Music Has Been Commoditised, Now What? 4 Causes and 3 Possible Solutions [Part 1]
First, let’s get acquainted
Welcome to The Biz of AI, an ongoing series of articles where I share insights and research on the music, video game and new media industries, and their players. In particular, I’ll look at how AI and machine learning are disrupting these verticals, presenting opportunities for new products and business models to be explored. I’ll also discuss the difficulties facing industry players with the advent of AI, and give my two cents on how to tackle them. Content from related topics will be bundled in multi-part posts.
I intend to publish weekly, keeping the articles brief (roughly 5 minutes reading time) so that you won’t need to take an extra coffee break (unless you really want to, of course).
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Now that we’ve got the small talk out the way, let’s get onto the meaningful stuff.
Music as a simple commodity
In this two-part post series, I’ll examine how music’s decline in market value is tied to commoditisation, where unique goods become simple commodities in the eyes of the market. I’ll subsequently propose three tentative solutions to overcome this pertinent issue.
Yesterday was a day like any other. After the morning metro ride, I got to the office and performed my usual daily rituals; laptop fired up, fresh glass of sparkling water in hand, I rifled through emails. Next, I launched Spotify and began listening to a stream of continuous music while working, barely recognising the compositions playing. Was it Bach first and then Bruckner, or the other way around? I really can’t say. The amazing thing is that, like everyone else these days, I had access to a gigantic catalogue of music. I could’ve listened to some ermetic Luciano Berio music from the ’70s or the latest Ariana Grande hit (not that I could name you one), and all of this for free.
Don’t get me wrong, I think this incredible level of free access to music, as to any other content, is utterly fantastic. However, there are some drawbacks. Over time, people have come to think that music isn’t that valuable after all, at least in a traditional sense. Many people refuse to spend money to buy new music. They expect music to be free. What’s more, they expect to have instantaneous access to an almost endless amount of music for free, so that they can quickly skim through a lot of songs until they find something they like. The artists become as interchangeable as the spare parts on a car, their work barely distinguishable from one another. Music, that was once a treasured commodity, therefore becomes a simple commodity — one that is generic and easy to acquire. This weakens the musicians’ position, who see their creative work depreciated to a point of little to no value; commoditisation in full effect.
There isn’t one single culprit to blame for the transformation of music into a simple commodity. It’s been facilitated by a combination of two factors: technological advancements, and the stasis of music industry business models. As such, I don’t see music commoditisation as the source of all evil per se. Rather, I think it’s a temporary state the industry can overcome by relying on new technologies and, most importantly, new business models. But before discussing tentative solutions, which I’ll save for my next post, let’s try to unpack the root causes that likely fueled, are fueling and will fuel music commoditisation.
The (bad) good old days: Illegal file sharing
Illegal music sharing is as old as cassette tapes, but rapidly increased with the introduction of CD-burning technology. When I was in secondary school, it was so common to copy CDs and share them with your schoolmates that it never crossed our minds that copying and distributing music was actually illegal. Although very cheap, burning CDs was so slow it was inconvenient.
Then came along the infamous service you’ve probably heard of, Napster. With its amazing peer-to-peer (P2P) file sharing technology, it was a massive hit in the early 2000s. This was a seismic shift. Everybody with basic internet connectivity could download free songs and reproduce them as many times as they liked. At peak Napster, its user base reached over 60 million. By the time it was shut down (after widespread controversy and lawsuits by the world’s biggest artists and labels), hundreds of similar P2P websites like LimeWire and eDonkey filled the gap. This technological revolution had major repercussions for the music industry, causing enormous losses. Between 1999 and 2010, global music revenue shrunk by a whopping 40%. Beyond the monetary loss, illegal file sharing had another negative effect. It changed people’s perception of music. Because an incredible amount of songs were freely and easily accessible, listeners started to perceive music as less rare and less valuable. The process of music commoditisation had started.
The present: Spotify and music streaming
With the advent of streaming platforms like Spotify in the early 2010s, the process of music commoditisation has arguably accelerated. Now, people are able to legally listen to tons of songs for free. Of course it would be easier to blame music commoditisation on Spotify. But it’s not that simple. I think music streaming platforms are clever in leveraging the depreciation of music, initially brought on by illegal file sharing. Spotify saw an opportunity to sell music subscriptions at previously unfathomably low prices, with a large catalogue and convenient user interface. Their bet was that people would rather pay a few quid a month and have all that music within reach, rather than the hassle of downloading songs onto their machines for an arm and a leg. A quick look at the growth of the music streaming market and it’s fair to say they were right on the money.
The future: AI music generation
Various music tech startups ready to reshape the music landscape have popped up over the last five years or so. Once again, industry disruption is preceded by revolutionary technology. Startup companies like Melodrive, Jukedeck and Popgun are using Artificial Intelligence (AI) and Machine Learning to generate music from scratch. Even tech giants like Google and IBM are interested in teaching machines to become great songwriters. We don’t have an AI Beethoven yet, but research in the field is moving swiftly. The quality of machine-generated music is improving day-to-day, which might alarm music industry professionals.
But AI music generation in itself isn’t a threat to music — as we know it — nor necessarily a catalyst for the process of commoditisation. It’s what companies make of the technology that really counts. At Melodrive, for example, we intend to use AI to augment the capabilities of composers and users. This means equipping them with tools to create and experience great interactive music content that’s just impossible to make without AI. Other AI music companies, however, adopt different approaches. Startups like PopGun, Melomics and Jukedeck provide a quick and cheap solution, by serving up music for all occasions. Need a track for your Youtube video? Go to Jukedeck’s website and create one, by selecting a style and a mood.
This technology is still to become mainstream, but will surely impact the future of music. Depending on the direction it takes, AI music generation could exacerbate the music commoditisation issue. Consider this: If we aren’t careful, in a few years you may wake up in a world where the only part humans play in making music is maintaining the machines. Not really exciting, is it?
The mammoth in the room: Music labels
As we can see, new technologies and businesses have contributed to commoditising music over the last two decades or so. Should we just accept devaluation of music as part of the natural order of things? Not really. Technological change is our inevitable gift to ourselves. It’s innovation that propels us to create new music. The invention of recording technology towards the end of the 19th century brought sweeping music distribution, and the popularisation of new music genres like blues and rock and roll. So, clearly technology itself isn’t the problem.
As a first step towards solving the music commoditisation issue, we should accept that our world is in constant flux. Such a simple truism is far from acknowledged by mammoth music labels. (This might explain why they’ve been perceived by some as a bit of a dying breed). With P2P file sharing, music streaming and now AI, the ground was constantly shifting below their feet, but they refused to lift a finger. If you look at the business models adopted in the music industry today, they aren’t really that different from those of the ‘90s.
Free access to music is the greatest asset technological change has given us. This doesn’t entail the commoditisation of music per se. It’s failure to recognise that the value of music in the minds of the listeners has shifted from owning a collection of CDs of their favourite bands to something else. That’s what really commoditised music. In other words, music commoditisation was facilitated by technological advancements but, in the end, determined by the lack of new business models able to respond to the changes brought on by the tech innovators.
In the next post, I’ll outline where I believe the value of music lies in the minds of today’s listeners, offering three possible solutions to de-commoditise music. Stay tuned!
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