Dealing with digital: the economic organisation of streamed music

Abstract

The intervention of digital service providers (DSPs) or platforms, such as Spotify Apple Music and Tidal, that supply streamed music has fundamentally altered the operation of copyright management organisations (CMOs) and the way song-writers and recording artists are paid. Platform economics has emerged from the economic analysis of two- and multi-sided markets, offering new insights into the way business is conducted in the digital sphere and is applied here to music streaming services. The business model for music streaming differs from previous arrangements by which the royalty paid to song-writers and performers was a percentage of sales. In the case of streamed music, payment is based on revenues from both subscriptions and ad-based free services. The DSP agrees a rate per stream with the various rights holders that varies according to the deal made with each of the major record labels, with CMOs, with representatives of independent labels and with unsigned artists and song-writers with consequences for artists’ earnings. The article discusses these various strands with a view to understanding royalty payments for streamed music in terms of platform economics, offering some data and information from the Norwegian music industry to give empirical support to the analysis.

Giants with feet of clay: the sustainability of the business models in music streaming services

“…Some labels may require certain levels of free-to-paid subscriber conversion under licence agreements. After gaining a wide active user base, user retention and loyalty become the core objective for DMSPs: capturing and maintaining the consumer's attention for as long as possible allows DMSPs both to increase the possibility of using the consumer as an asset for advertisers in the advertising-based business model, and to learn enough about them to retain customers who have switched to the subscription payment model (Towse, 2020). For the latter, the strategy followed by practically all Internet service providers, not just the music-related ones, is to build personalized offers based on user tastes, preferences and behaviour (Webster, 2020).…”

Music streaming platforms and self-releasing musicians: the case of China

“…Some analysts offered significant research on how musicians must adapt to, or in some cases push back against, requirements of platforms in the new digital music economy, including social media platforms, illuminating how the longstanding requirement for musicians to act as self-sufficient entrepreneurs was being remade and reinforced in the contemporary world (Baym, 2018;Haynes & Marshall, 2018). Research that focused on widespread concerns about musician earnings from MSPs nuanced polemical attacks on those platforms by pointing to the key role of rights-holders, who retained the lion's share of payments from the new MSPs (Hesmondhalgh, 2020); Marshall, 2015;Sinnreich, 2016;Towse, 2020) in ways familiar from previous regimes. But none of these recent studies of musical labour have paid systematic historicised attention to the structural political-economic and cultural issues raised by Toynbee and Stahl, concerning the dialectic of control and autonomy in the system based on the co-existence or a 'reservoir' of musical labour (Toynbee's first sphere) with highly centralised and commodified organisations and technologies (Toynbee's second sphere).…”

Beyond platform capitalism: critical perspectives on Facebook markets from Melanesia

“…Similarly, rather than serving as space where users can freely generate and share content, platforms actively curate their content through features such as the playlists on Spotify ( Prey, 2020 ) or computational processing techniques that variously recompose digital images ‘[reifying] certain representations while discriminating against others’ ( Taffel, 2021 : 250). Commercial interests essentially drive this curation ‘[inaugurating] relations of dependency among creators and the industries they draw upon’ ( Prey, 2020 : 1; see also Towse, 2020 ).…”