Spotify tows split and battered industry
STREAMING PAVES WAY FOR MONITIZATION
Streaming music is the newest and most popular outlet for listening to music, creating issues for record companies and artists who distribute on CDs. However, streaming sites have also made it easier for artists to deliver music to their audience and for listeners to discover new music.
According to Xapp Media, “Music sales were declining before streaming.” The progression into this new age of digital music has been packed with similar instances from vinyl records to cassette tapes, cassette tapes to CDs, and CDs to MP3s—each new form overshadowing its predecessor. Previously, these new outlets seemed to be destroying the music industry, but now those same sites, such as Spotify, are saving it.
Spotify in particular has been a huge force in bettering the industry for artists. An article from NBC states, “streaming does disrupt traditional music sales but revenue derived from the recent growth in streaming evens out what is lost in sales.” So where some consumers may not have bought the song at all, now streaming can make up for ‘lost sales,’ in some cases by thousands to millions of dollars in extra revenue.
While sites like TIDAL do pay more on average per stream to artists, they do not have the paying subscriber base. Therefore many other streaming outlets pay artists less in the big picture. Spotify has over 100 million active consumers worldwide, and GP Bullhound’s Spotify update from Sep. 2016 predicts 50 million-plus paying subscribers in 2017 and more than 100 million by 2020. With their massive consumer base—more signing up everyday—and easy accessibility, Spotify pays artists more than any other music streaming service.
Spotify also gives many more indie artists an opportunity to be discovered by new fans with its users and company’s playlists, and its “Discovery Mode.” Discovery Mode allows users to listen to new music based off of other stations they’ve listened to in the past.
While streaming sites like Spotify may have been looked at in a negative light before, as it drew sales away further from previous platforms, it has made artists’ music more accessible. Streaming services such as Apple Music or TIDAL offer a free trial after which the user will either have to pay or will be completely cut off. Spotify users have their music without a subscription and can even download the music to their device so they can listen without internet. The average person is more inclined to use Spotify as one can play their favorites on their custom playlist or listen to others with or without a subscription, further increasing revenue for artists.
Spotify CEO Daniel Ek said in a Digital Music News article, “Now, after years and years of decline, music is growing again, streaming is behind the growth in music, and Spotify is behind the growth in streaming.”