We can expect a hot year ending in the music industry

Music and the empire that grew around it has always generated a lot of debate, specially after we met that invention called Internet. As I always say when I talk about this industry, things changed forever impacting all those who make business with music.

Consumption and distribution habits suffered a revolution and the importance of the physical disks melted in no time. First P2P networks arrived, which allow users to scape from the control is the companies and caused lots of discussions and legal battles. After these, and one the Internet access services were developed, services offering music in streaming appeared. This paradigm that has Spotify as its main player is the most used model for music consumption and allows disc labels to keep control on the distribution of their contents. It's true that this new model does not give them the absolute power they had during the age of music stored in plastic but at least they can avoid having the parallel world created by Napster and similar platforms.

This can led us to think music industry has found a way for survival but it's thirst had not been satisfied. This business is still a dead or alive fight, not only due to competence between labels, but also because of the fight those labels have against their own customers. Not to mention the fact that the pricing scheme they have to deal with now is clearly less beneficial than before.

I mentioned Spotify above, the most well known steaming music service. Despite this is true its leader position does not ensure the business gives benefits. For the moment there are no services of this type that are winning money because it seems they have big difficulties to achieve pay users. For example, from the 60 million users Spotify currently has, 45 of them use the service via the free of charge mode, which is backed with ads. Providing free music services was a concession the industry had to make to fight against the P2P networks, provided that customers started not to accept the pricing model in force until the moment.

Due to all these facts it seems the music world does not see the appearance of the new model as a salvation. The debate about the incomings musicians get from these services has been there for long. In fact, there are some famous cases of musicians leaving Spotify, like Taylor Swift or Thom Yorke, claiming they are not getting what they deserve or that the money is going to the wrong hands. We enter in an interesting point here: is Spotify paying less than the amount that should be payed or is this money being split between to many intermediaries. I don't have the information to have an opinion but one thing is true: Spotify pays directly to the music labels and then the labels are the ones who choose how to redirect the money to their musicians. It would be really interesting to study the movements of the money once it reaches the labels.

In this scenario artists made a move. On the last weeks and months there have been lots of news around Tidal, a music service backed by some musicians that is different to others in the fact that they want to pay more to their colleagues. For this, Tidal forgets a free model and offers a subscription based service they justify by offering not only music, but also videos, both served in a higher quality. In my opinion this choice is not the right one because I think the higher quality will not be enough to make customers think it is worth paying.

Continuing with the free models, it seems this new way of offering music has an increasing number of enemies. It turns out that the new owner of the long expected Beats Music service, not other than Apple, seems to be pressing to achieve the end of the free model offered by Spotify. Rumors say this attitude comes  because Apple thinks this achievement would help putting Beats in the market, knowing that it will be a payed service. I don't know how close these rumors are to reality but I can't imagine the rest of the companies changing their strategies because Apple wants so, unless the company based in Cupertino has a secret weapon to press with. In any case, it seems clear that the service will hit the market during 2015 and it is likely it will come with some interesting ideas that will enliven the sector.

We don't know yet what way will the industry follow but for sure that way will not be relaxed. We will see trials constantly, as happened during the last decade. Probably the owners of another famous music service, Grooveshark, know what I'm talking about. After a legal battle that lasted years they had to come to an agreement with music rights owners and the service has been shut down. Not only that, if one reads the note released by the managers of the service it is like they were condemned to autoflagellation.

Several services, lot of debate but specially many people willing to hear music. The music industry will never be the same again, the scenario they enjoyed years ago is gone and therefore it is up to them to decide whether they want to adapt or not. They should have something clear: despite there will be people who won't pay a cent, users will not stop listening to music, so those who want to live from music will have to be prepared with a decent product to offer to those users who will be OK with paying.

Spotify, Beats, Tidal, Xbox Music, Google Play Music, Pandora, Rdio... Maybe to many services, even more if all of them offer the same. I bet there will be a few winners and the rest will have to surrender in front of the reality. Eben more, I think there is only one model who has its future ensured, the downloads via the Internet that ate out of control of the industry. The fight, then, will be between those who want to get the rest of the cake.