Streaming: The Resurrection of the Music Industry

The music industry has been at a steady decline in terms of sales since the late 90's / early 2000's. This has been due to the rise of MP3 music downloading and the decline of album sales. But in came the ushering of a new era when the world was introduced to music streaming. Companies such as Pandora, Spotify, Apple Music, Beats Music, etc has given the masses a new innovative way to gain access to all varieties of audio and video.

Image via Elena Scotti / Daily Beast

The music industry has always had a love-hate relationship for streaming music and the companies who provide this service. Both artists and record labels have tried to keep their tracks and albums off of services like Spotify, which offer customers the ability to listen to tracks with the occasional short ads. Taylor Swift for example has been vocal on her discontent with streaming services such as Spotify and Apple Music. According to a CNBC article "Swift earned a reputation as an advocate for artists, songwriters and producers when she removed her music catalog from the streaming service in late 2014. The singer-songwriter took on tech giant Apple for not paying professionals during a three-month free trial for its new music streaming service. The company quickly course-corrected and has since agreed to compensate artists." This was the same reason she decided to pull her entire catalog off of Spotify and cut all ties with the company. Steaming companies not giving artists their "just due" also spawned the emergence of Tidal. The rapper Jay Z acquired "Aspiro" in March 2015, a mass-marketing campaign was introduced to relaunch it as "Tidal". Multiple music artists changed their social media profiles design blue, and posted the phrase "#TIDALforAll" on several social media platforms. The service was promoted as being the first artist-owned streaming service. 

Image via FlavorWire / Tidal

Streaming services have become competitive but necessary for the growth of the music industry. According to data provided by the Recording Industry Association of America (RIAA) to Bloomberg the US music industry could grow over a two year period. The industry's revenue grew to $3.4 billion in the first half of 2016, surpassing revenue for the first half of 2015 by 8.1%. By the end of 2016, the music industry could reach two consecutive years of growth. “It feels like the market is slowly recovering after years of being in crisis and shrinking,” said Zach Katz, the head of U.S. operations at BMG Rights Management GmbH, a record label and music publisher. “It’s absolutely a step in the right direction.” Streaming companies are also becoming so important to the business that the RIAA is now including streams to go towards gold and platinum certifications. A Billboard article included a quote from Cary Sherman, chairman and CEO of the RIAA. "For nearly six decades, whether it’s vinyl, CDs, downloads or now streams, the Gold & Platinum Program has adapted to recognize the benchmarks of success in an evolving music marketplace." The RIAA set the new Album Award formula of 1,500 on-demand audio and/or video song streams = 10 track sales = 1 album sale. RIAA’s Digital Single Award ratio will be updated from 100 on-demand streams = 1 download to 150 on-demand streams = 1 download.

Image via ThatGrapeJuice / RIAA

It's safe to say that with business comes growth. The example of what music streaming has done for the music business on a whole is astonishing. From stagnant albums sales to digital streams dominating Billboards charts and RIAA certifications, what a difference a few changes and innovations can make. When it comes to the music industry, there must be consistent new ways to keep up with society and their new norms. From vinyl to digital streams, the industry has come a long way and still continues to thrive despite the slump.