June 6, 2012 at 2:20 pm

How Streaming Music Will Change Culture… for the Better

streaming music will change culture for the better

Forget, for the moment, about how much Spotify pays out to artists.

Focus instead on the nature of those payouts.

In the olden days (i.e. 20 years ago), recording artists had to convince you to fall for their music once — just long enough to buy a CD. Since the inception of pop music as a physical format, this need to impress the music buyer for a short length of time gave record labels a big incentive to look for one-hit-wonders capable of moving product quickly. (It also meant I used to walk home with lots of terrible music I never listened to again.) Granted, labels often put considerable effort into grooming those artists for a full career, because it’s easier to sell music when fans already like the people making it. But each time music was released, the purchases only had to happen once.

The rise of the iPod and iTunes made it harder for labels to pack long-playing albums with subpar “filler” tracks. It also made it easier for music fans to fall for a hit single for the low price of 99 cents, arguably exacerbating the tendency of artists to impress a fan for only long enough for them to click “buy.”

That landscape is changing.

Recorded music and the formats that deliver it have always influenced each other profoundly. Pop songs tend to be three minutes long because five decades ago, that’s how much music fit on one side of a vinyl single. The compact disc is said to be 74 minutes long to handle longer operas and Beethoven’s 9th Symphony. MTV made recording artists get more adventurous haircuts. The list goes on.

As more of us switch to streaming our tunes from online services with millions of tracks (Spotify, YouTube, Pandora, MOG, iHeartRadio, Rdio, Rhapsody, etc.), music’s format is set to have another impact on content and culture — especially as today’s younger music fans, who know music as an online thing, grow up and start having less time to track down music for free than they do money to spend on subscriptions.

Some would say this is happening just in time. Neil Young claims digital music sounds bad, while none other than Gene Simmons of Kiss and Tommy Lee of Mötley Crüe think pop music is rotten to the core. They are far from the only ones lamenting that hits are crafted in laboratories for an audience that data shows changes the channel after seven seconds unless a hook grabs their ear. Even hardcore indie music fans who read Pitchfork discard yesterday’s buzz bands faster than a bath salts addict… nevermind.

What matters here is that the same digital technologies derided by music purists contain the solution to what might be called music’s “quality problem.” It’s no longer enough to convince fans to buy a disc once; instead, artists and labels have to turn them into lifelong fans. The Beatles succeeded in doing that for generations. It eluded Milli Vanilli, another erstwhile chart-topper.

It is perhaps the height of irony. “Aren’t those the same services that rip off artists by paying a fraction of a cent per play as opposed to doling out 70 cents per song purchase the way iTunes does,” you might ask, “or paying even more per disc, the way those disappearing record stores do?”

Yes. This new phase of music consumption — represented by services that let you listen for free, or for $5, or $10 per month, or customizable internet radio stations that also pay out on a per-song, per-listener basis — is just what music fans who are sick of one-hit wonders and flashy pop hits need. By paying out only when people actually listen instead of suckering fans into buying something only to leave it on the shelf, Spotify, MOG, Rdio, Rhapsody, and other on-demand unlimited music services build an incentive into the music business to create works of lasting value.

When I mentioned this idea at a SXSW panel I moderated in March, panelists including MOG CEO David Hyman and Turntable.fm creator Billy Chasen agreed that while we may not have seen this effect in action yet, it is real. The economics are there for an emphasis on long-lasting quality in music — perhaps even a return to the “golden age” when labels used to spend years or decades developing an artist instead of releasing whatever they think will sell that week.

A rational way for music-makers to respond to these new economics is not by complaining or withholding their music from these services and therefore the future, but by making stuff we might want to play for the rest of our lives. For anyone who loves music, that should come as welcome news.

“The sales cycle of [a] record is anywhere from four to 12 weeks in most typical cases,” Spotify CEO Daniek Ek told Evolver.fm, echoing that sentiment. “With Spotify, we keep seeing the effect up to 25, 35 [weeks], or even a year… And every time someone plays a song, we pay the music industry.”

