshark, Napster, MP3.com, LimeWire, and so many others, torrent, peer to peer, putting malware on your PC when you downloaded your favourite artists new album, they ruled the internet music consumption ecosystem for well over a decade.
From the late 90’s listening to highly compressed low-quality MP3 files was the new thing, in sound quality this was like regressing from the viewing experience of a large flatscreen 4K TV to your grandmothers small black and white TV she now has in storage in the loft, nevertheless free was a big draw, and more so while CD’s were a relatively expensive high margin format in a lucrative business model owned by the music industry.
This new ocean of sound online was a treat for discovery, but not so great for recorded music sales and the resulting incomes of artists – who’s key income at this time was selling music. It’s effect and the legacy of digital convenience is best described by one single statistic, like for like, 1999 remains the most successful year of all time for global recorded music revenues to this day, twenty-five years later, and that’s not even factoring inflation where the effect is worst.
Divide and conquer.
According to the Musicians Union in the UK streaming now accounts for approximately 90% of all music consumption. The BPI stated there were 179.6 billion audio streams in the UK in 2023.
Streaming would not have taken off without the buy in from music catalogue owners and front-line labels. The majors licensed their music to the concept because with a battle lost on piracy, this was their one chance of recovery with a bite of the streaming revenue cherry. The icing on the cake was the vital incentive of an open invitation for major labels to be gifted stock in a new company on a mission to become the no.1 go to music brand in the new landscape of subscription digital media. The majors now had a vested interest in the success of its platform business with their sharehold, in parallel with the opportunity for digital music revenue, some may rightfully comment this demonstrated a conflict of interest with regard to major labels most important asset, their artists, and the livelihoods of those artists via royalties - artists and their representatives were of course not at the negotiation table.
Essentially the background of the founders of Spotify was not in music, but in file sharing and ad’s. Established by a peer-to-peer file sharing entrepreneur, digital ad’s company founder and CTO of Stardoll, Daniel Ek and Martin Lorentzon, co-founder of advertising network Tradedoubler, on the 23rd April 2006 Spotify was founded in Sweden, launching in the UK in February 2010 via an invitation-only policy, finally launching in the U.S in the summer of 2011 with the buy-in of all major labels with their Spotify stock arrangement trade-offs.
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