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What Does the Decline in Music Streaming Revenue Mean for Music Fans?

What Does the Decline in Music Streaming Revenue Mean for Music Fans?

  Streaming companies add value by gathering data on music listeners, but none of that wealth goes directly to musicians. Royalties may take longer to arrive for artists than expected. This can pose a major financial hardship as this delays could impair their ability to pay bills on time. 1. Artists Aren’t Being Paid Enough No one disputes that streaming services don't pay musicians enough; indeed, this has long been a source of contention within the music industry. Record labels and their investments in artists make more than musicians themselves do, leading to further imbalance in payment for artists as streaming becomes an ever-more prevalent way of accessing music. Therefore, new acts find it challenging to break through and make real money through streaming services. Although payment varies according to each service provider, streaming companies usually only pay around one cent per stream on average (for instance Spotify pays one penny while Apple Music only offers around $0.17), neither rate can support an artist in his or her musical endeavor nor cover recording or promotion costs. As well as low per-stream payouts, streaming services present other challenges when it comes to compensating musicians. Many services do not pay royalties directly to songwriters - instead paying only rights holders (typically labels) of master recordings of songs (usually labels ), with only a fraction of these funds reaching songwriters directly - something which hurts songwriters significantly and necessitates reform of per-stream rates. Unfortunately, streaming platforms often do not provide clear information regarding their royalty payments, making it hard for musicians to compare different platforms and determine which would best meet their needs. Without clear knowledge of their worth it's also difficult for artists to comprehend how much their work is valued by society. Lack of transparency among musicians has caused much discontent among them, prompting many of them to call for streaming platforms to be regulated as public utilities, which would force them to publicly reveal how much each stream costs and grant artists more control of their careers. This issue is complex and unlikely to be solved soon; nonetheless, it's essential that all parties involved understand its complexities so we can arrive at solutions which are fair for all involved parties. 2. It’s Hard to Stand Out Of course it is great that more people than ever are listening to recorded music; unfortunately this also makes it harder for new artists or bands to stand out amongst all of the noise. When new songs and albums are being added weekly to catalogs like iTunes or Spotify it becomes difficult for anyone to be noticed. Traditional promotional tactics that once worked such as press kits, merchandise sales or live performances no longer do. Add insult to injury, the average payout per stream is steadily decreasing: Spotify used to give out about half a cent per stream but this number has now fallen dramatically to just under one-third cent for each stream since 2018. This drop has led to devaluation of music which hurts artists as well as consumers alike. To better compete and survive in an ever-competitive online music market, many access-based services have adopted a freemium model by offering their basic service for free while charging a subscription fee for additional features. This enables them to generate enough revenue from subscribers that they can pay royalties to the music industry while remaining profitable. However, competition between services providing pure access has become fierce; and as there is less and less room for innovation within that framework alone, services must find ways to differentiate themselves in order to attract music listeners while maintaining subscriber retention. Solutions provided by platforms include creating algorithms that help them determine which songs and albums their subscribers will enjoy listening to repeatedly, as well as tools designed to generate revenue for platforms and their partners at the expense of organic discovery as well as underrepresented artists or musical communities. Unfortunately, these algorithms are far from neutral calculations: rather they're used as highly biased tools designed to make money for platforms rather than organic discovery of music. These algorithms are also being leveraged by streaming platforms to use user data to increase advertising spot values, with potentially negative consequences on music quality and streams, ultimately having an effectful on artist compensation payments. 3. It’s Hard to Sell Music Digital music streaming has revolutionized how people consume music. Instead of purchasing physical CDs or downloading songs individually, many fans now pay $9.99 monthly to access their favorite tunes through services like Spotify, Tidal and Pandora (where one of us works - full disclosure). This shift has caused sales for both physical albums and downloads to decline significantly. Major record labels who have entered into exclusive deals with streaming services have seen great success as a result, while it has had no tangible positive effect on musicians who are already struggling financially. Though streaming platforms enable musicians to get more streams per song than ever before, musicians don't see any significant increase in income due to these platforms. Streaming sites often give a small percentage of their total revenue to artists featured on their platform, yet this does not cover losses they have seen due to streaming. Although it may appear unimportant at first, the debate over what types of royalties an online music service should generate can have serious repercussions for its future growth and viability as an industry. Note that music and audio are used by businesses as marketing tools as well. As they typically have larger budgets than individual consumers, businesses may pay higher royalty rates than the typical streaming service. So if you're an independent musician seeking to establish themselves as professional artists, considering these other channels of sale is certainly worthwhile. A professional music distributor will upload your songs onto various marketplaces and streaming platforms that will significantly boost their discoverability while possibly offering other marketing and promotional tools that can put them in front of more potential customers. Though these avenues of sale might not seem lucrative at first, they should certainly be considered by anyone looking to make a career out of their musical talents. Just keep in mind that breaking into the industry may prove more challenging for aspiring artists compared with established superstars. 4. It’s Hard to Find New Music Music fans should rejoice in knowing that music quality has never been higher. Composition, construction and instrumentation of contemporary songs is more varied and technical than ever, while today's musicians stand on the shoulders of legendary composers who shaped popular music over decades. There are tons of new songs and albums waiting to be discovered that may just provide the ideal accompaniment for your day or your mood! As there are so many streaming services and options, it can be daunting to sift through them all. Music services also compete fiercely for your subscription dollars - sometimes without clear winners emerging. Some services have yet to find an ideal business model which attracts music listeners while satisfying rights holders; this is something which takes time. As you wait, it's essential to take a step back and assess how you discover new music. If the services you are currently using don't offer what you like, alternative platforms such as Bandcamp and SoundCloud might be worth exploring; both allow you to support artists that might otherwise fly under the radar while offering a range of styles to explore. Furthermore, producers who have worked with your favorite bands could have additional tracks available as well. Keep an eye out for song lyrics that inspire or bring up positive associations for you, or look back over your playlists to see which songs have recently been played the most and judge the mood they create in you. It's clear that streaming has both positive and negative ramifications for the industry, yet no one can deny that it has made finding new music much simpler. Before, discovering great tunes required much energy, time, money, and physical copies. Now all it requires is internet access and clicking through some pages - although one downside could be missing out on some amazing new tunes altogether!

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