The major advantage for streaming services is that it is legal and complies with copyright laws in the 58 countries it is located in (Spotify, 2014). Illegal downloading of original material from artists using sites such as torrenting programs have heavily impacted the music industry dramatically, eating into single and album sales of musicians. Artists now have to acquire most of their revenue from touring, due to the rising ticket prices, as album sales continue to slump due to piracy (Brown, 2014). There are of course plenty of advantages the music streaming model has for the decaying music industry, beginning with the exposure of underground and not well known artists. Before the digital revolution, an artist would need to sign with a record label for the production and exposure of their music. Now, artists can upload their music to SoundCloud and YouTube or even Spotify to achieve this exposure and sales in a digital age. Internet radio, on services like Pandora, iTunes and Spotify also increase exposure for new artists that any other type of media has failed to do before, such as radio and television. Streaming has opened up the vast realm of music to individuals, who may have budget constraints or the physical space to consume all that music they want access to, while being one hundred percent legal. The theory of intellectual ownership and the rights surrounding copyrighted material is discussed in Jackson’s (2003) discourse into copyright law and streaming media and discusses how streaming media combats the piracy of media. Streaming, and particularly Spotify, have brought the welcoming music industry into a new era and look to limit piracy around the world and ultimately protect artists and their intellectual ownership with royalties. It has created a new avenue for developing artists to expand their music and be discovered.
However, streaming can be seen to have many negative affects on the music industry, which has been vocalised my many artists over the past few years, most notably Taylor Swift. She has recently removed all of her discography from the service, exclaiming that she is “not willing to contribute my life's work to an experiment that I don't feel fairly compensates the writers, producers, artists and creators of this music. I just don't agree with perpetuating the perception that music has no value and should be free,’ even though Spotify has paid artists two billion dollars since its inception (Oldenburg, 2014). Oldenburg (2014) explores how Spotify’s current royalties is arguably quite minimal, around $US0.007 per play, which the CEO of the company argues is better than nothing which piracy collects. It can also be inferred that due to the streaming model being very cost effective for the consumer that it is eating into album sales, which is explored by Christman and Peoples from Billboard (2014) finding that US album sales are down by 14.6 percent this year.
When weighing up both positives and negatives for the effects on the music industry streaming has caused, it is easy to agree with the CEO of Spotify Daniel Ek where he argues that without his service, the music industry would be at a loss of two billion dollars to piracy. Music is an art form, and art must retain its value which Spotify aims to do. They are trying to balance the rights of the producers and artists with copyright law and royalties, while maintaining a strong connection with their consumers with their fair pricing model to entice more subscribers. The more subscribers Spotify obtains, the more they can afford to pay royalties to the artists. The music industry is shifting, and how we consume our music is changing. Streaming is the future of music consumption and Spotify is an essential for a prosperous music industry, and if artists like Taylor don't get on board, they might be left 'washed up'.
Reference List
Brown, S 2014, ‘How piracy is changing the music industry landscape’, The Conversation, 23 September 2014, viewed 6 November 2014, http://theconversation.com/how-piracy-is-changing-the-music-industry-landscape-31919
Christman, E & Peoples, G 2014, ‘Album Sales Hit A New Low’, Billboard, 28 August 2014, viewed 10 November, http://www.billboard.com/articles/business/6236365/album-sales-hit-a-new-low-2014
Jackson, M 2003, ‘From Broadcast to Webcast: Copyright Law and Streaming Media’, Texas intellectual property law journal, vol. 11, pp. 447-649.
Spotify 2014, Information, Spotify, viewed 6 November 2014, https://press.spotify.com/au/information/.
Oldenburg, A 2014, ‘Spotify CEO Daniel Ek to Taylor Swift: we pay plenty’, Sydney Morning Herald, 12 November 2014, viewed 12 November 2014
