The Economist Looks at Music Streaming and the Future of the Music Industry
Way back when, I didn’t get streaming.
“Why would I just “rent” my music? I want to keep the music I love forever! I don’t want it all to disappear if I stop paying my monthly subscription. Nope. I will continue to buy physical product like CDs and vinyl. And at the very least, I’ll keep buying digital files from iTunes.”
That was then. I’m long, long past my epiphany when it comes to music streaming services. I think streaming is one of the greatest innovations of the last half-century. Hell, I work for one of these companies now: Songza.
Yes, I will probably always continue to buy and hold the music I want. Some music just screams “Possess me for all time!” But with streaming, I can listen to and sample virtually any song ever recorded–often for free. Legally, too. (Songza’s free on desktop on mobile. So are a lot of other services).
Streaming allows you access to more music than you could ever hope to afford. And there’s no risk. Try something for free and if you like it, favour it and it’s essentially yours. Don’t like it? You don’t ever have to hear it again. The era of debating on which album to purchase when you only have $15 to spend is gone.
The Economist finds this shift interesting. Here’s what they have to say:
AT THE headquarters of Pandora, an online-radio firm, in Oakland, about a dozen headphone-clad analysts fill in a long questionnaire as they listen. They rank whether a song’s mood is “joyful” or “hostile”, the vocalist “breathy” or “gravelly”. They note whether they can hear electric guitars, lutes or bagpipes. Their ratings help to shape algorithms that push music to the service’s 76m users.
Pandora is in the vanguard of a revolution in which ever more consumers are streaming music over the internet to their smartphones or computers, instead of owning collections of songs. For the first time since Apple popularised the paid download in 2003, the record business is changing key again. From wax cylinders via vinyl, cassettes and CDs to MP3s, it is undergoing another format shift—maybe, some in the business muse, its last.
Streaming services give music-lovers access to millions of songs, but the services are not all alike. Online-radio versions, including Pandora and Apple’s iTunes Radio, choose what consumers hear, and the firms make their revenues through advertising. Others, such as Spotify and Deezer, let customers select songs from a catalogue of 20m-30m, charging premium subscribers a monthly fee. Free services that stream music videos, such as YouTube, also get plenty of play. All the variants pay the record labels some fraction of a penny each time someone clicks on a song.
