Music’s Future is Here: It’s Called Streaming (Part 1)
9 min read

Music’s Future is Here: It’s Called Streaming (Part 1)

Hello, happy to be back after a couple of weeks off. To preemptively kick off the summer, I put together a reader survey to collect your thoughts on the newsletter and potential changes I might wanna make. Check out the survey right here, and if you’d prefer to just hit me up directly, my email is Now, let’s get to the first of two newsletters to better contextualize this era where streaming dominates record industry revenue.

In March, the Record Industry Association of America (RIAA) released its annual report on the United States' record industry revenue. The trade organization representing the major labels knew the narrative it wanted to weave with its 2021 data. A headline number of $15 billion in annual revenue was touted to show that the industry surpassed its previous 1999 peak. This figure doesn’t account for inflation, which would undercut that number by over a third, but either way industry growth continues nonetheless. Jim Rogers, in his 2013 book The Death & Life of the Music Industry in the Digital Age, argued against the narrative of industry decline often credited to piracy by pointing out that publishing and live music revenues continue to rise even during the industry’s post-Millenium slump. He argued that focusing on recorded music both obscured what parts of the industry that did find success and smoothed out a path, and narrative, towards greater industry consolidation, as people perceived the business to be on the verge of complete collapse. The RIAA's eye-catching contemporary figures are doing the opposite work of trying to further inflate the sense of industry rebirth, as investors, at least until very recently, were desperately searching for new ventures to park cash.

Now back to the RIAA’s headline figure, 83% of the revenue is derived from an increasingly diversified bucket known as “streaming”, while physical sales accounted for 11%, followed by digital downloads at 4%, and synch licensing deals holding the rear at 2%. That 80%+ figure includes revenue from paid subscriptions like Apple Music and Spotify, YouTube advertising dollars, and also income from deals signed with social media companies like Facebook and TikTok and other tech firms like Peloton or Roblox. The rise of the former category is why I covered the opaque terms of those deals in May since they’re clearly emerging to be a relevant new revenue stream. Those companies are helping to offset the slowing growth of the traditional streaming business. Stunted growth is being manifested in increased attention on those lucrative social media deals, industry bullishness on NFTs, and a rising chorus demanding higher streaming subscription costs. All of these factors continue to play out, but for the average music consumer, streaming with each passing year blurs out the pre-digital era before nearly all commercially-recorded music was easily accessible via a handful of apps.

The ubiquity of streaming and its arrival alongside the smartphone flatten away much of the friction of music consumption, and from a consumer standpoint, there would need to be a major technological shift to upend this current paradigm. And even if the next shift appeared fully formed tomorrow, the revenue from streaming is situated within recorded music’s economy at a much firmer level than the physical mediums of the past. Comparison between the revenue generated by retail sales is so different from smartphone-based subscriptions or advertising that they’re almost not worth comparing as the RIAA did above. However, I do think that before jumping to the present, it’s worth going back to the 1970s.

The RIAA’s industry revenue chart, when adjusted for inflation, produces an interesting statistic contrasted with 2021’s “record” year. Recorded music revenue for 1978 hit just over $17 billion, which wouldn’t be matched again until 1992 and could potentially be toppled in 2022. The majority of that revenue could be attributed to a single format: Vinyl. Outlining the history of Warner Music Group, I stressed industry excess and desire to seek out new formats like cassettes and eventually the CD to offset the late 70s stagnating vinyl sales. Still, a collapsed vinyl market could pull in a couple billion in 1987, prior to the industry completely abandoning it for newer, more expensive, technologies. Decades-old by that point, vinyl records helped create the modern music industry, so its elimination, though rightfully bemoaned at the time for cheapening sound quality and a clear money grab, isn't hard to understand. Yet, it’s important to appreciate the long life of vinyl, and its persistence even in 2022, when looking at the shorter shelf lives of newer formats.

