Bloomberg almost gets it right. While Megan McArdle correctly identifies the problem with Spotify in the context of current market economics she fails to recognize the source of the downward pressure on online music distribution, Ad Funded Piracy.
As we have said many times, we don’t object to streaming as a business model, we only object to the poor revenue and compensation economics that these services currently provide. In other words, the economics of music streaming are a direct symptom of the larger disease of Ad Funded Piracy – this is why we hope to see more artists speaking up about the actual source of the problem as pirate sites are a for profit business that do not compensate artists at all.
In other words, while the cost side has improved, the revenue side has gotten worse even faster. People simply aren’t willing to pay very much for recorded music anymore. If you’re an artist, and especially if you’re a record label, that’s very bad news. Naturally, some artists want to shoot the messenger, blaming Spotify for their paltry payments. But Spotify is not the problem. The market is the problem. Spotify is just the messenger telling them what the market is now willing to pay for their songs.
We have a suggestion for any streaming music company executives who should happen across this post – if you really want to help musicians, why not start educating the media and musicians about the cause and source of why streaming economics are really so bad, Ad Funded Piracy.
Let’s join forces and aggregate the power of the community to restore a fair, ethical and balanced marketplace to music so that artists, songwriters and performers can have sustainable careers, and you too.
READ THE FULL STORY AT BLOOMBERG: