The following MBW op/ed comes from Kim Bayley, CEO of The Entertainment Retailers Association (ERA), a trade body in the United Kingdom that represents the interests of both digital and physical retailers and streaming services.
It’s a truism that revolutions happen both more slowly and more quickly than anyone ever expects.
At the point when a revolutionary new technology comes along, the pioneers who can see the future are understandably impatient for that future to arrive. Time seems to drag as they wait for what they see as inevitable to come to pass.
And then one day we all turn around and step back and the extent of the revolution hits us like a brick wall.
That’s how I felt when I was reading the proofs of the latest edition of the ERA Yearbook which is published tomorrow (March 1).
We all knew that streaming’s impact would be revolutionary. We could all guess it would change things. But none of us could have expected this.
Last year UK music fans listened to over 159bn streams. That’s nearly five days of listening for every man, woman or child in the country. And streaming services delivered a miracle few would have thought possible only a few years ago.
- All the music in the world – tens on millions of tracks – available in the palm of your hand whenever and wherever you want it 24/7;
- A huge democratization of music and great flowering of creativity with 60,000 new tracks a day being uploaded to streaming platforms;
- The music industry returned to growth – eight years of successive growth;
- And all of this funded primarily by the sweat of entrepreneurs and the investment of tech shareholders.
Honestly, what’s not to like about it? A music industry which was dead on its feet due to piracy and genuinely struggling with what to do about it has been rescued and returned to health.
Unfortunately, in the classic phrase, no good turn goes unpunished in the music business, and for the past year the debate has been raging about the “unfairness” of streaming.
Naturally, streaming, like just about anything you could care to mention, can be improved.
Importing distribution practices from the physical transactional world into a consumption- based digital world like streaming clearly creates challenges.
Some artists and songwriters may have been disadvantaged, but many streaming services also earn a lower margin than physical retailers despite the pro-active role they play in not just satisfying demand but creating it.
It is therefore right that we should review how the music streaming model functions. It is a matter of public record that that streaming has improved the profitability of record companies, but it has yet to generate the same magic for many of the digital services who actually created the streaming revolution.
Streaming has delivered billions in IPOs for shareholders of music companies and it has delivered hundreds of millions of pounds to artists like Bruce Springsteen and Bob Dylan and others who have seen the value of their music explode. It has also ensured that more artists can earn money from their recordings than ever before and it has delivered incredible benefits to music fans.
But the revolution is far from complete. The next challenge is not technological. It’s about fairness and sustainability. Music has never and will never be completely egalitarian. Some songs are better than others. Not all musicians will command a mass audience – even if streaming allows them to reach it.
It is not sufficient, however, simply to dismiss out of hand artist, songwriter and streaming service concerns. There is nothing God-given about the division of income between the recording and the song or how that money flows through the value chain. However comforting it may be to stick with the status quo, it is not beyond improvement.
We need to be bold. There are still significant flaws in the data supplied to streaming services. We need to address them. We need more transparency so we can go beyond asserting streaming is fair to demonstrate it. And we need to move on from saying we are “open-minded” about user centric licensing to actually doing the homework on what its impact would be.
Streaming services have done and continue to do a magnificent job in growing the music market. Let’s now ensure that the fruits of their innovation and investment are applied in a way which best ensures the long-term success of the entire music ecosystem. Music Business Worldwide