Free Streaming Under Fire

December 30, 2014 by

taylor-swift-money-makersPeople prefer to listen to songs for free. But now the music industry is rethinking its strategy of making popular music available for free via ad-supported online streaming services.

High-powered pop star Taylor Swift pulled her music from the Spotify platform in November. This could lead others to follow suit, as it appears that big-time recording artists increasingly believe that free streaming devalues their product. It also appears that record label execs agree, as they look to paid subscription streaming services to replace revenue lost to declining CD and download sales.

A recent Wall Street Journal article quoted an unnamed record-label exec who said, “In hindsight we made a mistake,” referring to the decision to universally license recordings for free, on-demand listening.

The Wall Street Journal also quoted Sony Music’s chief financial officer who asked, “…are the free, ad-supported services taking away from how quickly and to what extent we can grow those paid services?”

I believe the answer is yes. As long as labels allow their music to be streamed for free, a certain significant portion of the music-consuming public will not be motivated to pay for it. I am a proponent of paid subscription services, and I’m a Rhapsody subscriber. In the digital age, music piracy will always exist to some extent. However, the strategy to give music away, either as a promotional tool or because “they’re going to steal it anyway,” is proving to be a flawed model.

Perhaps digital jukebox platforms like TouchTunes and Rowe’s AMI music service could step into this arena as broader-based music discovery and artist promotion vehicles.

Categories: Blog, Jukebox
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