Streaming and New Releases

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Music streaming services have been heralded as the new delivery model for music and have seen exponential growth in subscriber numbers over the last 12 months. Recent figures released from ARIA for music sales in Australia, show the annual income generated from subscription services has grown by 111% with a value of just over $23 million in 2014. While this only accounts for around 7% of the current industry, streaming is set to become one of the dominant revenue streams for the industry over the next few years.

One of the major criticisms of music streaming is the royalties paid to artists are extremely low. This has led a number of artists to actively remove their catalogue from some of these services. Estimates from Spotify show that artists receive an average of $0.007US for each play. If we work with this assumption then one stream of a ten track album in Australia would generate a royalty of less than 9 cents. An album would then need to be streamed in full over 130 times for the artist to receive the same revenue as the sale of one album through iTunes.

Streaming services do not take advantage of album release cycles and this is where I feel they let artists down. Currently new releases are no different from back catalogue material. Streaming services need to monetize new releases in order to make the model sustainable for both artists and fans alike. This process will need to be a delicate balance in order to walk the line between convenience and discouraging piracy.

While there is no mechanism in music streaming to take advantage of this, most independent artists are now in control of their digital distribution and can directly take advantage of the new release cycle for their album. Artists have control over what they sell, where they sell it and when it will be available. For example, an album could initially be sold through iTunes with only a single available for streaming. As the cycle continues, the whole album could eventually be made available on streaming with a deluxe version then being sold through online stores.

There are many different approaches you could take here, but with a little forward planning, artists can take control of their release and can still maintain a new release cycle in the current market. Most fans will happily pay for a new release knowing they have exclusive access to the album ahead of streaming. This allows artists to maximise the potential of their release while maintaining a balanced approach, encouraging sales while steering clear of illegal downloads.

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