Streaming services like Pandora and Spotify are simultaneously destroying the existing industry, not paying artists, losing money hand over fist, and tricking consumers into thinking they are actually supporting content creators. It's lose/lose/lose and the worst scenario across the board.
I thing Spotify is far, far worse than piracy because with piracy at least people know the artists aren't making in money. People somehow believe that listening to a couple of brief ads per hour, or paying a whopping $10 a month, is enough to receive unlimited access to all music ever created. What a disaster.
I think this was inevitable the minute we had the combination of sufficient bandwidth and decent quality audio compression. From there on it was a perfect storm of the music industry not understanding what was about to happen, the manufacturers of players not getting it right and everyone being greedy and trying to make off with the whole cake.
Fast forward one generation of kids who are now grown-ups and you have an entire generation of music listeners who will not pay ... whatever CDs used to cost where you live.
The toothpaste is not going back in the tube. The time when David Gilmour could make living sitting on his fat arse is over. He will just have to accept that, and the sooner he realizes that the good old days are not coming back, the sooner he can do something productive. Like cultivate new ways to raise revenue.
the music industry not understanding what was about to happen
I think the music industry understood it moderately well and didn't like it; the small independent labels understood it especially well, because their bottom lines shrivelled away to nothing without them having the capital or market clout to create an alternative.
The time when David Gilmour could make living sitting on his fat arse is over.
Right...all musicians are exactly like David Gilmour or whatever former star you consider to be an overpaid has-been...even if they never actually got rich or famous, they should pay the price of his arrogance.
I actually think he has a valid point. The world changed.
There was a time where people made a fortune by digging for gold, then the world changed and now it's really hard to make a living by digging for gold. You can cry and say how unfair it is but that's not going to change anything.
Musicians today have to make a living through concerts, merchandising or whatnot. I personally think that this is actually a good development. The web allows musicians to cut out music labels and without much investment reach a large audience, increasing chances of building a fan base and making money from concerts, etc.
If you see music from an economic standpoint: there is an abundance of music being made and distributed today. And the cost of making a professional sounding recording, and bringing it to a large audience, has plummeted to where it is within the means of anyone with a bit of talent to make, and distribute, music. Merely recording music isn't "special" anymore. Anyone can do that.
There is a sense of entitlement that is out of sync with reality here.
The world has changed. Whining about it isn't going to change that.
>> "From there on it was a perfect storm of the music industry not understanding what was about to happen"
I think the problem is that these huge shifts are happening so often that it's difficult for the industry to keep up. First we had piracy, then after a while legal downloads were introduced with iTunes. Now only a few years later the entire industry has been changed again due to YouTube, Spotify etc. For an industry as huge as the music industry, adjusting to these shifts quickly is difficult. Once everyone finally figures out how to make money through streaming something else will have come along.
You forgot several big wins: music lovers enjoying music in an easy to use service they love. And thousands of unknown/unsigned artists getting discovered and kicking off their careers.
And thousands of unknown/unsigned artists getting discovered and kicking off their careers.
This has to be balanced against the (probably greater) number of people whose careers fizzled or stalled because so many smaller labels went out of business in a short period. File sharing and streaming has been a disaster for lots of less well-known genres that don't necessarily support large tours. Serious electronic music (as supposed to 'Superstar DJ' BS) has only recently started to put up green shoots in the US, and I'm not sure how long that's going to last: the largest importer/distributors of dance music on the East & West Coast of the US went out of business this spring and nobody is even willing to bid on the liquidation stock: http://www.ebay.com/itm/261230689524?ssPageName=STRK%3AMEWAX...
Next time you read some gushing article about the resurgence of vinyl think about those 70,000 records ending up in landfill.
Industry seems to be doing pretty good. But why should I even care about "the industry"? I can get why should I care about the artists, but "the industry" is just the means to the goal of getting music, if there would be some other means that gets the same result - who cares if "the industry" disappears?
The industry also provides marketing, administrative, and editorial services that are extremely valuable. Artists aren't necessarily good at self-promotion, accountancy, sound engineering etc. etc. Bands usually have managers because they're good at making music, not tour management and so on.
The point is, they're not kicking off their careers, because these days it is almost impossible to construct professional career in music unless you sign a 360 deal with a major label.
Pandora has 150m users. If every one of them paid $10/month, that'd be 1.5bn/months income. Pandora has 80K artists represented (all data from Wikipedia, I'm lazy :) so if they spent 1% of those 10 dollars/month - or $15M - on paying the artists, each one would get 187K/month. So if everybody paid $10/month, this should be more than enough to get all access you want to all music - I can't believe any artist would not agree to give access to all their music for 100K/month.
Of course, not nearly everybody pays $10/month - actually, AFAIK, paid subscription to Pandora costs $3/month and not everybody pays even that. Judging from Pandora's income, only minuscule part of the users does. But I think discounting $10/month as inadequate is wrong, it's actually quite a lot of money if collected on Pandora's scale. The problem is getting that many people to actually pay $10 :)
> if they spent 1% of those 10 dollars/month - or $15M - on paying the artists, each one would get 187K/month.
According to my math, it would be $187.50, not $187,500.
Let’s try a more realistic scenario. Let’s say that at some point in the future 10% of Spotify members pay $3 per month, and that Spotify spends 65% of its revenues on royalties (just like iTunes). That would mean that each one of the 80,000 artists would get $36.50 per month (if all artists’ music were played the same amount of times).
No problem. In the end, Spotify’s payments to artists are not going to surmount to any meaningful income. Meanwhile, if an independent artist offers his music directly through iTunes, he/she gets 40% of all sales. That’s magnitudes more than Spotify offers.
What do you think would be a fair price for receiving unlimited access to all music ever created? With about $12 billion in annual revenue for the industry in the US, that number doesn't seem too bad.
I thing Spotify is far, far worse than piracy because with piracy at least people know the artists aren't making in money. People somehow believe that listening to a couple of brief ads per hour, or paying a whopping $10 a month, is enough to receive unlimited access to all music ever created. What a disaster.