Friday, May 5, 2017

Digitalization Revolution: Spotify

Digitalization Revolution
Alec Ripp

The music industry has gone through some major changes economically in the past two decades due to the increased use of computers and the internet. Illegal downloads and digitalization of music on platforms like iTunes kicked off the  rapid decrease in purchased music. In 2013-2014 CD sales dropped by 15%. We have been moving on from a physical copy of albums for over a decade now, but in the past few years, there has been a 13% decrease in Digital track purchases. Illegal downloads have also caused a major decrease in profit for artists and labels. In 2008 more than half of the music downloaded was pirated and in 2009 30 billion songs were illegally downloaded. During this same time frame pirating music became more popular because of it’s simplicity. Google has done a good job of eliminating the most used illegal downloading websites in the past decade, which has helped push music listeners to use music streaming platforms such as Youtube, Soundcloud, and Spotify.

It’s hard to imagine how artists can make so much money still, when such a small percentage of people pay for albums. These music listening platforms have given artists like Drake the  opportunity to reach billions of streams. Drake’s was streamed more than 4.7bn times on Spotify last year, and every hour, his songs are streamed more than 500,000 times on the app.  So despite the decrease in actual purchases of the album, Drake is still brings in the cash from music streaming. Spotify stated they pay their artists royalties on average about $0.05 per stream, therefore with 4.7 billion streams in 2016, Drake has received an estimated $33,840,000.  

Streaming revenues are expected to double in the next few years. Artists are getting more recognition than ever before because of the simplicity of online music streaming. The most used streaming app Spotify gives consumers the option of free use, or a monthly subscription at a cost of $15 monthly. The incentives for consumers subscriptions are no advertisements, exclusive tracks, and having the option to stream music without using data.
Spotify executive Troy Carter revealed that Spotify had passed 39 million paying subscribers.That more than doubles Apple Music’s estimated 17 million.

Artists are getting more recognition than ever before due to the ease of streaming music. There's never been a better time for artists to get their music heard. With the help of social media, artists have been able to connect with fans on a much larger level. Competition in the industry has risen greatly because of the publicity given to artists on twitter. Subsequently,  demand has increased and will continue to grow exponentially with social media.
Screen Shot 2017-04-26 at 8.28.48 AM.pngScreen Shot 2017-04-26 at 7.20.41 AM.png

Works Cited

Camp, Gregory. "Spotify. Retrieved 21 January 2015." Journal of the Society for American Music 9.03 (2015): 375-78. Web. 26 Apr. 2017.

"Financial Times.". N.p., n.d. Web. 26 Apr. 2017.

Adejobi, Alicia. "How much has Drake earned from Spotify with 4.7 billion streams?" International Business Times UK. N.p., 01 Dec. 2016. Web. 26 Apr. 2017.


  1. That's interesting that artists are now receiving more attention for their music now that it's available to listen to digitally and for free. However, it's not those who listen to the music who are paying for it, but it's the companies that provide consumers that artist's music that pay for it. It's a win-win for the consumers, artists, and companies in this case. The consumers get their music for free, the artists get recognition and pay for their music, and the companies like Youtube, Soundcloud, and Spotify are used more frequently, thus receiving more attention and popularity. Sounds pretty good to me.

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  2. As a Spotify Premium user myself, I have fallen in love with streaming music. I remember back when Apple dominated the market with iTunes especially after they came out with the iPod but that has significantly died down. 10 years ago it would have cost $0.99 per song and now you can get almost every song you can think of (except Taylor Swift) for a little over $10 a month. Spotify had a great idea to enter the market and are now clearly showing that they are a powerhouse and will probably be one for a long time unless someone else steps in with another idea. Spotify also had a great idea of giving artists royalties which helped with the legal aspect and the hesitant artists not joining Spotify. It would be interesting to see how Apple will try to keep up with Spotify and the next few products they release.

  3. On spotify there is a free subscription people can use, but that includes commercials and songs can only be skipped a certain amount a day. The opportunity cost is having a free subscription with commercials or paying 15$ a month for being a premium member where you can skip as many songs as you want. Many people do choose to be a premium member to have more freedom. I have used apple music and I hated it. It deleted all my music multiple times which made me switch to spotify. Great topic!

  4. I've noticed there's been big steps changing the way the music industry works in the last few years. Not only with spotify, but sites like Bandcamp make paying for music a much more viable option. On that site, most artists set their music to "pay what you want," which allows consumers to get music for free if they want, or give more money as a sort of donation for the artist. It's a great platform, compared to the mostly outdated idea of buying individual songs or albums for high prices. Unlike physical products, buying music has no risk of something like a shortage. Music is so incredibly so easy to pirate that they needed to find a new a way for artists to still make a profit, and this "pay if you want" module is much more practical to me.

