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Streaming services like Spotify and Apple Music saved the music industry. They tear it up too.
My colleague Ben Sisario says musicians complain about the streaming economy which can translate millions of clicks on their songs into pennies for them. Last week, a group of musicians demonstrated outside the Spotify offices for changes to the way they are paid for streaming.
Ben explained to me why streaming music has been a disappointment for many musicians. The challenges reflect a larger question: What happens when the promise of making music, writing, or building apps online doesn’t match reality?
Shira: How has streaming changed the music industry?
Ben: It was the salvation of the industry. Thanks in large part to Spotify and other subscriptions, streaming has provided the industry with something it had never had before: regular monthly income.
To put it simply, the big winners are the streaming services and the majors. The losers are the 99% of artists who do not have Beyoncé’s level of notoriety. And they’re angry that they don’t share the success of the music industry.
If more people are paying for music, why isn’t that money flowing?
There is a complicated and opaque formula that determines how the $ 10 monthly subscription for Spotify or Apple Music gets to artists. Once these services take their share, around $ 7 goes into a pot of money that is divided in a number of ways – for record labels, songwriters, music publishers, artists, and the like.
The more music people listen to, the less each song is worth as it cuts the cake into smaller and smaller slices. I’ve seen financials from some pretty popular indie musicians that suggest they make a pretty good living from streaming. But often, unless musicians have hit numbers, they don’t do much.
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Who is to blame for this?
Both streaming services and record companies bear the blame.
Spotify pays a large chunk of its sales to the record companies, and then it’s up to those record companies to distribute the money to the musicians. The music industry does not have a good track record of equitable compensation for artists.
But Spotify is also far from its stated mission of “giving a million creative artists the chance to make a living from their art”. It probably has around seven million artists on its platform, and Spotify figures show that just 13,000 of them made $ 50,000 or more in payments last year. How can this number reach the million?
Haven’t many musicians always felt exploited and underpaid?
Yes, but the streaming model has exacerbated the gap between superstars and everyone else. It is also a mistake to dismiss the complaints of the musicians. Economic inequalities have been around for a long time, but they still need to be corrected.
What is the solution ? Can streaming work for everyone?
There is talk of changing payment systems to a “user-centric model” that distributes payments based on what people listen to. If I only listen to Herbie Hancock on Spotify, my subscription fees don’t accrue to her until the service has taken its share. Proponents say this system would be fairer, especially for artists in niche genres. But there have been studies that say it’s not that simple. And I wonder if it’s not too late to change.
Do some companies do it differently?
There is a smaller music service, Bandcamp, that musicians tend to like. It allows artists to limit how often their music is streamed and takes a relatively low commission on sales of downloads of songs, t-shirts and stuff like that. This is proof that Spotify is not the only way to do it.
I’m also interested to see what Square could do with Tidal, the streaming service he bought last month. It won’t change the economic value of a streaming song, but Square is deeply embedded in things like merchandise sales. He could come up with new ways to help artists make more money or connect and market to fans.
Where Big Tech is challenged
In China, nascent tech companies are doing something that may seem impossible. They challenge the kings of technology.
The Wall Street Journal recently reported that a five-year-old Chinese e-commerce site, Pinduoduo, has become the country’s most widely used shopping website. More people made purchases last year from Pinduoduo – which is a combination of Costco, a video game, QVC, and Amazon – than buying from Alibaba, the Chinese version of Amazon.
By the way, do you want to feel small and insignificant? Chinese shoppers spend more than $ 2 trillion each year on online purchases – and that accounts for nearly half of all retail sales in the country. Americans spent about $ 800 billion on e-commerce in 2020, or about 14% of retail sales.
One of the big questions about tech is whether current US tech giants like Google, Facebook, and Amazon will remain powerful forever. In China, the answer may not be. (We will see.)
In recent years, ByteDance, the company that makes the Douyin app and its international version TikTok, has also challenged the almighty Tencent of China.
I don’t want to go too far. Alibaba and Tencent remain extremely powerful, and it’s hard to imagine that changing. ByteDance and Pinduoduo might struggle to stay popular and make money. It’s also unclear whether China has any glimpse into what might happen to tech powers elsewhere in the world. China is unusual.
But it’s intriguing to see tech superpowers facing newcomers with new ideas.
Online hate as a precursor to real-world violence: Anti-Asian hate speech has increased in marginal corners of the internet, my colleague Davey Alba reported. Researchers told Davey that an increase in online vitriol towards ethnic groups showed an increased risk of violence against them.
A new but potentially abusive way to get more people online: The rest of the world has written about loans for people who couldn’t otherwise afford smartphones, but they’ve got a problem. Pop-up messages take over the phone’s screen to trick people into making payments, and the phone can lock up if people run out of it too much.
TikTok is the opposite of reading books but … TikTok videos sell a lot of books. My colleague Elizabeth A. Harris has written on “BookTok,” or short videos of people recommending titles, recording time-lapse videos of themselves reading or crying after an emotionally overwhelming ending. “I wish I could send them all the chocolates!” An author told Elizabeth.
Kisses to that
Here is a cat following a viral video from another cat.
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