Four Futures of the Music Business

Contemplating the fate of an evolving industry

This piece was inspired by Peter Frase’s excellent new book Four Futures, where he examines possible next steps after the end of capitalism. I wanted to take the concept and apply it on a much smaller level to the music business—an exercise to consider what the future could look like if the industry were to progress under different sets of conditions.

Scarcity & Loss

First, let’s look at the worst—but also least likely—outcome, a world where loss and scarcity are the order of the day. In this situation, scarcity means that music won’t be widely available. This isn’t some dystopian future where the government locks down pop music but rather a scenario like the one in the late nineties, where the cost of purchasing music was high and you had to go to a physical location in order to do it. If you lived outside a major Western media market, your access to music was very limited, and if you were an artist, it was difficult to distribute your music.

Loss in this case means that because music has become so restricted after a period of relative freedom, people are now unwilling to pay for it and simply choose to consume other media. This does not mean that piracy is rampant; rather that people look at the cost of music and choose simply not to engage with it, instead choosing to spend their time and attention on other media (podcasts, books, TV, etc).

What would cause a future of this sort to materialize? For one, the death of the streaming format, which isn’t as farfetched as it sounds. The market has become so flooded with streaming services that it is almost impossible for any standalone service to succeed given the scale it needs to achieve to be profitable and keep investors happy. Streaming services attached to bigger companies are now loss-leaders, and while those companies seem happy to keep them afloat for now, there could easily come a time when they decide to cut them off.

If this is the future, consumer attention will likely start shifting away from music and onto other ascendant formats, like podcasts and TV shows, especially if those remain free or very cheap. Music competes with free not only when it comes to piracy versus paid streaming, but also when it comes to other forms of no or low cost content. Already, many people are choosing to listen to podcasts instead of music on the subway or while working out, and devote their time and fandom to dissecting TV plots instead of discussing music. Humans have a finite amount of leisure time and capital, and we would likely choose to spend it on things other than music if it were to become a scarce commodity.

As terrible as this sounds, this is also unlikely. While a mass die-off of streaming services is technically possible, labels at this point realize they have an interest in keeping the format alive, and would likely come up with some sort of solution or reduce licensing costs to keep services in business. People always find value in music, so unless it were to be all-but-non consumable, fans would find a way to listen.

Scarcity & Profit

The second potential outcome, scarcity and profit, is better for the upper tiers of the business but worse for developing artists and fans. In this scenario, people still pay for music, but it’s a scarce good with tightly controlled distribution channels. The most likely way this would play out is if big streaming services went under and were replaced by label-specific streaming services — so fans would pay for branded Sony, Warner, and Universal services, but wouldn’t have access to other catalogues.

In this future, music listening resembles commercial radio — a small, set playlist that’s impossible for almost anyone without a big budget to crack. Money is still being made, but that money never trickles down to emerging or non-Western artists, and the barrier to entry is higher than ever. Anyone who has ever complained that there’s just too much music is guilty of perpetuating this future, because they believe creativity should be metered in some way.

Again, while this future isn’t as unlikely as the first one presented, it could still happen if streaming services run into trouble in the next few years. If SoundCloud is bought by a bigger company and folded into their ecosystem, that represents a step in this direction, as it kills off one of the main outlets for new artists to start building a following.

Abundance & Loss

The third scenario, abundance and loss, is basically what happened in the aftermath of Napster. For fans, it was the best time ever — music was everywhere, easy to access, and totally free (if you didn’t mind dealing with weird viruses and annoying download speeds). But it was awful for labels and many artists, because suddenly they lost the ability to generate revenue from recorded music.

Versions of this future are with us in the present. While more people are coming around to the idea of paying for streaming, or at least using ad-supported free services to listen, there are still pirates and stream-rippers aplenty, and we now have a whole generation of post-Napster music fans who still don’t want to pay for music. While there is more music available than ever, it has spread so thin that people simply listen once and discard it, and it’s hard to build lasting relationships with fans or stand out from the crowd when there’s simply so much out there.

If this becomes the future again, it’ll represent a step backwards and have a long lasting effect on creators. While music should be available and everyone who wants to create should be able to share their work, there need to be pathways to profitability, or at least some mechanism for artists to make something. While all the world’s music for free seems like an ideal concept for listeners, it means that artists will lose at least some of the incentive to create, and art will suffer.

Abundance & Profitability

The final scenario is the best—and perhaps the most likely one—as long as we keep moving forward and iterating. A world of abundance and profitability is the ideal, a place where fans can access all the music they want, from huge pop hits to bedroom compositions, and those who make the music can be compensated in some way. Writing and recording music might not be a path to riches, but for those who want to make it a living, they’ll have a reasonable shot, and for those who just want to explore and create, they have an outlet for their work.

The only way this comes to fruition is with hard work and forward movement of technology. We need to make sure streaming services can compete and be profitable, and that might mean changing the way content is licensed. We also need to make sure artists have multiple paths for monetization, including using new platforms like bitcoin and virtual reality to help them capitalize on their creativity. Finally, we need to acknowledge that more is better, and even if it means hearing a lot of music that an individual might not like, having more voices in the conversation is always preferable to the alternative.

The future is unlikely to be represented by any one of these extremes, and will probably combine some of the scenarios outlined above. But it’s always worth having these theoretical conversations to help those of us in the music and technology business figure out what the grand vision looks like, so we can start working towards making that a reality.