There are many opinions about music streaming services. For some they are the easiest way to access music, but some musicians claim that they are hurting their bottom line and want to go back to CDs and digital purchasing.Regardless of where you fall in the spectrum of opinions about music streaming services, you don’t have to look far back into the history of the recording industry to see that music streaming services were not just another business, but were the most logical step in a progression of events that began long before Spotify. Eventually someone was going to create it, and music lovers would adopt it. Spotify and the popularity of music streaming was not just a single event, the advent of the streaming wars goes back long before any streaming service had been created.
In the early 2000’s a piece of software took the world by storm. It was technologically genius, as is evidenced by its popularity. Peer-to-peer file sharing, made popular by Napster, changed the music industry in a very short amount of time. In the matter of a few months the world went from purchasing CDs and recording cassette tapes off of the radio, to sharing files amongst themselves. And at the same time, the record labels and Recording Industry Association of America (RIAA) went from having near complete control over the creation and distribution of worldwide music to being left in the dust by the Internet’s ability to distribute faster, and without regulation.
Was Napster illegal? Of course it was. Was it unethical for people to share music on the Internet? Sure. Was it inevitable that someone would come up with it, and that it would be so popular that the record labels couldn’t shut it down? Definitely.
Innovation finds a way, it always has, it always will.
To understand why music streaming was inevitable, and why Napster began at all, we need to take a trip further back into music history to see why people felt the need to create such a service, and how the recording industry has always dealt with technological innovation.
At the time Napster hit the web, CDs were priced anywhere from $10-20. That was roughly $1 per track. The labels and artists felt that this was a fair price, but if you look at it, it wasn’t a great price model for the amount of music that people were starting to consume. In other words, the price was great for the labels and artists, but not great for consumers.
If you were to buy 1 CD every month of the year, so that you weren’t listening to the same 5 CDs for the rest of your life, and you spent an average of $15 on a CD, then you were spending $180 a year for the privilege of listening to those songs.
But who wants to limit themselves to 1 CD a month? We routinely listen to much more music than that, and this model inhibits the consumer, as there are only limited funds to spend on music, and there were only so many songs on the radio to be able to sample said music.
When I started studying music, I was listening to anywhere from 1-5 hours of music a day. That’s up to 4 or 5 CDs a day. I listened to many of the same CDs as I was studying those songs, but I wanted to listen to much more music than I had funds available to buy, and I’m sure that I was not alone in that sentiment, otherwise Napster would not have taken off like it did.
Music Lovers Love to Share Music
For this reason many people, even before Napster were sharing music. Anyone who was around during that time knows that it was not uncommon to rip CDs onto the computer and make “mixtapes” of songs to give to people, it was so common that no one thought anything of it.
Keep in mind that copyright law, when it comes to recorded music states that when you purchase a CD you do not own that music, you simply own the CD. The music belongs to the copyright owner, and you are not legally allowed to use that music for anything other than personal listening. If you happen to put that CD on your computer and use that music to create a mixtape for a friend, or love interest, that’s copyright infringement. You don’t own the music, you just own the physical copy. So the recording industry had a pretty good system worked out, where they controlled the distribution, recording, pricing, and if anyone tried to share this music without purchasing a second disc was breaking the law.
But people did it anyway, not because they wanted to steal from the artists, or from the labels, but because people genuinely want to share music. When we listen to something that we love, or watch a movie that we liked, or went to a concert, if it’s something that we enjoyed we want to share that with others. We want other people to know what we like. We share music not because we don’t want artists to make a living, but because we want that artists music to spread. This word of mouth marketing would be encouraged in most of industries, but in music it was stifled. There were many cases of people sharing music on file sharing services that got sued by the record labels, one of which was a 12 year old girl.
The labels and RIAA used litigation to discourage people from using file sharing services. They wanted to seal in people’s minds that file sharing was stealing. I believe what they actually did was demonized themselves and firmly planted in consumers minds that file sharing was free, and there was no way that they could sue everyone who shared files.
Napster and the Content-on-Demand Model
The move away from CDs was as much a statement that they were too expensive as it was a statement that people no longer wanted to be bullied into buying something that they felt was overpriced. The popularity of file sharing was like a global boycott of record labels, and instead of recognizing this and innovating to please consumers, labels hunted down and sued anyone who crossed them.
But it had already begun; the beginning of the end for recorded music as we know it. The ability to listen to music whenever and however one wanted was practically here. For many people it was no different than making mixtapes for friends. It was just “sharing” for many people.
Napster got shut down, and the services that followed also got shut down, but there was the germ of an idea that began there, that the record labels couldn’t kill. People had gotten a taste for media on demand. The only thing that needed to happen was to take the success of Napster and find a price point that people would be willing to pay for music on demand.
The labels tried to kill the idea, but they couldn’t do it, it was too popular, it was too good. It was exactly what consumers wanted.
I don’t believe that many people out there wanted to steal, or to hurt musicians. After all, the fact that fans wanted to listen to their music was a testament to how much they liked that music. But I do believe that Napster showed the world that there was something better for consumers, an ability to listen to any kind of music at any time, and not have to worry about spending potentially thousands of dollars to be able to listen to it.
Netflix understood the demand for content-on-demand, and answered the call. Then Spotify came, it knew that Napster started something that would continue to grow. The content-on-demand strategy is now taking over the world with Apple, Google, Amazon, and many many others following suit. The industry is turning away from the model of music as a product, and has begun the natural progression toward music as a service.
This progression was inevitable, the demand for content was and continues to be too great, and the innate desire for people to share good content is more powerful than any oligarchy that controls prices for their benefit.
While many artists still complain that revenue from streamed music is too small to replace what they made from selling CDs, there is an undeniable fact that streaming music is better for consumers. Artists and labels need to see it for what is it; an opportunity to delight customers and not a barrier to their success, and recognize that recorded music is becoming less and less a product to be sold, but a service or tool to be used to create fans of their work.
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