Streaming is music to the ears of many fans, but not artists

IT'S HARD to deny that advances in technology continue to revolutionise the music industry.

The impact on music distribution channels has been similarly dramatic. It was not too long ago when the digital distribution of music began putting a dent in CD sales.

However, earlier this year iTunes reported a 5.7% reduction in music download sales for 2013, indicating that customers are increasingly accessing music via streaming. YouTube is the world's largest streaming platform and other commercial streaming services such as Pandora and Spotify are gaining momentum.

Streaming offers a lot of advantages for consumers. You can 'try before you buy' and most music is available from its release date. Basic services let you listen to music for free.

A subscription service at $10 - $15 per month allows access to millions of songs any time at a fraction of the price of your CD or vinyl collection. With either model you can discover new music quite easily or track down that old song you haven't heard in ages because it's now out of print or the radio won't play it. So with a good internet connection and the right device, it's a perfect world.

How does this fair for the artist? The typical commercial streaming service pays on average, $0.005 royalty per stream, so the model has been criticised for reducing an artist's earning capacity.

However, streaming services have reduced the barriers to market entry, particularly for independent artists. Aggregating services like CD Baby can have your catalogue placed on a popular streaming service at little or no cost and there is some flexibility in how the services are used.

The playlist style of Spotify can allow your music to be marketed alongside leading artists. Pandora's Music Genome Project recommends your music alongside similar artists or by genre making it more easily discovered.

The real hope for artists is the changing mindset of the consumer. It's no longer important to have tens of thousands of songs physically stored somewhere.

Illegal copying and sharing of music is becoming less important than having mobility and flexibility. The top streaming services now boast 200 million users worldwide and growing. As more consumers take up subscriptions, streaming services will realise profits and royalty payouts may increase.

For now, this distribution channel is one way to help cut through the noise of the internet.

* OWEN HOGAN is a PhD candidate - Policy Implementation - at the Southern Cross Business School, Southern Cross University.

Topics:  music

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