December 10, 2013

MAYBE MUSIC TODAY JUST ISN’T THAT GOOD? Spotify Isn’t Why Musicians Can’t Make A Living.

Spotify is not raking it in, and neither are the other music-streaming services. After all, our hypothetical music maven only pays Spotify $9.99 a month, or $120 a year. Someone listening to music even 35 hours a week is probably costing Spotify more in rights payments than they make in fees — and that doesn’t even count the cost of servers, bandwidths and marketing people to send out e-mails asking you to sign up for Spotify.

In theory, Spotify could charge more money, enough to cover their costs. In practice, Spotify is constrained by even cheaper alternatives. In 1995, I can totally imagine someone having created a streaming service that charged $50 a month for unlimited listening … if the technology had been available. Music fans would have hustled to get in on such an unbelievably good deal. But in 2010, such a service is competing with “free.” Which means that they cannot charge more than a negligible amount.

In other words, while the cost side has improved, the revenue side has gotten worse even faster. People simply aren’t willing to pay very much for recorded music anymore. If you’re an artist, and especially if you’re a record label, that’s very bad news. Naturally, some artists want to shoot the messenger, blaming Spotify for their paltry payments. But Spotify is not the problem. The market is the problem. Spotify is just the messenger telling them what the market is now willing to pay for their songs.

Or, alternatively, there are better alternatives competing with music-listening as an activity.