Spotify and other streaming services, including Google Play, as well as Apple and Amazon Music, have been the subject of scrutiny this month in the UK, with a House of Commons committee considering the economic impact these companies have had on the music industry. The worldwide market for music streaming services was estimated to be worth approximately $23 billion (Dh84bn) in 2020, so it is a conversation with global implications.
Streaming platforms delivered more than 100 billion songs to devices in the UK last year, but artists typically only receive a fraction of a penny on the pound every time one of their tracks is played. The Digital, Culture, Media and Sport Committee estimates that these platforms take a 30 per cent share of total revenues received. Streaming companies pay out a percentage of the rest to labels who then compensate the artists and producers, although some of the system of trickle-down revenue is opaque.
The music industry has gone through a series of fundamental changes over recent decades. If the business was concerned for much of the latter half of the 20th century with convincing consumers to upgrade to the latest platform on which to consume the product - coercing its customers to collect vinyl and then later upselling them to cassettes, CDs and even Minidisc - the later pivot to digital has turbocharged that journey. Cast your mind back 20 years when the iPod was introduced, with its marketing strapline that you could carry around “1,000 songs in your pocket” and it would have been hard to imagine back then that consumers can now buy unfettered access to the entirety of music history on their smartphone in exchange for the price of a small monthly subscription. If you are a music lover, it is probable that the monthly payment you make is far less than you used to pay for CDs, downloads or any other format back in the days when customers routinely used to own music.
I’ve written before about how I find the idea of a monthly subscription for music difficult to fully reconcile, even though I am a customer of one of those services.
Undoubtedly, they democratise music by offering a platform to deliver every genre of music wherever and whenever we want it. But streaming does take away some other parts of the culture of old, such as discovering an artist by hearing them being played in a record store. That process is now carried out by an algorithm that thinks it can short-circuit our neural pathways through a machine-generated recommendation. Streaming services have also hastened our journey towards viewing music as disposable rather than as semi-permanent displays of one’s identity and taste.
Some of the above is, of course, an overly nostalgic take on music as it used to be, because streaming services also provide important wins for all of us. The effective commoditisation of music ushered in by these platforms empowers subscribers and offers them genuine choice, particularly as price wars have sent subscription prices lower.
The idea of paying one fee for all of your consumption is also now impossible to give up on, even if the folly of an industry model that suggests artists should make their money from touring rather than streaming has been thoroughly dismantled by the economic hardships the pandemic has delivered upon cultural producers.
The questions that we now have to answer are whether that fee is enough to stimulate music content production in the future and if a fair share of that money is landing in the pockets of the people who make the music in the first place?
The era of streaming and, indeed, the Commons committee, have made some customers more profoundly aware of the distribution of wealth in the music industry than, say, when we used to buy vinyl and assume that a fair chunk of change was being returned to the artist. The fact is we did not know then, but we are finding out more now.
So where does this leave us? On the road to reform if the Commons has anything to do with it. In a series of stinging reported comments, Julian Knight, the chair of the committee, said that streaming services required “a complete reset”. The committee concluded that performers, songwriters and composers received “pitiful returns” from streaming.
For too long, of course, the industry has been shrouded in mystery as to where royalties flow. The irony may be that the age of streaming has finally delivered the unequivocal answer to the question of who really gets rich from a hit record. Now we must hope that this democratisation of music distribution may yet force through better financial settlements for artists from the entire ecosystem. The great rock and roll swindle of old could be about to end.
We may have to pay a higher price for the music we consume as a consequence, but if the fee structures are transparent and coherent then there should be no argument. If the end result is that a rebalancing helps deliver a fair wage to musicians young and old, then none of us should object.