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Why we need digital streaming services like Spotify

Spotify

Thanks to the rise of streaming services, the music industry has overturned their revenue slump and received a boost in sales, the biggest it has experienced in years, according to the Daily Mail. Despite people’s opinions on free streaming versus paid subscriptions, there’s no doubt that services such as Spotify and Pandora have breathed new life into the global music industry.

It’s no big surprise that mobile music apps have replaced album sales as the driving force of a musician’s profitability. We’re obsessed with having the latest technology, and anyone that hasn’t jumped on the digital bandwagon yet is clearly falling behind.

The advances in mobile technology are affecting businesses across all industries, from music providers like iTunes whose recent iOS updates included an entirely new music listening experience, not unlike what is currently being offered in existing streaming services like Spotify. Even gaming sectors around the world have been suffering from the competition’s success with digital platforms, with land-based casinos declaring bankruptcies while the Coral Group, which runs the Gala Bingo brand, report record profits from their mobile operations.

Like the gaming industry, music revenues have dropped tremendously over the past decade. According to Music Business Worldwide, profits fell below $15 billion last year, a 43 percent drop from 1999 revenues. Digital streaming is what is currently driving the dying industry, yet many are hotly contesting the idea of supplying unlimited streams for free.

Spotify is easily the biggest villain for musicians given that the ad-supported app doesn’t put a per-stream value for royalties, which in the musicians’ minds don’t provide the proper compensation for those long hours spent in the studio perfecting their album. But if 70 percent of revenue generated by Spotify goes back to labels and artists, ideally there shouldn’t even be an issue of how the company streams their music. If it were indie groups and small-time musicians making the complaints (and not one of the industry’s top earning artists like Jay-Z and Taylor Swift whom have no problems in terms of income), then this would be a different story. Although even if that were the case, the benefits outweigh the disadvantages. Digital streaming is what will keep artists afloat for now.

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