Andy Malt, editor of music news daily CMU, reviews the latest chapter in the great streaming debate and asks what’s next for the music industry.
Music streaming and the royalties it provides to songwriters has, once again, been a topic of much debate in recent months. Of course where musicians make their money from is as important a topic as ever. And it can indeed seem at times like the creators are at the bottom of the pile when it comes to divvying up the cash their work generates.
That artists are increasingly debating and taking an interest in the business side of music is a very positive thing. It’s important to remember that if you choose to make and sell music, you are a business. You are the chief executive and everyone else works for you. And, as any good chief executive knows, if you lose touch with what’s going on below you, you’re not going to be at the top for long. However, often the complexities of the streaming debate can be worn down to a black and white ‘for or against’ argument which ultimately serves little purpose to either side.
Is streaming the future of music? No. But it is a future of music, and will become more and more important as time goes on. Revenues from sales of recorded music have fallen dramatically over the last decade, while the number of people attempting to earn money from it has continued to grow – PRS for Music recently signed up its 100,000th member. However, in some territories, such as the Netherlands and Sweden, streaming has actually helped to reverse that decline over the last year, in large part by offering a more convenient alternative to piracy. It’s all part of a network of revenue streams that need to be balanced with each other in order to make the most from your creative work.
Streaming is an emerging format, and one that needs to be approached differently to ‘traditional’ models like record sales and radio play. It doesn’t provide one-off payments, it allows royalties to accumulate over the entire life of a recording, meaning potentially a song could prove more lucrative if its popularity maintains over time.
The model still has a long way to go in terms of defining how it works and who the dominant forces in it are. Currently, it’s not Spotify which is the leader, but YouTube – possibly the only streaming service that has managed to gain a mainstream audience, which makes PRS for Music’s recently signed new licensing deal all the more important for UK songwriters.
As streaming grows to maturity, there will be more opportunity for those artists who use it effectively to generate significant income from it. But it is important to recognise that it is just one source of income. Sales of CDs and downloads have never, for the vast majority, been an income that musicians and songwriters could live on alone, and streaming is no different. And as competition for the finite amount of money the public is willing to spend on music grows stronger, it’s important to recognise the need to maximise each potential revenue stream, from recordings and beyond.