Streaming : The Only Future of the Music Industry?

A while ago Radiohead frontman Thom Yorke did something not a lot of people saw coming. He denounced what many people believed to be the future model of sharing music. From a man who changed the face of distributing music with his bands unveiling of the ‘pay what you want’ system for Radiohead’s ‘In Rainbows’ release back in 2007, this was a pretty big deal. So why exactly did he speak out against ‘Spotify’?

“Make no mistake; new artists you discover on Spotify will not get paid. Meanwhile shareholders will shortly be rolling in it. Simples.”

Artists vs Shareholders, an age old battle given a 2013 context. Mr Yorke wasn’t the only voice speaking out against the service, music producer Nigel Godrich also commented on the issue…

“The music industry is being taken over by the back door and if we don’t try and make it fair for new music producers and artists, then the art will suffer. Make no mistake. These are all the same old industry bods trying to get a stranglehold on the delivery system.”

Sounds precarious no?

The rise of ‘Napster’ and subsequently torrenting sites like ‘The Pirate Bay’ brought the music industry to its knees back around the beginning of the millennia. Since then these ‘Industry Bods’ as Nigel Godrich called them have had about as much control over the musical climate as Nick Clegg has over the current government. I mean back in 2009 ‘Rage Against the Machine’ were Xmas number one for crying out loud.

That’s not to say this was a good time for the independent/alternative scene. Although a few lucky acts benefited from the rise of internet culture, thousands of bands were put ‘out of business’, not given their rightful opportunity because of lack of funds available to indie labels thanks to low album sales.

So with the old system of paying for music in tatters and now nobody but the platinum selling artists earning a prosperous living out of music, the music industry was looking, no begging for a new revenue system. A model of selling music that the public would be willing to sign up to.

Step forward the streaming service. This week Spotify has been valued at $4 billion by the Wall Street Journal and is touted as the epitome of the modern music service. For a sum of £5.99 you can have full uninterrupted access to the entire archive of Spotify’s 20 million + songs as well as a whole host of additional features. Great for the consumer, but as argued by some, not so great for the musical contributors.

Sam Duckworth, the man who performs under the guise ‘Get Cape Wear Cape Fly’ unveiled to The Guardian the total amount the service had earned him.

“4,685 Spotify plays of my last solo album equated to £19.22 (that’s 0.004p per album stream). The equivalent to me selling two albums at a show. I think it’s fair to say that at least two of those almost 5,000 listeners would have bought the album from me if they knew the financial disparity from streaming.”

A quote from an independent artist citing some pretty damning statistics, the type of artist Thom Yorke said would suffer.

Spotify isn’t the only name accused of short changing artists. Myspace Music, Google Play, Deezer and Rdio all offer similar services with similarly small royalties paid out per play.

But maybe we’re looking at this the wrong way. Perhaps instead of begrudging what the streaming sites aren’t doing, we should be celebrating what they are doing. An artist who has broken through in 2013 has more avenues of exposure open to them than any other artist has in history. Not only this, but if they choose to add their music to these sites they have another (relatively small) revenue stream to tap into.

Streaming services are an opportunity, not a salary.

The fact is although Spotify is valued in the billions it is still making a loss, and a hefty one at that. According to Mashable, in 2012, despite doubling its revenue, the service made a loss of $77 million. The service can’t afford to pay artists the pittance it already does, so artists shouldn’t expect it to.

The majority of upcoming acts nowadays have resigned themselves to the fact that live performances and merchandise are the only ways to make a substantial profit in the industry. Streaming services serve almost as taster sessions for listeners who would like to try the album before deciding to buy it.

Thom Yorke has a legitimate gripe, but this is more than a black or white/right or wrong issue. The future of the music industry is still shrouded in mystery but with the public once again paying for music perhaps evolving systems, not abandoning them, is the way forward.

The future? No. But streaming services are a good start.