Maybe music executives can finally stop singing the blues. Music piracy is on the decline, analysts say, while an industry group said digital music sales in 2012 drove global music industry revenues up for the first time since 1999.
It’s not a very big gain for the music industry — just 0.3 percent to $16.5 billion — but even that small uptick may be a sign that digital music has finally put the industry on the path to recovery. Digital music and services, the report said, grew 9 percent in the past year. That comprises digital downloads, as well as newer subscription services such as Spotify and ad-supported services including Pandora.
“No doubt, this is welcome news,” said Recording Industry Association of America spokesman Jonathan Lamy, who said over half of the industry’s revenues come from digital services now. “We are starting to turn the corner, and that’s great news for the business and fans.”Not only have free or low-priced streaming services given music lovers easy access to their favorite tunes, the NPD Groupfound in a separate study that broader access to music is also driving fewer people to download songs illegally. These services have gained some industry support because they allow consumers to get the music they want while still supporting artists, record labels and others in the industry.
In its annual music study, the analysis group found that consumers are sharing less illegal music across the board. Not only is the volume of illegally downloaded music files over file-sharing networks down 26 percent compared to the previous year, so is the number of people who burn and rip CDs, swap music files on hard drives and download music from digital lockers.
If Spotify and Pandora Are the Future, Do Artists Have One?
“Wait, 1.2 billion views and you’re paying me 0.6 cents a view?” / Photo by Getty Images
Streaming services’ growth stirs debate over slim royalties
The New York Times has seen the future of music, and it doesn’t look good for musicians.
As the Times reports, the comparatively teensy amount artists earn from streaming services has caused concern throughout the industry.
While the average musician might earn 7 to 10 cents on an iTunes download, artists receive a fraction of a fraction of a cent each time their songs are played on streaming services. That’s not terrible if you’re Psy, who a Google executive recently said had earned $8 million on the 1.2 billion views for “Gangnam Style,” a rate of roughly 0.6 cents per view. It’s less good if you’re Zoe Keating, a self-described “avant cello” musician who late last year revealed that despite getting more than 1.5 million plays on Pandora in a six-month span, she received less than $1,700. Spotify was a bit kinder: Her 131,000 plays last year yielded almost $550.
Artists might dream of penny royalties, but streaming service providers are swimming in big bucks. Pandora is publicly traded, with a share price that values it at nearly $2 billion. Spotify isn’t public, but its investors have reportedly pegged its value at $3 billion. To put that into perspective, the entire music industry saw revenues of roughly $7 billion in 2011, according to the Recording Industry Association of America.
Streaming service companies might be worth a lot on paper, but they’re not contributing much to the record business just yet. Pandora had $202 million in “content acquisition costs” in its last four reported quarters, and Spotify recently said it had made $500 million in royalty payments, the Times notes. That pales in comparison to music downloads’ $2.6 billion in 2011 sales.
Doodle Dandy 