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How Streaming Has Taken Over the Music Industry

Lauren discuss the rise of music streaming in the 21st century, and why this new method of listening is here to stay

Over the past 10 years the way we listen to music has gone through a transformative change. Apple’s invention of iTunes and the iPod revolutionised the music industry in the early 21st century, giving people a device and software duo which made it possible to listen to thousands of songs from your favourite artists all stored on a single device. Yet, this era now seems quaintly old-fashioned in contrast with streaming services like Spotify, which has become a juggernaut of the music industry. In this article I want to take a particular look at how streaming has infiltrated the music industry and its impact on both those who make music and those who listen. Focusing mostly on Spotify, I want to discuss  some of the main debates regarding its impact on the music industry and what it is about the platform that enticed 172 million of us to pay for the service in 2021.

Streaming services such as Spotify, Apple Music and Amazon Music have changed the way we listen to music. Now, instantly and with ease, at the tip of our fingers we can listen to an unlimited amount of music without leaving our bedrooms – all for a monthly fee, of course. We are clearly in the era of streaming music, with Spotify’s revenue in 2020 reaching 13.4 billion US dollars worldwide – its highest ever recorded intake – as well as accounting for over 62% of the total global recorded music revenue.  There is no doubt that this has had an immediate impact on the demand for tangible CDs and records. In a stark comparison, in 2020, Statista reported that CD albums accounted for less than 4% of music industry revenue. According to the Recording Industry Association of America (RIIA), CD album sales in the US have dropped by 87% since their peak in 2000, and are currently at their lowest ever recorded level. Juxtaposed to this would be the ‘vinyl revival’ we have experienced in recent years. In 2019, there was a reported 40% growth in the number of record shops in the UK. In light of high vinyl consumerism, high street stores like Urban Outfitters are appealing to the demand, making it both easier and cheaper than ever to buy a record player. There is no doubt that the vinyl has made its way back into the centrefold of pop culture and its demand is running parallel to the reign of Spotify.

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Spotify has made music more accessible to people all over the world in numerous ways. It has opened the door for new artists to enter the market, as well as giving people the chance to listen to an abundance of music and podcasts at a monthly fee or free (restricted by ads between songs) with extreme ease. However, there have been many controversies linked to the streaming takeover in recent years. Streaming services have often reached headlines after being called out by the artists in the industry, regarding how these artists are paid.  According to Business Insider, Spotify pays rights holders between $0.003 and $0.005 per stream on average, which can be seen to disproportionately affect smaller artists. This emphasises the ‘double-edged sword’ that is engrained within the nature of Spotify and other streaming services. By putting their music on Spotify, artists have a greater chance of reaching fans and having their music listened to on a global scale. Yet, at the same time, they are paid on a pro-rata basis, where they are paid a percentage of royalties proportionate to their share of all the streams on the platform over a given period of time. For example, in May 2020, UK classical violinist Tasmin Little tweeted that she was paid £12.34  for  six months of plays, which was ‘around 5-6 million streams’ on Spotify. There is no doubt that this is reproducing a cycle of inequality within the music industry that was not experienced before. Bigger artists are better off than fledging artists and groups but even pop mega stars have been quick to out streaming platforms in terms of how they pay their artists.

 

All in all, despite this ongoing background controversy, I doubt that this will have an impact big enough for the buying of CDs to take reign again in the music industry. Spotify’s marketing has been a backbone of its success and has fully cemented the platform into pop culture. Spotify set itself apart from radio stations when it gave users the freedom of music curation. Its feature of allowing users to create multiple playlists and personalise them makes it extremely attractive and easy to use. Spotify recognised this massive gap in the market that Apple had pretty much set up for them. They gathered information on people’s personal music tastes and began to offer the service Discover Weekly, generating a tailored playlist to the user based on their listening patterns, recommending new artists and songs. How Spotify uses our information and suggests new music to us has completely changed the way we consume music, with over 30% of streaming on Spotify coming from its algorithm generated playlists. From this, Spotify continued to dominate the market and have created a colossal impact on pop culture. Collecting data throughout the year, they then create personalised and colourised infographics depicting the listening habits of each user. Yes, I’m talking about Spotify Wrapped. It has transcended its humble origins to become an annual tradition – it is now a winter staple, like a Starbucks cup at Christmas. It finds a way to dominate social media every year by allowing people to flex their artistic inclinations.

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Although Spotify is finding a way to cement itself as a core piece of pop culture, it can be said that we have not heard the end of the streaming industry’s ‘double-edged’ sword nature. As much as it is making music more discoverable to listeners, it is the artists themselves that are losing money, and this is not sustainable.

 

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