Music Streaming Is The Poison To Artist’s Bank Accounts.


There is plenty of good news in the music industry’s latest sales report, Streaming is up. Vinyl has continued its unlikely renaissance. And did we mention that streaming is up?

But a closer look shows that the big sales numbers that have sustained the recorded music business for years are way down, and it is hard to see how they could ever return to where they were even a decade ago as there have been drastic shifts in listener behavior. CDs and downloads have been gradually abandoned as streaming has become the platform of choice.

The result is that the music industry finds itself fighting over cents while waving goodbye to shillings. For instance, the growing but still specialized market for vinyl records is generating more revenue than the music on YouTube, one of the biggest destinations on the Internet, but that’s because YouTube pays royalties in the tiniest fractions of cents.

Streaming — whether through paid subscriptions to Spotify or Rhapsody; Internet radio from Pandora; or even videos on YouTube — now makes up 34.3 percent of sales, edging out digital downloads as the industry’s biggest source of revenue.

Getting people to subscribe in masses to streaming services has been a priority for record labels and streaming companies alike, who have often claimed that by building robust subscriber ranks, they would eventually return the industry to its former glory.

But so far streaming has not saved the music business, and deep worries persist about the model. Many artists are suspicious of the deals that their record companies have cut with technology companies, and they want to know how much money is trickling down to them.

What gets lost in the battles over fractions of cents, however, is just how much money has vanished from the music business as consumers have abandoned its most profitable product: the CD.

CD sales have drop dramatically in the past decade, from 2006; years after Napster, and well into the iTunes era — record labels still reaped good revenue from CD sales something that is acutely headed downwards and downloads, also once viewed as the industry’s savior, have now been falling for three consecutive years with no sign of recovery.

As much as YouTube and sites like it generated almost $360 million (Source-Music Association of America) in royalties last year In comparison, vinyl records — a niche if there ever was one — brought in over $450 million.

Reforms are necessary to level the playing field and ensure that the entire music community derives the full and fair value of artist’s work, It may be possible for the music industry to wring more money out of YouTube. But it seems doubtful that it will ever earn back what it has lost from the CD.