This Mind Map of the Music Industry Showed Me the Damage that Streaming is Doing to It

Nora Germain
Apr 26, 2018 · 9 min read
The Music Industry Web, and How Streaming Impacts Its Ability to Function

I’m a millennial musician and author living in Los Angeles. I grew up streaming music and remember very little of the experience of buying a brand new, shrink-wrapped Jennifer Lopez or Spice Girls CD. For all the flak we get, I believe my generation is perhaps one of the most conscious in history. On everything from #BlackLivesMatter and #MeToo to #MarchForOurLives, my generation has been the spark and the support for many important social movements. However, my generation almost might be the most dependent on convenience in history. From FaceTime to Facebook to ordering our groceries online, we have evolved (for better or worse) to depend on convenience not just as an accessory to life but as a way of life.

For the past ten or so years, I’ve been an avid user of cheap or free streaming services, as well as a professional musician (yes — one without a day job). I’ve also been aware of an unspoken conflict between my desire to access every song ever recorded for free, and to support the artists whose music I am accessing. Like most musicians or conscious music lovers, I knew it wasn’t great for the music economy, but I looked the other way. Consciousness and convenience were at odds in my mind.

Through a series of cold hard lessons I learned while plunged deep into today’s music industry as a professional violinist and songwriter, I realized that the destruction that streaming has caused to the overall music ecosystem may be too much for me to ignore. I took a deeper look into this and quickly began to see that there was a connection between all my friends being on Spotify, and my favorite music venue closing its doors, or a local school cutting funding for its music program, or a symphony going bankrupt. I drew a web or “mind map” to visualize it all, and this is my summary of that web.

Of course, these issues are incredibly complex, and no single factor can possibly be held responsible for all of the music industry’s calamities. Nonetheless, here is my perspective on the music industry web and how I believe cheap or free streaming services affect its ability to function now and potentially in the future. I hope that fellow musicians, music lovers and casual listeners will be moved to reflect on their own habits, and that we all will be inspired to slowly but surely move forward in a more stable, altruistic and culturally profitable direction.

It all starts with one glaring problem. Streaming is currently designed to be free, which means that the most common way that music is consumed generates very little revenue, compared to what that volume of consumption would be returning if people actually paid for it. For those who volunteer to become paid subscribers, all they’re doing is covering the overhead costs for the streaming companies and maybe providing some of the funds necessary to pay the hundreds of thousands of artists whose music is streamed every day. It’s no wonder Spotify can’t pay artists a fraction of a cent more. They’ve basically been in debt since they started. You can’t run a business and pay your staff, let alone the artists, with the model of “free.” Streaming services also pay major labels huge sums of money to use their artists’ catalogues, so there just isn’t enough money coming in to cover all of the costs. They simply can’t pay artists fairly and profit. I always remind people that there is no free version of Netflix, and for good reason.

Another issue is that the money a paid subscriber spends on Spotify isn’t necessarily going to the artists that a subscriber actually listens to, so for a lot of those people, that money is practically wasted, or headed to the wrong place (if it even gets there at all).

The lack of revenue results in the connection between artists and listeners being broken. Artists have no way to financially (or emotionally) connect with their listeners when their fans have no way to support their work. FYI: iTunes, which I call the world’s last music store, is being cancelled in 2019. When the artist to fan connection is broken, it leads to the public believing that artists are poor, or pathetic, and that people should feel sorry for them because there’s no chance of them earning a living wage. This is an age-old myth, but streaming and today’s collapsing music industry only makes this myth harder and harder to break. Why should you be struggling if your song gets played a million times? Well, a rough calculation would give you about $4,000 for that song’s revenue via streaming, but once it’s split between all of the writers, publishers and everyone else, your million plays might earn you less than a month of rent.

The general public has no idea how broke an internet celebrity can be. The distance between an artist and a listener can become very wide, and the sheer volume of music at a listener’s disposal can naturally cause some to start taking songs and artists for granted — as an endless feed of anonymous thumbnails and foreign-sounding titles. Even if you listened to one of these random songs 100 times and fell in love with the artist, you still wouldn’t get close to the rate that that artist would have been paid on iTunes from 1 single download.

In part due to this growing anxiety about artists being perpetually broke in the streaming era, there is less investment made in music schools, community arts programs, and other initiatives that inspire and train young people, and give them the kind of experiences and mentorship that they need in order to believe in themselves and to ultimately succeed.

After that happens, we see the quality of culture decline. People go to the symphony less often because their kids don’t want to go, and their kids don’t want to go because they’ve never heard of a symphony. People get their entertainment in different ways, and they’re restricted in terms of their choices. This is due to cuts in other local arts outlets, like small music venues and theaters, local radio stations, or other organizations that bring culture to people on a regular basis.

