Digital Transformation Killed the Rockstar…or did it?

Not all digital transformation is good. Or at the very least, that’s the case according to many musicians and their fans. In some ways I count myself amongst those fans but am also perfectly aware that this makes me “an old”. I’m going to wager that at least 90% on my music is pre-1991. I often still buy (used) CDs, even if I have the album on my Apple Music. I miss the days of records stores so much that I’ve spend that past 3+ years driving all over eastern Massachusetts checking out the few ones that remain and the even fewer number that have decently sized collections (shout-out to Newbury Comics in Norwood). I’m not totally alone in this musical luddite movement. Vinyl purchases have seen somewhat of a comeback. In Japan, a country where many hard rock acts still thrive, a whopping 70% of their music sales are in CD format. With that said, streaming is taking over and I need to come to terms with that.

Setting my own nostalgia aside, the effects of streaming on music have been profound. For band, the business model has flipped. In the past, a band would tour to support a new album. Now a days, they put out an album to support a tour. As streaming isn’t providing much in the way of revenue for the artists, they need to tour endlessly. While that maybe be the most visible negative effect streaming and the digital transformation of music, there are several other angles to consider.

Let’s start off with the issue of artist royalties before I inevitably go off topic. Artists (allegedly) being screwed out of what they would say is their fair share is nothing new to this industry. There is a long and well documented history of musicians complaining (rightfully and wrongfully) about bad contracts, often luring them in with advances. It could be described as predatory to take starving artists lacking in business acumen and trapping them in label-friendly contracts. But on the other hand, the artists can’t deflect from signing away the rights to their music or agreeing to recoupment on all costs.

The primary complaint these days is centered on revenue per stream. Artists are aggrieved that that Spotify only pays $0.003 to $0.0084 per stream with bigger artists typically getting a much better shake. Apple music recently boasted that they pay $0.01 per stream, no doubt hoping to sign artists to exclusive deals. So perhaps the free market is the solution to this issue.

 Either way, legislation has been championed to attempt to address some these grievances. Much was made a few years ago about the Music Modernization Act which took aim at digital copyright laws. More acts are possibly on the horizon that try to amend anti-trust laws so as to give artists a more level playing field in negotiation. I’m no expert in this and welcome the input of the law squad.

While the legal and economic ramifications of streaming are not my forte but the musical impact most certainly is. We’ve now arrived at the part of the blog where I inform you of some of the downstream (yes, I went there) effects of digitization (particularly the internet) on the music itself.

While we’re all familiar with the artists’ issues with streaming, the record companies took a bigger hit. The internet has given way to somewhat of a democratization of the business permanently dented the standing of the labels. While it’s easy to say power to the people, some would argue that this has hurt the music itself. For all their flaws, the labels served the gate keepers of what is good. A band needed a record deal to get any real distribution and thus only a few made it through.  Now, virtually anyone can get their music out there. While the upside of this is obvious, the downside is an intense oversaturation. Some people (namely in the rock fanbase) think there aren’t enough new bands coming out. The truth is that there are too many and most of them suck. Without the infrastructure of the old system, anyone put their music out their and thus standing out from the crowd has become much harder.

On the flipside, good music (this is of course subjective) has broken through when it might not have in before the internet. Artists with enough social media savvy can build up a good following and promote themselves on a massive scale. On top of that, there has always been a certain degree of oversaturation in the music industry. When record companies felt that they found a formula, they would overproduce and create a quick burn effect of certain genres (see the demise of my beloved 80’s glam metal).

The recurring theme of digitized music is recurring themes. There is little new if anything under the sun. People have always tried to steal music, be it through bootlegged tapes or LimeWire. Artists have always fought over royalties, be it with labels or streaming platforms. Music isn’t going anywhere. Nor is digitization. It’s simply a matter of adapting to it as best as possible.

12 comments

  1. Nice post! I’ve been thinking about music in the context of our class so was pleased to see you dig into this. I think a big transformation of the last 20 years–from the days of Napster and Limewire and other things I can’t remember–is that the path of least resistance seems to pay for music in some form (via spotify or applemusic or amazon music). Even if it’s just fractions of a penny per listen, it’s something that can make the way to the artist. I don’t hear about people trying to download music for free… is it worth the time and hassle to find a torrent and such?

