It is definitely a hot topic surrounded by great controversy…Here is how artists can benefit from streaming.
Let’s try to summarize why artists should have their music on streaming services.
1. (Most) people don’t want to pay for music
In the current economic context, paying for consuming music, especially downloading it or buying CDs, is certainly not most people lives’ priorities. Paying rent, bills, car, taxes, etc. certainly is. Financially speaking, entertainment and leisure in general (not only music) are becoming a luxury. Add up to this the common perception that “music is free” and the easy access to illegal music sources and you should get close to the full picture…
Streaming offers a free (ad-supported plans) or very affordable access to an unlimited amount of music, anywhere, anytime.
2. Streaming matches with nowadays consumption habits and trends
One of the major competitive advantage of streaming over download is convenience. It is way easier to just connect to the internet and browse an online music library that is constantly refreshed than having to store files on your computer. Not only files consume some costly hard-drive space, but these can be “lost” at anytime if the computer crashes (it is not entirely lost since you will have the option to re-download from the store where you initially purchased the songs, but it is a long and tedious process).
Streaming also corresponds to the new consumption model that is progressively being adopted by the masses (and heavily marketed by brands and manufacturers in all sectors of the economy): usage rather than ownership.
3. A viable streaming offer drives listeners to legal platforms
With the current streaming offer, where basically all the music ever recorded in the world is available online, there is no reason for people to use illegal sources like p2p, torrent or any other unlicensed “music service”.
In Norway, Spotify has literally eradicated piracy (only 4% of Norvegians under 30 still use illegal sites for music; they were 80% in 2009, at a time the alternative was not perceived as “viable”).
Streaming allows artists and labels to monetize from an audience that was previously pirating content.
4. An infinite source of income
Purchasing a download or a physical record is a one shot. Once people have paid to acquire the music, it’s done, there won’t be any further income from this customer for this same product.
With streaming, artists make (little) money every single time their song is played, which drastically increases the per-unit income potential, making it virtually infinite (as long as the song stays online it can generate plays, from existing or new users).
5. If streaming is that great, why are some famous artists removing their catalogue from streaming services?
There are various reasons explaining this, the main ones have something to do with business negotiations happening in the back-end with other platforms than streaming “pure-players” and a need of publicity stunt to make sure these artists get (even more) attention from the mainstream media. To make it simple, it is about money. Everything else is storytelling.
6. Is that true that artists don’t make money from streaming?
The usual complaints about streaming often come from signed artists whose labels did not account or payed-out revenues received from streaming services. There can be various reasons for that, but in most cases it is simply because these artists’ advances have not been recouped yet. Also most major labels are extremely late in accounting digital sales, due to the huge amount of data to be processed (billions of transactions reported monthly).
Artists DO make money with streaming. Here at JTV Digital we have artists who make 3 times more money with streaming than with downloads (however this is not common, since usually download revenue is still much higher than streaming, it mainly depends on the music genre and fanbase’s behaviour).
Between January 2014 and December 2014, global streaming revenues from our artists have risen of +500% (!).
Streaming may not “save” the music industry, it may not be THE solution all major label’s executives were dreaming of in 2002, but it does represent an unprecedented recurrent income opportunity for artists who have their music online.