Sales of recorded music have declined precipitously in the past ten years. There’s truth to the idea that the money is falling out of music — and with it, the capacity of artists to take a year off from touring to craft an album with a highly-paid producer. But in the battle over what money there is left, only those artists who convince lots of people to listen to their music over long periods of time — the way the Beatles did — will come out ahead.

So the next time a curmudgeon, Luddite, or lamenter-of-those-goddamn-kids-today complains about the sorry state of music, please, tell them to calm down. Music is a business. And now, for perhaps the first time ever, its economics favor long-term quality over a flashy first impression.

Photo courtesy of Flickr/AJ Shuster

  • John McCready

    Not sure I agree with the writers conclusions, but for sure the days of a record lable spending $1,000,000 and allowing the artists a year to create master works like Fleetwood Mac’s RUMOUR are over.

  • Yup

    Ahhh, yes, the Peter Pan of digital BS strikes again! Funny how Elliot doesn’t talk much about how artists flat out din’t get PAID by many streaming services esp indie artists! Ohhh, but tell me again how great streaming is?

  • http://twitter.com/coryallenstaats Cory Allen Staats

    Sure. I like listening to Spotify. Lot’s of access. Nice intuitive UI. I don’t even mind the commercials.

    I’m sure other’s data could be different. But, based on my numbers it takes 103 people to listen to a song before it equals the $.70 that itunes would pass along.

    Now, I’ve had my current itunes library for over 4 years. The most played track in my library is at 143 times played. And that is a track that I have in my “sleeping” playlist which I put on to fall asleep to.

    I understand that if the MASSES like a song and stream it collectively, the payment is focused on that singular “good” song. But, does it make sense that I can enjoy my favorite song for FREE on Spotify for potentially 3+ years before the artist (or label) is compensated the “fair-market-value” that has been effectively set in stone by iTunes?

    I think the business model works for consumers. But, the compensation is not sustainable.

  • Derek

    The sentiments here are sound…there hasn’t been this much motivation for artists to create truly great music since the 1970s.  The need to create a great ‘career’ and not simply a great ‘album’ or even ‘single’ is good for music lovers.  The business side, however, needs to catch up to the technology.  The underlying problem still lies with the fact that it’s so terribly easy to find free music.  YouTube has it.  Torrent sites have it.  When paying for music feels free AND is easier to access than alternative (illegal) methods, people will undoubtedly turn to this legitimate service.  If people could spend 10 minutes online and find a grocery store that gave away their food for free, wouldn’t everyone shop there?  Would consumers care whether or not the farmer is getting paid well enough to make a living?  Unfortunately, I’m not sure they would…After all, he grows the food himself, he eats for free anyway, right?
    As easy as Spotify’s service is, they don’t have enough paying subscribers to allow them to pay artists legitimate rates without Spotify themselves going out of business.  You can’t really blame a company for trying to keep their doors open.  They’ve pretty much hit the ‘feel’ of free music on the head (especially when that $10 is pulled directly from my checking account)…but why agree to have that $10 taken out when it’s still just as easy to get what you want for free?  THIS is the problem that must be solved.  When finding free unlimited music online becomes a struggle, people will abandon it.  The alternatives are in place.  But as long as YouTube is still hosting millions of songs uploaded by people who don’t own them being consumed by people who didn’t pay for them (or sites who didn’t pay to host the material that draws them traffic and ad revenue), the ‘new model’ everyone is waiting for cannot exist.

