The Effect Of Streaming On The Music Industry

Over the last decade, streaming services quickly gained momentum and now represent an integral part of many people's lives. They became possible as another way to distribute music only after the Internet radically transformed the entire music industry. In public, music streaming services like to present themselves as the ultimate solution to the illegal file sharing problem that has long plunged the music industry into a financial crisis. However, many different actors of the music industry took a critical take on this altruistic claim and increasingly challenged the practices of streaming services. Their criticism highlights that streaming services might have a substantial impact on the entire music industry. Building on this notion, this thesis aims to decompose some of the effects that streaming services had on the music industry. Based on an extensive review of the literature and two interviews with radio broadcasters, the results indicate that streaming services have turned the entire music industry upside down. They should no longer be seen as mere platforms in the distribution of music but rather as producers of unique music experiences. Their curated playlists try to guide users through every aspect of life and thereby exercise significant control over their lifestyle and mood. Streaming services are also net positive for total rights holder revenue despite cannibalizing sales from physical and digital formats. So, streaming services help the music industry to grow. However, the current pay-per-stream royalty payout system of streaming services places smaller independent artists at a disadvantage and might wipe out financially artists from niche genres. To overcome this obstacle, many artists started to make their songs more streaming-friendly by shortening their songs and changing the structure of their compositions. As a result, consumers perceive new songs as increasingly similar and have difficulties keeping songs distinct and apart from one another. Streaming services have emerged as other large technology giants besides Amazon, Google, Facebook and Apple. Despite their dominance, streaming services' far reaching impacts on all involved stakeholders in the music industry are yet to be fully understood. Further research is needed to gain a more profound understanding of the effects of streaming services on the music industry.