Ten years ago the “Billboard Hot 100” began to include digital downloads in their chart rankings, yet this model for accessing music already appears to be on the way out, replaced by online streaming music streaming platforms such as Pandora and Spotify. Changing how we measure what is popular reflects the evolving nature of the music business, where creative destruction continually changes and shapes the industry; a fast-paced environment where new and popular innovations either keep music giants on their toes or cause them to disappear into history.
Some in the industry are nervous that consumers are not paying the full price that music is worth. Listeners can pay little money for the ability to access an almost unlimited amount of streaming music, and some artists fear they will be unable to maintain their previous earnings. Revenues from recorded music sales have fallen from $20 billion in 1999 to less than $6 billion today. Singer and songwriter Taylor Swift voiced these concerns last year in The Wall Street Journal. She wrote, “Music is art, and art is important and rare. Important, rare things are valuable. Valuable things should be paid for. It’s my opinion that music should not be free.”
People are still paying for recorded music but they purchase subscriptions to music-streaming services rather than individual songs or albums. Although listeners still access music through radio and digital sales, digital streaming music already represents 16 percent of listening hours, a significant increase from the last few years. Though these services may have undercut how much consumers are willing to spend on music (a figure that has dropped from $90 per year in the 1990s to $24 today), the demand for music is as high as ever. The average Spotify user listens to more than 1,300 tracks a month, and the average American listens to more than 4 hours of music a day.
However, the kind of damage that skeptics believe this could cause is unlikely. Consumers have shifted how they pay for music, spending far more on live concerts than previously with concert revenue for the most popular artists increasing 32 percent. Smaller, independent artists have benefitted most from this change, with a staggering 1,150 percent increase. While musicians are seeing a fall in revenue from recorded music, live music and concerts appear to be making up for this loss.
This trend has arguably shown that the music industry is becoming more of an even playing field, as independent artists have been able to achieve their own success without being signed up to record labels that notoriously offer costly deals. For instance, in 2013, the rapper Macklemore became the first unsigned artist in 20 years to achieve a number one single on the ‘“Billboard Hot 100”’, a feat he repeated again later that year. This shift is noteworthy since major labels take a large portion of artist income.
Changes in demand towards streaming music services and live entertainment suggest the possibility of a more competitive music industry, and we are therefore bound to see more musical variety and quality too, something consumers and musicians alike should welcome.