應外三乙 / 邱玠傅(Ciou, Jie-Fu ) / 10252231

Research Paper

Streaming Services Are Better Pirates in Music Industry

In the past, buying a CD, listening to radio, or even going to a concert were the

only ways for people to enjoy music. Today, with the invention of streaming services

such as Pandora, Spotify, or KKBOX on the Internet, hearing beautiful voices from

everywhere is no longer a difficult thing. However, Taylor Swift, a famous American

singer, decided to pull her music from Spotify last year, which shocked the whole

music industry. Taylor Swift’s action told everyone the clear fact that streaming

companies were not as perfect as people always thought. In fact, streaming services

might be foes for the music industry rather than friends because of the following three

problems.

To begin with, singers get unreasonable revenues from putting their songs on

those music streaming platforms. Based on Spotify (n.d.), the revenues are divided

into two parts. Seventy percent of the revenues go to right holders such as singers,

composers, lyricists, and producers and thirty percent of them belong to Spotify. In

other words, a singer does not get the whole 70% of the revenues because the

revenues which a singer gets are craved up by other right holders. In addition,

according to Linshi (2014), in one of his articles in Time, Here's Why Taylor Swift
Pulled Her Music From Spotify, he mentioned that “artists earn on average less than

one cent per play, between $0.006 and $0.0084, to be exact, according to Spotify

Artists” (para. 4). To make this fact more clearly, there is an example. Martin (2010)

reported in The Guardian that “over a five-month period, 1m plays of Lady Gaga's hit

Poker Face – one of the most popular songs on the site [(Spotify)] – earned her just

$167” (para. 7). This shows that, unlike physical CD markets, the more popular a

song is, the better the selling will be. Even when a top song is streamed online, it

could not bring the equivalent revenue for a singer.

Furthermore, the sales of physical CDs decline because of music streaming

services. This kind of service provides very convenient platforms to listen to music.

By clicking mice or tapping screens, people can listen to every kind of music. From

pop to indie music, whatever or whoever people want to listen to can be found on

those platforms. However, what people think convenient might be a nightmare for the

market of physical CDs. Actually, the market of CDs has been shrinking year by year.

Specifically, CDs are being replaced by music streaming services gradually because

of their convenience which people regard as an advantage. Recording Industry

Association of America (RIAA) (2014) illustrated that the sales of physical CDs

accounted for 35% of U.S. music industry revenues in 2013 compared to 95% in 2009.

As for revenues coming from streaming models in 2013, they increased to 21%. That
implied a truth that revenues from streaming services are devouring ones from

physical CDs. Moreover, some major singers like Taylor Swift and Jason Aldean lost

their revenues of physical CDs due to streaming services. For streaming services, how

they attract users depends on their stunts; that is, latest and popular songs are easily

accessible by listeners. Yet this kind of business model causes their songs to become

outdated in a fast way. Cubbison (2015) noted that what fans of those superstars look

forward to is listening to their latest albums, but what those celebrities concern about

is how to make their latest albums stay on the top list as longer as possible so that

those superstars can earn steadily. Once they put their latest albums on streaming

platforms, those albums will devalue drastically because people can listen to them just

by streaming services. In other words, people do not have to go out and buy those top

albums in a record store. Therefore, the sales of physical CDs plummets since people

can hear their latest songs simultaneously and immediately.

Finally, unlike those popular singers, some new musicians and independent

producers could not survive under even lower revenues. Pro-Rata system is a current

model adopted by streaming companies to distribute revenues for artists. However, a

conspiracy lies in this Pro-Rata system. In the final part of the formula of this system,

the total number of clicks a song has in a month is proportionately divided by the total

number of all clicks on the streaming platform during a month. Therefore, when a
popular singer releases his or her album in that month, most of the number of clicks is

occupied by this superstar. That is, despite the fact that a subscriber always listens to

an alternative singer or band, most of the money goes to another musician who owns

higher clicks rate. What’s worse is that the number of clicks becomes important rather

than having a fan. Under this Pro-Rata system, a non-mainstream musician’s revenues

could be influenced by any time when popular musicians are going to release their

new albums. Therefore, as Cubbison (2015) claimed in the paper, even though those

singers who just step into this streaming industry get what they need – Internet

presence – such low revenues does not really help his or her career life.

In conclusion, if the original purpose of music streaming services is to provide

an alternative to combat piracy in music industry, producers can share their excellent

works with the world without worries. Nevertheless, why those streaming services

turned into sugar-coated pirates is a problem which is still waiting for an answer. But

a clear clue for this controversy is given by few words from Taylor Swift who in

public responded to her action about Spotify, “Music is art, and art is important and

rare. Important, rare things are valuable. Valuable things should be paid for. It's my

opinion that music should not be free”.

 References

Cubbison, L. (2015). Will Taylor Swift and Spotify Ever Get Back Together?

Linshi, J. (2014). Here's Why Taylor Swift Pulled Her Music From Spotify. Time.

Retrieved from http://time.com/3554468/why-taylor-swift-spotify/

Martin, D. (2010). Spotify slammed by songwriters. The Guardian. Retrieved from

http://www.theguardian.com/music/2010/apr/13/spotify-songwriters

Recording Industry Association of America (RIAA). (2014). News and Notes on 2013

RIAA Music Industry Shipment and Revenue Statistics.

Spotify. (n.d.). How we paid royalties: an overview. Retrieved from

http://www.spotifyartists.com/spotify-explained/#how-we-pay-royalties-overvie