• Vladimir Chuprygin

The Future of Music Retail. Streaming vs. Downloads

Пост обновлен 23 мая 2019 г.



People who are constantly looking for new music would search for better and faster ways to achieve their goals. There is no doubt that the easiest, cheapest and as a result most satisfying way to listen to your favourite tracks or discover new releases is through digital web resources. Music consumption via internet can be split into two categories – digital music online stores which provide you with permanent mp3 downloads and streaming services that offer interactive or non-interactive music consumption in real time (online). The difference between interactive and non-interactive streaming is that the first one gives you an option to choose a particular song while the other type of streaming, non-interactive, is just an "advanced" radio where specific artist or a track can't be selected, but listener can choose between genres and moods categories.



While it’s hard to tell which of these two models works best for consumers, let’s find some pros and cons for each of them.

1. Price. Let’s take Apple Music as a model of a streaming music provider. The service offers unlimited access to high quality music content for $9.99 monthly subscription fee. It also has special “family packs” and offers for college students. Taking into consideration the average price for a digital album as a permanent download, which is $12.16 at the iTunes Store, $10.52 at Amazon MP3 (Bott, 2010), subscription fee is a much more attractive offer.


2. Content. On the other hand, while there are millions of tracks available for streaming (Spotify claims it has over 35 million songs in its library. Apple claims it has 45 million songs (Chambers, Bradley, & Bradley Chambers, 2019).) some of the artists' music is only available in digital online stores. You won’t be able to find Tailor Swift and Thom Yorke on Spotify as well as King Crimson and Bob Seger on Apple Music. The main reason why some artists keep their albums and songs out of streaming market is a much smaller revenue that they generate from it. “Pandora had the highest per-play royalty rate. At $0.01682 per play, an independent artist would need around 87,515 plays to earn the US monthly minimum wage of $1,472.” (Sanchez, 2019).


3. Availability. Streaming requires stable internet connection which sometimes can be hard to achieve, for example while in the airplane or covering long distances by car through low network signal areas. In this case having all your music downloaded on the devices becomes a better option. Some streaming services allow “offline listening” mode. Apple Music lets users download and listen to their streaming playlists offline as long as the service subscription is active.


4. Personal preferences. “Webcasters and digital services that broadcast recordings over the Internet (e.g. Pandora, iHeart Radio), cable (e.g. Music Choice), and satellite (e.g. SiriusXM) in radio-style programming where the end users/listeners have limited to no control over the selection of music (non-interactive) pay a royalty for the digital performance of sound recordings to SoundExchange.” (Bogan, 2018). Depending on streaming service policy, users often have an option to choose between free listening which would include audio ads or monthly subscription which removes ads. Every consumer can choose which option suits best his or her own preferences and budget.


My personal opinion is that with interactive streaming option you get the most. And you can also combine it with permanent digital downloads in case some of your favourite music is not available for streaming.

According to the goals they are chasing, creators are free to choose which way to share their music content with consumers. “The latest annual report from the Recording Industry Association of America shows that streaming generated 75% of industry revenue last year, up 10 percentage points from 2017. This growth has been fuelled by generational change: Despite their reputation as content freeloaders, Millennials actually are far more likely than their elders to pay for music streaming.” (Howe, 2019). According to the report by RIAA we can make a conclusion that due to the raising popularity of streaming services, this option is best for those artists who are willing to grow their audience and gain popularity. This step could be a wise action before moving to the next level, when artist can use permanent digital downloads option as an exclusive release status for some of his or her new and upcoming EPs or albums. Consumers will pay extra to be able to listen to the new music. On the other hand, according to Lady Gaga’s opinion, touring is now better option in terms of revenue, while online music consumption may be even free of charge and should be aimed to grow fan audience.


While internet is becoming faster, cheaper and available for new users, even more tools are switching to “online mode”, when smartphone or other device is used only for reaching the server via internet connection, where all “magic” happens. In the last three years cost of mobile internet in India dropped down by 93%, which caused high increase in data consumption. “The mobile data consumption in India is now the highest in the world at 1.3 million GB per month - more than combined data usage in the US and China” (www.ETTelecom.com, 2018). Google has recently announced a new upcoming cloud gaming service Stadia, which lets users stream video games in 4k on their devices regardless hardware specs. The only requirement is a stable internet connection. Same happens to music. Content consumption is switching to fully online mode and music is no exception. Which type of music consumption do you prefer and why? Let's discuss it in comments!




References:


Bogan, D. (2018, January 9). 5 Royalty Streams Every Indie Artist Should Know. Retrieved from https://www.tuneregistry.com/blog/5-royalty-streams-every-indie-artist-should-know


Bott, E. (2010, December 07). ITunes alternatives: How do Amazon and other digital music services compare? Retrieved from https://www.zdnet.com/article/itunes-alternatives-how-do-amazon-and-other-digital-music-services-compare/


Chambers, B., Bradley, & Bradley Chambers. (2019, March 09). Apple Music vs Spotify: Which should you choose? Retrieved from https://9to5mac.com/2018/05/06/apple-music-vs-spotify/


Howe, N. (2019, January 16). How Music Streaming Won Over Millennials. Retrieved from https://www.forbes.com/sites/neilhowe/2019/01/16/how-music-streaming-won-over-millennials/#7f8711d325c7


Sanchez, D. (2019, January 02). What Streaming Music Services Pay (Updated for 2019). Retrieved from https://www.digitalmusicnews.com/2018/12/25/streaming-music-services-pay-2019/


Www.ETTelecom.com. (2018, March 29). Data tariffs fall 93% in last three years: Telecom department - ET Telecom. Retrieved from https://telecom.economictimes.indiatimes.com/news/data-tariffs-fall-93-in-last-three-years-telecom-department/63537339

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