Music is an ever changing cultural stream that we can dip into in order to analyze any given time period by looking at its corresponding music. However, what many general audiences tend to overlook is that there is a business side to their favorite music. Even for something so creative and artistic beyond description as music is, there is still a cold, emotionless side of the music industry that is very revealing about the state of our culture.
The way we consume music has changed dramatically in a relatively short period of time, which is reflective of how our culture has changed in the same radical way. Choices and changes have been made by record labels and executives within the streaming industry that have negatively affected the music business of today for both artists and consumers.
Music is so transparent and useful for analyzing shifts in human culture because of how wide reaching it is. Everyone listens to music, whether you base your personality around your favorite sub-genre of techno-synth wave music, or you just sing along to the radio during your commute, you are still consuming music. There has always been a very active industry centered around pop music and what is being produced right now. Every producer wants to be on the forefront of their own cutting-edge trend that they can take credit for.
However, one of the most shocking trends that has been found among music consumers was reported by journalist Ted Gioia: “Old songs now represent 70 percent of the U.S. music market, according to the latest numbers from MRC Data, a music-analytics firm.” Year after year, the audience for new music is shrinking, while the audience for old music is growing at a consistent rate. This is something that is unprecedented, and it should demonstrate to us that something is wrong with the industry at this current moment.
One of the most impactful forces that has affected the music business is smartphone technology. We can visualize the development of the music industry as what it was like before smartphones and streaming apps, and what the industry is like after. One of the most impactful aspects of streaming apps is a process called “playlisting.” A primitive form of playlisting existed decades ago, and it consisted of recording songs from a radio station onto a blank tape. Spotify has constructed a far more convenient version of this, and the harm that it causes is very difficult to observe.
Gioia, being from the baby-boomer generation writes: “going back to my day, you spent a sizable amount of your budget, or your allowance — I guess that was the word you use, your allowance — you might spend a third of your allowance on music. You’re buying up albums or whatever. And now I find, talking to teens, I am asking them, ‘Do you pay for a streaming subscription?’ Usually, they just piggyback on their parents’ subscription.”
Generations of the past had only one way of really consuming music. They would buy physical copies of the music that they wanted to hear. This up-front investment would cause the average consumer to feel more attached and connected to the work; it was much more common to listen to an entire album several times over because of the investment and interest that was required to obtain the music. Today, you are given millions of hours of music virtually through your phone for $9.99 a month. Consumers of today listen to albums once, skipping the songs that don’t immediately grab them, and putting the songs they do like onto a playlist, after that, they have no reason to return to the artists’ original album. The effect of this over time is that the average music consumer today is much less passionate and interested in their favorite music than previous generations.
It is easy to see the general disinterest of music in the mainstream public. The biggest event in the entire modern music industry, the Grammy’s, is failing to draw in young viewers. The 2021 Grammy’s had the worst viewership in the show’s history with 8.8 million viewers, which is considerably less than the second to lowest viewership, which was 18.7 million viewers in 2006. This drop in viewership demonstrates how the audience for new music is shrinking due to the regressive state that the industry is in. We can also analyze what the biggest music corporations are investing their money into to see what the market is interested in. Corporations like Sony Music and Universal, as well as newer publishing companies like Primary Wave and Hipgnosis Songs Group, are spending hundreds of millions to purchase the publishing catalogs of older artists like Bob Dylan, Neil Young, Fleetwood Mac and John Lennon. These publishing companies realize that old music is vastly overperforming new music and that is why they are investing so much money into owning it. While new music is consistently dropping in popularity, the catalogs of older musicians are becoming more valuable as they age. The consistent failure of the Grammy’s and the rising interest in owning older classic music catalogs display how the interest for new music is at an all time low.
Along with the damage that streaming services like Spotify did to the average consumer, Spotify has also regressed the experience for artists as well. Before streaming, album sales were a legitimate source of income for artists, but streaming has made every form of physical music media obsolete. “The formula for ‘TAC’ equates 1,250 premium streams, or 3,750 ad-supported streams, to one album ‘sale,’” Tim Ingham, the founder and publisher of Music Business Worldwide, says.
