4 Ways Streaming Changed The Music Industry

 

The music business model has changed drastically during the past decade. We are sure that you remember the times when you were super excited to hear the newest song of your favorite artist, and you couldn’t wait to go in the shop and buy a CD or Vinyl?  

Nowadays, listening to your favorite album has become more accessible than ever through streaming. We all have heard of services like Spotify, Tidal, Apple Music, Pandora, and many more. Those streaming platforms are easily accessible for mass consumers and also affordable. However, the impact that streaming has also comes with new realizations and challenges for artists and professionals.  

As experts in the field, we can help you learn more about that! In this DaimoonMedia article, we’re helping you to expand your knowledge on what streaming is and how streaming changed the music industry for the better.

What Is Music Streaming?

Before we tell you about how streaming has changed the music industry, let’s first talk about what streaming music is. Streaming music is a method of accessing audio content directly to your device without the files being downloaded onto your device, because you can then access the media later. With the introduction of streaming platforms, the public can choose from diverse libraries of spectacular albums, playlists, and songs. All available songs can be played by different users simultaneously, no matter the time, location, or device. All you need is a subscription, and you get access to an endless library of art containing all the music you want. Now, let’s get into the impact this has created within the music industry.

Easier To Discover New Artists

Before the introduction of streaming platforms, new artists found it hard to get their music out. Back in the day, artists used to need a record label to help them distribute their records, but with streaming platforms, that changed. Artists can put their songs out there even without a major label. In addition, it is easier for people to discover lesser known artists as anyone can put their songs onto the streaming platforms. Next to it, the distribution of the songs is much easier in digital rather than distributing physical products. One example of an artist that became successful by the use of streaming platforms is Macklemore. By only using the opportunities of social media and streaming platforms such as YouTube and Spotify, he managed to get his music heard and become popular without a record label.

Eliminated Music Piracy

Did you know that piracy within the music industry has crippled the industry’s revenues? Statistics from the USA point out that The U.S economy totals $12.5 billion in losses each year due to music theft. Fortunately, and with the help of the streaming platforms such as Spotify and Tidal, streaming changed the chance of illegally downloading songs and made it lower as people have access to a variety of songs and genres on the streaming platforms.

Subscription Music Deals 

Everything valuable should not be easily accessible. That is why more and more streaming services are offering subscriptions deals. With the ideas of subscription services for video platforms such as Netflix, Amazon Prime, and Disney Plus, the introduction of subscription deals to music has arrived. With millions of us paying for streaming music, and as that number is expected to grow even more in the future, the music industry is expanding more than ever. What is next? This might very well be artists signing exclusive deals with specific streaming platforms directly. That was the case of Universal Music Group which offered exclusive deals to streaming platforms, but they stopped offering as there was a public objection to exclusivity.

Regular Monthly Revenue 

Did you know that for an Artist to get his money for a song that he records and distributes it could take from 1 to 2 years? Therefore,  it can be said that streaming has been the industry’s salvation. Because of the subscription options that streaming platforms have, the music industry receives regular monthly revenue. The facts state that around 70% of the streaming platform’s revenue goes to the right holders, which concludes that streaming services have generated huge money for the music industry. Back in the day, everyone had to go out and buy physical copies of new singles and albums, but now thanks to the streaming platforms each of the newly released songs are instantly available to everyone. 

Royalties Per Streaming 

The dominant way streaming has impacted artists’ lives is through paying royalties per streaming. If you are not familiar with what royalties are, we are here to tell you. Royalties are payments that permit the consumer to consume something that another musician has created or owns. Streaming services have licensed artists’ music through deals with record labels and distributors to rightfully include the music in the offering of their platforms. How much an artist gets depends on the streaming service. Spotify is the most popular streaming platform and pays between $0.003 and $0.005 per stream.

This can create a difficult situation because these revenues usually do not directly justify artists’ marketing investments to increase streaming on these platforms. As royalties for the artist are lower, the result is a shift towards live performing, clothing, other forms of merchandise, and brand deals as the leading way to make money.

The real challenge this creates for modern artists is … 

How can artists use the development of streaming services to the advantage of their growth?

 

Learn how streaming algorithms works

Everything in the streaming platforms is about statistics. When you don’t know how to use that to your advantage as an artist, we are here to help you. You may wonder, how does this algorithm work. Artificial intelligence constantly observes the audience’s behavior, their interactions, what types of music they find interesting, and what music they would like to hear in the future. Let’s take as an example Spotify. Spotify’s algorithm works using four factors: auditory history, emission rate, listening time, and playlist features.

• Auditory History: Consists of identifying the mood, style, and musical genre of a song. 
• The emission rate:: This consists in converting the fewest omissions into more recommendations. 
• Listening time: If the music sound exceeds 30 seconds, it is converted to data. 
• Playlist Features: Included in all private, official, and independent playlists.

When you consider those 4 factors, you will know better what your audience likes and prefers to hear, and you can define how your songs perform.

Fierce competition on the charts

In the ’70s a single would be released and distributed through radio, and people would enjoy the song and buy the single. As a result, the song will debut high on the charts and sink below after a few days. In the present day, streaming platforms and artists are more competitive than ever. There are millions of artists competing to score number one on the charts.  As a result, record labels focus on the most-streamed artists because this will bring more revenues. Therefore, through a good performance on the streaming platforms, it is easier to reach a record label and score a deal.

The Future Of Streaming

To sum up, streaming is a massive addition to help the growth of an artist’s career. If you are not a well-known artist, it will be hard to sell millions of your albums without the use of streaming platforms. So far, music streaming has had a colossal impact on listeners, artists, and the music industry. It is important to remember that streaming platforms made it easier to reach new audiences, explore new genres within seconds and help DIY artists get discovered. Moreover, it is easier to succeed as independent artists without the need to sign with a record label.

New technology created a way for the emergence of music streaming, and now due to the accessibility and personalization of listeners, people are willing to pay for streaming services.  In addition, it helped reduce music piracy which was a big problem costing the industry a lot of money. Streaming is a relatively new trend within the music industry, and what is next for the artists, we cannot tell but only see in the future.  If you have any questions regarding how to use streaming to grow as an artist, we are here to help you build your profile, stimulate the algorithm and help your career grow. Feel free to contact us on our website or Instagram (@daimoonmedia).

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