If music in 2009 will be remembered for anything, it’s likely to be the year that music officially became free. Which is pretty surreal when you think about it.
I remember growing up in Birmingham and having a great little independent record store called Swordfish, neatly positioned in a suitably secretive back alley, where i could thumb through vinyl before carefully deciding what to buy. The thought of pretty much all the recorded music in the world, ever, being on tap and less expensive than a pack of crisps feels insane. What’s next? Movies? Games?
Except it’s not as simple as it all seems on the surface. Advertising-funded music streaming services like We7, MySpace and Spotify are now pulling in millions of users – including you and me – who listen to music for free and leave those websites/applications to foot the bill.
The problem is that streaming each track costs a site fractions of a penny – say 0.4 pence. And those fractions, multiplied by the millions of listeners, all add up to a phenomenal amount. The advertising bucks coming through the door just can’t come anywhere close to covering the costs of spiralling bandwidth, staff, overheads and paying the music labels for the rights to stream the music in the first place.
The fact that internet overlord (and visionary) Google has launched a free ad-funded mp3 download (yep, not just streaming) site in China, makes things start to look very interesting.
Google already knows what happens when your advertising revenues don’t cover the money you agreed to pay the labels who are letting you stream their music. Google owns YouTube, and recently label giant Warner Music decided they’d rather have none of their music videos – or the user-created videos that include their music – on that site than accept a pittance each time their tracks were paid. Warner pulled out of the deal and YouTube lost a ton of content from artists like Bloc Party, Bjork and um… London Boys.
The more we listen to tracks on ad-funded music services the closer they get to ‘the cliff edge’. They have a finite amount of money, often invested by venture capitalists, and when it runs out they go bust. Or borrow even more money – which in light of what just happened to the worlds’ banks and mortgage lenders, is surely gambling at its most insane.
I’ve heard of ad-funded music services begging journalists NOT to write about them. They simply can’t watch any more cash rush out of their coffers with every new user streaming yet more music. It’s like throwing a house party, only for hundreds of gatecrashers to turn up, drink all your booze and leave you with the bill and the headache in the morning.
And it gets worse. There are more websites online than there ever have been. And nearly all of them need advertising to survive. Except there’s only so much advertising to go around. And advertising online is getting cheaper and cheaper as a result. Making it even harder to bring in the cash to pay for all of those lovely ‘free’ streams. Subcription models (e.g pay Spotify £9.99 a month for ‘premium’ ad-free listening) aren’t working either.
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Quite where all of this will go, I’ve got no idea. Will micropayments become common place, where music fans pay tiny amounts to hear tracks? Or will music remain free, with one or two big players killing off the competition and becoming more stable as a result?
One thing’s for sure, the next time Calvin Harris sees his music on sale for 57p in Tesco, instead of complaining he should count his lucky stars.