The music industry keeps evolving. What started with Vinyl and cassettes evolved into the CD. However, by the early 2000s, a new way of consuming music entered the market: Online Streaming. So, what does this mean for music artists and the industry?
The Online Streaming era
To understand the online streaming that we know today, we have to rewind four decades. Firstly, in the early ’80s, Karlheinz Brandenburg began decoding music data and how to implement it onto computers. Nevertheless, their only limitation: technology.
Generally speaking, as technology progressed, MP3 was successfully created in the mid-90s, allowing consumers (listeners) to have limited music files on their PCs.
Furthermore, in the late 90s, Napster allowed users to share online MP3 files among themselves. Music piracy was (and still is) a huge topic of discussion since listeners were no longer willing to buy compact discs in stores. Yet, a lack of substance between MP3 and Napster: Audio quality.
Therefore, beginning of the 2000s, Apple seized the opportunity and released iTunes and the iPod. An online platform where listeners could buy high-quality music and store them on the device respectively. Ever since then, Nothing Was The Same (get it?).
Nowadays, listeners are offered a variety of options in today’s Online Streaming market, such as:
- Spotify (2008)
- Tidal (2014)
- Apple Music (2015)
As mentioned in The Compact Disc era, 1 CD bought = 1 CD sold. Nevertheless, in today’s cycle, sales depend on streams. But how are these measured?
Billboard publishes and updates the rules for their Stream Equivalent Album (SEA) tracking, at a certain point in time it looked as follows:
| SEA (Stream Equivalent Album) | Unit of CD sold |
| 1,250 premium streams | 1 |
| 3,750 non-premium streams | 1 |
Nonetheless, it is far more complicated than that, since each Music App and country have different equivalent methods. Hence, this has led to some artists not becoming a fan of online streaming platforms.
For example, one of them is Taylor Swift, who decided to pull off her entire catalog from Spotify in 2014. Her argument consisted of how poorly artists were getting paid as shown in the next table.
| Online Streaming App | Stream Payment |
| Tidal | 0,0125 UDS |
| Apple Music | 0,00735 UDS |
| Spotify | 0,00437 USD |
| Youtube Music | 0,00069 USD |
In fact, keeping your catalog away from online streaming services (Spotify and Apple) can lead to a spike in CD sales. This is what happened to singer Adele in 2015 with her album “25.” As a result, the album sold 3.38 million copies within its first week, making it the fastest-selling album in history.
Moreover, the advantages of Online Streaming services for the listeners are their prices. Whereas in the ’90s-2000s CDs were priced between 10.00 and 20.00 USD, nowadays, this is the monthly price for unlimited music.
On the other hand, an advantage for music artists is that it gives them the freedom to modify their music as they please. Thus, this is what Kanye West did on his album “The Life of Pablo” (2016). Often, he modified verses or added features to songs.
Like with any other product, music has also been evolving, changing consumer behavior, which has led to changes in the music industry and the artists themselves. Finally, musicians no longer need to venture on a marketing-promo tour or depend on big record labels.
Indeed, technology has given artists the tools necessary to adapt, survive, and thrive in this constantly changing environment.
Admittedly, every often sells spike in Vinyl, cassettes, and CDs. A certain aspect of nostalgia hits the audience every once in a while, which makes them buy physical copies. There is nothing more pleasing than reading the CD’s notebook containing information such as the writers, producers, and much more!
