Music Streaming Business Isn’t Perfect, But It’s Better Than Piracy

It wasn’t about Napster. Otherwise when the music industry succeeded in shutting the service down, CD sales would have burgeoned and happiness would have reigned.

The customers just went elsewhere. An endless game of Whac-a-Mole ensued. Suddenly there was Kazaa. And eventually, BitTorrent and the Pirate Bay. Turns out consumers didn’t want Napster, they wanted free music.

But on Spotify and YouTube, music is not free. And this is a very good thing.

Spotify is the end of the line — the first time the music business has been ahead of the consumer. It’s a net made to catch those swimming toward the future. That’s how you play it in the Internet sphere. You get ahead of the consumer, you deliver what people can’t even conceive of, never mind don’t even know they want. And you do this by having a service that is so good, it solves all their problems.

Like Google.

Remember when search did not yield desired results? There was chaos in the sphere. Everybody used a different engine. The concept of a site where you got exactly what you wanted on the first hit, never mind the first page, was unfathomable. But over a few years, Google gained traction and has continued to be improved such that no other site can make headway.

The same thing will happen in music.

And if you require Spotify to pull back, consumers will just go elsewhere. They already went to YouTube as a result of the major labels’ refusal to license Spotify in a timely manner. Trying to turn Spotify into a cash cow prematurely will just force consumers to YouTube and P2P.

And it doesn’t matter if it’s Spotify or Apple/Beats or Deezer. One service will dominate, because that’s the history of the Internet: one Google, one Amazon. But if you get rid of Spotify’s free tier, you’ve got Rhapsody. And in more than a decade, Rhapsody has failed to penetrate public consciousness, let alone make significant money.

As for the winner of this derby making tons of money via sale or IPO, that’s the American way. No one is stopping you from making a hit record and establishing a career that rains down coin. You’ve just got to be smart and innovative, and convince those buying you’re worthy, which Spotify has done.

Most consumers don’t know that Spotify syncs playlists like you own them; there is no bandwidth cost. If your device has power, you can play. It might be years more until people figure this out, but they will.

When will the music industry accept that the landscape has changed? That albums have broken apart and people believe they have a right to hear whatever they want whenever they want? When will artists realize getting paid forever is better than getting paid once? And when will everybody learn that it’s not about intermediaries, but the end consumer. Otherwise sales for iTunes — approved, it must be remembered, as a reluctant response to P2P — would keep going up instead of down.

Spotify is the best response to P2P we’ve got.

And in today’s musical sphere, your challenge is to create appealing music, and market it to those who care. Taylor Swift has done this better than anyone. She built a brand name, worked with the best collaborator in the business, Max Martin, then utilized online tools to get her message out, selling a million albums in a week. But if you think this feat can be replicated, you’ve never heard of “In Rainbows.” One and done. Million-selling physical albums are a thing of the past.

We rent television. We rent software. I didn’t buy Microsoft Office, I signed up for Office 365.

Why can’t people in the industry wrap their heads around renting music?

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