The Price of Music in the Era of Spotify
Is music now priceless or worthless? In the era of Spotify, Apple Music and Tidal, the lines are blurred, and even with more people buying vinyl and tape than ever, music streaming is set to stay the most popular way of listening to music.
Spotify has not yet been able to turn a profit, and due to their prices (£9.99 per month for unlimited music), it’s not hard to see why. While the consumers are getting a good deal, the company and artists are not. If Spotify makes more money, the music industry will find a way of making sure higher royalties are paid to artists, meaning it’s unlikely for Spotify to actually ever make money.
In the earlier days of music streaming, Spotify was only up against itself. But now, with streaming services such as Apple Music, YouTube Music and Amazon Music, companies that can afford to lose money as their music offerings are part of a bigger strategy, it seems that for Spotify, the future is still unclear.
A survey by TorrentFreak indicated that 28% of musicians money comes from live gigs – which is the main way musicians today make money and on average, only 6% of their profit comes from recorded music. But this was not always the case- just a decade ago when James Blunt, Snow Patrol and Girls Aloud were seen topping the charts, it was not uncommon for an album to sell over three million copies.
For a musician to earn the same amount as the average full-time worker in the US, they would need to need to be bringing in just under 200,000 streams on Spotify every week. This is around 10 million streams per year and for most, this is unachievable. David Harrison, singer, writer and producer from Somerset, says he doesn’t even put music out anymore. “It’s a waste of time. Money is tight, especially when you’ve been doing this for as long as I have. At a certain point, you have to just start doing what’s right for you.”
At 26 years old, David has explored many different parts of the industry. “I just play gigs to earn my money. I’ve done so many different things in the industry. At the moment, I have a few residencies at different pubs and bars around the area, and it’s enough for me to get by on. I was close to giving up altogether not too long ago, but it just seems like now I’ve come too far.”
So what happened? It is clear that the revenue from recorded music is going down and has been since the ‘decade of decline’ – a time where purchasing music and CD sales were in decline, meanwhile illegally downloading music for your iPod was happening more than ever. But while streaming music is helping the music industry get back into a good state, according to the IFPI Global Music Report, revenues in 2017 were still just 68.4% of those in 1999.
Spotify has now disclosed they pay their artists somewhere between $0.006 and $0.0084 per stream. Even arguably one of the most famous pop stars on the planet, Beyoncé, complained about this in 2013, singing on her self-titled album “Soul not for sale / Probably won’t make no money off this / Oh well.”
Another of the world’s biggest celebrities, Taylor Swift, famously had a three-year boycott of the streaming service. Swift had previously said that “it is my opinion music should not be free,” but just after her album, 1989, sold ten million album copies, she celebrated by putting that album and her whole back catalogue back on the streaming service.
Streaming platforms, most notably Spotify, now make playlists, such as Discover Weekly and Release Radar, personally tailored for each user based on their listening habits, and this can determine which artists that users find and regularly listen to. Additionally, there are also playlists based on the biggest new releases, bands and songs, such as ‘New Music Friday UK’ – which has over 600,000 subscribers. Being on one of these playlists can mean getting discovered by all of these listeners, and that’s just one playlist.
The value of music can be subjective- some music you could choose to stream, whilst some of your favourite music you could purchase on vinyl, which makes it as economically subjective as the music itself. But with the price of music going down, this can also affect the amount of money that goes into making music, which could end up potentially affecting the quality of the music.
The current streaming model is unsustainable for both artists and for streaming services, and despite the fact they have been an asset to the music business, they’re not perfect- but it’s still early days for the streaming industry.