The Miserable, Horrible, Never Any Good Music Industry

Spotify, the one service to rule them all.

Zero.

Nothing.

Nada.

That’s how much it costs to listen to a nigh-unlimited music streaming service: zilch with a dollar sign.

“GET SPOTIFY FREE” blares across the cover photo of the website. Clearly, Spotify appeals to the willingness to pay nothing for unlimited music access. But does this cost truly reflect the value of music?

It’s not a secret anymore that if you can’t identify the product, than you are the product. In this information economy, behavioral information still holds value to the right industries.

And even free services must turn a profit, be it through advertisement, metadata or whatever new concoction of demographics and business.

Yet, if the upfront cost in dollars is still zero, than the question reflects back on to the listener: how much do they value the experience of music?

Looking at the stastics provided by Music Business Worldwide, the current state of the music industry sees three Goliaths surrounded by a field of wannabe Davids:

UMG owns nearly 29%.

Sony increased to over 22%.

Warner Music Group rests just above 17%.

Meanwhile independent labels divvy up the near last-third of market share.

It’s no surprise that a music industry that continues to conglomerate will lead to less buying power for consumers; the fewer the players in the market, the more the market share is left to win and control and the less power of choice the consumer will have.

But while conglomeration and oligopoly may seem like threats, there may be another problem here: price pressures. Whether by album or by streaming — the average new artist does not receive enough financial support because the price of music is so cheap.

Even your favourite classics like George Michael never received that much from records.

But with the increased digitalization of the world of music has not come without its own benefits (or disadvantages depending on the industry section) as Marc Hogan of Pitchfork writes:

Download sales cut out the cost of packaging, but artists got only a slightly bigger share of revenues: just 14% of the $9.99 iTunes album download price, according to a David Byrne essay in 2007, or 17% for an artist on one indie label cited by Kot.

So, if the artist only receives a 17% at best, where does the rest of the money go? According to Bandzoogle, the modern label takes around three dollars of this $9.99 price tag.

The modern retailer also takes around three dollars of the price tag.

Then the miscellaneous players such as packaging and manufacturing take almost two dollars.

The modern artist?

Two dollars — but only if they wrote the album entirely by themselves and don’t have an agent.

Oh, they didn’t and don’t? Looks like payday is now $1.40 per album as songwriters and agents divvy up the last 60 cents.

And if Spotify seems to offer a fair deal, it doesn’t.

As Lizzie Plaugic of The Verge explains:

Spotify admits the average “per stream” payout to rights holders lands somewhere between $0.006 and $0.0084.

Even their Premium or Family packages do not compensate enough. With monthly rates of $9.99 or $14.99, those limited tributes are split up between a staggering amount of parties. The more the parties, than the less the individual payout. Financially, the album price still trumps the Spotify model on a per-artist basis— but not by much.

Regardless of a still injured recording industry or a cultural adaption to the benefits of Spotify, the creatives fight for scraps while the recording industry, retailers and manufacturers carve out large pieces of the album price.

Tragedy is all the comes to mind, in remembering the words of Victor Hugo:

Music expresses that which cannot be said and on which it is impossible to be silent.

Some music to cheer you up before you go-go.

We say we don’t value our music enough and we remain silent on the artist’s right to a living wage. All the while listening to their work on Spotify or buying their album from the record store at the ridiculously low rate of $9.99.

And such is the industry’s iron cross: the current model has helped create an industry of financial pressures.

Until they find a solution, the music industry is likely to bleed creatives dry sans recuse. Until the value of music becomes better calculated and proportioned, the industry leaders will not want to set a higher price point and neither will audiences want pay for it.

Because if it’s already free, why pay?