Once this has gone on long enough, it leads to multiple systemic breakages in the music business and local music scenes. Entire festivals are cancelled, or are taken over by interests at odds with the original mission statement. Radio stations can’t promote themselves and are forced to take on advertisers that their listeners can’t stand. More people tune out. Breakages continue. This starts to be felt by larger acts who come through cities and towns expecting a more supportive scene, schools with more resources, or venues that aren’t cutting corners. Neighboring industries also start to feel the pressure, which could be one of the reasons why we’ve seen a dramatic change in the pay offered to artists whose music has been chosen for films or TV through historically profitable sync licensing deals. Sometimes the contract offers no royalties beyond a single upfront fee, and some offer no payment at all (besides “exposure”). It’s also getting harder to find recording contracts that offer royalties for musicians anymore, regardless of the role they had in the recording session.

After the entire system has been pushed to the breaking point (and it has), insult is added to injury: There’s mass confusion about how to finance the collection and distribution of what little money is coming in in the first place. That revenue is desperately needed by the artists and creators who work on these projects, but the cost to process hundreds of thousands of micro-payments is substantially larger than the payments themselves. As a result, a lot of the money gets lost, misplaced or miscounted, and there’s very little an artist can do to track it down once it’s been lost. You could call this the plague of the multiple inoperable databases.

Obviously this causes added stress and confusion. Artists and organizations become frustrated or demoralized, and rightly so. They begin to lose hope if they look too far into where their royalties have gone, or where they would have gone if they were due any royalties to begin with. People start posting humiliating selfies with their abysmally small royalty paychecks on social media, and even artists with resumes that a music student in college could only dream of building concede that the music industry is nothing but a long lost fairytale.

After this, we all witness a general decline in the arts’ ability to support, inspire and enliven global consciousness and our local communities. It seems like nobody cares about the arts, no matter how talented or hard working you are. Artists feel like second-class citizens. Sometimes we’re treated like second-class citizens. It all feels like a waste of time. Any success feels like a failure because it doesn’t yield the attention, the profit or the response that it should (and could).

Artists become exhausted. Supporters can share a new release on social media and help with grassroots promotion, or provide financial support through crowd funding, but there’s no guarantee that more eyeballs will guarantee more payoff. Remember the broke internet celebrity? In this age of streaming, the only thing that matters is going viral on Spotify (and even that is no financial goldmine). But what’s the point if every other sector of the business is broken?

The quality of mainstream music ends up declining. Even major artists can lose faith in their talents, in their abilities to make a living, and in the importance of connecting to people using those talents. The public’s taste changes, and they become less interested in higher value productions and performances. Music loses so much value at this point that there is incentive to make music that is low in risk, creativity, intelligence, lyric value, collaboration, exploration and musical complexity. Pressure comes from the record labels. They invest in lower quality, short-term acts because they know they will recover their investment in the digital space mostly through streaming. Live shows help, and can turn large profits for some artists, but live shows cannot replace the revenue that the millions of hours of music consumed every day on Earth should be returning.

Now it comes full circle. So long as streaming rules the music industry, it will be the only thing that matters to labels, to listeners and to artists. It will destroy the entire music economy, and in some ways, there’s evidence that some of the destroying has already taken place. What can we do to remedy this?

Enter Resonate — an ethical music streaming service and co-op. Their player is now running in Beta. Here are some key features of the platform that make me proud and inspired to use it as a listener and soon, an artist:

-It is a co-operative, which means that every person who uses Resonate has a voice in how it is run. Everybody knows that the wealth gap is widening and that control is in the hands of fewer and fewer every day. Resonate is trying to balance that scale, and I believe people will be thankful for that, especially given the declining power of the music unions.

-The #stream2own model is extremely innovative and powerful. It allows casual listening for a very low, Spotify-like rate, which doubles with each stream of the same song, until you hit 9 plays — at which point you’ve purchased the song and you own it forever. If you only want to listen to a song a couple times, you haven’t spent much money at all.

-The money collected by Resonate goes to the artists whose music you actually stream.

-The rate that Resonate artists are paid is approximately twice that of Spotify.

-For most listeners, the cost to use Resonate will be similar to or lower than Spotify’s rate, since the model is pay as you go rather than a fixed monthly price. You wouldn’t go out to dinner and pay for the all you can eat buffet or prix-fixe option every time, would you?

-Using this service will help to inject revenue back into the industry and will also help to repair a wide range of communities and organizations that support its ability to function.

-Resonate is supported by blockchain technology. The implementation of smart contracts will ensure that money goes to the right people in the right amounts every time, and cannot be lost, stolen, misplaced, or hacked.

-It’s currently available on desktop, but an app will be launched soon.

So does our use of traditional streaming services ultimately come back to hurt us? Probably. Is streaming the only cause of the hurt? Certainly not. But every once in a while we are presented with new information and a new opportunity to do better than we could before, and I think we ought to seize this opportunity. It’s certainly worth a try.

resonatecoop

Resonate - streaming music, culture and beyond

Nora Germain

Written by

Musician and Author Based in Los Angeles. noragermain.com

resonatecoop

Resonate - streaming music, culture and beyond