Tuesday, March 24, 2015

The Labels Hate The Free Streaming Tier, But That’s Not The Problem

streaming music image
From various reports, the major record labels would like to eliminate the free tiers of on-demand streaming services like Spotify, a feeling that’s for once united with their artists as well. According to a post on Rolling Stone, the labels want faster revenue growth and feel that unless some adjustments are made to the freemium model, streaming revenue will never offset the death spiral of the CD and download.

Here’s the problem with eliminating or crippling the free tier though; the genie’s out of the bottle, the horse has left the barn and the ship has already sailed. A whole generation (the very generation that consumes the most music) already feels that music should be free, and they’re going to find a way to get it for free whether the major labels and artists like it or not.

Consider the fact that the computer networks of some of the most powerful corporations  in the world are hacked on a daily basis, and that our own government can’t seem to eliminate the formidable social media presence of ISIS, and you see the problem at hand. Streaming has made music piracy a footnote, but there are lots of clever hackers out there that can bring it back again with a roar if those free tiers are either done away with or severely restricted.

Yes, everyone would like the paid tiers of the various streaming networks to increase subscriptions more rapidly, but that part of the business is growing at a pretty good pace already, having increased 26% in the U.S. last year according to the RIAA.

The fact is, the biggest impediment to streaming revenue growth is because of the price barrier of the paid tier, which hovers around $10 per month or $120 per year for most of the major streaming services. The problem is that the average music consumer is comfortable paying no more than half that, with the average now right around $48. What we have here is a bad price point. Read more on Forbes.

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1 comment:

Rand said...

Scenario: Paul the Plumber comes to Jimmy's house and spends 4 hours repairing some leaky pipes. Jimmy jumps for joy, high fives' Paul and says 'Hey man that was great, love your work.' Then tries to escort Paul out the front door without paying for his services. Despite him knowing a plumber is a professional business person who's entitled to be paid for their work.

Scenario: Paul the musician spends 4 months writing, rehearsing, recording an album of his very best music. His album is released, plus sold for .99 cents a song online.

Jimmy hears Paul's album streaming then jumps for joy, high fives' Paul's poster hung up on his wall and says 'Hey man that was great, love your work.' Then uses software to copy Paul's music without paying for his services.

Despite Jimmy knowing a musician/artist is a professional business person who's entitled to be paid for their work.

So that's what we've come down to; people who love their favorite artists so much they're choosing to steal their music instead of paying for it.

Since it's such an uphill battle, there's no easy resolution to this because it's become more of a moral issue than commercial. Since the beginning of recording tape and vinyl there's always been stolen music and bootlegs, etc. But never has it been so uncontrollably easy as with digital music and the internet.

How is it possible to restrict people's freedom of choice to compensate, and/or how to educate such blatantly selfish consumerism to the facts of international copyright laws?

Human nature having devolved to this low doesn't leave much room for optimism. Time for artists/record companies, etc. involved in the actual creative-marketing process to seriously think outside the box and innovate with better alternatives to guarantee fair payment for their craft and efforts.

Anything less is just relinquishing control to these parasites and/or simply condoning theft.


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