Will “Generalist” Competitors Crumble The Music Industry’s House Of Cards?
A response to “What is Music Streaming About If It Is Not About Music?” by Alaister Moughan
Generalist
[jen-er-uh-list]
noun
a person whose knowledge, aptitudes, and skills are applied to a field as a whole or to a variety of different fields (opposed to specialist)
Spotify was just chilling out with Pandora and then YouTube, Amazon and Apple crashed the party. so…
What implications does this have for the music industry?
Apple, Amazon and YouTube are playing a long-term game as they enter the music streaming market. They have the power and scale to compete but also change the basis of competition itself.
Why would these companies want to enter the market of music streaming anyway?
Alister Moughan has some very interesting insights as to why this might be the case.
“It may seem strange for companies like YouTube and Amazon to be entering the streaming industry, particularly given how notoriously unprofitable it is, but by offering it bundled with other services, profitability becomes less important than long-term customer loyalty.”
Fair enough. Just like artists and bands are striving for longevity in their fans, so too are the platforms that sell and advertise the music.
So what is the angle?
These generalist companies are entering this market for the DATA, “the hidden value of streaming.”
At this point it is about being exclusive, and what is offered in those exclusive subscription bundles.
“For Amazon, it’s bundling music services with the Amazon shopping Prime Service as well as video content. For YouTube Red it’s an ad free YouTube paired with GooglePlay and for Apple its bundling the service well, with Apple.”
“It appears that in the long term ‘pure’ music streaming services which compete on curation, artist involvement or functionality may only appeal to the hardcore ‘music first’ fans- the future’s vinyl revivalists (a grass-roots music first revival business in which Amazon ironically already dominates). This has major implications for the music business.”
As the generalist companies stick their foot in the music streaming door this will force the streaming market to mature. With that being said if the generalist companies dominant the market, like they most likely will, this will create implications for those that actually create the music.
Music by itself will lose its bargaining chip with music streaming services especially a generalist based streaming service, because the music is thought of as content and that is a much smaller part of a much larger package. This means artists have much less power to negotiate.
So what about the Money!?
This is what it always comes down to but specifically what about the money that goes to the artist and to the songwriters? a market founded on “Music becoming a stocking stuffer, rather than the main prize.” will ensure artists will not be rewarded reasonably for their creativity. there are already signs that the revenue received by artists is going down. Amazon and Spotify pay 70% of net revenues to the artist where the new youtube red is only paying content owners 55%. “a generalist dominated streaming market will further impede music creators from receiving reasonable or meaningful royalties.”
Just as Moughan ends his article, so will I in my response.
Since the dawn of streaming services the need for such direct conversation has been a polite nudge, perhaps now it’s time for someone to slam the fist on the table.
I guess we will have to see what will happen.
