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Music and Monetisation: Streaming

The idea that listening to my playlist could kill someone is a terrifying concept. Am I contributing to that right now I am sat listening to my ‘study’ playlist as I am writing this? Of course not, but after the revelations that Spotify cofounder Daniel Ek invested heavily in military technology were made, there was a real possibility my money could be contributing to death- although I know I am not even remotely to blame.

The company, which is worth 24 billion dollars, has a responsibility to users to use the money they make from them responsibly. Whilst we all support a free liberal economy of choice, this subversion takes it too far. Spotify’s colossal monopoly over the streaming industry means they have a huge responsibility to its user base to be moral and fair, and when artists are getting underpaid at the behest of producing guns, the moral compass seems to be far off-kilter. This is one of the many problems at current with the streaming ecosystem in general. The illusion of choice for consumers is in full effect, and it angers me to feel like there are no alternatives- but perhaps after all there are. This series of articles will peep into the world of music monetisation, and question the fairness of how our favourite artists are making money; starting off with what feels like the final stop for music consumption; streaming.

Pressure contains to grow on the current state of the music industry, in particular the interrelation between artists and monetisation. In a world where streaming giants and record labels dominate it has become particularly difficult, especially for smaller artists, to get their voices heard. With the shrinking cut of the profits from their work, they are having to look for different pathways to monetization. Firstly, let’s trace how we got to this point, and then take a look at the deadly effects it is having.

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Picture credit: Spotify

By sketching out the history of music storage we will trace the changes that physical technology can have on the way we consume. Up until 1877, music was a flexible medium, difficult to contain outside of musical notation. The very nature of music was not as bolted down as today- songs would change, improvisation was common and the community aspects of oral tradition. This all changed with Edison’s invention (or rather a theft, as was common with most of his ‘inventions’) of the container or can for music which holds two minutes of music – and from which the phrase canned laughter originates. Slowly but surely this time of two minutes increased, from two to three to four- with people criticising the technology for removing the opportunity for reinterpretation. Then in 1948 came a radical change, with the vinyl which could play up to 25 minutes of music. Its successor the CD came out in 1982, with bands like the Red Hot Chilli Peppers (perhaps, unfortunately) making use of the entire 72-minute run time. With the steady decline of album sales from 750 million in 2000 to 100 million today streaming has become the dominant mode of consuming our music.  At present streaming feels unsurpassable and unchangeable, the end of all storage mediums for music. Later on, I will delve into some of the problems surrounding the very concept of streaming, but first I want to further explore the idea of monetisation surrounding this medium. 

Zero point zero three of a dollar is currently the lowest price an artist gets paid for a stream by a streaming service. That means that if an artist got a million streams, a tough ordeal in such a saturated industry already, they would get three thousand dollars total. Then take into account the fees that go to record labels, producers, session musicians – this figure is cut in half. Whilst the higher end of the spectrum values a stream at $0.0073 this still does not bode too much better, and higher stream revenues are only ever offered by niche and more unpopular streaming services. Most services still lie somewhere in the middle, meaning there is no chance that an artist could remotely rely on streaming revenue, even ones that are charting. Whilst my sympathy for Ed Sheeran and Drake is non-existent, smaller artists (the ones who are the backbone of the music industry) need money to feed their families and survive. 

Therein lies another problem, the larger artists are such a small percentile of the industry but capture such a large share of the market. This inevitably leads to an incredible imbalance in the distribution of funds, but also means these smaller artists have less opportunity to break through, as they cannot spend money on promoting their music, hiring professionals, and may have to work another job that inhibits them pursuing their dreams.  It would be incredible if the music industry moved towards a more decentralised model, where artists were valued as members of the community and paid adequately for the creative work they do. 

Outlining the difficult situation the consumer is currently in too is also crucial. The rising cost of living, stagnating wages and widespread financial insecurity has meant that cheap access to music has become a necessity rather than a choice. This has snowballed through the effects of conformity and convenience. Further, thanks to the developments in big data, Spotify is able to have more optimized recommendation algorithms that fit people’s individual taste more accurately. This leaves consumers with little choice, whilst vinyl collection is on the rise it is not used as a replacement but rather a supplement to streaming services. At this point, the change requires large actors in the industry to make a change, be it individual artists, influencers or record labels. It is getting past this first stage, a stage of realising the problem, that is most crucial at present.

Picture credit: Obi – @pixel6propix on Unsplash

Whilst I hope you understand the problems with the state of streaming at present, particularly in regards to money, it is also worth laying out the effect streaming has had on music in general. It has created a more secular form of music culture. Our playlist recommendations are delicately designed echo chambers that play us what we want to hear. This has created, in a world of unlimited music, invisible boundaries on what we hear. Rarely are we recommended music from outside out staple genres, in other languages and by smaller artists. We have had the experience of rooting through a record store, or the CD isle in a store subsisted with a digital platform that forefronts things similar to what we have heard in the past. Further streaming has created an insular headphone culture, in which the estimated one-hundred-thousand-year history of music as a shared art has been torn down. There has also been an effect on artists, the average song length has dropped by thirty seconds over recent years, and the importance of the start of the song is crucial. As artists only get paid if the listener reaches the thirty second part many musicians focus on the catchiness of the song to increase revenue- instead of having a clear focus on the artistry. Retention is crucial for artists who want to chart high and avoid being skipped often, which is reflected in the shallow and soulless nature of the charts today. Whilst I am certain headphone culture is going nowhere, I would encourage people to listen to music more communally, explore more cultures and genres and look for musical inspiration outside multi-billion-dollar corporations- by artists whose music represents their true artistic sensibilities rather than the algorithms of a computer.

Moving forward in this article series the tone will get more hopeful,  we will explore the ways in which artists are working to combat the streaming industry, and break away from the current models of monetisation. Looking towards the future music has lots to be hopeful about, the barriers to entry are constantly lowering for new artists, and more music is being published now than ever- however more effective solutions to monetising it will be needed.

Written by Noah Collier