In a nutshell music subscription services are services that allow you to obtain music through an opted-in paid or free exchange. Netflix for the music world, cable TV with songs instead of channels, or simply pay a monthly fee (with exception of free services) and get access to whatever music we have in our extensive library. It appears that the subscription model is growing to be the main operating distribution model for the music industry. Now depending on who you are, artist, fan, or record label; a music subscription model means something different to you. Let’s begin with the different players, followed by a break down of how it affects its users.
Right now there are a few players in the music subscription game, but the list continues to grow. They are:
- icloud w/ itunes match
- Google Music (Beta)
- Amazon Cloud Drive
These companies all offer different variations of a music subscription service. That’s the thing about music subscription right now, no one service can be generally accepted as “the best”, at least not yet. It also all depends on the the user. With that being said, let’s get into how the music subscription model affect its users, beginning with the fan.
Generally speaking, we are all fans, artists included. Now for fans, a music subscription model is great. Especially in this time, since many of the services are offering free “invites” to entice users. As a fan, it was not long ago that we were paying upwards to $15 per CD. God forbid two or more of your favorite artists released albums on the same day. Now with subscription services, you simply pay a monthly fee and all the music you can handle is at the click of a button. Keep in mind not all services have the same amount of songs, so do your research before signing up. But for the most part, we’re talking in the millions when it comes to songs per service. Spotify is leading the way with over 15 million songs and counting. Let’s move on to record labels
When it comes to major record labels vs independent record labels, of course the majors got the better share of the deal. It makes sense since they do have the larger artists, but when you consider the advance money the majors got from some of these subscription services…..WOW. We’re talking hundreds of millions to each of “the big four” (Universal, Sony, EMI, and Warner). It’s hard to know ow much of that money trickles down to their artists. Independent record labels, on the other hand, did not receive any advance money from the subscription services. Indie labels have more control over how they operate, so it comes down to the individual record labels to decide on what will work best for them. Due to the smaller revenue scale of the subscription model, especially without advances, some indie labels have removed their artists from subscription services all together. This leads to the artists.
Now when only considering reach, subscription models work well for artists, giving them a major outlet for their songs to be heard. But when it comes to revenue, that scale is very low. After one million plays of Lady Gaga’s “Poker Face”, the payout from Spotify was only $167, and this is pop superstar Lady Gaga we’re talking about. So it seems that artists get the shortest end of the stick when it comes to subscription models. One can say, well at least they’re getting paid something as opposed to illegal downloads, but consider the service that Apple’s itunes Match is offering. It will take all of your music from your library (even if its downloaded illegally) and place it into itunes for a mere $25 bucks a month. One has to wonder how artists will make a living in this new music industry.
So there you have it. Depending on who you are and your use of the new music subscription model, you’re either happy and excited or definitely not having your best day ever. As new companies form and new offerings began to sprout up, check back for updates.