  • G Unit

    the music industry has always been far more complex than what critics have made it out to be. for every 10,000 acts doing the exact same thing, 1 or 2 get a lucky break. right place, right time, right hook, right manager, stars aligned, etc.

    the landscape is changing. but you can’t compare obsolete paradigms to here and now. it’s irrelevant. like the beatles thing…they were extremely talented, but it wasn’t their musical craftsmanship and “ability to convince people to listen to their music” that made them as big as they were. they were the first group to be pushed through the newly forming mass media machine. 

    the “battle over what money there is left” is a byproduct of the glorification of the piracy of music, facilitated by the new wave of tech companies (ie Spotify, YouTube, etc.) who are providing the platforms for its exploitation, shielded by extensive misinformation campaigns and other forms of highly-funded lobbying.

    anyway my question to you is, how exactly is streaming going to change culture for the better? you never really answer that question clearly, nor do you provide a framework or reference for attempting to answer it (ie how would you define culture). 

    this is an article filled with lots of words but nothing more than tangled references, popular spin doctoring, and shortsighted, biased opinions.

  • Jp

    I’ve read dozens of these types of articles and it all sounds like you guys are spinning your wheels in the mud.

  • http://twitter.com/Vesheccrumbs Nathan Veshecco

    I ended up here after reading Eliot’s comment on the recent CNN article. Now I have even more to be disappointed about.

    First off, the stances of these articles are always essentially “It’s the wave of the future and the technology must be respected, and musicians deserve to be punished for sucking.” Is it also the wave of the future to be lazy to the tune of “[Owning music] is a lot of work”? That statement makes the “on the go” generation look bad, and that generation includes a lot of good people with far better reasons (like being broke) for not buying music.

    I’m so tired of those obsessed with technology trying to make people feel bad for being ambivalent about it. There’s a genuine thread of alienation and unkindness in the “stream everything for free” world, and anyone who denies it is just shutting out the empathy we’re all equipped to access. It’s not there in everyone, because owning music just doesn’t rank up there with food, shelter and clothes. But it’s ALWAYS there in these sorts of articles, where a tech writer has one mission: to aggressively defend the right to be unquestionably forward-thinking.

    If people don’t want to own albums anymore, that’s fine. If unlimited access is a major priority, that’s fine. And if your life is all about thinking about what’s coming next and how much better the world is getting with every technological advancement, that’s also fine.

    But stop writing mean, condescending articles like this or album buyers like myself will just rest on this psychological conclusion: That when you know something you love to do is hurting people, you’ll show up on the defensive about it before anyone has said a word. We see you, tech folks, and we know that deep down (and maybe only subconsciously) you know how alienated our world has become. And you know that it isn’t working. And you know that this article has a shitty attitude.

  • http://twitter.com/Vesheccrumbs Nathan Veshecco

    We love you, Neil Young.

  • jkjgkj

    hi

  • http://www.vslevin.com/ Vince

    Seriously? Take it easy, there was nothing in this article to get so worked up about.

  • jazzgirl

    Thank you!

  • http://twitter.com/iOSMusician iOS Musician Blog

    Spotify also just makes sense as a way to contribute to artists efforts in general- why would you pay 99 cents for a song wants to listen to it as many times you want- what if you want to listen to a song only once? It just makes sense for the artist be paid per play

    Yes, yes, artists have shown significantly less revenue from Spotify as opposed to other digital distribution services- but, as Spotify and other online streaming services get larger Numbers of customer artist revenue would (presumably) go up…

  • Emmett McAuliffe

    “By paying out only when people actually listen instead of suckering fans into buying something only to leave it on the shelf, Spotify, MOG, Rdio, Rhapsody, and other on-demand unlimited music services build an incentive into the music business to create works of lasting value.”

    A highly questionable hypothesis. How ever did Elvis Presley and the Beatles create works of “lasting value” with no Spotify “incentive”, just grubby owners?

    But what about the premise?: “Why should people *have to* leave music on the shelf?. With physical media, you don’t have to “leave it on the shelf”, you take it to a used record store. You think the Internet is incapable of building a used record store? The Internet is incapable of building NOTHING. Here is one example of a used record store every bit as robust as a stock trading platform: thedce.com We have built what we believe is the greatest system for lending and selling used tracks. With absolutely no DRM.

