Being a music lover, a consumer of music on CD and vinyl, an abstainer of paying for music in digital form (it doesn’t exist to me, it’s just 1s and 0s) and a part of a fledgling DIY record label I spend a fair bit of time thinking about and musing upon the current state of the commercial side of the music industry… the bit where you/we/me part with hard cash for musical product.
What has tended to gaul me most about the cries and sobs from the Majors and their bedding partners is that everything is being blamed upon P2P downloading. That it is this ‘theft’ of music which has lead the Biz to the current state it is in.
Aside from the fact that most the figures They bandy about with regards to how much P2P piracy has cost Them are embellished/sexed-up to make Their woe that much more oooh! They fail to acknowledge that a very high percentage of the music downloaded for free would never have been bought in the first place, and if it hadn’t been downloaded then it would have been borrowed, heard in a record store, rented at a library, ripped from a mates CD or just plain ignored.
What is also (conveniently) ignored in the debate (if you can call it that) is that there are far more competitors for the disposable income of consumers from other entertainment areas, not least from computer games and now Apps on smartphones… and yet people’s disposable income hasn’t gone up to a degree that can sate all the companies that need to continually increase their bottom line. Disposable income is finite and yet the premise upon which companies are formed is continual economic expansion. Just doesn’t fit, does it?
And finally what is never discussed is that the Biz was riding a gravy train of shifting overpriced substandard product (on the whole) for many decades from the heart of bloated infrastructures and financial profligacy, and in the end that was bound to have an effect on their bottom-line (sustaining their ridiculous overheads of something like 95% of income generated isn’t the best economic model I’d say) and more importantly consumers… “Shaft me once, shame on you, shaft me for the 745th time and I’ll finally fuck off and stop giving you money.”
No, the Biz is in a financial mess because of P2P piracy, obviously. All those spotty 15 year olds spending their pocket money on weed instead of Gaga, Muse or Bieber CDs are the little fuckers that brought a once multi-billion dollar money grab to its proverbial knees.
So what about Spotify? I mean that was in the title wasn’t it?
Well, in the wake of the abomination of P2P becoming an overground phenomena (apparently… and if it is, who brought it to the wider public attention?) things sprung up offering to be the saviour of the Biz, and the Biz, being money orientated muppets trapped in a bygone era got involved in the hope of re-fattening their bottom(lines) off the back of coders and entrepreneurs who ‘got’ the www.
Of all the music start-ups two have laid siege to the hearts and minds of music consumers, iTunes as a source of purchasing mp3s legally and Spotify as a source of consuming as much music as you want for free or £10 a month. Sure, there are others, but these are THE two in their areas (at least from a British perspective).
The first major nail Spotify whacked into the Biz was that now everyone could easily and legally listen to (almost) every album that was released and decide if it was good or shit. If, as most are, it was shit then job done… one listen and then ignored for a lifetime with your £8 to £13 still safely in your pocket. You don’t even have to subscribe to use that element of it.
“It’s okay,” Spotify said to the Biz “you’ll get money from every stream of the music!” and then gave the Majors a small amount of shares in the company as well, just as a sweetner.
Thing is we all know that the amount you get paid for a stream is miniscule because the Spotify model simply doesn’t add up in terms of the economics. I don’t subscribe but I listen now and then to hear if an album is worth buying. When it isn’t and I don’t take a ‘punt’ on it, the company is down £8 to £13 and Spotify has generated nothing more than what their advertisers (fools, really) pay for the ads inserted into my listening time (which can be negated somewhat by clicking onto the next track before the current one ends anyway, which i’ll do if i’m checking an album out for the first time).
Even when people subscribe it is only £10 per person per month. So the cost of purchasing one CD a month and you can listen to every CD on there. 24 hours a day. 28 to 31 days a month. And even if you only listened to say 12 songs an hour for 3 hours a day that is still a 1000 songs a month for 1000 pennies generated by Spotify. At that costing you’d have to listen to a ten track album a hundred times for a similar amount of money to be generated as a CD purchase… and if you really loved one album that much you’re more likely a music lover than a music user and would probably want to own the artwork etc., anyway, and will have bought it… and the special edition version… and maybe the vinyl, cassette and 8-track versions too (point being, there’ll always be music lovers who buy real music and aren’t a tangible part of the Spotify equation).
See, no matter how I look at it, the economics of Spotify simply do not add up as being the saviour of anything. But more interestingly is how friends of mine, who WERE still consumers of music be it on CD or mp3, have now started going “fuck it, I’ll pay a tenner a month and listen to whatever I want,” and have stopped being consumers of music on a per release basis.
And that’s the biggest nail Spotify is hammering into the Biz. It isn’t stopping P2P from happening, because those kids will do it anyway, but it is taking away real consumption of music from retail and replacing it with a fraction of the amount that was being spent on CDs and mp3s, which is the relatively low subscription fee for Spotify.
In a few years when the accountants have finally done the maths on the great Spotify experiment they will ascertain that CD sales are still low and digital revenue hasn’t picked up the slack and income from Spotify is, in Their grand scheme of things, negligible. In fact I reckon they’ll be in a worse state than they are now because more and more people will stop buying music and stream it instead. And then they’ll pull the plug on Spotify.
Thing is, by then they’ll have conditioned the actual paying customers that they still had pre-Spotify into expecting to consume all their music via subscription service… why spend £1000 a year for 100 CDs when you can get (almost) all music for £120 a year? They’ll have displaced a huge chunk of their market who will have gotten used to not ‘buying’ music.
And yet, still it goes on.
I’m sure some marketing sort from Spotify will say that i’m not correct here… that it is fledgling and that when it reaches maturation (ie: every fucker in the world is subscribing) it will be the answer the Biz has been looking for… but the thing is, I just can’t see it. It’s basic mathematics.
It kind of amuses me how badly the Biz bosses have perceived the way the digital age affects/alters music consumption and how they have approached the whole thing. Personally I think the smartest move would have been to just shut the fuck up about the underground P2P music thing and simply let those people who still bought CDs keep buying CDs instead of giving them cheaper alternatives in an attempt to stem the perceived haemorrhaging of revenue from P2P theft (which, again, wasn’t as real or large as they make out on their little spreadsheets… the other factors I mentioned are probably far more salient in understanding the revenue decrease in music sales).
Of course they could have improved the quality of their product, but fuck, I guess that would take an interest in music and who has the time for that when you’ve got units to shift?