Research Paper (邱玠傅 Ciou, Jie-fu 10252231).docx

應外三乙 / 邱玠傅(Ciou, Jie-Fu ) / 10252231 Research Paper Streaming Services Are Better Pirates in Music Industry In the past, buying a CD, listening to radio, or even going to a concert were the only ways for people to enjoy music. Today, with the invention of streaming services such as Pandora, Spotify, or KKBOX on the Internet, hearing beautiful voices from everywhere is no longer a difficult thing. However, Taylor Swift, a famous American singer, decided to pull her music from Spotify last year, which shocked the whole music industry. Taylor Swift’s action told everyone the clear fact that streaming companies were not as perfect as people always thought. In fact, streaming services might be foes for the music industry rather than friends because of the following three problems. To begin with, singers get unreasonable revenues from putting their songs on those music streaming platforms. Based on Spotify (n.d.), the revenues are divided into two parts. Seventy percent of the revenues go to right holders such as singers, composers, lyricists, and producers and thirty percent of them belong to Spotify. In other words, a singer does not get the whole 70% of the revenues because the revenues which a singer gets are craved up by other right holders. In addition, according to Linshi (2014), in one of his articles in Time, Here's Why Taylor Swift

Pulled Her Music From Spotify, he mentioned that “artists earn on average less than one cent per play, between $0.006 and $0.0084, to be exact, according to Spotify Artists” (para. 4). To make this fact more clearly, there is an example. Martin (2010) reported in The Guardian that “over a five-month period, 1m plays of Lady Gaga's hit Poker Face – one of the most popular songs on the site [(Spotify)] – earned her just $167” (para. 7). This shows that, unlike physical CD markets, the more popular a song is, the better the selling will be. Even when a top song is streamed online, it could not bring the equivalent revenue for a singer. Furthermore, the sales of physical CDs decline because of music streaming services. This kind of service provides very convenient platforms to listen to music. By clicking mice or tapping screens, people can listen to every kind of music. From pop to indie music, whatever or whoever people want to listen to can be found on those platforms. However, what people think convenient might be a nightmare for the market of physical CDs. Actually, the market of CDs has been shrinking year by year. Specifically, CDs are being replaced by music streaming services gradually because of their convenience which people regard as an advantage. Recording Industry Association of America (RIAA) (2014) illustrated that the sales of physical CDs accounted for 35% of U.S. music industry revenues in 2013 compared to 95% in 2009. As for revenues coming from streaming models in 2013, they increased to 21%. That

implied a truth that revenues from streaming services are devouring ones from physical CDs. Moreover, some major singers like Taylor Swift and Jason Aldean lost their revenues of physical CDs due to streaming services. For streaming services, how they attract users depends on their stunts; that is, latest and popular songs are easily accessible by listeners. Yet this kind of business model causes their songs to become outdated in a fast way. Cubbison (2015) noted that what fans of those superstars look forward to is listening to their latest albums, but what those celebrities concern about is how to make their latest albums stay on the top list as longer as possible so that those superstars can earn steadily. Once they put their latest albums on streaming platforms, those albums will devalue drastically because people can listen to them just by streaming services. In other words, people do not have to go out and buy those top albums in a record store. Therefore, the sales of physical CDs plummets since people can hear their latest songs simultaneously and immediately. Finally, unlike those popular singers, some new musicians and independent producers could not survive under even lower revenues. Pro-Rata system is a current model adopted by streaming companies to distribute revenues for artists. However, a conspiracy lies in this Pro-Rata system. In the final part of the formula of this system, the total number of clicks a song has in a month is proportionately divided by the total number of all clicks on the streaming platform during a month. Therefore, when a

popular singer releases his or her album in that month, most of the number of clicks is occupied by this superstar. That is, despite the fact that a subscriber always listens to an alternative singer or band, most of the money goes to another musician who owns higher clicks rate. What’s worse is that the number of clicks becomes important rather than having a fan. Under this Pro-Rata system, a non-mainstream musician’s revenues could be influenced by any time when popular musicians are going to release their new albums. Therefore, as Cubbison (2015) claimed in the paper, even though those singers who just step into this streaming industry get what they need – Internet presence – such low revenues does not really help his or her career life. In conclusion, if the original purpose of music streaming services is to provide an alternative to combat piracy in music industry, producers can share their excellent works with the world without worries. Nevertheless, why those streaming services turned into sugar-coated pirates is a problem which is still waiting for an answer. But a clear clue for this controversy is given by few words from Taylor Swift who in public responded to her action about Spotify, “Music is art, and art is important and rare. Important, rare things are valuable. Valuable things should be paid for. It's my opinion that music should not be free”.

References Cubbison, L. (2015). Will Taylor Swift and Spotify Ever Get Back Together? Linshi, J. (2014). Here's Why Taylor Swift Pulled Her Music From Spotify. Time. Retrieved from http://time.com/3554468/why-taylor-swift-spotify/ Martin, D. (2010). Spotify slammed by songwriters. The Guardian. Retrieved from http://www.theguardian.com/music/2010/apr/13/spotify-songwriters Recording Industry Association of America (RIAA). (2014). News and Notes on 2013 RIAA Music Industry Shipment and Revenue Statistics. Spotify. (n.d.). How we paid royalties: an overview. Retrieved from http://www.spotifyartists.com/spotify-explained/#how-we-pay-royalties-overvie w