The Value of Music in the Age of Streaming

Published by Killings, 27 November 2014. Original post. Taylor Swift by Eva Rinaldi (Creative Commons).

If there has been an overarching theme to discussions about music in 2014, one that has implicitly or explicitly cast its shadow over the largest patch of music-critical discourse for the year, then that overarching theme is the streaming economy. While Spotify and its competitors (Pandora and Grooveshark among them) have existed for a few years now—practically aeons in internet time—it is only recently that their impact on patterns of musical consumption and on musicians’ and labels’ revenues has truly begun to be felt. Spotify was already the subject of controversy well before mid-2013 when Thom Yorke called it “the last desperate fart of a dying corpse”, and focus on the streaming service has only intensified since. Most recently, Taylor Swift removed her new album 1989 and her back catalogue from Spotify in response to the fact that she and her management couldn’t restrict streams of 1989 to Spotify’s paying subscribers.

Streaming should be controversial; like piracy, it fundamentally alters the way revenue flows through the music industry. The evidence so far seems to suggest that the transition to a streaming economy has been a mixed blessing for the music industry. The availability of streaming services means that casual music listeners who have a sudden craving for, say, Madonna’s Immaculate Collection won’t be tempted to hit the Pirate Bay and torrent it, but will instead listen through a streaming service. However, Spotify and its ilk also eat into the revenues generated by digital music stores like Apple’s iTunes. Unlike piracy services, Spotify does pay artists: around seventy per cent of its revenue goes directly to royalty payments, according to an in-depth profile of the company and its founder, Daniel Ek, in the New Yorker. The problem is that many users access the app for free and generate revenue only through advertising, which means Spotify appears to be shrinking the size of the overall pie even as it generates larger slices, proportionally, of its income.

For musicians, the choice is stark: say yes to streaming, which richly rewards only the most successful of artists and gives crumbs to the vast majority, or implicitly support the status quo, which means widespread piracy and even smaller revenues. It’s an invidious choice, so it’s no wonder that artists are trying to find innovative ways out of the dilemma, whether by ‘windowing’ new releases (placing them on Spotify several weeks after their release in order to stimulate early sales) or trying to find new paradigms for music distribution (such as Thom Yorke’s attempt to monetise BitTorrent with his new album Tomorrow’s Modern Boxes).

Steve Albini

Steve Albini by Jason Persse (Creative Commons).

It’s also unsurprising that different artists tend to disagree about the effects of ‘disruptive’ technologies such as Napster, the Pirate Bay, iTunes, and Spotify: for some (including, famously, Prince and Metallica) these technologies have been nothing but bad news; for others they have been a boon. Steve Albini’s recent keynote address at Melbourne’s recent Face the Music conference—reproduced in full on the Guardian’s website—even goes so far as to claim that the internet has solved those issues within the music business enumerated by Albini himself in his seminal 1993 essay ‘The Problem With Music’: “The music industry has shrunk. In shrinking it has [w]rung out the middle, leaving the bands and the audiences to work out their relationship from the ends. I see this as both healthy and exciting.”

Albini’s keynote addresses one of the major problems with doom and gloom talk about the disruptive effects of technology on musicians and their livelihoods—the fact that the old label system also wasn’t very good to musicians, who would often struggle to recoup any money beyond their advances even with solid sales. But is the new system much better? Albini appears to believe so, but his keynote curiously fails to address the sheer amounts of money that have been made through these disruptive technologies that do not, on the whole, pay artists well (if at all). Sean Parker has been able to leverage his experience as the co-founder of Napster to a fortune now totalling around US$3.1 billion; Kim Dotcom earned his estimated net worth of US$200 million in part through Megaupload, a now-defunct file sharing website that was a notorious haven for copyright-infringing content; even Daniel Ek’s estimated US$300 million net worth has been shaped by his time as CEO of both μTorrent and Spotify (although Ek coyly claims to have no idea of the size of his personal wealth or even how much of Spotify he owns). Even Apple, which now has skin in the music game through iTunes, is careful to ensure that its devices remain cheerfully agnostic about where the music that fills them comes from: they would rather sell you a phone that you can fill with pirated music than insist on copyright protection and lose sales to their competitors.

Viewed in this light, the history of technological disruptions in the music industry is one of a vast transfer of wealth, away from an old broken system (where music labels took the lion’s share and doled out a small parcel to artists) to a new, equally broken system (where the people who provide content infrastructures are richly rewarded, while the creators who provide the content that fills that infrastructure receive mere crumbs). This, in turn, has created a paradox of value. Music is everywhere right now: on your phone during your commute, in the background of advertisements on television, streaming from your desktop computer as you work, in the café you visit at lunchtime and the bar you visit after work, played by DJs in nightclubs and musicians at festivals. Our lives are increasingly soundtracked from the moment we wake up to the moment we go to sleep. Similarly, it’s never been easier to make and record your own music: any new-ish laptop can host the tools required to make most of the current Beatport top 100. Music has become like water: necessary, ubiquitous, and very cheap.

We needn’t mindlessly valorise the modes of music consumption which existed prior to these disruptive technologies in order to critique the current landscape: it’s not as though all music consumption in the seventies took place in a mood of reverent awe in front of exquisite hi-fi systems playing paid-for vinyl records that fairly compensated their creators. Piracy, the inequitable division of revenues, and the cheapening of music were all concerns before the internet existed; the disruptions brought by internet technologies have only thrown these issues into a different relief. If we are to craft a more equitable system of music distribution, we must not only critically interrogate the remnants of the old music industry and the latter-day robber barons who have made so much by disrupting it, but also think about deeper questions of value: Why do artists persist in making music despite the lack of money in it? And how can we prevent that impulse from being exploited?