  5. I couldn't agree more with you, When you driving someone, you rarely say, "hey check this CD I got." instead, you would say, "Hey, hand me the aux cord, I wanna play you this song." it's easier and more accessible than having a CD because you can play the song from where ever you are on your mobile device.

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  7. Spotify has definitely built itself a perfect platform for attracting users and changing how we listen to music. Plus, it benefits many of artists whose music is featured on the app, because their money stacks up extremely quickly. If artists only make $0.05 per stream, imagine the revenue that Spotify itself earns, especially with so many of the app-users having premium at $10/month! If I were Apple, I would be very worried about the status of iTunes. Even I haven't bound a song on iTunes in over a year because of Spotify. I'm eager to see how they will try to win back their users within the next couple of years.

  8. I have Spotify Premium and it is probably one of the best decisions I've made when it comes to music. Especially for students, for premium, they only need to pay $5 a month which to me is a deal for all of the music that you can access. Spotify is a convenient and cheap way to access yourself to a large variety of music. It would have been interesting if you talked about the competitors against Spotify such as Apple Music, Tidal, or Pandora. I agree that the way music is accessed and streams had evolved over even the past few years.

  9. Overall I think the change toward streaming services has been a good change both economically and for ease of consumers. Consumers are spending much less by just paying the once a month fee for thousands of songs and artist on any device they want, vs. paying fees to buy new cds for each artist and only being able to play them in cars or radios. Spotify also offers several different discounts for consumers like students, which gives them an advantage over other companies, like apple. Musicians are also making more money now, because they get paid for every time someone listens to their song, instead of just once for the purchase of their cd. Spotify also features different artist each week and makes several playlist of their own which help promote these artist and make them even more profits.

  10. Its not just the music industry, its the world, and we are shifting to a digital world. Streaming itself is a relatively new technology and its helped advance our lives very much. By paying artist for their work, more and more artists will want to be on the platform. And by having an affordable service as low as $5 a month, it is convenient for users as well. In addition it promotes circulating money when in turn helps the economy.

  11. Streaming platforms I think overall are more beneficial because not only is it new technology but it is much more proficient at playing music. In the 1900's music was either seen live or played on old technology. The new streaming technology for music is racking in millions each year. I didn't realize that's how much famous artist make per view and how they make more money on the streams than the actual album on iTunes or google music.I can definitely see this way of music growing into something more than what it is at the moment.

  12. Personally, I have been using Pandora for the past 2 years or so and recently they came out with a Pandora Premium that is very similar to Spotify. I think it is pretty interesting to see how the music industry has changed from the early 2000's to now. Like you said there is less physical copies and music is geared more and more towards streaming and such. Personally, I think this is great for developers because now it is easier for people to listen to their music with a click of a button. I expect that streaming will become more advanced and detailed as the demand rises. It will be interesting to see how this Pandora Premium competes with Spotify as they are the two major players in this industry.

  13. I am a spotify premium member, and it was one of the best decisions that I have made regarding music. I also feel like the opportunity cost of premium to free spotify membership's is well worth it, being $15. It is also very interesting seeing how much listening to music has changed recently. Not too long ago, people would listen to their music with CD Players, now all you have to do is download an app and search up what kind of music you want to listen to. It's also cool that there are other companies like Pandora, Soundcloud and Apple Music who are competing to make the best situation for music listeners.

  14. I can't remember the last time I actually paid for music. I feel like I am able to get everything I want and more switching between Spotify and Pandora. I found it interesting that the artists can get paid per stream and how Drake was able to make over $30 million solely from Spotify.

  15. I decided about 2 months ago to start paying for Spotify Premium, and the $10 a month fee has never been a question for me once I bought it. However, many individuals do not want to spend that kind of money on streaming music, especially considering there is a multitude of free options to choose from. There is the counterargument that the pesky ads and annoying inability to play and search up whatever song you like makes the free version in regards to spotify, obsolete. Now, when you compare the cost of apples itunes store, each song is about $1.29, and that adds up rather quickly, and further limits you to discovering new music and being able to listen to legitimately anything. When you focus on that, it really makes Spotify a valuable option for those who enjoy listening to music. Not to mention the countless other streaming services such as Soundcloud, Apple Music, and Pandora, all in the pool of competition.


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