Streaming into the future - Part 1: Music
When was the last time you, or anyone you know, purchased a film or music as a piece of physical media? For some of you, the answer may be that you’ve never purchased music as a CD or a game on a DVD or a film on a blu-ray disk (let alone on a video cassette). Some of you may have never held a cassette tape or dropped a needle onto a vinyl album.
In a relatively short period of time the media industry has gone through a fundamental change. While the transition from physical to digital is still ongoing, the industry has clearly moved beyond the ‘tipping point’ and everything is heading towards digital. But this transition is not just about a change of format (from physical media to digital media), it is transforming many other aspects; from models of production, distribution, consumption and ownership. New industries have arisen as older industries struggle to change their approach.
Listen to the music
The first sector of the media industry to make the transformation was music. Napster® was one of the first, and certainly the most high profile online service to challenge the traditional distribution model for music. Using peer-to-peer file sharing, the rise of Napster® showed that users were willing to deal with music as a non-physical medium.
However, since the Napster® model bypassed the record companies by allowing users to share music directly with each other, they were soon fighting legal battles with the recording industry. Napster® declared bankruptcy and ceased operations in 2001, but the floodgates had been opened.
Take the music with you
There is little argument about the fact that it was the launch of the iPod and iTunes (both released in 2001) that marked the start of the transition from physical to digital media as the mass market norm. While the iPod was not the first digital music player, it was the first device to achieve widespread use.
iTunes was initially a digital music library management tool. It allowed you to ‘rip’ your CDs (converting the content in digital MP3 files) and upload them to your iPod. The simplicity of both the device and the software made this a great combination and started Apple on their trajectory to be one of the most valuable companies in the world.
However, until 2003, you were still buying physical media and then ‘ripping’ to create the files to store in your iTunes library, or getting your files from peers (via Napster® or similar sharing systems). In April of 2003 Apple launched the iTunes Store. In the run up to the launch of the iTunes Store, Apple had been in negotiations with five major record labels, to make their music available as digital content. No more vinyl. No more compact discs. Music was now just digital data to be downloaded and Apple was on its way to dominating the music industry. By 2008, Apple was the largest music vendor in the US, and 2 years later the largest in the world.
All the music, everywhere
2008 saw the next step in the shifting relationship between music producers and consumers, with the launch of Spotify. While Apple was the largest seller of music, their model was still that of providing users with a store in order to purchase content, Spotify did something more radical.
Rather than act as a store and sell a product, they took the approach of providing a service which would allow users to listen to content. Instead of buying a song or an album, you would pay to access Spotify’s entire library of music. You could listen to anything available through the service for a monthly subscription (or for free, if you didn’t mind hearing some advertising). The record companies (and artists) would receive a small payment every time someone listened to one of their songs.
The network enables the music
The rise of Spotify relied upon several things. First, the shift from physical to digital music was already well on its way to becoming the norm. Second, the increase in mobile phone sales, coupled with the increase in mobile data speed and bandwidth, meant that more and more music was being listened to on mobile phones. Finally, increasing availability, bandwidth and falling cost of broadband internet connections in the home also played their part?
This combination meant that Spotify could provide access to the same library of songs whether the user was on the road, at home, or at work. Spotify now has 96 million paying subscribers who can access more than 35 million songs. The service is available in 79 countries and can be accessed via computers, mobile phones, gaming consoles, televisions and AI-powered speakers (Amazon Alexa, Google Home, etc.).
Since launching Apple Music, in 2015, the people that brought us the iPod, have become a streaming music giant; with a catalog of 40 million songs, available in 100 countries and having around 60 million subscribers. Amazon and Google have joined the fray, but it looks like Spotify and Apple will be battling for the largest part of the market.
What’s that big box for again?
The future looks like streaming all the way. Every so often, I’ll see an article that touts the fact that more vinyl was sold ‘this year compared to last’ but, in reality, we are talking about a very niche industry that will never recapture the majority of distribution, no matter how many audiophiles tell us how much better vinyl sounds, compared to MP3.
The full impact of streaming audio is yet to be realised. The relationship between artists and listeners is changing. While the cost of distributing music has been radically reduced, this has not made it easier to be discovered. Recording companies seem to be more interested in promoting their ‘big names’; where they feel there is a guaranteed market, than in developing new talent. However, we are also seeing a shift in the way that young artists are able to capitalise on their use of social media to reach new, albeit sometimes small, audiences.
When I was younger, I used to spend hours compiling ‘mix tapes’ for my friends; choosing the best tracks from my vinyl albums to share. Now, we can search the world’s musical output (both new and past releases) to find the new, the old, the popular, the obscure, to add to our ‘playlist’ and share with the world. If you are subscribed to Spotify, Apple Music, YouTube Music, or any of the other services, you now have a music library that is larger than anyone, in the history of recording, has ever owned. And, you don’t need a set of shelves groaning under the weight of vinyl or compact discs.
Music may not be changing but the way we engage with it and the way we listen to it, have changed in ways that we could not have foreseen; and it will never be the same again.
Napster and the Napster logo are registered trademarks of Rhapsody International Inc registered in the United States and other countries.