Music and Finances (Part 6)

Read Part 1 here
Read Part 2 here
Read Part 3 here
Read Part 4 here
Read Part 5 here

There is an interesting article in the NY Times this week about the current trend in music consumption toward streaming.

As I have discussed before, the movement in the industry from CDs to downloads has been financially devastating. While CD sales have fallen 50%, download sales have made up for only a fraction of the difference (see the chart on the link I just provided).

The movement from downloads toward streaming services is another financially-vicious hit for professional musicians. In that model, musicians are paid for each “play” on the service, with the normal rate being somewhere well less than a penny. On Spotify for example, musicians might get paid .7 cents/play for the small percentage of paid subscribers and less than 1/10th of a penny for free subscribers.

Of course, Spotify would be more palatable for musicians if one could actually understand their rates. I checked my numbers on Spotify and noticed something very interesting. During a one-month period, I was paid at least 4 different rates for plays of the exact same song (the rates ranged from half of a cent to 1.3 cents).

Regardless, it is inconceivable to imagine that many musicians will be able to earn a living in a world where most music is consumed by streaming and rates are as low as they are now.

At the moment, I am happy to have my music on the streaming services because I sort of look at it as free advertising. Those services are great for helping artists get discovered. Pandora is probably the best for that, and while I have never submitted my music to them, I probably should. In fact, I just put it on my To-Do List!

There is no reason to hit the panic button about streaming. I suspect that things will shake out eventually as supply and demand takes over. But on the other hand, musicians should be realistic and educated about what is happening and how it might affect sales. Streaming is just another factor to consider before duplicating a large amount of CDs.