Future of streaming music services

Not very much. I think the entire battle is going to come down to whether or not what companies like Tidal and Rhapsody/Napster are going to be able to have a viable model with pay for consumption use. Although the current system is not necessarily the best (Free w/ Ads vs. Adless streaming or premium features for a price), it does more to garner users and there is some money coming in through Ad Revenue. Unless these new services are offering me something that's worth my 10 bucks a month, I'm going to stick with free use services.

I could use the argument that Taylor Swift brings up the point of why give it away for free when services like Rhapsody charge for the album but I think she's off base with the way she values her music. I think that a lot of artists with significant followings (look at the list of those who signed up for Tidal for a few of 'em) will try to flex their muscle and move away from free services in order to make more money. I think the issue here is going to be whether or not artists can extract more out of the royalty payments the record labels and rights holders get, not which services have certain artists. I think that artist selectivity may drive a wedge in what people will want to use as well. If I have to pay 10 bucks a month to get Taylor Swift, Jay Z and the 2 dozen artists he has on his service that I like on Tidal and another 10 to Spotify for it's premium service to get the rest that I like, it makes more sense to pay for the better bang for my buck instead of looking for just one artist or two in particular.

At the end of the day, I think a lot of this is artists being greedy. Recording artists don't make money on their songs unless they either 1) Own the rights to their music or 2) Own the Label/Imprint and see profits from their business. Musicians make the majority of their money on their live shows, merch sales, and licensing their music. IF Taylor Swift decides she wants to be greedy, pick up and go to a platform that charges 10/Month to even use their platform, it's her decision; if she thinks the payout is going to be better, more power to her. The concern though, should be how many people are going to use these services and what will the actual payout be for the artists at the end of the day. Looking over Spotify's formula, the royalties payments make sense and don't seem unfounded when given the formula. If these artists aren't acting out of the sheer need for more money, I don't know what they are. The fact is, the big underlying issue is that it comes down to who controls the Master. The owner of those rights sees the most money from these revenue streams. If Taylor Swift, for example, owned her master, she would make far more per stream than she would if she doesn't own the master. That has been a problem for a very long time and will be as streaming music matures. Service wise, things will merge together and there will only be a few quality choices in the market. From a revenue standpoint, there will always be trouble.

Tidal will gain traction by virtue of its greedy owners reserving exclusive content on the platform- we've already seen it took 5 days for Daft Punk to rerelease Electronica as a Tidal exclusive. When Kanye and Beyonce do this, people will be forced onto Tidal. So Tidal will likely force out less profitable business models that barely subside on their existing users bases (I'm looking at you Pandora), and eventually the battle will be Tidal vs. Piracy. The industry is going to need a new business model innovation to get around exclusive contracts and can survive the high cost of royalties.

It really frustrates me anytime Jay Z acts like this "is for the music". He's a greedy bastard that's going to use his oligopoly buddies to corner 50% of the Billboard 100 market's content and force us to survive on Youtube streaming for our music.

As I look down the road, anything that enables superior music discovery (which will probably require a robust library) engine would be very interesting. I honestly don't know what I want to listen to and want discovery for me to be as automated as possible.

I like everything and I hate everything.

Given that it is both marketing and content driven and the fact that we live in a celebrity obsessed society I would expect Tidal to gain significant market share. I also expect that they will drop the $20/mo subscription based on the increasingly common knowledge that even most sound techs can't tell the difference in sound quality. I don't begrudge capitalism but I do not support rappers/athletes/celebrities who claim they are doing something for the music or their "people" and then pump out shitty products at ridiculous prices (Kanye, Beats by Dre, etc). A bit off topic but Beats is an interesting case study in product quality, product reviews, and marketing. I used a paid Pandora account.

Personally, I use Spotify/Soundcloud/Bandcamp/Youtube, as well as rateyourmusic for discovery/recordkeeping. My problem with streaming services is that I have a pretty wide range of tastes and none of the individual services covers enough of my tastes for me to justify a paid subscription, especially when the alternative of free downloading is so easy and accessible (compared to tv shows/movies, for example, where the process of downloading or finding decent streams is so onerous that I can easily justify a Netflix subscription). Soundcloud is good for electronica but not much else. Bandcamp is a great resource for me to buy digital albums and support small artists (I don't have room for a physical collection), but it doesn't have much of a discovery tool; I use it primarily after I've already discovered an artist to buy their music. Spotify is, well, spotty. A few months ago I tried looking for some fairly well-known metal bands (in the metal community at least), and couldn't find half of them at all. It's close, but needs a broader library for me to justify a subscription. Rateyourmusic is the best and most organized discovery tool, but doesn't have streaming functionality.

In summary, I realize I'm not the typical consumer, but I can't justify a subscription to a service where most of the music I'd be listening to is by artists who already have enough money, especially when I can just download it at a moment's notice. My only complaint with downloading is that I can't stream my collection when I'm not listening from my laptop (though I'm sure programs that do this exist and I'm probably just technologically inept). I'll probably get shit for this but I'm a bit baffled that people will pay money to listen to top 100 billboard music that's so easy to find and download and when there's seemingly so little cognitive dissonance invoked by just downloading it for free (I get feeling guilty for downloading an album by an obscure artist that probably does need the money, but do people really feel guilty for downloading Taylor Swift or Kanye albums?). But again, the average music consumer probably doesn't have this mentality, so I can see why subscription streaming services are viable.

streaming is weak, and let the people have their music ...artists make their millions, no reason to cry about a small percentage of leaked songs/albums that really is nothing in the grand scheme of things.