During the rise of Covid, something critical happened for working musicians — live music briefly went away. There were many musicians who quickly realized how little income their streams were drawing in, and how much they were depending on the revenue from live performances. Spotify pays on average $4000 per million streams, or about a half a cent per stream. When you consider how much of the time that money is split between the label and all of the contributors, like band members, producers or writers, that money becomes less and less. To make matters even worse for artists, the streaming market is incredibly oversaturated.
“The number of artists that generated more than $1,000 was 184,500 — but since there are more than six million artist profiles on Spotify, that means that about 97 percent of them failed to reach that level,” Ben Sisario, music industry writer of the New York Times, says.
So, as a result of streaming, artists are much more dependent on touring in order to make ends meet. This is also why so many artists get taken advantage of by record labels, because many artists will take the up-front money from a record label without realizing how much they are giving to the label in the long run. The entire streaming marketplace is exploitative, and it works in tandem with the modern record labels to put artists in a position where signing to a record deal is the only way to make enough up-front money to turn music into your profession.
The truth is that Spotify doesn’t actually care about music or the artists that make it. The proof of this can be found in Spotify’s new favorite passion project, Podcasts. Podcasts are far more profitable, as they are faster and cheaper to make. On top of that, Podcasts are longer, so for example, the length of the entire discography of the Grammy award-winning band Arcade Fire since they started in 2004, is less than two Joe Rogan podcast episodes. Joe Rogan is noteworthy in particular, as Spotify cut him a $100 million deal despite their inability to pay artists more than a half a cent. It displays how Spotify is neglecting their artists in favor of podcasts, despite the fact that most people use Spotify for music. Artists feel like their work is being exploited and the income generated is being handed over to competing forms of media. Streaming is not beneficial for artists because it takes their revenue, and uses it against them in the form of funding podcasts.
The advocates for modern music business practices like streaming would argue that Spotify is actually beneficial for artists because it allows independent artists to push the envelope with their music and get recognized online. It would seem that Spotify has made it so that anyone can blow up and make it as a music star. Although Spotify would love for you to believe that, the odds of becoming famous from Spotify alone is stacked against the artist. Along with the oversaturation factor, Spotify also has ultimate control over whose music is promoted, and whose is buried.
For example, “in 2020 Spotify launched an initiative it described as a “promotional recording royalty rate” that lessens an artist’s payout per stream in exchange for an algorithm nudge that ensures the track is more likely to be played in the platform’s autoplay and radio formats,” Randall Roberts, writer for the Los Angeles Times, says.
This proves that Spotify is in the business of essentially taking money for streams. It creates a never-ending cycle of true risk taking, independent artists getting buried underneath the dozens of more conventional, record-label-signed artists who have the resources to give up their already tiny piece of streaming revenue to Spotify. The system is predatory and exploitative, even more so than the record industry of the past, which did have numerous problems, but at least at that time record labels were actually taking financial risks on relatively unknown talents because every now and then, it would pay off. That is how we have Nirvana, or The Cranberries, for example.
The truth is that Spotify thrives off of the illusion that becoming famous on their platform is a viable way for anyone to start off a successful career. Spotify does not have to invest any money into the creators in the way the record labels had to. They profit off of the artists who are already big, and the small creators who don’t draw in the same numbers just fill out the site with content that is free for Spotify to exploit for no pay. This is why streaming is so harmful, because it puts artists into an invisible prison and convinces them to believe that they should continue to allow Spotify to profit off their work in the hopes that the site will make them famous.
The greed of music industry executives has caused the downfall of modern music for both consumers and artists. Consumers have grown more and more disinterested in new music because of playlisting, and because labels no longer take risks on artists. The industry has gotten tougher for artists due to extremely low streaming payouts, predatory collusion between labels and streaming services, and podcasts being Spotify’s main priority. Data on the audiences of old music vs. new music prove that the industry is in a state of decay currently. This is why all the people who are making the most money in the business right now, are older artists who became famous before streaming was invented. The sum of all these parts is that choices have been made that are regressive for everyone who truly cares about music, in the name of extracting maximum profits.