How streaming is saving the music business
There has never been a more vast, diverse, and readily available body of music to explore. But how does a below-the-megastar-radar artist or band survive the new paradigm?
I stream. You stream. We all stream our music these days. Nielsen recently issued an ear-opening report that says Americans’ music consumption is downright conspicuous, increasing to the tune of 12.5 percent year over year. Nielsen estimates that in 2017, the average American listened to music about 32 hours per week (up 5.5 hours from the previous year), and, with earbuds snugly in place, people increasingly ingested it via on-demand streaming sources like Spotify and Apple Music. Nielsen reports that on-demand audio streams increased 59 percent last year.
Sounds like awesome news for us music lovers, right? Well, yes. There has never been a more vast, diverse, and readily available body of music to explore. However, only 29 percent of music streamers hold a subscription and so pay for the privilege, according to Nielsen. “That’s a problem,” writes Los Angeles music publisher Abby North in an email. “We have already lost countless songwriters and musicians to other industries. We need to support great musicians so they can continue to share their music with the world.”
Napster’s momentous arrival on the scene nearly 20 years ago planted the seed in the minds of some that music “should be” free. Now, with a $10 monthly payment (or no payment at all if ads don’t bother you), a Spotify subscriber gets instant access to roughly 35 million songs. As of this spring, Spotify had a listener base of 170 million who use it monthly (75 million paid).
The spectacular growth and monetization of streaming (however imperfect) is the big music industry story of the past decade. According to the Recording Industry Association of America, last year’s recorded music revenue from all over the world returned to the revenue level of 2008. CD shipments continued to drop, with the format likely continuing its slow march to the Museum of Ancient Technology. Miraculously, though, our plucky friend the vinyl record continued its logic-defying 12-year growth spurt, up 9 percent over 2016 figures, per the Nielsen report, reanimated by Record Store Days every April and November.
“It’s the music fan’s reaction to the intangible nature of digital streaming,” Glenn Peoples, a music data analyst based in Nashville, Tenn., says of vinyl’s appeal. “It’s real. It’s colorful. You can hold it in your hands.”
So who is benefiting most from these millions and billions numbers? The highest-ranked artists in 2017 for total volume, which includes albums and streaming, were Drake, Kendrick Lamar, Ed Sheeran, Taylor Swift, and Future, according to Nielsen. Singer-songwriter Sheeran, with 6.3 billion streams on Spotify alone last year, dethroned 2016 streaming king Drake on the streaming service.
Meanwhile, concern continues in the music industry over those whom we’ll call the music 99 percent being able to earn a fair amount from streaming dollars. On YouTube, for example, the International Federation of the Phonographic Industry estimated in a 2017 report that the annual revenue for the music industry per user is less than $1. “User upload services, such as YouTube, are heavily used by music consumers and yet do not return fair value to those who are investing in and creating the music,” IFPI chief executive Frances Moore said in a statement.
So how does a below-the-megastar-radar artist or band survive the new paradigm? The Buzz Factor music marketing guru Bob Baker stresses in an email that artists looking to make it “need to accept that there is no one route to success.” Beyond the obvious – “writing great songs” – he suggests lots of touring and filling niche markets such as relaxing music for yoga.
Ms. North stresses the importance of savvy social media skills, and she’s a big fan of house concerts. “Attendees become superfans, and they buy CDs and other merchandise,” she says.
Meanwhile, Matt Scannell, lead singer of the band Vertical Horizon, says he has no time for statistics and numbers. “Yes, we can be smart and nimble, but if you spend your energy truly connecting with your fans instead of worrying about millions of streams by every flavor of the month, they will support you,” he says. “They’ll want you to keep doing this.”