The music industry is dying, and the Internet is killing it. Due to the combined powers of piracy, file sharing services, streaming, and online vendors, worldwide revenue in the music industry fell from 27 billion dollars in 1999 to only 15 billion in 2013, according to The New Yorker. Hardest hit by this worrying trend are the artists themselves, who rely on album sales to sustain their art. Streaming services such as Spotify and YouTube cut into artists’ profits by involving third party companies who receive a large portion of ad revenue. iTunes has also driven down artist income by allowing customers to pick and choose individual tracks to purchase, reducing the number of albums sold. Most significantly, BitTorrent services such as PirateBay cut artists out of the picture all together, allowing music to be obtained free of charge.In an attempt to ameliorate the current situation, some artists have taken matters into their own hands; Taylor Swift went as far as to pull her content from Spotify. Jay Z has taken the lead in the most recent effort, acquiring the streaming service Tidal, which, as Forbes reports, is “an artist-majority-owned company with a mission to reestablish the value of music, the protection of the sustainability of the music industry rooted in creativity and expression.” Tidal will pay 75 percent of profits directly back to artists, compared to the 50 percent of Spotify and Pandora. Stars like Kanye West, Rihanna, Beyoncé, and Daft Punk backed Tidal’s launch, hoping to use their influence to secure it a spot in the streaming market. However, as the Guardian reported, Tidal has already faced serious adversity, falling out of the iPhone top 700 downloads chart after less than a month. Although the failure of both of these solutions to bring about real change has caused some to decry Taylor Swift and Jay Z’s actions, the solutions themselves represent steps in the right direction to restore some power to artists.
While declining revenues certainly represents a risk to artists, thus far, attempts at finding solutions have ignored the realities of the music industry in the 21st century. While idealists may object to the shift, the old model—selling music by the album, directly to the consumer—is archaic. Unfortunately for musicians, nearly a decade of services like Napster, Grooveshark, Spotify, Youtube, and Pandora have conditioned consumers to expect their music to be streamable for free. While copyright prosecution has been successful in shutting down some of these services, namely Napster and Grooveshark, the damage has been done. Anything more than free is now too costly for streaming. Additionally, while some still purchase music through services like iTunes or Google Play, the accessibility and simplicity of piracy means that anyone can easily turn to piracy when streaming services fail to provide certain content. This means that in order to fight back, artists must beat free.Since consumers expect that streaming services be free, Tidal seems bound to fail. While Spotify and Pandora offer their basic services for free, and charge for membership privileges such as ad-free listening, Tidal charges between $9.99 and $19.99 per month for a subscription, without any free option. While modest on paper, this charge is enough to discourage many consumers who have grown to expect free streaming services.
Taylor Swift’s decision to pull her content from Spotify was also largely in vain. Despite selling 1.3 million albums in the first week of 1989’s release, The New Yorker reported that many fans simply streamed the album from YouTube, which actually pays artists less than Spotify does, or pirated the album from PirateBay, where the album quickly became the top download.
Artists’ solutions to declining revenues must be cognizant of several things in order to be effective. Artists must first recognize that anything less than the ‘freemium’ model—basic service for free with a ‘premium’ paid option offering benefits like advertisment-free listening and more—used by Spotify and Pandora will likely be met with resistance. Second, limiting access to music will do little but push consumers, who otherwise may have used services that somewhat benefit artists, toward piracy, which gives nothing to the artist. Finally, artists must respect the power that established distributors such as Spotify, Pandora and iTunes already have over customers. As Tidal has demonstrated, simply throwing known names behind a new company does little to actually sell it.
Because of these three issues, artists must combine elements of current efforts to produce a more effective solution. First, artists should seek reform with existing services through collective bargaining. More artists may have to follow Taylor Swift’s lead to gain the attention of Spotify and perhaps bring favorable change to its policies. Additionally, efforts such as Tidal must attract even more backing from artists, adopt a ‘freemium’ model, and do more to differentiate themselves from the competition. Though Tidal has attempted to sell itself on higher fidelity, the average listener doesn’t care enough about fidelity to pay for the service. Rather, Tidal should continue to use artist-backing and increase the amount of exclusive content it is hosting to draw more customers to its service. Beyoncé and Rihanna’s exclusive releases on Tidal represent a step in the right direction, but to make a true impact, more artists must do the same and take a more public stand for their sovereignty.
Ultimately, the fate of artists and their revenue rests in their own hands. If they use their influence and acumen correctly, they can bring significant change to the way the industry currently operates. While current solutions such as Tidal and Taylor Swift’s removal of her content from Spotify are positive changes, certain aspects of these actions miss key issues regarding the reality of the music industry today. However, with increased refinement and artist participation, these actions may eventually precipitate into real change.