As someone who believes in buying and supporting new music I have very conflicting views on the virtues of Spotify. Granted, I'm not going to be losing any sleep over overpaid rockstars and musicians feeling the pinch of their declining royalty returns, but my biggest concern is that ultimately labels will cease to invest in up and coming artists/bands who lack the support of the media machine and the clout of veteran artists who rely on ticket sales from concerts to fund themselves.

You can now reach the top 10 in the UK selling less than 6k (Prince's recent album reached number 8, selling just 6,543. To give you an indication of how drastic record sales have dropped since free-streaming media sites have dominated the industry, seven years ago he reached number 9 with his album 3121, selling 39,000 copies).

Do you think free-streaming media sites will ultimately prove to be a bad thing for music lovers?

MattyJam said:

As someone who believes in buying and supporting new music I have very conflicting views on the virtues of Spotify. Granted, I'm not going to be losing any sleep over overpaid rockstars and musicians feeling the pinch of their declining royalty returns, but my biggest concern is that ultimately labels will cease to invest in up and coming artists/bands who lack the support of the media machine and the clout of veteran artists who rely on ticket sales from concerts to fund themselves.

You can now reach the top 10 in the UK selling less than 6k (Prince's recent album reached number 8, selling just 6,543. To give you an indication of how drastic record sales have dropped since free-streaming media sites have dominated the industry, seven years ago he reached number 9 with his album 3121, selling 39,000 copies).

Do you think free-streaming media sites will ultimately prove to be a bad thing for music lovers?

This has already happened.

Major labels are not giving jackshit to the artist, and haven't been doing so for at least 5 years.

Unless you have existing investment to hire a marketing company to build your media buzz, hire a radio plugger, get tour support so you can play shows in a lot of places without losing money, then even if you have A&R interest, you have NO clout to negotiate and you'll be lucky to get the cost of a video footed and a small budget for marketing, and you can forgot about getting any sort of advance.

The switch to streaming sites, however, is not a bad thing. It's certainly better than people downloading music illegally. With streaming site, you do get some royalties, and you get some important metrics about who and where your fans are. It's also easy for people to share the music to other people.

However, very few people are making decent money off of streaming and that's simply because the companies behind them aren't making enough money themselves to offer a better royalty rate. This HAS to change in order to make the business more sustainable.

Originally, companies like Spotify were hoping to do this through paid subscriptions. This has worked well for the TV industry - Netflix for example is going from strength to strength.

But I don't see it happening for music streaming, if I'm quite honest. There are simply too many options.

The only way I see it happening is through heavier digital advertising. If there's a defacto music platform with billions of users, then the company can charge more for advertising, and can pay the content creators a lot more. This is why even companies like Apple, who have very little history in the online advertising space, are seeking to invest more into their ad platforms.

But I think there's only going to be one winner in this space. And it's the same place where billions of people already listen to music. There's already plans in place to convert it into a legitimate music service.

If Google can launch this as both as a subscription service, and an ad-funded service.... then this is the future.

The labels rake in big profits from streaming services like Spotify while paying the artists peanuts. That's the heart of the problem.

[Edited 10/31/14 5:50am]

MattyJam said:

but my biggest concern is that ultimately labels will cease to invest in up and coming artists/bands

.

its already been happening for years. and spotify sucks. and yes, im a musician.

Do you think free-streaming media sites will ultimately prove to be a bad thing for music lovers?

It's a good thing for music lovers. There is now so much music you can access for free and conveniently, that no one needs to make any more music. In fact they should probably stop immediately.

RIP Music, One Of The Great Art Forms.

I've been streaming Spotify and iHeartRadio on TMobile for free. I don't feel the need to buy the albums right now since I can listen to them wherever I go. If they were to stop this service though, I still have some of these albums, just too much trouble to rip the CD and then put it on my phone, not to mention there isn't that much storage.

It may not be helpful to artists unless the fans are hardcore and need to have a physical CD and go out and buy it and rip the darned thing.

Spotify pays out 70 percent of its total revenue directly to the labels. Artists have to negotiate with labels as there is nothing Spotify can do.

Identity said:

Spotify pays out 70 percent of its total revenue directly to the labels. Artists have to negotiate with labels as there is nothing Spotify can do.

And this is the key right here. Spotify's payouts are based on market share. If Taylor Swift has a billion streams then of course she (well, her label more likely) is going to make a good chunk of change.

The beauty of Spotify is that people can listen to your music without having to pony up money for it, but you still make a bit of money. It's infinitely better than people just pirating your stuff. I love it. I can't wait to get a premium account. People don't care as much about owning stuff anymore as much as just having access to it. That's why YouTube is the biggest source of listening these days.

I've made money on the record I put out in March from iTunes sales and selling people copies at gigs, but let's face it, record sales have never been a large source of income for a major label artist. Anyone who has made decent money from the sales of actual records probably had to go to court for it.

What I can't figure out is the musicians who have a Netflix account but shit on Spotify. Makes no sense to me.

Spotify hardly pays artists anything--something like 3/4 of a penny per stream so the revenue generated there won't be something new artists can live on. New artists need more eggs in their basket to survive.