    If we tried to incentivize ownership within the existing applications, we might get somewhere. For example, shouldn’t people who buy a track get a discount from their subscriptions from “Spotify, MOG, Rdio, Rhapsody”. If I play an album that I purchased and it is sitting on my hard-drive, these services are not providing me any rights to those songs, I already have full, ownership rights, and I can stream that music however many times I want. If you track ownership (which the DCE does for owners of all kinds including record stores and libraries) , it is easy to provide a discount off of Spotify, Pandora or whoever. Spotify and Pandora simply access thedce.com database for that user’s owned tracks. Did I mentioned no DRM??

    So we need to keep talking about this and I appreciate this author for doing that. But it can’t be a constant drumbeat of “streaming vs. ownership”. They are not mutually exclusive. The answer is streaming and ownership.

  • Rocket Queen Promotions

    awesome article

  • http://www.imaginaryplanet.net/weblogs/idiotprogrammer/ Robert Nagle

    I generally am still a music collector of digital files (mainly through emusic, CD ripping and digital samplers/fma/jamendo). The compensation issue still has not been adequately addressed. Actually though I think artists can simply refuse to stream their music on services which pay the least. With bandcamp’s recent redesign, I’ve recently become a fan of their business model. Streaming + download + cloud + set price directly (including pay what you want). I realize that bandcamp doesn’t have as much mindshare as Spotify and Rdio, but if they are paying better rates, why not go for them. An easy technical fix is for these whole album streaming services to have an assigned limit of how many times a paid member can play a song or album.

    For the record, I tend to regard “purchasing music” as a kind of tip or reward for musicians after listening to their album once or twice. For this reason, my batting average on the albums I buy on emusic tends to be extraordinarily high. In that respect, the article is right that it will improve album quality.

    I know you are a fan of blanket licenses, but ponder Netflix. Everyone loves Netflix because the streaming subscription is just one low price. But selection is dwindling, content providers are stingier about signing up and Amazon is offering both an all-you-can-eat subscription and an a la carte. Sure, digital movies are typically watched only once — while music is listened several times, but for video Amazon’s model is much more flexible and more likely to win out at the end.

    By the way, I do not think that Netflix streaming has resulted in better moviemaking — though it probably has resulted in better TV series. (The jury is still out though — and movie making have substantially larger budgets).

    An underlying issue is that digital albums are way overpriced. 8 or 9 dollars for any album (even a memorable one) seems excessive. That’s why these streaming services seems like such a good deal by comparison. If labels priced albums more moderately, people would respond by buying more albums!

  • Emmett McAuliffe

    Thanks for that excellent analysis. The only thing that I even possibly disagree with is this:

    “+ set price directly …. I tend to regard “purchasing music” as a kind of tip or reward for musicians after listening to their album once or twice. … an underlying issue is that digital albums are way overpriced. 8 or 9 dollars for any album (even a memorable one) seems excessive. That’s why these streaming services seems like such a good deal by comparison. If labels priced albums more moderately, people would respond by buying more albums!”

    it’s not just about choosing a more moderate price. Ideally the market would set the price. Predicting a good price point for each record is strictly for the birds (pre-Internet birds, I might add).

    We at the Digital Content Exchange have been harping on the industry for years to price and distribute “downloads” like stocks are priced and distributed on the stock exchange: i.e. the original issuer can decide what price it wants to issue the “download”, but after that it loses control. If the original issue puts, say, 10,000 units into the stream, it can watch the prices either go up or down, and then think about doing another issue, at a price that was either higher or lower than the issuer originally thought.

    I know it seems a little technical, and “not about the music” … but that one little adjustment would act like an enema on music sales. 15 years later, music as a fungible digital commodity, is still not being handled properly on the Internet. It’s a shame. And so we get what we get: dowloads eroding, and everybody saying that the streaming model unsustainable. Of course it’s unsustainable. The whole category is not being handled properly.

    At any rate, back to your original point, there’s no excuse in the digital age to have a “List” price like $16.98. Those were the days when you shipped discs in boxes to a retail store that had to know what price it was getting in order to justify its shelf space and rent. Of course that is no longer the case.