Editor’s Note: This is part two of this week’s series on the music industry. Don’t miss the first post, written by Matt Miller, here. Come back on Friday to read a dialogue between Miller and the author of today’s post, Stephen Carradini.
There are many questions surrounding the post-Napster music industry, but one has been answered definitively: control of the payment structure has shifted from gatekeepers in the music industry to consumers. With an almost infinite amount of music available for free at the touch of a keyboard, the consumer now decides when and how much to pay. Musicians can’t definitively state what their work is worth anymore; they can only hope to prop up the horrible business model of making optional payments as easy as possible for the consumer.
The music-purchasing process before file-sharing was standard capitalism. Music businessmen set prices for CDs to make a profit. Consumers did not have enough money to buy all the music that they wanted or the power to change prices, so they had to choose which albums to buy. Napster and its kind flipped the script: Consumers acquired what they wanted for free, and music businessmen had little power to change the price.
Cut forward ten years, and the aftereffects have been ugly. Pirate Bay is wreaking havoc on a second industry. Major labels have crashed. Bands give their music away in hopes of attracting people to shows. But the weirdest development, in my opinion, is streaming subscription services like Spotify, which legalize and encourage a mentality where money is decoupled from the experience of music.
When a consumer subscribes to Spotify, he or she pays to use the platform—not to buy music. Paying the artist for his or her work is secondary to keeping the platform alive. That’s the first problem. The second problem is that after discovering a great new band, the consumer does not actually buy anything. He or she simply streams the albums, for which bands get paid $0.0037 per stream, or maybe $0.006 per stream. If I listen to all five of the Sufjan Stevens albums I own on Spotify, Sufjan will make approximately $0.67 ($.006 per stream x 111 tracks). This comes into odds with the price Sufjan has set on his own music at Bandcamp.com: $8 for an album. To pay him via Spotify what he charges for a download of Age of Adz, I’d have to listen to the whole 11-track album a little more than 121 times (1334 streams).
This is where the consumer has to come to terms with a difficult question: Do other people’s opinions matter? Sufjan Stevens believes his albums are worth $8. If a consumer disregards this cost via streaming, piracy, or otherwise, the consumer is saying that Sufjan’s opinion of his own work does not matter, and that he is irrelevant to the pricing of his own work. The consumer indicates that his or her opinion on music is the only one worth considering, and no one (not even the artist) can say what music is worth. The consumer is saying to the artist, “I will pay you what you are worth, but I decide that. I am doing you a service by paying you—even if it’s not what you wanted to be paid.”
That, of course, sounds a little crazy.
Consider a restaurant where people decided what they were going to pay after they ate their food. If most people take four bites and leave without paying, the restaurant would almost certainly fail. If a consumer doesn’t like the prices in a restaurant, he doesn’t have to buy the spaghetti. But he still has to make a decision based on that price.
In the old economy, the consumers had a check on the power of the creator: if no one bought the product, the creator could mark down the price to try to entice consumers. But in this new economy, the creator has no check against consumer power: the artist can’t do anything to make people pay for music. Since consumers have driven the price down, artists who charge fair prices from the get-go can’t compete with those who put their music on Spotify or give it away for free. Technology may increase availability, but it can’t help us escape the fundamental fact that the consumer needs to pay somehow, or the artist won’t have money to keep making future product.
Those who do choose to pay artists they find on Spotify can do so by buying on iTunes ($6.30 of $10.00 goes to the artist), buying direct from the artist at Bandcamp, or paying fair price at a pay-what-you-want site ($.99 per track or $10 an album). Alternately, I enjoy contributing to crowdfunding sites like Kickstarter, which some bands use to fund their recordings.
Artists can pull their songs from Spotify, but that doesn’t change the root problem: consumers decide the value of music, to the exclusion of the artist’s opinion and sustainable business practices. If consumers keep pricing things to their convenience, I fear a future where the consumer prices artists out of a career in music entirely. The solution is easy: pay fair price for all the music you listen to, whether you streamed it originally or not.