A Sea Change in Music’s Value?

A couple of recent articles have left me wondering if music is losing its value almost completely as a commodity. The first is a new study by International Federation of the Phonographic Industry (IFPI), which found that ninety-five percent of music downloads are illegal, even though legal downloads are up and iTunes and its competitors dominate technology and media headlines. The demands of consumers are finally being met, with Apple announcing that they’re dropping Digital Rights Management from iTunes downloads, and Amazon competing heavily on price. However, if the study’s findings are to be believed, they’re pissing into an unstoppable wind of change.


Many people have come to expect music for free and are savvy enough to access it without paying, so the industry either has to embrace emerging technology or wither. One such development is Spotify, which allows users to stream whole albums legally for free in a program that strongly resembles iTunes. In addition to independents, the major labels have signed up, giving the service’s selection the potential for real depth, and unlike other streaming services, there is no buffering so tracks play the moment you click on them. It also features radio themed by decade and genre and the obligatory Web 2.0 community aspect with shared playlists. Revenue is generated through a monthly subscription of £10 or the occasional advert. As broadband bandwidth increases in the home and on mobile devices, Spotify or something like it could dominate the market and change the way we interact with music forever.

Spotify in Action

Spotify is a very exciting service and I do believe that the music industry has to evolve to survive (the established model has never been exactly fair to musicians anyway) but I can’t help but think of the long term implications of music losing commercial value in its own right – in a decade we’ve gone from paying £12 for a CD in HMV to listening to or viewing the occasional advert. Long term, if the labels have to make do with diminishing returns from hawking their catalogues to streaming services and generate revenue through advertising, we could be left with an ugly situation on several fronts. Advertising could dictate what they want heard next to their product placement, eventually leading to homogeneity of output on these services. If the music industry shifts from selling music as the end product, the concerns of advertisers may come to play an even larger role in who they sign and for how much money, leading to a potential lack of diversity and young, independent artists having to work even harder to be successful and build an audience. Musicians may focus more on feeding themselves than their art.

The independent labels have proved themselves to be adaptable in the past and I’m sure they will embrace emerging music distribution technology, but if the consensus of future generations is that music is essentially free, they may find it difficult to generate enough revenue and get themselves noticed amongst the din of major label marketing campaigns and the demands of advertisers – just look at the situation with commercial radio. Its output is usually determined by what producers think the majority of listeners want: there’s little room for surprise.

Personally, I can see myself using Spotify to sample albums, but I can’t imagine having a music collection that isn’t my own, which is defined as much by its boundaries and omissions as by what it contains. Also, as I’ve maintained before, spending your hard earned cash on a release is more likely to make you give it time to get under your skin. I could sit here and download a thousand albums for free, but they would probably just sit there gathering the hard drive equivalent of dust because I haven’t made that initial investment in it.

The death knell for personal music collections and music as a commodity in its own right is probably a little way off, but right now there’s a sea change in how we consume music.

Update 22/01/09: I’ve just read an interesting article on Guardian Technology today about the future of music listening and how over the next decade access rather than ownership will be prevalent when it comes to listening to music:

“Downloads are not going to go away, just like vinyl has not gone away […] but within the next 10 years, I suspect a significant percentage of music fans will listen by streaming stations, songs and playlists from the cloud.”

Worth a read.

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2 Responses to A Sea Change in Music’s Value?

  1. James says:

    Nice article Matthew! There is certainly sea change at hand, and right now no one knows where it’s going to lead and what the advantages or consequences will be. I work in the music industry and discuss such matters with people regularly, and whilst there are lots of ideas and suggestions out there (everyone has an idea/opinion), no one seems certain on what the future holds, or willing to take a chance – and that is both exciting and worrying.

    I think a large part of the problem is finding a ‘system’ that will suite all types of music consumers, something that will at the same time eliminate illegal downloading of music – or the need for it. As a rabid consumer of music (both recorded and live) what I want out of a service is very different to what someone who buys 2 or 3 albums a year wants – so the question is, how do you create something that appeals to all? Especially when there’s free and easy (be it illegal) alternative.

    Spotify is great start in that they’ve managed to get so many labels on board, and you can find at least some of most artist’s catalogues, but there’s still a lot of music that’s not on there, and that may put people off paying £10 per month. I currently have a free account and every time I go to listen to something from my music collection in iTunes I’m trying to use Spotify instead to see how my listening experience compares. Surprisingly I’m only hearing one short audio advert for every 2 albums worth of music – I can handle this.

    Ownership is not such an issue for me personally these days, as long as all the music I want is available on my computer (at home) and on my mobile (on the move) I don’t need to have a physical copy, be it on a CD shelf, or on my hard drive. I used http://www.mp3tunes.com for a while to listen to my music from the ‘cloud’ and it worked fairly well (like spotify) but it became a real hassle uploading the music I’d downloaded elsewhere to my account – and after I’d gotten 10+ GB behind with uploading I gave up and cancelled my account.

    Spotify is potentially the answer to one of the problems we have when it comes to how we’re going to consume our music in the future – but listening on a mobile device (be it an iPod or Mobile Phone) is becoming the norm for a lot of people – and Spotify will have to work incredibly well if it’s going to stream music en mass over a 3G (and sometimes 2G) connection in order to provide consumers with a seamless desktop to mobile listening experience.


  2. Pingback: Spotify - free ad-funded music « The Seldom Seen Kid

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