No, that doesn’t mean that royalties to artists will dry up.
In fact, many artists who are not as big as Taylor Swift
should be able to take advantage of new possibilities created by streaming
music, such as helping them find and cultivate a fan base.
This whole transition from CDs and permanent downloads to
streaming music is likely to take a few more years to run its course.
These are some of the takeaway messages from a fascinating
article on the CNet website by author Joan E. Solsman titled “Attention, Artists: Streaming music
is the Inescapable Future. Embrace It.” The entire article is well worth
reading. A link is below.
Solsman’s article responds to the news last week from Taylor
Swift, who pulled her new album, “1989,” and all her back catalog from Spotify,
a popular music streaming service that is available in both free and paid
subscription versions. Swift has complained about the small share of revenues
that are trickling down to the musical artists. Several other hugely popular
artists, including Jimmy Buffet, have aired similar gripes.
For a look at how quickly streaming musical services have
gained a larger share of total U.S. music industry revenues in the first half
of 2014, have a look at the Recording Industry of America (RIAA) mid-year
report, also linked below. Total streaming services bring in about the same amount
of revenue as physical music formats, such as CDs. Streaming accounted for 27
percent of the pie, physical formats 28 percent, and permanent downloads (think
iTunes) have the biggest share at 41 percent. But streaming music’s share has
been growing rapidly in recent years, while CDs and downloads have been
shrinking.
Solsman’s article on CNet makes several important points:
First, artist royalties may be small now, but will get much
larger as the music-listening public continues to make the transition to
streaming music. When CDs began replacing vinyl LPs, they didn’t produce much
in the way of royalties, either.
Second, artists have always made less money from recordings
than from merchandise, touring and sponsorship, and that’s still the case.
“Streaming actually bolsters those,” according to Solsman. Streaming and the
audience data it produces can allow enterprising artists to take advantage of
opportunities to target certain concert venues, as well as market opportunities
for fans to have personal experiences with artists.
Third, streaming services offer the artist instant access to massive
worldwide audiences, which was harder for smaller, independent artists to
attain when exposure depended on making physical product available for sale.
As I said, the entire article is well worth reading. It
paints a convincing picture of a future music industry that makes not
guarantees to struggling, young artists, as has always been the case. Hell,
there aren’t any guarantees for established or famous artists, either. But the
changing landscape opens up opportunities that weren’t there before, especially
for new, independent artists.
Sources:
Attention, Artists: Streaming music is the Inescapable
Future. Embrace It by Joan E. Solsman. Nov. 14, 2014. Accessed at CNet: http://www.cnet.com/news/attention-artists-streaming-music-is-the-inescapable-future-embrace-it/
News and Notes on 2014 Mid-Year RIAA Shipment and Revenue
Statistics. Joshua P. Friedlander, Vice President, Strategic Data Analysis,
RIAA. Accessed at: http://www.musicrow.com/wp-content/uploads/2014/09/RIAA-2014-Mid-Year-shipments-memo-and-2-yr-table.pdf
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