Newer formats emerged after the 1970s economic downturn and thus lacked the baby boomer, post-war prosperity that could spur the creation of a new consumer class for recorded music. From 1981 to 1999, the cassette brought in at least a billion dollars of revenue to recorded music with a peak of $3.5 billion in 1990. The CD from 1990 to 2010 saw a similar trajectory by generating at least $3.4 billion with a peak of $13.2 billion in 2000. Both were much shorter lifespans than the record before it, but would still stand out compared to the comparative blips of the early days of digital music revenue. The formats that arrived just before and after the global financial crisis saw much shorter shelf lives. Ringtones from 2005 to 2010 brought in over $400 million of revenue, but would never see those same numbers reach the rest of the decade. Digital album and single sales from 2007 to 2017 hit over a billion dollars, nearly reaching $3 billion of revenue in 2012 but would completely fall off the map by the end of the 2010s.

Piracy is so often given to be the explanation for collapsing CD sales and why digital sales were never able to fully pick up the slack. Again as Roger’s book (The Death & Life of the Music Industry in the Digital Age) points out, this both ignores the relative stability of the publishing and live music sectors, along with over extending the peculiarities of the American music industry, where self-inflated CD sales fell off a cliff but held on for much longer in markets like Japan or Germany. The shift away from discrete sales begins to really complicate industry revenue across decades as it’s no longer sales, be it of a CD or pile of MP3s, but rather the subscription or advertising revenue based on what feels like an infinite catalog of music.

The romanticization of tech within music can obscure the fact that many trends do not move fast and that formats persist. Vinyl records, no longer a mass-market item, but instead a premium physical good for already famous musicians and certain niche communities managed to generate a billion dollars of revenue last year for the first time since the late 80s. The shift in the makeup of the audience is useful to appreciate how locked in the streaming paradigm could potentially be. Record labels no longer seek to convince someone to spend money on a record, the assumption is that you’re already paying for a streaming service or are listening to ads on a said streaming platform. The decline in Netflix users last quarter and bearish sentiment in tech could shake up this dynamic but even if that were the case millions of people, self-included, are now used to a fairly frictionless format of music consumption. This marks a time when the record industry's primary source of revenue isn’t reliant on a hit record or song in the way it's traditionally been understood. People just need to hold a desire to listen to any music, not be pushed to a store to get the new no. 1 record, as was the case throughout most of the 20th and even 21st century.

This new model for those at big record labels is clearly working as advertising-supported and paid music streaming surpassed a billion dollars of revenue in 2013 and totaled $10.5 billion in 2021. That bullishness around music prior to the recent economic struggles could be seen in Universal Music Group going public last year with a valuation of $53 billion. Another outgrowth of this clear success is the growing political fight over streaming, which I’ll get into in the next newsletter. But it’s not surprising that much criticism of the streaming model could be seen early in the pushback Taylor Swift gave to Spotify (2014), Thom Yorke from Radiohead (2013), or newsletter favorite Damon Krukowski back in 2012. These were all happening just before the shift occurred and now the last two years there’s now become a more coherent and louder pushback against streaming be with the ‘Justice at Spotify’ campaign, the #BrokenRecord campaign, and even the interest in music NFTs can be seen as new nodes processing this new regime.

That there is a more coherent desire for a shift doesn’t mean streaming will be going away anytime soon. In fact, lumping together the money from TikTok, Facebook, and Peloton into the same revenue bucket speaks to the robust flexibility of this newer format. A revenue stream that can both serve consumers with easy to access music but also provide to large tech firms as a way to avoid constant litigation over the usage of copyrighted materials is a much, much stronger economic force than digital downloads. Next issue I’ll dive more into what it means if the economic, or cultural, peak of streaming isn’t to arrive anytime soon, and how different parts of the industry are adapting.

Unheard Labor

Workers at Moog Music, the decades-old synthesizer company, announced a union drive with the International Brotherhood of Electrical Workers (IBEW) down in Asheville, North Carolina. Massive respect to these workers for taking up this campaign and wishing them the best in their fight for recognition and a strong contract. Hollywood music supervisors are also looking to join the International Alliance of Theatrical Stage Employees (IATSE) and right now being denied voluntary recognition by the Alliance of Motion Picture & Television Producers (AMPTP). Over in the UK, Annabella Coldrick wrote an op-ed in Music Business Worldwide highlighting a set of reforms to help shed light on the often confusing process of payments for songwriters. Check out the full report on songwriter song data right here.

