Why Music Streaming Will Not Destroy Music

Posted on 26. Mar, 2009 by refe in MUSIC INDUSTRY

Business Week ran an article recently that talks about the “problem” of online music streaming services. The article claims that while online streaming was initially intended to promote music, and therefore promote the purchasing of music, it has actually had the opposite effect. The author describes a 23 year old man who has gone from spending over $100/mo. on music purchases to only $10/mo. because he figures he can simply stream whatever music he wants to hear at any given time.

Despite the account of the single consumer they interviewed, I disagree that online music streaming has really caused the sale of recorded music to decline. The fact is that online streaming does promote music. The listener is exposed to music that they may never have encountered otherwise. When a listener hears something she likes, she will look for more music by that artist and may end up a loyal fan down the road. Does that guarantee that she will someday purchase the music that she has enjoyed via the music streaming services? Of course not, but she is much more likely to do so than if she had never heard the artist in the first place

This perspective also seems to ignore the fact that conventional radio has been doing the same thing for decades. (Of course, Billy Corgan has decided he doesn’t like that either – but that is another post entirely!) Listeners do not pay the radio stations that they tune into, and the stations - particularly online stations – pay big royalties on the music they play. It is understood that the artists benefit from the free publicity, and the radio stations make their money from advertising dollars that exist because so many people are able to listen for free. The listeners obviously get to enjoy music in their homes, cars or wherever else they happen to have a radio. It works the same way online. Granted, there are at this point fewer listeners, and the ad dollars haven’t caught up with conventional radio, but the free publicity piece remains unchanged. If both services ‘stream’ music into the home, why is one generally accepted as promoting the sale of music, and the other as discouraging it?

The answer is that this entire discussion is irrelevant. Free online music streaming is not discouraging it’s listeners to purchase music any more than conventional radio. In fact, it is almost certainly helping music sales, especially for lesser-known artists. The real issue is that the old Industry models are broken in far more serious places. Consumers have decided what they want – free music that they can listen to whenever and wherever they want – and the established Industry doesn’t like it. The argument against online streaming is just another straw man that the Music Industry has erected in an attempt to reclaim some of it’s former control.

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