    To me, where things like Spotify really have potential is through the machine learning/algorithms that drive you to new music that then might make you purchase outright the physical media–this happens to me often with vinyl purchases. In fact, many artists have Spotify exclusive variants that a listener might be alerted to because they’ve listened to that artist. That’s how I picked up this McCartney LP:
    https://www.discogs.com/release/12494647-Paul-McCartney-Egypt-Station

  2. I actually think you missed a step. The music industry was disrupted by file-sharing (e.g. Napster, iTunes), not by streaming. There’s actually some data that says that streaming is better for artists than the pure file-sharing market that preceded the current environment. The rest of your post holds up fine, but it just misappropriated the actual disruptor. Streaming is disrupting those folks, which turns out a bit better for the artists. Nevertheless, musicians need to make money off of live shows these days, not recordings.

    1. I was going to focus on Napster at first but just kind of skipped to the end. Wish I could take a Mulligan on that one.

  3. This was a really refreshing post. Like more things that have gone through a digital transformation they feel so natural and evaded in our culture that we tend to forget that it was not always like that. I think professor Kane brought a great point that the streaming era is a lot better for artists than the file-sharing era. I believe that these platforms need to help out new artists which will bring more artists to their platforms and improve the organic growth by getting people committed to their streaming platforms. If they get too greedy people will lose interest and will move to new plataforms.

  4. While I do think that digitization has profoundly changed the way we purchase and listen to music, I think overall it’s a good thing. I think it allows for easier access and also an increased experience as data is gathered and used the way Spotify uses it to suggest new songs. Growing up, I was in the same boat as you…I vividly remember saving up all my money to buy Backstreet Boys, N’Sync, and Good Charlotte CD’s which were my prized possessions. While that physical aspect of ownership is gone, I think a good question is how can we alter the current experience to include that sense of ownership in some way? Maybe it’s NFT’s? Personally, nothing digital like that has any value to me, but I’m sure something like that will work its way in somewhere soon. Thanks for sharing your perspective.

  5. This is an interesting blog. I have been thinking about how the music industry is changing over the years. I admit that I was among the group of kids that used LimeWire to download music for free; however, things have significantly changed over the years. I now use Spotify for my daily music and Podcasts, and I am happy to pay the monthly fee for the service. I also agree that with the availability of platforms, it is getting more difficult for artists to get a breakthrough; however, groups can gain followers worldwide with a significant social media presence. I am interested to see how the reopening of in-person concerts will affect the streaming platforms.

    1. I was also guilty of using LimeWire back in the day. You’re right to point out that some artist have utilized social media to become big with minimal overhead. As far as the reopening shows, I’ve been to one and I think they’re coming back with a vengeance. But they just create more exposure for streaming so I don’t see it as taking away from it.

  6. I remember when I was first introduced to Napster when I was in Middle School. I thought I was going to be arrested for even having it open on my computer haha. I moved to LimeWire, like Yana, and that was how I got my music for years. I was unaware and too young to consider it at the time, but I was part of the generation that was truly disrupting the industry. To the point where Metallica became famous for publicly confronting streaming services like Napster and even suing Napster in 2000. Today, we see artists like Taylor Swift refusing to stream their music on Spotify.

    I personally feel as though the music industry will always be disrupted and I’m curious what the next disruptor will be. Fingers crossed vinyl continues to make a comeback!

  7. I used LimeWire too. I bet there wasn’t many kids in our generation that didn’t so ya I agree with you Dylan that we were the disrupters and didn’t even know it. Now I agree with what Ravi mentioned earlier, that who is going to waste their time downloading a torrent when you’ve got services like Spotify and Pandora available to use instead. My itunes library died with my original Mac from my undergrad years. It’s streaming for me from this point on.

  8. I really like this topic and agree with the professor that there is probably more to the timeline that could be explored/added. Most notably for me is the revenue share you mentioned for artists on Spotify vs. apple music. Typically artists go cross-platform, but I wonder how negotiations can shift if they had exclusive deals like Jay-Z on Tidal. Furthermore, it would be really interesting to explore the two-sided markets that these platforms have via consumers and via the artists. The interaction there makes for very different use cases / user experiences.

    1. It should be interesting to see what big names end up forgoing the cross-platform distribution for exclusive deals. I predict that you’ll see it with a few huge names but not much else for a while. This will apply to both music and other content such as podcasts.

  9. It’s always been so surprising to me that the issue with royalties and streaming was not better handled in the first few years of mass music streaming… There are clearly a lot of different aspects to cause legal friction between labels, streaming platforms, distributors, musicians themselves, etc. Thanks for mentioning the the Music Modernization Act, because I think those regulations need a lot more focus and attention to help find closer to a “fair” system for musicians. Live shows will definitely need to serve as primary profit sources, but the streaming royalties absolutely requires a lot more legal intervention to ensure some level of fairness.

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