Its been blamed for years for destroying the music industry, but could streaming services like Spotify actually be their saviour?
This week it was decided that from July, data from streaming services will be included in the official UK chart. With over 200 million songs streamed weekly, the Official Charts Company has decided that in order for the singles chart to be accurate, it should take all listening data into account. However, this news has not been well received by everyone in the industry, in particular the artists and record labels, who believe that the royalties they earn from streaming providers aren’t enough to keep them in a full-time job. But the statistics tell a different story…
Initially the music industry wasn’t sure how to cope with online downloads, predicted to have cost the US $12.5billion in 2007. But after the introduction of sites such as Spotify, Pandora, Deezer etc, the losses have turned around. Between 2011-12 Spotify lost just under $80million focusing on big improvements to its features and expansion, and Pandora suffered $16.1million in losses, although both companies have been making money through selling shares. So are these new ways of streaming sustainable for both music creators and the industry themselves?
For years the music industry tried to push people away from online downloads, but technology has made listening (and purchasing) music undeniably easier, especially from all-you-can-eat style music buffets like Spotify. Although they may not gain as much in royalties, bands that exclude themselves from streaming services may be putting themselves in a dangerous position. People will still download the music elsewhere (potentially for free), and artists lose being able to reach their audience on a personal level. Direct links to artists' merchandise and tours are available on sites like Spotify and new users can be found through the sites recommendations, which work through algorithms. And as for the sites themselves, as long as the demand for digital downloads and streaming exists, so will their platforms.
Changes to the Top 40 chart mark the biggest reform since 2005 and will see songs that are played for longer than 30 seconds, 100 times equivalent to one purchase or download on the singles chart.
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