Is Streaming The Future Of Music? Don’t Be So Sure

Remember when you first got an iPod and your CD collection, overnight, became less a cherished possession – the soundtrack of your life – and more a slab of shelf-hogging plastic clutter? The same thing is about to happen to the MP3s on your hard-drive, and it’ll happen sooner than you think.

After almost a decade of iTunes dominance, suddenly new streaming sites are pinging up everywhere. Emboldened by Spotify’s success in courting major labels and the media, the new breed of start-ups are not interested in selling you music files, at least not primarily. Their goal is to charge you for access to music that you will never physically own.

Monday sees the launch of Sky Songs (£6.49 a month – which seems a more realistic price than Spotify’s £9.95). Recommendation service MOG has just announced plans to launch an online jukebox in the Pandora vein, aided by millions of dollars’ worth of investment from Sony BMG and Universal.

Meanwhile, the money men behind Kazaa and Skype are plotting a “secretive” streaming service called Rdio (presumably inspired by Primal Scream’s ‘XTRMNTR’ album – or maybe they’re just dyslxc). Even Napster has come back from the dead: they recently sold up to retail giant Best Buy and now they’re undercutting everyone, offering monthly subscriptions for £5. That sound you can hear is Lars Ulrich punching a brick wall.

Taken the hint yet? The industry wants you to stop downloading, and to start streaming. Why? Why are labels colluding in the final eradication of recorded music? It’s simple: streaming is proven to defeat piracy. According to the most recent report, 60 per cent of illegal file-sharers go straight once they start using sites like Spotify.

Crucially, this is all taking place in the slipstream of a broader, more profound technological shift: the death of ownership and the rise of cloud computing. Admittedly, ‘cloud computing’ sounds like a phrase only an appalling nerd would use – the kind of whey-faced compulsive masturbator who pities you because you can’t work out how to Twitpic – but it’s a thuddingly simply concept.

It basically means information is increasingly housed ‘out there’, on a universal shared network, rather than on individual hard-drives. A limitless data stream that you access at will. And it’s one further reason why streaming is the Future Of Music. The gods of technological progress have willed it so.

There’s just one problem with all this, and it’s a pretty major one: it’s almost impossible for musicians to earn any money via streaming. How much do you think a songwriter makes when you listen to one of his songs on Spotify? As Billboard point out, it takes 150-200 plays of a track before the content owner earns royalties on a par with one paid-for MP3. It’s no surprise bands would rather you downloaded their music from iTunes, or bought the CD (well, they can dream).

But if musicians are screwed, the companies themselves must be coining it in, right? Not really. Not yet, anyway. According to co-founder Daniel Ek, Spotify has “a long way to go” before it turns a profit. No surprise, given that one informed estimate puts its outgoings at over £10million per month.

Neither is Spotify alone. In March, LastFM suspended free services in some territories in a bid to keep a lid on runaway streaming costs. It’s generally assumed that the colossal expense involved in streaming copyrighted material will at some point be offset by rising subscription income. It could happen. But until it does, absolutely no-one is making any money.

The bottom line? Streaming makes technological sense. But it doesn’t make financial sense. Which means we’re confronted, once again, with the single, glaring, ineradicable fact of the internet age: what’s exciting and welcome for consumers is almost always catastrophic for the poor bastards who produce the content.