Why the music industry wont stream music

More and more services are popping up that solve the music industries decade long plight of piracy; Streaming music.

Services like Spotify and Rdio are making music instantaneously available for everyone at affordable rates that seem to make everyone happy... Except the music industry wont go along in North America. "Why not?" I hear you sigh ask. Let's examine the models.

  • Traditional Music Industry model Expensive music recording and talent finding or talent creating organisations made money off hits that had main stream appeal and sold records. Thus subsidizing less popular songs recorded and making tons and tons of cash.
  • New Music Industry Model Dirt cheap music recording and no large organisation needed leaves music execs without jobs, making them scramble for larger marketing budgets trying to push out hits to people who've largely turned to youtube for their music finding needs. Streaming services pay music creators and labels for plays, not purchases, making income gradual over time instead of in chunks.

So basically, now we have the entire label org, music marketing and exec structures working against the change. At the same time pay is coming in in smaller doses over longer periods of time making hits less important. And very importantly, lowering quarterly income for the first years of change. Most probably lowering stock martet value. This is a most extreme case of the long tail economic model.

But in this new situation, the organisations that formerly cultivated talent are now cannibalizing off talent to fuel their inefficient cost structure of organisations that no longer work. How do they deal with this problem? Sue pirates. Legislate against sharing music people own. And worst case: deny new working models the right to use already popular music.

Great idea msuic industry! What do you think?