Music Streaming – A Change in the Music Industry

Before the magic of the internet, artists almost solely relied on radio plays and physical album sales to get their music stuck in the heads and into the hands of fans. The late 1900s saw the industry shift when television programs like MTV circulated music (more importantly music videos) to a new generation of music lovers. In the early to mid-2000s with the emergence of the internet and online spaces, artists were able to promote and release their music online to an audience bigger than ever before.

Early Days

In these early internet days, a peer-to-peer music-sharing website known as Napster started to gain popularity amongst young Americans, who predominantly used this service to share MP3 files of songs for free.

According to a report from the World Economic Forum, as of 2022 paid subscription options such as Apple Music and Spotify ranked as the number one most preferred option for music consumption among listeners, followed not-so-closely by methods like video streaming on platforms like YouTube and tuning into the radio.

Napster is now considered to be the first ever music streaming service, though it later faced lawsuits regarding copyright and legal ownership of works by artists, but not before it amassed nearly 22 million users before its shutdown – effectively paving the way for what streaming services and music consumption looks like today.

Up until this shift into the digital space in the early 2000s, physical media made up the bulk of music revenue. Each generation had its predominant form of physical music, from vinyl to 8track, to cassettes, all the way to CDs as the most recent instalment, first released in the early 80s. However, this shift to digital listening brought down CD sales significantly, and with the introduction of Spotify in 2006, CD sales dropped around $4 billion in just five years, and the growth for streaming continued to skyrocket. In 2021, the streaming industry raked nearly $12 billion for the music industry.

Streaming Today

Though streaming garners the most revenue for the industry as a whole, it’s still not the highest earner for the artists themselves – coming in at number three behind live performances and sales (both physical and digital). Artists like Taylor Swift and Thom Yorke have come forward about the unfair payment for artists’ catalogues to be on streaming services – Swift even going as far as to pull her catalogue of music from Spotify from 2014 until 2017. Though Spotify claims seventy percent of streaming revenue does go directly to artists, artists are realistically earning much less on streaming services compared to actual sales – earning an average of less than half a cent per stream. However, there is one big way that these streaming services pay – in exposure.

The internet and streaming services are able to provide unprecedented amounts of exposure for artists. These services make music more accessible than it has ever been, with companies providing both paid subscriptions and free ad-supported versions of their services, people are able to access an expansive catalogue of music. Spotify and Apple Music both host over 100 million tracks for their subscribers to choose from.

Algorithm

The rise of algorithmic listening has also changed the game for the way that people are exposed to music. Most – if not all – streaming services offer some form of personalized playlist or recommendation algorithm, though it varies from platform to platform. Spotify, for example, has features such as its Discover Weekly playlists and its Daylist, both of which create rotating playlists of songs tailored specifically to a user’s listening habits – both with artists they already know and love, as well as exposing them to new artists based off of the music they already listen to. These algorithms are great from a user perspective – giving them brand new songs and artists to enjoy without having to go digging through an overwhelming catalogue of songs or being at the mercy of a radio host.

These streaming services and algorithms also give the artist access to a huge global audience, as they allow any artist to upload their catalogues and content to their platforms to be broadcast and discovered by listeners worldwide, and without the involvement of a major label.

Though There are Arguments Against the Advantages of Streaming…

And a lot of people are re-discovering the art of physical media, streaming services have completely disrupted and dominated the music industry and the way people are exposed to music.

If you are an artist or need music consultation, refer to our Funktasy Artist & Music Consultation page, a boutique firm specializing in personalized artist & music career consultation, branding, music analysis, production, recording, and promotion.

If you have thoughts about getting into the industry or are an up-and-coming artist, refer to our Funktasy Artist & Music Consultation page, a boutique firm specializing in personalized artist & music career consultation, branding, music analysis, production, recording, and promotion.