With all the recent negativity surrounding the world of free online music streaming services, there’s a growing belief that these services provide little to no monetary benefit to artists. However recent studies have suggested that free online streaming have a positive effect on the sale of music.
This news arrives after three recent different studies were compiled, with Pandora releasing a piece on the “Pandora Effect”, the Country Music Association who analysed YouTube and Spotify, and also a user-study from BitTorrent, the trio of findings revealing that streaming has actually improved the sale of music, not taking away from it, as the guys at Billboard highlight.
Keeping things simple, we’ll break-down the three studies.
Viewing the Pandora case first, the streaming company implemented a type of A/B testing which allowed only certain songs to be available in certain areas, allowing Pandora to track what songs people were hearing in target areas, and if there was any purchase effect after they had listened.
The results proved that listeners did in fact go on to buy the music they’d heard from the service, with an approximate increase of 2.31 percentage for new releases whilst catalogue songs saw an approximate 2.66 percentage increase.
The second analysis by CMA revealed that users of YouTube and Spotify are three times stronger at driving music sales than AM/FM radio, which saw 25 percent of the surveyed going on to purchase music after streaming compared to a mere 8 percent after hearing it on the radio.
It should be noted that there is a large difference between online streaming and listening to the radio, which despite being one of the most comment methods of discovering new music, often has far lower levels of engagement as opposed to streaming services when seeking new music. CMA’s senior market research director Karen Stump commented on this, “A lot of the streaming users are very heavy music enthusiasts, so they do want to have a collection of music and they are buying the music.”
The final and perhaps most interesting surveyed results show that notorious peer-to-peer file-sharing website BitTorrent saw that users are more likely purchase a music subscription and pay for digital music compared to the average internet user.
BitTorrent has certainly been a sneaky way for millions to download complete catalogues of artists, however the website has been utilised by the likes of Thom Yorke and more recently Diplo in a push to move away from the tarnished reputation it wields as an illegal piracy website.
Yes, these findings do suggest that free online streaming is monetarily beneficial to musicians, however many successful artists have very different opinions.
Take Taylor Swift who recently removed her entire catalogue from Spotify, spoke of her actions to the Wall Street Journal, “Music is art, and art is important and rare. Valuable things should be paid for.” Whilst other artists like Beck also hit-out, “If I tried to make my albums with that Spotify pays me, I wouldn’t make them. I couldn’t hire other musicians or someone to master it; I’d have to do everything myself.”
With streaming services rapidly growing in popularity, other free music services such as broadcast radio may be swallowed by online world. Only time will really tell if and just how monetarily beneficial online music streaming services will have on recording artists.