While technological advances like streaming and downloading songs have made music accessible to the public for free, there is still a fine line between what is considered legal and illegal.
In November, Taylor Swift made headlines after removing her previous recordings from popular streaming services, Radio and Spotify, after claiming that many streaming services do not compensate artists fairly, causing the number of album sales to dwindle and hurt the music industry.
Since then, the use of music streaming services has divided artists between making their music accessible to the public and protecting their rights to their own songs in exchange for “proper payment.” With Spotify scrutinized for paying only $0.006 per song streamed, the concept of streaming has been labeled as a hindrance to music sales by many proponents of music.
The transition of music to online networks has made it harder for the music industry to prosper in the case of physical album purchases, as many consumers prefer the ease of downloading songs. However, because of this, streaming services have incorrectly become associated with illegal pirating, where songs are downloaded without any payment or royalties to the actual artists.
Prior to Spotify’s creation in 2006, the music industry had suffered a tremendous financial blow after the file-sharing service Napster introduced music piracy in 1999 and severely reduced worldwide revenue for physical music sales. According to The New Yorker, the emergence of the iTunes store worsened the situation, allowing users to spend less money on entire albums by selecting individual songs to purchase.
According to smallbusiness.com, Spotify and other streaming services should not be blamed entirely for the decline of the music industry when other factors, including music pirating and iTunes, are heavily responsible for its fall.
However, there are benefits to the artists from streaming, both in promotional and financial aspects. Many artists are not in the same level of fame as Swift; as a result, they do not have the financial stability of pulling their music off the Internet without repercussions, in ways such as losing fans or major sales.
Music streaming sites, most notably YouTube, have granted millions of artists the ability to put themselves in the music industry without having to attain a level of professionalism. In fact, it is because of streaming services that many independent artists have gained popularity and a foundation from which to launch their music careers. Pop duo Us the Duo and YouTubers like David Choi and Sam Tsui have attained thousands of followers on Spotify and millions of views for their song covers.
Although heralded as an advocate against music streaming, Swift has actually gained most of her ubiquity in the music world through digital services like Spotify, where her single “Safe and Sound” garnered over 34 million listens before being removed. According to the Recording Industry Association of America, streaming services generate 27 percent of industry revenue, with an estimate of almost 28 million people worldwide via online music subscriptions. It is obvious streaming is integral to music sales.
Nevertheless, Swift is right about the negative impact of streaming on the music industry—artists are paid a fraction of what their songs would be worth at “premium price” from album sales. According to raprehab.com, in 2012, artists with self-pressed CD’s needed to sell about 145 albums in order to make a profit of $8 per album, but artists on streaming sites such as Spotify had to meet over 4 million plays for the same amount of money. Being paid less than a cent per play, artists on streaming sites are not being compensated for the full price of what their album is actually worth.
Music streaming is definitely better in paying artists than the alternative of illegal downloading, where artists make no money at all. However, a need exists for greater compensation to the actual artist. Alternatives to this process include making some albums available only to listeners who pay for online music subscriptions or by restricting free music to certain time limits.
Advancement in technology offers consumers many ways to listen to music through both legal and illegal means. Although Swift has confronted streaming for not paying artists the same amount actual album sales would, consumers should still use online streaming as it is the better alternative to illegally downloading or buying every single album. Embracing this evolution of the music industry through online streaming can become beneficial to both artists and listeners, as long as a middle-ground that will rightfully compensate artists is found.
-Music Industry Fast Facts-
by ROBERT MIRANDA
- Worldwide music sales have declined since its peak in revenue in 1999 from $27 billion to $15 billion in 2013, according to The New Yorker.
- According to the Recording Industry Association of America (RIAA), illegal downloads of music account for economic losses of $12.5 billion each year, as well as 70,000 lost jobs in the United States.
- Of the globe’s total internet bandwidth usage, 22 percent is dedicated towards pirating material, according to the RIAA. In addition, over 90 percent of all content on BitTorrent download websites is copyrighted.
- According to com, YouTube has paid out more than $1 billion in royalties to many major record labels in the last four years.
- Music videos make up 19.1 percent of all video uploads and 38.4 percent of all views on YouTube, according to a 2014 study by TubularLabs, a video marketing platform.
- New data released by Spotify shows that only 0.6 cents of royalties are paid to a singer for each time a track is played. By comparison, a singer may make between $3-7 for every CD purchased. YouTube pays uploaders roughly $3 for every thousand views.
- Spotify pays out roughly 70 percent of all its profits, both from advertisements and Premium Members’ subscriptions, according to com.
- Apple iTunes
- According to Billboard.com, iTunes held 64 percent of the market share in music sales in 2013, but dropped to 59.8 percent in 2014 due to competition from major streaming services.
- The average iTunes user spends about $40 per year purchasing music.
- For every $0.99 for each song on iTunes, 30 cents goes to Apple, while the remaining 69 cents are split between the record label and the publisher. An artist may end up making less than 9 cents from every song sold.