Seriously, What If Music Streaming Doesn’t Work Out?

Seriously, What if Music Streaming Doesn’t Work Out?

The #musicbiz Twitter feed today was clogged up with links to the fantastic article on music streaming’s present situation by David Carr (@carr2n) “Free Music, at Least While it Lasts.”

No need to argue about it, it is a great piece, understated in its plain retelling of real-world situations the writer has experienced as of late pertaining to owning music.  In fact, it doesn’t even really let you know what Mr. Carr’s point of view on the future of music streaming is: whether that’s good or bad, or whether it will ever materialize at all.

The argument starts, as it always does, with some sort of isolated, poor royalty payout screed from an artist or songwriter ( Van Dyke Parks piece ). That is usually followed by those who love streaming music screaming that the ‘Luddites just don’t get it and disruption is normal’ enter Bob Lefsetz’s take and then, we just argue around and around.

“Will it ever materialize at all?” That’s what I am stuck on.

You see, I’m not anti or pro music streaming. It’s more complicated than that. First of all, when licensing is involved, I have to deal with the very real distinction of “non-interactive” and “on demand.” So, music streaming, to me, is not ONE thing, (but I get that I’ll lose that battle, so let’s call it music streaming).

I think for fans (consumers) it’s an amazing thing! I’m a premium user. Take any song, wherever you go, for just a few bucks a month? Pretty cool. Even for those in the industry, it is absolutely incredible. Do you know what we had to do back in the day to find and learn 4 hours of covers? Music supervision used to be a very expensive, and time-consuming, process. So, yes, it’s great!  But, you can’t sidestep the royalty problem forever. Truth be told, the problem lies in the upfront payments, not the royalty side, but there’s plenty of problems to go around.  “The services just aren’t to scale yet, you’ll see, the money will be huge.” I want to believe this, but at 10m paid subs (less than .05% of the adult U.S. population) we’re not going to get there anytime soon. Anyone under 30 knows what Spotify is. It’s not that they need to be marketed to.  So, it’s complicated, it’s convoluted.

But I just have a question: What if it music streaming doesn’t work out?

Not one of the music streaming companies has made a profit yet, not one.

Most are involved in corporate growth quarterly suicide, driven by large sums of VC money, or public pressure to return shareholder value. That’s fine, but that’s no way to nurture a creative company. I wish them all well, but honestly, that doesn’t seem like a good situation for the industry or consumer, maybe the VCs and shareholders, and money managers, but not us.   There is no guarantee that any of these companies will be around by the end of the year. I know that’s hard to believe, but they could, literally, just close up shop, count the money and go home.

And what happens if that goes down? Will there be CD manufacturers left? Now that they’ve killed the idea of downloads, could that even rise again? Sure, another company will take the space, but their catalog will be limited and they will play the same upfront payment/royalty backend game as everyone.

What if they don’t go out of business, but say, Sony (or any one of the majors) decides to not be on there anymore because their upfront money wasn’t right? These are short-term contracts, after all. No Sony? Would the subscription be worth it? And if you don’t think that a major would do such a thing, behold this.   The numbers tell me it’s not free: let’s say you pay for a premium subscription ($10/mo $120/yr), and you pay for a streaming radio service ($40/yr), and break out your data service on your phone as maybe $20/mo (low). That equals $400 a year for your “free” music. And I’m not even including broadband in that!!!  You will have to pay that much for the rest of your life, or lose all of your music now.

I see streaming as a terrific add-on, a convenience. That kind of money for access anytime is fine with me; it’s part of the app world we live in. But, it’s not a replacement for DLs or CDs or even special vinyl. Really it isn’t. There is no value to it but the platform. And, I just simply do not trust any of these companies to make the right decision for music. That is not their duty, it’s profit.  What is the next plan? If you kill the idea of downloads, ring the death knell of the shiny disc, and streaming becomes ubiquitous, great! But, what if we only reach a combined total of say, 20-40 mil subs in the U.S.? Then what? It won’t be sustainable. And anyone screaming that it WILL be higher or WILL be lower, simply doesn’t fucking know. It is literally a crapshoot right now.

And then, there are the royalties. HA! (another post perhaps)

So, in all seriousness, what if music streaming doesn’t work out?

(thanks to Andrew Leonard for continuing this important conversation here: Salon)