The BBC reported yesterday that online streaming services such as Spotify are now the fastest growing sector of the music industry. In 2012 it is estimated that online streaming services will generate in the region of £696m for the global music industry. This equates to a 40% increase from 2011 against an 8.5% increase for downloads. Despite this physical sales still dominate the market with a 61% share, however this is a downward trend with worldwide sales dropping a further 12%. Undoubtedly this means that downloads & streams are the foreseeable future for music consumption, but is this a good thing for artists & labels?
In recent months there has been a highly protracted and often fractious debate on what streaming services pay labels & artists. Highlighted by claims that Lady Gaga’s Poker Face generated a paltry $167 for the artist, despite receiving over 1million plays and more recently Mercury nominated artist Jon Hopkins tweeted “Got paid £8 for 90,000 plays. Fuck Spotify,”. Whilst these statements are inflammatory and may not be entirely accurate its fair to say, having trawled the net on this subject, that opinion is heavily divided. On the one hand its claimed that streaming services are playing a key role in tackling illegal downloads and therefore generating otherwise lost revenue, whilst on the other hand its claimed that streaming services are reducing potential revenue from the more profitable download and physical market.
Overall its hard to truly quantify or judge whether streaming services are a postive force within the music industry, that would require an in-depth thesis type study. However what is clear is that the musical landscape is shifting once again,and with a 40% increase in online streaming revenues, labels and artists cannot ignore this rapidly growing segment of the industry. Personally we feel such services water down an increasingly diluted industry, and if the types of figures being banded around prove to be accurate we fear for the industry’s ability to support the development of new music. It stands to reason that if there is less money in the pot then there is less to invest. You only have to look at the London Olympics to recognise that greater investment brings greater results, do we need to better protect our industry?
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