PHOTO BY GARETH SHUTE
Most criticisms of streaming are anchored around the idea that Spotify is this evil company from Sweden that pays musicians nothing and whose algorithms ensure that the biggest streams will be from lightweight tunes that will work on their background muzak playlists, All this, even while the company itself hasn’t even managed to make a profit. This perspective has a lot of truth to it, but it isn’t the whole story.
Streaming needs to be understood in comparison to what came before it if we’re really going to understand its impact, so let’s start there…
The Music Industry Was Dying Before Streaming
The brutal reality about any call to return to the “good old days” is that it is simply impossible. The music industry didn’t go directly from selling CDs into streaming. In between, there was a precipitous collapse when listeners instead went from CDs to just downloading any songs they wanted for free on the internet.
The reason why Spotify arrived offering such small royalties was that it was the only alternative to getting no money at all. Of course, there was iTunes and this initially seemed like a saviour when it launched in 2001 (arriving in Aotearoa in 2006). However, the decline in income from physical sales was always far larger than any new income that digital sales brought in.
In Aotearoa, the music industry reached its lowest point in 2014 when wholesale revenue dipped below $70 million (almost half what it had been a decade earlier). Spotify launched here in 2012 and in the decade since it has brought the industry back from the brink, with year-on-year growth from 2015 onward.
ILLUSTRATION: RECORDED MUSIC NZ 2022 ANNUAL REPORT
It is true that the new situation has seen revenues unevenly split. Most notably, music labels with large back catalogues now suddenly get passive income even from albums which they wouldn’t have bothered to re-release in the CD era. A person can only buy a CD once, but they can stream it forever. New artists gained less from the arrival of streaming, though it’s still worth saying - isn’t the small income from streaming better than the zero dollars that artists earned from illegal downloads?
Taking Music Overseas Is Easier Than Ever Before
Aotearoa has always produced world-class musicians, but it used to be nearly impossible to get their music out to the wider world. Gaining the attention of overseas music press was difficult and even once an NZ artist was on their radar, they still had to get their physical stock into stores overseas in order to sell a decent amount. At the height of Flying Nun’s popularity, its acts were often undone by unwise deals with overseas labels or the limited ability of the label to get stock directly into shops given arduous importation requirements and the huge cost of shipping.
These days, if The Chills want to reach their overseas fans to hear a new album then it can be put straight onto Spotify the day it is released. Then those that like it can show their appreciation by purchasing it on vinyl/CD or attending their live shows. Contrast this with the Noisyland Tour of the US undertaken by Straitjacket Fits, JPSE, and The Bats in 1993. Due to delays in pressing, the latest albums by JPSE and SJFs didn’t even reach US stores before the tour had ended!
STRAITJACKET FITS PERFORMING IN NEW YORK ON THE NOISY LAND TOUR — PHOTO BY DAVID CORIO
Obviously the streaming era has had an even bigger impact on pop acts like Benee and Lorde who have ridden the success of viral songs to very lucrative careers. Though this path to success has been taken by indie acts too. For example, Salvia Palth gathered interest via Tumblr then found even more fans via streaming (the song ‘i was all over her’ now has upwards of 300 million streams). Would anyone have even heard this music in the CD era, given it was independently released from a small town in rural Aotearoa? Equally, recent Flying Nun-associated acts Fazerdaze and Aldous Harding have also found much of their success through having songs go internationally viral.
What Good Old Days?
The subtext of posts against streaming is often that things were better in the good old days when acts released physical albums that listeners were actually prepared to pay a decent price for. In reality, this could cause its own problems.
In order to pay for recording costs, then pressing it onto CD/vinyl/cassette, and distributing it, a musician needed money. Record companies would cover this cost and then charge it back to the artist from their royalties. When it came to major labels, this often meant artists had to sell a huge number of albums in order to pay off the money advanced to them for the album’s creation or marketing.
The streaming era at least has this going for it - there is only a tiny yearly cost for putting a song out and then it is accessible to listeners across the world. The digital era has also meant musicians can record high quality music from their bedroom studios, rather than having to fork out huge amounts in studio costs as was often the case up until the early 2000s. This means a new act can start getting their music out and attracting fans from the start. Perhaps they will later sign to a label to get support in promoting their work and releasing it as a physical product, but at least they start with a far lower barrier to entry.
The Counter Argument
This is not to say that the dominance of streaming is an unalloyed good. Tech companies and their algorithms now have massive control over the way music is accessed. This has warped the playing field, since it is easier to satisfy listeners with lots of classic artists or new ones who are vanilla enough not to challenge expectations.
The Guardian reported that top 1% of artists account for 80% of all streams, and that 10% account for 98% of all listening by fans. This is partly because these top tier artists are the ones continually being presented to listeners through playlists and homepage recommendations. It’s like walking into a record store and only having half-a-dozen artists on display.
The small royalty rate per stream is made worse by the knowledge that major labels have been able to negotiate better rates for their artists. The situation makes it particularly hard for new acts or mid-level independent acts, since in the CD era they could at least make some income from selling albums but their streaming royalties are likely to be negligible unless they’re one of the lucky few who have a viral hit. It also makes it difficult for independent labels to start up, since the tiny revenue from streaming certainly doesn’t leave much for them to take a cut.
Indie labels used to provide a way for experienced music industry practitioners to foster young musicians and with fewer of them it often means that new acts have to find their own way. There are many downsides to streaming, but even though it’s hard to say it's better than what came before, there is no getting around its total hold over the industry.
Streaming Is The Current Reality
The truth is that there were only 60 years during which musicians were able to gain an income by selling physical albums - starting roughly in the ‘50s and reaching through until the late ‘00s. In reality, for much of this time musicians still survived by playing shows. The top NZ acts in the 1960s were often required to play extremely long sets (four hours or more) and, even then, many of them still had day jobs. Prior to the 1950s, some songwriters were able to make money via selling sheet music, but going back until the dawn of civilisation most musicians have survived primarily through performing music live.
These days, there’s a far wider range of ways to make money. Acts can still sell physical albums, but they can also synch their music for film/TV/ads, sell T-shirts, get fans to support the creation of special content via Patreon, or they can sell digital downloads via Bandcamp. Readers can go to the Flying Nun web-store right now and buy something if they want to support a young local act, who they want to see succeed.
Streaming provides listeners with an incredible service for an extremely low price, so there is little chance of the bulk of them moving away from it. Users have even been unwilling to move from Spotify to services (Tidal, Apple Music) that pay artists more. This means that streaming has to figure into any musician’s career. They need to work with it or work around it, but there’s no point complaining about it.