If you don’t stream, what do you do?
This seems to ring true when it comes to the music industry these days.
Just over a week ago, Taylor Swift decided to open her catalogues to streaming services once again. It also happened to be on the same day Katy Perry released her new album.
If you’re in touch with your pop culture, then you know that these two are feuding and that the whole planet (read: mostly teeny-boppers) exploded with accusations and some heavy side eye.
But aside from this little flurry of internet activity, Swift’s move ultimately highlights a bigger picture: the music industry needs streaming and will ultimately become it.
This is what captured our minutes this week.
1. The way audiences are choosing to experience music is changing.
Same goes for the way artists are choosing to share their music.
The Weeknd originally put out his music on YouTube. He just wanted people to experience it.
Chance the Rapper has been nominated for seven Grammys and has an album on the Billboard chart without ever having sold a single record.
Kanye West put out The Life of Pablo online before it was even finished because he wanted to be able to keep working with the music as fans listened to it.
It turns out audiences react well to this. In fact, they want the music immediately without any distractions (ads) and obstacles to leap over. So, they’ll stream before they worry about owning it.
Essentially, everyone just wants to get to the music.
Why? Because it allows both fans and artists alike to create their own unique experiences, experiment with the music and have an ongoing, barrier-free relationship with the content.
Access is a huge issue. While subscriptions obviously indicate paid services, $10 a month is much better than $1.29 per song.
It’s a win-win: the artists get their fans to experience the music openly and fans can do that whenever, wherever and has much or as little as they choose. In an age where customization is preferred, streaming represents a mutually beneficial relationship.
Unfortunately for music execs, that means business can’t keep being done the same way it’s always been done.
2. The establishment can no longer keep calling itself the establishment.
Taylor Swift, who has a history of being against streaming, put everything back. Like it was nothing. The official explanation on Instagram was that it was in honour of her album 1989 selling 10 million albums world-wide.
For those who don’t know who Taylor Swift is but might know who Bob Seger, Prince, The Beatles, Led Zeppelin, Pink Floyd, etc. are, you should know these streaming hold outs also did the same.
In the past, the music industry establishment dictated that record companies distributed that work and got to make bank on the records sold.
Nowadays, that’s just simply not the case. Here are some numbers to illustrate:
In 2016, streaming was responsible for more than 50% of all U.S. music industry revenue.
That’s $3.9 billion of $7.7 billion.
From 2015 to 2016, the number of streaming subscribers doubled to over 22.6 million.
Streaming isn’t all perfect. Spotify is having profitability issues with its costs catching up to its revenue (despite growing revenue) and questions over how fair the royalty payments to artists are (known to be quite small).
Yet still, the music industry is actually being heavily supported by this activity. According to the Recording Industry Association of America (RIAA), digital download revenues have been shrinking since 2013. In fact, the music industry’s earnings have been declining for about a decade now.
It’s a tough pill to swallow (excuse the idiom), but the original music industry establishment can’t expect to do things the same simply because that’s the way things have always been done.
Content changes. Distribution changes. Fans change. The establishment is better off going with the flow than trying to fight it.
The numbers prove fighting isn’t winning any accolades.
Truthfully, streaming presents a very unique opportunity for the music industry to prove its resilience and awareness of its brand relevance. The establishment just needs to be able to see it.
At the end of the day, people engage with content by lending their minutes. Content is successful when its battery is fully charged with attention.
What will win this week?
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