As technology continues to transform the music industry, from Napster’s impact in the late 90s to the current debate of streaming vs pure download sales, the music industry has had to accept the internet as the new world order.
The growth in music streaming, for the first time exceeding pure music sales in the last year, means digital streaming is not a debate anymore, it is a reality the music industry has to live with. Music consumption patterns have completely changed over the last few years, and this has had a direct impact on the bottom line. Tech companies and their algorithms are the order of the day.
American rapper Nipsey Hussle recently entered the music streaming debate by tweeting a list of payout rates for each million streams from the major streaming services.
Although his campaign for consumers to sign up for Tidal based on its superior payout rate in comparison to the other services is noble, Nipsey’s focus on royalty rates as the only basis for subscription, is biased.
In as much as the debate on the value of music is important, the industry needs to focus more on the needs of the consumer, their behavior and how to best exploit technology to not only increase the bottom line but also enhance the experience of the consumer.
When deciding on a subscription service, the consumer has to look at monthly fees, access or library of said service and features such as ‘on and offline’ mode for the best value for money. The last thing the consumer worries about is how much money their favourite artist is making from them.
With 5 major competitors in the music streaming space, the consumer is spoilt for choice and by way of consumer experience, innovation and competitiveness, the market will eventually dictate the royalty payout.
Activism on behalf of the industry is important, but exploiting a more and more engaged and connected consumer could be where the value lies.
The industry needs to focus beyond the royalty cheque.