Interesting take featuring Jimmy Iovine, who knows a thing or two about music & money.
https://joelgouveia.substack.com/p/the-death-of-spotify-why-streaming
The Death of Spotify: Why Streaming is Minutes Away From Being Obsolete
by 20 Comments
Comments
Leave a Reply
You must be logged in to post a comment.
I remember someone writing in either Q or Word some years back that an artist only needs 1000 dedicated fans to buy merch, tickets and CDs direct for them to do ok, more needed for a band presumably.
Was that a Hepworth theory?
Probably. Of course, that was when more people bought CDs so tickets, t shirts and other merch are probably more important than CDs now.
No.
https://kk.org/thetechnium/1000-true-fans/
I read this article some time ago last month, and not being very good at economics, couldn’t quite work out what the point was. so I didn’t post it here. Looking at it again, it seems to be that
*music streaming is a utility – no platform has an advantage over another
*there is flat income from users with accounts and advertising, but the more that a track is streamed, the more money is paid out
*most of that money goes to the top 1% of artistes, so most get next to nothing
*there’s no relationship between band/artiste and fan, so no sense of musical community.
I don’t like Spotify, and I do like Bandcamp, so I don’t see a problem with the former’s demise. There’s probably too much music in the world for it not to feel overwhelming. So it’s better to cherish those bits I do like, and support the living artistes out there who make it happen.
Bandcamp has the ability to create and sustain a musical community around artists, if they use it to it’s potential.
Correct that none of the streaming services do. Even the more ethical ones are about the service itself more than the artists.
As long as the vast majority of people want to listen with one voice command to virtually every piece of music ever recorded for around a tenner a month (ie virtually free) then streaming companies will survive. They no doubt will have to adapt and no doubt at least one of the current providers will wither and die but the main premise of this article is simply wishful thinking.
The likes of Bandcamp are for music aficionados, like what live here, and the vast majority has no idea they exist and if they did – “I’m going to spend a hundred quid a year so some guy can record an album in his bedroom, go on tour, play before fifty people then sell me an overpriced commerative t-shirt? Nah, pass ”
In case you are wondering I “donate” between £50 and a £100 each year to an artist (name witheld in case the rest of his 23 fans run off screaming “If Lodestone likes him…”) who uses Bandcamp but then I would, wouldn’t I?”
That high margin fan club model only works for some artists and some fans.
Most users will still want to not pay for their casual interest in music and bands without a strong committed fan base need exposure.
Then there are all the esoteric say fans of 60s Congolese rumba. what happens there?
You’ll need to ask @Kaisfatdad!
Ha, the guy was walking on the street I used to live on when listening to the podcast.
I am sure music streaming will not die, but eventually some of the players will disappear. Spotify is no. 1 so most likely to survive in some form I would think, and that will likely result in less money for the artists.
I buy an awful lot of CDs. Far too many probably. It’s a rare day when something or other isn’t delivered through my postbox. I buy new and secondhand from a variety of sellers including Bandcamp. I also stream. We’ve had this discussion numerous times before. It boils down to this. As long as there is a profit to be made for someone in streaming music, much the same as any other human activity it will continue. If all streaming were to end tomorrow the day after tomorrow pirating would increase. People can carp all they like about it but it isn’t stopping anytime soon. I could bang on about AI stealing visual artist’s work, visual artist’s lives but what’s the point? It’s not going to change anything. Profit hungry capitalist dickwads don’t give a toss and neither do the vast bulk of everybody else including some musicians who are already utilising AI generated artwork on their products. At least I still buy physical music and books and try to support other artists so just suck it up and quit carping on endlessly about it. Life isn’t fair. My solution is to become a not for profit artist. By removing the monetary aspect I’ve stopped worrying about it, the pressure has gone and I can just concentrate on my work. The work is what matters. Rant over.
Streaming music=tapwater…
Greater crossover between posts than intended? A dirty business, right enough.
“Money doesn’t talk it swears.”
“And your music doesn’t speak, it swears”
I hardly ever buy physical music product these days, preferring to use my limited spending money on going to live gigs. I subscribe and stream music from Qobuz, I listen to One Jazz Player online now and then and have an annual digital subscription with Jazz In Britain on Bandcamp.
Eight gigs this month. Nine in February.
It’s an interesting article, but I don’t agree with some of it. I’m not sure that streaming is on the way out, as it is such a convenient way to listen to music, and convenience is such a big driver of customer value. The easiest way to listen to Subterranean Homesick Blues at the moment is say to a speaker in your kitchen “Play me Subterranean Homesick Blues”, and that involves streaming. I’ve no idea what comes after streaming, but it will have to be as, if not more convenient.
I also don’t agree that Spotify, Tidal, Apple Music etc all offer the same product. Spotify’s value proposition is based on convenience and personalization as well as the music. This makes switching costs to be a bit higher than might be expected. Or in other words, if you (or just as importantly, your teenage kids) have years of playlists on Spotify, then it might take more than a Tidal promotion to make you switch.
