Streaming is Here to Stay, Why is This Important?

Streaming giants Spotify and Apple Music, among others, have taken over the music industry over the last several years and completely altered the way we listen to music. Gone are the days of buying songs and albums, replaced by playlists and algorithm generated recommendations. But what does all this mean for the music industry?

For artists, this means more people are listening to their music, yet somehow they are seeing fewer of the dollars in their pocket. In fact, there’s more money in the music industry now than ever, and it’s growing fast, by as much as 16% annually, according to the Recording Industry Association of America’s most recent year end report. The music industry in the US alone is worth a little under 9 billion dollars. Yet, the artists who create the music which makes up the industry get paid between $0.006 to $0.0084 per stream from Spotify. Artists being undercut isn’t new in the music industry, but it is becoming more drastic than ever. Back when iTunes was king of music, most artists would get around a 10% cut of sales. Which is equal to about 9 cents on a $0.99 song purchase. As it stands, you have to stream a song 165 times to put one dollar in the pocket of the artist who created the song.

How does Spotify impact music consumers? With curated playlists that pop up on our Spotify, music is more effortless than ever. You can put on a playlist and not have to think about curating your own music for a few hours. Hear a song you enjoy? Save it to your library. It’s convenient, but at what cost? The issue with Spotify, the largest independent distributor of music, is that it’s not really independent. In the early Spotify days, back in 2008, the streaming service gave out millions of shares to major labels. These stakes today are valued between 1 and 1.5 billion dollars, depending on the label. This was in order to entice the labels to allow their music on the service, but it had an important secondary effect: major labels are now financially invested in the success of the service, and vice versa. As a result, you get major label artists dominating curated playlists with millions of subscribers. They are manipulating the charts by giving you what they want you to hear.

It’s important to support independent artists and artists signed to smaller labels, because without these artists all we have left in the algorithmic music designed to make profits, and that’s not real art.  

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