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Streaming Technology? Can Musical Artists Navigate the Choices?

by Kristin Houser
Writer & Editor
, LA Music Blog

With the music Industry split over streaming technology, more brands are investing in services amid artist protests.

Between the downward trend in traditional music sales and the increasing number of available streaming services, one thing is clear in the currently murky waters of the music industry: fans no longer feel a need to own music to enjoy it.

Overall album sales in the United States dropped 14.5 percent during the first six months of 2014 compared to the same period in 2013, according to Billboard, while streaming services are currently thriving.

Spotify now boasts over 40 million active users, YouTube is currently the number one way teens listen to music and 175 million users listen via SoundCloud each month (enough for the company to announce they’ll soon be selling ads and paying artists).

David Bakula, Nielsen Entertainment’s SVP of client development and industry insights, explained in his 2014 SXSW address that “digital consumption has reached the masses, with a majority of consumers in the U.S. streaming music [in 2013].”

In just the first half of this year, the already bustling streaming-music scene has added two major brands to its ranks, with another getting ready to join.

Beats Music screenshot

Dr. Dre and Jimmy Iovine were brought into the Macintosh family in May when Apple announced its acquisition of Beats Entertainment, including the streaming service Beats Music, just five months after the service’s January 2014 launch.

Beats Music’s catalogue is comparable in size to Spotify’s, with approximately 20 million songs, but the service sets itself apart with its personalization system, which combines recommendations based on algorithms and users’ listening habits and features playlists curated by humans. And not just any humans — music professionals!

As Beats Electronics’ Chief Creative Officer, Trent Reznor stated in an interview with the New Yorker, “It’s like having your own guy when you go into the record store, who knows what you like but can also point you down some paths you wouldn’t necessarily have encountered.”

Online retailer Amazon added a streaming-music service to its Prime program in June, giving millions of U.S. Prime members unlimited, ad-free access to over 1 million songs and hundreds of programmed playlists at no additional cost to their membership.

Available on Kindle Fire HD/HDX, iOS, Android, PC and Mac, Prime Music also offers users the option to download songs and Prime Playlists for offline playback on mobile devices. While the service can’t compete with Spotify’s selection, if consumers were on the fence about purchasing Amazon Prime at $99 per year, the addition of a music-streaming source that won’t eat up their data allowance could be the added value they’re looking for.

Google-owned website YouTube is gearing up to launch its own streaming service, YouTube Music Key, which was officially announced in June and originally expected to debut by the end of summer. According to reports, the new service is expected to cost subscribers approximately $10 per month, keeping it competitive with Spotify and Beats Music.

If rumors are true, the service will allow subscribers to play YouTube songs ad-free, store videos for offline playback, listen to an artist’s entire album instead of just individual songs and use YouTube in audio-only mode. Android Police recently leaked a series of screenshots reported to be of the new service, so users now have an idea of what it will look like, but there’s still no release date.

YouTube Music screenshot

Part of the delay in the service’s launch has been due to a royalty dispute with independent labels, but YouTube Music Key is not the first streaming service to face opposition from the music industry.

Artists Amanda Palmer, The Black Keys and Radiohead’s Thom Yorke are just a few of the many musicians who have spoken out against music-streaming services, claiming artists aren’t being fairly compensated for their work. Some record labels, including Drag City (home to Ty Segall, White Fence), have made their entire catalogues unavailable for streaming via services like Spotify.

Spotify app on mobile phone

If 2014 is any indication, these protests are doing little to slow the growth of streaming services, so artists looking to stay relevant and profitable in the modern music landscape must focus on other sources of revenue. Thankfully, they have several viable options.

The first is collectibles and merchandise. As iQ previously reported, vinyl record sales have been increasing in recent years, with 2013’s sales totals revealing a 32 percent increase over 2012’s numbers, according to Slate. Artists can even use music-streaming services to fuel these sales, as Spotify recently partnered with BandPage to offer musicians a way to sell vinyl and other merch to fans as they stream music.

Live shows are another source of revenue. Billboard’s concert metric Boxscore reported a 30 percent increase in concert ticket sales from 2012 to 2013, revealing that while fans may not be stocking up on CDs, they are flocking to venues.

Some artists are even adopting an “if you can’t beat them, join them” mindset and selling their own subscription services. For example, EDM producer Deadmau5 sells all-access memberships to his Deadmau5 Live site for $4.99 per month or $44.99 per year, providing fans with streams of new and unreleased music, as well as live broadcasts and other goodies.

In other words, artists can still make money in a world that includes music-streaming tech, so don’t feel too guilty streaming music on your phone, tablet or computer. Just be sure to take off the headphones long enough to support your favorite artists by heading out to their concerts and buying a T-shirt or two between dance sessions.

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Since the publication of this article, Thom Yorke further demonstrated his antipathy towards streaming services and corporate digital storefronts by releasing his latest album, “Tomorrow’s Modern Boxes” as a BitTorrent Bundle for $6. According to the Guardian, this marks the first paid-for album to be distributed via BitTorrent bundles, which are links to the files that can be controlled and sold to users legally.

Unlike traditional methods of buying and downloading music, the BitTorrent bundles work through a peer network not radically dissimilar form the way pirated music functions, but the crucial difference being that users pay for it.

Artists and publishers that distribute music through BitTorrent can save on the server costs associated with other direct download services. It also allows them to sell albums directly without involving a third-party like Apple or Amazon or even a record label, reports the Guardian, which also points out that listeners, at least for now, will have to work through more steps to get music files into the right places so they can be play easily on different devices.

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