Addinator, First off, there are two types of rights. The first is essentially a writer's credit. I believe it's called a publication right, which pays out the writers of a song for their contribution to the lyrics of a song. This way, they get their cut. The second is what's called a Master Recording right. The Master Recording is what gets all the airplay (everything from radio edits, to remixes, to the album version, etc. is derived from the actual recorded master, which provides the owner income derived from the use of the music). In discussing the Master Recording Rights, it depends on the record contract. Traditionally, the costs have been covered by the label in exchange for control of the master recording. However, over the last few years there has been a shift from financier/label ownership outright to either direct ownership (if you do it yourself, you own it), a Master Recording Reversion deal (where the rights are leased to the label and revert to you after X years) or a Label as Agent Representing the Master Recording Holder deal. There are a number of artists who happen to own their masters, and, as such, benefit directly (read - take the chunk of the profits) on the replay of songs and sales of an Album. Bowie Bonds, for example, were built off the cash stream of David Bowie's album sales - something he could do because he owned the Master Recording Rights to all of his music and could monetize that revenue stream(royalties) as he saw fit. Really, the question is that when you factor who controls the master recording rights, how are they being paid out in accordance to whatever deal may be in place. That is something that we don't know and can't speak on without knowing individual deals, contracts and ownership rights.

I think the allure of Tidal is that if you control your revenue stream (either via direct ownership, or having pull over Masters), you can make a significant amount of money on a per stream basis. Without knowing Tidal's model and payouts, I can't speak authoritatively, but given that Tidal costs 10/Month for the basic package, the question is how many will it take to cover the overhead for this service before the artists see a return on on streaming revenue. Even if we use the WWE's Network streaming service as a baseline example, their 1 Million subscriber mark was the minimum number of people it would take to break even. Without even having a glimpse of Tidal's break even point, there is no way to say what their 10/Month streaming service will actually produce as revenue to the artists. Sadly, I think that everything is skewed towards the mega stars and those who control their own masters anyway. The mega stars can negotiate on the basis of leverage given either their star power (ie Taylor Swift) or on the basis of the master collection they own, but for those who don't own their masters, services like Spotify, Pandora, et al. really pay their way in making sure that artists see at least some money coming in. Regardless of a record deal, ownership of the Master Record is tantamount to printing gold in the music industry.

junkbondswap , I don't think so. I think that if people are stupid enough to buy Beats by Dre, they will shell out for the Hi-Fi services. This has to do with the fact that people are stupid and if > shills it that people love, they will buy it. People are stupid. That's why shitty but well marketed products make money.

For me, it's clearly Apple; Apple essentially had a monopoly on the music market for almost a decade. iTunes and iPod revived Apple from bankruptcy. iTunes may be on the decline, but Apple is most certainly not out of this industry. They revolutionized music once and I believe they know the market better than anyone. Apple has really strong roots in the music industry and it's an industry they'll never want to lose. Music is so much of a part of Apple's culture and even if it's not the most economical industry for them, they will want to win it for the sake of their brand and their culture.

The economics are also strongly in Apple's favor. Apple is also unbelievably good at creating switching costs, using their brand and negotiating power to their advantage. Further, I would be extremely surprised if any outside competitor could build a music app for iPhone with a better experience than what Apple can make. Do you remember how much better iTunes was than what was on the market in the early 2000s? I think a lot of who wins comes down to experience and no one does mobile experience on the iPhone better than Apple. In addition to experience, I'd bet on Apple for having the best pricepoint. Apple has crazy good negotiating power and they'll win on pricepoint because of their negotiating power, just as they did with iTunes. I can't imagine a world where Spotify or Jay Z or some other smaller service negotiates lower payout rates than Apple.

For me, it's clearly Apple; Apple essentially had a monopoly on the music market for almost a decade. iTunes and iPod revived Apple from bankruptcy. iTunes may be on the decline, but Apple is most certainly not out of this industry. They revolutionized music once and I believe they know the market better than anyone. Apple has really strong roots in the music industry and it's an industry they'll never want to lose. Music is so much of a part of Apple's culture and even if it's not the most economical industry for them, they will want to win it for the sake of their brand and their culture.

The economics are also strongly in Apple's favor. Apple is also unbelievably good at creating switching costs, using their brand and negotiating power to their advantage. Further, I would be extremely surprised if any outside competitor could build a music app for iPhone with a better experience than what Apple can make. Do you remember how much better iTunes was than what was on the market in the early 2000s? I think a lot of who wins comes down to experience and no one does mobile experience on the iPhone better than Apple. In addition to experience, I'd bet on Apple for having the best pricepoint. Apple has crazy good negotiating power and they'll win on pricepoint because of their negotiating power, just as they did with iTunes. I can't imagine a world where Spotify or Jay Z or some other smaller service negotiates lower payout rates than Apple.

(Disclaimer: I love and use Spotify premium, in addition to SoundCloud and 8Tracks. I think they all have value proposition and I wouldn't be surprised if there are many winners in this market. Apple stands out as the one I believe will create a product with the most subscribers and the most revenue.)