As we have said before, streaming – and particularly the subscription model – more fully captures the true demand for music. In the streaming universe, consumption drives the economics — so the more that people listen to music, the better it is for our artists and our business.
A couple of weeks ago, I wrote:
So who wins in the Spotify ecosystem? Well, Spotify do well for themselves, obviously. As do the big record labels, those who have a wide enough variety of popular artists that chances are something they’ve released is being streamed right now.
Every time anyone plays a track from Warner, Warner gets paid. They’ve got enough recording musicians to ensure a constant flow of money. Smaller musicians then just exist to provide financial support to the label. There are enough of them that their combined incomes are substantial, but individually they can’t make enough to get by. So unless Warner distributes the income socialistically,1 streaming remains a good deal only for labels and megastars.
Maybe Cooper’s statement should be adjusted to: “…the better it is for our biggest artists and our business.”
Later in his remarks, Cooper says:
In our view, right now, enabling meaningful global growth in the number of paying subscribers is the best option for artists, for songwriters, for copyright owners and for the services themselves. Subscription streaming is not only a fantastic offering for music fans, it will propel the long-term health of the music industry. We look forward to continuing to work closely with our partners to turbo-charge the adoption rate for subscription streaming.
We were pleased that two of the biggest streaming services in the world have taken meaningful steps to convert segments of their massive customer bases into paying subscribers.
Spotify’s adoption rate from advertised to paid is already incredibly high: 25% as compared to the 0.5–4% that’s considered a success in other industries. Though it’s likely due to the amazingly aggravating experience of hearing (loud, unskippable, unmutable) ads in the middle of your music, Cooper may be fooling himself in thinking that it can be pushed significantly higher.
- Ha! ↩