Streaming services provide a great opportunity for new artists to get in front of millions of listeners. However, new artists face the biggest uphill battle to take advantage of this opportunity.
Some artists think streaming services don’t pay them enough to make a living. Some listeners say they wouldn’t have discovered the artist otherwise.
Here’s a breakdown of how streaming services help and hinder new artists.
Brief history of streaming services
Born in the wake of illegal streaming, Spotify and other services offered people a legitimate way to access music. Sites like Napster began to decimate the once thriving economy of physical music sales, and the industry needed another way to make up for lost revenue.
Founded in 2006, Spotify has become the largest music streaming service with over 345 million active listeners and 155 million paying subscribers. It’s not the only streaming service and now there are plenty of free music streaming options to get your tunes.
Now, 15 years later, artists have both blamed and applauded streaming services for their role in lifting the music industry from the grave.
Spotify, Tidal, Apple Music, etc. have created a place where artists can attract the attention and notoriety of its millions of listeners. At the same time, they have created even more of a gap between the haves and have-nots in the music industry by offering extremely low payouts and biased algorithms.
The debate over whether these streaming services are there to help or hinder musicians is still a hotly debated topic. Let’s examine how these services both help and harm the artists they intend to profit from.
How streaming services help artists
The addition of streaming services to the music industry has regained some momentum for the industry that suffered throughout the 2000s. This success has been great for many artists who have benefited from increased label budgets. , a wider embedded audience and passive income.
More income for everyone
With major label revenue increasing through streaming services, smaller artists signed to these labels can benefit from increased marketing. The more a label earns, the more it is able to invest in its roster of artists, giving a chance to those who might not otherwise have had it.
It also helps unknown artists who are not signed to labels. They now have the opportunity to be discovered by public relations representatives who are funded by the additional resources enjoyed by the industry.
If the label weren’t doing so well, it would be forced to double down on artists who are already making money instead of scouting for new talent.
To make money with music, being seen by a small audience is not enough. You must have a large fan base. It could take years or even decades to get the support you need to be a full-time musician.
With the success of big streaming services like Spotify or YouTube, it was found that audiences could only take one viral song.
Justin Bieber is an example of an unknown artist who found success thanks to the videos he and his family posted on YouTube that quickly went viral.
Without the large built-in audiences provided by streaming platforms, musicians couldn’t get as much exposure using traditional methods of advertising and promotion.
Passive Income Stream
With every song streamed, artists earn fractions of a penny for their work. Although it’s not a huge amount of money, once the song is released on Spotify, the hard work is done.
All future money generated from this song becomes purely passive income. The more songs an artist has in their catalog, the more opportunities they have to earn passive income.
Before streaming services, such a model did not exist for musicians. Physical CD sales could be expected to sell out quickly when a new album was released, but sales would decline rapidly until album sales were minimal.
Now artists have the ability to continually earn money from each individual song, without anyone needing to buy their music.
How Streaming Services Harm Artists
Even with an embedded audience, increased revenue for the industry, and passive revenue models, streaming services have still come under understandable criticism. They have extremely low payouts, biased algorithms, and favor big name artists.
Low payouts for artists
The controversy over how much artists are paid for streaming platforms will never be appeased until platforms like Spotify make it clear how they pay their artists.
Spotify has launched a site called Loud & Clear, which aims to explain how artists make their money, but there’s never been an official word or calculation showing how that’s calculated.
Industry experts have estimated that artists earn an average of $0.004 per stream. This means an artist would need around 250 streams to earn a single dollar.
For lesser-known artists trying to make a living from their music, these earnings are too small to make a sizable income.
Only high-profile artists from major labels will benefit from the pricing structure since they receive hundreds of thousands, if not millions, of streams per year. This only creates a greater disparity between the bigger and lesser known artists.
As the music industry continues to move into the online world, the use of computer algorithms in streaming services is becoming a bigger part of how we consume our music.
Streaming platforms will use these algorithms to curate specific playlists designed just for you and suggest specific songs based on your previous selections. As the algorithm continues to learn your patterns, it continues to give you more of the same types of music.
It can be devastating for a new artist you may have enjoyed but never hear from because their style of music doesn’t match what you keep listening to every day.
Algorithms can also have a negative effect on trends outside of streaming services, like Spotify. For example, background playlists have become more popular on Spotify, such as quiet music you can listen to while doing chores or studying.
As the algorithm continues to promote these styles, musicians and producers will try to replicate these song structures and formats in order to be featured more on the platform.
The algorithm itself may cause the industry to pay more attention to what a computer is telling it rather than what the public actually wants to hear.
Unknown musicians are forgotten
When the playing field favors the most well-known artist and the compensation structure is designed for those who receive high attention, lesser-known artists will suffer.
Never before have new musicians had the time to be in front of as many people as is now possible. Yet most of these musicians will be completely ignored due to the way the system is constructed.
For artists to gain recognition, they still need to generate most of the buzz for themselves and build a dedicated following. These were the same methods in place before streaming services took over the industry.
To make matters worse, only well-established labels negotiate and close deals with streaming services. Independent labels or individual artists have no influence on major decisions made within the streaming industry.
How to Discover New Indie Music
On the one hand, the number of monthly listeners and paid subscribers to some of the biggest online streaming services offers endless opportunities for new artists. On the other hand, new artists rarely have the chance to be presented at such a high level.
To give new artists a fighting chance, you’ll need to use other sites to find your next favorite musician.
If mainstream music isn’t your thing, you should check out independent artists online. Here are seven websites to help you discover new music from independent artists around the world.
About the Author