Why streaming sucks

spotifyAs soon as digital copying became inevitable the record industry decided they could lock-up music delivery. Their first effort, the in-house SDMI consortium, failed. Subsequent attempts to use third party DRM also failed. CD copy-protection was a disaster and after a few years Amazon, then Apple, dropped DRM on downloads.

Streaming is the current plan for locking up music and breaking the retail power of Amazon and Apple, although it is not new. The customer never owns streamed music unless they pay again, and when their subscription ends no music has changed hands. This is called “access” rather “ownership”. The first comprehensive Major label streaming service, Listen, launched in 2002, it is now called Rhapsody and has about a million subscribers.

I have always been sceptical about streaming as a mass market substitute for music sales although many access evangelists would disagree. UMG expects streaming services to have 2 billion subscribers one day but after a decade there are just about 10 million, worldwide. Here are the main reasons why I think streaming has to change beyond recognition to succeed.

Premium pricing

Streaming subscriptions are priced as a premium product. That is, they are priced at twice what the average music buyer spends. And yet streaming doesn’t have a premium feature set: it is audio-only, it is not 100% reliable, its music repertoire and added-ons (e.g. band biographies, ticketing, lyric sheets, artwork, merchandise, etc.) are limited, new music is often delayed, and each service requires its own subscription. If you change services you lose everything, nothing is portable—you can’t share a subscription.

The record industry also hopes streaming will facilitate “music discovery”. A reliable music discovery service would be a premium product, if it worked.

The final drawback is that this premium product returns the smallest reward to its artists. This matters because music fans care about their favourite artists in a unique way. The most popular social media figures are not politicians, record company bosses, games designers or even media celebrities, they are music acts. Fans want to see artists rewarded fairly and artists want to get the market data they need from middlemen.

Either the price must drop—probably to $2.50 a month or less—or the product must change.

Audio v. YouTube and the rest

There are some audio-only situations: driving, jogging and background listening for example. Streaming—given suitable playlists—is a suitable product but it faces competition from radio, which does the same thing free.

Audio is only one aspect of today’s multi-media world. Artists play live, make records, make video, sell merch, blog and tweet. Any audio-only product is severely limited, especially when YouTube and other resources are just a click away. Why would any buyer blow their entire music budget on access to audio-only in 2013?

Streaming music repertoire

Daniel Ek likes to say Spotify has everything, everywhere but it doesn’t. There are still some big name holdouts but even without them there’s a lot of music missing. All the online music services offer about 25 million tracks out of the 100s of millions that have been recorded.

Streaming might be OK as a mass market product with just the chart music from the past 50 years, but it doesn’t even have that. And even if it did, chart music radio has that niche covered.

(Last year I tried the Apple Cloud music product. The repertoire record companies and digital aggregators make available to Apple, Amazon, Spotify and others is very similar. About 25% of my 11,000 track library was not matched by Apple.)

Streaming music reliability

Streaming music services depend on mobile carrier up-time and coverage, Internet availability, server up-time and device up-time.

I have seen many streaming evangelists claim they don’t keep any other music but we all experience Internet and mobile network down-time. Anyone who has a streaming subscription will have service interruptions. The evangelists can obviously live without their music because they will have to from time to time.

I have iPods, computers, CDs and mobile phones. I always have something that will play my music and I even have several copies of my digital library. It seems likely other music buyers in the premium market will have similar resources these days.

Music discovery

Many people have tried to crack music discovery: Peter Gabriel’s The Filter, Amazon’s collaborative filtering (“people who bought X also bought…”) and so on.

But music discovery is something we do, not something done for us. Here’s some of the places I discovered new music I like recently: cinema trailers, radio, YouTube, email from friends, Twitter, music media reviews, DVDs and TV. These sources help me discover music and lend context to it but they don’t do the discovery.

In short, anywhere music happens or gets discussed is a place where it might be discovered but streaming services are never going to offer this as a premium feature because nobody can.

Streaming sucks

OK, 10 million people pay for it and 20 million others like it enough to endure the adverts. Record companies get extra income and probably see it as a win but it’s not exactly taking off. Recently one of my favourite music biz economists, Will Page, moved from PRS to Spotify, and another, Ian Rogers, moved to Beats. They know what’s what and can point the way forward. But serious disruption is necessary if streaming is ever going to not suck.

9 thoughts on “Why streaming sucks

  1. Have to disagree with you on pricing there: streaming is a bargain. At five bucks a month you get access to more music than you’d be able to listen to if you spent every minute of your life doing so, from the day you were born till the day you die.

