Somehow, it all comes back to The Beatles.
When it was announced that the Fab Four would be coming to iTunes six years ago, Apple touted the achievement as a kind of victory for music downloading. The industry had officially gone digital, and the greatest band of all time was there on iTunes to prove it. So when it was recently revealed that The Beatles’ music is now set to arrive on streaming services, just in time for Christmas Eve, it also felt as if yet another seismic shift in the music industry was about to occur.
If current trends are any indication, music streaming is going to kill downloading. Whether the music industry is ready or not, The Beatles are simply the latest piece of evidence to suggest that another evolution in the age digital age of music is already upon us.
“It’s a bit disposable, streaming,” Grammy-winning singer Adele said in an interview with TIME magazine earlier this week. “I know that streaming music is the future, but it’s not the only way to consume music… I can’t pledge allegiance to something that I don’t know how I feel about yet.”
Adele isn’t the only one. No one in the music industry seems to be that hot on streaming. If it’s not the physical impermanence (something which people also complained about with digital downloads,) it’s the fact that the quality isn’t as good. Meanwhile, artists and executives alike are still struggling to make money in a world where you can now find anything for free on the Internet.
It was a simpler time a few years ago, before everyone wanted in on the streaming market, and everyone was struggling to make a profit off it. Consumers have more choices now, but their choices aren’t always good.
Things aren’t any less chaotic amongst streaming companies themselves. Tidal promised to be the next big thing this year, with special features and playlists that no one else had, until Apple Music beat them at their own game. Except even Apple Music isn’t that special. After initial reports that they would offer their streaming service for a lower price, they ended up rolling out the standard $10 a month rate that everyone else offers (they also offer a “family plan” for $15 a month.) Meanwhile, Spotify continues to crush both these services, even though the company’s losses are greater than its revenue.
It was a simpler time a few years ago, before everyone wanted in on the streaming market, and everyone was struggling to make a profit off it. Consumers have more choices now, but their choices aren’t always good. Certain services offer more than others, but no service offers everything. “So what am I supposed to do?”, asks The Atlantic’s Spencer Kornhaber. “Pay for two services? Make up the important gaps by buying albums on iTunes, even though it’s not clear which gaps will be permanent?”
But by merely asking this question, Kornhaber has already illustrated why streaming is poised for a victory over downloading. The fact is that most casual music fans would rather not pay for two streaming services, but most would rather not have to find music on iTunes either. The difference is that when an artist you like isn’t available on streaming, it’s a hassle. But downloading? Legal downloading? That’s a financial burden. To wit, it’s in most streaming services’ best interest to expand their catalogues to include acts like The Beatles (who will appear on Spotify, Apple Music, and Tidal.) As people abandon downloads for streaming, none of these services wants to be the one lacking. That’s why despite Spotify’s huge lead in the industry, they aren’t quite a monopoly– no one service has everything, yet.
The numbers showcasing streaming’s upturn in popularity prove its seemingly inevitable takeover. Writing about the annual digital music study conducted by the International Federation of the Phonographic Industry–an organization which represents the recording industry on a global scale– Forbes’ Bobby Owsinski notes that, “A data point that jumps out of the report is that the number of paying streaming subscribers now tops 41 million, which represents an estimated 46% increase.” It’s also worth pointing out that the IFPI finds streaming now accounts for 26% of the digital music market. With 100 million users streaming music for free, there’s still a lot of untapped potential in this field. But no matter what actually comes of all that potential, streaming may already be on track to overtake downloads in 2016.
Chris O’Brien at VentureBeat recently discussed other statistics that also point to this possibility:
“Earlier this year, Warner Music Group said it was now making more money from streaming royalties than digital download sales. And this was the year Apple itself, king of the download market, bowed to the inevitable and launched its own streaming music service… there are still holdouts like Adele, who kept her latest album off streaming music platforms and scored record sales. And [Taylor] Swift has used her might to set the terms of her catalog’s availability… But these are the dwindling exceptions. During the first six months of 2015, sales of digital downloads were $1.29 billion, according to the Recording Industry Association of America. Streaming royalties accounted for $1.02 billion. But downloads fell from $1.32 billion for the same period a year ago, while streaming was up from $834 million.”
Much as holdouts like Adele and Taylor Swift might protest, they eventually have to put their music on streaming, if they want to reach a mass audience. It’s gotten to the point where the average user just doesn’t want to go through the process of buying one record at a time. And it’s far easier for someone to get into a band by streaming their music, rather than committing to buying a song or an album after only hearing a few tracks. Sure, you can start off on YouTube, but what about when you want to hear some deep cuts? What about when you want better quality audio? At that point, you jump to your prefered streaming service– you already use it all the time, so why wouldn’t you?
Adele and Swift’s numerically-named 2015 releases, 25 and 1989, are exceptions to the rule. These are event albums, with everything that entails. But for everyone else, streaming, regardless of how little it pays the artists, is essential for exposure. And even for artists like Adele and Swift, streaming is going to become important, lest they risk angering fans, and looking out of touch with the culture. They may be the two most popular artists in music right now, but that doesn’t mean they can stop the direction the entire industry is going in (although if they teamed up with Beyonce, they might have a shot.)
There’s another reason streaming is here to stay though: Eventually, record companies are going to wise up and realize it’s better for them in the long run. Yes, there will be less giant success stories, but at this point there are only a few of those a year anyway. What paying for streaming does guarantee, however, is that the consumer is a constant stream of revenue.
Eventually, record companies are going to wise up and realize it’s better for them in the long run.
“It’s not about having users deciding to make a one-time purchase of one track from an album and then listening to it for the rest of your life. It’s about getting them to pay a monthly stipend to the industry for as long as you want to listen to any music,” writes Ewan Spence in Forbes. “Unlike the major format jump from vinyl to compact disc in the past which generated a significant but one-off contribution to the bottom line of the music industry, the move to streaming means that the you’re going to be paying every month to listen to ‘Rubber Soul.’”
It goes without saying that streaming is not without its kinks. In fact, the present model is rather shoddy. Users still have to suffer through the holes in most streaming services’ catalogues, and unless you’re one of the biggest artists in the world, it’s almost impossible to make as much as minimum wage on streaming. However, as the deal to bring The Beatles to streaming indicates, the gaps are closing. And there are certain approaches that might yield artists’ a better profit from streaming in the future. Sharky Laguana at Cuepoint suggests a “Subscriber Share” method, which would divide up money based on how much you listen to a given artist, rather than how many times you click on a given song.
For better or worse though, it appears that streaming is here to stay, and downloads are becoming a thing of the past. That’s not to say you won’t be able to download music still. But the record industry is on the verge of realizing that downloads will no longer make up the majority of their revenue. And when that happens, they will push streaming as hard as they can.
Digital music is changing, again. And streaming is the face of that change.
Chris Osterndorf is a freelance journalist whose work has appeared on Mic, Salon, xoJane, the Week, and more. When he’s not writing, he enjoys making movies with friends. He lives in Los Angeles.
Image via Roger / Flickr (CC by 2.0)
