The trend is clear: Sales of music on physical compact discs are steadily decreasing, while consumption of streaming music is increasing in a dramatic way. Even the growth of digital downloads, most popular from services like Apple’s iTunes and Amazon Music (formerly Amazon MP3), has slowed considerably. Consumers enjoy the convenience of music as a service, and are willing to pay between $4 and $10 a month to enjoy the world’s biggest jukebox.
The following is an excerpt from Chapter 10: Streaming Music & Downloads from my book Home Theater for the Internet Age, available on Amazon Kindle. This is the first of a three-part series regarding streaming music and the popular services delivering it to consumers.
This is an exciting time in terms of how entertainment content is packaged and sold to consumers. We’re in the middle of a titanic shift, from music-as-a-product to music-as-a-service. Instead of purchasing tunes on compact disc, consumers are increasingly choosing to obtain their musical entertainment from internet-based streaming services, such as Pandora and Spotify.
Even digital downloads, such as from iTunes, which decimated sales of compact discs, are being cannibalized by streaming music services. Consider that the sale of “digital singles” dropped 3% between 2012 and 2013, while music streaming increased 24% during the same period (according to Nielsen SoundScan). In 2013, digital downloads decreased 1% while streaming music grew by nearly 40% (according to the Recording Industry Association of America).
Renting vs. Buying Music
The economics of this shift are significant. You may be in the habit of purchasing music as albums on compact disc from a vendor such as Amazon or Walmart. Or maybe you prefer to buy your music one song at a time from iTunes or Rhapsody. Regardless of the method, it’s a model where you own the music, giving you the flexibility to burn it to a CD or listen offline, without an internet connection.
Music streaming services, however, are more like renting music. Or, rather, renting access to music. Services like Rdio and Beats Music offer catalogs comprised of tens of millions of songs. Think of them as the world’s largest jukeboxes, available on all of your devices—including your home theater.
Streaming vs. Downloading
When you purchase a song that you download, you’re copying the full song, as a single unit (a data file) from the internet to your computer. Streaming, on the contrary, is when you feed your mobile device or home theater a constant flow of digital data in the form of music or a movie. Most importantly, this data flow isn’t saved to your mobile device or AV receiver (minimizing the chance of piracy). In fact, this is the definition of “streaming.” YouTube, Netflix, and Pandora are good examples of streaming services. iTunes, Amazon Music, and HDtunes are examples of download services where you purchase, transfer, and store a song file on your computer.
Commercials & Artist Refusals
Streaming music is also a great way to avoid commercial interruptions. Subscription-based services offer ad-free entertainment in exchange for a monthly or annual fee. Some services, like Pandora and iTunes Radio, offer a free ad-supported version, as well as paid accounts that remove all commercials.
But it’s not all peaches and cream. Despite most services having deep catalogs of 16-30 million songs, don’t expect all artists and albums. Classic rock band Led Zeppelin, for example, is available only on Spotify, Songza, and Pandora. Pink Floyd prohibited its songs from being streamed by on-demand services until July 2013. The core works of Garth Brooks, the Beatles, AC/DC, Tool, Bob Seger, Metallica, and several other artists aren’t available on most streaming services.
Why Are Some Artists Unavailable?
Music services of all types must obtain legal rights to stream their song catalogs (obviously the intellectual property of thousands of other parties). This occurs through either the Digital Millennium Copyright Act (DMCA) or via direct negotiations with record labels. The DMCA is a U.S. law that some other countries recognize. When companies such as Spotify, Apple, or Google negotiate directly with the major music labels (there are three in the United States), their deals involve restrictions, such as which artists are available for streaming and in which countries they can operate.
Two streaming services featured in this book, Pandora and Songza, rely on the DMCA. All others negotiate directly with music labels. While this gives DMCA-reliant streamers the luxury of playing any song they want—just like an FM radio station (terrestrial AM and FM also rely on the DMCA)—they’re restricted to offering their services only in countries that recognize the DMCA. Thus, Pandora is available in only three nations and Songza in only two (compare this to Google Play Music’s 68 countries served or Spotify’s 61).
What does this mean in practical terms? That the bands that have withheld their songs from streaming distribution, such as the Beatles, Led Zeppelin, and AC/DC, can’t be heard on the major on-demand streaming services (outside of Spotify, which got exclusive rights to Led Zeppelin’s full catalog in late 2013).
If you really love Metallica, Bob Segar, or Tool and want to hear them on your on-demand streaming service, forget it. You’d have to use a radio type service like Pandora or Songza to, with luck, hear these bands, with zero control over the exact songs you hear or when you hear them. (See the Music Lockers section below for a neat and typically free solution to the problem of missing artists on nearly any music service.)
Digital Rights Management
Digital Rights Management, or DRM, is any form of copy protection applied to digital content, either streamed or disc-based. DRM can be found in many forms of digital media, including music and movies. Hollywood liberally employs DRM to protect movies from piracy, typically in the form of complex encryption. For most consumers, the result of DRM is not being able to copy a disc or a downloaded song or video. There are also more subtle results of DRM, such as preventing a laptop playing a streaming or Blu-ray-based movie from connecting to an external display panel via HDMI (the assumption is that there could be a recording device on the receiving end of the cable).
Most of the millions of songs available on iTunes are encrypted with DRM to prevent them from being freely shared. An increasing amount of modern video and audio, however, is DRM-free, a convenience feature that is purposefully marketed to consumers to win their favor. For example, music downloaded from the new high-resolution PonoMusic service contain no DRM, Amazon features no DRM in the MP3 songs it sells, and Apple is slowly converting its catalog to the DRM-free iTunes Plus format.
Curt Robbins is author of the following books from Amazon Kindle:
- Home Theater for the Internet Age ($9.95)
- Understanding Personal Data Security ($4.99)
- Understanding Home Theater ($4.99)
- Understanding Cutting the Cord ($4.99)
- Understanding Digital Music ($4.99)