    It only seems pricey if you consider the mythical “average consumer” – who is a purely mathematical construct. In reality, people who actually care enough about music to consider streaming services at all are spending a lot more.

    I happen to agree that streaming sucks as a model, albeit for probably completely opposite reasons.

    • I agree some people see it as a bargain, in fact about 10 million do, and the average consumer is of course theoretical but not irrelevant.

      In the US and the UK music consumer data shows a similar profile: that half the population buy no recorded music (and never have) and the other half spend an average of around £50 a year. In fact this average is more than most music buyers spend because a very small percentage buy a lot more. Most music buyers buy the equivalent of about 3 CDs a year. So when a streaming product is priced for the mass market it is important to understand what people will spend en masse.

      So I agree “people who care about music spend a lot more” but the fact is they don’t represent a mass market, probably 5% or less of the consumer marketplace. The mass music market is, perhaps unfortunately, a chart music market.

  2. I think that playing with number is good, because it is the mean of the “machine” or industry. But it will never be possible to define, track and trace the path of taste nor of consumer habbits regarding music as a product.

    The industry is paying the price of a decade long campaign where “everything is free if” you read the text in 6 points at the bottom of the 4’000’000 word contract.

    As long as i have been aware of music, there has been poeple passivelt listening to radio selection. Because caliming a “taste” is risky in our society. They are the ones who really get what they want from there money on streaming services. A few others acclaim the benefits of having access to infitiy, which is obviously untrue, unless you consider internet in its entirety.

    The problem as i see it, is the unawareness and gullability of the music makers. They seem to think that there will be some sort of miracle recipe emerging soon, that will make them rich and famous, even if they are in a little niche. This dream is fed by the majors with their supernova icons, and is due to a volontary mass missinformation generated by these majors fairy tails.

    The issue about music services today is to anihilate the side effects of the “everything for free if” campaign. It showed the hidden sides of the economic system: We use currencies that are completly arbitrary and based on the needs of a minority elite to remain in place and power.

    Unless we redefine the economic system, it remains unlikely we will see fair markets. Not only in music.

  3. Hmmm, streaming doesn’t appeal to me so I haven’t tried it. For stuff I like, I want to be able to listen to it whenever, not whenever I’m logged on. For new stuff, Noisetrade send me more stuff than I can listen to, I have bandcamp and thesixtyone and they more than satisfy my need.

    • It certainly baffles me what anyone sees in music streaming, enough to pay for it anyway. And as you say the web is awash with stuff to listen to and if I know what I want to hear online my first stop is always YouTube.

    • Your article highlights the importance of a context. Music doesn’t just turn up on a list in a stream, it comes from somewhere in the world and that’s part of the magic. Context makes the difference between buyers and fans.

  4. Yes streaming is ok, saveing mp3 music is great to. I have a bose bluetooth speaker the top model one, when i want to stream or play pandora or i have mp3 on a usb flash drive as well. But seriously anyone who wants to listen to Quality music sometime, streaming isnt there yet. The younger crowd at get togethers at my place still look puzzeled and dismayed at the sounds comeing out of my Quality cd stereo system running a class d amp. Its all oohs and ahhs and i have heard this song a million times but have never heard those musical notes before. Ahh yes a long way to go.

  5. I know this article was written a couple of years ago but more than ever before it is still so relevant, particularly with the recent advent of Apple’s new streaming service.

    Why pay for music you will never truly own and only ever have access to within the constraints of internet access, server reliability, and your providers licensing agreements ?

    Most music lovers I know spend their entire lives collecting music and building a playlist – it truly is the soundtrack to their lives. How many of us still have and still have great fondness for tunes that have been with us since we were kids ?

    What happens if you stop paying ? What happens if technology a little way into the future makes streaming redundant or even if your streaming provider goes tits up ? Your carefully collected and arranged playlist of ‘rented’ music is gone forever. Start again you say ? No thanks, it wont happen, I own my music and I can add to it, shape it expand it and take it with me everywhere, having the freedom to listen to it at any time from here until the end of my days.

    And as far as the idea of having some Apple algorithm “Curate” a streaming playlist for me ?

    Well, I’m sure many of us have had a bemused chuckle at some of iTunes’ “recommendation”s over the years.

    I’m not sure where the music industry is going, it’s been in a state of flux for so long now and its seems to be coalescing around Streaming which is a real shame for music collectors and the artists that, thus far, have provided us with the richest of tapestries over the generations.

Don't just sit there fuming, write something!