Experiments continue to roll out for musician-first universal basic income programs. San Francisco last year launched an eighteen-month pilot program where they provided $1,000 to working musicians in the city. The Rising Artist Foundation is a new non-profit that seeks to provide varying levels of financial support to musicians, to offset traditional employment so they can focus on their craft. The Musicians’ Union, over in the United Kingdom, put together a nice website hub for artists that want to learn more about UBI projects in the country and how they can get involved in projects over there.

A Note of Financialization

Hipgnosis and Blackstone joint venture made splashy headlines with their purchase of Justin Timberlake’s catalog for reportedly over $100,000,000. A week later, Primary Wave announced a “multi-million” purchase of Julian Casablancas’ publishing, master copyrights, and recordings. Matt Pincuss, a long-standing music industry player, the investment bank Liontree, JS Capital Management, and the Schusterman Family Investments raised $200 million to invest in technology, record labels/publishers, and web3 firms. Certainly a bit of good news for folks in the technology space, which is right now seeing headlines of layoffs, hiring freezes, and tumbling stock prices.

(Re)Politicizing Digital Well-Being: Beyond User Engagements - Microsoft Research

This paper interrogates the idea of  “time well spent” regarding social media platforms, and challenges readers not to immediately accept such framing handed down by firms such as Facebook. This logic put forth by social media companies creates a split between “good” and “harmful” without there being a clear sense of what people should be taking away from these platforms. The paper’s attempt to step back from this framing helped me see more clearly the role of potential non-digital solutions to what are primarily considered digital problems. Perhaps “time well spent” on apps should simply be increased limitations and restrictions, not misguided wellness rhetoric.

Streaming’s Surprise Growth in Sweden Suggests That, for Spotify, the Time for Price Rises is Now / Music Streaming Has a ‘Tsundoku’ Problem - Music Business Worldwide

A couple of stories with a similar theme: “Please for the love of God Spotify raise your prices.” I understand concerns about low streaming subscription prices but it’s perplexing the ire centers on Spotify rather than Apple, Amazon, or YouTube, which are all companies that could more easily subsidize such an increase. Still, the economic reality of high inflation only further complicates those in the industry who’d like to see this form of industry revenue tick upward at a faster clip.

Describing Major Music NFT Platforms as Music Products — Part 2: - Music Data Pro

A fascinating study into the economics of the 3LAU and Andressen Horowitz-backed crypto music start-up Royal. I remain skeptical about this project and I’m not alone there but this might be the most comprehensive deconstruction of this still-emerging model. The further financial interlocking of fandom isn’t the magic trick to empower artists and Royal, in particular, feels like a step backward, not forwards, towards that goal.

On Discord, Music Fans Become Artists’ Besties, Collaborators, and Even Unpaid Interns - Pitchfork

Cat Zhang bisects the line between fandom and labor within emergent Discord music communities. The differences between Discords servers centered around signed musicians with professional marketing teams versus fan-first spaces for collaborations shows there’s quite a bit more to explore in terms of understanding how one’s time and resources are being used. Reportedly professional community management is a growing field but even fan communities likely hold people who’ve developed their own knowledge and skill sets. There would seem to be quite a bit to explore on this topic, and I’m happy Zhang mentioned the work of the academic Nancy Baym, who has studied this space for years.

Music Licensing in Games: Trials, Tribulations, and What's Next - GameIndustry.Biz

A peak from behind enemy lines into how video game industry professionals perceive the music industry after decades of joint cooperation through licensing deals. The music business press often ogles at the money made by the video game industry, so perhaps it’s unsurprising that video game professionals are skeptical record business opaqueness as they attempt to squeeze more money out of their budgets.

The Future of Streaming Services May Be In The Past - The New Inquiry

Jaime Brooks looks back at 90s record clubs (“12 CDs for $1”) and sees a striking similarity with contemporary music streaming. The compelling comparison illuminates the malleability of record label business practices, in this case, a strategy that trades increased artist exposure by undercutting the amount of money they can make from their work. Brooks argues we could be on a path of higher-priced streaming platforms with increasingly bifurcated content offerings, which I could foresee and would affirm that streaming’s days are only beginning.