Streaming saved the music industry from the jaws of the internet. But the complicated picture of the past 20 years shows that surviving an online revolution isn’t the only hard thing. What comes next may be even more difficult.
Music was one of the first industries to feel the Internet’s sonic boom, starting with song-sharing websites like Napster in the late 1990s and later digital downloads from iTunes. This was exciting for music lovers, but new ways of listening to music and buying (or not buying) music pushed sales in the industry to a crater.
Now, mainly thanks to people paying for unlimited music streaming services like Spotify, music is financially sound and reaching more people than ever. But not everything is all right.
Even now, the music industry in the United States is generating less revenue than it was at the height of the CD. There is a raging debate about how long the streaming justice system will last. And many musicians and others say they don’t share in the spoils of digital transformation.
With this newsletter I wanted to answer a direct question: is the music industry a success story on the internet or not? There’s no easy answer that shows how messy it can be when technology shocks an industry, and it could take decades for all participants to feel like winners of the digital revolution — if at all.
First I’ll explain that the music industry is doing great. More than 500 million people around the world pay for digital music, mostly in fees for services such as Spotify, Apple Music or Tencent Music, based in China. Those services have given the industry something it’s never had before: a steady stream of cash every month.
The industry also makes money in countless ways. When you watch a music video on YouTube, money flows to the people responsible for that song. TikTok pays record companies when videos feature their popular songs. Perhaps more than for books, movies or other conventional entertainment sources, there has been a powerful symbiosis of social media and music that has increased the popularity of both.
That would have been hard to predict when it seemed like the internet was on its way to pulverizing the industry. “It’s bizarre that music is now considered a success,” said Ben Sisario, my music industry colleague for The New York Times. “The question now is, can growth continue?”
Oh yeah. The dark cloud. Revenues for the music industry have been rising steadily since 2015, but revenues from all sources — including streaming subscriptions, CDs, and elevator music royalties — are still lower than they were in 1999.
Total industry revenue at the time was about $24 billion adjusted for inflation, and revenue in 2021 was $15 billion, according to the Recording Industry Association of America. (Global sales data from another music retail group shows a similar trajectory.)
Not an infinite number of people in many countries are willing to pay the going rate of $10 a month to access a whole range of songs on their phone through a service like Spotify. That’s what worries people who think the digital success of the music industry has peaked.
Ben also told me that the industry fears that even the biggest songs or albums aren’t as popular as hits once were. There may be so much music and other entertainment at your fingertips that every new song just doesn’t grab as much attention or be valuable as music even ten years ago.
Ben has also written that 99 percent of performers — those not as famous as Beyoncé — tend to say millions of streams of their songs can be translated into pennies for them. If the music industry is a success, but so many musicians feel like they’re missing something… is that really a success?
The pessimists may be wrong. People have also been saying for years that Netflix can’t keep adding paying customers, but it does, and now the entire entertainment industry is copying its strategy. Many musicians are excited about newer ways to reach fans on their own terms, including through the Bandcamp website and non-replaceable tokens, or NFTs, which are essentially a way of turning a digital good into something unique.
But the combination of glory and fear in music reflects an ongoing theme in this newsletter. The days before the internet weren’t great, but the frustrations with the digital revolution are real too.
Before we go…
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A dating app that was much more for two refugees: After Anastasia Tischchenko fled Ukraine and reached the Romanian border, she opened the Tinder app to seek help. There she and her boyfriend found a place to sleep. “It was very inspiring,” Tischchenko told my colleague Patricia Cohen.
Related: NBC News traces the online origin of a false theory about biological research labs in Ukraine, which Russia has used as a false justification for its war against Ukraine. (And here’s a fact check from The New York Times.)
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California created the first government agency in the US with the sole job of regulating online privacy. It was a challenge, and even the state horse racing regulator offered advice, writes my colleague David McCabe.
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The Toyota Corolla among smartphones: In reviews of the iPhone SE, Apple’s cheapest new smartphone model, my colleague Brian X. Chen and Washington Post columnist Geoff Fowler say the device isn’t for everyone, but many people can benefit from a cheaper iPhone without some features often not used in more expensive models.
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