Finally, I really don’t understand this “Pro-Rata Scam”. If you pay the subscription and then play your cool indie music less than your teenage daughter who has Taylor Swift on repeat, then I don’t understand why it’s a scam that Taylor gets more. Am I missing something?
He talks about music being reduced to the status of a utility and that that’s a terrible thing.
I would contend that it’s more a terrible thing for the industry than for either artists or consumers and that the industry deserves to feel some pain for milking music so egregiously.
People are not going to stop making and hearing music just because Spotify, Apple, Amazon, Tidal, Universal, Sony and Warners catch a cold over streaming revenue.
We may revert to how it was before there was a music industry. Before music expanded to saturation point.
i.e. some talented people able to make/scratch a living out of playing music to other people and others, just as talented, making it for themselves and each other because they just want to.
It may be that the vast increase in music made as a profession, that 20th century audio technology brought us, has just been a bubble that was bound to burst eventually.
But people are going to still have ears and will appreciate a tune, want to dance or just wallow in pleasing sounds, so all is not lost.
The contention that music labels once controlled the entire means of consumption is basically bollocks. I bought my CDs / vinyl from HMV, Our Price, Virgin, Tower, independents like Spillers in Cardiff, Sainsburys and sometimes when abroad FYE and Sam Goody. But never direct from Sony, or Universal. Of course, Virgin had a record label and a roster of artists but don’t get a mention because they didn’t [checks notes] make Walkman’s.
And physical consumption wasn’t the only form of accessing music. The major labels didn’t control consumption via TV or radio either but they still got paid for what was consumed there – until they shat the bed and gave it to MTV for free.
Dave Hepworth has previously made the point that the record retailers never invested any time or money in trying to engender customer loyalty, and so had no come back as first the supermarkets and then the streamers stole not just their lunch money but their entire monthly allowance. To some degree the streamers are in the same position. He does have a point re Spotify not having the cross subsidy / wider eco system that Apple, You Tube and Amazon operate within, but the situation is more nuanced than presented. Across of the streamers there are attempts to use podcasts, audio books, video content merch, ticket sales and artist exclusives to make them a destination brand, and Spotify seem to be further ahead and with the advantage of a much bigger user base than the others.
Meanwhile there’s the contention that “everybody in the music business hates Spotify except for the people who work there”. If that’s the case, why hasn’t “everyone” banded together and frozen them out? Spotify are dead and buried without their music rights. Why are labels giving them their tracks to stream? Could it be the $11bn Spotify paid to these haters in 2025? Do they hate You Tube more or less given they only came up with $8bn?
I agree with this. Spotify had a unique position in the beginning – the app was good and the service was the first that really worked. The social playlist sharing was a differentiator. None of these things are unique and Spotify only really has audiobook and podcast content to compete with the others. My sense is neither of these are compelling enough differentiators (even for me who listens to spoken word at least as much as music).
The changes to the music business are a mixed bag. The streaming model is not right and needs thinking through. Maybe the royalty should be linked more to downloads and favourites?
But it seems more straightforward to get music recorded and out there. Rather than having to book studio time, get records pressed and hopefully sell them, songs can be available for a much smaller outlay. Radio has been supplemented (replaced) by social media. Tik Tik seems to be a place lot of bands use to get the word out and there are a number of songs that really take off.
The articles main point for me is that Spotify is, ultimately, in trouble unless it can figure out how to make themselves more differentiated and vital. I’m not sure they have the right cards in there hand to achieve that.
I’d agree that the streaming model isn’t ideal. There seem to have been lots of debates about a better form of payment distribution, but little consensus on what’s better or viable.
Pro-rata payments don’t do independent labels and artists with a smaller fan base any favours (maybe that’s how Joel determines them a “scam”) but they are the preferred model for the platforms (because they are simple), as well as the major labels (because it seeds them more money) and the bigger artists (ditto). I think paying for active listens / engagement (i.e. where I’ve clearly selected it rather than passive playlist plays) seems fairer and would align with your suggestion of downloads triggering payment, although how that would work with Spotify’s free / no downloads tier I’m unsure.
As with video streaming I think the music market will at some point see consolidation as there are too many players fighting for content and subscribers (it’s already happening with Paramount / Warner Bros & Discovery) . In such situations those with the deepest pockets and most substantial offering at the best price typically survive unless there a truly disruptive new offering. Spotify don’t have the deep pockets of some of the others but there are players like Tidal and Deezer that look more vulnerable.
Worth noting that if Jimmy and Joel are right, you’d expect to see Apple and Amazon undercutting Spotify to get the most from their financial advantage. But Amazon recently bumped their rates to £12 a month, making them £1 a month more than Apple, Tidal and Deezer and the same as Qobuz and Spotify (there are some differences in stream quality at play here too).