Currently, the two major forms of streaming music are Apple Music and Spotify. While you are technically "downloading" the music using your phone's storage, the music is only accessible through the app and content cannot be transferred between users. This is unlike Napster where the user had the music available to use in any form. These current producers also have relationships with the music industry and record companies which allows them to have artist's music on their application to provide to their users. For example, Spotify must pay the holder of music rights anywhere from $0.006 to $0.0084 per stream, where Napster did not compensate artists at all for using their music
The biggest difference between Napster and current streaming sources, beside them being legal, is the price. Napster missed a huge profit opportunity by allowing their technology to be free instead of charging consumers a small baseline fee. Napster made money through investors, who put in millions into their company, for seeing the expansions of the company. With Spotify, users have two options in the app: a free subscription, or a premium subscription of $9.99 a month. The free subscription includes advertisements every 5-10 songs, which is one way Spotify makes money. The other way it brings a profit is though its premium subscription. The benefits include no adds, unlimited skips, and downloading an unlimited number of songs. That means, in a month, the consumer may download two albums only for paying the $9.99 subscription fee, instead of paying $15 per album, or $30 total if they were to buy the CD.
Apple Music is similar where a subscription user can download as many songs as they wish in a month, However, without the subscription, Apple users must pay $1.29 for a single song, and if they want the whole album, it is is usually the same price as if they were buying the physical CD.
Although Napster's had a great fall primarily from allowing unlimited access to downloading songs and therefore hurting many music artists, they created the music streaming idea and technology that is used by millions today.
Apple Music is similar where a subscription user can download as many songs as they wish in a month, However, without the subscription, Apple users must pay $1.29 for a single song, and if they want the whole album, it is is usually the same price as if they were buying the physical CD.
Although Napster's had a great fall primarily from allowing unlimited access to downloading songs and therefore hurting many music artists, they created the music streaming idea and technology that is used by millions today.
Awesome post Katherine! I really appreciate your focused take on the specific costs/benefit analysis you are discussing here. I completely agree that for the consumer it just makes sense to pay for a subscription to access millions of songs as opposed to just paying on a per-song or per-album basis. Just recently, there's been a new finding to suggest that small businesses are using consumer accounts to provide music to their stores for far cheaper prices than having a retail license. This goes just to show you how much even companies value streaming vital to their store traffic too!
ReplyDeleteSource: https://www.billboard.com/articles/business/8480333/music-industry-265-billion-year-business-consumer-streaming
I agree with Noah, I think this article is super interesting as it focuses on the tangible costs of streaming music. It is fascinating to see how different streaming platforms have somewhat different techniques of drawing users in and creating brand loyalty through their subscription process. However, I know a lot of people have multiple subscriptions to a variety of streaming platforms, showing how the small content differences can be very enticing to the consumer.
ReplyDeleteI thought this post was very interesting. I liked learning how much musicians were paid per play of each song (I had always though it was a flat rate, a certain price for any given song by any given artist!).I think it's very interesting to consider what would happen to Napster if it had charged for a subscription. We don't know what the demand curve was for it, since they only ever had one price: $0. Napster would have to try to predict the demand at all of the possible prices to decide how much they would charge.
ReplyDeleteThe reason why Napster was so controversial was because of its effects on the music industry at its time of release. Consumers were asked to choose between two options: 1) pay a good amount of money to have to go to a store and purchase physical copies of their music, or 2) go on their laptop and download a theoretically infinite amount of music for free. Which would you choose? For this reason, Napster, while generating very little personal gain, blindly robbed the CD, record, and cassette industries. I'm sure that if Napster had the chance to go back and start over, they would implement new ideas to generate revenue such as advertisements or charging for premium features (like Spotify and other online streaming services today.)
ReplyDeleteInteresting post Katherine! I think you did a great job of comparing these new, current music streaming platforms versus the old music streaming platforms like Napster. I think Napster was definitely an inspiration for the music streaming leaders today. If Napster played their cards right, we could all have Napster music downloaded on our phones right now just we do with our other platforms. I'd also like to see how new platforms like Soundcloud fit in with big boys such as Spotify and Apple Music.
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