After years of lamenting the decline in CD sales, music industry executives might have been popping champagne corks at the latest figures from the Recording Industry Association of America.
Revenues from recorded music were up 0.9 per cent to $7bn (£4.9bn) in what the RIAA called “a milestone year for streaming music”. But Cary Sherman, chairman and chief executive of RIAA, said the champagne should remain on ice.
Streaming services had accrued 13 million subscribers by the end of December, he noted, but the system has been hijacked by tech giants.
“So many of our music community brethren feel that some technology giants have been enriching themselves at the expense of the people who actually create the music,” Mr Sherman said.
In 2015, streaming accounted for 34.4 per cent of music industry revenue, after overtaking downloads for the first time. Owning music – in whatever format – is on its way out. Revenue from downloads is down. Streaming is starting to pay, but not fast enough, according to those counting the cash.
Mr Sherman said that in 2015, fans listened to hundreds of billions of audio and video music streams through on-demand ad-supported digital services such as YouTube.
“But revenues from such services have been meagre – far less than other kinds of music services. And the problem is getting worse,” he said.
Ad-supported streaming revenue is up 30.6 per cent on 2014, at £385.1m, but that figure only accounts for 16 per cent of total streaming revenue. The majority comes from internet radio royalties and subscription services.
Nielsen figures show that video streaming services such as YouTube and Vevo accounted for more than 50 per cent of music streamed in 2015, or more than Spotify, Apple Music, Tidal and Google’s own Play Music combined. Put those two figures together, Mr Sherman contends, and it doesn’t look as though YouTube is paying its fair share.
YouTube, which is owned by Google, disagrees. “Past comparisons to other audio-only, subscription music services are apples to oranges,” a YouTube spokesperson said. “To date, Google has paid out over $3bn to the music industry – and that number is growing year on year.”
Jon Webster, president of industry trade body MMF, agreed that while tech companies have profited from changes to the way music is consumed, they have also provided the tools for artists and managers to grow their business. “Blaming technology for our woes is not a solution. The recorded music industry needs to work together to solve our internal issues, and externally to finding better modes of working with technology,” he said.
Those solutions are already emerging, according to James Sandom, who manages bands including Belle & Sebastian, Interpol and Kaiser Chiefs.
“Currently there are tech companies retaining a larger slice of revenue that rightfully should reach the songwriters and artists, and the morality of this is dubious; however structures continue to evolve,” Mr Sandom said. “The recorded music industry overall is in a period of growth again for the first time in a while. There is reason for optimism that a balanced blueprint will be established in time.”
YouTube says it’s at the forefront of this evolution. It contends that it provides a promotional platform for artists and labels who want to reach an audience of a billion users. It’s also launched a copyright system called Content ID that allows copyright holders to identify and monetise copies of their work.
But as long as YouTube remains the go-to platform for music streaming, paid-for subscriptions like the one offered by Spotify, who declined to comment for this article, are going to be a harder sell to the listener.
YouTube will continue to benefit. It was valued at $80bn by a Bank of America Merrill Lynch analyst last year – more than Starbucks, Yahoo and eBay combined.
From Android to Spotify: top tech of 2009
From Android to Spotify: top tech of 2009
Five to watch: Google's push into mobile. Google is rumoured to be launching its own handset, the Nexus One, on 5 January on both sides of the Atlantic - but the success of mobile phones is becoming much less about the handset, and more about the software they're running. Google Android will be appearing on a large number of cheaper phones in the next 12 months, and may dent the iPhone's dominance.
Five to watch: The long-awaited Apple tablet. Does an Apple touchscreen computer straddling the line between netbook and iPhone, even exist? Or is it, as one commentator put it, 'the most masterfully conceived shadow marketing campaign ever'? If it does appear in 2010, the most fascinating effect will be on the burgeoning e-reading market.
Five to watch: The move to the cloud. The benefits of storing data online rather than on your computer are still a mystery to many, but the expansion of Google's App Engine and the launch of Microsoft's Azure Platform on 1 January both indicate that we'll be running more software direct from the web, too.
The gadgets of the year: HD models made by Flip stood out: including the cute, stylish Mino.
The gadgets of the year: Dyson's Bladeless fan may cost 10 times more than its bladed cousin, but its appearance - a pedestal-mounted ring that gently pushes air towards you - made it the gadget most likely to be gawped at.
All Rights Reserved.
The gadgets of the year: The Powermat brought wireless recharging to owners of Blackberries, Nintendo DSs and iPhones for a sub-£100 price tag.
Tech Turkeys of 2009: Apple banning apps from the App Store. The often arcane criteria for approving new apps proved baffling to many, and many developers threatened abandoning the iPhone platform altogether in favour of Google's Android, where they could at least be certain of their app being made available to the public, even if the public didn’t want to buy it.
Tech turkeys of 2009: Google Wave. Invitations to Google's new real-time collaborative internet tool were hotly pursued, even selling for up to $70 on eBay. But once people had joined, the cry was unanimous: 'But what does it do?' We still don't have a clue, and we're hoping for enlightenment in 2010.
The socialweb: Back in January, umpteen newspaper articles were mocking 'celebrity tweeting', but at the end of the year the verb 'to tweet' is even being deployed without quotation marks.
All Rights Reserved
The socialweb: people deserted MySpace in their droves
Listening, watching, reading: Notes of optimism were struck over our willingness to shell out for music for games such as Rock Band and Guitar Hero
Listening, watching, reading: The most fundamental change to music consumption habits was the take-up of Scandinavian streaming service Spotify.
Listening, watching, reading: BNP leader Nick Griffin's appearance on Question Time drove take-up of the BBC iPlayer service, with requests in October up 70 per cent.
Listening, watching, reading: The British gave e-readers a wide berth, not least because Amazon's Kindle device is still only available on import with a customs charge tacked on
As one major label executive told online trade magazine Music Business Worldwide: “YouTube boasting about its payments to the music industry is like Bernie Madoff boasting about paying dividends to his investors.”
The music industry made more money out of vinyl sales than it did from ad-supported streaming from services such as YouTube in 2015.
Now streaming is starting to pay, YouTube may find itself under increasing pressure to give more money to the makers and the owners of the music it hosts.Reuse content